UNITED STATES

                    SECURITIES AND EXCHANGE COMMISSION

                          Washington, D. C. 20549

                                 FORM 10-Q

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

For the quarterly period ended          September 30, 1998    

Commission file Number        2-89561

                          Teche Bancshares, Inc.

Louisiana                          72-1008552
(State or other jurisdiction of         (I.R.S Employer
incorporation or organization)          Identification No.)

606 South Main Street, St. Martinville, Louisiana 70582
(Address of principal executive offices 70582

Registrant's telephone number, including area code:
(318) 394-9726

     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 ( )

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

     Common Stock, $10 Par Value - 27,925 shares as of September 30, 1998.















TECHE BANCSHARES, INC. AND SUBSIDIARY
  St. Martinville, Louisiana
         (UNAUDITED)
 CONSOLIDATED BALANCE SHEETS
September 30, 1998 and December 31, 1997
    (Dollars in Thousands)
                                                     Sept. 30, December 31
                                                       1998       1997
            ASSETS
Cash and due from banks                                 $1,746     $1,633
Securities Available for Sale at mkt value              20,976     14,758
Securities Held To Maturity (Market Value
     of $3,510 and $4,498, respectively)                 3,476      4,476
Other securities at cost                                   345        343
Federal funds sold                                       1,325      1,050
Loans, net of allowance for loan losses
     of $168 and $171, respectively)                    16,439     13,707
Bank premises, furniture, and equipment                    679        674
Accrued interest receivable                                378        314
Other real estate owned                                    230        230
Other assets                                               207        120
                                                    ----------------------
Total assets                                           $45,801    $37,305
                                                    ======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
    Deposits -
        Non-interest demand                              7,152     $6,636
        Interest bearing -
            NOW and MMDA accounts                        6,072      5,523
            Savings                                      3,726      3,592
            Time, $100 and over,                        10,811      7,788
            Other time                                  10,703     10,182
                                                    ----------------------
                Total deposits                          38,464     33,721

Accrued interest payable                                   142        137
Federal Home Loan Borrowings                             3,297          0
Fed Funds Purchased                                          0          0
Other liabilities and accrued expenses                     355        205
                                                    ----------------------
               Total liabilities                        42,258     34,063
Stockholders' equity:
    Common stock ($10 par value, 100,000
        shares authorized, 28,125 shares
        issued and outstanding)                            281        281
    Surplus                                              1,143      1,143
    Retained earnings                                    2,026      1,719
                                                    ----------------------
                                                         3,450      3,143
    Less:   200 shares of treasury stock                   (19)       (19)
                Allowance for unrealized
                  loss on mkt securities                     0          0
                Market Value Allowance on
                  AFS Bonds                                112        118
                                                    ----------------------
                Total stockholders' equity               3,543      3,242
                                                    ----------------------
Total liabilities and stockholders' equity             $45,801    $37,305
                                                    ======================






The accompanying notes are an integral part of this statement.










































TECHE BANCSHARES, INC. AND SUBSIDIARY
  St. Martinville, Louisiana
         (UNAUDITED)
CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended September 30, 1998 and 1997;
(Dollars in Thousands except Earnings per Share)

                                Three Months Ended     Nine Months Ended
                               Sept. 30,  Sept. 30,  Sept. 30,  Sept. 30,
                                 1998       1997       1998       1997
Interest income:
    Interest and fees on loans      $378       $342     $1,080       $973
    Interest on investment securities -
        U.S. government's            295        295        888        903
        State/political sub's         14         13         40         32
    Dividends on equities              3          0          6          0
    Interest on due from banks         3          0          8          0
    Interest on federal funds         34          4        112         38
                              --------------------------------------------
        Total interest income        727        654      2,134      1,946
Interest expense:
    Interest on deposits            $359       $283     $1,018       $850
    Stockholder loans                  0          0          0          0
                              --------------------------------------------
        Total interest expense       359        283      1,018        850
                              --------------------------------------------
Interest inc. before provision       368        371      1,116      1,096
Provision for Credit Losses            0          0          0         10
                              --------------------------------------------
    Net interest income              368        371      1,116      1,086
                              --------------------------------------------
Other income:
    Service charges deposits          65         62        193        192
    Gain on sale of ORE               10          6         10          6
    Gain on sale of Securities         0          1          2          2
    Other income and charges          18         11         64         53
                              --------------------------------------------
           Total other income         93         80        269        253

