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 $15.25 per share.

         There was a cash dividend declared for the first quarter of 1998 in the
amount of $0.05 per share to stockholders of record on March 31, 1998 payable on
April, 15, 1998.

         At  December  31,  1997  Algiers  Bancorp,   Inc.  had  607,124  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) 497-2300
         10 Commerce Drive                                     (800) 368-5948
         Cranford, New Jersey 07016-3572             FAX       (908) 497-2310

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) 367-8222.

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>
Algiers
Bancorp, Inc.

P.O. Box 6308
NEW ORLEANS, LA 70174-6308

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.

         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.
<PAGE>

         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,
                                                 ------------------------------- 
                                                   1997        1996        1995
                                                 -------     -------     -------
<S>                                              <C>         <C>         <C>
SELECTED FINANCIAL DATA:

Total Assets ...............................     $45,312     $48,239     $42,450
Cash and cash equivalents ..................       2,555       1,722       1,452
Investment securities ......................       4,087       3,292       1,922
Mortgage-backed securities .................      28,445      32,887      28,149
Loans receivable, net ......................       9,198       9,220       9,690
Deposits ...................................      35,534      36,635      38,203
Federal Home Loan Bank Advances ............        --         1,500        --
Stockholders Equity/Retained Earnings ......       9,536       9,799       4,040
Book Value Per Share .......................       15.71       15.12        --
Market Price Per Share .....................       14.88       11.50        --
Full Service Offices .......................           2           2           2
<CAPTION>


                                                   Year Ended December 31,
                                            ------------------------------------ 
                                              1997          1996         1995
                                            -------       -------       -------
<S>                                          <C>           <C>          <C>     

SELECTED OPERATING DATA:
Total Interest Income .................     $ 3,140       $ 3,059       $ 2,670
Total Interest Expense ................       1,751         1,835         1,740
Net Interest Income ...................       1,389         1,223           930
Provision for (Recovery of) Loan Losses         (45)           (4)          (23)
Net Interest Income after Provision
      for (Recovery of)Loan Losses ....       1,434         1,227           953
Total Noninterest Income ..............         238           195           235
Total Noninterest Expense .............       1,413         1,199           956
Income Before Income Taxes ............         259           223           232
Income Taxes ..........................          48            66            62
Net Income ............................         211           157           170

SELECTED OPERATING RATIOS:
Return on average assets ..............        0.42%         0.34%         0.41%
Return on average equity ..............        1.65%         2.86%         4.44%
Average equity to average assets ......       25.60%        11.93%         9.20%
Dividend Payout Ratio** ...............       53.55%        20.38%         --
Equity to Total Assets at End of Period       21.05%        20.31%         9.52%
Risk Based Capital Ratio ..............       57.29%        54.45%        35.06%
</TABLE>

**   For 1996 Reflects one quarterly dividend since stock conversion on July 8,
     1996
<PAGE>
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

         This   Annual   Report   includes   statements   that  may   constitute
forward-looking statements,  usually containing the words "believe," "estimate,"
"project," "expect," "intend" or similar expressions.  These statements are made
pursuant to the safe harbor  provisions  of the  Private  Securities  Litigation
Reform Act of 1995.  Forward-looking  statements  inherently  involve  risks and
uncertainties  that could cause actual results to differ  materially  from those
reflected  in the  forward-looking  statements.  Factors that could cause future
results to vary from current  expectations  include, but are not limited to, the
following:  changes in economic conditions (both generally and more specifically
in the  markets  in which the  Company  operates);  changes in  interest  rates,
deposit  flows,  loan demand,  real estate  values and  competition;  changes in
accounting principles,  policies or guidelines and in government legislation and
regulation  (which  change  from time to time and over which the  Company has no
control);  and other risks  detailed in this Annual  Report and in the Company's
other public filings. Readers are cautioned not to place undue reliance on these
forward-looking  statements,  which reflect management's analysis only as of the
date hereof.  The Company  undertakes  no  obligation  to publicly  revise these
forward-looking  statements to reflect events or circumstances  that arise after
the date hereof.

         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.  Profitability for the Company's
70% owned  subsidiary  Jefferson  Community  Lending,  L.L.C.  ("Jefferson")  is
dependent  on fees  received  from the sale of mortgage  loans in the  secondary
market.  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

                                       3
<PAGE>
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 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,  1997,  the  Association's  fixed-rate  mortgage-backed  securities
amounted  to $1.5  million or 3.3% of total  assets,  its ARMs  amounted to $7.6
million  or  16.8%  of  total  assets  and its  adjustable-rate  mortgage-backed
securities amounted to $26.9 million or 59.3% 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  Company'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 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 Company's NPV by
less  than 2% as a  percentage  of the  estimated  market  value of it assets at
December  31,  1997,  the  Company  would not have been  subject to any  capital
deduction as of December  31, 1997 if the  regulation  had been  effective as of
such date.  The  following  table  presents the Company's NPV as of December 31,
1997, as calculated by the OTS, based on information  provided to the OTS by the
Association.

                                       4
<PAGE>
<TABLE>
<CAPTION>
    Change in                                       Change in
 Interest Rates        Net Portfolio Value         NPV as % of        NPV as % of
in Basis Points --------------------------------  Portfolio Value   Portfolio Value
  (Rate Shock)   Amount     $ Change    % Change    of Assets         of Assets(1)
  ------------   ------     --------    --------    ---------         ------------
               (Dollars in Thousands)

<S>             <C>          <C>           <C>         <C>              <C>     
       400      $ 4,548      $ (921)       -17%        11.4%            (1.6)%
       300        4,803        (666)       -12%        11.9%            (1.1)%
       200        5,042        (426)        -8%        12.3%             (.7)%
       100        5,264        (205)        -4%        12.7%             (.3)%
      Static      5,469          --         --         13.0%              --
      (100)       5,743         274          5%        13.5%               .5%
      (100)       5,743         274          5%        13.5%               .5%
      (200)       6,169         700         13%        14.2%              1.2%
      (300)       6,732       1,263         23%        15.2%              2.2%
      (400)       7.439       1,970         36%        16.4%              3.4%
</TABLE>
-----------------
 

         (1) Based on the portfolio  value of the Company's  assets  assuming no
change in interest rates.

Changes in Financial Condition

         Assets.  Total assets  decreased to $45.3  million at December 31, 1997
from $48.2 million at December 31, 1996.

Mortgage-backed securities as a percentage of total assets increased to 62.7% at
December  31,  1997  from  68.2% at  December  31,  1996.  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").
Mortgage-backed  securities  increase  the  quality of the  Company'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.

                                       5
<PAGE>
         At December 31, 1997,  net loans  receivable  totalled  $9.2 million or
20.3% of total  assets.  Of the total  loan  portfolio,  $8.1  million  or 79.6%
consisted of one-to-four family residential loans.  Consumer loans accounted for
$1.3  million or 12.6% of the total loan  portfolio,  and 7.4% of the  portfolio
consisted of commercial real estate loans.

         Mortgage-backed  securities  and investment  securities  were 62.7% and
9.1% of total assets, respectively, at December 31, 1997 Of such amount, $52,000
or .1% of total assets mature within one year of December 31, 1997. See Notes C,
D and G to the  Consolidated  Financial  Statements.  Cash and cash  equivalents
amounted to 5.6% of total assets at such date.
 
         Non-performing  assets  have  increased  from  .20% of total  assets at
December 31, 1996 to 1.44% of total  assets at December  31, 1997.  Non-accruing
single-family  residential  loans  represented  20.1% of the  $636,000  of total
non-performing assets at December 31, 1997. The balance of non-performing assets
included two commercial  loans  accounting for 79.9%.  At December 31, 1997, the
Company's  allowance  for loan losses  equalled  $482,000 or 4.8% of total loans
outstanding.  The Company's largest commercial real estate loan with a principal
balance of $500,000  and a specific  reserve of $261,000 as of December 31, 1997
is not  current  as of March 31,  1997.  The  Company's  management  is  closely
monitoring  this loan and is discussing its status with the borrower.  It is the
opinion of management that the property  securing this loan has a value adequate
to cover the net amount of the loan.

         The Company's total deposits  decreased during 1997 to $35.5 million at
December 31, 1997 from $36.6 million at December 31, 1996. Certificates accounts
decreased by $895,000 or 3.2% from December 31, 1996 to December 31, 1997, while
transaction accounts decreased by $206,000 or 2.4% during the period.

         Total  stockholders'  equity was $9.5  million at December  31, 1997, a
decrease of $263,000 from December 31, 1996.  The decrease was due to a $472,000
purchase  of  treasury  stock and  dividends  of  $113,000  partially  offset by
increases in net income of $211,000,  a $73,000 allocation to the Employee Stock
Ownership   Plan   and  an   increase   in   unrealized   gain   on   securities
available-for-sale.
 
Results of Operations

         Net income.  The Company's net income  increased by $54,000 or 34.4% in
1997 and by $14,000 or 8.2% in 1996. The increase in 1997 is  attributable to an
increase of $166,000 in net interest  income, a $43,000 increase in non-interest
income and a reduction in federal income taxes of $18,000.

         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 $166,000 or 13.6% in 1997, and increased  $294,000 or 31.6%
in 1996.  The  increase  in 1997 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.

                                       6
<PAGE>
         The Company's  average interest rate spread increased to 2.23% for 1997
from 2.22% for 1996 after increasing from 2.06% for 1995. In addition, its ratio
of  average  interest-earning  assets to  average  interest-bearing  liabilities
increased  to 126.5% for 1997 from  113.3%  for 1996 and  106.4%  for 1995.  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 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.

