UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549





FORM
      10-QSB




(Mark
      One)





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





For
      the
      quarterly period ended December 31, 2006





or





o
      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 0-29814





FIRST
      BANCORP OF INDIANA, INC.


(Exact
      name of small business issuer as specified in its charter)





Indiana
            35-2061832(State
                or other jurisdiction of incorporation
            (I.R.S.
                Employeror
                organization)
            Identification
                No.)





P.O.
                Box 1111, Evansville, Indiana
            47706(Address
                of principal executive offices)
            (Zip
                Code)




(812)
      492-8100


(Issuer's
      telephone number, including area code)




Not
      Applicable


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





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 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 o




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




APPLICABLE
      ONLY TO CORPORATE ISSUERS:





Indicate
      the number of shares outstanding of each of the issuer's classes of common
      stock, as of the latest practicable date: 1,852,934 **** of
      common
      stock, par value $0.01 per share, were outstanding as of February 2,
      2007.





Transitional
      Small Business Disclosure Format (Check one):  Yes
o
      No x









FIRST
      BANCORP OF INDIANA, INC. AND SUBSIDIARY





FORM
      10-QSB





FOR
      THE
      QUARTER ENDED DECEMBER
      31, 2006





INDEX





PagePart
                I Financial InformationItem
                1. Financial Statements
            3-6Item
                2. Management's Discussion and Analysis or Plan of
                Operation
            10Item
                3. Controls and Procedures
            17Part
                II Other InformationItem
                1. Legal Proceedings
            18Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            18Item
                3. Defaults Upon Senior Securities
            18Item
                4. Submission of Matters to a Vote of Security Holders
            18Item
                5. Other Information
            18Item
                6. Exhibits
            18




2


**FIRST
        BANCORP OF INDIANA, INC.**
 **AND** **S** **UBSIDIARY**
 **Condensed
            Consolidated Balance Sheets**
  **December
                          31, 2006**
                      
                      **June
                          30, 2006**(Unaudited)**Assets**Cash
                          and due from banks
                      
                      $
                      1,854,173
                      
                      $
                      6,656,560Interest-bearing
                          demand deposits
                      
                      
                      8,929,953
                      
                      
                      3,056,142Federal
                          funds sold
                      
                      
                      0
                      
                      
                      25,000Total
                          cash and cash equivalents
                      
                      
                      10,784,126
                      
                      
                      9,737,702Interest-bearing
                          deposits
                      
                      
                      4,584,784
                      
                      
                      229,000Investment
                          securitiesAvailable
                          for sale
                      
                      
                      66,155,436
                      
                      
                      56,128,031Held
                          to maturity
                      
                      
                      15,662,510
                      
                      
                      14,593,296Total
                          investment securities
                      
                      
                      81,817,946
                      
                      
                      70,721,327Loans
                      
                      
                      234,666,448
                      
                      
                      187,587,271Allowance
                          for loan losses
                      
                      
                      (1,233,361
                      )
                      
                      (835,736
                      )Net
                          loans
                      
                      
                      233,433,087
                      
                      
                      186,751,535Premises
                          and equipment
                      
                      
                      9,433,944
                      
                      
                      8,543,424Goodwill
                      
                      
                      5,959,039
                      
                      
                      1,786,297Core
                          deposit intangibles
                      
                      
                      969,040
                      
                      
                      86,690Federal
                          Home Loan Bank stock
                      
                      
                      4,564,700
                      
                      
                      4,013,800Other
                          assets
                      
                      
                      12,868,131
                      
                      
                      12,681,440Total
                          assets
                      
                      $
                      364,414,797
                      
                      $
                      294,551,215**Liabilities**DepositsNon-interest
                          bearing
                      
                      $
                      13,762,342
                      
                      $
                      15,698,051Interest
                          bearing
                      
                      
                      233,772,893
                      
                      
                      173,643,103Total
                          deposits
                      
                      
                      247,535,235
                      
                      
                      189,341,154Long-term
                          borrowings
                      
                      
                      77,493,839
                      
                      
                      73,000,000Advances
                          by borrowers fortaxes
                          and insurance
                      
                      
                      618,069
                      
                      
                      570,357Other
                          liabilities
                      
                      
                      4,449,440
                      
                      
                      3,433,356Total
                          liabilities
                      
                      
                      330,096,583
                      
                      
                      266,344,867**Stockholders'
                          Equity**Preferred
                          stock, $.01 par valueAuthorized
                          and unissued - 1,000,000 sharesCommon
                          stock, $.01 par valueAuthorized
                          - 9,000,000 sharesIssued
                          - 2,566,346 shares
                      
                      
                      25,663
                      
                      
                      22,724Additional
                          paid-in capital
                      
                      
                      27,816,779
                      
                      
                      22,360,757Retained
                          earnings
                      
                      
                      19,240,770
                      
                      
                      19,305,925Accumulated
                          other comprehensive income / (loss)
                      
                      
                      (775,289
                      )
                      
                      (1,659,119
                      )46,307,923
                      
                      
                      40,030,287Less:Unreleased
                          employee stock ownership planshares
                          - 60,592 and 68,170 shares
                      
                      
                      (618,536
                      )
                      
                      (695,893
                      )Treasury
                          stock - 729,660 and 717,632 shares
                      
                      
                      (11,371,173
                      )
                      
                      (11,128,046
                      )Total
                          stockholders' equity
                      
                      
                      34,318,214
                      
                      
                      28,206,348Total
                          liabilities and stockholders' equity
                      
                      $
                      364,414,797
                      
                      $
                      294,551,215
  See
        notes
        to unaudited condensed consolidated financial statements
  3
  **FIRST
          BANCORP OF INDIANA, INC.**
 **AND** **S** **UBSIDIARY**
  **Condensed
          Consolidated Statements of Income**
 **For
                  the**
              
              **For
                  the****Three
                  Months Ended**
              
              **Six
                  Months Ended****December
                  31,**
              
              **December
                  31,****2006**
              
              **2005**
              
              **2006**
              
              **2005***(Unaudited)*
              
              
              
              *(Unaudited)***Interest
                  Income**Loans
                  receivable
              
