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

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)
[ x ]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2007

                                       or

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

          For the transition period from _____________ to _____________

                        Commission File Number: 000-18464


                            EMCLAIRE FINANCIAL CORP.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


     Pennsylvania                                       25-1606091
--------------------------------------------------------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)


     612 Main Street, Emlenton, Pennsylvania                      16373
--------------------------------------------------------------------------------
     (Address of principal executive offices)                   (Zip Code)


                                 (724) 867-2311
--------------------------------------------------------------------------------
                         (Registrant's telephone number)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


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

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer.

Large accelerated filer|_|    Accelerated filer|_|     Non-accelerated filer |X|

     Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).     Yes |_|         No |X|

     The number of shares outstanding of the Registrant's common stock was
1,267,835 at November 9, 2007.

--------------------------------------------------------------------------------
<PAGE>
                            EMCLAIRE FINANCIAL CORP.

                     INDEX TO QUARTERLY REPORT ON FORM 10-Q
<TABLE>
<CAPTION>
<S>                     <C> <C>               <C> <C>                                                                  <C>
                         PART I - FINANCIAL INFORMATION

Item 1.       Interim Financial Statements (Unaudited)

              Consolidated Balance Sheets as of
              September 30, 2007 and December 31, 2006..................................................................1

              Consolidated Statements of Income for the three and nine
              months ended September 30, 2007 and 2006..................................................................2

              Condensed Consolidated Statements of Cash Flows for the nine
              months ended September 30, 2007 and 2006..................................................................3

              Consolidated Statements of Changes in Stockholders'
              Equity for the three and nine months ended September 30, 2007 and 2006....................................4

              Notes to Consolidated Financial Statements................................................................5

Item 2.       Management's Discussion and Analysis
              of Financial Condition and Results of Operations.........................................................10

Item 3.       Quantitative and Qualitative Disclosures about Market Risk...............................................21

Item 4.       Controls and Procedures..................................................................................22

                           PART II - OTHER INFORMATION

Item 1.       Legal Proceedings........................................................................................22

Item 1A.      Risk Factors.............................................................................................22

Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds..............................................23

Item 3.       Defaults upon Senior Securities..........................................................................23

Item 4.       Submission of Matters to a Vote of Security Holders......................................................23

Item 5.       Other Information........................................................................................23

Item 6.       Exhibits.................................................................................................23

Signatures    .........................................................................................................24
</TABLE>
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Interim Financial Statements

                     Emclaire Financial Corp. and Subsidiary
                           Consolidated Balance Sheets
           As of September 30, 2007 (Unaudited) and December 31, 2006
              (Dollar amounts in thousands, except per share data)

                                              September 30,       December 31,
                                                  2007                2006
                                             ---------------     ---------------
                   Assets
                   ------

Cash and due from banks                      $        6,290      $        7,540
Interest-earning deposits with banks                    117               9,177
                                             ---------------     ---------------
  Cash and cash equivalents                           6,407              16,717
Securities available for sale, at fair value         48,835              51,774
Loans receivable, net of allowance for loan
 losses of $2,118 and $2,035                        226,199             213,344
Federal bank stocks, at cost                          2,608               2,217
Bank-owned life insurance                             4,938               4,794
Accrued interest receivable                           1,481               1,374
Premises and equipment, net                           7,785               7,958
Goodwill                                              1,422               1,422
Deferred tax asset                                      539                 533
Prepaid expenses and other assets                       676                 427
                                             ---------------     ---------------

    Total Assets                             $      300,890      $      300,560
                                             ===============     ===============

    Liabilities and Stockholders' Equity
    ------------------------------------

Liabilities:
 Deposits:
  Noninterest-bearing                        $       45,643      $       44,045
  Interest-bearing                                  190,505             200,447
                                             ---------------     ---------------
    Total deposits                                  236,148             244,492
 Short-term borrowed funds                            7,600                   -
 Long-term borrowed funds                            30,000              30,000
 Accrued interest payable                               732                 825
 Accrued expenses and other liabilities               1,650               1,326
                                             ---------------     ---------------

   Total Liabilities                                276,130             276,643
                                             ---------------     ---------------

Stockholders' Equity:
 Preferred stock, $1.00 par value, 3,000,000
  shares authorized; none issued                          -                   -
 Common stock, $1.25 par value, 12,000,000
  shares authorized; 1,395,852 shares issued;
  1,267,835 shares outstanding                        1,745               1,745
 Additional paid-in capital                          10,887              10,871
 Treasury stock, at cost; 128,017 shares             (2,653)             (2,653)
 Retained earnings                                   15,278              14,370
 Accumulated other comprehensive loss                  (497)               (416)
                                             ---------------     ---------------

   Total Stockholders' Equity                        24,760              23,917
                                             ---------------     ---------------

    Total Liabilities and Stockholders'
     Equity                                  $      300,890      $      300,560
                                             ===============     ===============

See accompanying notes to consolidated financial statements.

                                       1
<PAGE>

                     Emclaire Financial Corp. and Subsidiary
                        Consolidated Statements of Income
   For the three and nine months ended September 30, 2007 and 2006 (Unaudited)
              (Dollar amounts in thousands, except per share data)
<TABLE>
<CAPTION>
<S>                                          <C>                 <C>                 <C>                 <C>
                                                    For the three months ended            For the nine months ended
                                                        September 30,                           September 30,
                                             -----------------------------------     -----------------------------------
                                                   2007                2006                2007                2006
                                             ---------------     ---------------     ---------------     ---------------

Interest and dividend income:
 Loans receivable, including fees            $         3,937     $         3,670     $        11,329     $        10,166
 Securities:
   Taxable                                               388                 352               1,171               1,103
   Exempt from federal income tax                        169                 176                 514                 523
 Federal bank stocks                                      35                  28                 106                  68
 Deposits with banks                                       6                  14                 143                  55
                                             ---------------     ---------------     ---------------     ---------------
  Total interest and dividend income                   4,535               4,240              13,263              11,915
                                             ---------------     ---------------     ---------------     ---------------

Interest expense:
 Deposits                                              1,578               1,530               4,813               4,293
 Borrowed funds                                          361                 324               1,047                 658
                                             ---------------     ---------------     ---------------     ---------------
  Total interest expense                               1,939               1,854               5,860               4,951
                                             ---------------     ---------------     ---------------     ---------------

Net interest income                                    2,596               2,386               7,403               6,964
 Provision for loan losses                                45                  90                 120                 168
                                             ---------------     ---------------     ---------------     ---------------

Net interest income after provision for loan
 losses                                                2,551               2,296               7,283               6,796
                                             ---------------     ---------------     ---------------     ---------------

Noninterest income:
 Fees and service charges                                412                 387               1,128               1,122
 Commissions on financial services                        83                 101                 325                 316
 Net gain on sale of available for sale
  securities                                              18                 134                 194                 376
 Net gain on sales of loans                               15                   9                  22                   9
 Earnings on bank-owned life insurance                    55                  53                 163                 144
 Other                                                   113                 109                 366                 324
                                             ---------------     ---------------     ---------------     ---------------
  Total noninterest income                               696                 793               2,198               2,291
                                             ---------------     ---------------     ---------------     ---------------

Noninterest expense:
 Compensation and employee benefits                    1,241               1,391               3,791               3,988
 Premises and equipment                                  404                 387               1,205               1,140
 Intangible amortization expense                           -                   2                   -                   7
 Other                                                   610                 485               1,904               1,598
                                             ---------------     ---------------     ---------------     ---------------
  Total noninterest expense                            2,255               2,265               6,900               6,733
                                             ---------------     ---------------     ---------------     ---------------

Income before provision for income taxes                 992                 824               2,581               2,354
 Provision for income taxes                              238                 132                 569                 474
                                             ---------------     ---------------     ---------------     ---------------

Net income                                   $           754     $           692     $         2,012     $         1,880
                                             ===============     ===============     ===============     ===============

 Basic and diluted earnings per share        $          0.59     $          0.55     $          1.59     $          1.48


 Average common shares outstanding                 1,267,835           1,267,835           1,267,835           1,267,835
 Dilutive shares                                           -                   -                   -                   -
</TABLE>

See accompanying notes to consolidated financial statements.