                                       7
<PAGE>
<TABLE>
<CAPTION>
                                                                              Year ended December 31,
                                           -----------------------------------------------------------------------------------------
                                                       1997                             1996                         1995
                                           ------------------------------   ----------------------------   -------------------------
                                                                  Average                       Average                     Average
                                           Average                 Yield/    Average             Yield/    Average           Yield/
                                           Balance    Interest    Rate(1)    Balance  Interest   Rate(1)   Balance  Interest Rate(1)
                                           -------    --------    -------    -------  --------   -------   -------  ----------------
                                                                                (Dollars in Thousands)
<S>                                        <C>         <C>          <C>      <C>       <C>        <C>      <C>      <C>        <C>
Interest-earning assets:
   Loans receivable(2) ..................  $ 9,298     $   822      8.84%    $ 9,581   $   776     8.09%   $10,024  $   807    8.05%
   Mortgage-backed securities ...........   30,912       1,993      6.45      30,872     2,008     6.50     27,196    1,702    6.26
   Investment securities(3) .............    2,576         219      8.50       1,772       166     9.37      2,127      134    6.30
   Other interest-earning assets ........    1,796         106      5.90       2,025       109     5.38        414       27    6.52
                                           -------     -------      ----     -------   -------     ----    -------  -------    ---- 
      Total interest-earning assets .....   44,582       3,140      7.04      44,250     3,059     6.91     39,761    2,670    6.72
                                           -------     -------      ----     -------   -------     ----    -------  -------    ---- 
Noninterest-earning assets ..............    2,346                             1,406                         1,772
                                           -------                           -------                       -------  
      Total assets ......................  $46,928                           $45,656                       $41,533
                                           =======                           =======                       =======  
Interest-bearing liabilities:
   Passbook, NOW and money
      market accounts ...................  $ 8,705         216      2.48    $ 10,047       248     2.46    $ 9,944      263    2.64
   Certificates of deposit ..............   27,242       1,506      5.53      28,706     1,569     5.46     27,296    1,471    5.39
                                           -------     -------      ----     -------   -------     ----    -------  -------    ---- 
      Total deposits ....................   35,947       1,722      4.79      38,753     1,817     4.68     37,240    1,734    4.66
   FHLB advances ........................      462          29      6.28         307        18     5.86        123        6    4.88
                                           -------     -------      ----     -------   -------     ----    -------  -------    ---- 
      Total interest-bearing liabilities    36,409       1,751      4.81      39,060     1,835     4.69     37,363    1,740    4.66
                                                       -------      ----               -------     ----             -------    ---- 
Noninterest-bearing liabilities(4) ......      851                             1,870                           379
                                           -------                           -------                       -------         
      Total liabilities .................   37,260                            40,930                        37,742
   Stockholders' equity .................    9,668                             4,726                         4,726
                                           -------                           -------                       ------- 
      Total liabilities and stockholders'
         equity .........................  $46,928                           $45,656                       $42,468
                                           =======                           =======                       =======
                                                    
Net interest-earning assets .............  $ 8,173                           $ 5,190                       $ 2,398
                                           =======                           =======                       ======= 
Net interest income; average interest
   rate spread ..........................              $ 1,389     2.23%                 $1,224    2.22%            $   930    2.06%
                                                       =======   ------                  ======  ------             =======  ------
Net interest margin(5) ..................                          3.12%                           2.76%                       2.34%
                                                                 ======                          ======                      ======
Average interest-earning assets to
   average interest-bearing liabilities .                        122.45%                         113.28%                     106.42%
                                                                 ======                          ======                      ====== 
</TABLE>
                                       8
<PAGE>
(1)  At December 31, 1997,  the weighted  average  yields  earned and rates paid
     were as  follows:  loans  receivable,  8.84%;  mortgage-backed  securities,
     6.45%; investment securities,  8.50%; other interest-earning assets, 5.90%;
     total interest-earning assets 7.04%; deposits,  4.81%; FHLB advances 6.28%;
     and interest rate spread, 2.23%.

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

(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.

                                       9
<PAGE>
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.
<TABLE>
<CAPTION>
                                                         1997 vs 1996                             1996 vs 1995
                                               ---------------------------------          ---------------------------------- 
                                                          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                            $ 71         $ (25)         $ 46            $ 4         $ (35)        $ (31)
   Mortgage-backed securities                   (15)            -           (15)            68           238           306
   Investment securities                        (15)           68            53             50           (27)           23
   Other interest-earning assets                 10           (13)           (3)            (3)           94            91
                                               ----         ------         ----            ---         -----         ----- 
      Total interest income                      51            30            81            119           270           389
                                               ----         ------         ----            ---         -----         ----- 
Interest expense:
   Passbook, NOW and money
      market accounts                             2           (34)          (32)           (18)            3           (15)
   Certificates of deposits                      20           (83)          (63)            20            78            98
                                               ----         ------         ----            ---         -----         ----- 
      Total deposits                             22          (117)          (95)             2            81            83
   FHLB advances                                  1            10            11              2            10            12
                                               ----         ------         ----            ---         -----         ----- 
      Total interest expense                     23          (107)          (84)             4            91            95
                                               ----         ------         ----            ---         -----         ----- 
Increase (decrease) in net
   interest income                             $ 28         $ 137         $ 165          $ 115         $ 179         $ 294
                                               ====         =====         =====          =====         =====         =====
</TABLE>
 
         Interest  Income.  Interest on loans increased  $46,000 or 5.9% in 1997
due to an increase in the weighted  average yields on loans  receivable to 8.84%
from 8.09%. 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.

                                       10
<PAGE>
         Interest on mortgage-backed  securities  decreased by $15,000 or .7% in
1997 from 1996,  due to a $40,000 or .1% increase in the average  balance and an
decrease in the average  yield to 6.45% in 1997 from 6.50% in 1996.  The average
balance increased as the amount of mortgage-backed  securities purchased in 1997
decreased by $4.4 million from 1996. The higher purchases in 1997 were partially
offset by higher  repayments and the sale of $1.6 million in 1997. The increased
yield was due to the  interest  rate on a large  portion of the  adjustable-rate
mortgage-backed securities adjusting upward in 1997.

         Interest on investment securities increased by $62,000 or 39.4% in 1997
from 1996, due to an increase in the average  balance of $1.3 million from 1996,
which was  partially  offset by a decrease in the average  rate to 7.09% in 1997
from 8.860% in 1996.  During 1997 the Company purchased $2.7 million of callable
notes and bonds issued by various  government  agencies which had interest rates
of 6.50% to 8.00%. 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,  decreased  by $12,000 or 10.2% in
1997 over 1996, due to a $742,000 or 36.6% decrease in the average balance.  The
average yield increased to 8.26% in 1997 from 5.82% in 1996 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 Company  purchasing  additional FHLB stock and
increasing overnight deposits in 1997.

         Total interest  income  increased by $81,000 or 2.6% in 1997 from 1996,
due  to  a  $332,000  or  .8%   increase   in  the  average   balance  of  total
interest-earning  assets and an increase  in the average  yield to 7.04% in 1997
from 6.91% in 1996.  The  average  yield on each  category  of  interest-earning
assets (other than other mortgage-backed  securities and investment  securities)
increased in 1997 from 1996.

         Interest Expense.  Interest on deposits decreased by $95,000 or 5.2% in
1997 over 1996, due to a $2.8 million or 7.24%  decrease in the average  balance
and an  increase in the  average  rate to 4.79% in 1997 from 4.68% in 1996.  The
increase  in the  average  balance  was mostly due to an increase in the average
rate paid on certificates  of deposit.  The average rate paid on certificates of
deposit increased to 5.53% in 1997 from 5.46% in 1996, which increase was mostly
offset by a decrease in the average rate paid by the Company on its  transaction
accounts to 2.48% in 1997 from 2.46% in 1996.

         Interest on FHLB  advances  increased  by $11,000 or 61.1% in 1997 from
1996,  primarily  due to an increase in the average  balance of FHLB advances of
$155,000 or 50.5% in 1997.

         Total interest expense  increased by $84,000 or 4.6% in 1997 over 1996,
primarily due to the increase in the average balance of certificates of deposit.

         Provision  (Credit) for Loan Losses.  The Company  recovered $0, $4,000
and  $24,000  of  its  allowance  for  loan  losses  in  1997,  1996  and  1995,
respectively.  Approximately  $7,000 of the  credit in each of 1996 and 1995 was
due to  continued  principal  payments  on  the  Company's  largest  outstanding
commercial real estate loan,  which amounted to $500,000 at December 31, 1997. A
portion  of this loan is  classified  substandard  because  the  carrying  value

                                       11
<PAGE>
exceeds the appraised value of the property securing the loan, and the amount of
the allowance  allocated to this loan ($261,000 at December 31, 1997) 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 $482,000 or 4.8% of
the total loan portfolio at December 31, 1997.

         Noninterest  Income.  Service charges and fees, which primarily consist
of charges for checking  accounts,  overdrafts and late  payments,  decreased by
$1,000 or 1.5% in 1997 from 1996.

         The  gross  carrying  value  of  the  Company's  Guaranteed  Investment
Contracts  (the  "GIC  bonds")  was  reduced  in 1997 by  $62,000  of  principal
payments. See Note E of Notes to Consolidated Financial Statements.

         In 1997 the Company  sold $1.6  million of  mortgage-backed  securities
which were part of the available for sale portfolio  which resulted in a gain of
$11,000.