              $
              3,912,807
              
              $
              2,644,503
              
              $
              7,037,448
              
              $
              5,030,244Investment
                  securities
              
              
              967,200
              
              
              806,982
              
              
              1,797,808
              
              
              1,553,304Deposits
                  with financial institutions
              
              
              122,430
              
              
              31,246
              
              
              162,291
              
              
              104,164Federal
                  funds sold
              
              
              0
              
              
              15,002
              
              
              12,311
              
              
              60,054Other
                  interest and dividend income
              
              
              55,489
              
              
              31,872
              
              
              99,337
              
              
              69,369Total
                  interest income
              
              
              5,057,926
              
              
              3,529,605
              
              
              9,109,195
              
              
              6,817,135**Interest
                  Expense**Deposits
              
              
              2,207,574
              
              
              1,130,252
              
              
              3,835,707
              
              
              2,205,139Borrowings
              
              
              868,215
              
              
              710,375
              
              
              1,657,158
              
              
              1,229,116Other
              
              
              21,758
              
              
              28,026
              
              
              43,516
              
              
              56,051Total
                  interest expense
              
              
              3,097,547
              
              
              1,868,653
              
              
              5,536,381
              
              
              3,490,306**Net
                  Interest Income**
              
              
              1,960,379
              
              
              1,660,952
              
              
              3,572,814
              
              
              3,326,829Provision
                  for loan losses
              
              
              100,000
              
              
              82,000
              
              
              195,000
              
              
              157,000**Net
                  Interest Income after Provision**
              
              
              1,860,379
              
              
              1,578,952
              
              
              3,377,814
              
              
              3,169,829**Noninterest
                  Income**Increase
                  in cash surrender valuesof
                  life insurance
              
              
              49,500
              
              
              52,071
              
              
              99,000
              
              
              106,071Net
                  gains (losses) on loan sales
              
              
              24,340
              
              
              36,404
              
              
              91,840
              
              
              75,814ATM
                  transaction & POS interchange fees
              
              
              66,566
              
              
              60,404
              
              
              126,777
              
              
              122,524Service
                  charges on deposit accounts
              
              
              108,788
              
              
              104,066
              
              
              212,778
              
              
              216,144Net
                  gain on sale of branch office
              
              
              0
              
              
              685,647
              
              
              0
              
              
              685,647Other
                  income
              
              
              209,769
              
              
              214,827
              
              
              429,171
              
              
              464,233Total
                  noninterest income
              
              
              458,963
              
              
              1,153,419
              
              
              959,566
              
              
              1,670,433**Noninterest
                  Expense**Salaries
                  and employee benefits
              
              
              1,059,114
              
              
              957,114
              
              
              1,985,954
              
              
              1,932,784Net
                  occupancy expense
              
              
              170,487
              
              
              80,227
              
              
              316,320
              
              
              159,511Equipment
                  expense
              
              
              100,584
              
              
              94,797
              
              
              214,013
              
              
              184,210Amortization
                  of intangible assets
              
              
              40,813
              
              
              19,013
              
              
              59,825
              
              
              38,025Professional
                  fees
              
              
              41,352
              
              
              51,741
              
              
              109,254
              
              
              101,127Advertising
              
              
              53,914
              
              
              79,472
              
              
              121,658
              
              
              161,871Data
                  processing fees
              
              
              111,841
              
              
              87,649
              
              
              210,247
              
              
              174,735Other
                  expense
              
              
              437,395
              
              
              374,480
              
              
              798,610
              
              
              715,304Total
                  noninterest expense
              
              
              2,015,500
              
              
              1,744,493
              
              
              3,815,881
              
              
              3,467,567**Income
                  Before Income Tax**
              
              
              303,842
              
              
              987,878
              
              
              521,499
              
              
              1,372,695Income
                  tax expense
              
              
              76,289
              
              
              331,084
              
              
              120,275
              
              
              469,529**Net
                  Income**
              
              $
              227,553
              
              $
              656,794
              
              $
              401,224
              
              $
              903,166Basic
                  earnings per share
              
              $
              0.13
              
              $
              0.44
              
              $
              0.25
              
              $
              0.60Diluted
                  earnings per share
              
              $
              0.13
              
              $
              0.42
              
              $
              0.24
              
              $
              0.58Dividends
                  declared per share
              
              $
              -
              
              $
              -
              
              $
              0.30
              
              $
              0.30
  See
        notes
        to unaudited condensed consolidated financial statements
  4
  **FIRST
        BANCORP OF INDIANA, INC.**
 **AND
        SUBSIDIARY**
  **Condensed
        Consolidated Statement of Changes in Stockholders'
        Equity**
  **Accumulated****Additional**
              
              
              
              **Other**
              
              **Unallocated****Comprehensive**
              
              **Common**
              
              **Paid-in**
              
              **Retained**
              
              **Comprehensive**
              
              **ESOP**
              
              **Treasury****Income**
              
              **Stock**
              
              **Capital**
              
              **Earnings**
              
              **Income**
              
              **Shares**
              
              **Shares**
              
              **Total****Balances,
                  June 30, 2006**$
              22,724
              
              $
              22,360,757
              
              $
              19,305,925
              
              $
              (1,659,119
              )
              $
              (695,893
              )
              $
              (11,128,046
              )
              $
              28,206,348Net
                  income
              
              $
              173,670
              
              
              
              
              
              
              
              
              173,670
              
              
              
              
              
              
              
              
              
              
              
              173,670Other
                  comprehensive income,net
                  of tax--Unrealized gainson
                  securities (unaudited)
              
              
              664,161
              
              
              
              
              
              
              
              
              
              
              
              664,161
              
              
              
              
              
              
              
              
              664,161Cash
                  dividends paid ($0.30 per share)
              
              
              
              
              
              
              
              
              
              
              
              (466,378
              )
              
              
              
              
              
              
              
              
              
              
              (466,378
              )Employee
                  Stock Ownership Planshares
                  allocated
              
              
              
              
              
              
              
              
              31,504
              
              
              
              
              
              
              
              
              38,647
              
              
              
              
              
              70,152Treasury
                  shares purchased
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (82,073
              )
              
              (82,073
              )Options
                  exercised
              
              
              
              
              
              
              
              
              (4,493
              )
              
              
              
              
              
              
              
              
              
              
              32,593
              
              
              28,099Comprehensive
                  income (unaudited)
              
              $
              837,831**Balances,
                  Sept 30, 2006 (unaudited)**
              
              
              
              
              $
              22,724
              
              $
              22,387,768
              
              $
              19,013,217
              
              
              ($994,958
              )
              
              ($657,246
              )
              
              ($11,177,526
              )
              $
              28,593,979Net
                  income
              
              $
              227,553
              
              
              
              
              
              
              
              
              227,553
              
              
              
              
              
              
              
              
              
              
              
              227,553Other
                  comprehensive income,net
                  of tax--Unrealized gainson
                  securities (unaudited)
              
              
              219,669
              
              
              
              
              
              
              
              
              
              
              
              219,669
              
              
              
              
              
              
              
              
              219,669Employee
                  Stock Ownership Planshares
                  allocated
              
              
              
              
              
              
              
              
              33,969
              
              
              
              
              
              
              
              
              38,710
              
              
              
              
              