                                       2
<PAGE>
                     Emclaire Financial Corp. and Subsidiary
                 Condensed Consolidated Statements of Cash Flows
             For the nine months ended September 30, 2007 and 2006
                                   (Unaudited)
                          (Dollar amounts in thousands)
<TABLE>
<CAPTION>
<S>                                                              <C>                <C>
                                                                      For the nine months ended
                                                                            September 30,
                                                                 -----------------------------------
                                                                       2007               2006
                                                                 -----------------------------------
Cash flows from operating activities
Net income                                                       $         2,012    $         1,880
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization of premises and equipment                      497                557
     Provision for loan losses                                               120                168
     Amortization of premiums and accretion of discounts, net                  9                 27
     Amortization of intangible assets and mortgage servicing
      rights                                                                  12                  5
     Realized gain on sales of available for sale securities, net           (194)              (376)
     Net gains on sales of loans                                             (22)                (9)
     Stock compensation expense                                               16                  -
     Earnings on bank owned life insurance, net                             (144)              (125)
     Increase in accrued interest receivable                                (107)              (201)
     (Increase) decrease in prepaid expenses and other assets               (225)               114
     Increase (decrease) in accrued interest payable                         (93)               140
     Increase (decrease) in accrued expenses and other
      liabilities                                                            324               (369)
                                                                 -----------------------------------
   Net cash provided by operating activities                               2,205              1,811
                                                                 -----------------------------------
Cash flows from investing activities
  Loan originations and principal collections, net                       (14,575)           (26,049)
  Proceeds from the sale of loans                                          1,615              1,016
  Available for sale securities:
     Sales                                                                 1,275                814
     Maturities, repayments and calls                                     13,869              4,714
     Purchases                                                           (12,136)            (1,753)
  Held to maturity securities:
     Maturities, repayments and calls                                          -                 15
  Purchases of federal bank stocks                                          (391)              (562)
  Purchases of premises and equipment                                       (324)            (1,396)
                                                                 -----------------------------------
   Net cash used in investing activities                                 (10,667)           (23,201)
                                                                 -----------------------------------
Cash flows from financing activities
  Net increase (decrease) in deposits                                     (8,345)             8,542
  Net increase in overnight borrowed funds                                 7,600             11,000
    Dividends paid on common stock                                        (1,103)            (1,027)
                                                                 -----------------------------------
   Net cash provided by (used in) financing activities                    (1,848)            18,515
                                                                 -----------------------------------
Net decrease in cash and cash equivalents                                (10,310)            (2,875)
Cash and cash equivalents at beginning of period                          16,717             10,367
                                                                 -----------------------------------
Cash and cash equivalents at end of period                       $         6,407    $         7,492
                                                                 -----------------------------------
Supplemental information:
  Interest paid                                                  $         5,953    $         4,811
  Income taxes paid                                                          366                501
Supplemental noncash disclosure:
  Transfers from loans to foreclosed real estate                               -                 20
</TABLE>
See accompanying notes to consolidated financial statements.

                                       3
<PAGE>
                     Emclaire Financial Corp. and Subsidiary
           Consolidated Statements of Changes in Stockholders' Equity
           For the three and nine months ended September 30, 2007 and
                                2006 (Unaudited)
              (Dollar amounts in thousands, except per share data)
<TABLE>
<CAPTION>
<S>                                          <C>            <C>            <C>            <C>
                                               For the three months        For the nine months ended
                                                       ended
                                                   September 30,                 September 30,
                                             -------------------------     --------------------------
                                                 2007          2006            2007           2006
                                             -----------    ----------     -----------    -----------

Balance at beginning of period               $   23,990     $  23,480      $   23,917     $   23,615

Net income                                          754           692           2,012          1,880

Other comprehensive income (loss):
  Change in net unrealized gains (losses) on
   available for sale securities, net of
   taxes                                            381           529              47             51
  Less reclassification adjustment for gains
   included in net income, net of taxes             (12)          (88)           (128)          (248)
                                             -----------    ----------     -----------    -----------
  Other comprehensive income (loss)                 369           441             (81)          (197)
                                             -----------    ----------     -----------    -----------

Total comprehensive income                        1,123         1,133           1,931          1,683

Stock compensation expense                           15             -              16              -
Dividends declared                                 (368)         (342)         (1,103)        (1,027)
                                             -----------    ----------     --------------------------

Balance at end of period                     $   24,760     $  24,271      $   24,760     $   24,271
                                             ===========    ==========     ===========    ===========

Cash dividend per common share               $     0.29     $    0.27      $     0.87     $     0.81
                                             ===========    ==========     ===========    ===========
</TABLE>
See accompanying notes to consolidated financial statements.

                                       4
<PAGE>

                     Emclaire Financial Corp. and Subsidiary
             Notes to Consolidated Financial Statements (Unaudited)

1.   Nature of Operations and Basis of Presentation.

     Emclaire  Financial Corp.  (the  "Corporation")  is a Pennsylvania  company
     organized as the holding company of Farmers  National Bank of Emlenton (the
     "Bank").  The  Corporation  provides a variety  of  financial  services  to
     individuals and businesses through its offices in western Pennsylvania. Its
     primary deposit  products are checking,  savings and certificate of deposit
     accounts and its primary  lending  products are  residential and commercial
     mortgages, commercial business and consumer loans.

     The  consolidated   financial   statements  include  the  accounts  of  the
     Corporation  and its wholly owned  subsidiary,  the Bank. All  intercompany
     transactions   and  balances   have  been   eliminated   in  preparing  the
     consolidated financial statements.

     The  accompanying  unaudited  consolidated  financial  statements  for  the
     interim periods  include all  adjustments,  consisting of normal  recurring
     accruals,  which are  necessary,  in the opinion of  management,  to fairly
     reflect the Corporation's  consolidated  financial  position and results of
     operations.  Additionally,  these consolidated financial statements for the
     interim periods have been prepared in accordance with  instructions for the
     Securities and Exchange Commission's Form 10-Q and therefore do not include
     all  information  or footnotes  necessary  for a complete  presentation  of
     financial  condition,  results of  operations  and cash flows in conformity
     with  accounting  principles  generally  accepted  in the United  States of
     America.  For  further  information,  refer  to  the  audited  consolidated
     financial  statements and footnotes thereto for the year ended December 31,
     2006,  as contained in the  Corporation's  2006 Annual  Report of Form 10-K
     filed with the Securities and Exchange Commission.

     The balance  sheet at December  31, 2006 has been  derived from the audited
     financial  statements at that date but does not include all the information
     and footnotes  required by generally  accepted  accounting  principles  for
     complete financial statements.

     The  preparation of financial  statements,  in conformity  with  accounting
     principles  generally  accepted in the United  States of America,  requires
     management  to make  estimates  and  assumptions  that affect the  reported
     amounts in the consolidated  financial  statements and accompanying  notes.
     Actual results could differ from those estimates.  Material  estimates that
     are particularly  susceptible to significant change in the near term relate
     to the  determination  of the  allowance  for loan  losses.  The results of
     operations  for  interim   quarterly  or  year  to  date  periods  are  not
     necessarily  indicative  of the results that may be expected for the entire
     year or any other period. Certain amounts previously reported may have been
     reclassified  to  conform  to  the  current  year's   financial   statement
     presentation.

2.   Earnings per Common Share.

     Basic earnings per common share (EPS) excludes  dilution and is computed by
     dividing  net  income by the  weighted  average  number  of  common  shares
     outstanding during the period.  Diluted EPS reflects the potential dilution
     that could occur if  securities  or  contracts  to issue  common stock were
     exercised  or  converted  into common  stock or resulted in the issuance of
     common stock that then shared in the earnings of the  Corporation.  Options
     on 83,000  shares of common stock were not  included in  computing  diluted
     earnings per share because their effects were not dilutive.

                                       5
<PAGE>

3.   Securities.

     The  Corporation's  securities as of the respective dates are summarized as
     follows:
<TABLE>
<CAPTION>
<S>                                          <C>           <C>            <C>            <C>
(Dollar amounts in thousands)                 Amortized   Unrealized    Unrealized        Fair
                                                cost        gains         losses          value
----------------------------------------------------------------------------------------------------
Available for sale:
-------------------
  September 30, 2007:
     U.S. Government agencies and related
      entities                               $    28,857   $         -    $     (189)    $    28,668
     Mortgage-backed securities                    2,047             -           (77)          1,970
     Municipal securities                         14,205           495             -          14,700
     Equity securities                             3,933             2          (438)          3,497
                                             -------------------------------------------------------
                                             $    49,042   $       497    $     (704)    $    48,835
                                             -------------------------------------------------------
  December 31, 2006:
     U.S. Government agencies and related
      entities                               $    31,354   $         -    $     (606)    $    30,748
     Mortgage-backed securities                    2,434             -           (95)          2,339
     Municipal securities                         14,688           574             -          15,262
     Equity securities                             3,382           176          (132)          3,425
                                             -------------------------------------------------------
                                             $    51,858   $       750    $     (833)    $    51,774
----------------------------------------------------------------------------------------------------
</TABLE>

4.   Loans Receivable.

     The  Corporation's   loans  receivable  as  of  the  respective  dates  are
     summarized as follows:

(Dollar amounts in thousands)           September 30,      December 31,
                                              2007               2006
---------------------------------------------------------------------------
Mortgage loans on real estate:
Residential first mortgages             $        65,301    $         64,662
Home equity loans and lines of credit            49,928              47,330
Commercial                                       67,626              61,128
                                        -----------------------------------
                                                182,855             173,120
Other loans:
Commercial business                              36,022              34,588
Consumer                                          9,440               7,671
                                        -----------------------------------
                                                 45,462              42,259
                                        -----------------------------------
Total loans, gross                              228,317             215,379
Less allowance for loan losses                    2,118               2,035
                                        -----------------------------------
                                        $       226,199    $        213,344
Total loans, net                        -----------------------------------

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

                                       6
<PAGE>
5.   Deposits.

