SECURITIES & EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

(Mark One)

[X]  Annual report  pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934

     For the fiscal year ended December 31, 2003

                                       or

[ ]  Transition  report  pursuant  to  Section  13 or  15(d)  or the  Securities
     Exchange Act of 1934

           For the transition period from ___________ to _____________


                  Commission file number:                0-18847

                              HOME FEDERAL BANCORP
             (Exact name of registrant as specified in its charter)

                 Indiana                                35-1807839
        (State or other jurisdiction                  (I.R.S. Employer
     of incorporation or organization)               Identification No.)

                 501 Washington Street, Columbus, Indiana        47201
               (Address of Principal Executive Offices)        (Zip Code)

         Registrant's telephone number including area code: (812) 522-1592

         Securities registered pursuant to Section 12(b) of the Act:

                                      None

     Securities registered pursuant to Section 12(g) of the Act:

                           Common Stock, no par value
                                       and
                          Common Share Purchase Rights
                                (Title of Class)

Indicate by check mark whether the Registrant (l) 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 if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K (229.405 of this chapter) is not contained  herein,  and will
not be contained,  to the best of registrant's knowledge, in definitive proxy or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]

Indicate  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act. YES __X___ NO ______

<PAGE>


The aggregate market value of the issuer's voting stock held by  non-affiliates,
as of June 30, 2003, was $89.8 million.

The number of shares of the registrant's Common Stock, no par value, outstanding
as of March 10, 2004, was 4,247,006 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions  of the  Annual  Report to  Shareholders  for the twelve  months  ended
December  31,  2003,  are  incorporated  into  Part II.  Portions  of the  Proxy
Statement for the annual meeting of  shareholders  to be held on April 27, 2004,
are incorporated into Part I and Part III.


                            Exhibit Index on Page 34
                               Page 2 of 40 Pages

<PAGE>


                              HOME FEDERAL BANCORP

                                    FORM 10-K

                                      INDEX

Forward Looking Statements                                                     4

Item 1.    Business                                                            4

Item 2.    Properties                                                         26

Item 3.    Legal Proceedings                                                  28

Item 4.    Submission of Matters to a Vote of Security Holders                28

Item 4.5   Executive Officers of Home Federal Bancorp                         28

Item 5.    Market for Registrant's Common Equity,
           Related Stockholder Matters, And Issuer Purchases
           of Equity Securities                                               28

Item 6.    Selected Financial Data                                            30

Item 7.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                          30

Item 7.A   Quantitative and Qualitative Disclosures About Market Risk         30

Item 8.    Financial Statements and Supplementary Data                        30

Item 9.    Changes in and Disagreements with Accountants on
           Accounting and Financial Disclosure                                30

Item 9A.   Controls and Procedures                                            30

Item 10.   Directors and Executive Officers of the Registrant                 30

Item 11.   Executive Compensation                                             31

Item 12.   Security Ownership of Certain Beneficial Owners
           and Management and Related Stockholder Matters                     31

Item 13.   Certain Relationships and Related Transactions                     31

Item 14.   Principal Accountant Fees and Services                             31

Item 15.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K   32

Signatures                                                                    33

Certifications                                                                38


<PAGE>


FORWARD LOOKING STATEMENTS

This  Annual  Report on Form  10-K  ("Form  10-K")  contains  statements,  which
constitute  forward  looking  statements  within  the  meaning  of  the  Private
Securities Litigation Reform Act of 1995. These statements appear in a number of
places in this Form 10-K and include  statements  regarding the intent,  belief,
outlook,  estimate  or  expectations  of the Company  (as  defined  below),  its
directors or its officers primarily with respect to future events and the future
financial  performance  of the Company.  Readers of this Form 10-K are cautioned
that any such forward looking  statements are not guarantees of future events or
performance  and involve risks and  uncertainties,  and that actual  results may
differ  materially from those in the forward  looking  statements as a result of
various  factors.  The  accompanying  information  contained  in this  Form 10-K
identifies  important factors that could cause such  differences.  These factors
include  changes in interest  rates,  loss of deposits  and loan demand to other
financial  institutions,  substantial  changes in financial markets,  changes in
real estate values and the real estate market,  regulatory  changes,  changes in
the  financial  condition  of the  issuers  of  the  Company's  investments  and
borrowers,  changes in the  economic  condition  of the  Company's  market area,
increases in  compensation  and employee  expenses or  unanticipated  results in
pending legal proceedings.

                                     PART I

Item 1.  Business

General

     Home  Federal  Bancorp (the  "Company" or "HFB") is an Indiana  corporation
organized  as  a  bank  holding  company  authorized  to  engage  in  activities
permissible for a financial holding company.  The principal asset of the Company
consists of 100% of the issued and outstanding capital stock of HomeFederal Bank
("HomeFederal" or the "Bank").

     HomeFederal  Bank began  operations in Seymour,  Indiana under the name New
Building and Loan Association in 1908. The Bank received its federal charter and
changed  its name to Home  Federal  Savings  and Loan  Association  in 1950.  On
November 9, 1983,  Home Federal  Savings and Loan  Association  became a federal
savings bank and its name was changed to Home Federal  Savings  Bank. On January
14,  1988,  Home Federal  Savings  Bank  converted to stock form and on March 1,
1993, Home Federal Savings Bank reorganized by converting each outstanding share
of its  common  stock  into one share of common  stock of the  Company,  thereby
causing the Company to be the holding  company of Home Federal  Savings Bank. On
December 31, 2001 Home Federal Savings Bank completed a charter conversion to an
Indiana  commercial  bank,  which is a member of the Federal Reserve System.  On
September 24, 2002,  the Company  announced a change in its fiscal year end from
June 30 to December 31.

     On  October  22,  2002,  Home  Federal  Savings  Bank  changed  its name to
HomeFederal Bank.  HomeFederal Bank currently provides services through its main
office at 501  Washington  Street in Columbus,  Indiana,  seventeen full service
branches  located in south  central  Indiana and the STAR  network of  automated
teller machines at sixteen locations in Seymour,  Columbus, North Vernon, Salem,
Madison,  Bloomington,  Edinburgh,  Shelbyville,  Batesville and Greenwood. As a
result, HomeFederal serves primarily Bartholomew,  Jackson, Jefferson, Jennings,
Scott,  Ripley,  Decatur,  Marion,  Monroe,  Johnson and Washington  Counties in
Indiana.  HomeFederal  also  participates  in the  nationwide  electronic  funds
transfer networks known as Plus System, Inc. and Cirrus System.