              72,679Treasury
                  shares purchased
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (212,283
              )
              
              (212,283
              )Options
                  exercised
              
              
              
              
              
              
              
              
              (7,686
              )
              
              
              
              
              
              
              
              
              
              
              18,636
              
              
              10,950Bank
                  Acquisition
              
              
              
              
              
              2,939
              
              
              5,402,728
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              5,405,667Comprehensive
                  income (unaudited)
              
              $
              447,222**Balances,
                  Dec 31, 2006 (unaudited)**
              
              
              
              
              $
              25,663
              
              $
              27,816,779
              
              $
              19,240,770
              
              
              ($775,289
              )
              
              ($618,536
              )
              
              ($11,371,173
              )
              $
              34,318,214
  See
        notes
        to unaudited condensed consolidated financial statements.
  5
  **FIRST
        BANCORP OF INDIANA, INC.**
 **AND** **S** **UBSIDIARY**
  **Condensed
        Consolidated Statements of Cash Flows**
  **Year
                  to Date****December
                  31,****2006**
              
              **2005***(Unaudited)***Net
                  Cash Provided (Used) by Operating Activities**
              
              $
              566,659
              
              
              ($1,173,544
              )**Investing
                  Activities**Net
                  change in interest-bearing deposits
              
              
              1,282,186
              
              
              132,256Proceeds
                  from maturities of securities available for sale
              
              
              4,189,550
              
              
              8,826,484Proceeds
                  from maturities of securities held to maturity
              
              
              628,917
              
              
              1,472,675Purchases
                  of securities available for sale
              
              
              (4,492,686
              )
              
              (8,319,555
              )Purchases
                  of securities held to maturity
              
              
              0
              
              
              (10,123,250
              )Net
                  change in loans
              
              
              (7,157,199
              )
              
              (23,585,877
              )Purchases
                  of premises and equipment
              
              
              (450,347
              )
              
              (2,015,338
              )Proceeds
                  from sales of premises and equipment
              
              
              0
              
              
              1,131,920(Purchase)/Sale
                  of FHLB stock
              
              
              61,600
              
              
              (300,000
              )Acquisition
                  of bank, net of cash received
              
              
              (2,024,394
              )
              
              0Net
                  cash provided (used) by investing activities
              
              
              (7,962,373
              )
              
              (32,780,685
              )**Financing
                  Activities**Net
                  change inNon-interest
                  bearing, interest-bearing demandand
                  savings deposits
              
              
              (3,771,012
              )
              
              563,675Certificates
                  of deposit
              
              
              17,424,767
              
              
              (12,242,810
              )Proceeds
                  from issuance of long-term borrowings
              
              
              0
              
              
              20,000,000Repayments
                  of long-term borrowings
              
              
              (4,500,000
              )
              
              0Net
                  issuance of short-term borrowings
              
              
              0
              
              
              3,000,000Advances
                  by borrowers for taxes and insurance
              
              
              10,068
              
              
              60,219Dividends
                  paid
              
              
              (466,378
              )
              
              (479,918
              )Purchase
                  treasury shares
              
              
              (294,356
              )
              
              (1,125,721
              )Options
                  exercised
              
              
              39,049
              
              
              258,117Net
                  cash provided (used) by financing activities
              
              
              8,442,138
              
              
              10,033,562**Net
                  Change in Cash and Cash Equivalents**
              
              
              1,046,424
              
              
              (23,920,667
              )**Cash
                  and Cash Equivalents, Beginning of Period**
              
              
              9,737,702
              
              
              35,335,864**Cash
                  and Cash Equivalents, End of Period**
              
              $
              10,784,126
              
              $
              11,415,197**Additional
                  Cash Flow Information**Interest
                  paid
              
              $
              5,040,929
              
              $
              3,459,621Income
                  tax paid
              
              
              55,000
              
              
              110,000
  See
        notes
        to unaudited condensed consolidated financial statements
  6




FIRST
      BANCORP OF INDIANA, INC. AND SUBSIDIARY


NOTES
      TO
      UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





NOTE
      1 -
      BASIS OF PRESENTATION





The
      accompanying condensed consolidated financial statements of First Bancorp of
      Indiana, Inc. (the "Company") have been prepared in accordance with instructions
      to Form 10-QSB. Accordingly, they do not include all of the information and
      footnotes required by accounting principles generally accepted in the United
      States of America for complete financial statements. However, such information
      reflects all adjustments (consisting solely of normal recurring adjustments)
      which are, in the opinion of management, necessary to fairly present the
      financial position, results of operations, and cash flow of the Company. The
      condensed consolidated balance sheet of the Company as of June 30, 2006, has
      been derived from the audited consolidated balance sheet of the Company as
      of
      that date. The results of operations for the three and six months ended December
      31, 2006, are not necessarily indicative of the results to be expected for
      the
      year ending June 30, 2007. The condensed consolidated financial statements
      and
      notes thereto should be read in conjunction with the audited consolidated
      financial statements and notes thereto for the year ended June 30, 2006,
      contained in the Company's Annual Report on Form 10-KSB.





NOTE
      2 -
      LONG-TERM DEBT





The
      following summarizes the Company's borrowings at December 31, 2006, and June
      30,
      2006. Each putable advance is convertible from a fixed-rate to a variable-rate
      instrument at the discretion of the Federal Home Loan Bank contingent upon
      meeting prescribed strike rates and/or initial lockout periods.





December
                31,
              2006
            
            June
                30,
              2006(unaudited)Federal
                Home Loan Bank putable advancesFixed
                rate of 5.330%, due in March 2008
            
            $
            2,500,000Fixed
                rate of 4.980%, due in December 2010
            
            
            2,000,000Fixed
                rate of 5.370%, due in February 2011
            
            
            10,000,000
            
            $
            10,000,000Fixed
                rate of 4.830%, due in July 2011
            
            
            10,000,000
            
            
            10,000,000Fixed
                rate of 3.268%, due in January 2015
            
            
            8,000,000
            
            
            8,000,000Fixed
                rate of 3.520%, due in May 2015
            
            
            5,000,000
            
            
            5,000,000Fixed
                rate of 4.350%, due in September 2015
            
            
            10,000,000
            
            
            10,000,000Fixed
                rate of 3.700%, due in September 2015
            
            
            10,000,000
            
            
            10,000,000Fixed
                rate of 4.180%, due in March 2016
            
            
            15,000,000
            
            
            15,000,000Federal
                Home Loan Bank bullet advancesFixed
                rate of 3.050%, due in July 2006
            
            
            
            
            
