STOCK INFORMATION

         The Company's stock is not listed on any security exchange.  Therefore,
Algiers  Bancorp,  Inc.  does not have  exchange data that provides high and low
stock prices. The most recent sale of the Company's stock was $11.50 per share.

         There was a cash  dividend  declared for the fourth  quarter of 1996 in
the  amount of $0.05  per share to  stockholders  of record on  January  7, 1997
payable on January 14, 1997.

         At  December  31,  1996  Algiers  Bancorp,   Inc.  had  648,025  shares
outstanding.

REGISTRAR AND TRANSFER COMPANY

         Shareholders  requesting  a change of address,  records or  information
about lost certificates should contact:

         Registrar and Transfer Company             Telephone (908) 272-8511
         10 Commerce Drive                                    (800) 346-6084-NYC
         Cranford, New Jersey 07016-3572            FAX  (908) 272-1006




LEGAL COUNSEL                             INDEPENDENT AUDITORS
 Elias, Matz, Tiernan and Herrick, L.L.P.  LaPorte, Sehrt, Romig & Hand
 Suite 1200                                A Professional Accounting Corporation
 734 15th Street, N.W.                     800 Two Lakeway Center
  Washington, D.C. 20005                   3850 N. Causeway Blvd.
                                           Metairie, LA  70002

Buchler and Buchler
P.O. Box 127
Metairie, LA 70004

INFORMATION
         Shareholders  and  other  individuals  seeking  information  about  the
Company, should contact Dennis J. McCluer, Vice President at (504) 367-8221.

DUPLICATE MAILINGS
         The  Company  is  required  to mail  information  to  each  name on its
shareholder list, even if it means sending duplicates.  Shareholders  wishing to
eliminate  duplicate  mailings  should send a written  request to Registrar  and
Transfer  Company at the address on this page  indicating  which names should be
removed. This will not affect dividend or proxy mailings.
<PAGE>
TO OUR FELLOW SHAREHOLDERS:

         In  1926  Algiers  Homestead  Association  was  organized  as  a  state
chartered  mutual  building and loan company.  Its purpose was to receive public
deposits in the form of savings accounts and invest those funds in single family
residential  mortgages.  Management's  conservative  philosophy of operating the
association  with this intended  purpose and  retaining  earnings in the form of
reserves  supported  Algiers  through  the  Great  Depression  as well as  other
difficult economic times.

         With all of the changes that impacted the banking and thrift industries
during the 1980's,  Algiers  continued  to prosper and as a result is one of the
few  surviving  savings and loans in the New  Orleans  market.  Recognizing  the
continuing  dynamics of the financial services industry,  the Board of Directors
chose to convert  Algiers from a state chartered  mutual  association to a state
chartered stock  association.  A holding  company,  Algiers  Bancorp,  Inc., was
formed to become the parent of the wholly  owned  subsidiary  Algiers  Homestead
Association.

         Pursuant to the Plan of Conversion adopted by the Board of Directors on
January  16,  1996,  the  Company   commenced  a   Subscription   Offering  with
nontransferable   subscription   rights  being  granted  to  depositors  of  the
association,  together with a concurrent Community Offering of the common stock.
The conversion was completed on July 8, 1996 with 648,025 shares of common stock
being sold at $10 per share and began trading  through  selected  brokers.  This
resulted in additional capital, net of expenses, totaling $6,114,379.  Given the
conversion  proceeds,  existing surplus and retained earnings for 1996,  Algiers
Bancorp, Inc. shows total capital of $9,800,000 at December 31, 1996.

         1995 was  historic  in nature to all  thrifts  that are  insured by the
Savings  Association  Insurance Fund ("SAIF").  In order to bring the SAIF up to
its legally mandated level of reserves,  each association was charged a one-time
assessment  which in the case of Algiers  amounted to $241,000 before taxes. Had
the  association  not been required to make this payment,  income before federal
income tax expense would have been $463,000 and federal  income taxes would have
been approximately $137,000, leaving a net income of $326,000. Net loan balances
outstanding  decreased  $470,000  or 4.85%  during this 12 month  period.  Total
assets for the Company  increased 13.63% from  $42,450,000 to $ 48,239,000.  The
Company's return on average assets was .34% compared to .41% in 1995.
<PAGE>

         Algiers  non-performing  assets  to total  loans  receivable  and total
assets stood at .53% and .20% respectively, at December 31, 1996.

         1997 will offer additional  challenging  opportunities  for the banking
industry given the continuing legislation being considered in Washington.

         We look  forward to  continuing  our  expansion of the loan program and
have dedicated  additional  resources to this effort.  Also, we are  selectively
implementing new financial products to maintain our competitive effectiveness.

         Overall  given  Algiers'  strong ties to the local  community,  the new
corporate structure and the overall outlook for the financial industry,  Algiers
should continue to do well.

         In  making  our  first  annual  report  to  shareholders  we take  this
opportunity to express our deepest  appreciation for your continued interest and
support.

Sincerely,


/s/Hugh E. Humphrey, Jr.
------------------------
Hugh E. Humphrey, Jr.
Chairman and President
<PAGE>
<TABLE>
<CAPTION>
                                    Algiers Bancorp, Inc.
                                    Financial Highlights
                        (Dollars in Thousands, except per share data)

                                                                    At December 31,
                                                       ------------------------------------ 
                                                          1996          1995          1994
                                                          ----          ----          ----
<S>                                                    <C>           <C>           <C>
SELECTED FINANCIAL DATA:

Total Assets .......................................   $ 48,239      $ 42,450      $ 42,149
Cash and cash equivalents ..........................      1,722         1,452         1,452
Investment securities ..............................      3,292         1,922         2,739
Mortgage-backed securities .........................     32,887        28,149        27,357
Loans receivable, net ..............................      9,220         9,690        10,241
Deposits ...........................................     36,635        38,203        37,825
Federal Home Loan Bank Advances ....................      1,500          --             600
Stockholders Equity/Retained Earnings ..............      9,799         4,040         3,538
Book Value Per Share ...............................      15.12          --            --
Market Price Per Share .............................      11.50          --            --
Full Service Offices ...............................          2             2             2

<CAPTION>

                                                               Year Ended December 31,
                                                       ------------------------------------ 
                                                           1996          1995          1994
                                                           ----          ----          ----
<S>                                                    <C>           <C>           <C>
SELECTED OPERATING DATA:
Total Interest Income ..............................   $  3,059      $  2,670         2,574
Total Interest Expense .............................      1,835         1,740         1,507
Net Interest Income ................................      1,223           930         1,067
Provision for (Recovery of) Loan Losses ............         (4)          (23)          (15)
Net Interest Income after Provision
      for (Recovery of)Loan Losses .................      1,227           953         1,083
Total Noninterest Income ...........................        195           235           152
Total Noninterest Expense ..........................      1,200           956           924
Income Before Income Taxes .........................        222           232           311
Income Taxes .......................................         66            62            62
Net Income .........................................        156           170           249

SELECTED OPERATING RATIOS:
Return on average assets ...........................       0.34%         0.41%         0.56%
Return on average equity ...........................       2.86%         4.44%         6.66%
Average equity to average assets ...................      11.93%         9.20%         8.46%
Dividend Payout Ratio** ............................      19.23%         --            --
Equity to Total Assets at End of Period ............      20.31%         9.52%         8.39%
Risk Based Capital Ratio ...........................      54.45%        35.06%

**Reflects one quarterly dividend since stock conversion on July 8, 1996
</TABLE>
<PAGE>
                    [LETTERHEAD LaPorte Sehrt Romig & Hand]
The Board of Directors

Algiers Bancorp, Inc. & Subsidiaries

                          Independent Auditor's Report 

         We have audited the accompanying  consolidated  statements of financial
condition of Algiers  Bancorp,  Inc. and its  wholly-owned  subsidiary,  Algiers
Homestead  Association and its  majority-owned  subsidiary  Jefferson  Community
Lending,  LLC as of  December  31, 1996 and 1995,  and the related  consolidated
statements of operations,  changes in stockholders'  equity,  and cash flows for
the years then ended.  These financial  statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

         We conducted our audits in accordance with generally  accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material respects, the consolidated financial position of Algiers
Bancorp, Inc. and its wholly-owned subsidiary, Algiers Homestead Association and
its majority-owned  subsidiary  Jefferson Community Lending,  LLC as of December
31, 1996 and 1995, and the results of their  operations and their cash flows for
the years  ended  December  31,  1996 and 1995,  in  conformity  with  generally
accepted accounting principles.



                                           /s/LaPorte Sehrt Romig & Hand
                                           -----------------------------
                                           LaPorte Sehrt Romig & Hand
                                           A Professional Accounting Corporation

February 28, 1997
Metairie, Louisiana
<PAGE>
<TABLE>
<CAPTION>
                           ALGIERS BANCORP, INC. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                          ASSETS

                                                                      December 31,
                                                               --------------------------- 
                                                                   1996            1995
                                                               -----------     ----------- 
<S>                                                            <C>             <C>
Cash and Cash Equivalents (Note A) .......................     $ 1,721,810     $ 1,452,111
Investments Available-for-Sale - at Fair Value (Note D) ..       2,467,344         697,396
Investment Securities Held-to-Maturity -
    Fair Value of $823,529 and $1,203,580 at
    December 31, 1996 and 1995, Respectively  (Note C) ...         825,000       1,225,000
Loans Receivable - Net (Note F) ..........................       9,219,933       9,690,308
Mortgage-Backed Securities - Available-for-Sale -
    at Fair Value (Note G) ...............................       9,077,210       7,688,409
Mortgage-Backed Securities - Held-to-Maturity - Fair Value
    of $23,229,360 and $19,883,326 at December 31, 1996
    and 1995, Respectively (Note G) ......................      23,810,104      20,460,589
Stock in Federal Home Loan Bank ..........................         455,500         429,800
Accrued Interest Receivable (Note H) .....................         265,449         229,105
Real Estate Owned - Net (Note I) .........................          44,713          92,316
Office Properties and Equipment, at Cost - Furniture,
    Fixtures and Equipment, Less Accumulated
    Depreciation of $187,210 and $165,267 at
    December 31, 1996 and 1995, Respectively (Note J) ....         231,263         227,216
Deferred Charges .........................................          18,059           5,110
Deferred Tax Asset (Note K) ..............................          22,855          59,337
Income Tax Receivable ....................................          74,640         191,780
Other Assets .............................................           5,458           1,439
                                                               -----------     -----------

           Total Assets ..................................     $48,239,338     $42,449,916
                                                               ===========     ===========




The accompanying notes are an integral part of these financial statements.
</TABLE>
                                       2
<PAGE>
<TABLE>
<CAPTION>
                           LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                      December 31,
                                                            ------------------------------- 
                                                                 1996              1995
                                                            ------------      -------------
<S>                                                         <C>               <C>
LIABILITIES
    Deposits (Note L) .................................     $ 36,635,028      $ 38,203,050
    Advance from Federal Home Loan Bank (Note M) ......        1,500,000              --
    Advance Payments from Borrowers for
       Insurance and Taxes ............................          237,010           152,227
    Accrued Interest Payable on Depositors' Accounts ..              908             2,656
    Dividends Payable .................................           32,401              --
    Other Liabilities .................................           35,209            52,293
                                                            ------------      ------------
           Total Liabilities ..........................       38,440,556        38,410,226
                                                            ------------      ------------

STOCKHOLDERS' EQUITY
    Preferred Stock - Par Value $.01
       0 Shares Issued and Outstanding in 1996 and 1995             --                --
    Common Stock - Par Value $.01
       648,025 Shares Issued and Outstanding in 1996 ..            6,480              --
    Additional Paid-in Capital ........................        6,107,899              --
    Unearned ESOP Shares ..............................         (492,499)             --
    Retained Earnings .................................        4,200,584         4,077,036
    Unrealized Loss on Securities Available-for-Sale,
       Net of Applicable Deferred Income Tax ..........          (23,682)          (37,346)
                                                            ------------      ------------

           Total Stockholders' Equity .................        9,798,782         4,039,690
                                                            ------------      ------------

           Total Liabilities and Stockholders' Equity .     $ 48,239,338      $ 42,449,916
                                                            ============      ============



The accompanying notes are an integral part of these financial statements.
</TABLE>
                                       3
<PAGE>
<TABLE>
<CAPTION>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                         For The Years Ended
                                                           December 31,
                                                     -------------------------- 
                                                        1996            1995
                                                     ----------    ----------- 
<S>                                                  <C>            <C>
INTEREST INCOME
    Loans ......................................     $  775,762     $  806,397     
    Mortgage-Backed Securities .................      2,008,319      1,702,312
    Investment Securities ......................        248,637        134,183
    Other Interest-Earning Assets ..............         25,934         26,771
                                                     ----------     ----------
          Total Interest Income ................      3,058,652      2,669,663
                                                     ----------     ----------

INTEREST EXPENSE
    Deposits ...................................      1,817,072      1,734,511
    FHLB Advances ..............................         18,189          5,632
                                                     ----------     ----------

          Total Interest Expense ...............      1,835,261      1,740,143
                                                     ----------     ----------

NET INTEREST INCOME BEFORE
    CREDIT FOR LOAN LOSSES .....................      1,223,391        929,520

CREDIT FOR LOAN LOSSES (Note F) ................          3,667         23,951
                                                     ----------     ----------

NET INTEREST INCOME AFTER
    CREDIT FOR LOAN LOSSES .....................      1,227,058        953,471
                                                     ----------     ----------

NON-INTEREST INCOME
    Service Charges and Fees ...................         68,061         70,534
    Lawsuit Proceeds ...........................           --           95,838
    Recapture of Allowance on GIC Bonds (Note E)         66,537         61,566
    Gain on Sale of Investments ................         29,280           --
    Miscellaneous Income .......................         31,277          7,134
                                                     ----------     ----------

          Total Non-Interest Income ............        195,155        235,072
                                                     ----------     ----------



The accompanying notes are an integral part of these financial statements.
</TABLE>
                                       4
<PAGE>
<TABLE>
<CAPTION>
                          ALGIERS BANCORP, INC. & SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)


                                                         For The Years Ended
                                                             December 31,
                                                      ------------------------- 
                                                          1996           1995
                                                      ----------     ---------- 
<S>                                                   <C>            <C>

NON-INTEREST EXPENSES
    Compensation and Benefits ...................     $  456,180     $  435,457
    Occupancy and Equipment .....................        118,343        112,979
    Computer ....................................         49,392         72,097
    SAIF Assessment .............................        241,146           --
    Deposit Insurance Premium ...................         90,347         86,019
    Professional Services .......................         32,846         34,789
    FHLB Service Charges ........................         39,386         30,673
    Provision (Credit)  for Possible Real Estate
       Write-Downs (Note I) .....................          3,626        (13,064)
    Loss on Sale of Real Estate Owned ...........          5,053           --
    Real Estate Owned Expense - Net .............          2,910         31,775
    Other .......................................        161,209        165,759
                                                      ----------     ----------

                                                       1,200,438        956,484
INCOME BEFORE FEDERAL
    INCOME TAX EXPENSE ..........................        221,775        232,059

FEDERAL INCOME TAX EXPENSE (Note K) .............         65,826         62,548
                                                      ----------     ----------

NET INCOME ......................................     $  155,949     $  169,511
                                                      ==========     ==========

EARNINGS PER SHARE ..............................     $     0.26     $     --
                                                      ==========     ==========  



The accompanying notes are an integral part of these financial statements.
</TABLE>
                                       5
<PAGE>
<TABLE>
<CAPTION>
                                                ALGIERS BANCORP, INC. & SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                           For The Years Ended December 31, 1996 and 1995



                                                            Additional      Unearned                     Sale - Net         Total
                                                Common       Paid-in          ESOP        Retained      of Applicable      Retained
                                                 Stock       Capital         Shares        Earnings     Deferred Taxes     Earnings
                                                 -----       -------         ------        --------     --------------     --------
<S>                                             <C>        <C>            <C>            <C>            <C>             <C>     
BALANCE - December 31, 1994 .................   $   --     $      --      $      --      $ 3,907,525    $  (339,469)    $ 3,568,056