         Other  noninterest  income  amounted to $44,000 and $31,000 in 1997 and
1996, respectively.
 
         Total  noninterest  income  increased  by $43,000 or 22.1% in 1997 from
1996,  primarily  due to an increase of $49,000 in recapture of allowance on GIC
bonds and an increase of $18,000 in gain on sale of investments in 1997. Algiers
considers  these items to be  non-recurring  in nature.  After  excluding  these
items, total noninterest income increased by $12,000 or 12.1% in 1997 from 1996.

         Noninterest Expense. Compensation and benefits increased by $309,000 or
67.7% in 1997  over  1996,  due to  payments  to the  Company's  Employee  Stock
Ownership Plan which resulted in $70,000 of compensation expense and $257,000 of
compensation expense in Jefferson.

         Occupancy and equipment  expenses increased by $55,000 or 46.6% in 1997
over 1996,  primarily  due to a $6,000  increase  in the  monthly  rental of the
Association's main office and the rental of office space for Jefferson.

         Federal insurance  premiums  increased by $72,000 or 80.0% in 1997 from
1996,  primarily due to a decrease in the SAIF premium rate. 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.

         Computer  expenses  decreased  by  $15,000  or 30.6% in 1997 from 1996,
primarily  due to a  reduction  in the  monthly  billing  for the  Association's
on-line computer system.

         Professional  services  increased $105,000 or 318.2% in 1997 from 1996,
due to an increase of $13,000 in specialized training for Jefferson, an increase
in legal fees of $92,000.

                                       12
<PAGE>
         FHLB service charges  decreased $14,000 or 36.9% in 1997 from 1996, due
to a  decrease  in the  number  of  mortgage-backed  securities  and  investment
securities which the Company owned in 1997.

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

         The Association provided $0 of its allowance for real estate owned loss
in 1997 and $4,000 in 1996.  The  allowance  for loss on real  estate  owned was
increased in 1997 by $45.000 for properties held more than five years.  See Note
I of Notes to  Consolidated  Financial  Statements.  The  real  estate  owned at
December 31, 1997  consisted of two one- to four-family  residential  properties
and one vacant lot.

         The Association's real estate owned expense, net decreased by $1,000 or
33.3% in 1997 from 1996,  primarily  due to the low number of real estate  owned
properties that were owned by the Association at December 31, 1997.

         Other noninterest  expense,  which primarily  consists of insurance and
bond premiums,  postage and supplies,  and other operating expenses increased by
$52,000 or 32.3% in 1997 from 1996.  The increase 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 $214,000 or 17.8% in 1997 from
1996,  primarily  due to increases  of $309,000 in  compensation  and  benefits,
$55,000 in occupancy and equipment, $105,000 in professional services $41,000 in
provision for possible real estate  write-downs  and $52,000 in other  expenses,
partially offset by decreases of $15,000 of computer expenses,  $313,000 in SAIF
assessment and insurance  premiums,  $14,000 in FHLB service  charges and $5,000
loss on sale of real estate  owned.  Total  noninterest  expense as a percent of
average assets was 2.8% in 1997 compared to 2.6% in 1996.
 
         Federal  Income Tax Expense.  The Company's  federal income tax expense
increased  by  $18,000 or 27.4% in 1997 from 1996.  The  effective  tax rate for
1997, 1996 and 1995 was 18.5%, 29.7% and 27.2%, respectively.  The effective tax
rate of  18.5%  in 1997  was the  result  of the tax  benefits  from  the  gross
operating  loss of $270,000 in the Company's  subsidiary  Jefferson for the year
ending December 31, 1997.

         The Company had a deferred tax valuation reserve of $194,000,  $194,000
and $230,000 at December 31, 1997, 1996 and 1995, respectively. Other components
of the valuation  reserve  consist of allowances for loan losses and real estate
owned  losses,  each  of  which  decreased  slightly  in  1997.  For  additional
information, see Note K of Notes to Consolidated Financial Statements.

                                       13
<PAGE>
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 4% 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, 1997,  Algiers'
liquidity was 7.4% or $1.2 million 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.  Financing  activities  used net cash in
1995 due to the  repayment  of  $600,000 of FHLB  advances.  Total cash and cash
equivalents  amounted to $2.6 million at December 31, 1997. See the Consolidated
Statements of Cash Flows in the Consolidated Financial Statements.

         At December 31, 1997, Algiers had outstanding  commitments to originate
$62,000  of  one-to   four-family   residential  loans  (including   undisbursed
construction  loans) and  $300,000  in boat loans.  At the same date,  the total
amount  of  certificates  of  deposit  which  were  scheduled  to  mature in the
following 12 months was $14.2  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,  1997,  Algiers  exceeded  each of its  capital
requirements,  with  tangible,  core and  risk-based  capital  ratios of 16.50%,
16.50% and 65.30%,  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.

                                       14
<PAGE>
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.

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  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

                                       15
<PAGE>
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 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.

                                       16
<PAGE>
         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.  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.

The Year 2000

         The Company is currently  addressing  the computer and data  processing
issues relating to the Year 2000.  Management has completed the assessment phase
and do not  believe  that  issues  related to the Year 2000 are likely to have a
material adverse effect on the Company's liquidity, capital resources or results
of operations.

                                       17
<PAGE>
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, 1997 and 1996,  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, 1997 and 1996, and the results of their  operations and their cash flows for
the years  ended  December  31,  1997 and 1996,  in  conformity  with  generally
accepted accounting principles.


                                                 /s/LaPorte, Sehrt, Romig & Hand

                                           A Professional Accounting Corporation

March 9, 1998
Metairie, Louisiana


                                       18
<PAGE>
<TABLE>
<CAPTION>

                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                             (Dollars in Thousands)

                                     ASSETS

                                                                 December 31,
                                                             -------------------
                                                               1997        1996
                                                             -------     ------- 
<S>                                                          <C>         <C>
Cash and Amounts Due from Depository Institutions ......     $   482     $   287
Interest-Bearing Deposits in Other Banks ...............       2,073       1,435
Investments Available-for-Sale - at Fair Value (Note D)        4,087       2,467
Investment Securities Held-to-Maturity -
    Fair Value of $-0- and $823 at December 31, 1997
    and 1996, Respectively  (Note C) ...................        --           825
Loans Receivable - Net (Note F) ........................       9,198       9,220
Mortgage-Backed Securities - Available-for-Sale -
    at Fair Value (Note G) .............................       6,615       9,077
Mortgage-Backed Securities - Held-to-Maturity - Fair
    Value of $21,580 and $23,228 at December 31, 1997
    and 1996, Respectively (Note G) ....................      21,830      23,810
Stock in Federal Home Loan Bank ........................         483         456
Accrued Interest Receivable (Note H) ...................         269         265
Real Estate Owned - Net (Note I) .......................        --            45
Office Properties  and Equipment,  at Cost - Furniture,
    Fixtures and Equipment, Less Accumulated
    Depreciation of $212 and $187 at December 31, 1997
    and 1996, Respectively (Note J) ....................         253         231
Prepaid Expenses .......................................          19          18
Deferred Tax Asset (Note K) ............................        --            23
Income Tax Receivable ..................................        --            75
Other Assets ...........................................           3           5
                                                             -------     -------



          Total Assets .................................     $45,312     $48,239
                                                             =======     =======
</TABLE>


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


                                       19
<PAGE>
<TABLE>
<CAPTION>
                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                       December 31,
                                                                 ---------------------- 
                                                                   1997           1996
                                                                 --------      --------
<S>                                                              <C>           <C>
LIABILITIES
    Deposits (Note L) ......................................     $ 35,534      $ 36,635
    Advance from Federal Home Loan Bank (Note M) ...........         --           1,500
    Advance Payments from Borrowers for
       Insurance and Taxes .................................          112           237
    Accrued Interest Payable on Depositors' Accounts .......            1             1
    Dividends Payable ......................................           31            32
    Deferred Tax Liability .................................           28          --
    Income Taxes Payable ...................................           17          --
    Other Liabilities ......................................           53            35
                                                                 --------      --------

          Total Liabilities ................................       35,776        38,440
                                                                 --------      --------

STOCKHOLDERS' EQUITY
    Preferred Stock - Par Value $.01
       0 Shares Issued and Outstanding at
       December 31, 1997 and 1996 ..........................         --            --
    Common Stock - Par Value $.01
       648,025 Shares Issued - 614,124 Outstanding at
       December 31, 1997 and 648,025 Outstanding at
       December 31, 1996 ...................................            6             6
    Additional Paid-in Capital .............................        6,122         6,108
    Unearned ESOP Shares ...................................         (433)         (492)
    Retained Earnings ......................................        4,299         4,201
    Treasury Stock - 33,901 Shares at Cost .................         (472)         --
    Unrealized Gain (Loss) on Securities Available-for-Sale,
       Net of Applicable Deferred Taxes ....................           14           (24)
                                                                 --------      --------

          Total Stockholders' Equity .......................        9,536         9,799
                                                                 --------      --------


          Total Liabilities and Stockholders' Equity .......     $ 45,312      $ 48,239
                                                                 ========      ========


</TABLE>
The accompanying notes are an integral part of these financial statements.