            2,000,000Fixed
                rate of 2.730%, due in January 2007
            
            
            500,000Fixed
                rate of 5.040%, due in March 2007
            
            
            2,000,000
            
            
            2,000,000Fixed
                rate of 4.100%, due in April 2007
            
            
            500,000Fixed
                rate of 5.240%, due in May 2007
            
            
            1,000,000
            
            
            1,000,000Fixed
                rate of 3.290%, due in August 2007
            
            
            500,000Fixed
                rate of 4.300%, due in June 2010
            
            
            500,000Total
                Federal Home Loan Bank advances
            
            $
            77,500,000
            
            $
            73,000,000Weighted
                average rate
            
            
            4.319
            %
            
            4.238
            %





7


NOTE
      3 -
      EARNINGS PER SHARE





Earnings
      per share for the quarters ended December 31, 2006, and December 31, 2005,
      were
      computed as follows:





Quarter
                Ended December 31, 2006Income
            
            Weighted-Average
                Shares
            
            Per
                Share AmountNet
                income
            
            $
            227,553Basic
                earnings per shareIncome
                available to common stockholders
            
            $
            227,553
            
            
            1,779,459
            
            $
            0.13Effect
                of dilutive securitiesStock
                options
            
            
            —
            
            
            35,442Unvested
                MRP shares
            
            
            —
            
            
            —Diluted
                earnings per shareIncome
                available to common stockholders and assumed conversions
            
            $
            227,553
            
            
            1,814,901
            
            $
            0.13




Quarter
                Ended December 31, 2005Income
            
            Weighted-Average
                Shares
            
            Per
                Share AmountNet
                income
            
            $
            656,794Basic
                earnings per shareIncome
                available to common stockholders
            
            $
            656,794
            
            
            1,496,823
            
            $
            0.44Effect
                of dilutive securitiesStock
                options
            
            
            —
            
            
            53,507Unvested
                MRP shares
            
            
            —
            
            
            —Diluted
                earnings per shareIncome
                available to common stockholders and assumed conversions
            
            $
            656,794
            
            
            1,550,330
            
            $
            0.42




8


Year-to-date
      earnings per share were computed as follows:





Six
                Months Ended December 31, 2006Income
            
            Weighted-Average
                Shares
            
            Per
                Share AmountNet
                income
            
            $
            401,224Basic
                earnings per shareIncome
                available to common stockholders
            
            $
            401,224
            
            
            1,632,512
            
            $
            0.25Effect
                of dilutive securitiesStock
                options
            
            
            —
            
            
            35,085Unvested
                MRP shares
            
            
            —
            
            
            —Diluted
                earnings per shareIncome
                available to common stockholders and assumed conversions
            
            $
            401,224
            
            
            1,667,597
            
            $
            0.24




Six
                Months Ended December 31, 2005Income
            
            Weighted-Average
                Shares
            
            Per
                Share AmountNet
                income
            
            $
            903,166Basic
                earnings per shareIncome
                available to common stockholders
            
            $
            903,166
            
            
            1,504,283
            
            $
            0.60Effect
                of dilutive securitiesStock
                options
            
            
            —
            
            
            53,092Unvested
                MRP shares
            
            
            —
            
            
            —Diluted
                earnings per shareIncome
                available to common stockholders and assumed conversions
            
            $
            903,166
            
            
            1,557,375
            
            $
            0.58





NOTE
      4 -
      RECLASSIFICATIONS





Certain
      reclassifications have been made to the condensed consolidated income statement
      for the three- and six-month periods ended December 31, 2005, to conform to
      the
      presentation of the condensed consolidated income statement for the three-
      and
      six-month periods ended December 31, 2006. These reclassifications had no effect
      on earnings.





NOTE
      5 -
      ACQUISITION OF HOME BUILDING BANCORP, INC.





Effective
      October 1, 2006, the Company completed its acquisition of Home Building Bancorp,
      Inc. (“Home Building Bancorp”), the parent company of Home Building Savings
      Bank, FSB, pursuant to the Agreement and Plan of Merger dated April 25, 2006.
      Concurrent with the acquisition, Home Building Savings Bank merged with and
      into
      First Federal Savings Bank.  The aggregate merger consideration included
      approximately $5.6 million in cash, 293,946 shares of First Bancorp stock valued
      at $18.39 per share pursuant to EITF Abstract 99-12, and acquisition costs
      approximating $809,000.





9


The
      transaction has been accounted for as a purchase, and the results of operations
      of Home Building Bancorp since the acquisition date have been included in the
      consolidated financial statements. The following table summarizes the allocation
      of the $11.8 million total acquisition cost for Home Building Bancorp to assets
      acquired and liabilities assumed, based on their fair values (in
      thousands):





Cash
                and cash equivalents
            
            $
            8,994Investment
                securities
            
            
            10,032Net
                loans
            
            
            39,581Premises
                and equipment
            
            
            618Goodwill
            
            
            4,173Core
                deposit intangibles
            
            
            942Other
                assets
            
            
            1,712Total
                assets acquired
            
            
            66,052Deposits
            
            
            44,540Long-term
                debt
            
            
            8,993Other
                liabilities
            
            
            748Total
                liabilities acquired
            
            
            54,281Net
                assets acquired
            
            $
            11,771





As
      the
      table illustrates, $4.2 million of goodwill, which is not subject to
      amortization, resulted after determining the total fair value of the assets
      and
      liabilities. The $942,000 core deposit intangible is being amortized over 10
      years on a straight-line basis.





Home
      Building Bancorp’s results of operations have been reflected in the Company’s
      consolidated statements of income beginning as of the acquisition date. Certain
      information, which is unaudited and pro forma, is presented below, and includes
      the effects of purchase accounting adjustments. The total net interest income,
      total income (net interest income plus noninterest income), net income, and
      basic and diluted earnings per share for the three- and six-month periods ended
      December 31, 2006, and December 31, 2005, after giving effect to the acquisition
      as if it occurred at the beginning of the periods presented, are as
      follows:





For
                the three months
              Ended
                December 31,
            
            For
                the six months
              Ended
                December 312006
            
            2005
            
            2006
            
            2005(in
                thousands, except per share data)Net
                interest income
            
            $
            1,960
            
            $
            2,032
            
            $
            3,941
            
            $
            4,019Total
                income
            
            
            2,319
            
            
            3,138
            
            
            4,708
            
            
            5,559Net
                income
            
            
            228
            
            
            710
            
            
            417
            
            
            920Basic
                earnings per share
            
            
            0.13
            
            
            0.40
            
            
            0.23
            
            
            0.51Diluted
                earnings per share
            
            
            0.13
            
            
            0.39
            
            
            0.23
            
            
            0.50




These
      unaudited pro forma condensed combined results of operations do not reflect
      any
      anticipated post-merger cost savings and revenue enhancements. Accordingly,
      the
      pro forma results may not be indicative of the results that actually would
      have
      occurred if the merger had been in effect during the periods presented or of
      the
      results that may be attained in the future.





