<PAGE>




                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001         COMMISSION FILE NO: 1-14364
                           -----------------                             -------


                            ACADIANA BANCSHARES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

        LOUISIANA                                               72-1317124
---------------------------------                        -----------------------
  (State or other jurisdiction                                (IRS Employer
of incorporation or organization)                         Identification Number)

    200 WEST CONGRESS STREET
      LAFAYETTE, LOUISIANA                                       70501
---------------------------------                        -----------------------
(Address of principal executive offices)                       (Zip Code)


Registrant's telephone number, including area code:  (337) 232-4631


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

                     COMMON STOCK (PAR VALUE $.01 PER SHARE)
                    -----------------------------------------
                                (Title of Class)


                             AMERICAN STOCK EXCHANGE
                    -----------------------------------------
                   (Name of each exchange on which registered)


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

Indicate by check mark whether Registrant: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes  X   No
                                      -----   -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]


As of March 14, 2002, the aggregate market value of the 942,115 shares of Common
Stock of the Registrant issued and outstanding on such date, which excludes
241,606 shares held by all directors and executive officers of the Registrant as
a group, was approximately $23.4 million. This value was based on the closing
sale price of $24.82 per share of the Registrant's Common Stock on March 12,
2002.

Number of shares of Common Stock outstanding as of March 14, 2002: 1,183,721
                                                                   ---------

                       DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents incorporated by reference and the Part of
the Form 10-K into which the document is incorporated.

(1)  Portions of the Annual Report to Stockholders for the fiscal year ended
     December 31, 2001 are incorporated into Part II, Items 5 through 8 of this
     Form 10-K.
(2)  Portions of the definitive proxy statement for the 2002 Annual Meeting of
     Stockholders are incorporated into Part III, Items 10 through 13 of this
     Form 10-K.


                                       1
<PAGE>


PART I

IN ADDITION TO HISTORICAL INFORMATION, THIS ANNUAL REPORT ON FORM 10-K INCLUDES
CERTAIN "FORWARD-LOOKING STATEMENTS," AS DEFINED IN THE SECURITIES ACT OF 1933
AND THE SECURITIES EXCHANGE ACT OF 1934, BASED ON CURRENT MANAGEMENT
EXPECTATIONS. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THAT OF
MANAGEMENT EXPECTATIONS. SUCH FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS
REGARDING THE COMPANY'S INTENTIONS, BELIEFS OR CURRENT EXPECTATIONS AS WELL AS
THE ASSUMPTIONS ON WHICH SUCH STATEMENTS ARE BASED. STOCKHOLDERS AND POTENTIAL
STOCKHOLDERS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT
GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, AND THAT
ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH
FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE FUTURE RESULTS TO VARY FROM
CURRENT MANAGEMENT EXPECTATIONS INCLUDE, BUT ARE NOT LIMITED TO, GENERAL
ECONOMIC CONDITIONS, LEGISLATIVE AND REGULATORY CHANGES, MONETARY AND FISCAL
POLICIES OF THE FEDERAL GOVERNMENT, CHANGES IN TAX POLICIES, RATES AND
REGULATIONS OF FEDERAL, STATE AND LOCAL TAX AUTHORITIES, CHANGES IN INTEREST
RATES, DEPOSIT FLOWS, THE COST OF FUNDS, DEMAND FOR LOAN PRODUCTS, DEMAND FOR
FINANCIAL SERVICES, COMPETITION, CHANGES IN THE QUALITY OR COMPOSITION OF THE
COMPANY'S LOAN AND INVESTMENT PORTFOLIOS, CHANGES IN ACCOUNTING PRINCIPLES,
POLICIES OR GUIDELINES AND OTHER ECONOMIC, COMPETITIVE, GOVERNMENTAL AND
TECHNOLOGICAL FACTORS AFFECTING THE COMPANY'S OPERATIONS, MARKETS, PRODUCTS,
SERVICES AND FEES. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY
FORWARD-LOOKING STATEMENTS TO REFLECT CHANGED ASSUMPTIONS, THE OCCURRENCE OF
UNANTICIPATED EVENTS OR CHANGES TO FUTURE OPERATING RESULTS OVER TIME.

ITEM 1.  BUSINESS

GENERAL
Acadiana Bancshares, Inc., (the "Company") is a Louisiana corporation organized
in February 1996, for the purpose of becoming the bank holding company for LBA
Savings Bank (the "Bank"). The Board of Directors of the Bank adopted the Plan
of Conversion pursuant to which the Bank converted from a Louisiana chartered
mutual savings bank to a Louisiana chartered stock savings bank. The Bank was
originally organized as a Louisiana mutual savings and loan association in
February of 1900. The Company completed its subscription and community offering
in July of 1996, and with a portion of the net proceeds, acquired the capital
stock of the Bank. The Bank is a wholly owned subsidiary of the Company. The
Company became a financial holding company in April 2000 operating from its
headquarters in Lafayette, Louisiana. As a financial holding company the Company
can offer a broad range of products and services that are financial in nature.
In addition to the Bank, the Company owns Acadiana Holdings, L.L.C.
("Holdings"), a nonbank subsidiary, formed in May 2000 for the purpose of
acquiring and holding a new office facility for the Company's headquarters and
the Bank's main office.

FINANCIAL INFORMATION ABOUT SEGMENTS
The Company has evaluated its potential operating segments against the criteria
specified in Statement of Financial Accounting Standards ("FAS") No. 131,
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION and has
determined that no operating segment disclosures are required in 2001, 2000 or
1999 because of the aggregation concepts in the statement.

DESCRIPTION OF BUSINESS
SUMMARY. The Company's primary business is the operation of the Bank. The
Company provides a variety of financial services primarily to individuals, but
also to commercial business customers. The Company's marketing area is primarily
in the parish of Lafayette, Louisiana and secondarily in other surrounding
parishes in southwest Louisiana. As of December 31, 2001, the Company operated
four full-service branches in Lafayette, Louisiana, one full-service branch in
New Iberia, Louisiana, and one loan production office in Eunice, Louisiana.

The primary activities of the Company in the operation of the Bank are making
loans and investments and attracting deposits. Borrowings provide an alternative
source of funds. At December 31, 2001, the Company had total assets of $315.5
million, net loans receivable of $229.9 million, investment securities of $51.7
million, deposits of $215.6 million, borrowings of $71.7 million and
stockholders' equity of $26.8 million.


                                       2
<PAGE>


One of management's goals has been to increase earnings per share and return on
average equity by changing the mix of the Company's loan portfolio by lessening
its historical dependence on interest income from residential loans and growing
its commercial and consumer loan portfolios while prudently managing the
Company's changing exposure to credit risk and interest rate risk. The
relocation to a new main office facility in March 2001 greatly enhanced the
commercial banking transition and provided a significant boost with respect to
the Company's image and its service delivery capabilities. The new facility has
provided a platform for growth and expansion necessary to achieve management's
goals.

An important contribution toward the Company's historical increase in earnings
per share and return on average equity has been its repurchases of common stock,
which lowered the number of shares outstanding from 2,731,250 in July of 1996 to
1,183,721 at December 31, 2001 and which significantly helped adjust the
Company's capital to assets ratio nearer to industry norms. The Company's
average equity to average assets ratio decreased from 17.23% for the year ended
December 31, 1997 to 8.50% for the year ended December 31, 2001. Equity capital
of $6.0 million, $1.4 million and $4.6 million, not needed as a source of
permanent funding, or for future asset growth, or to provide a cushion to
withstand unforeseen, adverse developments, has been used to acquire common
stock for the treasury during the years ended December 31, 1999, 2000 and 2001,
respectively.