                                       20
<PAGE>
<TABLE>
<CAPTION>

                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                             (Dollars in Thousands)


                                                             For The Years Ended
                                                                December 31,
                                                            --------------------
                                                               1997         1996
                                                             ------       ------
<S>                                                          <C>          <C>
INTEREST INCOME
    Loans ............................................       $  822       $  776
    Mortgage-Backed Securities .......................        1,993        2,008
    Investment Securities ............................          219          166
    Other Interest-Earning Assets ....................          106          109
                                                             ------       ------

          Total Interest Income ......................        3,140        3,059
                                                             ------       ------

INTEREST EXPENSE
    Deposits .........................................        1,722        1,818
    FHLB Advances ....................................           29           18
                                                             ------       ------

          Total Interest Expense .....................        1,751        1,836
                                                             ------       ------

NET INTEREST INCOME BEFORE
    CREDIT FOR LOAN LOSSES ...........................        1,389        1,223

CREDIT FOR LOAN LOSSES (Note F) ......................           45            4
                                                             ------       ------

NET INTEREST INCOME AFTER
    CREDIT FOR LOAN LOSSES ...........................        1,434        1,227
                                                             ------       ------

NON-INTEREST INCOME
    Service Charges and Fees .........................           67           68
    Recapture of Allowance on GIC Bonds (Note E) .....          116           67
    Gain on Sale of Investments ......................           11           29
    Other Income .....................................           44           31
                                                             ------       ------

          Total Non-Interest Income ..................          238          195
                                                             ------       ------
</TABLE>

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

                                       21
<PAGE>
<TABLE>
<CAPTION>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
                             (Dollars in Thousands)


                                                            For The Years Ended
                                                                December 31,
                                                           --------------------- 
                                                            1997           1996
                                                           ------         ------
<S>                                                        <C>            <C> 
NON-INTEREST EXPENSES
    Compensation and Benefits ....................         $  765         $  456
    Occupancy and Equipment ......................            173            118
    Computer .....................................             34             49
    SAIF Assessment ..............................           --              241
    Deposit Insurance Premium ....................             18             90
    Professional Services ........................            138             33
    FHLB Service Charges .........................             25             39
    Provision for Possible Real Estate
                                                               45              4
    Loss on Sale of Real Estate Owned ............              5
    Real Estate Owned Expense - Net ..............              2              3
    Other ........................................            213            161
                                                           ------         ------

                                                            1,413          1,199
                                                           ------         ------
INCOME BEFORE FEDERAL
    INCOME TAX EXPENSE ...........................            259            223

FEDERAL INCOME TAX EXPENSE (Note K) ..............             48             66
                                                           ------         ------


NET INCOME .......................................         $  211         $  157
                                                           ======         ======

EARNINGS PER SHARE ...............................         $ 0.37         $ 0.26
                                                           ======         ======

</TABLE>
The accompanying notes are an integral part of these financial statements.

                                       22
<PAGE>
<TABLE>
<CAPTION>
                                                ALGIERS BANCORP, INC. & SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                           For The Years Ended December 31, 1997 and 1996
                                                       (Dollars in Thousands)
                                                                                            Unrealized
                                                                                           Gain (Loss)
                                                                                          on Securities
                                                                                          Available-for-
                                                    Additional     Unearned                 Sale - Net                     Total
                                         Common      Paid-in          ESOP      Retained   of Applicable     Treasury    Retained
                                          Stock       Capital        Shares     Earnings   Deferred Taxes      Stock      Earnings
                                          -----       -------        ------     --------   --------------      -----      -------- 
<S>                                       <C>          <C>          <C>         <C>           <C>           <C>            <C>
BALANCE - December 31, 1995 .........     $  --        $   --       $   --      $  4,076      $    (38)          --        $ 4,038

Net Income ..........................        --            --           --           157            --           --            157

Dividends Declared ..................        --            --           --           (32)           --           --            (32)

Common Stock Issuance - 648,025
   Shares at $.01 Per Share Issued
   at $10 Per Share .................          6        6,474           --            --            --           --          6,480

Costs of Conversion from a Mutual
   Association to a Stock Association         --         (370)          --            --            --           --           (370)

Shares Allocated to the ESOP Plan ...         --           --         (518)           --            --           --           (518)

ESOP Shares Released for Allocation .         --            4           26            --            --           --             30

Changes in Unrealized Gain on
   Securities Available-for-Sale, Net
   of Applicable Deferred Income
   Taxes of $12,200 .................         --           --           --            --            14           --             14
                                          -------     -------      -------      --------      --------      -------        -------

BALANCE - December 31, 1996 .........          6        6,108         (492)        4,201           (24)          --          9,799

Net Income ..........................         --           --           --           211            --           --            211

Dividends Declared ..................         --           --           --          (113)           --           --           (113)

ESOP shares Released for Allocation .         --           14           59            --            --           --             73

Purchase of Treasury Stock ..........         --           --           --            --            --         (472)          (472)

Changes in Unrealized Gain on
   Securities Available-for-Sale, Net
   of Applicable Deferred Income
   Taxes of $7,302 ..................         --          --           --             --            38           --             38
                                          -------     -------      -------      --------      --------      -------        -------

BALANCE - December 31, 1997 .........     $     6     $ 6,122      $  (433)     $ 4,299       $     14      $  (472)       $ 9,536
                                          =======     =======      =======      =======       ========      =======        =======
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                       23
<PAGE>
<TABLE>
<CAPTION>
                            ALGIERS BANCORP, INC. & SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Dollars in Thousands)


                                                                        For The Years Ended
                                                                            December 31,
                                                                      --------------------- 
                                                                         1997         1996
                                                                      --------     -------- 
<S>                                                                   <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net Income ..................................................     $   211      $   157
    Adjustments to Reconcile Net Income to Net
       Cash Provided by Operating Activities:
          Depreciation and Amortization .........................          24           22
          Premium Amortization Net of Discount Accretion ........          62          127
          Loss on Sale of Real Estate ...........................        --              5
          Gain on Sale of Mortgage-Backed Securities ............         (11)         (29)
          ESOP expense ..........................................          70           30
          (Decrease)  in Accrued Interest Payable ...............        --             (2)
          Increase (Decrease) in Other Liabilities ..............          18          (17)
          (Increase) in Accrued Interest Receivable .............          (4)         (36)
          Credit for Loan Losses ................................         (45)          (4)
          Provision for Losses on Real Estate Owned .............          45            4
          (Increase) Decrease in Other Assets ...................           2           (4)
          (Increase) in Prepaid Expenses ........................          (1)         (13)
          Decrease in Prepaid Income Taxes ......................          75          117
          Increase in Income Tax Payable ........................          17         --
          Decrease in Deferred Income Taxes .....................          51           29
                                                                      -------      -------

             Net Cash Provided by Operating Activities ..........         514          386
                                                                      -------      -------

CASH FLOWS FROM INVESTING ACTIVITIES
    Maturities of Investment Securities - Held-to-Maturity ......         825          400
    Purchases of Investment Securities - Available-for-Sale .....      (3,094)      (3,022)
    Maturities of Investment Securities - Available-for-Sale ....       1,539        1,247
    Purchases of Mortgage-Backed Securities - Held-to-Maturity ..        (185)      (5,786)
    Maturities of Mortgage-Backed Securities - Held-to-Maturity .       2,119        2,373
    Purchases of Mortgage-Backed Securities - Available-for-Sale         (784)      (3,424)
    Maturities of Mortgage-Backed Securities - Available-for-Sale       1,600        1,358
    Proceeds From Sale of Mortgage-Backed Securities ............       1,661          668
    Net Decrease in Loans .......................................          22          474
    Non-Cash Dividend - FHLB ....................................         (27)         (26)
    Purchase of Furniture and Fixtures ..........................         (46)         (26)
    Proceeds from Sales of Foreclosed Real Estate ...............        --             39
                                                                      -------      -------

             Net Cash Provided by (Used in) Investing Activities        3,630       (5,725)
                                                                      -------      -------
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                       24
<PAGE>
<TABLE>
<CAPTION>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                             (Dollars in Thousands)


                                                                        For The Years Ended
                                                                             December 31,
                                                                        --------------------- 
                                                                          1997         1996
                                                                        --------     --------
<S>                                                                    <C>          <C>
CASH FLOWS FROM FINANCING ACTIVITIES
    Net Decrease in Deposits .....................................      (1,101)      (1,568)
    Net Increase (Decrease) in Advances from Borrowers
       for Taxes and Insurance ...................................        (125)          85
    Proceeds from Federal Home Loan Bank Advance .................       3,900        3,000
    Repayment of Federal Home Loan Bank Advance ..................      (5,400)      (1,500)
    Sale of Common Stock .........................................        --              6
    Contribution of Additonal Paid-in Capital ....................        --          6,104
    Dividends Paid ...............................................        (113)        --
    Purchase of Treasury Stock ...................................        (472)        --
    Purchase of ESOP Shares ......................................        --           (518)
                                                                       -------      -------

             Net Cash Provided by (Used in) Financing Activities .      (3,311)       5,609
                                                                       -------      -------

NET INCREASE IN CASH AND CASH EQUIVALENTS ........................         833          270

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR ....................       1,722        1,452
                                                                       -------      -------


CASH AND CASH EQUIVALENTS - END OF YEAR ..........................     $ 2,555      $ 1,722
                                                                       =======      =======


SUPPLEMENTAL DISCLOSURE OF CASH FLOW
    INFORMATION
       Cash Paid During the Year for:
          Interest ...............................................     $ 1,751      $ 1,819
          Income Taxes ...........................................     $    31      $    30

SUPPLEMENTAL DISCLOSURE OF NON-CASH
    TRANSACTIONS
       Dividends Declared ........................................     $    31      $    32

</TABLE>
The accompanying notes are an integral part of these financial statements.