ITEM
      2.


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





FORWARD-LOOKING
      STATEMENTS





This
      report contains forward-looking statements within the meaning of the federal
      securities laws. These statements are not historical facts, rather they are
      statements based on the Company's current expectations
      regarding its business strategies and their intended results and its future
      performance. Forward-looking statements are preceded by terms such as "expects,"
      "believes," "anticipates," "intends," and similar expressions. Forward-looking
      statements are not guarantees of future performance. Numerous risks and
      uncertainties could cause or contribute to the Company's actual results,
      performance, and achievements to be materially different from those expressed
      or
      implied by the forward-looking statements. Factors that may cause or contribute
      to these differences include, without limitation, general economic conditions,
      including changes in market interest rates and changes in monetary and fiscal
      policies of the federal government; legislative and regulatory changes; and
      other factors disclosed periodically in the Company's filings with the
      Securities and Exchange Commission. Because of the risks and uncertainties
      inherent in forward-looking statements, readers are cautioned not to place
      undue
      reliance on them, whether included in this report or made elsewhere from time
      to
      time by the Company or on its behalf. The Company assumes no obligation to
      update any forward-looking statements.




10




GENERAL





Management's
      discussion and analysis of financial condition and results of operations is
      intended to assist in understanding the financial condition and results of
      operations of the Company. The information contained in this section should
      be
      read in conjunction with the unaudited condensed consolidated financial
      statements and accompanying notes thereto.





COMPARISON
      OF FINANCIAL CONDITION AT DECEMBER 31, 2006, AND JUNE 30, 2006





Total
      consolidated assets of the Company increased $69.8 million, or 23.7%, to $364.4
      million at December 31, 2006, from $294.6 million at June 30, 2006. Assets
      acquired via the merger with Home Building Bancorp accounted for the majority
      of
      the increase.





Cash
      and
      cash equivalents, which consist mainly of time deposits at the Federal Home
      Loan
      Bank of Indianapolis (FHLB), increased $1.0 million to $10.8 million during
      the
      six months ended December 31, 2006. Certificates of deposit (CDs) with other
      financial institutions, which are all fully insured by the FDIC, totaled $4.6
      million at December 31, 2006, compared to $229,000 six months earlier. The
      change was attributed solely to certificates acquired in the
      merger.





The
      Company acquired $10.0 million of investment securities, excluding investment
      CDs, via the merger. Consequently, this portfolio increased 15.7% through the
      first two quarters of fiscal 2007. This $81.8 million portfolio is composed
      entirely of mortgage-related securities, federal agency notes, municipal bonds,
      and investment grade asset-backed paper.





Net
      loans
      grew to $233.4 million at December 31, 2006, a 24.9% increase from the $186.8
      million balance at June 30, 2006. Aside from the $39.6 million of net loans
      obtained from Home Bancorp, commercial business and commercial real estate
      loans
      accounted for nearly all the growth. For example, commercial real estate
      mortgage loans, including those secured by nonowner-occupied, one- to
      four-family residences, increased to 20.5% of net loans at December 31, 2006,
      from 16.5% at June 30, 2006. During the same period, commercial business loans
      increased to 6.0% from 4.8%. The consumer loan portfolio fell to 33.5% of net
      loans at December 31, 2006, from 38.6% at June 30, 2006 due in part to the
      lower
      ratio of consumer loans acquired in the merger. Indirect automobile loan
      production totaled $22.2 million during the first two quarters of fiscal 2007
      from which $5.0 million of were sold. Also, $2.8 million of newly originated
      permanent single family residential mortgage loans, or 60.0% of total
      production, were sold during the first half of fiscal 2007. For the foreseeable
      future, management intends to continue building the mortgage loan servicing
      portfolio through the origination and sale of loans. Consumer loan retention
      is
      subject to First Federal's liquidity needs, as well as internal and regulatory
      asset diversification limitations.





The
      allowance for loan losses totaled $1.2 million at December 31, 2006, a $398,000
      increase from the preceding fiscal year end. The change was composed of $195,000
      in provisions for losses, $64,000 in net charge-offs, and $267,000 of allowances
      associated with the loans acquired in the merger. The Company’s allowance for
      loan losses represented 0.53% of total loans at December 31, 2006, compared
      to
      0.45% at June 30, 2006. Relative to nonperforming loans, the allowance for
      loan
      losses increased to 208.3% at December 31, 2006, from 110.4% at June 30,
      2006.




11


The
      table
      below highlights changes in the Company’s nonperforming assets since the most
      recent fiscal year end.





December
                31, 2006
              (unaudited)
            
            June
                30,
              2006Loans
                accounted for on a nonaccrual basis
            
            $
            561,000
            
            $
            757,000Accruing
                loans past due 90 days or more
            
            
            30,000
            
            
            —Nonperforming
                loans
            
            
            591,000
            
            
            757,000Real
                estate owned (net)
            
            
            29,000
            
            
            63,000Other
                repossessed assets
            
            
            21,000
            
            
            5,000Total
                nonperforming assets
            
            $
            641,000
            
            $
            825,000Total
                loans delinquent 90 days or more to total loans
            
            
            0.25
            %
            
            0.40
            %Total
                loans delinquent 90 days or more to total assets
            
            
            0.16
            %
            
            0.26
            %Total
                nonperforming assets to total assets
            
            
            0.18
            %
            
            0.28
            %





Total
      deposits increased $58.2 million to $247.5 million at December 31, 2006, from
      $189.3 million at June 30, 2006. Home Bancorp deposits were valued at $44.6
      million at the effective date of the merger. The remaining deposit growth was
      attributed primarily to a $19.5 million increase in brokered funds that offset
      net withdrawals of non-maturity deposit instruments and retail certificates
      of
      deposit. Borrowings, which consisted entirely of FHLB products, increased $4.5
      million due to advances acquired via the merger. First Federal believes that
      it
      has substantial resources to increase its borrowing capacity with the
      FHLB.





At
      $618,000, escrow balances at December 31, 2006, were 8.4% above the levels
      six
      months earlier due to a greater volume of loans serviced, including loans
      acquired from Home Building Bancorp, together with seasonal variances. During
      the first six months of fiscal 2007, other liabilities, which include accrued
      expenses and miscellaneous short-term payables, increased $1.0 million, or
      29.6%. The change was attributed primarily to accrued interest on time deposits
      and accrued income taxes.