Additional information regarding the business of the Company can be found in
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS in the Company's 2001 Annual Report, and in Note 1 NATURE OF
BUSINESS, in the Notes to the Consolidated Financial Statements.

COMPETITION
The Company faces strong competition in both originating loans and attracting
deposits. The Company experiences strong competition for real estate loans,
commercial business loans and consumer loans, principally from other savings
institutions, commercial banks and mortgage banking companies. The Company
competes for loans principally through the interest rates and loan fees it
charges, the efficiency and quality of services it provides borrowers and the
convenient locations of its branch office network. Competition may increase as a
result of the continuing reduction of restrictions on the interstate operations
of financial institutions.

The Company's most direct competition for deposits has historically come from
other savings institutions, credit unions and commercial banks located in its
market area, including many large financial institutions which have greater
financial and marketing resources available to them. In addition, the Company
faces additional significant competition for investors' funds from short-term
money market securities, mutual funds and other corporate and government
securities. The ability of the Company to attract and retain savings deposits
depends upon the convenient locations of its branch office network and on its
ability to generally provide a rate of return, liquidity and risk comparable to
that offered by competing investment opportunities.

EMPLOYEES
As of December 31, 2001 the Company had 89 full-time equivalent employees. None
of these employees is represented by a collective bargaining agreement. The
management of Company believes that it enjoys excellent relations with its
personnel. Employee benefits are explained in Note 14 to the Consolidated
Financial Statements.

SUBSIDIARIES
The Company owns one bank subsidiary, LBA Savings Bank, and one non-bank
subsidiary, Acadiana Holdings, L.L.C. These entities are consolidated in the
Company's financial statements, as explained in Note 1 to the Consolidated
Financial Statements. The Company also owns a 40 percent investment in Cadence
Holdings, LLC, who is an affiliate in the financial services industry. This
investment is accounted for under the equity method. Note 6 to the Consolidated
Financial Statements provides additional information about this investment.


                                       3
<PAGE>


LOANS AND LENDING ACTIVITIES
The Company's primary assets are loans. Loans receivable, net, amounted to 72.9%
of total assets at December 31, 2001 compared to 81.6% of total assets at
December 31, 2000. All of the Company's loans, commitments and letters of credit
have been granted to customers in the Company's market area. The concentration
of credit by type of loan is set forth in the tables below. The distribution of
commitments to extend credit approximates the distribution of loans outstanding.
Additional information regarding the Company's loans receivable can be found in
Notes 1 and 4 to the Consolidated Financial Statements.

LOAN PORTFOLIO COMPOSITION. The following table sets forth the composition of
the Company's loan portfolio at the dates indicated.


<TABLE>
<CAPTION>
(Dollars in Thousands)
At December 31,                              2001                       2000                      1999
------------------------------------------------------------------------------------------------------------------
                                                    % of                       % of                       % of
                                      Amount       Total         Amount       Total         Amount       Total
                                  -------------------------- -------------------------- --------------------------
<S>                               <C>             <C>        <C>           <C>           <C>           <C>
Type of loan:
    Mortgage Loans:
      Single-family residential    $    139,739    60.79 %    $    188,133    71.04 %    $    179,109    73.10 %
      Construction                        6,093     2.65             3,912     1.48            12,612     5.15
      Multi-family residential              166     0.07               346     0.13               425     0.17
      Commercial real estate             40,119    17.45            28,851    10.90            18,798     7.67
      Equity lines of credit              4,421     1.92             4,227     1.60             3,406     1.39
                                  -------------------------- -------------------------- --------------------------
Total mortgage loans                    190,538    82.88           225,469    85.15           214,350    87.48
    Commercial business loans            20,468     8.90            19,702     7.44            18,144     7.41
    Consumer loans                       25,287    11.00            24,398     9.21            21,803     8.90
                                  -------------------------- -------------------------- --------------------------
Total loans                             236,293   102.78           269,569   101.80           254,297   103.79

Less:
    Allowance for loan losses            (2,710)   (1.18)           (2,714)   (1.01)           (2,747)   (1.12)
    Net deferred loan fees                 (161)   (0.07)             (197)   (0.07)             (222)   (0.09)
    Unadvanced loan funds                (3,531)   (1.53)           (1,853)   (0.72)           (6,332)   (2.58)
                                  -------------------------- -------------------------- --------------------------
Total loans, Net                   $    229,891   100.00 %    $    264,805   100.00 %    $    244,996   100.00 %
                                  ========================== ========================== ==========================


<CAPTION>
(Dollars in Thousands)
At December 31,                             1998                       1997
------------------------------------------------------------ --------------------------
                                                    % of                       % of
                                      Amount       Total         Amount       Total
                                  -------------------------- --------------------------
<S>                               <C>            <C>         <C>            <C>
Type of loan:
    Mortgage Loans:
      Single-family residential    $    169,362   75.02 %     $    169,694    79.72 %
      Construction                       12,588    5.58             10,286     4.83
      Multi-family residential              481    0.21                546     0.26
      Commercial real estate             16,887    7.48             13,900     6.53
      Equity lines of credit              2,040    0.90                587     0.28
                                  -------------------------- --------------------------
Total mortgage loans                    201,358   89.19            195,013    91.62
      Commercial business loans          13,861    6.14              9,821     4.61
      Consumer loans                     19,348    8.57             15,768     7.41
                                  -------------------------- --------------------------
Total loans                             234,567  103.90            220,602   103.64

Less:
      Allowance for loan losses          (2,726)  (1.21)            (2,760)   (1.30)
      Net deferred loan fees               (300)  (0.13)              (373)   (0.17)
      Unadvanced loan funds              (5,789)  (2.56)            (4,629)   (2.17)
                                  -------------------------- --------------------------
Total loans, Net                   $    225,752  100.00 %     $    212,840   100.00 %
                                  ========================== ==========================

</TABLE>


The Company's primary lending products are single-family residential loans,
commercial loans and consumer loans with the largest concentration in
single-family residential loans. Residential mortgage


                                       4
<PAGE>


loan applications are developed primarily from advertising, referrals from real
estate brokers and builders, existing customers and walk-in customers.
Commercial real estate and commercial business loan applications are obtained
primarily from previous borrowers, direct solicitations by Company personnel, as
well as referrals. Consumer loans originated by the Company are obtained
primarily from advertising, direct mail campaigns and through existing and
walk-in customers.

The Company has been historically dependent on interest income from residential
mortgage loans. Interest income from residential mortgage loans was $13.2
million, $14.4 million and $13.0 million for the years ended December 31, 2001,
2000 and 1999, respectively, which amounts represent 53.0%, 56.9% and 57.9% of
total income of the Company for such years. The Company's second largest source
of interest income is from commercial real estate and commercial business loans.
Interest income from commercial loans was $4.5 million, $3.9 million and $3.2
million for the years ended December 31, 2001, 2000 and 1999, respectively,
which amounts represent 18.3%, 15.5% and 14.1% of total income of the Company
during those years. The Company's interest income from consumer loans was $2.5
million, $2.4 million and $2.1 million for the years ended December 31, 2001,
2000 and 1999, respectively, which amounts represent 10.2%, 9.5% and 9.6% of
total income of the Company during those years. Interest income from all loans
was $20.2 million, $20.7 million and $18.3 million for the years ended December
31, 2001, 2000 and 1999, respectively, representing 81.5%, 81.9% and 81.6% of
total income of the Company during those years.