Other expenses:
    Salaries/employee benefits       160        159        490        467
    Occupancy expense                 56         56        172        161
    Loss on sale of ORE                0          5          0          6
    Other operating expenses         105         95        298        300
                              --------------------------------------------
        Total other expenses         321        315        960        934
                              --------------------------------------------
    Income before income taxes       140        136        425        405

    Income taxes                      31         41        118        126
                              --------------------------------------------
            Net income              $109        $95       $307       $279

    Earnings per share             $3.90      $3.39     $10.99      $9.98

The accompanying notes are an integral part of this statement.






















































TECHE BANCSHARES, INC. AND SUBSIDIARY
  St. Martinville, Louisiana

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
         (UNAUDITED)
For the Nine Months Ended September 30, 1998 and 1997


                                         Allowance for
                                         Unrealized Unrealized
                                Common     Loss on  Gain (Loss)
                                Stock,   Marketable     on
                              Treasury &   Equity       AFS
                                Surplus  Securities Securities    Total

Balances, January 1, 1998         $3,124         $0       $118     $3,242

    Net income nine months           307                    -        $307

    Change in Unrealized AFS                                (6)       ($6)
                                   ------     ------     ------     ------

Balances, September 30, 1998      $3,431         $0       $112     $3,543
                                   ======     ======     ======     ======



Balances, January 1, 1997         $2,803         $0        $44     $2,847

    Net income nine months           279                    -        $279

    Change in Unrealized AFS                                70        $70
                                 -------      ------     ------    -------

Balances, September 30, 1997      $3,082         $0       $114     $3,196
                                 =======      ======     ======    =======







The accompanying notes are an integral part of this statement.










TECHE BANCSHARES, INC. AND SUBSIDIARY
  St. Martinville, Louisiana

CONSOLIDATED STATEMENTS OF CASH FLOWS
         (UNAUDITED)
For the Nine Months Ended September 30, 1998 and 1997

                                                     Sept. 30,  Sept. 30,
                                                       1998       1997
Cash flows from operating activities:
    Net income                                            $307       $279
    Adjustments to reconcile net income
      to net cash provided by
      operating activities -
        Depreciation of bank premises                       62         63
        Provision for Credit Losses                          0         10
        (Gain) Loss on Other real estate                   (10)         0
        (Gain) Loss on sale of securities                   (2)        (2)
        (Inc)dec accrued int recievable                    (64)       (83)
        (Inc) dec other assets                             (87)       (89)
        Inc(dec) accrued interest payable                    4        (14)
        Inc(dec) other liabilities                         151        153
          Net cash provided by operating            ----------------------
            activities                                     361        317
Cash flows from investing activities:
    Dec(inc) in federal funds                             (275)       925
    Dec(inc) in investment securities                   (5,225)       (76)
    Net dec (inc) in loans                              (2,732)    (1,141)
    Capital expenditures premises & equip                  (67)       (51)
    Acquisition of other real estate                         0       (195)
    Proceeds from sale of other real estate                 10          0
                                                    ----------------------
      Net cash used in investing activities             (8,289)      (538)

Cash flows from financing activities:
    Net increase (decrease) in -
      Demand deposits                                      516         56
      NOW and MMDA                                         549       (797)
      Savings deposits                                     135        256
      Time deposits $100,000 and over                    3,023        594
      Other time deposits                                  521       (150)
      Federal Home Loan Borrowings                       3,297          0
      Increase in federal funds purchased                    0        500
                                                    ----------------------
  Net cash provided by financing activities              8,041        459

 Net increase in cash and cash equivalents                 113        238

Cash and cash equivalents, beginning                     1,633      1,476

Cash and cash equivalents, end of period                $1,746     $1,714


Cash paid during the period:

    Interest                                            $1,014       $864

    Income Taxes                                          $129       $105








The accompanying notes are an integral part of this statement.












































                          TECHE BANCSHARES, INC.

                       NOTES TO FINANCIAL STATEMENTS

                           September 30, 1998

     The information furnished reflects all normal, recurring adjustments
which are, in the opinion of management, necessary for a fair statement of
Teche Bancshares, Inc. and its subsidiary for the nine (9) months ended
September 30, 1998.  Results for the interim period presented are not
necessarily indicative of results which may be expected for any other interim
period or for the year as a whole.










































                          TECHE BANCSHARES, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1998.   