Net Income ..................................       --            --             --          169,511           --           169,511

Changes in Unrealized (Loss) on
     Securities Available-for-Sale, Net of
     Applicable Deferred Income Taxes
     of $190,178 ............................       --            --             --             --          302,123         302,123
                                                --------   -----------    ----------     -----------    -----------     -----------
BALANCE - December 31, 1995 .................       --            --             --        4,077,036        (37,346)      4,039,690

Net Income ..................................       --            --             --          155,949           --           155,949

Dividends Declared ..........................       --            --             --          (32,401)          --           (32,401)

Common Stock Issuance - 648,025 shares at
     $.01 per share issued at $10 per share .      6,480     6,473,770           --             --             --         6,480,250

Costs of Conversion from a Mutual Association
     to a Stock Association .................       --        (369,759)          --             --             --          (369,759)

Shares allocated to the ESOP Plan ...........       --            --         (518,420)          --             --          (518,420)

Shares released for allocation ..............       --           3,888         25,921           --             --            29,809

Changes in Unrealized Gain on
     Securities Available-for-Sale, Net of
     Applicable Deferred Income Taxes
     of $12,200 .............................       --            --             --             --           13,664          13,664
                                                --------   -----------    ----------     -----------    -----------     -----------

BALANCE - December 31, 1996 .................   $  6,480   $ 6,107,899    $  (492,499)   $ 4,200,584    $   (23,682)    $ 9,798,782
                                                ========   ===========    ===========    ===========    ===========     ===========



                             The accompanying notes are an integral part of these financial statements.
</TABLE>
                                                   6
<PAGE>
<TABLE>
<CAPTION>
                                ALGIERS BANCORP, INC. & SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                          For The Years Ended
                                                                              December 31,
                                                                      ---------------------------- 
                                                                          1996             1995
                                                                      -----------      ----------- 
<S>                                                                   <C>              <C>

CASH FLOWS FROM OPERATING ACTIVITIES
    Net Income ..................................................     $   155,949      $   169,511
    Adjustments to Reconcile Net Income to Net
       Cash Provided by Operating Activities:
          Depreciation and Amortization .........................          21,943           20,127
          Premium Amortization Net of Discount Accretion ........         127,706          135,264
          Loss on Sale of Real Estate ...........................           5,053             --
          Gain on Sale of Investments ...........................         (29,280)            --
          ESOP expense ..........................................          29,809             --
          (Decrease)  in Accrued Interest Payable ...............          (1,748)          (9,143)
          Increase (Decrease) in Other Liabilities ..............         (17,086)           5,346
          (Increase) in Accrued Interest Receivable .............         (36,344)          (6,057)
          (Decrease) in Income Tax Payable ......................            --            (10,500)
          Credit for Loan Losses ................................          (3,667)         (23,951)
          Provision (Credit) for Losses on Real Estate Owned ....           3,626          (13,064)
          (Increase) Decrease in Other Assets ...................          (4,020)           4,261
          (Increase) Decrease in Deferred Loan Fees .............         (12,949)           3,583
          Decrease (Increase) in Prepaid Income Taxes ...........         117,140         (191,780)
          Decrease in Deferred Income Taxes .....................          29,447          184,849
                                                                      -----------      -----------  
             Net Cash Provided by Operating Activities ..........         385,579          268,446
                                                                      -----------      -----------  
CASH FLOWS FROM INVESTING ACTIVITIES
    Maturities of Investment Securities - Held-to-Maturity ......         400,000           99,000
    Purchases of Investment Securities - Available-for-Sale .....      (3,022,211)        (197,336)
    Maturities of Investment Securities - Available-for-Sale ....       1,247,396          914,040
    Purchases of Mortgage-Backed Securities - Held-to-Maturity ..      (5,785,902)      (1,184,316)
    Maturities of Mortgage-Backed Securities - Held-to-Maturity .       2,373,284        1,901,024
    Purchases of Mortgage-Backed Securities - Available-for-Sale       (3,424,131)      (2,986,118)
    Maturities of Mortgage-Backed Securities - Available-for-Sale       1,357,840        1,751,589
    Proceeds From Sale of Investment ............................         667,736             --
    Principal Collected on Loans ................................       2,631,328        1,846,352
    Loans Made to Customers .....................................      (2,157,285)      (1,274,887)
    Non-Cash Dividend - FHLB ....................................         (25,700)         (26,500)
    Purchase of Furniture and Fixtures ..........................         (25,990)         (32,443)
    Proceeds from Sales of Foreclosed Real Estate ...............          38,923           58,041
                                                                      -----------      -----------  

             Net Cash Provided by (Used in) Investing Activities       (5,724,712)         868,446
                                                                      -----------      -----------  

            The accompanying notes are an integral part of these financial statements.
</TABLE>
                                                 7
<PAGE>
<TABLE>
<CAPTION>
                                ALGIERS BANCORP, INC. & SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                        For The Years Ended
                                                                             December 31,
                                                                     ---------------------------- 
                                                                         1996              1995
                                                                     -----------      ----------- 
<S>                                                                  <C>              <C>

CASH FLOWS FROM FINANCING ACTIVITIES
    Net Increase (Decrease) in Deposits ........................      (1,568,022)         377,599
    Net Increase in Advances from Borrowers
       for Taxes and Insurance .................................          84,783           36,643
    Proceeds from Federal Home Loan Bank Advance ...............       3,000,000             --
    Repayment of Federal Home Loan Bank Advance ................      (1,500,000)        (600,000)
    Sale of Common Stock .......................................           6,480             --
    Contribution of Additonal Paid-in Capital ..................       6,104,011             --
    Loan to ESOP to purchase stock .............................        (518,420)            --
                                                                     -----------      -----------
             Net Cash Provided by (Used in) Financing Activities       5,608,832         (185,758)
                                                                     -----------      -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS ......................         269,699          951,134

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR ..................       1,452,111          500,977
                                                                     -----------      -----------

CASH AND CASH EQUIVALENTS - END OF YEAR ........................     $ 1,721,810      $ 1,452,111
                                                                     ===========      ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
    INFORMATION
       Cash Paid During the Year for:
          Interest .............................................     $ 1,818,820      $ 1,743,654
          Income Taxes .........................................     $    30,000      $    62,000

SUPPLEMENTAL DISCLOSURE OF NON-CASH
    TRANSACTIONS
       Transfers from Loans to Real Estate
          Acquired Through Foreclosure .........................     $      --        $     6,000
       Donation of Real Estate Owned ...........................     $      --        $    30,000
       Dividends Declared ......................................     $    32,401      $      --


The accompanying notes are an integral part of these financial statements.
</TABLE>
                                       8
<PAGE>
                                ALGIERS BANCORP, INC. & SUBSIDIARIES
                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A
         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         NATURE OF OPERATIONS
                  Algiers Bancorp, Inc. was organized as a Louisiana corporation
         on  February  5, 1996 for the  purpose of engaging in any lawful act or
         activity  for which a  corporation  may be formed  under the  Louisiana
         Business  Corporation Law, as amended.  Other than steps related to the
         reorganization  described below,  the Company was essentially  inactive
         until July 8, 1996, when it acquired Algiers Homestead Association in a
         business  reorganization  of entities  under common control in a manner
         similar to a pooling of  interest.  Algiers  Homestead  Association  is
         engaged in the  savings and loan  industry.  The  acquired  association
         became  a  wholly  owned  subsidiary  of the  Corporation  through  the
         exchange of 1,000 shares of common stock which was all the  outstanding
         stock of the  acquired  Association.  On  December  23,  1996,  Algiers
         Bancorp, Inc. entered into a limited liability company partnership when
         it acquired a majority interest in Jefferson  Community  Lending,  LLC.
         Jefferson  Community  Lending is engaged in the  business  of  consumer
         lending.  The accompanying  financial  statements for 1996 are based on
         the assumption  that the companies were combined for the full year, and
         the  financial  statements  of prior  years have been  restated to give
         effect to the combination.

 .        PRINCIPLES OF CONSOLIDATION
                  The accompanying consolidated financial statements include the
         accounts  of the  Company  and  its  wholly-owned  subsidiary,  Algiers
         Homestead  Association  and its  majority-owned  subsidiary,  Jefferson
         Community  Lending,  LLC. In consolidation,  significant  inter-company
         accounts, transactions, and profits have been eliminated.

         BASIS OF FINANCIAL STATEMENT PRESENTATION
                  The financial statements have been prepared in conformity with
         generally accepted accounting principles.

                  Material  estimates  that  are  particularly   susceptible  to
         significant  change  relate to the  determination  of the allowance for
         losses on loans and  valuation  of real estate  acquired in  connection
         with  foreclosures  or in satisfaction of loans. In connection with the
         determination  of the allowances for losses on foreclosed  real estate,
         management obtains independent appraisals for all properties.

                  While  management  uses  available  information  to  recognize
         losses on loans and  foreclosed  real estate,  future  additions to the
         allowances  may  be  necessary  based  on  changes  in  local  economic
         conditions.  In addition,  regulatory agencies,  as an integral part of
         their  examination  process,   periodically  review  the  Association's
         allowances  for  losses  on loans  and  foreclosed  real  estate.  Such
         agencies  may require the  Association  to  recognize  additions to the
         allowances based on their judgments about information available to them
         at the time of their examination.

                                       9
<PAGE>
NOTE A
         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         INVESTMENT SECURITIES
                  Investment  securities  that  management  has the  ability and
         intent to hold to  maturity  are  classified  as  held-to-maturity  and
         carried at cost,  adjusted for amortization of premium and accretion of
         discounts  using the  straight-line  method  which is a departure  from
         generally accepted  accounting  principles,  but the difference between
         this method and the  interest  method  required by  generally  accepted
         accounting principles is not material. Marketable securities classified
         as  available-for-sale  are  carried  at fair  value in 1996 and  1995.
         Unrealized  gains  and  losses  on  securities  available-for-sale  are
         recognized  as direct  increases  or  decreases  in  retained  earnings
         effective December 31, 1995 in accordance with the adoption of FAS 115.
         Cost of securities sold is recognized using the specific identification
         method.

         MORTGAGE-BACKED SECURITIES
                  Mortgage-backed  securities represent  participating interests
         in pools of first mortgage loans  originated and serviced by issuers of
         the  securities.  Mortgage-backed  securities  are  carried  at  unpaid
         principal  balances,  adjusted  for  unamortized  premiums and unearned
         discounts.   Premiums  and  discounts   are  amortized   using  methods
         approximating   the  interest  method  over  the  remaining  period  to
         contractual  maturity.  Management  intends and has the ability to hold
         such securities, which management has classified as "held-to-maturity",
         to maturity.  Should any be sold, cost of securities sold is determined
         using  the  specific   identification   method.  Other  mortgage-backed
         securities are classified as available-for-sale and are carried at fair
         value.

         LOANS
                  Loans  are  stated  at  unpaid  principal  balances,  less the
         allowance  for loan  losses,  net  deferred  loan  fees,  and  unearned
         interest and discounts.

                  Loan origination  fees, as well as certain direct  origination
         costs,  are deferred and amortized as a yield adjustment over the lives
         of the related  loans using the interest  method.  Commitment  fees and
         costs relating to  commitments,  the likelihood of exercise of which is
         remote,  are recognized  over the commitment  period on a straight-line
         basis, if material. If the commitment is subsequently  exercised during
         the commitment period, the remaining unamortized  commitment fee at the
         time  of  exercise  is  recognized  over  the  life  of the  loan as an
         adjustment of yield.

                  Loans are placed on non-accrual  when principal or interest is
         delinquent for 90 days or more. Any unpaid interest  previously accrued
         on those loans is reversed  from income,  and  thereafter,  interest is
         recognized only to the extent of payments received.

                  A  loan  is  considered   impaired  when,   based  on  current
         information  and events,  it is probable that a creditor will be unable
         to collect all amounts due  according to the  contractual  terms of the
         loan  agreement.  Interest  payments  on impaired  loans are  typically
         applied to principal unless  collectibility  of the principal amount is
         fully assured,  in which case interest is recognized on the cash basis.
         Interest may be recognized  on the accrual  basis for certain  troubled
         debt restructurings.

                                       10
<PAGE>
NOTE A
         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         LOANS (Continued)

                  The  allowance for loan losses is maintained at a level which,
         in  management's  judgment,  is  adequate  to absorb  potential  losses
         inherent in the loan portfolio. The amount of the allowance is based on
         management's  evaluation of the  collectibility  of the loan portfolio,
         including the nature of the portfolio, credit concentrations, trends in
         historical  loss  experience,  specific  impaired  loans,  and economic
         conditions.

         OFFICE PROPERTY AND EQUIPMENT
                  Land is carried at cost;  office  property and  equipment  are
         carried at cost less accumulated depreciation. Depreciation is computed
         using the  straight-line  method,  over the  estimated  useful lives of
         those properties and equipment acquired prior to 1981.

                  Property and equipment  acquired  after 1980, but before 1987,
         are depreciated under the Accelerated Cost Recovery System.  Properties
         and equipment  acquired after 1986 are  depreciated  under the Modified
         Accelerated Cost Recovery System.  The depreciation under these methods
         does not differ  materially  from that  calculated in  accordance  with
         generally accepted accounting principles.

                  When these  assets are retired or  otherwise  disposed of, the
         cost and related  accumulated  depreciation  or amortization is removed
         from the  accounts,  and any  resulting  gain or loss is  reflected  in
         income for the period.

         FORECLOSED REAL ESTATE
                  Foreclosed real estate includes formally foreclosed  property.
         At the time of  foreclosure,  foreclosed real estate is recorded at the
         lower  of the  Association's  cost  or the  asset's  fair  value,  less
         estimated  costs to sell,  which becomes the property's new basis.  Any
         write-downs  are charged to the allowance for losses on foreclosed real
         estate.  Costs  incurred  in  maintaining  foreclosed  real  estate are
         included in income (loss) on foreclosed real estate.

         INCOME TAXES
                  Effective  January  1,  1994,  the  Company  adopted  FAS 109,
         "Accounting  for Income Taxes." Under FAS 109, the liability  method is
         used in accounting for income taxes.

                  Income   taxes  are  provided  for  the  tax  effects  of  the
         transactions  reported in the financial statements and consist of taxes
         currently due plus deferred  taxes related to  differences  between the
         basis of assets and liabilities for financial and income tax reporting.
         The deferred tax assets and liabilities represent the future tax return
         consequences  of those  differences,  which  will  either be taxable or
         deductible  when the assets and  liabilities  are recovered or settled.
         Deferred tax assets are reduced by a valuation  allowance  when, in the
         opinion of management,  it is more likely than not that some portion or
         all of the  deferred  tax assets  will not be  realized.  Deferred  tax
         assets and  liabilities  are  adjusted for the effect of changes in tax
         laws and rates on the date of enactment.

                  Algiers Homestead  Association is exempt from Louisiana income
         tax.

                                       11
<PAGE>
NOTE A
         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         USE OF ESTIMATES
                  The  preparation  of financial  statements in conformity  with
         generally accepted  accounting  principles  requires management to make
         estimates and  assumptions  that affect the reported  amounts of assets
         and liabilities and disclosures of contingent assets and liabilities at
         the  date of the  financial  statements  and the  reported  amounts  of
         revenues and expenses during the reporting period. Actual results could
         differ from these estimates.

         CASH EQUIVALENTS
                  Cash equivalents  consist of certificates of deposit purchased
         with a maturity of three months or less,  and daily  demand  investment
         deposit accounts.