                                       25
<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
         issuance of 1,000 shares of common stock to the Corporation in exchange
         for  50%  of the  net  proceeds  received  by  the  Corporation  in the
         reorganization.  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 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.

                                       26
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 interest method.  Marketable  securities classified
         as  available-for-sale  are  carried  at fair  value in 1997 and  1996.
         Unrealized  gains  and  losses  on  securities  available-for-sale  are
         recognized  as direct  increases  or  decreases  in  retained  earnings
         effective December 31, 1996 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 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.

                                       27
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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  are   depreciated   using
         accelerated  methods.  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
                  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.

                                       28
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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  31,1997  and  1996
         included the following (in thousands):

                                                   1997              1996
                                               ----------        ----------

                  Cash                         $      482        $      287
                  Interest-Bearing Deposits
                      in Other Institutions         2,073             1,435
                                               ----------        ----------

                                               $    2,555        $    1,722
                                               ==========        ==========


         RECLASSIFICATIONS
                  Certain  reclassifications of previously reported amounts have
         been made to conform with 1997 presentation. Such reclassifications had
         no effect on net income.

         NON-DIRECT RESPONSE ADVERTISING
                  The  Association   expenses  advertising  costs  as  incurred.
         Advertising for 1997 and 1996 was $2,000 and $6,000, respectively.

         ACCOUNTING STANDARDS NOT YET ADOPTED
                  Statement of  Financial  Accounting  Standards  No. 130 ("SFAS
         130"),  "Reporting  Comprehensive Income" is effective for fiscal years
         beginning after December 15, 1997. This statement establishes standards
         for reporting and display of comprehensive income and its components in
         a full set of  general-purpose  financial  statements.  This  statement
         requires that an enterprise (a) classify  items of other  comprehensive
         income by their  nature in a  financial  statement  and (b) display the
         accumulated  balance  of other  comprehensive  income  separately  from
         retained earnings and additional  paid-in capital in the equity section
         of a statement of financial  condition.  Adoption of this pronouncement
         is not  expected  to have a material  adverse  effect on the  financial
         position and results of operations of the Company.

                                       29
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A
         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         ACCOUNTING STANDARDS NOT YET ADOPTED (Continued)

                  Statement of  Financial  Accounting  Standards  No. 131 ("SFAS
         131"),  "Disclosures  about  Segments  of  an  Enterprise  and  Related
         Information" is effective for fiscal years beginning after December 15,
         1997.  This  statement  establishes  standards  for the way that public
         business  enterprises  report  information about operating  segments in
         annual financial  statements and requires that those enterprises report
         selected  information  about  operating  segments in interim  financial
         reports  issued to  shareholders.  It also  establishes  standards  for
         related disclosures about products and services,  geographic areas, and
         major customers. Adoption of this pronouncement is not expected to have
         a material  adverse  effect on the  financial  position  and results of
         operations of the Company.


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 (in thousands):

                                                                     Algiers
                                                    Algiers         Homestead
                                                 Bancorp, Inc.     Association
                                                 -------------     -----------

                  Operating Income               $   -            $     1,519
                                                 ===========      ===========

                  Net Income                     $   -            $       173
                                                 ===========      ===========


                  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  which  would  have  occurred  had the  pooling
         occurred at the beginning of the fiscal years,  or of the results which
         may occur in the future.

                                       30
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE C
         INVESTMENT SECURITIES HELD-TO-MATURITY
                  The   Association   owned   no   held-to-maturity   investment
         securities at December 31, 1997. Investment securities held-to-maturity
         at December 31, 1996 consist of the following (in thousands):
<TABLE>
<CAPTION>
                                               Gross        Gross
                                Amortized    Unrealized   Unrealized        Fair
                                   Cost        Gains        Losses         Value
                                   ----        -----        ------         -----
<S>                                <C>          <C>           <C>          <C>    
Federal Farm
  Credit Banks ...........         $200         $ --          $--          $200
SLMA .....................          200           --           --           200
Federal Home Loan
  Bank Notes .............          425           --           --           425
                                   ----         ------        ----         ----

                                   $825         $ --          $--          $825
                                   ====         ======        ====         ====
</TABLE>

NOTE D
         INVESTMENT SECURITIES AVAILABLE-FOR-SALE
                  Investment securities  available-for-sale at December 31, 1997
         consist of the following (in thousands):
<TABLE>
<CAPTION>
                                               Gross        Gross
                                Amortized    Unrealized   Unrealized        Fair
                                   Cost        Gains        Losses         Value
                                   ----        -----        ------         -----
<S>                                <C>          <C>           <C>          <C>    
FNMA Medium Term
   Callable Note ...........       $  216       $   --       $   16       $  200
FHLMC Callable Note ........        1,095            6            1        1,100
FHLB Callable Notes ........        2,782            5           --        2,787
                                   ------       ------       ------       ------

                                   $4,093       $   11       $   17       $4,087
                                   ======       ======       ======       ======
</TABLE>
                  Algiers Homestead Association has invested in FHLB stock which
         is reflected at cost and approximates market.

                                       31
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE D
         INVESTMENT SECURITIES AVAILABLE-FOR-SALE (Continued)

                  Investment securities  available-for-sale at December 31, 1996
         consist of the following (in thousands):
<TABLE>
<CAPTION>
                                                 Gross        Gross
                                  Amortized    Unrealized   Unrealized      Fair
                                     Cost        Gains        Losses       Value
                                     ----        -----        ------       -----
<S>                                <C>          <C>         <C>         <C>    
FNMA Medium Term
   Callable Note .............     $   324      $     1     $    --     $   325
FHLMC Callable Note ..........         650            6          --         656
FHLB Callable Notes ..........       1,498            1          13       1,486
Louisiana Agricultural
   Finance Authority .........          19           --          --          19
Southeast Texas Housing
   Finance Authority .........          43           --          --          43
                                   -------      -------     -------     -------

                                     2,534            8          13       2,529

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

                                   $ 2,472      $     8     $    13     $ 2,467
                                   =======      =======     =======     =======
</TABLE>

                  The  following  is a  summary  of  contractual  maturities  of
         investment  securities  available-for-sale  as of December 31, 1997 (in
         thousands):
<TABLE>
<CAPTION>
                                                                            Fair
                                                            Cost           Value
                                                           ------         ------
<S>                                                        <C>            <C>
Due in One Year or Less ..........................         $  200         $  200
Due After One Year Thru Five Years ...............            500            500
Due After Five Years Thru Ten Years ..............          1,780          1,785
Due After Ten Years ..............................          1,613          1,602
                                                           ------         ------

                                                           $4,093         $4,087
                                                           ======         ======
</TABLE>

                                       32
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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  had  estimated  that the ultimate
         collectibility  of the bonds would  approximate  88% of their  original
         carrying  value.  As such,  the  Association  has applied all  proceeds
         received  during 1996 and 1997 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 years ended  December  31, 1997 and 1996
         (in thousands):
<TABLE>
<CAPTION>


                                                         Carrying         Reserve
                                                           Value          Balance
                                                           -----          -------
<S>                                                        <C>            <C>
Balance at December 31, 1995 .....................         $ 129          $(129)
   Principal Repayment ...........................           (67)            --
   Recapture of Provision
       for Investment Losses .....................            --             67
                                                           -----          -----

Balance at December 31, 1996 .....................            62            (62)
   Principal Repayment ...........................           (62)            --
   Recovery of Previous Charge - Offs ............            --            (54)
   Recapture of Provision
       for Investment Losses .....................            --            116
                                                           -----          -----

Balance at December 31, 1997 .....................         $  --          $  --
                                                           =====          =====
</TABLE>


                                       33
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE F
         LOANS RECEIVABLE
                  Loans receivable consist of the following (in thousands):
<TABLE>
<CAPTION>
                                                              1997         1996
                                                             ------       ------ 
<S>                                                          <C>          <C>
Principal Balances -
   First Mortgage Loans - 1-4 Family .................       $8,018       $8,134
   Commercial ........................................          738          668
   Construction Loans - 1-4 Family ...................           43           89
   Partially-Guaranteed by VA
       or Insured by FHA Loans - 1-4 Family ..........           41           51
                                                             ------       ------

                                                              8,840        8,942
                                                             ------       ------
Principal Balances -
   Second Mortgage Loans - 1-4 Family ................          189          175
   Consumer Loans ....................................          325         --
   Share Loans .......................................          758          694
                                                             ------       ------

                                                              1,272          869
                                                             ------       ------
Less:
   Allowance for Losses ..............................          485          530
   Unearned Interest on Mortgage Loans ...............           73            7
   Undisbursed Portion of Construction Loans .........          301            7
   Net Deferred Loan Origination Fees ................           55           47
                                                             ------       ------

                                                                914          591
                                                             ------       ------

                                                             $9,198       $9,220
                                                             ======       ======
</TABLE>
                  Activity in the  allowance  for loan losses is  summarized  as
         follows for the years ended December 31, 1997 and 1996 (in thousands):
<TABLE>
<CAPTION>
                                                          1997             1996
                                                         -----            ------ 
<S>                                                      <C>              <C>
Balance at Beginning of Year .................           $ 530            $ 534
   Charge-Offs ...............................                               --
   Recoveries ................................              --               --
   Credit for Loan Losses ....................             (45)              (4)
                                                         -----            -----

Balance at End of Year .......................           $ 485            $ 530
                                                         =====            =====
</TABLE>

                                       34
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE F
         LOANS RECEIVABLE (Continued)

                  At December 31, 1997 and December  31, 1996,  the  Association
         had loans totaling approximately $10,000 and $8,000, respectively,  for
         which  impairment  had been  recognized.  The allowance for loan losses
         related to these loans totaled  $10,000 and $8,000 at December 31, 1997
         and December 31, 1996, respectively. During the year ended December 31,
         1996,  the amount of interest  income that would have been  recorded on
         loans in  nonaccrual  status  at  December  31,  1996,  had such  loans
         performed in accordance with their terms, was approximately $1,000. The
         actual  interest  income  recorded on these loans during the year ended
         December 31, 1996 was  approximately  $-0-. Such interest  foregone for
         the year ended December 31, 1997 was approximately $1,000.

