Patrick Little, President and CEO of Teche Holding Company (AMEX: TSH), holding company for Teche Federal Bank, today reported third quarter net income of $0.65 per diluted share, an increase of $0.05, or 8.3% compared to the same quarter in fiscal 2004.

The Company reported the following key achievements including:

-- Total Deposits, in the past nine months, grew $62.6 million, or 14.5%, to $495.0 million, from $432.4 million. SmartGrowth Deposits grew $2.0 million.

-- The Bank reduced total advances by $38.6 million since September 30, a reduction of 25% to $115.8 million.

-- Quarterly Net-Interest Income grew $899,000, or 20.8% over the past year, to $5.2 million, compared to $4.3 million in fiscal 2004.

-- New Loans in the past nine months were $109.9 million, of which $92.6 million, or 84% were SmartGrowth loans.

-- Commercial Loans grew $32.9 million, a nine-month increase of 50.8%, to $97.8 million.

-- Dividends increased to $0.24 per share compared to $0.20 per share in the same quarter last year, an increase of 20.0%. Dividends have increased for nine consecutive quarters.

Deposit Growth

Total Deposits grew $62.6 million to $495.0 million, from $432.4 million, a nine-month increase of 14.5%. SmartGrowth Deposits grew $2.0 million.

For the past three months, total deposits grew approximately $7.3 million, a one-quarter increase of 1.5%. During the same period, SmartGrowth Deposits declined approximately $19.4 million to $212.1 million, while Time Deposits increased $26.6 million to $282.8 million, a one-quarter increase of 10.4%.

"We have experienced the largest single nine months' growth in deposits in the history of the bank," said Little.

Net Interest Income

Net Interest Income amounted to $5.2 million compared to $4.3 million in the same quarter of fiscal 2004, an increase of $899,000 or 20.8%. For the past nine months, Net Interest Income amounted to $15.2 million compared to $12.8 million for the same period of fiscal 2004, an increase of $2.4 million, or 18.8%.

Increases in Net Interest Income for both the three and nine month periods were primarily due to growth in deposits and SmartGrowth Loans and deposits and to increases in both loans and deposits as a result of the merger in July 2004 with St. Landry Financial Corporation.

Provision For Loan Losses

The provision for loan losses amounted to $45,000 and $105,000 for the quarter and nine months ended June 30, 2005, compared to $15,000 and $45,000 the previous year, primarily due to growth in the loan portfolio.

SmartGrowth Loans and Deposits

SmartGrowth loans, consisting of commercial loans, home equity loans, alternative mortgage loans and consumer loans, were $285.9 million, or 57.7% of total loans at June 30, 2005, compared to $246.7 million, or 51.9% at September 30, 2004, a nine month increase of $39.1 million, or 15.9%.

"Overall, for the past nine months, SmartGrowth loan growth has been excellent," said Little. The bank continued to post growth in Commercial Loans. "The $32.9 million, or 50.8% increase, is a continuation of our plans in these areas."

The Company's SmartGrowth Deposit Accounts, consisting of checking accounts, money market accounts, and savings accounts, remained steady. Total SmartGrowth Deposits grew $2.0 million to $212.1 million or 0.9% from $210.2 million at September 30, 2004.

For the past quarter, SmartGrowth Deposit balances decreased approximately $19.3 million from $231.5 million at March 30, 2005, while time deposit balances grew to $282.8 million from $256.2 million last quarter. SmartGrowth Deposits amount to 43% of total deposits as of June 30, 2005.

Asset quality remained strong. Non-performing Assets to Total Assets increased slightly 0.57%, compared to 0.49% at September 30, 2004.

Increase in Dividends

Since June 12, 2003, the Company has increased dividends for nine consecutive quarters and currently pays $0.24 per share. The Company changed its dividend payout policy as a response to changes in the federal tax law.

Net Interest Margin

Net interest margin amounted to 3.25% and 3.21% for the three and nine-month period ended June 30, 2005, compared to 3.20% and 3.24% a year ago.