                  Cash  and  cash  equivalents  at  December  31,1996  and  1995
included the following:
<TABLE>
<CAPTION>
                                                      1996                1995
                                                  ----------          ----------
<S>                                               <C>                 <C>
Cash ...................................          $  286,589          $  212,362
Interest-Bearing Deposits
    in Other Institutions ..............           1,435,221           1,239,749
                                                  ----------          ----------

                                                  $1,721,810          $1,452,111
                                                  ==========          ==========
</TABLE>
         RECLASSIFICATIONS
                  Certain  reclassifications of previously reported amounts have
         been made to conform with 1996 presentation. Such reclassifications had
         no effect on net income.

         NON-DIRECT RESPONSE ADVERTISING
                  The  Association   expenses  advertising  costs  as  incurred.
         Advertising   expense   for  1996  and  1995  were  $625  and   $1,266,
         respectively.

NOTE B
         POOLING OF INTEREST
                  Details  of  the  unaudited   results  of  operations  of  the
         previously  separate  entities for the periods prior to the combination
         (January 1, 1996 - July 7, 1996) follows:
<TABLE>
<CAPTION>
                                                                       Algiers
                                                 Algiers              Homestead
                                               Bancorp, Inc.         Association
                                               -------------         -----------
<S>                                               <C>                 <C>
Operating Income ....................             $  --               $1,519,408
                                                  ==========          ==========
Net Income ..........................             $  --               $  173,484
                                                  ==========          ==========
</TABLE>
                                       12
<PAGE>
NOTE B
         POOLING OF INTEREST (Continued)

                  As discussed in Note A, Algiers Bancorp,  Inc. had essentially
         no activity prior to July 8, 1996, the  acquisition  date. The proforma
         data  reflects  certain  estimated  values  and  assumptions.  Proforma
         results of  operations  are not  necessarily  indicative  of the actual
         results of operations that would have occurred had the pooling occurred
         at the beginning of the fiscal years, or of the results which may occur
         in the future.


NOTE C
         INVESTMENT SECURITIES HELD-TO-MATURITY
                  Investment  securities  held-to-maturity  at December 31, 1996
consist of the following:
<TABLE>
<CAPTION>

                                               Gross        Gross
                              Amortized     Unrealized   Unrealized       Fair
                                Cost           Gains        Losses        Value
                                ----           -----        ------        -----
<S>                           <C>           <C>           <C>           <C>
Federal Farm
  Credit Banks .........      $200,000      $   --        $    500      $199,500
SLMA ...................       200,000          --             512       199,488
Federal Home Loan
  Bank Notes ...........       425,000          --             459       424,541
                              --------      --------      --------      --------
                              $825,000      $   --        $  1,471      $823,529
                              ========      ========      ========      ========

</TABLE>

                  Investment  securities  held-to-maturity  at December 31, 1995
consist of the following:
<TABLE>
<CAPTION>
                                           Gross          Gross
                         Amortized      Unrealized     Unrealized        Fair
                             Cost          Gains          Losses         Value
                             ----          -----          ------         -----
<S>                      <C>            <C>            <C>            <C>
Louisiana Public
  Facility Authority     $  300,000     $     --       $      240     $  299,760
Federal Home Loan
  Bank Notes .......        925,000           --           21,180        903,820
                         ----------     ----------     ----------     ----------
                         $1,225,000     $     --       $   21,420     $1,203,580
                         ==========     ==========     ==========     ==========

</TABLE>

                  The  amortized   cost  and   estimated   value  of  investment
         securities   held-to-maturity  at  December  31,  1996  by  contractual
         maturity  are  shown  below.   Expected  maturities  will  differ  from
         contractual  maturities because borrowers may have the right to call or
         prepay obligations with or without call or prepayment penalties.

                                       13
<PAGE>
NOTE C
         INVESTMENT SECURITIES HELD-TO-MATURITY (Continued)
<TABLE>
<CAPTION>

                                                       Amortized          Fair
                                                         Cost             Value
                                                         ----             -----
<S>                                                    <C>              <C>
Due in One Year or Less ......................         $825,000         $823,529
Due After One Year Thru Five Years ...........             --               --
Due After Five Years Thru Ten Years ..........             --               --
Due After Ten Tears
                                                       --------         --------
                                                       $825,000         $823,529
                                                       ========         ========
</TABLE>

                  Algiers Homestead Association has invested in FHLB stock which
         is reflected at cost and approximates market.

NOTE D
         INVESTMENT SECURITIES AVAILABLE-FOR-SALE
                  Investment securities  available-for-sale at December 31, 1996
consist of the following:
<TABLE>
<CAPTION>
                                                 Gross           Gross
                             Amortized         Unrealized      Unrealized       Fair
                                Cost             Gains           Losses         Value
                                ----             -----           ------         -----
<S>                         <C>              <C>             <C>             <C>
FNMA Medium Term
   Callable Note ......     $   324,086      $       914     $      --       $   325,000
FHLMC Callable Note ...         650,000            6,094            --           656,094
FHLB Callable Notes ...       1,498,125              625          12,500       1,486,250
Louisiana Agricultural
   Finance Authority ..          19,237             --              --            19,237
Southeast Texas Housing
   Finance Authority ..          43,163             --              --            43,163
                            -----------      -----------     -----------     -----------
                              2,534,611            7,633          12,500       2,529,744

Allowance for  Loss ...         (62,400)            --              --           (62,400)
                            -----------      -----------     -----------     -----------

                            $ 2,472,211      $     7,633     $    12,500     $ 2,467,344
                            ===========      ===========     ===========     ===========

</TABLE>
                                       14
<PAGE>
NOTE D
         INVESTMENT SECURITIES AVAILABLE-FOR-SALE (Continued)

                  Investment securities  available-for-sale at December 31, 1995
consist of the following:
<TABLE>
<CAPTION>

                                              Gross        Gross
                              Amortized    Unrealized   Unrealized       Fair
                                 Cost         Gains        Losses        Value
                                 ----         -----        ------        -----
<S>                           <C>            <C>        <C>           <C>
U.S. Treasury Securities      $ 697,396      $ --       $    --       $ 697,396
Louisiana Agricultural
   Finance Authority ....        45,499        --            --          45,499
Southeast Texas Housing
   Finance Authority ....        83,438        --            --          83,438
                              ---------      -----      -------       ---------
                                826,333        --            --         826,333

Allowance for  Loss .....      (128,937)       --            --        (128,937)
                              ---------      -----      -------       ---------

                              $ 697,396      $ --       $    --       $ 697,396
                              =========      =====      =======       =========
</TABLE>
                  The  following  is a  summary  of  contractual  maturities  of
         investment securities available-for-sale as of December 31, 1996:
<TABLE>
<CAPTION>
                                                                          Fair
                                                       Cost              Value
                                                    ----------        ----------
<S>                                                 <C>               <C>
Due in One Year or Less ....................        $     --          $     --
Due After One Year Thru Five Years .........              --                --
Due After Five Years Thru Ten Years ........           974,086           981,094
Due After Ten Years ........................         1,498,125         1,486,250
                                                    ----------        ----------

                                                    $2,472,211        $2,467,344
                                                    ==========        ==========

</TABLE>
NOTE E
         GUARANTEED INSURANCE CONTRACT (GIC) BONDS
                  During 1987 and 1989,  the  Association  invested in Louisiana
         Agricultural  Finance  Authority  Bonds  and  Southeast  Texas  Housing
         Finance  Authority  Bonds  which  were  backed by  insurance  contracts
         guaranteed by Executive  Life  Insurance  Company.  A  conservator  was
         subsequently  appointed  for  Executive  Life  Insurance  Company  thus
         impacting  the  ultimate  collectibility  of the entire bond  proceeds.
         Prior to 1996,  the  conservator  was unable to determine  the ultimate
         amount  of  principal   which  would  be  recovered;   therefore,   the
         Association  set up reserves which amounted to $339,375 at December 31,
         1993  based on its best  estimate  of what  would be  recovered.  As of
         December 31, 1996,  the  conservator  has  estimated  that the ultimate
         collectibility  of the bonds  will  approximate  88% of their  original
         carrying value. As such, the

                                       15
<PAGE>
NOTE E
         GUARANTEED INSURANCE CONTRACT (GIC) BONDS (Continued)

         Association  has applied  all  proceeds  received  during 1995 and 1996
         against the carrying value of the bonds.  The  Association has reserved
         100%  against  the  remaining  principal  value of the bonds  given the
         questionability of the proceeds to be collected.

                  The activity in the carrying value and the reserve  account is
         summarized as follows for the year ended December 31, 1996 and 1995:
<TABLE>
<CAPTION>
                                                                    Carrying          Reserve
                                                                      Value           Balance
                                                                  -----------      -----------
<S>                                                               <C>              <C>
                  Balance at December 31,1994 ...............     $   604,659      $  (339,375)
                  Principal Repayment .......................        (306,084)            --
                  Write-Off of Discount .....................         (20,766)            --
                  Write-Off of Principal ....................        (148,872)         148,872
                  Recapture of Provision
                     for Investment Losses ..................            --             61,566
                                                                  -----------      -----------

                  Balance at December 31, 1995 ..............         128,937         (128,937)
                  Principal Repayment .......................         (66,537)            --
                  Recapture of Provision
                     for Investment Losses ..................            --             66,537
                                                                  -----------      -----------

                  Balance at December 31, 1996 ..............     $    62,400      $   (62,400)
                                                                  ===========      =========== 
</TABLE>
NOTE F
         LOANS RECEIVABLE
                  Loans receivable consist of the following:
<TABLE>
<CAPTION>
                                                                      1996             1995
                                                                  -----------      -----------
<S>                                                               <C>              <C>
                  Principal Balances -
                     First Mortgage Loans
                         1-4 Family .........................     $ 8,134,400      $ 7,978,587
                         Commercial .........................         667,926          857,847
                     Construction Loans - 1-4 Family ........          89,260          490,550
                     Partially-Guaranteed by VA
                         or Insured by FHA Loans - 1-4 Family          51,052           71,598
                                                                  -----------      -----------

                                                                    8,942,638        9,398,582
                                                                  -----------      -----------
                  Principal Balances -
                     Second Mortgage Loans - 1-4 Family .....         175,016          111,257
                     Share Loans ............................         693,585          985,686
                                                                  -----------      -----------

                                                                      868,601        1,096,943
                                                                  -----------      -----------
</TABLE>
                                       16
<PAGE>
NOTE F
         LOANS RECEIVABLE (Continued)
                  Loans receivable consist of the following:
<TABLE>
<CAPTION>
                                                                                 1996              1995
                                                                            -----------      -----------
<S>                                                                         <C>              <C>
         Less:
            Allowance for Losses ......................................         530,184          533,851
            Unearned Interest on Mortgage Loans .......................           6,913            6,102
            Undisbursed Portion of Construction Loans .................           7,044          223,627
            Net Deferred Loan Origination Fees ........................          47,125           41,637
                                                                            -----------      -----------

                                                                                591,266          805,217
                                                                            -----------      -----------
                                                                            $ 9,219,933      $ 9,690,308
                                                                            ===========      ===========
</TABLE>
                  Activity in the  allowance  for loan losses is  summarized  as
         follows for the years ended December 31, 1996 and 1995:
<TABLE>
<CAPTION>
                                                                                 1996              1995
                                                                            -----------      -----------
<S>                                                                         <C>              <C>
         Balance at Beginning of Year .................................     $   533,851      $   557,802
         Charge-Offs ..................................................            --               --
         Recoveries ...................................................            --               --
         Credit for Loan Losses .......................................          (3,667)         (23,951)
                                                                            -----------      -----------

         Balance at End of Year .......................................     $   530,184      $   533,851
                                                                            ===========      ===========
</TABLE>
                  The  Financial  Accounting  Standards  Board  issued  FAS 114,
         "Accounting  by Creditors  for  Impairment of a Loan, as amended by FAS
         118,  "Accounting  by  Creditors  for  Impairment  of a Loan  -  Income
         Recognition  and  Disclosures,"  which is  effective  for fiscal  years
         beginning   after  December  15,  1994.   This  statement   establishes
         standards,  including the use of discounted cash flow  techniques,  for
         measuring  the  impairment  of a loan  when  it is  probable  that  the
         contractual terms will not be met.

                  The Association  adopted FAS 114 on January 1, 1995.  Adoption
         of  this  standard  had no  impact  on the  Association's  net  income,
         retained earnings or total assets.

                  At December 31, 1996 and December  31, 1995,  the  Association
         had loans totaling approximately $8,000 and $76,000,  respectively, for
         which  impairment  had been  recognized.  The allowance for loan losses
         related to these loans totaled  $8,000 and $13,600 at December 31, 1996
         and December 31, 1995, respectively. During the year ended December 31,
         1995,  the amount of interest  income that would have been  recorded on
         loans in  nonaccrual  status  at  December  31,  1995,  had such  loans
         performed in accordance with their terms, was approximately $4,800. The
         actual  interest  income  recorded on these loans during the year ended
         December 31, 1995 was approximately  $5,600. Such interest foregone for
         the year ended December 31, 1996 was approximately $1,300.

                                       17
<PAGE>
NOTE F
         LOANS RECEIVABLE (Continued)

                  The Association does not service any loans for others.

                  In the normal course of business,  the Association  originates
         installment  loans to members of the Board of Directors  and  officers.
         Loans to such borrowers are summarized as follows:
<TABLE>
<CAPTION>
<S>                                                                    <C>
Balance at Beginning of Year ............................              $ 59,806
Net Decrease ............................................               (42,580)
                                                                       --------
Balance at End of Year ..................................              $ 17,226
                                                                       ========
</TABLE>
                  An  approximate  schedule  of  loan  maturities  or  repricing
opportunities is as follows:
<TABLE>
<CAPTION>
                                     Variable           Fixed
    Maturities                         Rate              Rate            Total
    ----------                         ----              ----            -----
<S>                                 <C>              <C>              <C>
Three Months or Less ........       $1,438,963       $     --         $1,438,963
Three Months - One Year .....        6,372,835              669        6,373,504
One Year - Five Years .......             --            539,184          539,184
Over Five Years .............             --          1,459,588        1,459,588
                                    ----------       ----------       ----------
                                    $7,811,798       $1,999,441       $9,811,239
                                    ==========       ==========       ==========
</TABLE>
NOTE G
         MORTGAGE-BACKED SECURITIES
                  Fixed   and   variable   rate    mortgage-backed    securities
         available-for-sale at December 31, 1996 are summarized as follows:
<TABLE>
<CAPTION>
                                             December 31, 1996
                         -------------------------------------------------------
                                            Gross         Gross
                          Amortized      Unrealized    Unrealized         Fair
                             Cost           Gains         Losses          Value
                         ----------     ----------     ----------     ----------
<S>                      <C>            <C>            <C>            <C>
GNMA Certificates ..     $  884,955     $   19,151     $    2,766     $  901,340

FNMA Certificates ..      5,397,253         63,957         46,560      5,414,650
FHLMC Certificates .      2,770,106         19,374         28,260      2,761,220
                         ----------     ----------     ----------     ----------
                         $9,052,314     $  102,482     $   77,586     $9,077,210
                         ==========     ==========     ==========     ==========
</TABLE>
                                       18
<PAGE>
NOTE G
         MORTGAGE-BACKED SECURITIES (Continued)

                  Fixed   and   variable   rate    mortgage-backed    securities
         held-to-maturity at December 31, 1996 are summarized as follows:
<TABLE>
<CAPTION>
                                           December 31, 1996
                     -----------------------------------------------------------
                                         Gross           Gross
                      Amortized       Unrealized       Unrealized        Fair
                         Cost            Gains           Losses          Value
                     -----------     -----------     -----------     -----------
<S>                  <C>             <C>             <C>             <C>
GNMA Certificates    $ 3,199,363     $    25,378     $     5,191     $ 3,219,550
FNMA Certificates     16,684,132          15,409         510,511      16,189,030
FHLMC Certificates     3,926,609           1,001         106,830       3,820,780
                     -----------     -----------     -----------     -----------