     Online banking and telephone banking are also available to HomeFederal Bank
customers.  Online banking services are accessed through the Company's  website,
www.homf.com.  In addition to online  banking  services,  the Company also makes
available,  free of charge at the website,  the Company's  annual report on Form
10-K,  quarterly  reports  on Form  10-Q,  current  reports  on Form 8-K and any
amendments  to those  reports  filed  pursuant to Section  13(a) or 15(d) of the
Securities  Exchange Act of 1934 as soon as  reasonably  practicable  after such
material is electronically  filed with the SEC. The information on the Company's
website is not incorporated into this Form 10-K.

     Management  analyzes the  operation of Home  Federal  Bancorp  assuming one
operating  segment,  community banking services.  HomeFederal Bank directly and,
through its service  corporation  subsidiary,  indirectly offers a wide range of
consumer and commercial community banking services.  These services include: (i)
residential and commercial real estate loans; (ii) NOW checking accounts;  (iii)
regular and term savings accounts and savings  certificates;  (iv)  full-service
securities  brokerage  services;  (v) consumer  loans;  (vi) debit cards;  (vii)
business  credit  cards;  (viii)  annuity  and  life  insurance  products;  (ix)
Individual Retirement Accounts and Keogh plans; (x) commercial loans; (xi) trust
services: and (xii) commercial demand deposit accounts.

     HomeFederal  Bank's  primary  source of revenue is  interest  from  lending
activities.  Its principal  lending  activity is the origination of conventional
mortgage loans to enable borrowers to purchase or refinance  one-to-four  family
residential real property.  These loans are generally secured by first mortgages
on the property and constituted  27.0% of the Bank's loans at December 31, 2003.
Virtually  all of the real  estate  loans  originated  by  HomeFederal  Bank are
secured  by  properties  located  in  Indiana,  although  HomeFederal  Bank  has
authority to make or purchase real estate loans throughout the United States. In
addition,  HomeFederal  Bank makes secured and unsecured  consumer related loans
(including consumer auto loans, second mortgage,  home equity,  mobile home, and
savings  account  loans)  and  commercial  loans  secured  by  mortgages  on the
underlying property. At December 31, 2003, approximately 17.3% of its loans were
consumer-related  loans and  25.9% of its loans  were  commercial  mortgage  and
multi-family  loans.  HomeFederal  Bank also  makes  construction  loans,  which
constituted  14.3% of  HomeFederal  Bank's loans at December 31, 2003.  Finally,
HomeFederal Bank makes commercial loans, which constituted 15.0% of its loans at
December 31, 2003.
<PAGE>
Lending Activities

Loan Portfolio Data

     The following two tables set forth the composition of HomeFederal Bank's
loan porfolio by loan type and security type as of the dates indicated. The
third table represents a reconciliation of gross loans receivable after
consideration of undisbursed portions of loans in process, deferred loans, and
the allowance for loan losses.
<TABLE>
<CAPTION>

                                               --------------------  -------------------   -----------------------------------------
                                                  Dec 31, 2003          Dec 31, 2002         June 30, 2002        June 30, 2001
                                                 Amount   Percent     Amount   Percent      Amount   Percent      Amount   Percent
                                                 ------   -------     ------   -------      ------   -------      ------   -------
TYPE OF LOAN                                          (Dollars in Thousands)
First mortgage loans:
<S>                                          <C>             <C>   <C>            <C>    <C>            <C>   <C>             <C>
     One-to-four family residential loans    $    178,159    27.0% $   195,255    29.9%  $   214,565    32.6% $    270,124    38.2%
     Commercial and multi-family                  171,397    25.9%     183,369    28.1%      172,495    26.2%      153,169    21.6%
     Loans on property under construction          94,431    14.3%      63,017     9.6%       54,639     8.3%       67,789     9.6%
     Loans on unimproved acreage                    3,201     0.5%       2,795     0.4%        4,712     0.7%        5,017     0.7%
Second mortgage, home equity                       80,044    12.1%      80,274    12.3%       85,819    13.0%       94,140    13.3%
Commercial loans                                   99,085    15.0%      90,063    13.8%       86,435    13.1%       74,687    10.5%
Consumer loans                                      4,221     0.6%       4,681     0.7%        4,535     0.7%        5,864     0.8%
Auto loans                                         23,244     3.5%      25,149     3.8%       25,355     3.9%       25,852     3.6%
Mobile home loans                                   4,365     0.7%       5,834     0.9%        6,625     1.0%        8,308     1.2%
Savings accounts loans                              2,736     0.4%       3,018     0.5%        3,092     0.5%        3,738     0.5%
                                               --------------------  -------------------   -------------------  --------------------
     Gross loans receivable                  $    660,883   100.0% $   653,455   100.0%  $   658,272   100.0% $    708,688   100.0%
                                               ====================  ===================   ===================  ====================

TYPE OF SECURITY
Residential:
     One-to-four family                      $    280,942    42.5% $   293,886    45.0%  $   320,256    48.6% $    388,770    55.0%
     Multi-dwelling units                          22,034     3.3%      22,767     3.5%       29,640     4.5%       34,008     4.8%
Commercial real estate                            221,055    33.5%     205,262    31.4%      177,622    27.0%      162,444    22.9%
Commercial                                         99,085    15.0%      90,063    13.8%       86,435    13.1%       74,687    10.5%
Mobile home                                         4,365     0.7%       5,834     0.9%        6,625     1.0%        8,308     1.2%
Savings account                                     2,736     0.4%       3,018     0.5%        3,092     0.5%        3,738     0.5%
Auto                                               23,244     3.5%      25,149     3.8%       25,355     3.9%       25,852     3.6%
Other consumer                                      4,221     0.6%       4,681     0.7%        4,535     0.7%        5,864     0.8%
Land acquisition                                    3,201     0.5%       2,795     0.4%        4,712     0.7%        5,017     0.7%
                                               --------------------  -------------------   -------------------  --------------------
     Gross loans receivable                  $    660,883   100.0% $   653,455   100.0%  $   658,272   100.0% $    708,688   100.0%
                                               ====================  ===================   ===================  ====================