"We are pleased that our net interest margin has remained relatively stable, even as our deposits and loans are experiencing strong growth," said Little. "This has enabled us to grow Net Interest Income 19.4% over the last nine months, a portion of which is due to a merger with St. Landry Financial Corporation in July 2004."

During quarter ended June 30, 2005, the Bank both sold loans in the amount of $14.4 million with an average interest rate of 6.12%, and prepaid approximately $16.1 million of long term advances from the Federal Home Loan Bank, with average rates of approximately 7.7%.

"Prepayment of these advances helped to reduce interest expense for a portion of this quarter, thus lessening the effects of an overall increase in short term interest rates," said Little. "Further, selling a selected group of long term loans helped to manage interest rate risk," he added.

In addition, SmartGrowth Deposits amount to 42.9% of total deposits and SmartGrowth loans amount to 57.7% of total loans at June 30, 2005.

Branch Network Growth

Teche added four additional branch offices in fiscal 2004, including two new offices in Baton Rouge and two offices as a result of the merger with St. Landry Financial Corporation in July 2004.

At June 30, 2005, total deposits at the Sherwood Forest Office location amounted to $27.7 million, compared to $14.7 million a year ago, an increase of $13.0 million, or 88.4%. "Results in Baton Rouge have been remarkable," said Little,

At June 30, 2005, total deposits at the two St. Landry Parish offices increased to $53.0 million, from $50.8 million last quarter, a single quarter increase of $2.2 million or 4.3%. The merger of St. Landry Financial Corporation has been successful. Since October 1, 2004, deposits in our two St. Landry Parish branches have increased $9.2 million to $53.0 million, an increase of 21.0%. On April 12, 2005, the bank announced the addition of Tina Vidrine, an experienced commercial loan officer in the St. Landry Parish area.

A new branch in the new Prairieville Wal-Mart Supercenter will be opened in August 2005 in the fast-growing Ascension Parish market, located near the city of Baton Rouge.

Non-interest Income

Non-Interest Income for the quarter and nine month period ended June 30, 2005, amounted to $2.9 million and $8.1 million respectively, or 35.7% and 34.7% of revenue.

Deposit service charges amounted to 88.4% of total non-interest income for the quarter ended June 30, 2005.

"Deposit fees continue to provide the Company with a stable and growing source of income, as has been the case for the past nine years," said Little.

Non-Interest Expense

Non-interest Expense amounted to $5.8 million and $16.7 million compared to $4.6 and $13.4 million for the quarter and nine months ended June 30, 2004, primarily due to increased expenses associated with new branch offices and the merger with St. Landry Financial Corporation.

Teche Federal Bank is the fourth largest publicly traded bank based in Louisiana with over $677 million in assets. Teche Holding Company is the parent company of Teche Federal Bank, which operates eighteen offices in South Louisiana and serves over 50,000 customers. Teche Holding Company's common stock is traded under the symbol "TSH" on the American Stock Exchange

Statements contained in this news release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by Teche Holding Company with the Securities and Exchange Commission from time to time. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.

TECHE HOLDING COMPANY
(Dollars in thousands, except per share data)
Franklin, LA
Statements of Income
(UNAUDITED)

Three Months Nine Months
Ended Ended
June 30 June 30
2005 2004 2005 2004
------- ------- ------- -------
Interest Income $ 9,268 $ 7,537 $26,955 $22,321
Interest Expense 4,047 3,215 11,713 9,554
------- ------- ------- -------
Net Interest Income 5,221 4,322 15,242 12,767
Provision for Loan Losses 45 15 105 45
------- ------- ------- -------
Net Interest Income after
Provision for Loan Losses 5,176 4,307 15,137 12,722
Non Interest Income 2,901 2,345 8,106 7,304
Non Interest Expense 5,847 4,630 16,668 13,444
------- ------- ------- -------
Income Before Gain on Sales of
Securities and Income Taxes 2,230 2,022 6,575 6,582
Gains on
Sales of Securities -- 99 81 131
Income Taxes 725 700 2,163 2,169
------- ------- ------- -------