Total
      stockholders’ equity increased $6.1 million to $34.3 million at December 31,
      2006, from $28.2 million at June 30, 2006. The 293,946 shares of First Bancorp
      common stock issued in the merger added $5.4 million based on the $18.39 share
      price determined in accordance with EITF Abstract 99-12. Aside from the $401,000
      of net income, other significant components of the change in equity included
      15,328 shares of First Bancorp common stock repurchased at a total cost of
      $294,000 and semiannual cash dividends totaling $466,000. Also affecting
      stockholders’ equity were $143,000 in allocations of ESOP shares, and $39,000
      from the exercise of stock options. Finally, an unrealized gain, adjusted for
      deferred taxes, of $884,000 was recognized on the portfolio of
      available-for-sale securities.





COMPARISON
      OF OPERATING RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2006, AND
      2005





GENERAL.
      Net income for the quarter ended December 31, 2006, fell 65.3% to $228,000
      from
      $657,000 for the quarter ended December 31, 2005. As a result, the annualized
      return on average assets decreased to 0.26% for the quarter ended December
      31,
      2006, from 0.93% for the same quarter last year. Similarly, the return on
      average equity fell to 2.67% from 9.04% for the comparative quarters. The higher
      net earnings for the second quarter of fiscal 2006 resulted from an after-tax
      gain of approximately $414,000 from the sale of a branch banking facility.
      Rising interest rates and an inversion of the yield curve over the past 12
      months also weakened earnings. Noninterest expenses increased significantly
      between the comparative periods primarily due partly to personnel added in
      the
      merger. However, the greater noninterest expenses also reflect costs associated
      with the new corporate headquarters and the growth of the commercial lending
      function.





12


NET
      INTEREST INCOME. At $2.0 million, net interest income for the quarter ended
      December 31, 2006, grew 18.0% from the same quarter a year ago. Total interest
      income increased 43.3% between the comparative quarters on a $64.8 million
      increase in average interest-earning assets attributed mainly to the merger
      and
      a 79 basis point improvement in the average yield. Total interest expenses
      increased 65.8% between the same periods. Because market funding rates rose
      steadily throughout the intervening twelve months, the net interest margin
      declined to 2.44% for the second quarter of fiscal 2007 from 2.59% for the
      same
      period the preceding year.





PROVISION
      FOR LOAN LOSSES. The provision for loan losses is intended to establish an
      allowance adequate to cover losses inherent in the loan portfolio as of the
      balance sheet date based upon management's periodic analysis of information
      available at that time. At $100,000, the provision for loan losses for the
      quarter ended December 31, 2006, was $18,000 more than the same quarter last
      fiscal year. The increased concentration of commercial loans warranted the
      increased level of provisions. While management believes the allowance for
      loan
      losses to be sufficient given current information, future events, conditions,
      or
      regulatory directives could necessitate additions to the allowance for loan
      losses that may adversely affect net income.





NONINTEREST
      INCOME. Noninterest income totaled $459,000 for the quarter ended December
      31,
      2006, compared to $1.2 million for the same quarter last year. Last year’s
      quarterly total included a $686,000 pre-tax gain from the sale of a branch
      office facility. Routine noninterest revenues were comparable between the
      comparative quarters.





NONINTEREST
      EXPENSE. At $2.0 million for the quarter ended December 31, 2006, total
      noninterest expense increased significantly from the same quarter in fiscal
      2006
      due in large part to ongoing personnel and other overhead expenses associated
      with the merger. Net occupancy and equipment expenses also reflected the impact
      of the new corporate headquarters that was placed in service in April 2006.
      The
      amortization of intangible assets more than doubled to $41,000 for the most
      recent quarter. The change is attributed primarily to the amortization of a
      $942,000 core deposit intangible that resulted from the merger. This asset
      is
      being amortized using the straight-line method over a ten year period. Despite
      these items, noninterest expenses relative to average assets declined 19 basis
      points to an annualized 2.29%.





INCOME
      TAXES. Effective tax rates for the quarters ended December 31, 2006 and 2005
      approximated 25.1% and 33.5%, respectively. The variance between the comparable
      quarters was attributed to the tax benefits generated by bank-qualified
      municipal securities relative to the levels of income before taxes.





COMPARISON
      OF OPERATING RESULTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2006, AND
      2005





GENERAL.
      Due largely to the gain from the December 2005 sale of a branch facility,
      earnings through the first half of fiscal 2007 were well below the same period
      in fiscal 2006. In addition, the net interest margin continued to narrow.
      Although routine noninterest revenues were generally on par with last year’s,
      noninterest expenses increased substantially due to personnel and facilities
      added in the merger, costs associated with the new corporate headquarters,
      and
      the continued growth of the commercial lending function.





Overall,
      net income for the six months ended December 31, 2006, decreased 55.6% to
      $401,000 from $903,000 for the six months ended December 31, 2005. Consequently,
      the annualized return on average assets declined to 0.25% for the six months
      ended December 31, 2006, from 0.65% for the same period last year. Similarly,
      the return on average equity decreased to 2.57% from 6.17% for the comparative
      six-month periods.





NET
      INTEREST INCOME. Net interest income increased 7.4% to $3.6 million for the
      six
      months ended December 31, 2006, compared to the same period a year earlier.
      Total interest income increased 33.6% between the comparable periods due in
      part
      to the earning assets acquired in the merger with Home Building Bancorp along
      with a 75 basis point improvement in the average yield on earning assts.
      Similarly, the average rate on costing liabilities rose 95 basis points between
      the comparable six-month periods. Consequently, the net interest margin declined
      to 2.41% for the first six months of fiscal 2007 from 2.63% for the same period
      the preceding fiscal year.





13


PROVISION
      FOR LOAN LOSSES. The provision for loan losses is intended to establish an
      allowance adequate to cover losses inherent in the loan portfolio as of the
      balance sheet date based upon management's periodic analysis of information
      available at that time. At $195,000, the provision for loan losses for the
      six
      months ended December 31, 2006, was $38,000 more than the same six-month period
      in fiscal 2006. Net charge-offs, which typically are related to the automobile
      loan portfolio, totaled $64,000 for the most recent six months versus $186,000
      for the first half of last fiscal year. The higher concentration of commercial
      loans warranted the increased level of provisions. While management believes
      the
      allowance for loan losses to be sufficient given current information, future
      events, conditions, or regulatory directives could necessitate additions to
      the
      allowance for loan losses that may adversely affect net income.





NONINTEREST
      INCOME. Noninterest income totaled $960,000 for the six months ended December
      31, 2006, compared to $1.7 million for the same period the preceding year.
      The
      sale of a branch office facility in December 2005 accounted for most of the
      variance. Routine noninterest revenues were comparable between the comparative
      six-month spans.