                     $23,810,104     $    41,788     $   622,532     $23,229,360
                     ===========     ===========     ===========     ===========
</TABLE>
                  Fixed   and   variable   rate    mortgage-backed    securities
         available-for-sale at December 31, 1995 are summarized as follows:
<TABLE>
<CAPTION>
                                            December 31, 1995
                        -------------------------------------------------------- 
                                          Gross          Gross
                         Amortized     Unrealized      Unrealized        Fair
                           Cost           Gains          Losses          Value
                        ----------     ----------     -----------    -----------
<S>                     <C>            <C>            <C>            <C>
GNMA Certificates ..    $1,141,586     $   19,477     $    3,549     $1,157,514
FNMA Certificates ..     3,288,381         38,902         34,170      3,293,113
FHLMC Certificates .     3,254,411         13,551         30,180      3,237,782
                       ----------     -----------     -----------     ---------- 

                        $7,684,378     $   71,930     $   67,899     $7,688,409
                        ==========     ==========     ==========     ==========
</TABLE>
                  Fixed   and   variable   rate    mortgage-backed    securities
         held-to-maturity at December 31, 1995 are summarized as follows:
<TABLE>
<CAPTION>
                                            December 31, 1995
                        -------------------------------------------------------- 
                                          Gross          Gross
                         Amortized     Unrealized      Unrealized        Fair
                           Cost           Gains          Losses          Value
                        ----------     ----------     -----------    -----------
<S>                    <C>             <C>            <C>            <C>
GNMA Certificates      $ 3,719,273     $    25,545     $    76,122   $ 3,668,696
FNMA Certificates       13,970,612          24,115         513,491    13,481,236
FHLMC Certificates       2,770,704           1,447          38,757     2,733,394
                       -----------     -----------     -----------   -----------
                       $20,460,589     $    51,107     $   628,370   $19,883,326
                       ===========     ===========     ===========   ===========
</TABLE>
                                       19
<PAGE>
NOTE G
         MORTGAGE-BACKED SECURITIES (Continued)

                  The   amortized   cost  and  fair  value  of   mortgage-backed
         securities at December 31, 1996,  by  contractual  maturity,  are shown
         below.  Expected  maturities  will differ from  contractual  maturities
         because  borrowers  may have the  right to call or  prepay  obligations
         without call or prepayment penalties.
<TABLE>
<CAPTION>
                                                    Amortized             Fair
                                                       Cost               Value
                                                   -----------       -----------
<S>                                                <C>               <C>
Mortgage-Backed Securities Maturing:
   Due in One Year or Less .................       $    43,431       $    43,239
   Due After One Year Thru Five Years ......           631,997           564,592
   Due After Five Years Thru Ten Years .....         2,571,830         2,500,249
   Due After Ten Years .....................        29,615,160        29,198,490
                                                   -----------       -----------
                                                   $32,862,418       $32,306,570
                                                   ===========       ===========
</TABLE>
NOTE H
         INTEREST RECEIVABLE
                  Interest   receivable   at  December  31,  1996  and  1995  is
summarized as follows:
<TABLE>
<CAPTION>
                                                        1996               1995
                                                     --------           --------
<S>                                                  <C>                <C>
Mortgage Loans ...........................           $ 14,436           $   --
Share Loans ..............................              2,597             20,473
Investment Securities ....................             24,313             27,957
Mortgage-Backed Securities ...............            224,103            180,675
                                                     --------           --------
                                                     $265,449           $229,105
                                                     ========           ========
</TABLE>
NOTE I
         REAL ESTATE OWNED
                  A summary of real estate  owned at December  31, 1996 and 1995
is as follows:
<TABLE>
<CAPTION>
                                                          1996            1995
                                                       --------         --------
<S>                                                    <C>              <C>
Real Estate Acquired in Settlement ...........         $ 90,455         $140,121
Less:  Allowances for Losses .................           45,742           47,805
                                                       --------         --------
                                                       $ 44,713         $ 92,316
                                                       ========         ========
</TABLE>
                                       20
<PAGE>
NOTE I
         REAL ESTATE OWNED (Continued)

                  Activity  in the  allowance  for losses for other real  estate
         owned for years ended December 31, 1996 and 1995 is as follows:
<TABLE>
<CAPTION>
                                                        1996              1995
                                                     --------          --------
<S>                                                  <C>               <C>
Balance at Beginning of Year ...............         $ 47,805          $ 98,450
Provision (Credit) for REO Losses ..........            3,626           (13,064)
Charge-Offs ................................           (5,689)
Recoveries .................................             --                --
                                                     --------          --------
Balance at End of Year .....................         $ 45,742          $ 47,805
                                                     ========          ========
</TABLE>
NOTE J
         OFFICE PROPERTY AND EQUIPMENT
                  Office  property  and  equipment  consist of the  following at
December 31, 1996 and 1995:
<TABLE>
<CAPTION>
                                                          1996             1995
                                                       --------         --------
<S>                                                    <C>              <C>
Land .........................................         $ 30,000         $ 30,000
Building .....................................          162,182          146,871
Furniture, Fixtures and Equipment ............          185,886          176,162
Leasehold Improvements .......................           40,405           39,450
                                                       --------         --------
                                                        418,473          392,483
Less:  Accumulated Depreciation
    and Amortization .........................          187,210          165,267
                                                       --------         --------
                                                       $231,263         $227,216
                                                       ========         ========
</TABLE>
                  Depreciation expense for the years ended December 31, 1996 and
         1995 was $21,943 and $20,127, respectively.

NOTE K
         FEDERAL INCOME TAXES
                  As discussed in Note A, the Company  adopted FAS 109 effective
         January 1, 1995. Prior year financial  statements were restated with no
         cumulative adjustment at adoption required.

                  The  provision  for income taxes for 1996 and 1995 consists of
         the following:
<TABLE>
<CAPTION>
                                                         1996              1995
                                                       -------           -------
<S>                                                    <C>               <C>
Current Federal Tax Expense ................           $47,430           $  --
Deferred Federal Tax Expense ...............            18,396            62,548
                                                       -------           -------
                                                       $65,826           $62,548
                                                       =======           =======
</TABLE>
                                       21
<PAGE>
NOTE K
         FEDERAL INCOME TAXES (Continued)

                  The  provision  for federal  income  taxes  differs  from that
         computed by applying  federal  statutory rates to income before federal
         income tax expense, as indicated in the following analysis:
<TABLE>
<CAPTION>
                                                          1996            1995
                                                       --------        --------
<S>                                                    <C>             <C>
Expected Tax Provision at 34% Rate .............       $ 75,404        $ 78,900
Difference in Federal Bad Debt Deduction
    For Book and Tax Purposes ..................         26,356         (23,634)
Increase (Decrease) in Deferred Tax Asset
    Valuation Allowance ........................        (35,934)          7,282
                                                       --------        --------
                                                       $ 65,826        $ 62,548
                                                       ========        ========
</TABLE>
                  Deferred  tax  liabilities  have been  provided for taxable or
         deductible  temporary   differences  related  to  unrealized  gains  on
         available-for-sale  securities,  deferred loan costs,  depreciation and
         non-cash  Federal  Home Loan Bank  dividends.  Deferred tax assets have
         been provided for taxable or deductible  temporary  differences related
         to the reserves for  uncollected  interest and late  charges,  deferred
         loan fees,  allowance  for loan  losses,  the  allowance  for losses on
         foreclosed  real  estate and the  allowance  for losses on real  estate
         held-for-investment.  The net deferred tax assets or liabilities in the
         accompanying  statements of financial  condition  include the following
         components:
<TABLE>
<CAPTION>
                                                             1996          1995
                                                          --------      --------
<S>                                                       <C>           <C>
Deferred Tax Assets
   Uncollected Interest ............................      $  1,341      $  1,355
   Market Value Adjustment to Available-for-
       Sale Securities .............................        12,200        19,238
   Allowance for Loan Losses .......................       178,922       180,154
   Allowance for REO Losses ........................        15,552        16,253
   Allowance for Unrealized Loss on Investments ....        21,216        43,839
   Net Operating Loss Carryforward .................          --          34,000
   Charitable Contribution Carryforward ............         7,895          --
   Amortization of Start Up Costs ..................         2,383          --
   Deferred Loan Fees ..............................        16,023        14,157
                                                          --------      --------
       Total Deferred Tax Assets ...................       255,532       308,996
                                                          --------      --------
Deferred Tax Liabilities
   Fixed Assets and Depreciation ...................         9,871         5,922
   FHLB Stock ......................................        22,066         3,328
   481A Adjustment .................................         6,266          --
                                                          --------      --------

       Total Deferred Tax Liabilities ..............        38,203        19,250
                                                          --------      --------
</TABLE>
                                       22
<PAGE>
NOTE K
         FEDERAL INCOME TAXES (Continued)
<TABLE>
<CAPTION>
                                                          1996            1995
                                                        --------        --------
<S>                                                     <C>             <C>
Deferred Tax Assets - Net of Deferred
   Tax Liabilities .............................         217,329         289,746

Deferred Tax Valuation Reserve .................         194,474         230,409
                                                        --------        --------
       Total Net Deferred Tax Assets ...........        $ 22,855        $ 59,337
                                                        ========        ========
</TABLE>
                  Included in retained earnings at December 31, 1996 and 1995 is
         approximately  $1,307,000  and  $1,309,000,  respectively,  in bad debt
         reserves for which no deferred  federal  income tax  liability has been
         recorded.  These amounts  represent  allocations  of income to bad debt
         deductions  for tax  purposes  only.  Reduction  of these  reserves for
         purposes  other than tax bad-debt  losses or  adjustments  arising from
         carryback of net operating losses would create income for tax purposes,
         which would be subject to the then current  corporate  income tax rate.
         The unrecorded  deferred  liability on these amounts was  approximately
         $444,000 and $445,000 for December 31, 1996 and 1995.

NOTE L
         DEPOSITS
                  Deposits  consist of the  following  at December  31, 1996 and
1995:
<TABLE>
<CAPTION>
                                    Weighted
                                    Average
                                    Rate at                 1996                         1995
                                    12/31/96       Amount        Percent        Amount         Percent
                                    --------       ------        -------        ------         -------
<S>                                   <C>       <C>              <C>         <C>               <C>
NOW Accounts .....................    2.16%     $ 1,712,759        4.67      $ 1,698,788         4.45%
Passbook .........................    2.65%       5,773,599       15.76        6,430,893        16.83
Money Fund .......................    2.58%       1,216,463        3.32        1,530,637         4.01
Certificates of Deposit:
   2% to 2.99% ...................    2.75%          93,762         .26          168,617          .44
   3% to 3.99% ...................      --               --          --           11,712          .03
   4% to 4.99% ...................    4.88%       6,957,524       18.99       10,057,671        26.43
   5% to 5.99% ...................    5.27%      13,346,462       36.44       10,504,613        27.39
   6% to 6.99% ...................    6.41%       5,544,141       15.13        5,704,880        14.93
   7% to 7.99% ...................    7.05%       1,990,318        5.43        2,091,199         5.47
   8% to 8.99% ...................      --               --          --            4,040          .02
                                                -----------      ------      -----------       ------
                                                $36,635,028      100.00%     $38,203,050       100.00%
                                                ===========      ======      ===========       ====== 

</TABLE>
                                                   23
<PAGE>
NOTE L
         DEPOSITS (Continued)
<TABLE>
<CAPTION>
<S>                                            <C>                   <C>
Due on Demand ......................           $ 8,702,821           $ 9,660,318
Due Within -
   6 Months ........................            10,891,562            11,355,638
   7 to 12 Months ..................             6,311,313             5,648,892
   13 to 24 Months .................             6,127,096             6,564,324
   25 to 36 Months .................             1,806,885             3,348,813
Due After 36 Months ................             2,795,351             1,625,065
                                               -----------           -----------
                                               $36,635,028           $38,203,050
                                               ===========           ===========
</TABLE>
                  The  aggregate  amount of  short-term  jumbo  certificates  of
         deposit  with a minimum  denomination  of  $100,000  was  approximately
         $2,005,000 and $1,855,133 at December 31, 1996 and 1995, respectively.

                  Interest expense consisted of the following:
<TABLE>
<CAPTION>
                                                      1996                1995
                                                  ----------          ----------
<S>                                               <C>                 <C>
NOW Accounts ...........................          $   39,907          $   34,294
Passbook ...............................             174,558             181,578
Money Fund .............................              33,468              46,761
Certificates of Deposits ...............           1,569,139           1,471,878
                                                  ----------          ----------
   Total ...............................          $1,817,072          $1,734,511
                                                  ==========          ==========

</TABLE>
NOTE M
         ADVANCES FROM FEDERAL HOME LOAN BANK
                  Pursuant to collateral  agreements  with the Federal Home Loan
         Bank (FHLB),  advances are secured by a blanket  floating lien on first
         mortgage loans and $106,000 of  mortgage-backed  securities  which have
         been pledged to the short-term  FHLB advance.  Total  interest  expense
         recognized in 1996 and 1995, respectively, was $18,189 and $-0-.

                  Advances  at  December  31, 1996  consisted  of the  following
         maturities:
<TABLE>
<CAPTION>

     Maturity Date                           Advance Total      Contract Rate
     -------------                           -------------      -------------
<S>                                          <C>                     <C>
January 7, 1997 ..................           $  500,000              5.61%
December 22, 2003 ................            1,000,000              5.87%
                                             ----------
                                             $1,500,000
                                             ==========
</TABLE>
                  Subsequent to December 31, 1996, Algiers Homestead Association
         was advanced $1,700,000 from the Federal Home Loan Bank on a short-term
         basis.

                                       24
<PAGE>
NOTE N
         FEDERAL DEPOSIT  INSURANCE  ASSOCIATION  IMPROVEMENT ACT OF 1991
         (FDICIA) AND FINANCIAL  INSTITUTIONS REFORM,  RECOVERY AND EN-FORCEMENT
         ACT OF 1989 (FIRREA)
                  FDICIA was signed into law on December 19,  1991.  Regulations
         implementing the prompt  corrective  action provisions of FDICIA became
         effective on December 19,  1992.  In addition to the prompt  corrective
         action  requirements,  FDICIA includes significant changes to the legal
         and  regulatory   environment  for  insured  depository   institutions,
         including  reductions  in  insurance  coverage  for  certain  kinds  of
         deposits,  increased  supervision by the federal  regulatory  agencies,
         increased  reporting  requirements  for insured  institutions,  and new
         regulations concerning internal controls, accounting and operations.

                  FIRREA was signed into law on August 9, 1989.  Regulations for
         savings  institutions' minimum capital requirements went into effect on
         December  7, 1989.  In addition  to its  capital  requirements,  FIRREA
         includes provisions for changes in the federal regulatory structure for
         institutions,  including  a new  deposit  insurance  system,  increased
         deposit insurance premiums,  and restricted  investment activities with
         respect  to  noninvestments  grade  corporate  debt and  certain  other
         investments.   FIRREA   also   increases   the   required   ration   of
         housing-related assets in order to qualify as a savings institution.

                  The  regulations  require   institutions  to  have  a  minimum
         regulatory  tangible  capital equal to 1.5% of adjusted total assets, a
         minimum 4% core/leverage  capital ratio, a minimum 4% tier 1 risk-based
         ratio, and a minimum 8% total risk-based capital ratio to be considered
         "adequately  capitalized."  An  institution is deemed to be "critically
         undercapitalized"  if it has a tangible equity ratio of 2% or less. The
         ability to include qualifying  supervisory goodwill for purposes of the
         core/leverage  requirements  was phased out by January 1, 1995, and the
         ability  to  include   investments  in   impermissible   activities  in
         core/leverage  capital and  tangible  capital was phased out by July 1,
         1994.