LOAN ORIGINATION AND SALES ACTIVITY. The Company has made some progress towards
reducing its historical dependence on interest income from residential mortgage
loans. Fueled by favorable market conditions and its desire to accelerate the
change in loan mix, management of the Company began early during 2001 to
originate almost all of its residential loans for sale in the secondary market.
The management of the Company expects to continue selling residential loans to
the extent that it can maintain net interest income while selling originated
loans, and to the extent that local market conditions relating to new
residential loans allow the Company an opportunity to maintain its origination
and sales volumes. The Company does not expect to originate loans outside of its
market. The table below sets forth the Company's total loan origination and loan
reduction experience during the periods indicated.


<TABLE>
<CAPTION>
(Dollars in Thousands)
Years Ended December 31,                             2001             2000              1999
-------------------------------------------------------------- ----------------  ----------------
<S>                                            <C>              <C>               <C>
Loans receivable, net beginning of period       $   264,805        $   244,996         $  225,752
Loan originations:
  Single-family residential                          48,897             27,624             37,154
  Construction                                        9,297              8,227             14,704
  Multi-family residential                              -                  -                  -
  Commercial real estate                             12,300             12,206              5,803
  Commercial business loans                           7,493             12,500             22,395
  Consumer loans                                     14,890             16,037             16,642
                                             ----------------- ----------------  ----------------
     Total loan originations                         92,877             76,594             96,698
                                             ----------------- ----------------  ----------------
Loan reductions:
  Loan sales                                        (56,022)            (4,415)            (8,565)
  Loan participation                                    -                  -               (2,471)
  Principal repayments                              (70,634)           (56,783)           (73,417)
  Other changes, net (1)                             (1,135)             4,413              6,999
                                             ----------------- ----------------  ----------------
     Total loan reductions                         (127,791)           (56,785)           (77,454)
                                             ----------------- ----------------  ----------------
Loans receivable, net end of period             $   229,891        $   264,805        $   244,996
                                             ================= ================  ================
</TABLE>

-----------------------------
(1) Includes changes in net deferred loan fees, allowance for loan losses, and
    unadvanced loan funds.

The Company sold $8.6 million, $4.4 million and $56.0 million of single-family
residential loans during the years ended December 31, 1999, 2000 and 2001,
respectively. The loan sales in 1999 occurred


                                       5

<PAGE>


during the first half of the year and the sales in 2000 occurred primarily
during the last quarter of that year. Loan sales occurred throughout the 2001
year. The gain on sale of loans is a significant portion of total non-interest
income, and for 2001 compared to 2000, this source of income provided the most
growth in non-interest income. The Company expects to continue selling
single-family residential loans to the extent that it can maintain net interest
income while selling originated loans, and to the extent that local market
conditions relating to new residential loans allow the Company an opportunity to
maintain its origination and sales volumes.

MATURITIES AND SENSITIVITIES OF LOANS TO CHANGES IN INTEREST RATES. The
contractual maturities of the Company's loan portfolio do not reflect the
expected timing of loan repayments. The average life of the Company's loans is
substantially less than contractual terms because of loan prepayments and
because of due-on-sale clauses relating to a loan's collateral. A due-on-sale
clause requires a loan to be paid in full upon sale of the underlying
collateral. Prepayments occur when loan repayments are made before they are
contractually due. Prepayment amounts are expected to be higher when competing
loan rates are lower than actual (contractual) loan rates. Prepayment amounts
are expected to be lower when competing loan rates are higher than actual loan
rates.

The following table sets forth the time to contractual maturity of the Company's
loan portfolio at December 31, 2001.

<TABLE>
<CAPTION>

(In thousands)                                                   Over One
                                           Less than           Through Five           Over Five
                                            One Year               Years                Years                Total
                                       -----------------  -------------------- --------------------  -------------------
<S>                                      <C>                 <C>                  <C>                  <C>

Single-family residential                 $    5,279          $    23,367          $    111,093        $    139,739
Construction                                   6,093                  -                    -                  6,093
Multi-family residential                         166                  -                    -                    166
Commercial real estate                         4,961               11,729                23,429              40,119
Equity lines of credit                         4,421                  -                    -                  4,421
Commercial business loans                      8,781                7,528                 4,159              20,468
Consumer loans                                 6,001               11,360                 7,926              25,287
                                       -------------------  -------------------- --------------------  -------------------
Total                                     $   35,702          $    53,984          $    146,607          $  236,293
                                       ===================  ==================== ====================  ===================

</TABLE>

Additionally, the table below sets forth the dollar amount at December 31, 2001
of all loans contractually due after December 31, 2002, for all loans with
predetermined rates or fixed rates and for all loans with floating or adjustable
interest rates.

<TABLE>
<CAPTION>
(In thousands)                                           Fixed             Adjustable
                                                         Rates                Rates
                                                 -------------------- --------------------
<S>                                              <C>                    <C>
Single-family residential                            $   75,881            $    58,579
Construction                                                -                      -
Multi-family residential                                    -                      -
Commercial real estate                                   19,856                 15,302
Equity lines of credit                                      -                      -
Commercial business loans                                 4,443                  7,244
Consumer loans                                           18,361                    925
                                                 -------------------- --------------------
Total                                                $  118,541            $    82,050
                                                 ==================== ====================
</TABLE>


UNDERWRITING STANDARDS AND LOAN ORIGINATION PROCEDURES. The lending activities
of the Company are subject to written underwriting standards and loan
origination procedures established by the Company's Board of Directors and
management. Applications for real estate mortgage loans, construction loans and
commercial real estate, commercial business loans and consumer loans must be
reviewed and approved by appropriate Loan Officers, the Directors' Loan
Committee of the Company's Board of Directors, and the full Board of Directors,
depending on the amount of the request. The Directors' Loan

                                       6

<PAGE>

Committee is comprised of five directors, one of whom is the Chairman,
President and Chief Executive Officer, and two outside directors, one of whom
is designated as the chairman. Any loan of $1,000,000 or more must also be
approved by the Board of Directors.

Single-family residential loans are originated and underwritten subject to
written underwriting standards and loan origination procedures established by
the Board of Directors and management. Additionally, such loans are generally
underwritten and documented according to standards required by the secondary
market to permit their sale in the secondary market. Substantially all of the
Company's residential loans consist of conventional loans. The Company
originates such loans in its market area. The Company does not expect to
originate or purchase loans outside of its market area. Additional information
regarding single-family residential loans can be found in the Company's 2001
Annual Report and in Notes 1 and 4 of the Notes to Consolidated Financial
Statements.

Construction financing is generally considered to involve a higher degree of
risk of loss than long-term financing on improved, owner-occupied real estate.
Prior to making a commitment to fund a construction loan, the Company requires
an appraisal of the property by an independent state-licensed or qualified
appraiser approved by the Board of Directors. In addition, during the term of
the construction loan, an independent inspector periodically inspects the
project. Single-family construction loans are included in the Company's
Construction loan portfolio.

Commercial real estate and multi-family residential lending, included in the
Company's commercial loan portfolio, entail different and significant risks when
compared to single-family residential lending because such loans often involve
large loan balances to single borrowers and because the payment experience on
such loans is typically dependent on the successful operation of the project or
the borrower's business. These risks can also be significantly affected by
supply and demand conditions in the local market for apartments, offices,
warehouses or other commercial space. The Company attempts to minimize its risk
exposure by limiting such lending to proven businesses, only considering
properties with existing operating performance which can be analyzed, requiring
conservative debt coverage ratios, and periodically monitoring the operation and
physical condition of the collateral.