     The  Corporation's  deposits as of the  respective  dates are summarized as
     follows:

(Dollar amounts in thousands)      September 30, 2007     December 31, 2006
------------------------------------------------------------------------------
            Type of accounts         Amount      %        Amount        %
------------------------------------------------------------------------------
Noninterest-bearing deposits       $   45,643     19.3%  $    44,045     18.0%
Interest-bearing demand deposits       72,675     30.8%       70,951     29.0%
Time deposits                         117,830     49.9%      129,496     53.0%
                                   -------------------------------------------
                                   $  236,148    100.0%  $   244,492    100.0%
                                   -------------------------------------------

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

6.   Guarantees.

     The Corporation does not issue any guarantees that would require  liability
     recognition  or  disclosure,  other  than its  standby  letters  of credit.
     Standby  letters  of  credit  are  conditional  commitments  issued  by the
     Corporation to guarantee the performance of a customer to a third party. Of
     these letters of credit at September  30, 2007,  $85,000 will expire within
     the next twelve months,  $275,000 will automatically  renew within the next
     twelve  months and $517,000  will  automatically  renew within  thirteen to
     twenty-five  months.  The Corporation,  generally,  holds collateral and/or
     personal guarantees supporting these commitments.  Management believes that
     the  proceeds   obtained  through  a  liquidation  of  collateral  and  the
     enforcement of guarantees would be sufficient to cover the potential amount
     of future payments required under the corresponding guarantees.  The credit
     risk involved in issuing letters of credit is essentially the same as those
     that are involved in extending  loan  facilities to customers.  The current
     amount of the  liability  as of  September  30, 2007 for  guarantees  under
     standby letters of credit issued is not material.

7. Employee Benefit Plans.

     The  Corporation  maintains a defined  contribution  401(k) Plan.  Eligible
     employees participate by providing tax-deferred  contributions up to 20% of
     qualified compensation. Employee contributions are vested at all times. The
     Corporation   provides  a  matching   contribution  of  up  to  4%  of  the
     participant's  salary.  Matching  contributions  for the nine months  ended
     September 30, 2007 and 2006 amounted to $100,000 and $63,000, respectively.

     The Corporation  provides pension benefits for eligible employees through a
     defined  benefit  pension  plan.   Substantially  all  full-time  employees
     participate  in the  retirement  plan on a  non-contributing  basis and are
     fully vested after five years of service.

     The Corporation uses December 31 as the measurement date for its plans.

                                       7
<PAGE>
7.   Employee Benefit Plans (continued).

     The components of the periodic pension cost are as follows:
<TABLE>
<CAPTION>
<S>                                     <C>            <C>            <C>            <C>            <C>
--------------------------------------------------------------------------------------------------------------
(Dollar amounts in thousands)           For the three months ended    For the nine months ended     Year ended
                                                                                                    December
                                              September 30,                 September 30,               31,
                                        --------------------------    -------------------------     ----------
                                              2007           2006          2007           2006           2006
---------------------------------------------------    -----------    ----------     ----------     ----------
Service cost                            $       66     $       56     $     180      $     160      $     213
Interest cost                                   68             62           198            178            237
Expected return on plan assets                 (74)           (69)         (228)          (201)          (268)
Transition asset                                 4             (2)            -             (6)            (8)
Prior service costs                             (8)            (7)          (24)           (23)            32
Recognized net actuarial loss                   10             23            24             47              -
Effect of Special Termination Benefits           -              -             -              -            274
                                        -----------    -----------    ----------     ----------     ----------

Net periodic pension cost               $       66     $       63     $     150      $     155      $     480
                                        ===========    ===========    ==========     ==========     ==========
</TABLE>

     The expected  rate of return on plan assets was 8.50% for the periods ended
     September 30, 2007 and 2006. The  Corporation  contributed  $360,000 to its
     pension plan for the 2007 plan year during the quarter ended  September 30,
     2007.

8.   Stock Compensation Plans.

     In May 2007,  the  Corporation  adopted the 2007 Stock  Incentive  Plan and
     Trust.  Under the Plan, the Corporation may grant options to its directors,
     officers and employees for up to 177,496 shares of common stock.  Incentive
     stock options, non-incentive or compensatory stock options and share awards
     may be granted under the Plan.  The exercise  price of each option shall at
     least  equal the  market  price of a share of  common  stock on the date of
     grant and have a  contractual  term of ten  years.  Options  shall vest and
     become  exercisable  at the  rate,  to  the  extent  and  subject  to  such
     limitations as may be specified by the  Corporation.  Effective  January 1,
     2007, the Corporation adopted SFAS No. 123(R),  Share-Based Payment,  which
     requires that compensation cost related to share-based payment transactions
     be recognized in the financial  statements with measurement  based upon the
     fair value of the equity or liability instruments issued. For the three and
     nine-month  period ended  September 30, 2007,  the  Corporation  recognized
     $15,000  and  $16,000,  respectively  in  compensation  expense  for  stock
     options.

     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes  option-pricing model with the following weighted average
     assumptions:

                                          Nine months ended
                                         September 30, 2007
        -------------------------------------------------------
        Dividend yield                          4.46%
        Expected life                         10 years
        Expected volatility                    14.09%
        Risk-free interest rate                 5.10%
        -------------------------------------------------------

     The expected  volatility is based on historical  stock price  fluctuations.
     The risk-free interest rates for periods within the contractual life of the
     awards are based on the U.S.  Treasury yield curve in effect at the time of
     the grant.  The expected  life is based on the maximum term of the options.
     The dividend  yield  assumption is based on the  Corporation's  history and
     expectation of dividend payouts.

                                       8
<PAGE>
8.   Stock Compensation Plans (continued).

     A summary of option  activity  under the Plan as of September 30, 2007, and
     changes during the period then ended is presented below:
<TABLE>
<CAPTION>
<S>                                        <C>              <C>                        <C>
                                                                                 Weighted-
                                                                     Aggregate   Average
                                                   Weighted-Average  Intrinsic  Remaining Term
                                          Options   Exercise Price     Value     (in years)
-------------------------------------------------  ----------------  ---------- ------------
Outstanding at the beginning of the year        -     $         -                        -
Granted                                    83,000           26.00                      9.7
Exercised                                       -               -                        -
Forfeited                                       -               -                        -
-------------------------------------------------  ----------------  ---------- ------------
Outstanding as of September 30, 2007       83,000     $     26.00     $       -        9.7
=================================================  ================  ========== ============
Exercisable as of September 30, 2007            -     $         -     $       -          -
=================================================  ================  ========== ============
</TABLE>

     A  summary  of the  status  of the  Corporation's  nonvested  shares  as of
     September 30, 2007,  and changes  during the period then ended is presented
     below;

                                                     Weighted-Average
                                         Options     Grant-date Fair
                                                           Value
                -------------------------------------------------------

                Nonvested at the
                 beginning of the year          -                    $-
                Granted                    83,000                  3.39
                Vested                          -                     -
                Forfeited                       -                     -
                                         --------  --------------------
                Nonvested as of
                 September 30, 2007        83,000                 $3.39
                                         ========  ====================


     As of  September  30,  2007,  there  was  $265,000  of  total  unrecognized
     compensation   cost   related   to   nonvested   share-based   compensation
     arrangements granted under the Plan. That cost is expected to be recognized
     over a weighted-average period of 2.7 years.

9.   Effect of Recently Issued Accounting Standards.

     In September 2006, the Financial  Accounting  Standards Board (FASB) issued
     Statement  of Financial  Accounting  Standards  (SFAS) No. 157,  Fair Value
     Measurements (SFAS 157), which defines fair value,  establishes a framework
     for measuring fair value under  generally  accepted  accounting  principles
     (GAAP),  and expands  disclosures about fair value  measurements.  SFAS 157
     applies to other  accounting  pronouncements  that  require or permit  fair
     value measurements.  The new guidance is effective for financial statements
     issued for fiscal years  beginning after November 15, 2007, and for interim
     periods within those fiscal years. The Corporation is currently  evaluating
     the  potential  impact,  if  any,  of  the  adoption  of  SFAS  157  on its
     consolidated financial statements.

                                       9
<PAGE>
9.   Effect of Recently Issued Accounting Standards (continued).

     In September  2006,  FASB's  Emerging  Issues Task Force (EITF) issued EITF
     Issue No. 06-4,  Accounting for Deferred  Compensation  and  Postretirement
     Benefit  Aspects of Endorsement  Split Dollar Life  Insurance  Arrangements
     (EITF 06-4).  EITF 06-4 requires the recognition of a liability  related to
     the  postretirement  benefits covered by an endorsement  split-dollar  life
     insurance  arrangement.  The consensus highlights that the employer (who is
     also the  policyholder)  has a liability for the benefit it is providing to
     its  employee.  As such,  if the  policyholder  has agreed to maintain  the
     insurance  policy in force for the  employee's  benefit  during  his or her
     retirement,  then the liability  recognized  during the  employee's  active
     service  period  should  be based on the  future  cost of  insurance  to be
     incurred  during the employee's  retirement.  Alternatively,  if the policy
     holder has agreed to provide the employee  with a death  benefit,  then the
     liability  for the future death  benefit  should be recognized by following
     the guidance in SFAS 106 or Accounting  Principles  Board (APB) Opinion No.
     12, as  appropriate.  For  transition,  an entity  can  choose to apply the
     guidance  using  either  of  the  following  approaches:  (a) a  change  in
     accounting  principle  through  retrospective  application  to all  periods
     presented   or  (b)  a   change   in   accounting   principle   through   a
     cumulative-effect  adjustment  to the balance in  retained  earnings at the
     beginning  of the year of  adoption.  The EITF is effective in fiscal years
     beginning  after  December 15, 2007,  with early  adoption  permitted.  The
     Corporation is currently  evaluating the impact that the  implementation of
     EITF 06-4 may have on its consolidated financial statements.