LOANS RECEIVABLE-NET
Gross loans receivable                       $    660,883   104.8% $   653,455   103.9%  $   658,272   104.2% $    708,688   105.1%
Deduct:
Undisbursed portion of loans in process           (22,150)   -3.5%     (16,856)   -2.7%      (19,498)   -3.1%      (27,999)   -4.2%
Deferred net loan fees                               (555)   -0.1%        (544)   -0.1%         (508)   -0.1%         (447)   -0.1%
Allowance for loan losses                          (7,506)   -1.2%      (7,172)   -1.1%       (6,451)   -1.0%       (5,690)   -0.8%
                                               --------------------  -------------------   -------------------  --------------------
     Net loans receivable                    $    630,672   100.0% $   628,883   100.0%  $   631,815   100.0% $    674,552   100.0%
                                               ====================  ===================   ===================  ====================
</TABLE>

TABLE CONTINUES ON FOLLOWING PAGE

<PAGE>
Lending Activities (Cont'd.)
<TABLE>
<CAPTION>

                                                    -------------------------------------
                                                     June 30, 2000        June 30, 1999
                                                    Amount   Percent     Amount   Percent
                                                    ------   -------     ------   -------
TYPE OF LOAN
First mortgage loans:
<S>                                             <C>             <C>   <C>            <C>
     One-to-four family residential loans       $    282,555    41.3% $   248,846    41.0%
     Commercial and multi-family                     102,974    15.1%     107,908    17.8%
     Loans on property under construction             89,248    13.0%      65,997    10.9%
     Loans on unimproved acreage                      17,440     2.5%      11,611     1.9%
Second mortgage, home equity                          85,300    12.5%      68,873    11.3%
Commercial loans                                      60,948     8.9%      56,956     9.4%
Consumer loans                                         9,446     1.4%       9,250     1.5%
Auto loans                                            22,587     3.3%      21,764     3.6%
Mobile home loans                                      9,963     1.5%      12,048     2.0%
Savings accounts loans                                 3,625     0.5%       3,826     0.6%
                                                  --------------------  -------------------
     Gross loans receivable                     $    684,086   100.0% $   607,079   100.0%
                                                  ====================  ===================

TYPE OF SECURITY
Residential:
     One-to-four family                         $    409,174    59.9% $   347,049    57.2%
     Multi-dwelling units                             32,937     4.8%      30,358     5.0%
Commercial real estate                               117,966    17.2%     114,217    18.8%
Commercial                                            60,948     8.9%      56,956     9.4%
Mobile home                                            9,963     1.5%      12,048     2.0%
Savings account                                        3,625     0.5%       3,826     0.6%
Auto                                                  22,587     3.3%      21,764     3.6%
Other consumer                                         9,446     1.4%       9,250     1.5%
Land acquisition                                      17,440     2.5%      11,611     1.9%
                                                  --------------------  -------------------
     Gross loans receivable                     $    684,086   100.0% $   607,079   100.0%
                                                  ====================  ===================

LOANS RECEIVABLE-NET
Gross loans receivable                          $    684,086   104.9% $   607,079   103.4%
Deduct:
Undisbursed portion of loans in process              (26,628)   -4.1%     (15,285)   -2.6%
Deferred net loan fees                                  (502)   -0.1%        (527)   -0.1%
Allowance for loan losses                             (4,949)   -0.8%      (4,349)   -0.7%
                                                  --------------------  -------------------
     Net loans receivable                       $    652,007   100.0% $   586,918   100.0%
                                                  ====================  ===================
</TABLE>


<PAGE>


     The following tables  summarize the contractual  maturities for HomeFederal
Bank's   loan   portfolio   (including    participations   and   mortgage-backed
certificates) for the fiscal periods indicated and the interest rate sensitivity
of loans due after one year:
<TABLE>
<CAPTION>

                                      Balance                                    Maturities in Fiscal
                                    Outstanding                                                        2007           2009
                                  At December 31,                                                       to             to
                                      2003              2004             2005           2006           2008           2013
                                      ----              ----             ----           ----           ----           ----
                                                                                   (In Thousands)

<S>                            <C>                <C>              <C>            <C>             <C>            <C>
Real estate                    $         352,757  $         2,655  $          773 $        7,977  $      24,247  $     103,513
Mortgage-backed
      certificates,
      collateralized
      mortgage obligations                50,502               53               0            166          1,665         27,909
Construction Loans                        94,431           29,113          10,435              0         12,438         17,518
Commercial loans                          99,085           46,224          11,875         13,450         12,173         10,944
Other loans                              114,610            8,001           7,556         14,221         38,497         26,494
                                 ----------------   --------------   -------------  -------------   ------------   ------------
      Total                    $         711,385  $        86,046  $       30,639 $       35,814  $      89,020  $     186,378
                                 ================   ==============   =============  =============   ============   ============
</TABLE>


TABLE ABOVE CONTINUES BELOW
<TABLE>
<CAPTION>
                                 2014            2018
                                  to             and
                                 2018         thereafter
                                 ----         ----------


<S>                            <C>         <C>
Real estate                    $   56,229  $      157,363
Mortgage-backed
      certificates,
      collateralized
      mortgage obligations          6,640          14,069
Construction Loans                  2,474          22,453
Commercial loans                    1,731           2,688
Other loans                        10,590           9,251
                               -----------   -------------
      Total                    $   77,664  $      205,824
                               ===========   =============
</TABLE>


Interest Rate Sensitivity:
<TABLE>
<CAPTION>
                                                            Due After December 31, 2004
                                                    ---------------------------------------------
                                                        Fixed                     Variable Rate
                                                        Rate                       and Balloon
                                                        -----                     -------------
                                                                 (In Thousands)

<S>                                               <C>                             <C>
Real estate                                       $        43,259                 $      306,843
Mortgage-backed certificates,
      collateralized mortgage obligations                  50,268                            181
Construction Loans                                          4,173                         61,145
Commercial loans                                           16,487                         36,374
Other loans                                                75,555                         31,054
                                                    --------------                  -------------
      Total                                       $       189,742                 $      435,597
                                                    ==============                  =============

</TABLE>



Residential Mortgage Loans

     HomeFederal Bank is authorized to make one-to-four family residential loans
without any limitation as to interest rate,  amount,  or number of interest rate
adjustments.   Pursuant  to  federal  regulations,   if  the  interest  rate  is
adjustable,  the  interest  rate must be  correlated  with  changes in a readily
verifiable  index.  HomeFederal  Bank  also  makes  residential  and  commercial
mortgage  loans secured by mid-size  multi-family  dwelling  units and apartment
complexes.  The  residential  mortgage  loans  included  in  HomeFederal  Bank's
portfolio  are primarily  conventional  loans.  As of December 31, 2003,  $202.3
million,  or 30.6%,  of  HomeFederal  Bank's total loan  portfolio  consisted of
residential  first  mortgage  loans,  $178.2  million,  or 27.0%,  of which were
secured by one- to four-family homes.