Commercial business loans are included in the Company's commercial loan
portfolio. Commercial business lending also entails different and significant
risks when compared to single-family residential lending because such loans
often involve large loan balances attributed to single borrowers and because the
payment experience on such loans is typically dependent on the successful
operation of the project or the borrower's business. These risks can also be
significantly affected by supply and demand conditions in the local market for a
business's products and services. The Company attempts to minimize its risk
exposure by limiting such lending to proven businesses, only considering
businesses with existing operating performance which can be analyzed, requiring
conservative debt coverage ratios, and periodically monitoring the operation and
physical condition of the collateral. The Company concentrates its commercial
business lending activities among small- to mid-size businesses in Lafayette,
Louisiana and contiguous parishes, in a manner consistent with its current
underwriting standards.

Consumer loans and equity lines of credit are included in the Company's consumer
loan portfolio. The Company offers consumer loans and home equity lines of
credit in order to provide a full range of retail financial services to its
customers. Consumer loans generally involve more credit risk than single-family
residential mortgage loans because of the type and nature of the collateral and,
in certain cases, the absence of collateral. In addition, consumer-lending
collections are dependent on the borrower's continuing financial stability, and
thus are more likely to be adversely affected by job loss, divorce, illness and
personal bankruptcy. In many cases, any repossessed collateral for a defaulted
consumer finance loan will not provide an adequate source of repayment of the
outstanding loan balance because of improper repair and maintenance of the
underlying security. The remaining deficiency often does not warrant further
substantial collection efforts against the borrower. The Company originates
substantially all consumer loans and home equity lines of credit in its primary
market area.


                                       7
<PAGE>

ASSET QUALITY

As part of the Company's efforts to improve its asset quality, it has developed
and implemented an asset classification system. All of the Company's assets are
subject to review under the classification system. All assets of the Company are
periodically reviewed, and the Audit Committee of the Board of Directors of the
Bank reviews the classifications on at least a quarterly basis. When the account
becomes 90 days delinquent, the Company institutes foreclosure or other
proceedings, as necessary, to minimize any potential loss. Loans are placed on
non-accrual status when, in the judgment of management, the probability of
collection of interest is deemed insufficient to warrant further accrual. When a
loan is placed on non-accrual status, previously accrued but unpaid interest is
deducted from interest income. As a matter of policy, the Company does not
accrue interest on loans past due 90 days or more. During the last several
years, the Company's asset quality has remained well above peer group
comparatives.

DELINQUENT LOANS, NON-PERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS. The
following table presents information regarding accruing loans which are
contractually past due 90 days or more as to principal or interest payments;
loans accounted for on a non-accrual basis; and loans not already included but
which are "troubled debt restructurings" as defined in FAS 15, ACCOUNTING BY
DEBTORS AND CREDITORS FOR TROUBLED DEBT RESTRUCTURINGS.

<TABLE>
<CAPTION>

(Dollars in Thousands)
At December 31,                                  2001        2000        1999        1998       1997
--------------------------------------------------------- ----------- ----------- ----------- ----------
<S>                                           <C>        <C>         <C>          <C>           <C>
Accruing loans 90 days or more past due:
  Single-family residential                    $    -     $    -      $    -       $   -       $   -
  Construction                                      -          -           -           -           -
  Multi-family residential                          -          -           -           -           -
  Commercial real estate                            -          -           -           -           -
  Equity lines of credit                            -          -           -           -           -
  Commercial business loans                         -          -           -           -           -
  Consumer loans                                    -          -           -           -           -
                                               ---------- ----------- ----------- ----------- ----------
   Total accruing loans                             -          -           -           -           -
                                               ---------- ----------- ----------- ----------- ----------
Non-accrual loans:
  Single-family residential                          17          41          33        140         285
  Construction                                      -          -           -           -           -
  Multi-family residential                          -          -           -           -           -
  Commercial real estate                            -          -           -           -           -
  Equity lines of credit                            -          -             18        -           -
  Commercial business loans                         430         148        -           -           -
  Consumer loans                                     15          22          49         50         129
                                               ---------- ----------- ----------- ----------- ----------
   Total non-accrual loans                          462         211         100        190         414
                                               ---------- ----------- ----------- ----------- ----------
Total non-performing loans                          462         211         100        190         414
Other real estate owned, and repossessed
     assets                                         207          11        -             7         204
                                               ---------- ----------- ----------- ----------- ----------
Total non-performing assets                         669         222         100        197         618
                                               ========== =========== =========== =========== ==========

Performing troubled debt restructurings         $   347    $    404    $    453    $   490      $  515
                                               ========== =========== =========== =========== ==========
Total non-performing assets and troubled
   debt restructurings                          $ 1,016    $    626    $    553    $   687      $1,133
                                               ========== =========== =========== =========== ==========


Non-performing assets to total loans               0.28%       0.08%       0.04%      0.08%       0.29%
Non-performing assets to total assets              0.21        0.07        0.03       0.07        0.22
Non-performing loans to total loans                0.20        0.08        0.04       0.08        0.19
Non-performing loans to total assets               0.15        0.07        0.03       0.07        0.15
Total non-performing assets and troubled
    debt restructurings to total assets            0.32        0.19        0.18        0.24       0.41

</TABLE>


Total non-performing assets increased during 2001 in both total volume and as a
percentage of total loans and total assets. Such increase was due principally to
one large commercial credit that is


                                       8
<PAGE>


considered impaired under Statement of Financial Accounting Standards 114 at
December 31, 2001. Additional information with regard to impaired loans can be
found in Note 4 to the Consolidated Financial Statements. Because of the
allowance for loan losses associated with this loan, and because of the change
in the loan mix during 2001, the allowance for loan losses to total loans
increased from 1.01% at December 31, 2000 to 1.15% at December 31, 2001. The
ratio of allowance for loan losses to total non-performing loans and troubled
debt restructurings remains strong at 586.58%. Despite the increase in
non-performing loans and the status of the general economy, management does not
believe that the loan portfolio in general has declined in quality. During 2001
management increased the monitoring process for watch list credits, and reports
on such credits regularly to the audit committee of the Board of Directors of
the Bank.

OTHER CLASSIFIED ASSETS. Federal regulations require that the Company classify
its assets on a regular basis. In addition, concerning examinations of insured
institutions, federal examiners have authority to identify problem assets and,
if appropriate, classify them in their reports of examination. There are three
classifications for problem assets: "substandard", "doubtful" and "loss."
Substandard assets have one or more defined weaknesses and are characterized by
the distinct possibility that the insured institution will sustain some loss if
the deficiencies are not corrected. Doubtful assets have the weaknesses of
substandard assets with the additional characteristic that the weaknesses make
collection or liquidation in full, based on currently existing facts, conditions
and values questionable, and there is a high possibility of loss. An asset
classified as loss is considered uncollectible and of such little value that
continuance as an asset of the institution is not warranted. At December 31,
2001, the Company had $1.6 million of assets classified substandard and no
assets classified as doubtful or loss. At such date, the aggregate of the
Company's classified assets amounted to 0.5% of total assets.

POTENTIAL PROBLEM LOANS. As of December 31, 2001, the Company had not identified
any additional potential problem loans that are not already described above in
sections titled DELINQUENT LOANS, NON-PERFORMING ASSETS AND TROUBLED DEBT
RESTRUCTURINGS, and OTHER CLASSIFIED ASSETS.

ALLOWANCE FOR POSSIBLE LOAN LOSSES
The allowance for loan losses is established as losses are estimated to have
occurred through a provision for loan losses charged to earnings. Loan losses
are charged against the allowance when management believes the uncollectibility
of a loan balance is confirmed. Subsequent recoveries, if any, are credited to
the allowance. The allowance is increased by a provision for loan losses, which
is charged to expense, and reduced by charge-offs, net of recoveries.