                  The  following  table  sets  out  the  Association's   various
         regulatory capital categories at December 31, 1996 and 1995.
<TABLE>
<CAPTION>
                                              1996                        1995
                                     -----------------------   --------------------------
                                      Dollars     Percentage     Dollars       Percentage
                                      -------     ----------     -------       ----------
                                    (thousands)                (thousands)
<S>                                   <C>            <C>         <C>            <C>

Tangible Capital ...............      $6,777         14.83%      $4,077          9.60%
Tangible Equity ................      $6,777         14.83%      $4,077          9.60%
Core/Leverage Capital ..........      $6,777         14.83%      $4,077          9.60%
Tier 1 Risk-Based Capital ......      $6,777         52.29%      $4,077         33.92%
Total Risk-Based Capital .......      $6,950         54.24%      $4,214         35.06%

</TABLE>
                                       25
<PAGE>
NOTE O
         REGULATORY CAPITAL
                  The  following  is  a  reconciliation  of  generally  accepted
         accounting  principles  (GAAP)  net income  and  capital to  regulatory
         capital for the Association. The following reconciliation also compares
         the  capital   requirements   as   computed  to  the  minimum   capital
         requirements for the Association.
<TABLE>
<CAPTION>
                                             Net Income            Capital
                                             Year Ended             as of
                                         December 31, 1996    December 31, 1996
                                         -----------------    -----------------
<S>                                          <C>                   <C>
Per GAAP ............................        $134,102              $  6,751
                                             ========              ========

Total Assets ........................                              $ 45,713
                                                                   ========

Capital Ratio .......................                                 14.77%
<CAPTION>
                                                             Core/           Tier 1        Total
                             Tangible        Tangible       Leverage       Risk-Based    Risk-Based
                              Capital         Equity         Equity          Capital       Capital
                              -------         ------         ------          -------       -------
<S>                           <C>            <C>            <C>            <C>            <C>
Per GAAP ..............       $ 6,751        $ 6,751        $ 6,751        $ 6,751        $ 6,751
Assets required
    to be added
      Unrealized Loss
        on Securities
        Available-
        for-Sale ......            26             26             26             26             26
      General valuation
        allowance .....          --             --             --             --              173
                              -------        -------        -------        -------        -------
Regulatory capital
    measure ...........       $ 6,777        $ 6,777        $ 6,777        $ 6,777        $ 6,950
                              =======        =======        =======        =======        =======
Adjusted total
    assets ............       $45,713        $45,713        $45,713
                              =======        =======        =======
Risk-weighted
    assets ............                                                    $12,813        $12,813
                                                                           =======        =======

Capital Ratio .........         14.83%         14.83%         14.83%         52.89%         54.24%

Required Ratio ........          1.50%          2.00%          3.00%          4.00%          8.00%
                                 ====           ====           ====           ====           ==== 

Required Capital ......       $   686                       $ 1,371                       $ 1,025
                              =======                       =======                       =======

Excess Capital ........       $ 6,091                       $ 5,406                       $ 5,925
                              =======                       =======                       =======

</TABLE>
                                       26
<PAGE>
NOTE P
         RELATED PARTY TRANSACTIONS
                  Until March 31, 1996, the Association leased its premises from
         one of its  officers.  The lease  commenced on September 19, 1967 for a
         term of thirty years at $33,000 per year.

                  On March 20, 1996,  the  Association  entered into a new lease
         agreement  with one of its  officers for its main office which is for a
         period of ten years  beginning April 1, 1996. The annual rental payment
         for the first five years is $45,000.  The annual rental payment for the
         next five years will be adjusted by changes in the Consumer Price Index
         but in no case will be less than $45,000 per year.

NOTE Q
         PENSION PLAN
                  The Association  offered for 1995 a contributory  plan for its
         employees.  Employees  electing to participate in the plan are required
         to make a minimum  contribution,  and may elect to contribute a maximum
         of 15% of their salaries (including the employer's contribution).

                  The  Association   contributed  $13,146  for  the  year  ended
         December 31, 1995. This Plan was terminated in 1996.

NOTE R
         EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)
                  During 1996, Algiers Bancorp, Inc. sponsored an employee stock
         ownership   plan  that  covers  all  employees  of  Algiers   Homestead
         Association  who have  completed  one year of service and have attained
         the age of 21. The  Association  may contribute to the Plan such amount
         as shall be determined by the  Association.  All dividends  received by
         the ESOP  are  either  used to pay  debt  service  or  credited  to the
         participant  accounts at the discretion of the administrator.  The ESOP
         shares are pledged as  collateral  for its debt. As the debt is repaid,
         shares are released from collateral and allocated to active  employees,
         based on the  proportion of debt service paid in the year..  The shares
         pledged as  collateral  are  reported  as  unearned  ESOP shares in the
         statements  of  financial  condition.   As  shares  are  released  from
         collateral,  the  Company  reports  compensation  expense  equal to the
         current market price of the shares,  and the shares become  outstanding
         for earnings per share computations. Dividends on allocated ESOP shares
         are  recorded  as  a  reduction  of  retained  earnings.  Dividends  on
         unallocated ESOP shares are recorded as a reduction of debt and accrued
         interest. ESOP compensation expense was $29,809 for 1996.
         The ESOP shares as of December 31, 1996 were as follows:
<TABLE>
<CAPTION>
<S>                                                                     <C>
Allocated Shares ...............................................            --
Shares Released for Allocation .................................           2,592
Unreleased Shares ..............................................          49,250
                                                                        --------
Total ESOP Shares ..............................................          51,842
                                                                        ========
Fair Value of Unreleased Shares at December 31, 1996 ...........        $566,375
                                                                        ========
</TABLE>
                                       27
<PAGE>
NOTE R
         EMPLOYEE STOCK OWNERSHIP PLAN (ESOP) (Continued)

                  In  conjunction  with the  establishment  of the  ESOP,  Plan,
         Algiers Bancorp,  Inc. loaned the ESOP the money to purchase the shares
         of stock for the ESOP plan. The  corresponding  note is to be paid back
         in 40 equal  quarterly  payments of $19,202 on the last business day of
         each quarter  beginning  September  30, 1996 at the rate of 8.25%.  The
         note payable and corresponding note receivable have been eliminated for
         consolidation purposes.

NOTE S
         FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
                  In the normal  course of  business,  various  commitments  and
         contingent  liabilities are outstanding,  such as commitments to extend
         credit and stand-by  letters of credit  which are not  reflected on the
         Company's  financial  statements.  Management  does not  anticipate any
         material loss as a result of these transactions.  Commitments to extend
         credit totaled  approximately  $108,000 on one to four family  mortgage
         loans,  and stand-by  letters of credit totaled $90,000 at December 31,
         1996.

                  The  Association  is a party  to  financial  instruments  with
         off-balance  sheet risk in the normal  course of  business  to meet the
         financing needs of its customers.  These financial  instruments consist
         of commitments to extend credit and stand-by  letters of credit.  These
         instruments  involve,  to  varying  degrees,  elements  of  credit  and
         interest rate risk in excess of the amounts recognized in the Company's
         balance sheet.

                  The  Association's  exposure  to  credit  loss in the event of
         nonperformance  by the other party to these  financial  instruments for
         commitments  to  extend  credit  and  stand-by  letters  of  credit  is
         represented by the contractual  notional  amount of those  instruments.
         The Association uses the same credit policies making  commitments as it
         does for on-balance sheet instruments.

                  Commitments  to  extend  credit  are  agreements  to lend to a
         customer as long as there is no violation of any condition  established
         in the contract.  Commitments  generally have fixed expiration dates or
         other termination  clauses and may require payment of a fee. Since many
         of the commitments are expected to expire without being drawn upon, the
         total  commitment  amount does not  necessarily  represent  future cash
         requirements.     The    Association    evaluates    each    customer's
         creditworthiness  on a  case-by-case  basis.  The  amount  and  type of
         collateral  obtained,  if  deemed  necessary  by the  Association  upon
         extension  of  credit,  varies  and is  based  on  management's  credit
         evaluation of the counterparty.

                  Stand-by letters of credit are conditional  commitments issued
         by the  Association  to guarantee  the  performance  of a customer to a
         third party. Stand-by letters of credit generally have fixed expiration
         dates or other  termination  clauses and may require  payment of a fee.
         The credit risk  involved in issuing  letters of credit is  essentially
         non-existent,   as  the  letters  of  credit  are  secured  by  pledged
         certificates of deposit of the Association.

                                       28
<PAGE>
NOTE T
         DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
                  On  January  1,  1995,  the   Association   adopted  FAS  107,
         "Disclosures about Fair Value of Financial Instruments," which requires
         the disclosure of fair value information  about financial  instruments,
         whether or not recognized in the statement of financial condition,  for
         which it is  practicable  to estimate the value.  Quoted market prices,
         when  available,  are used as the measure of fair value. In cases where
         quoted  market  prices  are not  available,  fair  values  are based on
         present value  estimates or other valuation  techniques.  These derived
         fair values are significantly affected by assumptions used, principally
         the  timing  of  future  cash  flows and the  discount  rates.  Because
         assumptions  are  inherently  subjective in nature,  the estimated fair
         values cannot be  substantiated  by comparison  to  independent  market
         quotes  and,  in many  cases,  the  estimated  fair  values  would  not
         necessarily  be  realized in an  immediate  sale or  settlement  of the
         instrument.  The  disclosure  requirements  of FAS 107 exclude  certain
         financial  instruments and all nonfinancial  instruments.  Accordingly,
         the   aggregate   fair  value   amounts   presented  do  not  represent
         management's estimation of the underlying value of the Association.

                  The following  methods and  assumptions  were used to estimate
         the fair value of each class of financial  instruments  for which it is
         practicable to estimate the value:

                  The  carrying  amount  of  cash  and  short-term   investments
         approximate  the fair value.  For investment  securities  fair value is
         based on quoted market prices.

                  For mortgage  loan  receivables,  the fair values are based on
         discounted  cash flows using  current rates at which similar loans with
         similar maturities would be made to borrowers with similar credit risk.

                  The fair value of deposits  is equal to the amount  payable at
         the financial statement date.

                  For certificates of deposit,  fair value is estimated based on
         current rates for deposits of similar remaining maturities.

                  The fair value of loan  commitments  is  estimated  using fees
         that would be charged to enter similar agreements,  taking into account
         (1) the remaining terms of the agreement,  (2) the  creditworthiness of
         the  borrowers,  and (3) for fixed  rate  commitments,  the  difference
         between current interest rates and committed rates.
<PAGE>
                 Estimated  fair  values of the  financial  instruments  are as
         follows:
<TABLE>
<CAPTION>
                                                         December 31, 1996
                                                  ------------------------------
                                                    Carrying             Fair
                                                     Amount              Value
                                                  -----------        -----------
<S>                                               <C>                <C>      
Financial Assets
  Cash and Short-Term Investment .........        $ 1,721,810        $ 1,721,810
  Investment Securities ..................         36,179,658         35,597,443
  Loans (Net of Loan Allowance) ..........          9,219,933          9,257,000
                         
Financial Liabilities
  Deposits ...............................        $36,635,028        $36,784,000

</TABLE>
                                       29
<PAGE>
NOTE U
         CONVERSION FROM A MUTUAL TO A STOCK ASSOCIATION
                  On July 8, 1996, Algiers Homestead  Association converted from
         a  Louisiana-chartered   mutual  savings  and  loan  association  to  a
         Louisiana-chartered   stock  savings  and  loan  association  known  as
         "Algiers  Homestead  Association"  (the  Association).  The Association
         issued  and sold  1000  shares  of stock at $.01 per  share to  Algiers
         Bancorp to become the wholly owned subsidiary of Algiers  Bancorp.  The
         Association  received  net  proceeds  from  the  sale of this  stock of
         $3,055,245.   The  costs  associated  with  the  stock  conversion  was
         approximately $370,000. The amount of retained earnings appropriated as
         a "liquidation account" is approximately $4,117,000 which is the amount
         of retained  earnings at March 31, 1996. This is the retained  earnings
         as of the  latest  date  shown  in the  prospectus  as per the  plan of
         conversion.

NOTE V
         CONCENTRATION OF CREDIT RISK
                  All of the  Association's  loans  and  commitments  have  been
         granted to customers in the greater New Orleans area.

                  The  Association  also  had  deposits  in  another   financial
         institution which exceed the federally insured limits by $376,121.

NOTE W
         DIVIDEND DECLARED
                  On  December  17,  1996,  the board of  directors  of  Algiers
         Bancorp declared a $.05 per share dividend to stockholders of record at
         January 7, 1997 to be payable on January 14, 1997.  The total  dividend
         payable recorded is $32,401.

NOTE X
         STOCKHOLDERS' EQUITY
                  Common Stock - Par value $.01;  10,000,000 shares  authorized,
         648,025 shares issued and outstanding in 1996.

                  Preferred Stock - Par value $.01; 5,000,000 shares authorized,
         0 shares issued and outstanding in 1996.

                                       30
<PAGE>
NOTE Y
         EARNINGS PER COMMON SHARE
                  Earnings  per share are computed  using the  weighted  average
         number of shares  outstanding  which was 598,775 in 1996.  Common stock
         dividends  of  $.05  per  share  were  paid  on  January  14,  1997  to
         stockholders of record as of January 7, 1997.

NOTE Z
         SAIF ASSESSMENT
                  The deposits of the Association  are currently  insured by the
         SAIF, which is a federal deposit insurance fund that covers SAIF member
         institutions.  On  September  30,  1996,  legislation  was passed which
         required  all  SAIF  member  institutions  to  pay a one  time  special
         assessment to recapitalize  the SAIF. The one-time  special  assessment
         for the Association  amounted to $241,146.  Net of related tax benefits
         the one-time special assessment  amounted to $81,990 or $.14 per share.
         The payment of such special  assessment  had the effect of  immediately
         reducing the Association's  capital by such amount.  Nevertheless,  the
         assessment did not have a material adverse effect on the Company.

 
NOTE AA
         CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY
<TABLE>
<CAPTION>

                              ALGIERS BANCORP, INC.
                          CONDENSED FINANCIAL CONDITION
                                December 31, 1996

                     ASSETS
<S>                                                                   <C>
Cash and Cash Equivalents ...................................         $1,024,726
Investments Available-for-Sale - at Fair Value ..............            476,406
Mortgage-Backed Securities - Available-for-Sale -
    at Fair Value ...........................................          1,047,869
Investment in Subsidiaries ..................................          3,037,740
Due from Subsidiaries .......................................              6,923
Accrued Interest Receivable .................................             33,402
Deferred Tax Asset ..........................................              1,021
                                                                      ----------
           Total Assets .....................................         $5,628,087
                                                                      ==========
</TABLE>
                                       31
<PAGE>
NOTE AA
         CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY (Continued)
<TABLE>
<CAPTION>


                              ALGIERS BANCORP, INC.
                          CONDENSED FINANCIAL CONDITION
                                December 31, 1996

                     LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                                   <C>
Due to Subsidiary ...........................................       $    19,504
Dividends Payable ...........................................            32,401
Income Tax Payable ..........................................            20,779
                                                                    -----------
           Total Liabilities ................................            72,684
                                                                    -----------
Preferred Stock - Par Value $.01
    0 Shares Issued and Outstanding in 1996 .................              --
Common Stock - Par Value $.01
    648,025 Shares Issued and Outstanding in 1996 ...........             6,480
Additional Paid-in Capital ..................................         6,107,899
Retained Earnings ...........................................           (43,199)
Less:  Note Receivable ESOP .................................          (518,420)
Unrealized Loss on Securities Available-for-Sale,
    Net of Applicable Deferred Income Tax ...................             2,643
                                                                    -----------
           Total Stockholders' Equity .......................         5,555,403
                                                                    ------------
           Total Liabilities and Stockholders' Equity .......       $ 5,628,087
                                                                    ===========
</TABLE>
                                       32
<PAGE>
NOTE AA
         CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY (Continued)
<TABLE>
<CAPTION>

                              ALGIERS BANCORP, INC.
                            STATEMENTS OF OPERATIONS
                   For The Six Months Ended December 31, 1996