Liquidity

Liquidity is the ability to insure that adequate funds are available to
satisfy contractual liabilities, fund operations, meet withdrawal
requirements of depositors and provide for customer's credit needs in a
timely manner. Our primary source of liquidity is our core deposits. We
supplement our core deposits with a line of credit with one of our
correspondent banks, public fund time deposits, repurchase agreements with
correspondent banks and a line of credit with the Federal Home Loan Bank. Our
sources of liquidity are adequate to fund the loan demand that we are
experiencing.

The primary source of funding for the parent company is dividends from the
Bank.  Management believes the parent's current sources of funds are
sufficient to meet its liquidity needs for the foreseeable future.

Capital Resources and Asset Quality

Our consolidated risk based capital to asset ratio was 18.02% and Tier one
capital ratio was 7.52% at September 30, 1998.  The bank only risk based
capital ratio was 17.97% and Tier one capital ratio was 7.50%. Banks are
required to maintain a risk weighted capital to asset ratio of 8% and Tier
one capital ratio of 5%.  Our risk based capital ratio and Tier one capital
ratio both exceed the required amount.

Asset quality continues to be satisfactory due to our emphasis on credit
quality in our loan portfolio.  Management is of the opinion that we have all
of our problem credits identified and that an adequate allowance has been
made for any potential future losses.

We continuously monitor the quality of our loans.  Loans past due 90 days or
greater still accruing at September 30, 1998, were $133,017 an increase of
$90,646 from December 31, 1997. Loans on which the accrual of interest had
been discontinued at September 30, 1998 totalled $522 which is down $24,466
as compared to the amount at December 31, 1997.   

We are actively marketing our other real estate owned.  At September 30, 1998
other real estate totalled $229,720 which is changed $1 from December 31,
1997.  We sold one property during the quarter that had a nominal book value.

Results of Operations

Net Income.     Our net income for the nine (9) months ended September 30,
1998 was $306,929 up $28,312 as compared to that of the same period last
year. The increase in income was mostly attributed to an increase in our net
interest income.                                                            
                                       


Revenue. Our net interest income for the nine (9) months ended September 30,
1998 is up $30,390 as compared to the same period in 1997.  During the first
half of the year we have experienced loan growth that has improved our
interest margin.  The bank's loan portfolio increased $2,731,949 since the
beginning of the year.

Provision for Loan Losses. Our bad debt reserve totalled $167,894 at
September 30, 1998 which represents 1.01% of our gross loans.  During 1998,
we did not add to our reserve for loan loss account.  Our reserve for loan
loss balance was considered adequate at September 30, 1998.

Other Income. Our other income is up $16,099 when compared to the same period
last year.  The improvement was due to an increase in commission income from
the sale of credit life and A&H insurance and an increase in service charges
on demand deposit accounts attributable to an increase in the volume of
accounts .

Other Expenses. Other expenses are up $25,434 as compared to the same time
last year.  Other expenses increased due to increases in Salaries and
employee benefits.  Salaries and benefits increased as the result of raises
that were provided in the fourth quarter of 1997.
                                                        
Provision for Income Tax. A provision is made for income tax to reflect three
fourths (9/12ths) of the annualized income tax that we anticipate we will
incur. The provision for income tax for the period ended September 30, 1998
was $118,359 as compared to $125,616 for the same period last year. The
decrease in income tax was due to the tax benefit accrued from the sale of
other real estate.
                                                                            
Year 2000 Preparation.  We have inventoried our software, hardware and
environmental systems.  We have identified those products that need
modification or replacement and are in the process of replacing.  We have
committed to updating our bank application system to one that is year 2000
compliant and are planning for a December 1998 conversion date.  We have
installed a new check sorter that is year 2000 compliant. The effect of these
replacements should not be material to the financial statements or operations
of Teche Bancshares, Inc.                                                   
                                                                            
                                                

















                        PART II - OTHER INFORMATION

Item #1   Legal proceedings
          
          Inapplicable

Item #2   Changes in Securities

          Inapplicable

Item #3   Defaults Upon Senior Securities

          Inapplicable

Item #4   Submission of Matters to be a Vote of Securities Holders

          Inapplicable

Item #5   Other information

          Inapplicable

Item #6   Exhibits and Reports on Form 8-K

          Inapplicable






























                          TECHE BANCSHARES, INC.

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

                              TECHE BANCSHARES, INC.
                              Registrant


                              /s/ Alcee J. Durand, Jr.

November 13, 1998             Alcee J. Durand, Jr.
Date                          President/CEO