     In September 2006,  FASB's EITF issued EITF Issue No. 06-5,  Accounting for
     Purchases of Life Insurance - Determining the Amount That Could Be Realized
     in  Accordance  with FASB  Technical  Bulletin  No.  85-4,  Accounting  for
     Purchases of Life Insurance (EITF 06-5), The scope of EITF 06-5 consists of
     six separate  issues  relating to accounting  for life  insurance  policies
     purchased by entities  protecting against the loss of key persons.  The six
     issues are  clarifications  of previously issued guidance on FASB Technical
     Bulletin No. 85-4.  EITF 06-5 is effective for fiscal years beginning after
     December 15,  2006.  The  implementation  of EITF 06-5 had no effect on the
     Corporation's consolidated financial statements.

     In February  2007,  the FASB issued SFAS No. 159, The Fair Value Option for
     Financial Assets and Financial Liabilities - Including an amendment of FASB
     Statement  No.  115 (SFAS  159).  SFAS 159  permits  entities  to choose to
     measure many financial  instruments  and certain other items at fair value.
     Unrealized  gains and losses on items for which the fair  value  option has
     been elected will be  recognized in earnings at each  subsequent  reporting
     date.  SFAS 159 is  effective  for the  Corporation  January 1,  2008.  The
     Corporation  is  evaluating  the impact that the  adoption of SFAS 159 will
     have on its consolidated financial statements.

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

This section  discusses  the  consolidated  financial  condition  and results of
operations of Emclaire Financial Corp. (the  "Corporation") and its wholly owned
subsidiary  bank,  the Farmers  National Bank of Emlenton (the "Bank"),  for the
three and nine months ended  September  30, 2007 compared to the same periods in
2006 and should be read in conjunction with the Corporation's  December 31, 2006
Annual Report of Form 10-K filed with the Securities and Exchange Commission and
with the accompanying  consolidated  financial statements and notes presented on
pages 1 through 9 of this Form 10-Q.

The  Private  Securities  Litigation  Reform Act of 1995  contains  safe  harbor
provisions regarding forward-looking  statements.  When used in this discussion,
the words "believes," "anticipates,"  "contemplates" and similar expressions are
intended to identify forward-looking  statements. Such statements are subject to
certain  risks and  uncertainties  that  could  cause  actual  results to differ
materially from those projected.  Those risks and uncertainties  include changes
in  interest  rates,  the  ability to control  costs and  expenses  and  general
economic  conditions.  The  Corporation  does not  undertake,  and  specifically
disclaims any obligation,  to update any  forward-looking  statements to reflect
occurrences  or  unanticipated  events or  circumstances  after the date of such
statements.


                                       10
<PAGE>

CHANGES IN FINANCIAL CONDITION

Total assets  increased  $330,000 to $300.9  million at September  30, 2007 from
$300.6  million at December 31, 2006.  This increase  resulted from increases in
loans  receivable,  net of allowance for loan losses of $12.9 million or 6.0% to
$226.2  million at September  30, 2007 from $213.3  million at December 31, 2006
and federal bank stocks of $391,000 or 17.6% to $2.6  million at  September  30,
2007 from $2.2 million at December 31, 2006.  Partially offsetting this increase
were  decreases in cash and cash  equivalents  of $10.3 million or 61.7% to $6.4
million at  September  30,  2007 from $16.7  million at  December  31,  2006 and
securities  available  for  sale of $2.9  million  or 5.7% to $48.8  million  at
September  30, 2007 from $51.8 million at December 31, 2006, as these funds were
utilized in funding commercial real estate and business loans.

Total  liabilities  decreased  $513,000 to $276.1  million at September 30, 2007
from $276.6  million at December  31,  2006,  while total  stockholders'  equity
increased  $843,000 to $24.8 million at September 30, 2007 from $23.9 million at
December 31, 2006.  The decrease in total  liabilities  was  primarily  due to a
decrease in customer  deposits of $8.3 million  partially offset by increases in
short-term  borrowed  funds and accrued  expenses and other  liabilities of $7.6
million and $324,000, respectively.

RESULTS OF OPERATIONS

Comparison of Results for the Three Month  Periods Ended  September 30, 2007 and
2006

General.  Net income increased  $62,000 or 9.0% to $754,000 for the three months
ended  September  30,  2007 from  $692,000  for the same  period  in 2006.  This
increase was a result of an increase in net interest income and decreases in the
provision  for loan losses and  non-interest  expense of $210,000  $45,000,  and
$10,000,  respectively,  partially offset by a decrease in noninterest income of
$97,000 and an increase in the provision for income taxes of $106,000.

Net interest  income.  Net interest  income on a tax equivalent  basis increased
$206,000 or 8.3% to $2.7 million for the three months ended  September  30, 2007
from  $2.5  million  for the same  period  in 2006.  This  net  increase  can be
attributed  to an  increase  in tax  equivalent  interest  income  of  $290,000,
partially offset by a $84,000 increase in interest expense.

Interest income. Interest income on a tax equivalent basis increased $290,000 or
6.7% to $4.6 million for the three months ended September 30, 2007,  compared to
$4.3  million  for the same  period  in the prior  year.  This  increase  can be
attributed to increases in interest earned on loans, securities and federal bank
stocks of  $265,000,  $26,000 and $7,000,  respectively,  partially  offset by a
decrease in interest earned on interest-earning deposits with banks of $8,000.

Tax equivalent interest earned on loans receivable increased $265,000 or 7.2% to
$4.0  million for the three months ended  September  30, 2007,  compared to $3.7
million for the same period in 2006.  During that time,  average loans increased
$8.3  million or 3.8%,  accounting  for  $144,000 in  additional  loan  interest
income. This increase can be primarily attributed to growth in the Corporation's
commercial loan portfolios.  Additionally, the yield on loans increased 22 basis
points to 7.01% for the three months ended September 30, 2007,  versus 6.79% for
the same period in 2006,  contributing  $120,000 in additional  interest income.
The increase in the yield was  primarily  due to the  increased  origination  of
higher rate commercial  loans. Also contributing to the increase in the yield on
loans  between  the  periods  was the  collection  of  $60,000 of  interest  due
associated  with the payoff of a  previously  nonperforming  commercial  loan in
August 2007. In connection with the loan payoff,  the  Corporation  received all
principal and interest due under the contractual terms of the loan agreement and
interest  collected was recorded as loan interest income during the three months
ended September 30, 2007.

                                       11
<PAGE>

Tax  equivalent  interest  earned on  securities  increased  $26,000  or 4.3% to
$633,000 for the three months ended September 30, 2007, compared to $607,000 for
the same period in 2006. The average volume of securities decreased $1.9 million
or 3.6%,  accounting for a $23,000 decrease in interest income.  Offsetting this
volume decrease,  the yield on securities increased 38 basis points to 5.03% for
the three months ended  September 30, 2007,  versus 4.65% for the same period in
2006, as a result of certain lower yielding securities maturing.  This favorable
yield variance contributed an additional $48,000 to interest income.

Interest earned on interest-earning  deposit accounts decreased $8,000 to $6,000
for the three months ended  September  30, 2007 from $14,000 for the same period
in 2006.  The  average  volume  of these  assets  decreased  $667,000  or 59.5%,
primarily as a result of funding  loans and  purchasing  securities,  decreasing
interest income by $9,000.  Partially  offsetting  this decrease in volume,  the
average yield on interest-earning  deposit accounts increased 63 basis points to
5.58% for the three months ended  September 30, 2007,  compared to 4.95% for the
same  period in the prior  year,  contributing  $2,000  in  additional  interest
income.  The increase in the average yield  reflects the increases in short-term
interest rates. Interest earned on federal bank stocks increased $7,000 or 25.0%
to $35,000 for the three month period ended  September 30, 2007 from $28,000 for
the same period in the prior year as a result of both  higher  volume and higher
yield.

Interest expense. Interest expense increased $84,000 or 4.5% to $1.9 million for
the three months ended September 30, 2007, compared to $1.8 million for the same
period in the prior year. This increase in interest expense can be attributed to
increases in interest  incurred on deposits  and  borrowed  funds of $48,000 and
$36,000, respectively.

Interest expense incurred on deposits  increased $48,000 or 3.1% to $1.6 million
for the three months ended September 30, 2007,  compared to $1.5 million for the
same period in the prior year.  This  increase can be  attributed to the cost of
interest-bearing  deposits  increasing  12 basis  points  to 3.26% for the three
months ended  September 30, 2007,  compared to 3.14% for the same period in 2006
contributing $57,000 in additional expense.  Offsetting this rate increase,  the
average  volume of deposits  decreased  $1.1  million to $192.3  million for the
three months ended  September 30, 2007,  compared to $193.4 million for the same
period in 2006 causing a $9,000  decrease in interest  expense.  The increase in
the rate paid on deposits  reflects the increases in short-term  market interest
rates between the periods.

Interest  expense  incurred  on  borrowed  funds  increased  $36,000 or 11.1% to
$361,000 for the three months ended September 30, 2007, compared to $325,000 for
the same period in the prior  year.  This  increase  in interest  expense can be
attributed  to the  increase  in the average  balance of borrowed  funds of $4.0
million or 14.1% to $32.1 million for the three months ended September 30, 2007,
compared to $28.1  million  for the same  period in the prior year  contributing
$45,000 in  additional  expense.  This volume  increase  was the result of $15.0
million of FHLB term borrowings  placed in the second and third quarters of 2006
used primarily to fund loan growth.  Partially  offsetting this volume increase,
the cost of  borrowed  funds  decreased  12 basis  points to 4.46% for the three
months ended September 30, 2007, compared to 4.58% for the same period in 2006.