The allowance for loan losses is maintained at a level, which, in management's
judgment, is adequate to absorb credit losses inherent in the loan portfolio.
The amount of the allowance is evaluated on a regular basis by management and is
based upon management's periodic review and evaluation of various factors,
including the collectibility of the loan portfolio, the nature of the portfolio,
credit concentrations, and trends in historical loss experience, specific
impaired loans, and prevailing economic conditions that may adversely affect the
borrower's ability to repay, and the estimated value of any underlying
collateral. This evaluation is inherently subjective as it requires estimates
that are susceptible to significant revision as more information becomes
available. Allowances for impaired loans are generally determined based on
collateral values or the present value of estimated cash flows using the loan's
effective interest rate.

Management of the company presently believes that its allowance for loan losses
is adequate to cover any potential losses in the Company's loan portfolio.
However, future adjustments to this allowance may be necessary, and the
Company's results of operations could be adversely affected if circumstances
differ substantially from the assumptions used by management in making its
determinations in this regard. ALLOWANCE FOR LOAN LOSSES found in Note 1 to the
Consolidated Financial Statements provides additional information regarding the
Company's allowance for loan losses. The following table describes the activity
related to the Company's allowance for possible loan losses for the periods
indicated.


                                       9
<PAGE>


<TABLE>
<CAPTION>

(Dollars in Thousands)
Years Ended December 31,                   2001              2000             1999              1998              1997
----------------------------------------------------     -------------    -------------     -------------     -------------
<S>                                   <C>                <C>              <C>               <C>                <C>
Balance, beginning of period          $    2,714          $   2,747        $    2,726        $     2,760       $     2,592
Provision for loan losses                     20                (83)             -                    90               180
Charge-offs:
  Single-family residential                  (30)              -                   (4)               (40)              (14)
  Construction                               -                 -                 -                  -                  -
  Multi-family residential                   -                 -                 -                  -                  -
  Commercial real estate                     -                 -                 -                  -                  -
  Equity lines of credit                                         (8)             -                  -                  -
  Commercial business loans                  (31)              -                  (25)              (169)              -
  Consumer loans                            (182)              (162)             (156)              (104)             (221)
                                       -------------     -------------    -------------     -------------     -------------
   Total charge-offs                        (243)              (170)             (185)              (313)             (235)
                                       -------------     -------------    -------------     -------------     -------------
Recoveries:
  Single-family residential                   44                 55                40                 36                76
  Construction                               -                  -                 -                  -                 -
  Multi-family residential                   -                  -                 -                  -                 -
  Commercial real estate                     -                  -                 -                  -                  56
  Equity lines of credit                     -                  -                 -                  -                 -
  Commercial business loans                   53                 37                47                 22               -
  Consumer loans                             122                128               119                131                91
                                       -------------     -------------    -------------     -------------     -------------
   Total recoveries                          219                220               206                189               223
                                       -------------     -------------    -------------     -------------     -------------
Net (charge-offs) / recoveries               (24)                50                21               (124)              (12)
                                       -------------     -------------    -------------     -------------     -------------
Balance, end of period
                                        $  2,710          $   2,714        $    2,747        $     2,726       $     2,760
                                       =============     =============    =============     =============     =============
Allowance for loan losses to
 total non-performing loans
 and troubled debt restructurings
 at end of period                         586.58 %           441.30 %          496.75 %           396.80 %          297.09 %
                                       =============     =============    =============     =============     =============
Allowance for loan losses to
 total loans at end of period               1.15 %             1.01 %            1.08 %             1.16 %            1.25 %
                                       =============     =============    =============     =============     =============
Net (charge-offs) / recoveries to
 average loans outstanding                 (0.01)%             0.02 %            0.01 %           (0.06)%            (0.01)%
                                       =============     =============    =============     =============     =============
</TABLE>


The following table presents an allocation of the allowance for loan losses by
the categories indicated and the percentage that loans in each category bear to
total loans. This allocation is used by management to assist in its evaluation
of the Company's loan portfolio. It should be noted that allocations are no more
than estimates and are subject to revisions as conditions change. Based upon
historical loss experience and the Company's assessment of its loan portfolio,
all of the Company's allowances for losses on loans have been allocated to the
categories of loans indicated. Allocations to loans are based primarily on the
creditworthiness of each borrower. In addition, general allocations are also
made to each category based upon, among other things, the current impact of
economic conditions on the loan portfolio taken as a whole. Losses on loans made
to consumers are reasonably predictable based on the prior loss experience and a
review of current economic conditions.

                                      10

<Page>

<TABLE>
<CAPTION>
    (Dollars in Thousands)
    At December 31,                           2001                    2000                    1999
    -------------------------------------------------------- ----------------------- ------------------------
                                                  Percent                 Percent                  Percent
                                                  of Loans                of Loans                of Loans
                                                  to Gross                to Gross                to Gross
                                       Amount      Loans       Amount      Loans       Amount       Loans
                                     ----------- ----------- ----------- ----------- ------------------------
<S>                                  <C>          <C>        <C>          <C>          <C>        <C>
Mortgage loans:
      Single-family residential       $   832      59.14%     $  1,119      69.79%     $   992        70.43%
      Construction                         20       2.58%           31       1.45%          74         4.96%
      Multi-family residential              1       0.07%            3       0.13%           3         0.17%
      Commercial real estate              133      16.98%          409      10.70%         505         7.39%
      Equity lines of credit               20       1.87%           87       1.57%          81         1.34%
                                     ----------- ----------- ----------- ----------- ------------------------
Total mortgage loans                    1,006      80.64%        1,649      83.64%       1,655        84.29%
                                     ----------- ----------- ----------- ----------- ------------------------
      Commercial business loans         1,000       8.66%          791       7.31%         737         7.14%
      Consumer loans                      704      10.70%          274       9.05%         355         8.57%
                                     ----------- ----------- ----------- ----------- ------------------------
Total non-mortgage loans                1,704      19.36%        1,065      16.36%       1,092        15.71%
                                     ----------- ----------- ----------- ----------- ------------------------
Total allowance for loans             $ 2,710     100.00%     $  2,714     100.00%   $   2,747       100.00%
                                     =========== =========== =========== =========== ========================


<CAPTION>
    (Dollars in Thousands)
    At December 31,                           1998                    1997
    -------------------------------------------------------- -----------------------
                                                  Percent                 Percent
                                                  of Loans                of Loans
                                                  to Gross                to Gross
                                       Amount      Loans       Amount      Loans
                                     ----------- ----------- ----------- -----------
<S>                                  <C>          <C>        <C>           <C>
Mortgage loans:
      Single-family residential       $  1,591     72.20%      $1,739      76.92%
      Construction                          80      5.37%          64       4.66%
      Multi-family residential               3      0.20%           5       0.25%
      Commercial real estate               397      7.20%         350       6.30%
      Equity lines of credit                31      0.87%           9       0.27%
                                     ----------- ----------- ----------- -----------
Total mortgage loans                     2,102     85.84%       2,167      88.40%
                                     ----------- ----------- ----------- -----------
      Commercial business loans           346       5.91%         274       4.45%
      Consumer loans                      278       8.25%         319       7.15%
                                     ----------- ----------- ----------- -----------
Total non-mortgage loans                  624      14.16%         593      11.60%
                                     ----------- ----------- ----------- -----------
Total allowance for loans            $  2,726     100.00%     $ 2,760     100.00%
                                     =========== =========== =========== ===========

</TABLE>

INVESTMENT SECURITIES AND INVESTING ACTIVITIES
The Company's second largest asset group is investment securities, amounting to
approximately 16.4% and 11.1% of total assets at December 31, 2001 and 2000,
respectively. Investment securities provide the Company both an additional
significant source of income and a source of secondary liquidity (cash and cash
equivalents being the Company's primary liquidity). Income from investments
amounted to $2.3 million, $2.9 million and $2.7 million for the years ended
December 31, 2001, 2000 and 1999, respectively, which amounts represent 9.1%,
11.6% and 11.9% of the Company's total income for such years. The Company's
investments typically include time deposits in other banks that have a maturity
greater than 90 days, securities issued by the U.S. Government and federal
agencies, corporate bonds, mortgage-backed securities and certain marketable
equity securities. All of the Company's investments are in domestic securities.
None of its securities are tax exempt obligations.