     Many of the  residential  mortgage loans  currently  offered by HomeFederal
Bank have  adjustable  rates.  These loans  generally  have interest rates which
adjust (up or down)  semi-annually  or annually,  with maximum  rates which vary
depending upon when the loans are written and  contractual  floors and ceilings.
The  adjustment  for the  majority  of these loans is  currently  based upon the
weekly average of the one-year Treasury constant maturity rate.

     The rates offered on  HomeFederal  Bank's  adjustable-rate  and  fixed-rate
residential  mortgage  loans are  competitive  with the rates  offered  by other
financial institutions in its south central Indiana market area.

     Although  HomeFederal  Bank's  residential  mortgage  loans are written for
amortization  terms up to 30 years,  due to  prepayments  and  refinancing,  its
residential mortgage loans in the past have generally remained outstanding for a
substantially  shorter  period  of time  than  the  maturity  terms  of the loan
contracts.

     All of the  residential  mortgages  HomeFederal  Bank currently  originates
include "due on sale" clauses,  which give HomeFederal Bank the right to declare
a loan  immediately due and payable in the event that,  among other things,  the
borrower  sells or  otherwise  disposes  of the  real  property  subject  to the
mortgage and the loan is not repaid.  HomeFederal  Bank utilizes the due on sale
clause as a means of protecting  the funds loaned by insuring  payoff on sale of
the property collateralizing the loan.

     Under applicable  banking  policies,  HomeFederal Bank must establish loan-
to-value  ratios   consistent  with  supervisory   loan-to-value   limits.   The
supervisory  limits are 65% for raw land loans, 75% for land development  loans,
80% for  construction  loans  consisting of commercial,  multi-family  and other
non-residential  construction,  and  85%  for  improved  property.  Multi-family
construction includes  condominiums and cooperatives.  A loan-to-value limit has
not  been   established   for  permanent   mortgage  or  home  equity  loans  on
owner-occupied  one-to-four family residential  property.  However, for any such
loan with a loan-to-value ratio that exceeds 90% at origination,  an institution
should require  appropriate  credit  enhancement in the form of either  mortgage
insurance  or  readily  marketable   collateral.   The  Board  of  Directors  of
HomeFederal  Bank approved a set of loan-to-value  ratios  consistent with these
supervisory limits.

     It  may  be  appropriate  in  individual  cases  to  originate  loans  with
loan-to-value  ratios in excess of the FDIC limits based on the support provided
by other credit  factors.  The aggregate  amount of all loans in excess of these
limits should not exceed 100 percent of total capital.  Moreover,  loans for all
commercial,   agricultural,   multi-family  or  other   non-one-to-four   family
residential properties should not exceed 30% of total capital.

Commercial Mortgage Loans

     At December  31, 2003,  37.0% of  HomeFederal  Bank's total loan  portfolio
consisted of mortgage  loans secured by commercial  real estate,  of which 10.8%
were commercial  construction  loans.  These properties  consisted  primarily of
apartment buildings,  office buildings,  warehouses,  motels,  shopping centers,
nursing homes,  manufacturing  plants,  and churches located in central or south
central  Indiana.  The commercial  mortgage loans are generally  adjustable-rate
loans,   written  for  terms  not  exceeding  20  years,   and  require  an  85%
loan-to-value ratio.  Commitments for these loans in excess of $1.5 million must
be approved in advance by  HomeFederal  Bank's Board of  Directors.  The largest
such loan as of December 31, 2003 had a balance of $5.8  million.  At that date,
all of  HomeFederal  Bank's  commercial  real estate  loans  consisted  of loans
secured by real estate located in Indiana.

     Generally,  commercial  mortgage loans involve  greater risk to HomeFederal
Bank than residential loans.  Commercial  mortgage loans typically involve large
loan balances to single borrowers or groups of related  borrowers.  In addition,
the  payment  experience  on loans  secured by  income-producing  properties  is
typically dependent on the successful  operation of the related project and thus
may be subject to adverse conditions in the real estate market or in the general
economy.

Construction Loans

     HomeFederal  Bank offers  conventional  short-term  construction  loans. At
December 31, 2003, 14.3% of HomeFederal Bank's total loan portfolio consisted of
construction loans. Normally, a 95% or less loan-to-value ratio is required from
owner-occupants of residential  property, an 80% loan-to-value ratio is required
from persons building residential property for sale or investment purposes,  and
an 80%  loan-to-value  ratio is required for commercial  property.  Construction
loans  are  also  made  to  builders  and  developers  for the  construction  of
residential or commercial  properties on a to-be-occupied or speculative  basis.
Construction normally must be completed in six months for residential loans. The
largest such loan on December 31, 2003 was $8.8 million.

Consumer Loans

     Consumer-related  loans,  consisting  of second  mortgage  and home  equity
loans,  mobile home loans,  automobile loans,  loans secured by savings accounts
and consumer  loans were $114.6  million on December  31, 2003 or  approximately
17.3% of HomeFederal Bank's total loan portfolio.

     Second  mortgage  loans  are  made  for  terms  of 1 - 15  years,  and  are
fixed-rate, fixed term or variable rate line of credit loans. HomeFederal Bank's
minimum  for such loans is $5,000.  HomeFederal  Bank will loan up to 90% of the
appraised value of the property,  less the existing  mortgage  amount(s).  As of
December 31, 2003,  HomeFederal Bank had $44.5 million of second mortgage loans,
which equaled 6.7% of its total loan  portfolio.  HomeFederal  Bank markets home
equity credit lines, which are  adjustable-rate  loans. As of December 31, 2003,
HomeFederal  Bank had $35.5 million  drawn on its home equity loans,  or 5.4% of
its total loan portfolio,  with $72.4 million of additional  credit available to
its borrowers under existing home equity loans.