<S>                                                                    <C>
INTEREST INCOME
    Mortgage-Backed Securities ................................        $  3,981
    Investment Securities .....................................          31,173
    Loans .....................................................          20,633
                                                                       --------
           Total Interest Income ..............................          55,787
                                                                       --------
NON-INTEREST INCOME
    Loss in Subsidiary-Algiers Homestead Association ..........         (39,383)
    Loss in Subsidiary-Jefferson Community Lending ............          (7,011)
    Miscellaneous Income ......................................           3,081
                                                                        -------
           Total Non-Interest Income ..........................         (43,313)
                                                                       --------
NON-INTEREST EXPENSES
    General and Administrative ................................           4,876
                                                                       --------

                                                                          4,876
INCOME BEFORE FEDERAL
    INCOME TAX EXPENSE ........................................           7,598

FEDERAL INCOME TAX EXPENSE ....................................          18,396
                                                                       --------

NET LOSS ......................................................        $(10,798)
                                                                       ======== 

</TABLE>
                                       33
<PAGE>
NOTE AA
         CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY (Continued)
<TABLE>
<CAPTION>

                                              ALGIERS BANCORP, INC.
                                        STATEMENTS OF STOCKHOLDERS' EQUITY
                                    For The Six Months Ended December 31, 1996


                                                                    Unrealized
                                                                    Gain (Loss)
                                                                   on Securities
                                                                   Available-for-
                                        Additional                   Sale - Net        Total
                                          Common       Paid-in        Retained     of Applicable      Retained
                                          Stock        Capital        Earnings     Deferred Taxes     Earnings
                                          -----        -------        --------     --------------     --------
<S>                                   <C>            <C>             <C>             <C>            <C> 

BALANCES AT ......................    $      --      $      --       $      --       $      --      $      --   
    DECEMBER 31, 1995

Net Loss .........................           --             --           (10,798)           --          (10,798)

Dividends Declared ...............           --             --           (32,401)           --          (32,401)

Common Stock Issuance -
    648,025 shares at $.01 per
    share issued at $10 per share           6,480      6,473,770            --              --        6,480,250

Costs of Conversion from a
    Mutual Association ...........           --         (369,759)           --              --         (369,759)
    to a Stock Association

Shares allocated to the ESOP Plan            --            3,888            --              --            3,888

Changes in Unrealized Gain on
    Securities Available-for-Sale,
    Net of Applicable Deferred
    Income Taxes of $1,361 .......           --             --              --             2,643          2,643
                                      -----------    -----------     -----------     -----------    ----------- 
BALANCES AT
    DECEMBER 31, 1996 ............    $     6,480    $ 6,107,899     $   (43,199)    $     2,643    $ 6,073,823
                                      ===========    ===========     ===========     ===========    ===========


</TABLE>
                                                       34
<PAGE>
NOTE AA
         CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY (Continued)
<TABLE>
<CAPTION>
                              ALGIERS BANCORP, INC.
                            STATEMENTS OF CASH FLOWS
                   For The Six Months Ended December 31, 1996

<S>                                                                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net Loss ....................................................    $   (10,798)
    Adjustments to Reconcile Net Income to Net
      Cash (Used in) by Operating Activities:
         Increase in Accounts Payable ...........................         19,504
         (Increase) in Accrued Interest Receivable ..............        (33,402)
         (Increase) in Due from Subsidiaries ....................         (6,923)
         Increase in Income Tax Payable .........................         20,779
         (Increase) in Deferred Income Taxes ....................         (2,383)
                                                                     -----------
         
           Net Cash (Used in) Operating Activities ..............        (13,223)
                                                                     -----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchases of Investment Securities - Available-for-Sale .....       (474,086)
    Purchases of Mortgage-Backed Securities - Available-for-Sale      (1,058,199)
    Maturities of Mortgage-Backed Securities - Available-for-Sale         12,015
    Investments in Subsidiaries .................................     (3,037,740)
                                                                     -----------

           Net Cash (Used in) Investing Activities ..............     (4,558,010)
                                                                     -----------
CASH FLOWS FROM FINANCING ACTIVITIES
    Sale of Common Stock ........................................          6,480
    Contribution of Additonal Paid-in Capital ...................      6,107,899
    Loan to Subsidiary for ESOP .................................       (518,420)
                                                                     -----------

           Net Cash Provided by Financing Activities ............      5,595,959
                                                                     -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS .......................      1,024,726

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR ...................           --
                                                                     -----------

CASH AND CASH EQUIVALENTS - END OF YEAR .........................    $ 1,024,726
                                                                     ===========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
    Cash Paid During the Year for:
      Interest ..................................................    $      --
      Income Taxes ..............................................    $      --
</TABLE>
                                       35
<PAGE>




























                                       36
<PAGE>

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

General

         The profitability of Algiers Bancorp,  Inc. (the "Company") and Algiers
Homestead  Association  (the  "Association")  depends  primarily on net interest
income,  which  is the  difference  between  interest  and  dividend  income  on
interest-earning  assets,  principally  mortgage-backed  securities,  loans  and
investment  securities and interest expense on  interest-bearing  deposits.  Net
interest  income is dependent upon the level of interest rates and the extent to
which such rates are  changing.  Profitability  also is  dependent,  to a lesser
extent,  on the level of its  noninterest  income,  provision  (credit) for loan
losses,  noninterest  expense and income taxes.  Noninterest expense consists of
general,  administrative and other expenses,  such as compensation and benefits,
occupancy and equipment expense,  federal insurance premiums,  and miscellaneous
other expenses.

Asset and Liability Management

         Consistent   net  interest   income  is  largely   dependent  upon  the
achievement  of a positive  interest  rate spread that can be  sustained  during
periods of fluctuating  market  interest rates.  Interest rate  sensitivity is a
measure  of the  difference  between  amounts  of  interest-earning  assets  and
interest-bearing  liabilities  which  either  reprice  or mature  within a given
period of time. The difference,  or the interest rate repricing "gap",  provides
an indication of the extent to which an institution's  interest rate spread will
be affected by changes in interest rates. A gap is considered  positive when the
amount  of  interest-rate  sensitive  assets  repricing  or  maturing  within  a
specified  period  exceeds  the amount of  interest-rate  sensitive  liabilities
repricing or maturing  within such period,  and is considered  negative when the
amount of  interest-rate  sensitive  liabilities  repricing or maturing within a
specified period exceeds the amount of interest-rate  sensitive assets repricing
or maturing  within such period.  Generally,  during a period of rising interest
rates,  a negative gap within  shorter  maturities  would  adversely  affect net
interest income,  while a positive gap within shorter maturities would result in
an  increase in net  interest  income,  and during a period of falling  interest
rates, a negative gap within shorter  maturities  would result in an increase in
net interest  income while a positive gap within shorter  maturities  would have
the  opposite  effect.  However,  the effects of a positive or 

                                       37
<PAGE>
negative  gap are  impacted,  to a  large  extent,  by  consumer  demand  and by
discretionary pricing by the Association's management.

         The   Association   attempts  to  manage  its  interest  rate  risk  by
maintaining a high percentage of its assets in  adjustable-rate  mortgage-backed
securities and in  adjustable-rate  mortgages  ("ARMs").  From 1985 to 1995, the
only residential mortgages originated by the Association were ARMs. During 1996,
the Association  started  offering fixed rate mortgage loans. It was the opinion
of  management  that a mix of fixed rate and  adjustable-rate  mortgage  product
would better  insulate the  Association  from  periods of rate  fluctuation.  At
December 31,  1996,  the  Association's  fixed-rate  mortgage-backed  securities
amounted  to $3.8  million or 7.9% of total  assets,  its ARMs  amounted to $7.0
million  or  14.5%  of  total  assets  and its  adjustable-rate  mortgage-backed
securities amounted to $28.0 million or 58.0% of total assets. The interest rate
on the ARMs and a portion  of the  adjustable-rate  mortgage-backed  securities,
however,  adjusts no more  frequently  than once a year,  with the amount of the
change subject to annual limitations, whereas the interest rates on deposits can
change more frequently and are not subject to annual  limitations.  A portion of
the Association's adjustable-rate mortgage-backed securities have interest rates
which adjust  monthly or  semi-annually  with  limitations  on the amount of the
increase.

         Management also monitors and evaluates the potential impact of interest
rate changes upon the market value of the  Association's  portfolio  equity on a
quarterly  basis,  in an attempt to ensure that interest rate risk is maintained
within  limits  established  by the Board of  Directors.  In August 1993 the OTS
adopted a final rule  incorporating  an interest  rate risk  component  into the
risk-based  capital rules.  Under the rule, an  institution  with a greater than
"normal"  level of  interest  rate risk will be  subject to a  deduction  of its
interest rate risk component from total capital for purposes of calculating  the
risk-based  capital  requirement.  An  institution  with a greater than "normal"
interest rate risk is defined as an institution  that would suffer a loss of net
portfolio  value ("NPV")  exceeding  2.0% of the  estimated  market value of its
assets in the event of a 200 basis point increase or decrease in interest rates.
NPV is the difference  between incoming and outgoing  discounted cash flows from
assets, liabilities,  and off-balance sheet contracts. A resulting change in NPV
of more than 2% of the estimated  market value of an  institution's  assets will
require the  institution to deduct 50% of 

                                       38
<PAGE>
that excess  change.  The rule provides that the OTS will calculate the interest
rate  risk  component  quarterly  for  each  institution.  The OTS has  recently
indicated  that no  institution  will be required to deduct capital for interest
rate risk until further  notice.  Because a 200 basis point increase in interest
rates would have decreased the Association's NPV by less than 2% as a percentage
of the estimated market value of it assets at December 31, 1996, the Association
would not have been subject to any capital  deduction as of December 31, 1996 if
the regulation had been effective as of such date. The following  table presents
the  Association's  NPV as of December 31, 1996, as calculated by the OTS, based
on information provided to the OTS by the Association.
<TABLE>
<CAPTION>
    Change in                                                                                Change in
   Interest Rates                                                       NPV as % of         NPV as % of
   in Basis Points                 Net Portfolio Value                Portfolio Value     Portfolio Value
    (Rate Shock)          Amount       $ Change        % Change        of Assets          of Assets(1)
    ------------          ------       --------        --------        ---------          ------------
                                  (Dollars in Thousands)
<S>                     <C>            <C>                <C>              <C>                 <C>

         400            $  3,476       $ (1,632)          -32%              8.4%               (3.2)%
         300               3,903         (1,205)          -24%              9.3%               (2.3)%
         200               4,318           (791)          -15%             10.1%               (1.5)%
         100               4,719           (389)           -8%             10.8%                (.7)%
       Static              5,108              -             0%             11.6%                   -
        (100)              5,512            404             8%             12.3%                 .7%
        (200)              6,018            910            18%             13.2%                1.6%
        (300)              6,715          1,607            31%             14.4%                2.8%
        (400)              7,575          2,467            48%             15.8%                4.3%

         (1) Based on the portfolio value of the  Association's  assets assuming
no change in interest rates.
</TABLE>
 
Changes in Financial Condition

         Assets.  Total assets  increased to $48.2  million at December 31, 1996
from $42.4  million at December 31, 1995.  This increase is primarily due to the
mutual to stock conversion completed on July 8, 1996.

  Mortgage-backed  securities as a percentage of total assets increased to 68.2%
at December  31,  1996 from 66.3% at December  31,  1995.  All of the  Company's
mortgage-backed  securities are either insured or guaranteed by the Federal Home
Loan Mortgage Corporation  ("FHLMC"),  the Federal National Mortgage Association
(FNMA")   or   the   Government   National   Mortgage   Association    ("GNMA").

                                       39
<PAGE>
Mortgage-backed  securities increase the quality of the Association's  assets by
virtue of the guarantees that support them, require fewer personnel and overhead
costs  than  individual   residential  mortgage  loans,  are  more  liquid  than
individual  mortgage loans and may be used to collateralize  borrowings or other
obligations of Algiers. However, mortgage-backed securities typically yield less
than individual residential montage loans.

         At December 31, 1996,  net loans  receivable  totalled  $9.2 million or
19.1% of total  assets.  Of the total  loan  portfolio,  $8.1  million  or 82.9%
consisted of one-to-four family residential loans.  Consumer loans accounted for
$869,000  or  8.9% of the  total  loan  portfolio,  and  6.8%  of the  portfolio
consisted of commercial real estate loans.

         Mortgage-backed  securities  and investment  securities  were 68.2% and
7.8% of  total  assets,  respectively,  at  December  31,  1996 Of such  amount,
$868,000 or 1.8% of total  assets  mature  within one year of December 31, 1996.
See Notes C, D and G to the  Consolidated  Financial  Statements.  Cash and cash
equivalents amounted to 3.6% of total assets at such date.

         Non-performing  assets  have  decreased  from  .40% of total  assets at
December 31, 1995 to .20% of total  assets at December  31,  1996.  Non-accruing
single-family  residential  loans  represented  44.4%  of the  $97,000  of total
non-performing assets at December 31, 1996. The balance of non-performing assets
included a one-to-four  family real estate owned  property  which  accounted for
46.4%,  and a commercial  loan  accounted  for 8.2%.  At December 31, 1996,  the
Association's allowance for loan losses equalled $530,000 or 5.4% of total loans
outstanding.  The  Association's  largest  commercial  real  estate  loan with a
principal  balance of $504,000 and a specific reserve of $190,000 as of December
31, 1996 is not current as of March 31, 1997. As of March 31, 1997 there are two
payments  due  for  principal,   interest  and  escrow  totalling  $9,400.   The
Association's  management is closely  monitoring this loan and is discussing its
status with the borrower.  The borrower has pledged to the Association a deposit
account  with a  balance  of  $15,000  to be used to make  monthly  payments  if
necessary.  It is the opinion of management that the property securing this loan
has a value adequate to cover the net amount of the loan.


                                       40
<PAGE>
         The Association's total deposits decreased during 1996 to $36.6 million
at December  31,  1996 from $38.2  million at December  31,  1995.  Certificates
accounts  decreased  by $611,000 or 2.1% from  December 31, 1995 to December 31,
1996,  while  transaction  accounts  decreased  by  $957,000  or 2.5% during the
period.

         Total  stockholders'  equity was $9.8 million at December 31, 1996,  an
increase of $5.8  million from  December 31, 1995.  The increase was due to $6.1
million of net proceeds from the stock  conversion and net income of $156,000 in
1996, less $492,000 allocated to the Employee Stock Ownership Plan and dividends
of $32,000.
 
Results of Operations

         Net income.  The Company's  net income  decreased by $14,000 or 8.2% in
1996  and by  $80,00  or 31.9% in 1995.  The  decrease  in 1996 is  attributable
primarily to the special SAIF  assessment of $241,000,  which reduced net income
by $159,000.

         Net  Interest  Income.  The primary  source of earnings is net interest
income,  which is the difference between income generated from  interest-earning
assets and interest  expense  from  interest-bearing  liabilities.  Net interest
income  increased by $294,000 or 31.6% in 1996, and decreased  $137,000 or 12.8%
in 1995.  The  increase  in 1996 was due to an  increase in the ratio of average
interest-earning assets to average interest-bearing  liabilities and to a lesser
extent the increase in the interest  rate  spread.  Interest  rate spread is the
yield  on   interest-earning   assets   minus  the  costs  of   interest-bearing
liabilities.

         The  Association's  average interest rate spread increased to 2.22% for
1996 from 2.06% for 1995 after  declining from 2.28% for 1994. In addition,  its
ratio of average interest-earning assets to average interest-bearing liabilities
increased  to 113.3% for 1996 from  106.4%  for 1995 and  106.3%  for 1994.  The
increase in the  average  interest  rate spread was due to the average  yield on
interest-earning assets increasing by a higher amount than the average rate paid
on interest-bearing liabilities.
 