Investment securities that are held principally for resale in the near term are
classified as trading securities and are carried at fair value, with changes in
fair value recorded in earnings. Quoted market prices are used to determine fair
value. Investment securities that management has the positive intent and ability
to hold to maturity, are classified as held to maturity and carried at cost,
adjusted for


                                       11
<PAGE>


amortization of premiums and accretion of discounts using methods approximating
the interest method. Investment Securities not classified as held to maturity or
trading, including equity securities with readily determinable fair values, are
classified as available for sale and are carried at fair value. Unrealized gains
and losses on securities available for sale are recognized in other
comprehensive income net of applicable income taxes. The cost of securities sold
is recognized using the specific identification method. Time deposits in other
banks are not otherwise classified. The maximum investment in time deposits in
any one bank is $100,000.

The following table sets forth information about the Company's investment
securities indicating amounts periodically due and weighted average yield for
each range of maturities at December 31, 2001.

<TABLE>
<CAPTION>

(Dollars In Thousands)                                             Amounts (Book Value) Due
                                                       -------------------------------------------------
                                                                    After One   After Five
                                                                       Year        Years
                                            Weighted        In       Through      Through
                                            Average      One Year      Five         Ten      After Ten      Total
                                             Yield       or Less      Years        Years       Years       Amounts
                                           ----------------------  ------------------------------------ ------------
<S>                                       <C>         <C>         <C>          <C>          <C>          <C>
U.S. Treasury Notes and Bonds                 6.01%      $   -     $    497      $    -      $    -        $    497
Corporate Bonds                               5.15%          -        2,009           -           -           2,009
                                                       ----------  -----------  -----------  ----------  -----------
                                                         $   -     $  2,506      $    -      $    -        $  2,506
                                                       ----------  -----------  -----------  ----------
Mortgage-backed securities:
    with fixed rates                          5.16%                                                          30,778
    with adjustable rates                     6.21%                                                          18,262
Marketable equity securities                  13.5%                                                               5
                                                                                                         ------------
     Total Investments                                                                                    $  51,551

Time Deposits in Other Banks                  4.05%          603      2,445           -           -           3,048
                                                       ----------  -----------  -----------  ----------  -----------
Total Investments and Time Deposits                     $    603    $ 4,951       $   -       $   -       $  54,599
                                                       ================================================= ============

Weighted Average Yield                                      4.05%      4.69%

</TABLE>

The majority of the Company's investment in mortgage-backed securities
represents debt of U.S. government agencies such as the Government National
Mortgage Association ("GNMA") and in government-sponsored enterprises such as
the Federal National Mortgage Corporation ("FNMA") and the Federal Home Loan
Mortgage Corporation ("FHLMC"). On a limited basis, the Company also invests in
issues of private companies. Below is list of aggregate investments by issuer at
December 31, 2001.

<TABLE>
<CAPTION>

(In thousands)                                  Aggregate          Aggregate
                                                   Book              Market
Name of Issuer                                    Value              Value
--------------------------------------------------------------  -----------------
<S>                                           <C>              <C>
GNMA                                          $        3,980     $        4,023
FNMA                                                  10,138             10,265
FHLMC                                                 29,928             29,921
Northwest Asset Securities Corporation                 4,994              4,938
                                             -----------------  -----------------
                                              $      49,040      $      49,147
                                             =================  =================
</TABLE>


The Bank is a member of the Federal Home Loan Bank ("FHLB") of Dallas, which is
one of twelve regional banks in the United States comprising the FHLB System. As
a condition of membership in the FHLB system, the Company owns stock in the
FHLB, representing an equity interest that does not have a readily determinable
value (for purposes of FAS 115) because its ownership is restricted and it lacks
a market. It can be sold only to the FHLB or to another member institution. It
is carried at cost, which is also equal to the par value of the stock. Both cash
and stock dividends are received on FHLB stock and are reported as income. The
stock dividends are redeemable at par value. At December 31, 2001, FHLB stock
amounted to $4.3 million, or 1.4% of total assets.


                                       12
<PAGE>


SOURCES OF FUNDS
GENERAL. The Company's sources of funds include deposits obtained from its
customers, borrowings in the form of Securities Sold Under Agreements to
Repurchase, borrowings from the FHLB and borrowings from other banks, and equity
capital.

DEPOSITS AND DEPOSIT ACTIVITIES. The Company's primary funding source is
deposits. The Bank is a Savings Association Insurance Fund ("SAIF") insured bank
through which it obtained federal insurance for its depositors. Deposits funded
68.3% of total assets at December 31, 2001 compared to 69.2% at December 31,
2000. The current deposit product offerings include both interest bearing and
noninterest bearing demand accounts, savings accounts, and certificates of
deposit ranging in maturities from 90 days to 10 years. Deposits are obtained
from the Company's market area. All of the Company's deposits are deposits in
domestic bank offices. The Company does not accept broker deposits.

The Company attracts local deposit accounts by offering a wide variety of
features related to its accounts, competitive interest rates, and convenient
service hours at its branch office locations. The Company uses traditional
marketing methods to attract new customers and deposits, including print and
broadcast advertising, direct mail marketing, and direct calling efforts.

The Company's aggregate balance of certificates of deposit with a balance of
$100,000 or more at December 31, 2001 was $43.0 million. The scheduled
maturities of such certificates of deposit were as follows:

<TABLE>
<CAPTION>
              Over Three      Over Six       Over One      Over Two       Over Three
   Three        Months         Months          Year          Years          Years       Over
  Months       Through         Through       Through        Through        Through      Five
 and Less     Six Months      One Year      Two Years     Three Years     Five Years    Years       Total
------------ -------------  -------------- ------------- --------------  ------------- --------  ------------
                                                (In Thousands)
<S>          <C>             <C>            <C>           <C>            <C>           <C>       <C>
 $   6,414    $    8,116      $   10,326    $    6,651    $    11,176     $      311    $   -     $  42,994
============ =============  ============== ============= ==============  ============= ========  ============

</TABLE>

BORROWINGS AND BORROWING ACTIVITIES. The Company's borrowings normally include
both short-term and long-term borrowings. Like many other financial
institutions, the Company has experienced increasing difficulty in attracting
net new deposits in amounts necessary to fully fund new loan demand. The FHLB
has provided an important funding source that, when used together with deposits,
is expected to be an adequate source of funds to meet anticipated loan demand.
The Company's securities sold under agreements to repurchase are explained in
Note 9 of the Consolidated Financial Statements. The Company`s long-term debt,
which includes both borrowings from the FHLB and from other banks, is explained
in Note 10 of the Notes to the Financial Statements.