     Automobile  loans are  generally  made for terms of up to five  years.  The
vehicles are required to be for personal or family use only.  As of December 31,
2003,  $23.2  million,  or 3.5%,  of  HomeFederal  Bank's  total loan  portfolio
consisted of automobile loans.

     As of December 31, 2003, $4.4 million, or 0.7%, of HomeFederal Bank's total
loan portfolio consisted of mobile home loans.  Generally,  these loans are made
for terms of one year for each $1,000.00 of the sales price, with a maximum term
of 15 years. On new mobile home loans,  HomeFederal Bank permits a loan-to-value
ratio of up to 125% of the manufacturer's  invoice price plus sales tax or up to
90% of the actual sales price,  whichever is lower. Also, HomeFederal Bank makes
loans for previously occupied mobile homes up to a 90% loan-to-value ratio based
upon the actual sales price or value as appraised, whichever is lower.

     Loans  secured by  savings  account  deposits  may be made up to 95% of the
pledged  savings  collateral at a rate 2% above the rate of the pledged  savings
account or a rate equal to HomeFederal Bank's highest seven-year  certificate of
deposit  rate,  whichever is higher.  The loan rate will be adjusted as the rate
for the pledged savings account changes.  As of December 31, 2003, $2.7 million,
or 0.4%, of HomeFederal Bank's total loan portfolio consisted of savings account
loans.

     Although  consumer-related  loans generally  involve a higher level of risk
than one-to-four  family  residential  mortgage loans,  their relatively  higher
yields,  lower average balance, and shorter terms to maturity are believed to be
helpful in HomeFederal Bank's asset/liability management.

Commercial Loans

     Collateral for HomeFederal  Bank's commercial loans includes  manufacturing
equipment, real estate, inventory, accounts receivable, and securities. Terms of
these loans are normally for up to ten years and have  adjustable  rates tied to
the reported prime rate and treasury  indexes.  Generally,  commercial loans are
considered  to  involve a higher  degree of risk than  residential  real  estate
loans. However, commercial loans generally carry a higher yield and are made for
a shorter term than real estate loans.  As of December 31, 2003,  $99.1 million,
or 15.0%,  of HomeFederal  Bank's total loan  portfolio  consisted of commercial
loans.

Origination, Purchase and Sale of Loans

     HomeFederal Bank originates  residential  loans in conformity with standard
underwriting  criteria of the Federal Home Loan Mortgage  Corporation  ("FHLMC")
and the  Federal  National  Mortgage  Association  ("FNMA")  to  assure  maximum
eligibility for possible resale in the secondary  market.  Although  HomeFederal
Bank  currently  has  authority to lend  anywhere in the United  States,  it has
confined  its loan  origination  activities  primarily  to the central and south
central  Indiana  area.  HomeFederal  Bank's  loan  originations  are  generated
primarily  from  referrals from real estate  brokers,  builders,  developers and
existing  customers,  newspaper,  radio and periodical  advertising  and walk-in
customers.  HomeFederal  Bank's loan approval  process is intended to assess the
borrower's ability to repay the loan, the viability of the loan and the adequacy
of the value of the property that will secure the loan.

     HomeFederal Bank studies the employment, credit history, and information on
the historical and projected income and expenses of its individual mortgagors to
assess their ability to repay its mortgage loans. Additionally, HomeFederal Bank
utilizes  Freddie Mac's Loan Prospector and Fannie Mae's Desktop  Underwriter as
origination,  processing,  and  underwriting  tools. It uses staff appraisers or
independent  appraisers to appraise the property securing its loans. It requires
title insurance  evidencing  HomeFederal Bank's valid lien on its mortgaged real
estate and a mortgage  survey or survey coverage on all first mortgage loans and
on other loans when  appropriate.  HomeFederal  Bank  requires fire and extended
coverage  insurance  in  amounts  at least  equal to the value of the  insurable
improvements  or the principal  amount of the loan,  whichever is lower.  It may
also require flood insurance to protect the property securing its interest. When
private mortgage insurance is required,  borrowers must make monthly payments to
an escrow account from which HomeFederal Bank makes  disbursements for taxes and
insurance. Otherwise, such escrow arrangements are optional.

     The procedure for approval of loans on property under  construction  is the
same as for  residential  mortgage  loans,  except that the  appraisal  obtained
evaluates  the building  plans,  construction  specifications  and  estimates of
construction  costs, in conjunction  with the land value.  HomeFederal Bank also
evaluates the  feasibility  of the  construction  project and the experience and
track record of the builder or developer.

     Consumer  loans  are  underwritten  on the basis of the  borrower's  credit
history and an analysis of the borrower's income and expenses,  ability to repay
the loan and the value of the collateral, if any.

     In order to generate  loan fee and  servicing  income and recycle funds for
additional  lending  activities,  HomeFederal  Bank  seeks to sell  loans in the
secondary  market.   Loan  sales  can  enable   HomeFederal  Bank  to  recognize
significant  fee income and to reduce  interest  rate risk while  meeting  local
market demand.  HomeFederal  Bank sold $380.5 million of fixed-rate loans in the
fiscal year ended December 31, 2003.  HomeFederal  Bank's current lending policy
is to sell fixed-rate  residential  mortgage loans exceeding 10-year maturities.
In  addition,   when  in  the  opinion  of  management  cash  flow  demands  and
asset/liability  concerns  warrant,   HomeFederal  Bank  will  consider  keeping
fixed-rate  loans with 15-year  maturities.  Typically  HomeFederal Bank retains
adjustable-rate  loans in  portfolio.  HomeFederal  Bank may sell  participating
interests in commercial  real estate loans in order to share the risk with other
lenders.  Mortgage  loans  held for sale are  carried at lower of cost or market
value,  determined on an aggregate basis. The servicing is retained on most loan
sales except Veteran's  Administration  ("VA"),  Federal Housing  Administration
("FHA") and Indiana Housing Finance Authority ("IHFA") loans.