                                       12
<PAGE>
Average Balance Sheet and Yield/Rate  Analysis.  The following table sets forth,
for the periods  indicated,  information  concerning the total dollar amounts of
interest income from  interest-earning  assets and the resulting average yields,
the total dollar amounts of interest expense on interest-bearing liabilities and
the resulting  average costs, net interest income,  interest rate spread and the
net interest margin earned on average  interest-earning  assets. For purposes of
this table,  average loan  balances  include  non-accrual  loans and exclude the
allowance for loan losses and interest income includes accretion of net deferred
loan fees.  Interest and yields on tax-exempt  loans and securities  (tax-exempt
for federal income tax purposes) are shown on a fully tax equivalent  basis. The
information is based on average daily balances during the periods presented.
<TABLE>
<CAPTION>
<S>                                         <C>            <C>            <C>    <C>          <C>                  <C>
(Dollar amounts in thousands)                                     Three months ended September 30,
                                            ----------------------------------------------------------------------------
                                                            2007                                   2006
                                            -----------------------------------  ---------------------------------------
                                                Average                 Yield /     Average                     Yield /
                                                Balance     Interest    Rate        Balance       Interest       Rate
------------------------------------------------------------------------------------------------------------------------

Interest-earning assets:
----------------------------------------
 Loans, taxable                             $   218,421    $    3,867     7.02%  $   209,615  $     3,593          6.80%
 Loans, tax exempt                                6,255           102     6.46%        6,797          111          6.47%
                                            -----------    ----------            -----------  -----------
   Total loans receivable                       224,676         3,969     7.01%      216,412        3,704          6.79%
                                            -----------    ----------            -----------  -----------

 Securities, taxable                             35,401           388     4.35%       36,706          352          3.80%
 Securities, tax exempt                          14,543           245     6.68%       15,118          255          6.70%
                                            -----------    ----------            -----------  -----------
   Total securities                              49,944           633     5.03%       51,824          607          4.65%
                                            -----------    ----------            -----------  -----------

 Interest-earning deposits with banks               454             6     5.58%        1,121           14          4.95%
 Federal bank stocks                              2,283            35     6.08%        2,201           28          5.05%
                                            -----------    ----------            -----------  -----------
   Total interest-earning cash equivalents        2,737            41     6.00%        3,322           42          5.02%
                                            -----------    ----------            -----------  -----------

 Total interest-earning assets                  277,357         4,643     6.64%      271,558        4,353          6.36%
   Cash and due from banks                        5,770                                6,711
   Other noninterest-earning assets              14,774                               13,740
                                            -----------                          -----------

   Total Assets                             $   297,901                          $   292,009
                                            ===========                          ===========

Interest-bearing liabilities:
----------------------------------------
 Interest-bearing demand deposits           $    73,740           240     1.29%  $    73,362          224          1.21%
 Time deposits                                  118,585         1,338     4.48%      120,047        1,306          4.32%
                                            -----------    ----------            -----------  -----------
   Total interest-bearing deposits              192,325         1,578     3.26%      193,409        1,530          3.14%
                                            -----------    ----------            -----------  -----------

 Borrowed funds, short-term                       2,086            21     3.99%        2,479           34          5.44%
 Borrowed funds, long-term                       30,000           340     4.50%       25,645          291          4.50%
                                            -----------    ----------            -----------  -----------
   Total borrowed funds                          32,086           361     4.46%       28,124          325          4.58%
                                            -----------    ----------            -----------  -----------

 Total interest-bearing liabilities             224,411         1,939     3.43%      221,533        1,855          3.32%
                                            -----------    ----------            -----------  -----------

   Noninterest-bearing demand deposits           46,334             -        -        44,674            -             -
                                            -----------    ----------            -----------  -----------

   Funding and cost of funds                    270,745         1,939     2.84%      266,207        1,855          2.76%

   Other noninterest-bearing liabilities          2,930                                2,105
                                            -----------                          -----------

   Total Liabilities                            273,675                              268,312
   Stockholders' Equity                          24,226                               23,697
                                            -----------                          -----------

   Total Liabilities and Stockholders'
    Equity                                  $   297,901                          $   292,009
                                            ===========    ----------            ===========  -----------

Net interest income                                        $    2,704                         $     2,498
                                                           ==========                         ===========

Interest rate spread (difference between                                  3.21%                                    3.04%
 weighted average rate on interest-earning
 assets and interest-bearing liabilities)

Net interest margin (net interest                                         3.87%                                    3.65%
 income as a percentage of average
 interest-earning assets)
</TABLE>

                                       13
<PAGE>
Analysis of Changes in Net Interest  Income.  The following  table  analyzes the
changes in  interest  income and  interest  expense in terms of: (1)  changes in
volume of  interest-earning  assets  and  interest-bearing  liabilities  and (2)
changes in yields and rates.  The table  reflects the extent to which changes in
the  Corporation's  interest  income and interest  expense are  attributable  to
changes in rate (change in rate  multiplied  by prior year  volume),  changes in
volume   (changes  in  volume   multiplied  by  prior  year  rate)  and  changes
attributable to the combined impact of volume/rate (change in rate multiplied by
change  in  volume).   The  changes  attributable  to  the  combined  impact  of
volume/rate  are  allocated  on a consistent  basis  between the volume and rate
variances.  Changes  in  interest  income on loans and  securities  reflect  the
changes in interest income on a fully tax equivalent basis.
<TABLE>
<CAPTION>
<S>                                                               <C>             <C>            <C>
 (Dollar amounts in thousands)                                 Three months ended September 30,
                                                                       2007 versus 2006
                                                                  Increase (Decrease) due to
                                                           -----------------------------------------
                                                             Volume        Rate           Total
----------------------------------------------------------------------------------------------------
Interest income:
Loans                                                      $      144     $      120     $      264
   Securities                                                     (23)            48             25
   Interest-earning deposits with banks                            (9)             2             (7)
   Federal bank stocks                                              1              6              7
                                                           -----------------------------------------
  Total interest-earning assets                                   113            176            289
                                                           -----------------------------------------
Interest expense:
Deposits                                                           (9)            57             48
   Borrowed funds                                                  45             (9)            36
                                                           -----------------------------------------
  Total interest-bearing liabilities                               36             48             84
                                                           -----------------------------------------
Net interest income                                        $       77     $      128     $      205
                                                           =========================================
</TABLE>

Provision for loan losses. The Corporation records provisions for loan losses to
maintain a level of total allowance for loan losses that management believes, to
the best of its knowledge, covers all known and inherent losses that are both
probable and reasonably estimable at each reporting date. Management considers
historical loss experience, the present and prospective financial condition of
borrowers, current conditions (particularly as they relate to markets where the
Corporation originates loans), the status of non-performing assets, the
estimated underlying value of the collateral and other factors related to the
collectibility of the loan portfolio.

Information pertaining to the allowance for loan losses and non-performing
assets for the quarters ended September 30, 2007 and 2006 is as follows:

(Dollar amounts in thousands)            At or for the three months
                                                    ended
                                                September 30,
                                       -------------------------------
                                           2007             2006
----------------------------------------------------------------------
Balance at the beginning of the period $      2,086   $         1,898
Provision for loan losses                        45                90
Charge-offs                                     (16)               (7)
Recoveries                                        3                 4
                                       -------------  ----------------
Balance at the end of the period       $      2,118   $         1,985
                                       =============  ================

Non-performing loans                   $        931   $         1,653
Non-performing assets                         1,015             1,739
Non-performing loans to total loans            0.41%             0.75%
Non-performing assets to total assets          0.34%             0.59%
Allowance for loan losses to total
 loans                                         0.93%             0.90%
Allowance for loan losses to non-
 performing loans                            227.48%           120.08%


                                       14
<PAGE>
The  provision  for loan  losses  decreased  $45,000 or 50.0% to $45,000 for the
three month period ended  September 30, 2007 from $90,000 for the same period in
the prior year.  Management's  evaluation of the loan  portfolio,  including the
changing  composition  of the portfolio as well as economic  trends,  regulatory
considerations  and other factors  contributed to the  recognition of $45,000 in
the provision for loan losses during the three months ended September 30, 2007.

Noninterest  income.  Noninterest  income decreased $97,000 or 13.9% to $696,000
during the three months ended  September 30, 2007,  compared to $793,000  during
the same period in the prior year.  This decrease can be attributed to decreases
in commissions  earned on financial  services and gains on securities of $18,000
and $116,000,  respectively.  Partially  offsetting this decrease in noninterest
income were increases in fees and service  charges,  gains on the sale of loans,
earnings on bank-owned life insurance and other  noninterest  income of $25,000,
$6,000, $2,000 and $4,000, respectively.

Noninterest  expense.  Noninterest  expense  decreased  $10,000 to $2.25 million
during the three months ended  September  30,  2007,  compared to $2.26  million
during the same period in the prior year.  This decrease in noninterest  expense
can be  attributed  to a decrease  in  compensation  and  employee  benefits  of
$150,000,  partially  offset by increases in premises  and  equipment  and other
noninterest expenses of $17,000 and $125,000, respectively.