                  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 (in thousands):

                  Balance at Beginning of Year             $        17
                     Additional Borrowings                          88
                     Repayments                                    (21)
                                                           -----------

                  Balance at End of Year                   $        84
                                                           ===========


                  An  approximate  schedule  of  loan  maturities  or  repricing
         opportunities is as follows (in thousands):
<TABLE>
<CAPTION>
                                           Variable        Fixed
     Maturities                              Rate           Rate          Total
     ----------                              ----           ----          -----
<S>                                        <C>            <C>            <C>
Three Months or Less ..............        $   292        $    51        $   343
Three Months - One Year ...........            247              7            254
One Year - Five Years .............            474            304            778
Over Five Years ...................          6,507          2,230          8,737
                                           -------        -------        -------

                                           $ 7,520        $ 2,592        $10,112
                                           =======        =======        =======
</TABLE>


                                       35
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE G
         MORTGAGE-BACKED SECURITIES
                  Fixed   and   variable   rate    mortgage-backed    securities
         available-for-sale  at December 31, 1997 are  summarized as follows (in
         thousands):
<TABLE>
<CAPTION>
                                                 December 31, 1997
                                  ----------------------------------------------
                                                 Gross        Gross
                                  Amortized   Unrealized  Unrealized       Fair
                                    Cost         Gains       Losses        Value
                                    ----         -----       ------        -----
<S>                                <C>          <C>          <C>          <C>    
GNMA Certificates ..........       $  502       $    9       $    1       $  510
FNMA Certificates ..........        4,902           96           35        4,963
FHLMC Certificates .........        1,132           18            8        1,142
                                   ------       ------       ------       ------

                                   $6,536       $  123       $   44       $6,615
                                   ======       ======       ======       ======
</TABLE>
                  Fixed   and   variable   rate    mortgage-backed    securities
         held-to-maturity  at December  31, 1997 are  summarized  as follows (in
         thousands):
<TABLE>
<CAPTION>
                                                 December 31, 1997
                                  ----------------------------------------------
                                                 Gross        Gross
                                  Amortized   Unrealized  Unrealized       Fair
                                    Cost         Gains       Losses        Value
                                    ----         -----       ------        -----
<S>                                <C>          <C>          <C>          <C>    
GNMA Certificates ..........      $ 2,801      $    34      $     2      $ 2,833
FNMA Certificates ..........       15,256           21          226       15,051
FHLMC Certificates .........        3,773            2           79        3,696
                                  -------      -------      -------      -------

                                  $21,830      $    57      $   307      $21,580
                                  =======      =======      =======      =======
</TABLE>
                  Fixed   and   variable   rate    mortgage-backed    securities
         available-for-sale  at December 31, 1996 are  summarized as follows (in
         thousands):
<PAGE>
<TABLE>
<CAPTION>
                                                 December 31, 1996
                                  ----------------------------------------------
                                                 Gross        Gross
                                  Amortized   Unrealized  Unrealized       Fair
                                    Cost         Gains       Losses        Value
                                    ----         -----       ------        -----
<S>                                <C>          <C>          <C>          <C>    
GNMA Certificates ..........       $  885       $   19       $    3       $  901
FNMA Certificates ..........        5,397           64           46        5,415
FHLMC Certificates .........        2,770           19           28        2,761
                                   ------       ------       ------       ------

                                   $9,052       $  102       $   77       $9,077
                                   ======       ======       ======       ======
</TABLE>


                                       36
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE G
         MORTGAGE-BACKED SECURITIES (Continued)

                  Fixed   and   variable   rate    mortgage-backed    securities
         held-to-maturity  at December  31, 1996 are  summarized  as follows (in
         thousands):
<TABLE>
<CAPTION>
                                                 December 31, 1996
                                  ----------------------------------------------
                                                 Gross        Gross
                                  Amortized   Unrealized  Unrealized       Fair
                                    Cost         Gains       Losses        Value
                                    ----         -----       ------        -----
<S>                                <C>          <C>          <C>          <C>    
GNMA Certificates ..........      $ 3,199      $    25      $     5      $ 3,219
FNMA Certificates ..........       16,684           15          511       16,188
FHLMC Certificates .........        3,927            1          107        3,821
                                  -------      -------      -------      -------

                                  $23,810      $    41      $   623      $23,228
                                  =======      =======      =======      =======
</TABLE>
                  The   amortized   cost  and  fair  value  of   mortgage-backed
         securities at December 31, 1997,  by  contractual  maturity,  are shown
         below (in thousands).  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 .....................         $     2         $     2
   Due After One Year Thru Five Years ..........             719             691
   Due After Five Years Thru Ten Years .........           1,435           1,409
   Due After Ten Years .........................          26,210          26,093
                                                         -------         -------

                                                         $28,366         $28,195
                                                         =======         =======
</TABLE>
<PAGE>
NOTE H
         INTEREST RECEIVABLE
                  Interest   receivable   at  December  31,  1997  and  1996  is
summarized as follows (in thousands):
<TABLE>
<CAPTION>
                                                           1997             1996
                                                           ----             ---- 
<S>                                                        <C>              <C>
Mortgage Loans ...............................             $ 29             $ 14
Share Loans ..................................                3                3
Investment Securities ........................               52               24
Mortgage-Backed Securities ...................              185              224
                                                           ----             ----

                                                           $269             $265
                                                           ====             ====
</TABLE>


                                       37
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE I
         REAL ESTATE OWNED
                  A summary of real estate  owned at December  31, 1997 and 1996
is as follows (in thousands):
<TABLE>
<CAPTION>
                                                               1997         1996
                                                               ----         ---- 
<S>                                                            <C>           <C>
Real Estate Acquired in Settlement .................           $90           $90
Less:  Allowances for Losses .......................            90            45
                                                               ---           ---

                                                               $--           $45
                                                               ===           ===
</TABLE>
                  Activity  in the  allowance  for losses for other real  estate
         owned for years  ended  December  31,  1997 and 1996 is as follows  (in
         thousands):
<TABLE>
<CAPTION>
                                                           1997             1996
                                                           ----             ---- 
<S>                                                        <C>             <C>
Balance at Beginning of Year ..................            $ 45            $ 47
    Provision for REO Losses ..................              45               4
    Charge-Offs ...............................             --               (6)
                                                           ----            ----

Balance at End of Year ........................            $ 90            $ 45
                                                           ====            ====
</TABLE>
<PAGE>

NOTE J
         OFFICE PROPERTY AND EQUIPMENT                  
                  Office  property  and  equipment  consist of the  following at
         December 31, 1997 and 1996 (in thousands):
<TABLE>
<CAPTION>
                                                             1997            1996
                                                             ----            ---- 
<S>                                                          <C>            <C>
Land .............................................           $ 30           $ 30
Building .........................................            185            162
Furniture, Fixtures and Equipment ................            205            186
Leasehold Improvements ...........................             45             40
                                                             ----           ----

                                                              465            418
Less:  Accumulated Depreciation
    and Amortization .............................            212            187
                                                             ----           ----

                                                             $253           $231
                                                             ====           ====
</TABLE>
                  Depreciation expense for the years ended December 31, 1997 and
         1996 was approximately $22,000 and $24,000, respectively.

                                       38
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE K
         FEDERAL INCOME TAXES
                  The  provision  for income taxes for 1997 and 1996 consists of
         the following (in thousands):
<TABLE>
<CAPTION>
                                                              1997          1996
                                                              -----         ---- 
<S>                                                           <C>           <C>
Current Federal Tax Expense .........................         $ 77          $ 48
Deferred Federal Tax Expense (Benefit) ..............          (29)           18
                                                              ----          ----

                                                              $ 48          $ 66
                                                              ====          ====
</TABLE>
                  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  (in
         thousands):
<TABLE>
<CAPTION>
                                                              1997          1996
                                                             -----         -----
<S>                                                          <C>           <C>
Expected Tax Provision at 34% Rate .................         $ 88          $ 76
Effect of Net Loan, REO and Investment
    Losses Charged Directly to Tax
    Bad Debt Reserves ..............................          (40)           26
(Decrease) in Deferred Tax Asset
    Valuation Allowance ............................          --            (36)
                                                             ----          ----

                                                             $ 48          $ 66
                                                             ====          ====
</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 Company and its wholly-  owned  subsidiary  file  separate
         company  returns  for  federal  income  tax  purposes.  As a result the
         Company  has  available  a net  operating  loss  carryforward  which is
         approximately $181,000 which expires in 2012.