     When loans are sold,  HomeFederal Bank typically retains the responsibility
for collecting and remitting loan payments,  inspecting the properties  securing
the loans,  making  certain that  monthly  principal  and interest  payments and
escrow  payments are made on behalf of borrowers,  and  otherwise  servicing the
loans.  HomeFederal Bank receives a servicing fee for performing these services.
The  amount of fees  received  by  HomeFederal  Bank  varies,  but is  generally
calculated  as an amount equal to 25 basis  points per annum on the  outstanding
principal  amount of the loans  serviced.  The  servicing  fee is  recognized as
income  over the life of the loans.  At  December  31,  2003,  HomeFederal  Bank
serviced $611.6 million of loans sold to other parties. Gains and losses on sale
of loans, loan participations and  mortgage-backed  securities are recognized at
the time of sale.

     Management  believes that purchases of loans and loan participations may be
desirable  and  evaluates  potential  purchases  as  opportunities  arise.  Such
purchases can enable  HomeFederal  Bank to take  advantage of favorable  lending
markets  in  other  parts  of the  state,  diversify  its  portfolio  and  limit
origination  expenses.  Any  participation it acquires in commercial real estate
loans requires a review of financial  information  on the borrower,  a review of
the appraisal on the property by a local designated appraiser,  an inspection of
the property by a senior loan officer, and a financial analysis of the loan. The
seller generally does servicing of loans purchased. At December 31, 2003, others
serviced  approximately 4.0% or $26.4 million,  of HomeFederal Bank's gross loan
portfolio.

<PAGE>

     The  following  table shows loan activity for  HomeFederal  Bank during the
periods indicated:
<TABLE>
<CAPTION>

                                                               Dec 31, 2003   Dec. 31, 2002   June 30, 2002    June 30, 2001
                                                               ------------   -------------   -------------    -------------
                                                                 (Dollars in Thousands)

<S>                                                         <C>            <C>             <C>             <C>
Gross loans receivable at beginning of period               $      653,455 $       658,272 $       708,688 $       684,086
                                                              -------------  --------------  --------------  --------------
     Loans Originated:
     Mortgage loans and contracts:
          Construction loans:
               Residential                                          28,253          16,254          28,970          38,838
               Commercial                                           33,643          20,627          29,468          48,752
          Permanent loans:
               Residential                                          60,225          35,142         124,902         138,016
               Commercial                                           18,721          17,506          32,874          29,723
          Refinancing                                              333,727         205,771         202,000          83,017
          Other                                                      1,227             262           1,321           1,515
                                                              -------------  --------------  --------------  --------------
               Total                                               475,796         295,562         419,535         339,861

     Commercial                                                     65,823          29,321          50,382          50,060
     Consumer                                                       24,200          13,610          28,598          37,155
                                                              -------------  --------------  --------------  --------------
          Total loans originated                                   565,819         338,493         498,515         427,076

     Loans purchased:
          Residential                                                    -               -               -             441
          Other                                                     10,605           7,384           4,271           8,694
                                                              -------------  --------------  --------------  --------------
               Total loans originated and purchased                576,424         345,877         502,786         436,211

     Real estate loans sold                                        381,764         208,264         260,022         132,517
     Loan repayments and other deductions                          187,232         142,430         293,180         279,092
                                                              -------------  --------------  --------------  --------------
          Total loans sold, loan repayments and other deductions   568,996         350,694         553,202         411,609

     Net loan activity                                               7,428          (4,817)        (50,416)         24,602
                                                              -------------  --------------  --------------  --------------
     Gross loans receivable at end of period                       660,883         653,455         658,272         708,688
     Adjustments                                                   (30,211)        (24,572)        (26,457)        (34,136)
                                                              -------------  --------------  --------------  --------------

     Net loans receivable at end of period                  $      630,672 $       628,883 $       631,815 $       674,552
                                                              =============  ==============  ==============  ==============
</TABLE>


     A  commercial  bank  generally  may not make any loan to a borrower  or its
related  entities if the total of all such loans by the commercial  bank exceeds
15% of its capital (plus up to an additional 10% of capital in the case of loans
fully collateralized by readily marketable collateral).  The maximum amount that
HomeFederal  Bank could have loaned to one borrower and the  borrower's  related
entities at December 31,  2003,  under the 15% of capital  limitation  was $14.5
million.  At that date, the highest  outstanding balance of loans by HomeFederal
Bank to one borrower and related entities was  approximately  $12.3 million,  an
amount within such loans-to-one borrower limitations.

Origination and Other Fees

     HomeFederal  Bank  realizes  income from loan related fees for  originating
loans,  collecting late charges and fees for other  miscellaneous loan services.
HomeFederal Bank charges origination fees that range from 0% to 1.0% of the loan
amount.  HomeFederal  Bank  also  charges  processing  fees  of  $150  to  $225,
underwriting  fees  from  $0 to  $150  and a $50 fee  for  any  loan  closed  by
HomeFederal Bank personnel. In addition,  HomeFederal Bank makes discount points
available to customers for the purpose of buying the rate down.  The points vary
from loan to loan and are quoted on an  individual  basis.  In  accordance  with
Financial  Accounting  Standards  Board  Statement  No. 91,  Accounting  for Non
Refundable  Fees and Costs  Associated  with  Originating or Acquiring Loans and
Initial  Direct Costs of Leases,  the Bank amortizes  costs and fees  associated
with originating a loan, over the life of the loan as an adjustment to the yield
earned on the loan. Late charges are assessed fifteen days after payment is due.

<PAGE>


Non-performing Assets

     HomeFederal  Bank assesses  late charges on mortgage  loans if a payment is
not received by the 15th day following its due date.  Any borrower whose payment
was not received by this time is mailed a past due notice.  At the same time the
notice is mailed, the delinquent account is downloaded to a PC- based collection
system and assigned to a specific loan service representative.  The loan service
representative  will  attempt to make contact with the customer via a phone call
to resolve any problem  that might exist.  If contact by phone is not  possible,
mail, in the form of preapproved  form letters,  will be used  commencing on the
25th day following a specific due date.  Between the 30th and 45th day following
any due date, or at the time a second  payment has become due, if no contact has
been made with the  customer,  a  personal  visit  will be  conducted  by a Loan
Service  Department  employee to interview the customer and inspect the property
to determine  the  borrower's  ability to repay the loan.  Prompt follow up is a
goal of the Loan Service Department with any and all delinquencies.