         Average  Balances,  Net Interest  Income,  and Yields  Earned and Rates
Paid. The following  table  presents for the periods  indicated the total dollar
amount of interest income from average interest-earning assets and the resultant
yields, as well as the interest expense on average interest-bearing liabilities,
expressed  both in 

                                       41
<PAGE>
dollars and rates,  and the net interest  margin.  Tax-exempt  income and yields
have not been adjusted to a tax-equivalent basis. All average balances are based
on monthly balances.
<TABLE>
<CAPTION>
                                                                            Year ended December 31,
                                                ------------------------------------------------------------------------------ 
                                                              1996                                        1995    
                                                -----------------------------------       ------------------------------------ 
                                                                            Average                                   Average    
                                                Average                      Yield/       Average                      Yield/  
                                                Balance      Interest       Rate(1)       Balance       Interest       Rate(1) 
                                                                             (Dollars in Thousands)
<S>                                             <C>           <C>          <C>            <C>            <C>          <C>
Interest-earning assets:
   Loans receivable(2)                          $ 9,581       $  776         8.09%        $10,024        $  807         8.05%     
   Mortgage-backed securities                    30,872        2,008         6.50          27,196         1,702         6.26      
   Investment securities(3)                       1,772          157         8.86           2,127           134         6.30      
   Other interest-earning assets                  2,025          118         5.82             414            27         6.52 
                                                -------       ------       ------         -------        ------       ------     
      Total interest-earning assets              44,250        3,059         6.91          39,761         2,670         6.72  
                                                              ------       ------                        ------       ------     
    
Noninterest-earning assets                        1,406                                     1,772 
                                                -------                                   -------                                
      Total assets                              $45,656                                   $41,533                                 
                                                =======                                   =======                              

Interest-bearing liabilities:
   Passbook, NOW and money
      market accounts                           $10,047          248         2.46         $ 9,944           263         2.64      
   Certificates of deposit                       28,706        1,569         5.46          27,296         1,471         5.39   
                                                -------       ------       ------         -------        ------       ------     
      Total deposits                             38,753        1,817         4.68          37,240         1,734         4.66      
   FHLB advances                                    307           18         5.86             123             6         4.88 
                                                -------       ------       ------         -------        ------       ------     
      Total interest-bearing liabilities         39,060        1,835         4.69          37,363         1,740         4.66  
                                                              ------       ------                        ------       ------     
Noninterest-bearing liabilities(4)                1,870                                       379 
                                                -------                                   -------                                 
      Total liabilities                          40,930                                    37,742                                 
   Stockholders' equity                           4,726                                     4,726  
                                                -------                                   -------                                 
      Total liabilities and stockholders'
         equity                                 $45,656                                   $42,468                                 
                                                =======                                   =======                                

Net interest-earning assets                     $ 5,190                                   $ 2,398  
                                                =======                                   =======                               
Net interest income; average interest
   rate spread                                                $1,224         2.22%                       $  930         2.06% 
                                                              ======       ------                        ======       ------  
    
Net interest margin(5)                                                       2.76%                                      2.34%
                                                                           ======                                     ======   
Average interest-earning assets to
   average interest-bearing liabilities                                    113.28%                                     106.4%  
                                                                           ======                                     ======  
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                      Year ended December 31,
                                                -----------------------------------
                                                                1994
                                                -----------------------------------
                                                                            Average             
                                                Average                      Yield/            
                                                Balance       Interest      Rate(1)            
                                                -------       --------     -------- 
<S>                                             <C>           <C>            <C>                                                    
Interest-earning assets:                    
   Loans receivable(2)                          $10,229       $  830         8.11%                         
   Mortgage-backed securities                    28,884        1,571         5.44                    
   Investment securities(3)                       3,108          155         4.99                    
   Other interest-earning assets                    392           18         4.59
                                                -------       ------       ------                    
      Total interest-earning assets              42,613        2,574         6.04  
                                                              ------       ------                  
Noninterest-earning assets                        1,592 
                                                -------                                                   
      Total assets                              $44,205                                             
                                                =======                                             
                                                                                                           
Interest-bearing liabilities:                                                                              
   Passbook, NOW and money                                                                                 
      market accounts                           $12,605          348         2.76           
   Certificates of deposit                       27,306        1,150         4.21  
                                                -------       ------       ------                    
      Total deposits                             39,911        1,498         3.75                    
   FHLB advances                                    162            9         5.56 
                                                -------       ------       ------                    
      Total interest-bearing liabilities         40,073        1,507         3.76   
                                                              ------       ------                 
Noninterest-bearing liabilities(4)                  417 
                                                -------                                                  
      Total liabilities                          40,490                                                    
   Stockholders' equity                           3,715 
                                                -------                                                   
      Total liabilities and stockholders'                                                                  
         equity                                 $44,205                                             
                                                =======                                                            
Net interest-earning assets                     $ 2,540 
                                                =======                                          
Net interest income; average interest                                                                      
   rate spread                                             $    1,067        2.28% 
                                                           ==========      ------                  
Net interest margin(5)                                                       2.50% 
                                                                           ======                  
Average interest-earning assets to                                                                         
   average interest-bearing liabilities                                    106.34%                 
                                                                           ======                                
 -------------------------
 

(1) At December 31, 1996, the weighted average yields earned and rates paid were
as  follows:  loans  receivable,  8.06%;  mortgage-  backed  securities,  6.59%;
investment  securities,  5.70%;  other  interest-earning  assets,  5.85%;  total
interest-earning assets 6.81%; deposits, 4.95%; and interest rate spread, 1.86%.
<PAGE>

(2) Includes nonaccrual loans during the respective  periods.  Calculated net of
deferred fees and discount, loans in process and allowance for loan losses.

                                       42
<PAGE>
(3) Includes non-accruing investment securities during the respective periods.

(4) Includes noninterest-bearing deposits.

(5)  Net   interest   margin  is  net   interest   income   divided  by  average
interest-earning assets.
</TABLE>
Rate/Volume Analysis.  The following table describes the extent to which changes
in  interest  rates  and  changes  in  volume  of  interest-related  assets  and
liabilities  have  affected  Algiers'  interest  income and  expense  during the
periods   indicated.   For  each   category  of   interest-earning   assets  and
interest-bearing liabilities, information is provided on changes attributable to
(i)  changes in rate  (change in rate  multiplied  by prior year  volume),  (ii)
changes in volume  (change in volume  multiplied by prior year rate),  and (iii)
total change in rate and volume. The combined effect of changes in both rate and
volume  has been  allocated  proportionately  to the  change due to rate and the
change due to volume.

                                       43
<PAGE>
<TABLE>
<CAPTION>

                                                 1996 vs 1995                           1995 vs 1994
                                       -----------------------------------    ----------------------------------  
                                                   Increase                                Increase
                                                  (Decrease)                              (Decrease)
                                                    Due to                                  Due to
                                       -----------------------------------    ---------------------------------- 
                                                                   Total                                Total
                                                                 Increase                              Increase
                                        Rate        Volume      (Decrease)      Rate       Volume     (Decrease)
                                        ----        ------      ----------      ----       ------     ----------
                                                (In Thousands)                         (In Thousands)
<S>                                    <C>          <C>          <C>          <C>          <C>          <C>
Interest income:
   Loans receivable ............       $   4        $ (35)       $ (31)       $  (6)       $ (17)       $ (23)
   Mortgage-backed securities ..          68          238          306          223          (92)         131
   Investment securities .......          50          (27)          23           28          (49)         (21)
   Other interest-earning assets          (3)          94           91            8            1            9
                                       -----        -----        -----        -----        -----        -----
      Total interest income ....         119          270          389          253         (157)          96
                                       -----        -----        -----        -----        -----        -----

Interest expense:
   Passbook, NOW and money
      market accounts ..........         (18)           3          (15)         (14)         (71)         (85)
   Certificates of deposits ....          20           78           98          322           (1)         321
                                       -----        -----        -----        -----        -----        -----
      Total deposits ...........           2           81           83          308          (72)         236
   FHLB advances ...............           2           10           12           (1)          (2)          (3)
                                       -----        -----        -----        -----        -----        -----
      Total interest expense ...           4           91           95          307          (74)         233
                                       -----        -----        -----        -----        -----        -----
Increase (decrease) in net
   interest income .............       $ 115        $ 179        $ 294        $ (54)       $ (83)       $(137)
                                       =====        =====        =====        =====        =====        ===== 

</TABLE>
 
         Interest  Income.  Interest on loans decreased  $31,000 or 3.8% in 1996
due  to a  decrease  of  $443,000  or  4.4%  in the  average  balance  of  loans
receivable,  offset  slightly by an increase in the average rate.  The decreased
average  balance is primarily  due to a decrease in the amount of  single-family
residential loans. A substantial  portion of the loans have adjustable  interest
rates,  and the change in the average  yields  reflects  the  general  change in
market interest rates.

         Interest on mortgage-backed  securities  increased by $306,000 or 18.0%
in 1996 from  1995,  due to a $3.7  million  or 13.5%  increase  in the  average
balance  and an  increase  in the  average  yield to 6.50% in 1996 from 6.26% in
1995. The average balance increased as the amount of mortgage-backed  securities
purchased in 1996 increased by $4.8 million from 1995.  The higher  purchases in
1996 were partially offset by higher repayments in 1996. The increased yield was
due  to  the  interest   rate  on  a  large   portion  of  the   adjustable-rate
mortgage-backed securities adjusting upward in 1996.

                                       44
<PAGE>
         Interest on investment securities increased by $23,000 or 17.2% in 1996
from 1995,  due to an increase in the average  yield to 8.86% in 1996 from 6.30%
in 1995,  which was  partially  offset by a $355,000  or 16.7%  decrease  in the
average balance. During the last half of 1996 the Company purchased $3.5 million
of callable  notes and bonds  issued by various  government  agencies  which had
interest rates of 7.75% to 8.50%. These notes and bonds partially  accounted for
the increase in the average yield on investment securities.

         Other  interest  income,  which consists of dividends on FHLB stock and
interest on  overnight  deposits at the FHLB,  increased by $91,000 or 337.0% in
1996 over 1995, due to a $1.6 million or 389.1% increase in the average balance.
The  average  yield  decreased  to  5.82%  in 1996  from  6.52% in 1995 due to a
decrease  in the rate  paid by the FHLB of  Dallas on  overnight  deposits.  The
increase  in the  average  balance  resulted  from  the  Association  purchasing
additional FHLB stock and increasing overnight deposits in 1996.

         Total interest income increased by $389,000 or 14.6% in 1996 from 1995,
due to a $4.5  million  or  11.3%  increase  in the  average  balance  of  total
interest-earning  assets and an increase  in the average  yield to 6.91% in 1996
from  6.72%  in  1995.   The   increase   in  the   average   balance  of  total
interest-earning  assets was  primarily due to the sale of common stock in 1996.
The average yield on each category of interest-earning  assets (other than other
interest-earning assets) increased in 1996 from 1995.

         Interest Expense.  Interest on deposits increased by $83,000 or 4.8% in
1996 over 1995,  due to a $1.5 million or 4.1%  increase in the average  balance
and an  increase in the  average  rate to 4.68% in 1996 from 4.66% in 1995.  The
increase in the average balance was mostly due to an increase in certificates of
deposit.  The average rate paid on certificates of deposit increased to 5.46% in
1996 from 5.39% in 1995,  which  increase was mostly offset by a decrease in the
average rate paid by the  Association  on its  transaction  accounts to 2.46% in
1996 from 2.64% in 1995.

         Interest on FHLB  advances  increased by $12,000 or 200.0% in 1996 from
1995,  primarily  due to an increase in the average  balance of FHLB advances of
$184,000 or 149.6% in 1996.

                                       45
<PAGE>
         Total interest expense  increased by $95,000 or 5.5% in 1996 over 1995,
primarily due to the increase in the average balance of certificates of deposit.

         Provision (Credit) for Loan Losses.  The Association  recovered $4,000,
$24,000 and  $15,000 of its  allowance  for loan losses in 1996,  1995 and 1994,
respectively.  Approximately $7,000 of the credit in each of 1996, 1995 and 1994
was due to continued principal payments on the Association's largest outstanding
commercial real estate loan,  which amounted to $504,000 at December 31, 1996. A
portion  of this loan is  classified  substandard  because  the  carrying  value
exceeds the appraised value of the property securing the loan, and the amount of
the allowance  allocated to this loan ($190,000 at December 31, 1996) is reduced
as principal  payments are made. The remaining $17,000 credit in 1995 was due to
declines of $760,000 in one- to  four-family  residential  loans and $193,000 in
substandard loans. The allowance for loan losses amounted to $530,000 or 5.4% of
the total loan portfolio at December 31, 1996.

         Noninterest  Income.  Service charges and fees, which primarily consist
of charges for checking  accounts,  overdrafts and late  payments,  decreased by
$2,000 or 3.5% in 1996 from 1995.

         The gross carrying  value of the  Association's  Guaranteed  Investment
Contracts  (the  "GIC  bonds")  was  reduced  in 1996 by  $67,000  of  principal
payments. See Note E of Notes to Consolidated Financial Statements.

         In 1996 the Association sold a mortgage-backed  security which was part
of the  available for sale  portfolio.  This security was purchased in 1995 at a
10% discount.  As interest rates declined in early 1996 the security was sold to
take advantage of the gain that was created.

         Other  noninterest  income  amounted  to $31,000 and $7,000 in 1996 and
1995, respectively.

         Total  noninterest  income  decreased  by $40,000 or 17.0% in 1996 from
1995,  primarily due to the recognition of $95,000 of lawsuit  proceeds in 1995.
This decrease was partially  offset by a $29,000 gain on sale of  investments in
1996.  Algiers  considers  these  items to be  non-recurring  in  nature.  After
excluding these items, total noninterest income increased by $27,000 or 19.1% in
1996 from 1995.

                                       46
<PAGE>
         Noninterest Expense.  Compensation and benefits increased by $21,000 or
4.8% in 1996 over 1995,  primarily due to the adoption of the Company's Employee
Stock  Ownership Plan which resulted in $30,000 of  compensation  expense.  This
amount was  partially  offset by a reduction in overtime  compensation  that was
paid in 1995 due to a computer conversion.

         Occupancy  and equipment  expenses  increased by $5,000 or 4.7% in 1996
over 1995,  primarily  due to a $6,000  increase  in the  monthly  rental of the
Association's main office.

         Federal insurance premiums increased by $245,000 or 385.4% in 1996 from
1995,  primarily  due  to  a  special  SAIF  assessment  of  $241,000.   Federal
legislation  passed  in 1996  required  all SAIF  member  institutions  to pay a
special  one-time  assessment to  recapitalize  the SAIF,  and the amount of the
assessment  for the  Association  amounted  to  $241,000,  gross of related  tax
benefits.  The payment of such  assessment  reduced the Company's net income and
retained  earnings in the period ending September 30, 1996.  However,  after the
recapitilization   of  the  SAIF,  the  premiums  to  be  paid  by  SAIF-insured
institutions  were  reduced  to a level  comparable  to  those  currently  being
assessed BIF-insured  institutions,  which will result in the special assessment
being  recouped  in  approximately   four  years  through  the  lower  premiums.
Management does not believe that the special one-time  assessment had a material
adverse effect on the Company's overall financial condition or liquidity.
 
         Computer  expenses  decreased  by  $23,000  or 31.5% in 1996 from 1995,
primarily due to a switch to a new data processing service provider in 1995.

         Professional  services  decreased $2,000 or 5.6% in 1996 from 1995, due
to a decrease in fees associated with a change in independent auditors.

         FHLB service charges  increased  $9,000 or 28.4% in 1996 from 1995, due
to an  increase  in the  number of  mortgage-backed  securities  and  investment
securities which the Company owned in 1996.

         Beginning in 1996, the Company incurred additional expenses as a result
of becoming a public  company.  Such expenses will include,  among other things,
increased  professional fees and

                                       47
<PAGE>
printing  expenses  associated  with the Company's  reporting  obligations,  and
annual listing fees.

         The Association  provided $4,000 of its allowance for real estate owned
loss in 1996 and recovered  $13,000 in 1995.  The allowance for loss was reduced
in 1996 by net charge-offs of real estate owned amounting to $6,000.  See Note I
of Notes to Consolidated Financial Statements. The recovery of the allowance for
loss in 1995 was due to the gross carrying value of real estate owned decreasing
to $140,000 at December 31, 1995 from  $260,000 at December  31, 1994.  The real
estate  owned  at  December  31,  1996  consisted  of two  one-  to  four-family
residential properties and one vacant lot.