Compensation and employee benefits  decreased  $150,000 or 10.8% to $1.2 million
for the three months ended September 30, 2007,  compared to $1.4 million for the
same period the prior year.  This  decease can be  attributed  primarily to cost
savings  from  staffing  reductions  associated  with the  2006  reorganization,
partially  offset by the costs  associated  with the staffing of one  additional
branch facility opened in November 2006.

Premises  and  equipment  increased  $17,000 or 4.4% to  $404,000  for the three
months ended September 30, 2007, compared to $387,000 for the same period in the
prior year.  This increase can be  attributed  primarily to the operation of the
additional branch facility opened in November 2006.

Other  noninterest  expense  increased  $125,000 or 25.8% to $610,000 during the
three months ended September 30, 2007,  compared to $485,000 for the same period
in the prior year.  This  increase can be  attributed  primarily to increases in
professional  fees  relating  to  Sarbanes-Oxley  Section 404  compliance,  data
processing center  information  technology  initiatives and other operations and
compliance.

Provision for income taxes. The provision for income taxes increased $106,000 or
80.3% to $238,000  for the three months ended  September  30, 2007,  compared to
$132,000  for the same period in the prior year.  This was due to an increase in
pre-tax  earnings of $168,000 to $992,000 for the three  months ended  September
30,  2007,  compared  to  $824,000  for the same period in the prior year and an
increase in the effective tax rate to 24.0% for the three months ended September
30, 2007,  compared to 16.0% for the same period in 2006. The difference between
the  statutory  rate of 34% and the  Corporation's  effective tax rate is due to
tax-exempt income earned on certain tax-free loans and securities and bank-owned
life insurance.

Comparison of Results for the Nine Month  Periods  Ended  September 30, 2007 and
2006

General.  Net income  increased  $132,000  or 7.0% to $2.0  million for the nine
months ended  September  30, 2007 from $1.9 million for the same period in 2006.
This  increase  was a result of an increase in net  interest  income of $487,000
partially offset by a decrease in noninterest  income of $94,000 and an increase
in  noninterest  expense and the  provision  for income  taxes of  $167,000  and
$95,000, respectively.

Net interest  income.  Net interest  income on a tax equivalent  basis increased
$427,000 or 5.9% to $7.7  million for the nine months ended  September  30, 2007
from  $7.3  million  for the same  period  in 2006.  This  net  increase  can be
attributed  to an increase in tax  equivalent  interest  income of $1.3 million,
partially offset by a $910,000 increase in interest expense.

                                       15
<PAGE>
Interest  income.  Interest  income on a tax  equivalent  basis  increased  $1.3
million or 10.9% to $13.6 million for the nine months ended  September 30, 2007,
compared to $12.3  million for the same period in the prior year.  This increase
can be attributed to increases in interest earned on loans, securities,  federal
bank stocks, and interest-earning  deposits with banks of $1.2 million, $55,000,
$38,000 and $88,000, respectively.

Tax equivalent  interest  earned on loans  receivable  increased $1.2 million or
11.3% to $11.4 million for the nine months ended September 30, 2007, compared to
$10.3  million for the same  period in 2006.  During  that time,  average  loans
increased  $16.0 million or 7.9%,  accounting  for $826,000 in  additional  loan
interest  income.  This  increase can be primarily  attributed  to growth in the
Corporation's  commercial  loan  portfolios.  Additionally,  the  yield on loans
increased 21 basis points to 6.95% for the nine months ended September 30, 2007,
versus 6.74% for the same period in 2006,  contributing  $330,000 in  additional
interest income.  Contributing to the increase in the yield on loans between the
periods was the  collection  of $120,000 of  interest  due  associated  with the
payoff of previously  non-performing  commercial  loans in April and August 2007
that had been on non-accrual  status.  In connection with the loan payoffs,  the
Corporation  received all principal and interest due under the contractual terms
of the loan  agreements  and interest  collected  was recorded as loan  interest
income during the nine months ended September 30, 2007.

Tax equivalent  interest earned on securities  increased $55,000 to $1.9 million
for the nine months ended  September  30, 2007.  The average yield on securities
increased 28 basis points to 4.92% for the nine months ended September 30, 2007,
versus 4.64% for the same period in 2006, as a result of certain lower  yielding
securities  maturing.  This favorable  yield variance  contributed an additional
$106,000 to interest income.  Partially  offsetting this increase was a decrease
in the  average  volume of $1.4  million or 2.7%,  primarily  as a result of the
utilization of these funds for loan growth.  This resulted in a $51,000  decline
in interest income.

Interest  earned on  interest-earning  deposit  accounts  increased  $88,000  to
$143,000 for the nine months ended  September 30, 2007 from $55,000 for the same
period in 2006.  The average  volume of these  assets  increased  $2.0  million,
primarily  as a result of the  investment  of funds  from  maturing  securities,
contributing  $80,000 in additional interest income.  Additionally,  the average
yield on  interest-earning  deposit accounts  increased 62 basis points to 5.26%
for the nine months ended  September  30,  2007,  compared to 4.64% for the same
period in the prior year, contributing $8,000 in additional interest income. The
increase in the average  yield  reflects the  increases in  short-term  interest
rates.  Interest earned on federal bank stocks increased $38,000 to $106,000 for
the nine month period ended  September 30, 2007 from $68,000 for the same period
in the prior year as a result of a higher volume and a higher yield.  The higher
yield resulted from the recognition of a special dividend on FHLB capital stock.

Interest expense.  Interest expense increased  $910,000 or 18.4% to $5.9 million
for the nine months ended  September 30, 2007,  compared to $5.0 million for the
same  period in the  prior  year.  This  increase  in  interest  expense  can be
attributed to increases in interest  incurred on deposits and borrowed  funds of
$520,000 and $390,000, respectively.

Interest  expense  incurred  on  deposits  increased  $520,000  or 12.1% to $4.8
million for the nine months ended  September 30, 2007,  compared to $4.3 million
for the same period in the prior year.  This  increase can be  attributed to the
cost of  interest-bearing  deposits  increasing 29 basis points to 3.29% for the
nine months ended  September 30, 2007,  compared to 3.00% for the same period in
2006 contributing  $429,000 in additional expense. The increase in the rate paid
on deposits  reflects the increases in short-term  interest  rates.  The average
volume of deposits increased $4.0 million or 2.1% to $195.3 million for the nine
months ended September 30, 2007,  compared to $191.3 million for the same period
in 2006 contributing $91,000 in additional expense.

                                       16
<PAGE>
Interest expense incurred on borrowed funds increased  $390,000 or 59.3% to $1.0
million for the nine months ended  September 30, 2007,  compared to $658,000 for
the same period in the prior  year.  This  increase  in interest  expense can be
attributed  to the  increase in the average  balance of borrowed  funds of $11.1
million to $31.3 million for the nine months ended September 30, 2007,  compared
to $20.2 million for the same period in the prior year. This volume increase was
the  result of $15.0  million of FHLB term  borrowings  placed in the second and
third  quarters  of 2006  contributing  $371,000  in  additional  expense.  Such
borrowings  were primarily used to fund loan growth.  Additionally,  the cost of
borrowed  funds  increased  12 basis  points to 4.48% for the nine months  ended
September  30,  2007 from  4.36% for the same  period  in 2006  contributing  an
additional $19,000 in interest expense.


                                       17
<PAGE>

Average Balance Sheet and Yield/Rate  Analysis.  The following table sets forth,
for the periods  indicated,  information  concerning the total dollar amounts of
interest income from  interest-earning  assets and the resulting average yields,
the total dollar amounts of interest expense on interest-bearing liabilities and
the resulting  average costs, net interest income,  interest rate spread and the
net interest margin earned on average  interest-earning  assets. For purposes of
this table,  average loan  balances  include  non-accrual  loans and exclude the
allowance for loan losses and interest income includes accretion of net deferred
loan fees.  Interest and yields on tax-exempt  loans and securities  (tax-exempt
for federal income tax purposes) are shown on a fully tax equivalent  basis. The
information is based on average daily balances during the periods presented.
<TABLE>
<CAPTION>
<S>                               <C>            <C>                 <C>       <C>            <C>                  <C>
------------------------------------------------------------------------------------------------------------------------
(Dollar amounts in thousands)                                Nine months ended September 30,
                                  --------------------------------------------------------------------------------------
                                                    2007                                          2006
                                  ---------------------------------------- ---------------------------------------------
                                       Average                    Yield /       Average                         Yield /
                                      Balance        Interest      Rate        Balance          Interest         Rate
------------------------------------------------------------------------------------------------------------------------
Interest-earning assets:
------------------------
 Loans, taxable                   $   213,477    $    11,116         6.96%     $  196,972     $     9,938          6.75%
 Loans, tax exempt                      6,364            308         6.46%          6,835             330          6.46%
                                  -----------    -----------     --------- -------------- ---------------     ----------
   Total loans receivable             219,841         11,424         6.95%        203,807          10,268          6.74%
                                  -----------    -----------     --------- -------------- ---------------     ----------

 Securities, taxable                   37,241          1,171         4.20%         38,332           1,103          3.85%
 Securities, tax exempt                14,877            745         6.70%         15,235             758          6.65%
                                  -----------    -----------     --------- -------------- ---------------     ----------
   Total securities                    52,118          1,916         4.92%         53,567           1,861          4.64%
                                  -----------    -----------     --------- -------------- ---------------     ----------