     When an advanced stage of delinquency  appears  (generally  around the 60th
day of  delinquency)  and if  repayment  cannot be expected  within a reasonable
amount of time,  HomeFederal Bank will make a determination of how to proceed to
protect the  interests  of both the  customer and  HomeFederal  Bank.  It may be
necessary for the borrower to attempt to sell the property at HomeFederal Bank's
request.  If a resolution  cannot be arranged,  HomeFederal  Bank will  consider
avenues  necessary  to obtain title to the property  which  include  foreclosure
and/or   accepting  a  deed-in-lieu  of  foreclosure,   whichever  may  be  most
appropriate.  However,  HomeFederal  Bank  attempts to avoid taking title to the
property if at all possible.

     HomeFederal Bank has acquired certain real estate in lieu of foreclosure by
acquiring  title to the real  estate and then  reselling  it.  HomeFederal  Bank
performs an updated title check of the property and, if needed,  an appraisal on
the property before accepting such deeds.

     On December 31, 2003, HomeFederal Bank held $1.7 million of real estate and
other  repossessed  collateral  acquired as a result of  foreclosure,  voluntary
deed,  or other means.  Such assets are  classified as "real estate owned" until
sold. When property is so acquired,  it is recorded at the lower of cost or fair
market value less  estimated  cost to sell at the date of  acquisition,  and any
subsequent write down resulting from this is charged to the allowance for losses
on real estate owned.  Interest  accrual ceases on the date of acquisition.  All
costs  incurred  from the  acquisition  date in  maintaining  the  property  are
expensed.

     Consumer loan borrowers who fail to make payments are contacted promptly by
the loan service  department in an effort to cure any  delinquency.  A notice of
delinquency is sent 10 days after any specific due date when no payment has been
received.  The delinquent account is downloaded to a PC-based  collection system
and  assigned  to a  specific  loan  service  representative.  The loan  service
representative will then attempt to contact the borrower via a phone call.

     Continued  follow-up  in the form of phone  calls,  letters,  and  personal
visits (when necessary) will be conducted to resolve delinquency.  If a consumer
loan  delinquency  continues  and advances to the 60-90 days past due status,  a
determination  will be  made  by  HomeFederal  Bank  on how to  proceed.  When a
consumer  loan  reaches  90  days  past  due  HomeFederal  Bank  determines  the
loan-to-value  ratio by performing an  inspection  of the  collateral  (if any).
HomeFederal  Bank may  initiate  action to obtain  the  collateral,  (if any) or
collect the debt through  available  legal  remedies.  Collateral  obtained as a
result of loan default is retained by HomeFederal Bank as an asset until sold or
otherwise disposed.

     The table below sets forth the amounts and categories of HomeFederal Bank's
non-performing  assets  (non-accrual loans, loans past due 90 days or more, real
estate owned and other  repossessed  assets) for the last five years.  It is the
policy  of  HomeFederal  Bank  that  all  earned  but  uncollected  interest  on
conventional  loans be reviewed  monthly to  determine  if any  portion  thereof
should  be  classified  as  uncollectible,  for  any  portion  that  is due  but
uncollected for a period in excess of 90 days.

<PAGE>

     The  determination is based upon factors such as the amount  outstanding of
the  loan  as a  percentage  of the  appraised  value  of the  property  and the
delinquency record of the borrower.
<TABLE>
<CAPTION>


Non-performing Assets:           Dec 31, 2003    Dec 31, 2002   June 30, 2002   June 30, 2001  June 30, 2000   June 30, 1999
                                 --------------  -------------- --------------  -------------- --------------  --------------
   Loans:
<S>                                <C>          <C>            <C>             <C>            <C>            <C>
        Non-accrual                $     2,499  $        3,264 $        2,281  $        6,351 $        2,422 $         3,509
        Past due 90 days or
          more and still accuring        1,130           1,166          1,110               -              -               -
        Restructured loans                 258             316            374             879            632              61
                                --------------- ------------------------------ ----------------------------------------------
   Total non-performing loans            3,887           4,746          3,765           7,230          3,054           3,570

        Real estate owned, net (1)       1,729           1,416          2,168           1,238          1,210           1,936
        Other repossessed assets, net       10              56             71              60             25             114
                                --------------- ------------------------------ ----------------------------------------------
   Total non-performing assets(2)   $    5,626  $        6,218 $        6,004  $        8,528 $        4,289 $         5,620
                                =============== ============================== ==============================================

   Total non-performing assets to
        total assets                      .66%            .70%           .70%            .99%           .52%            .75%
   Loans with allowance for
        uncollected  interest      $     2,521  $        3,343 $        2,295  $        6,440 $        2,422 $         3,509
</TABLE>

(1)  Refers to real estate  acquired by  HomeFederal  Bank through  foreclosure,
     voluntary deed, or insubstance foreclosure, net of reserve.

(2)  At December 31, 2003,  34.8% of HomeFederal  Bank's  non-performing  assets
     consisted  of  residential   mortgage   loans,   10.5%  consisted  of  home
     equities/second  mortgages, 4.4% consisted of commercial real estate loans,
     11.6%  consisted of commercial  loans,  3.2% consisted of  consumer-related
     loans, 4.6% consisted of restructured loans, 21.1% consisted of residential
     real estate owned,  9.6% consisted of commercial  real estate owned and .2%
     consisted of other repossessed assets.

     For the year ended  December  31,  2003,  the  income  that would have been
recorded under original terms on the above  non-accrual and  restructured  loans
was $461,000  compared to actual  income  recorded of $253,000.  At December 31,
2003,  HomeFederal Bank had approximately  $7.3 million in loans that were 30-89
days past due.

Investments

     HomeFederal    Bank's   investment    portfolio   consists   primarily   of
mortgage-backed securities, collateralized mortgage obligations, overnight funds
with the FHLB of Indianapolis, U.S. Treasury obligations, U.S. Government agency
obligations,  corporate debt and municipal bonds. At December 31, 2003, December
31, 2002,  June 30, 2002 and 2001,  HomeFederal  Bank had  approximately  $136.9
million,  $143.8  million,  $138.0  million,  and $97.2 million in  investments,
respectively.

     HomeFederal  Bank's  investment  portfolio  is managed by its  officers  in
accordance  with an investment  policy  approved by the Board of Directors.  The
Board reviews all transactions  and activities in the investment  portfolio on a
quarterly basis.  HomeFederal  Bank does not purchase  corporate debt securities
which are not rated in one of the top four investment grade categories by one of
several generally  recognized  independent  rating agencies.  HomeFederal Bank's
investment  strategy  has enabled it to (i) shorten the average term to maturity
of its assets,  (ii)  improve the yield on its  investments,  (iii) meet federal
liquidity  requirements and (iv) maintain  liquidity at a level that assures the
availability of adequate funds.