         The Association realized a $5,000 loss on the sale of real estate owned
in 1996 due to the sale of one property.

         The Association's  real estate owned expense,  net decreased by $29,000
or 91.3% in 1996 from 1995,  primarily due to a $32,000 decline in rental income
in 1996.

         Other noninterest  expense,  which primarily  consists of insurance and
bond premiums,  postage and supplies,  and other operating expenses decreased by
$5,000 or 2.8% in 1996 from 1995.  The  decrease was  primarily  due to a $17,00
decrease in other operating expenses.  Amortization  expense amounted to $22,000
and $22,000 for 1996 and 1995, respectively.

         Total  noninterest  expense increased by $244,000 or 25.5% in 1996 from
1995, primarily due to increases of $241,000 in SAIF insurance premiums, $21,000
in  compensation  and benefits,  and $6,000 in occupancy and equipment  expense,
partially  offset by decreases  of $29,000 in net real estate owned  expense and
$23,000 in computer expenses.  Total noninterest expense as a percent of average
assets was 2.5% in 1996 compared to 2.3% in 1995.

         Federal  Income Tax Expense.  The Company's  federal income tax expense
increased  by $3,000 or 5.2% in 1996 from  1995.  The  Association  has filed an
amended tax return for 1994 and  expects to receive a $74,640 tax refund,  which
is shown as a receivable on the balance  sheet as of December 31, 1996.  The tax
return for 1994 was amended because  payments  received on the GIC bonds in 1994
were  originally  included in  interest  income  rather than being  treated as a
reduction  of  principal.  The  effective  tax rate for 1996,  1995 and 1994 was
29.7%, 27.2% and 19.9%,  respectively.  The

                                       48
<PAGE>
Company had a deferred tax valuation reserve of $194,000,  $230,000 and $223,000
at December 31, 1996, 1995 and 1994, respectively.  The increase in this reserve
in 1995 was due to the inclusion of $34,000 with respect to a net operating loss
carryforward  recognized as a deferred tax asset in 1995, which carryforward was
primarily  due to a bad debt  deduction  for tax purposes as a result of the GIC
bonds being  classified as  uncollectible  in 1995. The other  components of the
valuation  reserve  consist of allowances  for loan losses and real estate owned
losses,  each of which decreased  slightly in 1996. For additional  information,
see Note K of Notes to Consolidated Financial Statements.

Liquidity and Capital Resources

         Algiers is required under  applicable  federal  regulations to maintain
specified levels of "liquid" investments in qualifying types of U.S. Government,
federal agency and other  investments  having  maturities of five years or less.
Current OTS  regulations  require  that a savings  institution  maintain  liquid
assets of not less than 5% of its  average  daily  balance  of net  withdrawable
deposit accounts and borrowings payable in one year of less, of which short-term
liquid  assets must consist of not less than 1%. At December 31, 1996,  Algiers'
liquidity was 6.07% or $402,000 in excess of the minimum OTS requirement.

         Cash was  generated by Algiers'  operating  activities  during 1996 and
1995  primarily as a result of net income in each period and the  provision  for
depreciation  and  amortization.  The adjustments to reconcile net income to net
cash provided by operations during the periods presented  consisted primarily of
the provision for  depreciation and  amortization,  accretion of the premiums on
investments,  recovery of loan  losses,  gains and losses on the sale of assets,
and  increases or  decreases in various  receivable  and payable  accounts.  The
primary  investing  activities  of Algiers are the  purchase of  mortgage-backed
securities  and the  origination of loans,  which are primarily  funded with the
proceeds from repayments and  prepayments on existing loans and  mortgage-backed
securities and the maturity of mortgage-backed securities.  Investing activities
used net cash in 1996 primarily because the amount of mortgage-backed securities
and  investments  purchased  exceeded  the amount  matured.  In 1995,  investing
activities  provided  net cash as the amount of  maturities  of  mortgage-backed
securities  and  investments  exceeded  the  amount of  purchases.  The  primary
financing  activity consists of the issuance of capital stock of $6.1 million in
1996 and of deposits and FHLB advances. 

                                       49
<PAGE>
Financing  activities  used net cash in 1995 due to the repayment of $600,000 of
FHLB  advances.  Total cash and cash  equivalents  amounted  to $1.7  million at
December  31,  1996.  See  the  Consolidated  Statements  of Cash  Flows  in the
Consolidated Financial Statements.

         At December 31, 1996, Algiers had outstanding  commitments to originate
$108,000  of  one-to  four-family   residential  loans  (including   undisbursed
construction loans) and to purchase $185,000 in mortgage-backed  securities.  At
the same date, the total amount of  certificates of deposit which were scheduled
to mature in the following 12 months was $17.2 million. Algiers believes that it
has adequate resources to fund all of its commitments and that it can adjust the
rate on certificates  of deposit to retain  deposits to the extent  desired.  If
Algiers requires funds beyond its internal funding  capabilities,  advances from
the FHLB of Dallas are available as an additional source of funds.

         Algiers is required to maintain  regulatory  capital sufficient to meet
tangible,   core  and  risk-based   capital  ratios  of  1.5%,   3.0%  and  8.0%
respectively.  At  December  31,  1996,  Algiers  exceeded  each of its  capital
requirements,  with  tangible,  core and  risk-based  capital  ratios of 14.83%,
14.83% and 54.24%,  respectively.  See Note O of Notes to Consolidated Financial
Statements.
 
Impact of Inflation and Changing Prices

         The  Consolidated  Financial  Statements  and  related  financial  data
presented  herein  have been  prepared in  accordance  with  generally  accepted
accounting  principles,  which  generally  require the  measurement of financial
position  and  operating  results  in  terms  of  historical  dollars,   without
considering  changes in relative  purchasing  power over time due to  inflation.
Unlike  most  industrial  companies,   virtually  all  of  Algiers'  assets  and
liabilities are monetary in nature. As a result, interest rates generally have a
more  significant  impact  on  Algiers'  performance  than  do  the  effects  of
inflation.  Interest rates do not  necessarily  move in the same direction or in
the same  magnitude as the prices of goods and  services,  since such prices are
affected by inflation to a larger extent than interest rates.

                                       50
<PAGE>
Recent Accounting Pronouncements

         In December 1990,  the Financial  Accounting  Standards  Board ("FASB")
issued SFAS No. 106,  "Employers'  Accounting for Postretirement  Benefits Other
Than  Pensions."  SFAS No. 106  requires  that certain  postretirement  benefits
provided to former employees,  their  beneficiaries,  and covered  dependents be
recognized over those employees' service period. Postretirement benefits include
health care, life insurance and other welfare  benefits.  This statement  became
effective for the  Association  for fiscal years  beginning  after  December 15,
1994. The Association  does not provide any of the benefits  covered by SFAS No.
106.

         In December 1991, the FASB issued SFAS No. 107, "Disclosures About Fair
Value of Financial Investments." SFAS No. 107 requires all entities to disclose,
in  financial  statements  or the notes  thereto,  the fair  value of  financial
instruments,  both assets and  liabilities  recognized and not recognized in the
statement of financial  condition,  for which it is practicable to estimate fair
value.  SFAS No. 107 is effective for financial  statements of institutions with
assets greater than $150 million issued for years ending after December 15, 1992
(December 15, 1995 for smaller  institutions).  Substantially  all of the assets
and liabilities of Algiers are financial  instruments and, as a result, SFAS No.
107  requires the fair value of such assets and  liabilities  to be disclosed to
the extent the institution  meets the size criteria  specified in the statement.
Because such assets and  liabilities  are monetary in nature,  their fair values
may fluctuate significantly over time.

         In November 1992, the FASB issued SFAS No. 112, "Employers'  Accounting
for  Post-Employment  Benefits."  SFAS No. 112 requires  accrual of the expected
cost  of  providing  post-employment  benefits  to an  employee  and  employee's
beneficiaries and covered  dependents during the years that the employee renders
the necessary services. Such benefits include salary continuation,  supplemental
unemployment  benefits,  severance  benefits,  job training and counseling,  and
continuation of health care benefits. SFAS No. 112 is effective for fiscal years
beginning after December 15, 1993. The  Association  does not provide any of the
benefits covered by SFAS No. 112.

         In May 1993, the FASB issued SFAS No. 114, "Accounting by Creditors for
Impairment  of a Loan."  SFAS No. 114 is  effective

                                       51
<PAGE>
for  years  beginning  after  December  15,  1994,  and  earlier   adoption  was
encouraged.  The Statement establishes accounting  measurement,  recognition and
reporting  standards  for impaired  loans.  SFAS No. 114 provides that a loan is
impaired when, based on current  information and events, it is probable that the
creditor will be unable to collect all amounts due according to the  contractual
terms (both  principal and interest).  SFAS No. 114 requires that when a loan is
impaired,  impairment  should  be  measured  based on the  present  value of the
expected cash flows,  discounted at the loan's  effective  interest rate. If the
loan is collateral dependent, as a practical expedient,  impairment can be based
on a loan's  observable  market price or the fair value of the  collateral.  The
value of the loan is adjusted  through a valuation  allowance  created through a
charge against income.  Residential mortgages,  consumer installment obligations
and  credit  cards  are  excluded.  Loans  that  were  treated  as  in-substance
foreclosures  under  previous  accounting  pronouncements  are  considered to be
impaired loans and remain in the loan portfolio under SFAS No. 114. SFAS No. 114
was  amended in October  1994 by SFAS No.  118,  "Accounting  by  Creditors  for
Impairment of a Loan - Income Recognition and Disclosures." SFAS No. 118 amended
SFAS No. 114  primarily to remove its income  recognition  requirements  and add
some disclosure  requirements.  The adoption of SFAS No. 114, as amended by SFAS
No. 118, did not  materially  affect the  Association's  financial  condition or
results of operations in 1996.

         In November 1993, the AICPA issued SOP 93-6,  Employers' Accounting for
Employee Stock  Ownership  Plans,  which is effective for years  beginning after
December 15, 1993. SOP 93-6 requires the  application of its guidance for shares
acquired by ESOPs after  December 31, 1992 but not yet  committed to be released
as of the  beginning of the year SOP 93-6 is adopted.  Among other  things,  SOP
93-6  changed the measure of  compensation  expense  recorded by  employers  for
leveraged  ESOPs from the cost of ESOP shares to the fair value of ESOP  shares.
The  Company  and  the  Association  adopted  an  ESOP in  connection  with  the
Conversion, which purchased 8% of the Common Stock sold in the Conversion. Under
SOP 93-6, the Company  recognizes  compensation  cost equal to the fair value of
the ESOP  shares  during  the  periods  in which  they  become  committed  to be
released.  To the extent that the fair value of the Company's ESOP shares differ
from the cost of such shares,  this  differential will be charged or credited to
equity.  Employers with  internally  leveraged  ESOPs such as the Company do

                                       52
<PAGE>
not report the loan  receivable  from the ESOP as an asset and do not report the
ESOP debt from the employer as a liability.

         In October  1994,  the FASB  issued  SFAS No.  119,  "Disclosure  About
Derivative Financial Instruments and Fair Value of Financial Instruments," which
is effective for years ending after December 15, 1994.  SFAS No. 119 expands the
disclosure requirements for derivative financial instruments,  which are defined
to include futures,  forwards,  swaps or options  contracts or other instruments
with similar  characteristics.  It excludes all such instruments whose financial
effects  are  recorded  on the balance  sheet.  SFAS No. 119 also makes  certain
modifications  to SFAS No. 107. In 1996,  1995 and 1994, the  Association had no
financial  instruments which would require additional  disclosure under SFAS No.
119.

         In December  1994,  the AICPA  issued SOP 94-6  "Disclosure  of Certain
Significant  Risks and  Uncertainties,"  which addresses risks and uncertainties
that could significantly affect the amounts reported in the financial statements
in the near term or the near-term functioning of the reporting entity. The risks
and  uncertainties  the SOP  addresses  result  from the nature of the  entity's
operations,  from the  necessary  use of  estimates  in the  preparation  of the
entity's  financial  statements and from significant  concentrations  in certain
aspects of the entity's operations. Near term is defined as a period of time not
to  exceed  one  year  from the date of the  financial  statements.  This SOP is
effective for financial statements issued for fiscal years ending after December
15,  1995 and for  financial  statements  for  interim  periods in fiscal  years
subsequent to the year for which this SOP is to be first applied. Management has
implemented the SOP in the financial statement disclosures.
 
         In March  1995,  the FASB  issued  SFAS No.  121,  "Accounting  for the
Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be Disposed Of."
This statement establishes accounting standards for the impairment of long-lived
assets, certain identifiable  intangibles,  and goodwill related to those assets
to be held and used for long-lived assets and certain  identifiable  intangibles
to be disposed of. This statement  requires that  long-lived  assets and certain
identifiable  intangibles  to be held  and used by an  entity  be  reviewed  for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
carrying amount of an asset may not be recoverable. Measurement of an impairment
loss for long-lived  assets and identifiable  intangibles that an entity expects
to hold and use should be based on the fair value of the asset. 

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<PAGE>
This  statement  does not apply to  financial  instruments,  long-term  customer
relationships   of  a  financial   institution   (for   example,   core  deposit
intangibles),  mortgage and other servicing rights,  deferred policy acquisition
costs,  or deferred  tax assets.  This  statement  is  effective  for  financial
statements for fiscal years  beginning  after December 15, 1995. The adoption of
SFAS No.  121 for 1996 did not have  any  significant  impact  on the  financial
statements.

         In  October  1995,  the FASB  issued  SFAS  No.  123,  "Accounting  for
Stock-Based  Compensation,"  which is effective  for  transactions  entered into
after December 15, 1995.  This Statement  establishes  financial  accounting and
reporting standards for stock-based employee  compensation plans. This Statement
defines a fair value based method of accounting  for an employee stock option or
similar  equity  instrument  and encourages all entities to adopt that method of
accounting for all of their employee stock compensation plans.  However, it also
allows an entity to continue to measure  compensation cost for those plans using
the  intrinsic  value  based  method  of  accounting  prescribed  by  Accounting
Principles  Bulletin Opinion No. 25, "Accounting for Stock Issued to Employees."
Under the fair value based  method,  compensation  cost is measured at the grant
date based on the value of the award and is recognized  over the service period,
which is usually the vesting  period.  Under the  intrinsic  value based method,
compensation cost is the excess, if any, of the quoted market price of the stock
at grant date or other  measurement date over the amount an employee must pay to
acquire the stock.

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<PAGE>

                               BOARD OF DIRECTORS
                              ALGIERS BANCORP, INC.
                             New Orleans, Louisiana


Thu Dang
         Travel Agent
         Self-employed

John H. Gary
         Convention Promoter
         Self-employed

Hugh E. Humphrey, Jr.
         Algiers Homestead Association
         Chairman of the Board,
         President and
         Chief Executive Officer

Hugh E. Humphrey, III
         Algiers Homestead Association
         Secretary and Treasurer

Eugene J. LeBoeuf
         Retired


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<PAGE>
                          ALGIERS HOMESTEAD ASSOCIATION
                             New Orleans, Louisiana


EXECUTIVE OFFICERS                          CORPORATE OFFICE
Hugh E. Humphrey, Jr.                       # 1 Westbank Expressway
Chairman of the Board,                      Post Office Box 6308
President and                               New Orleans, LA 70174-6308
Chief Executive Officer                     504-367-8221  504-367-8223 (FAX)

Dennis J. McCluer
Vice President and                          BANKING OFFICES
Chief Operating Officer                     # 1 Westbank Expressway
                                            New Orleans, LA 70114
Hugh E. Humphrey, III                       504-367-8221  504-367-8223 (FAX)
Secretary and Treasurer
                                            2021 Carol Sue Avenue
                                            Terrytown, LA  70056
                                            504-362-4567  504-362-9145

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