 Interest-earning deposits with
  banks                                 3,633            143         5.26%          1,585              55          4.64%
 Federal bank stocks                    2,271            106         6.24%          1,850              68          4.91%
                                  -----------    -----------     --------- -------------- ---------------     ----------
   Total interest-earning cash
    equivalents                         5,904            249         5.64%          3,435             123          4.79%
                                  -----------    -----------     --------- -------------- ---------------     ----------

 Total interest-earning assets        277,863         13,589         6.54%        260,809          12,252          6.28%
   Cash and due from banks              5,865                                       6,908
   Other noninterest-earning
    assets                             14,659                                      13,295
                                  -----------                              --------------

   Total assets                   $   298,387                                  $  281,012
                                  ===========                              ==============

Interest-bearing liabilities:
-----------------------------
 Interest-bearing demand deposits $    72,925            697         1.28%     $   73,103             545          1.00%
 Time deposits                        122,372          4,116         4.50%        118,220           3,748          4.24%
                                  -----------    -----------     --------- -------------- ---------------     ----------
   Total interest-bearing deposits    195,297          4,813         3.29%        191,323           4,293          3.00%
                                  -----------    -----------     --------- -------------- ---------------     ----------

 Borrowed funds, long-term             30,000            995         4.43%         18,663             600          4.30%
 Borrowed funds, short-term             1,297             52         5.36%          1,528              58          5.07%
                                  -----------    -----------     --------- -------------- ---------------     ----------
   Total borrowed funds                31,297          1,047         4.47%         20,191             658          4.36%
                                  -----------    -----------     --------- -------------- ---------------     ----------

 Total interest-bearing
  liabilities                         226,594          5,860         3.46%        211,514           4,951          3.13%
   Noninterest-bearing demand
    deposits                           44,939              -            -          43,604               -             -
                                  -----------    -----------     --------- -------------- ---------------     ----------

  Funding and cost of funds           271,533          5,860         2.89%        255,118           4,951          2.59%
   Other noninterest-bearing
    liabilities                         2,785                                       2,271
                                  -----------                              --------------

   Total liabilities                  274,318                                     257,389
   Stockholders' equity                24,069                                      23,623
                                  -----------                              --------------

   Total liabilities and
    stockholders' equity          $   298,387                                  $  281,012
                                  ===========    -----------               ============== ---------------

Net interest income                              $     7,729                                  $     7,301
                                                 ===========                              ===============

Interest rate spread (difference between                             3.08%                                         3.15%
                                                                 =========                                    ==========
 weighted average rate on interest-earning
 assets and interest-bearing liabilities)

Net interest margin (net interest                                    3.72%                                         3.74%
                                                                 =========                                    ==========
 income as a percentage of average
 interest-earning assets)
</TABLE>

                                       18
<PAGE>
Analysis of Changes in Net Interest  Income.  The following  table  analyzes the
changes in  interest  income and  interest  expense in terms of: (1)  changes in
volume of  interest-earning  assets  and  interest-bearing  liabilities  and (2)
changes in yields and rates.  The table  reflects the extent to which changes in
the  Corporation's  interest  income and interest  expense are  attributable  to
changes in rate (change in rate  multiplied  by prior year  volume),  changes in
volume   (changes  in  volume   multiplied  by  prior  year  rate)  and  changes
attributable to the combined impact of volume/rate (change in rate multiplied by
change  in  volume).   The  changes  attributable  to  the  combined  impact  of
volume/rate  are  allocated  on a consistent  basis  between the volume and rate
variances.  Changes  in  interest  income on loans and  securities  reflect  the
changes in interest income on a fully tax equivalent basis.

 (Dollar amounts in thousands)               Nine months ended September 30,
                                                    2007 versus 2006
                                               Increase (Decrease) due to
                                         ---------------------------------------
                                            Volume        Rate         Total
--------------------------------------------------------------------------------
 Interest income:
    Loans                                $       826   $       330   $     1,156
    Securities                                   (51)          106            55
    Interest-earning deposits with banks          80             8            88
    Federal bank stocks                           17            21            38
                                         ------------  ----------- -------------
    Total interest-earning assets                872           465         1,337
                                         ------------  ----------- -------------
 Interest expense:
    Deposits                                      91           429           520
    Borrowed funds                               371            18           389
                                         ------------  ----------- -------------
    Total interest-bearing liabilities           462           447           909
                                         ------------  ----------- -------------
 Net interest income                     $       410   $        18   $       428
                                         ============  =========== =============

Provision for loan losses. The Corporation records provisions for loan losses to
maintain a level of total allowance for loan losses that management believes, to
the best of its  knowledge,  covers all known and inherent  losses that are both
probable and reasonably  estimable at each reporting date.  Management considers
historical loss experience,  the present and prospective  financial condition of
borrowers,  current conditions (particularly as they relate to markets where the
Corporation   originates  loans),  the  status  of  non-performing  assets,  the
estimated  underlying  value of the collateral and other factors  related to the
collectibility of the loan portfolio.

Information pertaining to the allowance for loan losses and non-performing
assets for the nine months ended September 30, 2007 and 2006 is as follows:
<TABLE>
<CAPTION>
<S>                                              <C>            <C>            <C>
(Dollar amounts in thousands)                      At or for the nine months    At or for the
                                                          ended                  year ended
                                                       September 30,             December 31,
                                                 --------------------------    -----------------
                                                    2007           2006              2006
------------------------------------------------------------------------------------------------
Balance at the beginning of the period           $    2,035     $    1,869     $          1,869
Provision for loan losses                               120            168                  358
Charge-offs                                             (63)           (74)                (221)
Recoveries                                               26             22                   29
                                                 -----------    -----------    -----------------
Balance at the end of the period                 $    2,118     $    1,985     $          2,035
                                                 ===========    ===========    =================

Non-performing loans                             $      931     $    1,653     $          1,841
Non-performing assets                                 1,015          1,739                1,939
Non-performing loans to total loans                    0.41%          0.75%                0.85%
Non-performing assets to total assets                  0.34%          0.59%                0.65%
Allowance for loan losses to total loans               0.93%          0.90%                0.94%
Allowance for loan losses to non-performing loans    227.48%        120.08%              110.54%
------------------------------------------------------------------------------------------------
</TABLE>

                                       19
<PAGE>
The  provision  for loan losses  decreased  $48,000 or 28.6% to $120,000 for the
nine month period ended  September 30, 2007 from $168,000 for the same period in
the prior year.  Management's  evaluation of the loan  portfolio,  including the
changing  composition  of the portfolio as well as economic  trends,  regulatory
considerations  and other factors  contributed to the recognition of $120,000 in
the provision for loan losses during the nine months ended September 30, 2007.

Noninterest income. Noninterest income decreased $94,000 or 4.1% to $2.2 million
for the nine months ended  September 30, 2007,  compared to $2.3 million  during
the same period in the prior year.  This decrease can be attributed to decreases
in gains on the sale of  securities  of $182,000.  Offsetting  this decrease was
increases on fees and service charges, commissions earned on financial services,
gains on the sale of loans,  earnings on  bank-owned  life  insurance  and other
noninterest   income  of  $6,000,   $9,000,   $13,000,   $19,000  and   $42,000,
respectively.

Noninterest  expense.  Noninterest  expense  increased  $167,000 or 2.5% to $6.9
million  during the nine  months  ended  September  30,  2007,  compared to $6.7
million  during the same period in the prior year.  This increase in noninterest
expense can be  attributed  to  increases in premises  and  equipment  and other
noninterest expenses of $65,000 and $306,000, respectively,  partially offset by
a decrease in compensation and benefits of $197,000.

Premises and  equipment  increased  $65,000 or 5.7% to $1.2 million for the nine
months ended September 30, 2007, compared to $1.1 million for the same period in
the prior year.  This increase can be  attributed  primarily to the operation of
one additional branch facility opened in November 2006.

Other noninterest expense increased $306,000 or 19.2% to $1.9 million during the
nine months  ended  September  30,  2007,  compared to $1.6 million for the same
period in the prior year. This increase can be attributed primarily to increases
in professional  fees relating to  Sarbanes-Oxley  Section 404 compliance,  data
processing center  information  technology  initiatives and other operations and
compliance.

Compensation  and  benefits  decreased  $197,000 or 4.9% to $3.8 million for the
nine months  ended  September  30,  2007,  compared to $4.0 million for the same
period the prior year. This decrease can be attributed primarily to cost savings
from staffing  reductions  associated  with the 2006  reorganization,  partially
offset  by the costs  associated  with the  staffing  of one  additional  branch
facility opened in November 2006.

Effective  January 1, 2007, the Federal  Deposit  Insurance  Corporation  (FDIC)
created a new risk framework of four risk categories and established  assessment
rates to  coincide  with each  category.  Assessment  rates for Risk  Category I
institutions,  which includes the Bank, range from 5 to 7 basis points. The FDIC
also approved a one-time  assessment  prior to that date. The Bank believes that
the one-time  credit will more than offset the new FDIC assessment cost for 2007
and anticipates  that the credit will be depleted in the second quarter of 2008.
Accordingly,  the Bank will begin to recognize the FDIC  assessment cost at that
time.