                                       39
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE K
         FEDERAL INCOME TAXES (Continued)

                  The net deferred tax assets or liabilities in the accompanying
         statements of financial condition include the following  components (in
         thousands):
<TABLE>
<CAPTION>
                                                              1997          1996
                                                              ----          ---- 
<S>                                                           <C>          <C>
Deferred Tax Assets
   Market Value Adjustment for Available-for-
       Sale Securities ................................       $--          $  12
   Allowance for Loan Losses ..........................         164          173
   Allowance for REO Losses ...........................          31           16
   Allowance for Unrealized Loss on Investments .......        --             21
   Employee Stock Option Plan .........................           7         --
   Charitable Contribution Carryforward ...............        --              8
   Deferred Loan Fees .................................          19           16
   Other ..............................................           2            3
                                                              -----        -----

       Total Deferred Tax Assets ......................         223          249
                                                              -----        -----

Deferred Tax Liabilities
   Fixed Assets and Depreciation ......................          13           10
   Market Value Adjustment for Available-for-
       Sale Securities ................................           7         --
   Section 481 Adjustment .............................           5         --
       FHLB Stock .....................................          32           22
                                                              -----        -----

       Total Deferred Tax Liabilities .................          57           32
                                                              -----        -----

Net Deferred Tax Assets ...............................         166          217
Deferred Tax Valuation Reserve ........................         194          194
                                                              -----        -----

   Total Net Deferred Tax Asset (Liability) ...........       $ (28)       $  23
                                                              =====        =====
</TABLE>
                  Included in retained earnings at December 31, 1997 and 1996 is
         approximately  $1,309,000  and  $1,307,000,  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
         $445,000 and $444,000 for December 31, 1997 and 1996.

                                       40
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE L
         DEPOSITS
                  Deposits  consist of the  following  at December  31, 1997 and
         1996 (in thousands):
<TABLE>
<CAPTION>
                           Weighted
                           Average
                           Rate at               1997                       1996
                                         -------------------       --------------------- 
                           12/31/97       Amount     Percent        Amount       Percent
                           --------       ------     -------        ------       -------
<S>                         <C>          <C>         <C>           <C>           <C>   

 NOW Accounts               2.40%        $ 1,098       3.09        $  1,713        4.67
 Passbook                   2.69%          5,483      15.43           5,774       15.76
 Money Fund                 2.58%          1,915       5.39           1,216        3.32
 Certificates of Deposit:
    2% to 2.99%                 -              -          -              94        0.26
    3% to 3.99%             3.50%             33       0.10               -           -
    4% to 4.99%                 -              -          -           6,958       18.99
    5% to 5.99%             5.46%         23,644      66.54          13,346       36.44
    6% to 6.99%             6.28%          2,293       6.45           5,544       15.13
    7% to 7.99%             7.09%          1,068       3.00           1,990        5.43
                                          


                                         $35,534     100.00%        $ 36,63      100.00%
                                         =======     ======         =======      ====== 


 Due on Demand                           $ 8,496                    $ 8,703
 Due Within -
    6 Months                               7,589                     10,892
    7 to 12 Months                         6,583                      6,311
    13 to 24 Months                        5,353                      6,127
    25 to 36 Months                        4,977                      1,807
 Due After 36 Months                       2,536                      2,795
                                         -------                   --------  

                                         $35,534                   $ 36,635
                                         =======                   ========
</TABLE>
                  The  aggregate  amount of  short-term  jumbo  certificates  of
         deposit  with a minimum  denomination  of  $100,000  was  approximately
         $1,746,000 and $2,005,000 at December 31, 1997 and 1996, respectively.

                                       41
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE L
         DEPOSITS (Continued)

                  Interest expense consisted of the following (in thousands):
<TABLE>
<CAPTION>
                                                          1997             1996
                                                        ------            ------ 
<S>                                                     <C>               <C>
NOW Accounts ...............................            $   36            $   40
Passbook ...................................               149               175
Money Fund .................................                31                33
Certificates of Deposits ...................             1,506             1,569
                                                        ------            ------

   Total ...................................            $1,722            $1,817
                                                        ======            ======
</TABLE>

                  In the normal  course of  business,  the  Association  accepts
         deposits  from members of the Board of Directors  and  officers.  As of
         December 31, 1997, these deposits totalled approximately $567,000.


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 1997 and 1996, respectively, was $29,000 and $18,000.

                  There  were  no  advances  from  the  FHLB  outstanding  as of
         December 31, 1997.


NOTE N
         FEDERAL DEPOSIT INSURANCE CORPORATION  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.

                                       42
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE N
         FEDERAL DEPOSIT INSURANCE CORPORATION  IMPROVEMENT ACT OF 1991 (FDICIA)
         AND FINANCIAL  INSTITUTIONS  REFORM,  RECOVERY AND  EN-FORCEMENT ACT OF
         1989 (FIRREA) (Continued)

                  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   ratio   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 at least 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, 1997 and 1996.
<TABLE>
<CAPTION>
                                                            1997                              1996
                                               -----------------------------      ---------------------------
                                                  Dollars         Percentage        Dollars        Percentage
                                               ------------       ----------      ------------     ----------
                                                (thousands)                       (thousands)
<S>                                            <C>                  <C>           <C>                 <C>

         Tangible Capital                      $      7,184         16.51%        $      6,777        14.83%
         Tangible Equity                       $      7,184         16.51%        $      6,777        14.83%
         Core/Leverage Capital                 $      7,184         16.51%        $      6,777        14.83%
         Tier 1 Risk-Based Capital             $      7,184         64.02%        $      6,777        52.29%
         Total Risk-Based Capital              $      7,326         65.29%        $      6,950        54.24%
</TABLE>

                                       43
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 (in thousands).
<TABLE>
<CAPTION>
                                       Net Income                Capital
                                       Year Ended                 as of
                                    December 31, 1997         December 31, 1997
                                    -----------------         -----------------  
<S>                                     <C>                         <C>
                  Per GAAP              $    332                     $ 7,185
                                        ========                     =======
                  Total Assets                                       $43,518
                  Capital Ratio                                        16.51%
<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                    $    7,185     $    7,185       $   7,185      $    7,185         $   7,185
         Assets required
             to be added
               Unrealized Loss
                 on Securities
                 Available-
                 for-Sale                     1              1               1               1                 1
               General valuation
                 allowance                    -              -               -               -               142
                                     ----------     ----------       ---------      ----------         ---------
         Regulatory capital
             measure                 $    7,184     $    7,184       $   7,184      $    7,184         $   7,326
                                     ==========     ==========       =========      ==========         =========
         Adjusted total
             assets                  $   43,517     $   43,517       $  43,517
                                     ==========     ==========       =========
         Risk-weighted
             assets                                                                 $   11,221         $  11,221
                                                                                    ==========         =========

         Capital Ratio                    16.51%         16.51%           16.51%         64.02%            65.29%

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

         Required Capital            $      653                       $   1,306                        $     898
                                     ==========                       =========                        =========

         Excess Capital              $    6,531                       $   5,878                        $   6,428
                                     ==========                       =========                        =========
</TABLE>


                                       44
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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
         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  $70,311 for 1997.  The ESOP
         shares as of December 31, 1997 were as follows:
<TABLE>
<CAPTION>
<S>                                                                     <C>
Allocated Shares ...............................................           2,592
Shares Released for Allocation .................................           5,954
Unreleased Shares ..............................................          43,296
                                                                        --------

Total ESOP Shares ..............................................          51,842

Fair Value of Unreleased Shares at December 31, 1997 ...........        $726,000
                                                                        ========
</TABLE>
                  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.

                                       45
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE R
         RECOGNITION AND RETENTION PLAN
                  On July 18, 1997, the Associated established a Recognition and
         Retention  Plan as an incentive to retain  personnel of experience  and
         ability in key positions.  The  Association  approved a total of 25,921
         shares of stock to be acquired  for the plan.  As of December 31, 1997,
         no shares have been acquired nor awarded.

                  Plan share awards are earned by recipients at a rate of 20% of
         the aggregate  number of shares covered by the plan over five years. If
         the employment of an employee or service as a non-employee  director is
         terminated prior to the fifth  anniversary of the date of grant of plan
         share award for any reason,  the  recipient  shall forfeit the right to
         any shares  subject to the award which have not been earned.  The total
         cost associated with the plan is based on the market price of the stock
         as of the date on  which  the  plan  shares  were  granted.  For  1997,
         compensation  expense  pertaining to the Recognition and Retention plan
         was $0 as no shares were granted.

                  As shares are  acquired for the plan,  the  purchase  price of
         these  shares is  recorded as unearned  compensation,  a contra  equity
         account.  As the shares are  distributed,  the contra equity account is
         reduced.

NOTE S
         STOCK OPTION PLAN
                  In 1997, the  Association  adopted a stock option plan for the
         benefit of directors,  officers, and other key employees. The number of
         shares of common stock  reserved  for  issuance  under the stock option
         plan was equal to 64,802 shares, or ten percent, of the total number of
         shares  of  common  shares  sold in the  Association's  initial  public
         offering of its common stock.  The option exercise price cannot be less
         than the fair value of the  underlying  common  stock as of the date of
         the option grant and the maximum option term cannot exceed ten years.