Net Income $ 1,505 $ 1,421 $ 4,493 $ 4,544
======= ======= ======= =======

Selected Financial Data
-----------------------

Dividends Declared Per Share $ 0.24 $ 0.20 $ 0.69 $ 0.57
Basic Earnings Per Common Share $ 0.68 $ 0.64 $ 2.02 $ 2.04
Diluted Earnings Per Common Share $ 0.65 $ 0.60 $ 1.92 $ 1.90
Annualized Return on Avg. Assets 0.87% 0.98% 0.88% 1.07%
Annualized Return on Avg. Equity 9.93% 9.75% 9.94% 10.51%
Annualized Return on Avg.
Tangible Equity (1) 10.79% 9.75% 10.81% 10.51%
Net Interest Margin 3.25% 3.20% 3.21% 3.24%
Non Interest Income/Avg. Assets 1.68% 1.69% 1.61% 1.76%
Non Interest Expense/Avg. Assets 3.39% 3.18% 3.28% 3.17%

(1) Eliminates the effect of goodwill and the core deposit intangible
assets and the related amortization expense on a tax effected
basis. The amount was calculated using the following information:

Annualized Return on Avg.
Tangible Equity (1)
-------------------------
Average Stockholders' Equity $60,646 $58,297 $60,262 $57,663
Less average goodwill and
other intangible assets,
net of related income
taxes 3,904 -- 3,891 --
------- ------- ------- -------
Average Tangible Equity $56,742 $58,297 $56,371 $57,663
======= ======= ======= =======

Net Income $ 1,505 $ 1,421 $ 4,493 $ 4,544
Plus Amortization of
core deposit Intangibles,
net of related income taxes 26 -- 79 --
Net Income, as adjusted $ 1,531 $ 1,421 $ 4,572 $ 4,544
======= ======= ======= =======

TECHE HOLDING COMPANY
(Dollars in thousands, except per share data)
Franklin, LA
Balance Sheets
(UNAUDITED)
at

June 30, September 30,
2005 2004

SmartGrowth Loans (a) $ 285,858 $ 246,717
Mortgage Loans (b) 209,914 228,975
------------ ------------
495,772 475,692
Allowance for Loan Losses (4,344) (4,365)
------------ ------------
Loans Receivable, Net 491,428 471,327

Cash and Securities 147,520 144,498
Goodwill and Other Intangibles 4,010 4,008
Foreclosed Real Estate 624 194
Other 33,676 33,007
------------ ------------
TOTAL ASSETS $ 677,258 $ 653,034
============ ============

SmartGrowth Deposits (c) $ 212,135 $ 210,168
Time Deposits 282,818 222,249
------------ ------------
Total Deposits 494,953 432,417

FHLB Advances 115,821 154,439
Other Liabilities 5,168 5,891
Stockholders' Equity 61,316 60,287
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 677,258 $ 653,034
============ ============

Ratio of Equity to Assets 9.05% 9.23%
Tangible Equity to Assets (2) 8.53% 8.69%
Book Value per Common Share $ 27.41 $ 26.55
Tangible Book Value
Per Common Share (2) $ 25.22 $ 24.85
Non-performing Assets/Total Assets 0.57% 0.49%
Shares Outstanding (in thousands) 2,237 2,271

(a) Consumer, Commercial, Home Equity, and Alternative Mortgage Loans
(b) Owner Occupied Conforming Mortgage Loans
(c) Checking, Money Market and Savings Deposits

(2) Eliminates the effect of goodwill and the core deposit intangible
assets and the related accumulated amortization on a tax-effected
basis. The amount was calculated using the following information:

Stockholders' Equity $ 61,316 $ 60,287
Less goodwill and other Intangible
assets, net of related income taxes 3,904 3,845
------------ ------------
Tangible Stockholders' Equity $ 57,412 $ 56,442
============ ============

Total Assets $ 677,258 $ 653,034
Less goodwill and other Intangible
assets, net of related income taxes 3,904 3,845
------------ ------------
Total Tangible Assets $ 673,354 $ 649,189
============ ============