NONINTEREST
      EXPENSE. At $3.8 million for the six months ended December 31, 2006, total
      noninterest expense increased 10.0% from the same period in fiscal 2006. The
      absorption of the former Home Building Savings Bank staff accounted for the
      increase in salaries and employee benefits. In addition to the facilities
      acquired via the merger, net occupancy and equipment expenses also reflected
      the
      impact of the new corporate headquarters that was placed in service in April
      2006. The amortization of intangible assets increased 57.3% due to the $942,000
      core deposit intangible that resulted from the recent merger. This asset is
      being amortized using the straight-line method over a ten year period. Despite
      these items, noninterest expenses relative to average assets declined 16 basis
      points to an annualized 2.35%.





INCOME
      TAXES. Effective tax rates for the six months ended December 31, 2006 and 2005
      approximated 23.1% and 34.2%, respectively. The variance between the comparable
      quarters was attributed to the tax benefits generated by bank-qualified
      municipal securities relative to the levels of income before taxes.





LIQUIDITY
      AND CAPITAL RESOURCES





Federal
      regulations require First Federal to maintain liquidity commensurate with safe
      and sound operations. Such liquidity may include both existing assets and access
      to reliable funding sources. To this end, First Federal maintains an adequate
      level of liquidity to ensure the availability of sufficient funds to fund loan
      originations and deposit withdrawals, to satisfy other financial commitments,
      and to take advantage of investment opportunities. First Federal invests excess
      funds in overnight deposits and other short-term interest-bearing assets to
      provide liquidity to meet these needs. At December 31, 2006, bank-only cash
      and
      cash equivalents totaled $10.6 million, or 2.9% of total assets. First Federal
      also had marketable securities, excluding a small inventory of negotiable CDs,
      totaling $81.8 million, of which, 80.9% were classified “available for sale.” At
      the same time, First Federal had net commitments to fund loans, including loans
      in process, of $2.5 million.





Retail
      certificates of deposit scheduled to mature in one year or less totaled $84.4
      million at December 31, 2006. Based upon historical experience, management
      believes the majority of maturing certificates of deposit will remain with
      First
      Federal. Management of First Federal believes it can adjust the offering rates
      of certificates of deposit to retain deposits in changing interest rate
      environments. If a significant portion of these deposits are not retained by
      First Federal, First Federal would be able to utilize FHLB advances and other
      wholesale sources to fund deposit withdrawals. This could result in an increase
      in interest expense to the extent that the average rate paid on wholesale funds
      generally exceeds the average rate paid on retail deposits of similar
      duration.





Management
      believes its ability to generate funds internally will satisfy its liquidity
      needs. However, should First Federal require funds beyond its ability to
      generate them internally, it has the ability to borrow funds from the Federal
      Home Loan Bank. Based on currently pledged collateral, First Federal had
      approximately $18.6 million remaining available to borrow under its credit
      arrangement with the FHLB as of December 31, 2006. In addition, First Federal
      had unpledged collateral sufficient to add another $26.1 million of borrowing
      capacity with the FHLB.





14





Office
      of
      Thrift Supervision regulations require First Federal to maintain specific
      amounts of capital. As of December 31, 2006, First Federal exceeded its minimum
      capital requirements as the following table illustrates.





Regulatory
                Minimum
            
            Well
                Capitalized perActual
            
            Required
                Capital
            
            12
                CFR Part 565Amount
            
            Ratio
            
            Amount
            
            Ratio
            
            Amount
            
            Ratio(Dollars
                in Thousands)As
                of December 31, 2006 (unaudited)Total
                capital (to risk weighted assets)
            
            $
            25,500
            
            
            10.32
            %
            $
            19,767
            
            
            8.00
            %
            $
            24,709
            
            
            10.00
            %Tier
                I capital (to risk weighted assets)
            
            
            25,422
            
            
            9.86
            
            
            9,884
            
            
            4.00
            
            
            14,825
            
            
            6.00Tier
                I capital (to adjusted total assets)
            
            
            25,422
            
            
            7.11
            
            
            14,294
            
            
            4.00
            
            
            17,868
            
            
            5.00As
                of June 30, 2006Total
                capital (to risk weighted assets)
            
            $
            25,930
            
            
            12.66
            %
            $
            16,387
            
            
            8.00
            %
            
            20,483
            
            
            10.00
            %Tier
                I capital (to risk weighted assets)
            
            
            26,407
            
            
            12.28
            
            
            8,193
            
            
            4.00
            
            
            12,290
            
            
            6.00Tier
                I capital (to adjusted total assets)
            
            
            26,407
            
            
            8.99
            
            
            11,743
            
            
            4.00
            
            
            14,679
            
            
            5.00





The
      Company’s fourth stock repurchase program was announced on August 24, 2006, to
      acquire up to 77,000 shares, or 5%, of the outstanding shares. This repurchase
      program, as with the previous programs, has been undertaken to enhance
      shareholder value and to provide liquidity for the otherwise thinly traded
      shares. The repurchase programs generally have been conducted through open
      market purchases, although unsolicited negotiated transactions or other types
      of
      repurchases have been considered. The Company’s previously announced third stock
      repurchase program to acquire up to 80,000 was completed during the most recent
      quarter. As of December 31, 2006, 1,570 shares had been repurchased under the
      fourth stock repurchase program leaving 75,430 shares to be
      purchased.





The
      following chart summarizes stock repurchase activity during the most recent
      quarter.


Period
              
              Total
                  Number of Shares Purchased
              
              Average
                  Price Paid per Share
              
              Total
                  Number of Shares Purchased as Part of Publicly Announced Plans
                  or
                  Programs
              
              Maximum
                  Number of Shares that May Yet Be Purchased Under the Plans or
                  ProgramsOctober
                  1, 2006 through October 31, 2006
              
              
              0
              
              
              N/A
              
              
              N/A
              
              
              86,533November
                  1, 2006 through November 30, 2006
              
              
              11,103
              
              $
              19.07
              
              
              11,103
              
              
              75,430December
                  1, 2006 through December 31, 2006
              
              
              0
              
              
              N/A
              
              
              N/A
              
              
              75,430Total
              
              
              11,103
              
              $
              19.07
              
              
              11,103




CRITICAL
      ACCOUNTING POLICIES





ALLOWANCE
      FOR LOAN LOSSES. The allowance for loan losses is established through a
      provision for loan losses charged to earnings at the time losses are estimated
      to have occurred. Loan losses are charged against the allowance when management
      believes the uncollectibility of a loan balance is confirmed. Subsequent
      recoveries, if any, are credited to the allowance.





15





The
      allowance for loan losses is evaluated on a regular basis by management and
      is
      based upon management’s periodic review of the collectibility of the loans in
      light of historical experience, the nature and volume of the loan portfolio,
      adverse situations that may affect the borrower’s ability to repay, estimated
      value of any underlying collateral and prevailing economic conditions. This
      evaluation is inherently subjective as it requires estimates that are
      susceptible to significant revision as more information becomes
      available.