EQUITY. Stockholders' equity provides a permanent source of funding to the
Company, allows for future growth, and provides the Company with a cushion to
withstand unforeseen, adverse developments. At December 31, 2001, stockholders'
equity totaled $26.8 million, or 8.5% of total assets at such date. Federal
regulations impose minimum regulatory capital requirements on all institutions
with deposits insured by the Federal Deposit Insurance Corporation ("FDIC"). At
December 31, 2001, the Company and the Bank significantly exceeded all
applicable regulatory capital ratio requirements. Substantial restrictions exist
regarding the payment of dividends as explained in Notes 13 and 18 of the Notes
to the Financial Statements.

SUPERVISION AND REGULATION
GENERAL. The banking industry is extensively regulated under both federal and
state law. The Company is subject to regulation under the Bank Holding Company
Act of 1956 ("BHCA") and to supervision by the Federal Reserve Board ("FRB").
The BHCA requires the Company to obtain the prior approval of the FRB for bank
and non-bank acquisitions and prescribes certain limitations in connection with
acquisitions and the non-banking activities of the Company. The Company,
including its non-banking activities, is subject to regulation and examination
by the OFI and by the FRB. The Company's banking activities are subject to
regulation and examination by the FDIC and the OFI, and are also subject to
certain requirements established by the FRB.

                                       13
<PAGE>


The banking industry is affected by the monetary and fiscal policies of the FRB.
An important function of the FRB is to regulate the national supply of bank
credit to moderate recessions and to curb inflation. Among the instruments of
monetary policy used by the FRB to implement its objectives are: open-market
operations in U.S. Government securities, changes in the discount rate and the
federal funds rate (which is the rate banks charge each other for overnight
borrowings) and changes in reserve requirements on bank deposits.

FINANCIAL MODERNIZATION LEGISLATION. The Gramm-Leach-Bliley Act of 1999 (the
"GLB Act") includes a number of provisions intended to modernize and to increase
competition in the American financial services industry, including authority for
bank holding companies to engage in a wider range of non-banking activities.
Under the GLB Act, a bank holding company that elects to become a financial
holding company may engage in any activity that the FRB, in consultation with
the Secretary of the Treasury, determines by regulation or order is (i)
financial in nature, (ii) incidental to any such financial activity, or (iii)
complementary to any such financial activity and does not pose a substantial
risk to the safety or soundness of depository institutions or the financial
system generally. The GLB Act specifies certain activities that are deemed to be
financial in nature, including lending, exchanging, transferring, investing for
others, or safeguarding money or securities; underwriting and selling insurance;
providing financial, investment, or economic advisory services; underwriting,
dealing in or making a market in, securities; and any activity currently
permitted for bank holding companies by the FRB. A bank holding company may
elect to be treated as a financial holding company only if all depository
institution subsidiaries of the holding company are and continue to be
well-capitalized and well-managed and have at least a satisfactory rating under
the Community Reinvestment Act.

National banks and state banks with requisite investment authority under
applicable state law are also authorized by the GLB Act to engage, through
"financial subsidiaries", in any activity that is permissible for a financial
holding company (as described above) and any activity that the Secretary of the
Treasury, in consultation with the FRB, determines is financial in nature or
incidental to any such financial activity, except (i) insurance underwriting,
(ii) real estate development or real estate investment activities (unless
otherwise permitted by law), (iii) insurance company portfolio investments; and
(iv) merchant banking. The authority of a bank to invest in a financial
subsidiary is subject to a number of conditions, including, among other things,
requirements that the bank must be well-managed and well-capitalized (after
deducting from capital the bank's outstanding investments in financial
subsidiaries).

The GLB Act also adopts a number of consumer protections, including provisions
intended to protect privacy of bank customers' financial information and
provisions requiring disclosure of ATM fees imposed by banks on customers of
other banks.

The Company became a financial holding company in April of 2000, in order to
utilize the expanded powers offered by the GLB Act.

LOANS-TO-ONE BORROWER LIMITATIONS. The Louisiana Savings Bank Act of 1990 (the
"LSBA") imposes limitations on the aggregate amount of loans that a Louisiana
chartered savings bank can make to any one borrower. Under the LSBA, the
permissible amount of loans-to-one borrower may not exceed 15% of a savings
bank's total net worth. In addition, a savings bank may make loans in an amount
equal to an additional 10% of a savings bank's net worth if the loans are 100%
secured by readily marketable collateral. A savings bank's net worth shall be
calculated based on its last quarterly call report and consists of (i)
outstanding and unimpaired common stock; (ii) outstanding and unimpaired
perpetual preferred stock; (iii) unimpaired capital surplus, undivided profits,
capital reserves, minus intangible assets; (iv) purchased mortgage servicing
rights; and (v) mandatory convertible debt up to 20% of categories (i) through
(iv). Readily marketable collateral consists of financial instruments or
bullion, which are salable under ordinary circumstances with reasonable
promptness at fair market value or on an auction or a similarly available daily
bid and ask price market. At December 31, 2001, the Company's limit on
loans-to-one borrower under LSBA was approximately $4.2 million. At December 31,
2001, the Company's five largest loans or groups of loans-to-one borrower ranged
from $2.3 million to $3.4 million and all such loans were performing in
accordance with their terms.


                                       14
<PAGE>


FEDERAL TAXATION
The Company and the Bank are subject to the generally applicable corporate tax
provisions of the Internal Revenue Code, and the Bank is subject to certain
additional provisions of the Internal Revenue Code which apply to financial
institutions. The Company, the Bank, and the non-bank subsidiary file a
consolidated federal income tax return on the basis of a fiscal year ending on
December 31.

Retained earnings at December 31, 2001 and 2000 included approximately $7.1
million accumulated prior to January 1, 1987 for which no provision for federal
income taxes has been made, because before that date such earnings were not
subject to federal income tax. If this portion of retained earnings is used in
the future for any purpose other than to absorb bad debts, it will be added to
future taxable income, and it will become subject to federal income tax.

The net deferred tax asset at December 31, 2001 includes $3.6 million of future
deductible temporary differences. Included is $2.7 million related to
accumulated provisions for loan losses deducted from income in the Company's
financial statements over several years that have not been deducted against
federal taxable income for any tax year.

STATE TAXATION
Louisiana does not permit the filing of consolidated income tax returns. The
Company is subject to the Louisiana Corporation Income Tax based on its separate
Louisiana taxable income, and it is subject to Louisiana franchise tax. In
addition, the Bank is subject to the Louisiana Shares Tax, which is imposed on
the assessed value of its stock. The formula for deriving the assessed value is
to calculate 15% of the sum of (a) 20% of the company's capitalized earnings,
plus (b) 80% of the company's taxable stockholders equity, and to subtract from
that figure 50% of the company's real and personal property assessment. Various
items are also subtracted in calculating a company's capitalized earnings. The
Louisiana Shares Tax and franchise tax are included in non-interest expense.

AVAILABLE INFORMATION
The Company's common stock trades on the AMEX under the symbol "ANA" and is
listed as Acadiana Bancshares, Inc. in THE WALL STREET JOURNAL and under similar
designations in other daily newspapers. The Company files annual reports (Form
10-K) and quarterly reports (Form 10-Q) with the Securities and Exchange
Commission ("SEC"). The SEC maintains an internet site that contains these and
other reports filed by the Company including proxy and information statements at
http://www.sec.gov. Information about the Company is also available at its
website found at www.acadianabancshares.com.


ITEM 2.  DESCRIPTION OF PROPERTY

The management of the Company considers all facilities, both owned and leased,
to be suitable and adequate for their intended purposes. The following table
sets forth certain information related to the Company's offices at December 31,
2001.