Provision for income taxes. The provision for income taxes increased  $95,000 or
20.0% to $569,000 for the nine months  ended  September  30,  2007,  compared to
$474,000  for the same period in the prior year.  This was due to an increase in
pre-tax earnings of $227,000 to $2.6 million for the nine months ended September
30, 2007, compared to $2.4 million for the same period in the prior year and the
increase in the effective tax rate to 22.0% for the nine months ended  September
30, 2007,  compared to 20.1% for the same period in 2006. The difference between
the  statutory  rate of 34% and the  Corporation's  effective tax rate is due to
tax-exempt income earned on loans, securities and bank-owned life insurance.

LIQUIDITY

The Corporation's primary sources of funds generally have been deposits obtained
through the offices of the Bank,  borrowings from the FHLB and  amortization and
prepayments of outstanding loans and maturing securities. During the nine months
ended September 30, 2007, the Corporation used its sources of funds primarily to
fund loan originations and security purchases.  As of such date, the Corporation
had  outstanding  loan  commitments,  including  undisbursed  loans and  amounts
available  under credit lines,  totaling $27.8 million,  and standby  letters of
credit totaling $877,000.

                                       20
<PAGE>

At September 30, 2007, time deposits  amounted to $117.8 million or 49.9% of the
Corporation's total consolidated deposits, including approximately $67.5 million
of which are  scheduled  to  mature  within  the next  year.  Management  of the
Corporation  believes  that  it  has  adequate  resources  to  fund  all  of its
commitments,  that all of its commitments  will be funded as required by related
maturity  dates and  that,  based  upon  past  experience  and  current  pricing
policies,  it can  adjust  the rates of time  deposits  to retain a  substantial
portion of maturing liabilities.

Aside from  liquidity  available  from  customer  deposits or through  sales and
maturities of securities,  the Corporation has alternative sources of funds such
as a term  borrowing  capacity  from the FHLB and, to a limited and rare extent,
the sale of loans. At September 30, 2007, the Corporation's  borrowing  capacity
with the FHLB, net of funds borrowed, was $108.7 million.

Management  is  not  aware  of  any   conditions,   including   any   regulatory
recommendations  or requirements,  which would adversely impact its liquidity or
its ability to meet funding needs in the ordinary course of business.

CRITICAL ACCOUNTING POLICIES

Management  views  critical  accounting  policies  to be those  which are highly
dependent on subjective or complex  judgments,  estimates  and  assumptions  and
where changes in those estimates and assumptions could have a significant impact
on the financial statements. Management currently views the determination of the
allowance for loan losses as a critical accounting policy.

The allowance for loan losses provides for an estimate of probable losses in the
loan portfolio.  In determining the appropriate  level of the allowance for loan
loss,  the loan portfolio is separated into  risk-rated and  homogeneous  pools.
Migration  analysis/historical  loss rates,  adjusted for relevant trends,  have
been applied to these  pools.  Qualitative  adjustments  are then applied to the
portfolio to allow for quality of lending policies and procedures,  national and
local economic and business conditions,  changes in the nature and volume of the
portfolio,  experience,  ability and depth of lending management, changes in the
trends,  volumes and severity of past due,  non-accrual and classified loans and
loss and  recovery  trends,  quality of the  Corporation's  loan review  system,
concentrations  of  credit,  and  external  factors.  The  methodology  used  to
determine  the  adequacy  of the  Corporation's  allowance  for loan  losses  is
comprehensive  and  meets  regulatory  and  accounting  industry  standards  for
assessing  the  allowance,  however,  it is still an  estimate.  Loan losses are
charged against the allowance while recoveries of amounts previously charged-off
are credited to the allowance.  Loan loss provisions are charged against current
earnings  based on  management's  periodic  evaluation and review of the factors
indicated above.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Market  risk for the  Corporation  consists  primarily  of  interest  rate  risk
exposure and liquidity risk. Since virtually all of the interest-earning  assets
and interest-bearing  liabilities are at the Bank, virtually all of the interest
rate risk and liquidity risk lies at the Bank level.  The Bank is not subject to
currency  exchange risk or commodity  price risk, and has no trading  portfolio,
and  therefore,  is not subject to any trading risk. In addition,  the Bank does
not  participate in hedging  transactions  such as interest rate swaps and caps.
Changes in interest rates will impact both income and expense  recorded and also
the market value of long-term  interest-earning  assets.  Interest rate risk and
liquidity risk management is performed at the Bank level.  Although the Bank has
a diversified  loan portfolio,  loans  outstanding to individuals and businesses
depend upon the local economic conditions in the immediate trade area.

One of the primary  functions of the  Corporation's  asset/liability  management
committee  is to  monitor  the level to which the  balance  sheet is  subject to
interest rate risk. The goal of the  asset/liability  committee is to manage the
relationship  between interest rate sensitive  assets and  liabilities,  thereby
minimizing  the  fluctuations  in  the  net  interest  margin,   which  achieves
consistent  growth of net interest  income during  periods of changing  interest
rates.

                                       21
<PAGE>
Interest  rate  sensitivity  is the result of  differences  in the  amounts  and
repricing  dates  of  the  Bank's  rate  sensitive  assets  and  rate  sensitive
liabilities.  These  differences,  or interest rate repricing "gap",  provide an
indication of the extent that the  Corporation's net interest income is affected
by future  changes in interest  rates.  A gap is  considered  positive  when the
amount  of  interest  rate-sensitive  assets  exceeds  the  amount  of  interest
rate-sensitive  liabilities  and is  considered  negative  when  the  amount  of
interest   rate-sensitive   liabilities   exceeds   the   amount   of   interest
rate-sensitive  assets.  Generally,  during a period of rising interest rates, a
negative gap would  adversely  affect net  interest  income while a positive gap
would result in an increase in net interest income. Conversely,  during a period
of falling  interest  rates,  a negative  gap would result in an increase in net
interest income and a positive gap would adversely  affect net interest  income.
The closer to zero that gap is maintained,  generally,  the lesser the impact of
market interest rate changes on net interest income.

Based on certain  assumptions  provided by a federal  regulatory  agency,  which
management   believes  most   accurately   represents  the  sensitivity  of  the
Corporation's  assets and liabilities to interest rate changes, at September 30,
2007, the Corporation's interest-earning assets maturing or repricing within one
year totaled $77.7 million while the Corporation's  interest-bearing liabilities
maturing or repricing  within  one-year  totaled  $103.6  million,  providing an
excess of  interest-bearing  liabilities over  interest-earning  assets of $25.9
million  or a  negative  8.7% of  total  assets.  At  September  30,  2007,  the
percentage  of the  Corporation's  assets to  liabilities  maturing or repricing
within one year was 75.0%.

For more information, see "Market Risk ManaFgement" in Exhibit 13 to the
Corporation's Annual Report on Form 10-K for the year ended December 31, 2006.

Item 4.  Controls and Procedures

The Corporation  maintains  disclosure controls and procedures that are designed
to  ensure  that  information  required  to be  disclosed  in the  Corporation's
Exchange Act reports is recorded, processed,  summarized and reported within the
time periods  specified in the SEC's rules and forms,  and that such information
is accumulated and communicated to the Corporation's  management,  including its
Chief Executive Officer and Chief Financial  Officer,  as appropriate,  to allow
timely decisions  regarding required  disclosure based closely on the definition
of "disclosure controls and procedures" in Rule 13a-15(e).

There  has  been no  change  made in the  Corporation's  internal  control  over
financial reporting during the period covered by this report that has materially
affected,  or is  reasonably  likely to  materially  affect,  the  Corporation's
internal control over financial reporting.

As of the quarter  ended  September  30, 2007,  the  Corporation  carried out an
evaluation,   under  the   supervision  and  with  the   participation   of  the
Corporation's  management,  including the Corporation's  Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
the Corporation's  disclosure  controls and procedures.  Based on the foregoing,
the Corporation's  Chief Executive Officer and Chief Financial Officer concluded
that the Corporation's disclosure controls and procedures were effective.  There
have been no significant  changes in the  Corporation's  internal controls or in
other factors that could  significantly  affect the internal controls subsequent
to the date the Corporation completed its evaluation.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

The  Corporation  is  involved in various  legal  proceedings  occurring  in the
ordinary course of business. It is the opinion of management, after consultation
with  legal  counsel,   that  these  matters  will  not  materially  effect  the
Corporation's consolidated financial position or results of operations.

Item 1A.  Risk Factors

There have been no material changes in the Corporation's risk factors from those
previously disclosed in the 2006 Form 10-K.

                                       22
<PAGE>

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Submission of Matters to a Vote of Security Holders

None.

Item 5.  Other Information

(a) Not applicable.

(b) Not applicable.

Item 6.  Exhibits

Exhibit 31.1 Rule 13a-14(a) Certification of Chief Executive Officer
Exhibit 31.2 Rule 13a-14(a) Certification of Chief Financial Officer
Exhibit 32.1 CEO Certification Pursuant to 18 U.S.C. Section 1350
Exhibit 32.2 CFO Certification Pursuant to 18 U.S.C. Section 1350

                                       23
<PAGE>

Signatures

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


EMCLAIRE FINANCIAL CORP. AND SUBSIDIARY



Date:  November 9, 2007       By:      /s/ David L. Cox
                              --------------------------------------------
                              David L. Cox
                              Chairman of the Board,
                              President and Chief Executive Officer

Date:  November 9, 2007       By:      /s/ William C. Marsh
                              ---------------------------------------------
                              William C. Marsh
                              Chief Financial Officer and Treasurer



                                       24