                  The stock  option  plan also  permits  the  granting  of Stock
         Appreciation Rights ("SAR's").  SAR's entitle the holder to receive, in
         the form of cash or stock,  the  increase  in the fair value of Company
         stock  from the date of grant to the date of  exercise.  No SAR's  have
         been issued under the plan.
<PAGE>

                  The following table  summarizes the activity  related to stock
         options:
<TABLE>
<CAPTION>
                                         Exercise        Available       Options
                                           Price          for Grant    Outstanding
                                           -----          ---------    -----------
<S>                                       <C>               <C>           <C>
At Inception ......................       $  --             64,802          --
Granted ...........................                           --            --
Canceled ..........................                           --            --
Exercised .........................                           --            --
                                                           -------        ------

At December 31, 1997 ..............                         64,802          --
                                                           =======        ======
</TABLE>
                                       46
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE T
         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
         Association's financial statements.  Management does not anticipate any
         material loss as a result of these transactions.  Commitments to extend
         credit  totaled  approximately  $62,000 on one to four family  mortgage
         loans,  and stand-by  letters of credit totaled $40,000 at December 31,
         1997.

                  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
         Association 's Statement of Financial Conditon.

                  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.

                                       47
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE U
         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,  the 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 (in thousands):
<TABLE>
<CAPTION>
                                                            December 31, 1997
                                                         Carrying          Fair
                                                          Amount           Value
                                                          ------           -----
<S>                                                      <C>             <C>
Financial Assets
  Cash and Short-Term Investment ...............         $ 2,555         $ 2,555
  Investment Securities ........................           4,093           4,087
  Loans and Mortgage Backed Securities .........          37,643          34,868

Financial Liabilities
  Deposits .....................................         $35,534         $35,661

</TABLE>


                                       48
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE V
         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  initially
         reserved for 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 W
         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 well capitalized
         financial  institution  which exceed the  federally  insured  limits by
         $376,000.

NOTE X
         DIVIDEND DECLARED
                  On  December  16,  1997,  the board of  directors  of  Algiers
         Bancorp declared a $.05 per share dividend to stockholders of record at
         January 3, 1998 to be payable on January 16, 1998.  The total  dividend
         payable recorded is $31,000.

NOTE Y
         STOCKHOLDERS' EQUITY

                  Common Stock - Par value $.01;  10,000,000 shares  authorized,
         648,025  shares issued and 614,624 are  outstanding  as of December 31,
         1997.

                  Preferred Stock - Par value $.01; 5,000,000 shares authorized,
         0 shares issued and outstanding in 1997.

                  Treasury Stock - Par value $.01; 33,901 shares at December 31,
         1997.

NOTE Z
         EARNINGS PER COMMON SHARE
                  Earnings  per share are computed  using the  weighted  average
         number of shares  outstanding  which was 574,423 in 1997.  Common stock
         dividends  of  $.05  per  share  were  paid  on  January  16,  1998  to
         stockholders of record as of January 3, 1998.

                                       49
<PAGE>
                      ALGIERS BANCORP, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE AA
         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 $241,000.  Net of related tax benefits
         the one-time special assessment amounted to $159,000 or $.26 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 Association.


NOTE BB
         COMMITMENTS AND CONTINGENCIES
                  The Association is currently involved in litigation concerning
         a labor and personnel dispute,  which has not yet been resolved.  As of
         the date of this report, it is not possible to determine the outcome of
         this dispute;  however,  management and the Association's legal counsel
         believe  that any  outcome  would have an  insignificant  impact on the
         Association's financial statements.

                                       50
<PAGE>
<TABLE>
<CAPTION>
                              ALGIERS BANCORP, INC.
                             CONDENSED BALANCE SHEET
                           December 31, 1997 and 1996
                             (Dollars in Thousands)


                                                                  December 31,
                                                              ------------------
                                                               1997        1996
                                                              ------      ------
ASSETS

<S>                                                           <C>         <C>   
Cash and Cash Equivalents                                     $  879      $1,025
Investments Available-for-Sale - at Fair Value                     2         476
Loans Receivable                                                 116        --
Mortgage-Backed Securities - Available-for-Sale -
    at Fair Value                                                841       1,048
Investment in Subsidiaries                                     7,341       3,038
ESOP Loan Receivable                                             455         518
Due from Subsidiaries                                           --             7
Accrued Interest Receivable                                       10          33
Fixed Assets                                                      21        --
Deferred Tax Asset                                              --             1
                                                              ------      ------

          Total Assets                                        $9,665      $6,146
                                                              ======      ======

LIABILITIES AND STOCKHOLDERS' EQUITY

Due to Subsidiary                                             $   51      $   20
Dividends Payable                                                 31          32
Deferred Tax Liability                                             4        --
Advance Payments for Taxes & Insurance                            19        --
Income Tax Payable                                                17          21
                                                              ------      ------

          Total Liabilities                                      122          73
                                                              ------      ------

Total Stockholders' Equity                                     9,543       6,073
                                                              ------      ------


          Total Liabilities and Stockholders' Equity          $9,665      $6,146
                                                              ======      ======
</TABLE>


                                       51
<PAGE>
<TABLE>
<CAPTION>
                              ALGIERS BANCORP, INC.
                            STATEMENTS OF OPERATIONS
                             (Dollars in Thousands)

                                                          For The           For The Six
                                                        Year Ended         Months Ended
                                                       December 31,         December 31,
                                                           1997                1996
                                                      ----------------   ----------------
<S>                                                          <C>                <C>      
Mortgage-Backed Securities                                   $  75              $   4    
ESOP Loan                                                       41                       
Investment Securities                                           57                 31    
Loans and Fees                                                  13                 21    
                                                             -----              -----    
                                                                                         
       Total Interest Income                                   186                 56    
                                                             -----              -----    
                                                                                         
                                                                                         
Income (Loss) in Subsidiary-Algiers Homestead                                            
    Association                                                332                (39)   
Loss in Subsidiary-Jefferson Community Lending                (179)                (7)   
Miscellaneous Income                                            10                  3    
                                                             -----              -----    
                                                                                         
       Total Non-Interest Income                               163                (43)   
                                                             -----              -----    
                                                                                         
                                                                                         
General and Administrative                                     122                  5    
                                                             -----              -----    
                                                                                         
                                                                                         
INCOME TAX EXPENSE                                             227                  8    
                                                                                         
                                                                16                 18    
                                                             -----              -----    
                                                                                         
                                                                                         
                                                             $ 211              $ (10)   
                                                             =====              =====    
</TABLE>

                                       52
<PAGE>
<TABLE>
<CAPTION>
                              ALGIERS BANCORP, INC.
                            STATEMENTS OF CASH FLOWS

                                                                     For The        For The Six
                                                                    Year Ended      Months Ended
                                                                    December 31,    December 31,
                                                                       1997             1996
                                                                   -------------   ---------------
<S>                                                                   <C>          <C>     
CASH FLOWS FROM OPERATING ACTIVITIES
    Net Income (Loss)                                                 $   211      $   (10)
    Adjustments to Reconcile Net Income (Loss) to Net
      Cash (Used in) by Operating Activities:
        Increase in Due to Subsidiaries                                    31           20
        Decrease (Increase) in Accrued Interest Receivable                 23          (33)
        Decrease (Increase) in Due from Subsidiaries                        7           (7)
        Increase in Advance Payments for Taxes & Insurance                 19         --
        (Decrease) Increase in Income Tax Payable                          (4)          21
        Decrease (Increase) in Deferred Income Taxes                        5           (2)
                                                                      -------      -------

           Net Cash Provided by (Used in) Operating Activities            292          (11)
                                                                      -------      -------

CASH FLOWS FROM INVESTING ACTIVITIES
    Increase in Loans Receivable - Net                                   (116)        --
    Purchases of Investment Securities - Available-for-Sale                (2)        (474)
    Maturities of Investment Securities - Available-for-Sale              476         --
    Purchases of Mortgage-Backed Securities - Available-for-Sale         --         (1,058)
    Maturities of Mortgage-Backed Securities - Available-for-Sale         207           12
    Investments in Subsidiaries                                        (4,303)      (3,038)
                                                                      -------      -------

           Net Cash (Used in) Investing Activities                     (3,738)      (4,558)
                                                                      -------      -------

CASH FLOWS FROM FINANCING ACTIVITIES
    Sale of Common Stock                                                 --              6
    Contribution of Additonal Paid-in Capital                           3,346        6,108
    Dividends Paid                                                       (112)        --
    Loan to Subsidiary for ESOP                                          --           (518)
    Repayments of ESOP Loan                                                64         --
                                                                      -------      -------

           Net Cash Provided by Financing Activities                    3,298        5,596
                                                                      -------      -------

NET INCREASE (DECREASE) IN CASH AND CASH
    EQUIVALENTS                                                          (148)       1,027

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR                           1,027         --
                                                                      -------      -------

CASH AND CASH EQUIVALENTS - END OF YEAR                               $   879      $ 1,027
                                                                      =======      =======

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
    INFORMATION
      Cash Paid During the Year for:
        Interest                                                      $  --        $  --
        Income Taxes                                                  $    45      $  --
</TABLE>


                                       53
<PAGE>
                               BOARD OF DIRECTORS
                              ALGIERS BANCORP, INC.
                             NEW ORLEANS, LOUISIANA

Thomas M. Arnold, Sr.
         Assessor, Orleans Parish

Thu Dang
         Travel Agent
         Self - employed

John H. Gary, III
         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

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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                     504-367-8222   504-367-8223 (FAX)

Dennis J. McCluer                           BANKING OFFICES
Vice President and
Chief Operating Officer                     # 1 Westbank Expressway
                                            New Orleans, LA 70114
Hugh E. Humphrey, III                       504-367-8222   504-367-8223 (FAX)
Secretary and Treasurer
                                            2021 Carol Sue Avenue
Francis M. Minor, Jr.                       Terrytown, LA  70056
Chief Financial Officer                     504-362-4567   504-362-9145 (FAX)


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