A
      loan is
      considered impaired when, based on current information and events, it is
      probable that the Bank will be unable to collect the scheduled payments of
      principal or interest when due according to the contractual terms of the loan
      agreement. Factors considered by management in determining impairment include
      payment status, collateral value and the probability of collecting scheduled
      principal and interest payments when due. Loans that experience insignificant
      payment delays and payment shortfalls generally are not classified as
      impaired.





Management
      determines the significance of payment delays and payment shortfalls on a
      case-by-case basis, taking into consideration all of the circumstances
      surrounding the loan and the borrower, including the length of the delay, the
      reasons for the delay, the borrower’s prior payment record and the amount of the
      shortfall in relation to the principal and interest owed. Impairment is measured
      on a loan-by-loan basis for commercial and construction loans by either the
      present value of expected future cash flows discounted at the loan’s effective
      interest rate, the loan’s obtainable market price or the fair value of the
      collateral if the loan is collateral dependent.





Large
      groups of smaller balance homogenous loans are collectively evaluated for
      impairment. Accordingly, the Bank does not separately identify individual
      consumer and residential loans for impairment disclosures.





RECENT
      ACCOUNTING PRONOUNCEMENTS





In
      March
      2006, FASB issued Statement of Financial Accounting Standards 156 (SFAS 156),
      Accounting for Servicing of Financial Assets, an amendment of FASB Statement
      No.
      140, Accounting for Transfers and Servicing of Financial Assets and
      Extinguishments of Liabilities. SFAS 156 will be effective for the Company
      beginning July 1, 2007. SFAS 156 requires all separately recognized servicing
      assets and servicing liabilities be initially measured at fair value, if
      practicable, and permits for subsequent measurement using either fair value
      measurement with changes in fair value reflected in earnings or the amortization
      and impairment requirements of Statement No. 140. The subsequent measurement
      of
      separately recognized servicing assets and servicing liabilities at fair value
      eliminates the necessity for entities that manage the risks inherent in
      servicing assets and servicing liabilities with derivatives to qualify for
      hedge
      accounting treatment and eliminates the characterization of declines in fair
      value as impairments or direct write-downs. We are currently evaluating the
      effect of the recognition and measurement provisions of SFAS 156, but we
      currently believe the adoption of SFAS 156 will not result in a material impact
      on the Company’s results of operations or financial condition.





In
      September 2006, the FASB issued Statement No. 157, Fair Value Measurements.
      This
      Statement defines fair value, establishes a framework for measuring fair value
      and expands disclosures about fair value measurements. Although this statement
      does not require any new fair value measurements, the application of this
      Statement may change current practices. The new standard will be effective
      for
      the Company beginning July 1, 2008. The Company has not completed its evaluation
      of the impact of the adoption of SFAS No. 157.





In
      September 2006, the Securities Exchange Commission issued Staff Accounting
      Bulletin No. 108, Considering the Effects of Prior Year Misstatements When
      Quantifying Misstatements in Current Year Financial Statements (SAB 108), which
      provides interpretive guidance on the consideration of the effects of prior
      year
      misstatements in quantifying current year misstatements for the purpose of
      a
      materiality assessment. SAB 108 is effective for fiscal years ending after
      November 15, 2006. The Company does not believe that the application of SAB
      108
      will have a material impact on its financial condition and results of operations
      for the current fiscal year.





16


ITEM
      3.


CONTROLS
      AND PROCEDURES




The
      Company’s management, including the Company’s principal executive officer and
      principal financial officer, have evaluated the effectiveness of the Company’s
“disclosure controls and procedures,” as such term is defined in Rule 13a-15(e)
      promulgated under the Securities Exchange Act of 1934, as amended, (the
“Exchange Act”). Based upon their evaluation, the principal executive officer
      and principal financial officer concluded that, as of the end of the period
      covered by this report, the Company’s disclosure controls and procedures were
      effective for the purpose of ensuring that the information required to be
      disclosed in the reports that the Company files or submits under the Exchange
      Act with the Securities and Exchange Commission (the “SEC”) (1) is
      recorded, processed, summarized and reported within the time periods specified
      in the SEC’s rules and forms, and (2) is accumulated and communicated to
      the Company’s management, including its principal executive and principal
      financial officers, as appropriate to allow timely decisions regarding required
      disclosure.





17




PART
      II.
      OTHER INFORMATION





ITEM
      1.


LEGAL
      PROCEEDINGS.





Periodically,
      there have been various claims and lawsuits involving the Company and First
      Federal, such as claims to enforce liens, condemnation proceedings on properties
      in which First Federal holds security interests, claims involving the making
      and
      servicing of real property loans and other issues incident to First Federal's
      business. In the opinion of management, after consultation with the Company's
      and First Federal's legal counsel, no significant loss is expected from any
      of
      such pending claims or lawsuits. Neither the Company nor First Federal is a
      party to any material pending legal proceedings.





ITEM
      2.


UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.





See
      “Liquidity and Capital Resources” in Part I for information regarding stock
      repurchase activity during the quarter.





ITEM
      3.


DEFAULTS
      UPON SENIOR SECURITIES.





None.





ITEM
      4.


SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS.





The
      Annual Meeting of Stockholders of the Company was held on November 15, 2006.
      The
      results of the votes on the matters presented at the meeting are as
      follows:





1.
            The
                following individuals were elected as directors, each for a three-year
                term:


Vote
                  For
              
              Vote
                  WithheldTimothy
                  A. Flesch
              
              
              1,307,285
              
              
              13,807Michael
                  H. Head
              
              
              1,309,085
              
              
              12,007





2.
            The
                appointment of BKD LLP as auditors for the Company for the fiscal
                year
                ending June 30, 2007, was ratified by stockholders by the following
                vote:




For
              1,317,917
              Against
              3,100
              Abstain
              75





ITEM
      5.


OTHER
      INFORMATION.





None.





ITEM
      6.


EXHIBITS.





31.1
            Rule
                13a-14(a)/15d-14(a) Chief Executive Officer
                Certification.





31.2
            Rule
                13a-14(a)/15d-14(a) Chief Financial Officer
                Certification.





32.0
            Section
                1350 Certifications.





18


SIGNATURES





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.


FIRST
                BANCORP OF INDIANA, INC.Dated:
              February 13, 2007
            By:
            /s/
              Michael H. HeadMichael
                H. Head
              President
                and Chief Executive Officer
              (principal
                executive officer)




Dated: February 13, 2007
            By:
            /s/
              George J. SmithGeorge
                J. Smith
              Treasurer
                and Chief Financial Officer
              (principal
                financial and accounting officer)