                                       15
<PAGE>


<TABLE>
<CAPTION>
                                                                   Net Book Value of
                                                                     Premises and
                                         Owned or                    Equipment at
                                          Leased                   December 31, 2001
                                        ------------             --------------------
                                                                    (In Thousands)
<S>                                    <C>                       <C>
Main Office:
 200  West Congress
 Lafayette, Louisiana  70501              Owned                     $  5,072

Branch Offices:
 Northside Office
 2601 Moss Street
 Lafayette, Louisiana  70501              Owned                         432

 Southside Office
 3701 Johnston Street
 Lafayette, Louisiana  70503              Owned                         143

 Broadmoor Office
 5301 Johnston Street
 Lafayette, Louisiana  70503              Owned                         203

 New Iberia Office
 230 West Main Street
 New Iberia, Louisiana  70560             Owned                         447

Loan Production Office:
 Eunice Loan Production Office
 136 South Third Street
 Eunice, Louisiana  70535                 Leased                          6
                                                               -----------------
                                                                $     6,303
                                                               =================
</TABLE>


In December of 2000, the Company sold its former headquarters and Bank's main
office building located at 101 West Vermilion Street, Lafayette, Louisiana, and
leased back those facilities through March 31, 2001. On March 3, 2001, the
Company moved its headquarters and the Bank's main office from 101 West
Vermilion Street, Lafayette, Louisiana to 200 West Congress Street, Lafayette,
Louisiana.


ITEM 3.  LEGAL PROCEEDINGS

The Company is involved in routine legal proceedings occurring in the ordinary
course of business, which, in the aggregate, are believed by management to be
immaterial to the financial condition of the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable.


                                       16
<PAGE>


PART 2

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The information required herein, to the extent applicable, is incorporated by
reference from page 53 of the Registrant's 2001 Annual Report to Stockholders
("Annual Report").

ITEM 6.   SELECTED FINANCIAL DATA

The Information required herein is incorporated by reference from page 6 of the
Registrant's 2001 Annual Report.

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The Information required herein is incorporated by reference from pages 7
through 21 of the Registrant's 2001 Annual Report.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required herein is incorporated by reference from pages 17
through 20 of the Registrant's 2001 Annual Report.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required herein is incorporated by reference from pages 22
through 51 of the Registrant's 2001 Annual Report.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES

         Not Applicable.

PART III.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required herein is incorporated by reference from pages 2
through 3, and page 10 of the Registrant's definitive proxy statement for the
2002 Annual Meeting of Stockholders ("Proxy Statement").

ITEM 11.  EXECUTIVE COMPENSATION

The information required herein is incorporated by reference from pages 8
through 12 of the Registrant's Proxy Statement.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required herein is incorporated by reference from pages 6
through 7 of the Registrant's Proxy Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required herein is incorporated by reference from pages 10
through 11 of the Registrant's Proxy Statement.


                                       17
<PAGE>


PART IV.

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)      Documents Filed as Part of this Report.

(1)      The following financial statements are incorporated by reference from
         Item 8 hereof (see Exhibit 13):

         Report of Independent Auditors

         Consolidated Balance Sheets as of December 31, 2001 and 2000

         Consolidated Income Statements for the Fiscal Years Ended December 31,
         2001, 2000 and 1999

         Consolidated Statements of Stockholders' Equity for the Years Ended
         December 31, 2001, 2000 and 1999

         Consolidated Statements of Cash Flows for the Years Ended December 31,
         2001, 2000 and 1999

         Notes to Consolidated Financial Statements

(2)      All schedules for which provision is made in the applicable accounting
         regulation of the SEC are omitted because of the absence of conditions
         under which they are required or because the required information is
         included in the consolidated financial statements and related notes
         thereto.

(3)      The following exhibits are filed as part of this Form 10-K and this
         list includes the Exhibit Index.



                                  EXHIBIT INDEX

<TABLE>
<S>      <C>
3.1 (1)  Articles of Incorporation of Acadiana Bancshares, Inc.
3.2 (1)  Bylaws of Acadiana Bancshares, Inc.
4.0 (1)  Form of Stock Certificate of Acadiana Bancshares, Inc.
10.1 (2) Stock Option Plan
10.2 (2) 1996 Recognition and Retention Plan and Trust Agreement for Employees
         and Non-Employee Directors
10.3 (3) Employment Agreement between LBA Savings Bank and Gerald G. Reaux, Jr.
10.4 (4) Form of Severance Agreement between Acadiana Bancshares, Inc., LBA
         Savings Bank and Lawrence Gankendorff, Wayne Bares, Gregory King,
         James J. Montelaro, Mary Anne Bertrand, Emile E. Soulier, III and
         Thomas F. Debaillon.
10.5 (5) Form of Amendment No. 1 to Severance Agreements
13.0     2001 Annual Report to Stockholders
21.0     Subsidiaries of the Registrant - Reference is made to "Item 1.
         "Business" for the required information
23.1     Consent of Castaing, Hussey & Lolan, LLC

</TABLE>

-------------------

(1)      Incorporated herein by reference from the Registration Statement on
         Form S-1 (Registration No. 333-1396) filed by the Registrant with the
         SEC on February 15, 1996, as subsequently amended.
(2)      Incorporated herein by reference from the definitive proxy statement,
         dated December 16, 1996 filed by the Registrant with the SEC
         (Commission File No. 1-14364).
(3)      Incorporated herein by reference to the Annual Report on Form 10-K
         (File No. 1-14364) filed by the Registrant with the SEC on March 31,
         1997.
(4)      Incorporated herein by reference to the Annual Report on Form 10-K
         filed by the Registrant with the SEC on March 28, 2001.
(5)      Incorporated herein by reference to the Annual Report on Form 10-K
         filed by the Registrant with the SEC on March 29, 2000.

(b)      Reports on Form 8-K
          not applicable.


                                       18
<PAGE>



                                   SIGNATURES

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

                                    ACADIANA BANCSHARES, INC.

March 27, 2002                      By:  /s/ Gerald G. Reaux, Jr.
                                         ----------------------------
                                         Gerald G. Reaux, Jr.
                                         Chairman, President and Chief Executive
                                         Officer

         Pursuant to the requirements of the Securities and Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

Name                                           Title                                            Date
---------------------------------------------- ------------------------------------------------ ----------------------
<S>                                            <C>                                              <C>
                                               Chairman of the Board, President and
/s/ Gerald G. Reaux, Jr.                       Chief Executive Officer                          March 27, 2002
----------------------------------------------
Gerald G. Reaux, Jr.


/s/ Lawrence Gankendorff
----------------------------------------------
Lawrence Gankendorff                           Vice Chairman of the Board                       March 27, 2002


/s/ Albert W. Beacham, M.D.
----------------------------------------------
Albert W. Beacham, M.D.                        Director                                         March 27, 2002


/s/ James J. Monelaro
----------------------------------------------
James J. Montelaro                             Executive Vice President and Director            March 27, 2002


/s/ John H. DeJean
----------------------------------------------
John H. DeJean                                 Director                                         March 27, 2002


/s/ Thomas S. Ortego
----------------------------------------------
Thomas S. Ortego                               Director                                         March 27, 2002


/s/ Donald J. O'Rourke, Sr.
----------------------------------------------
Donald J. O'Rourke, Sr.                        Director                                         March 27, 2002


/s/ Kaliste J. Saloom, Jr.
----------------------------------------------
Kaliste J. Saloom, Jr.                         Director                                         March 27, 2002


/s/ Emile E. Soulier, III                      Senior Vice President and Chief
---------------------------------------------- Financial Officer (principal financial           March 27, 2002
Emile E. Soulier, III                          and accounting officer)

</TABLE>

                                       19