     Effective March 31, 2002,  HomeFederal  Bank  transferred the management of
approximately  $90 million in  securities to its wholly owned  subsidiary,  Home
Investments, Inc. Home Investments, Inc., a Nevada corporation, holds, services,
manages,  and invests that portion of the Bank's investment  portfolio as may be
transferred  from  time to time by the  Bank  to  Home  Investments,  Inc.  Home
Investments  Inc's  investment  policy mirrors that of the Bank. At December 31,
2003 of the $136.9  million in  consolidated  investments  owned by  HomeFederal
Bank, $103.7 million was held by Home Investments, Inc.

Source Of Funds

General

     Deposits have traditionally been the primary source of funds of HomeFederal
Bank for use in lending and  investment  activities.  In  addition to  deposits,
HomeFederal Bank derives funds from loan amortization,  prepayments,  borrowings
from  the  FHLB of  Indianapolis  and  income  on  earning  assets.  While  loan
amortization  and income on  earning  assets are  relatively  stable  sources of
funds,  deposit  inflows  and  outflows  can vary widely and are  influenced  by
prevailing  interest rates,  money market  conditions and levels of competition.
Borrowings  may be used to  compensate  for  reductions  in  deposits or deposit
inflows at less than projected levels and may be used on a longer-term  basis to
support expanded activities. See "-- Borrowings."

Deposits

     Consumer and  commercial  deposits are  attracted  principally  from within
HomeFederal Bank's primary market area through the offering of a broad selection
of deposit instruments including checking accounts,  fixed-rate  certificates of
deposit,  NOW accounts,  individual  retirement  accounts,  savings accounts and
commercial demand deposit  accounts.  HomeFederal Bank does not actively solicit
or  advertise  for  deposits  outside of the  counties in which its branches are
located,  with the exception of brokered  deposits.  Deposit account terms vary,
with the principal differences being the minimum balance required, the amount of
time the funds  remain on deposit  and the  interest  rate.  To  attract  funds,
HomeFederal  Bank  may pay  higher  rates on  larger  balances  within  the same
maturity class.

     Under regulations adopted by the FDIC,  well-capitalized insured depository
institutions (those with a ratio of total capital to risk-weighted assets of not
less than 10%, with a ratio of core capital to risk-weighted  assets of not less
than 6%,  with a ratio of core  capital to total  assets of not less than 5% and
which have not been  notified  that they are in troubled  condition)  may accept
brokered deposits without limitations. Undercapitalized institutions (those that
fail to meet  minimum  regulatory  capital  requirements)  are  prohibited  from
accepting brokered deposits. Adequately capitalized institutions (those that are
neither  well-capitalized  nor  undercapitalized)  are prohibited from accepting
brokered  deposits unless they first obtain a waiver from the FDIC.  Under these
standards,  HomeFederal Bank would be deemed a well-capitalized  institution. At
December 31, 2003 HomeFederal had $33.4 million in brokered deposits.

     An undercapitalized  institution may not solicit deposits by offering rates
of interest that are significantly  higher than the prevailing rates of interest
on insured deposits (i) in such institution's normal market areas or (ii) in the
market area in which such deposits would otherwise be accepted.

     HomeFederal  Bank on a periodic  basis  establishes  interest  rates  paid,
maturity terms,  service fees and withdrawal  penalties.  Determination of rates
and terms are predicated on funds acquisition and liquidity requirements,  rates
paid by  competitors,  growth  goals,  federal  regulations,  and market area of
solicitation.

The  following  table  sets  forth  by  nominal  interest  rate  categories  the
composition of deposits of HomeFederal Bank at the dates indicated:
<TABLE>
<CAPTION>

                                              Dec 31, 2003        Dec 31, 2002        June 30, 2002        June 30, 2001
                                              ------------        ------------        -------------        -------------

                                                   (Dollars in Thousands)

<S>                                         <C>                 <C>                  <C>                 <C>
Non-interest bearing and below 1.99%        $         375,815   $         325,605    $         292,155   $           95,143
2.00% - 2.99%                                          47,912              72,379               60,575               43,853
3.00% - 3.99%                                          59,853              71,880               58,294              136,431
4.00% - 4.99%                                          55,147              74,978               64,302               73,376
5.00% - 5.99%                                          42,250              53,695               53,631               67,285
Over 6.00%                                              7,938              10,821               48,521              160,455
                                            ------------------  ------------------   ------------------  -------------------
Total                                       $         588,915   $         609,358    $         577,480   $          576,543
                                            ==================  ==================   ==================  ===================
</TABLE>
<PAGE>

     The following table sets forth the change in dollar amount of deposits in
the various accounts offered by HomeFederal Bank for the periods indicated.

<TABLE>
<CAPTION>
                                                                            DEPOSIT ACTIVITY
                                                                         (Dollars in Thousands)

                                Balance                                Balance                               Balance
                                  at                                     at                                    at
                                Dec 31,      % of       Increase       Dec 31,     % of       Increase      June 30,     % of
                                 2003      Deposits    (Decrease)       2002     Deposits    (Decrease)       2002     Deposits
                                 ----      --------    ----------       ----     --------    ----------       ----     --------
Withdrawable:
<S>                           <C>               <C>    <C>         <C>                <C>      <C>       <C>                <C>
Non-interest bearing          $    55,535       9.4%   $     3,815 $      51,720      8.5%      $  1,836 $      49,884      8.6%
Statement savings                  50,269       8.5%         2,460        47,809      7.8%          (573)       48,382      8.4%
Money market savings              112,797      19.2%        (8,147)      120,944     19.9%        (1,034)      121,978     21.1%
NOW                                67,533      11.5%        (6,157)       73,690     12.1%         6,328        67,362     11.7%
                              ----------------------- -------------  ----------------------  ------------  ----------------------
     Total Withdrawable           286,134      48.6%        (8,029)      294,163     48.3%         6,557       287,606     49.8%
                              ----------------------- -------------  ----------------------  ------------  ----------------------
Certificates:
Less than one year                 51,516       8.7%         6,477        45,039      7.4%        17,864        27,175      4.7%
12 to 23 months                    38,270       6.5%       (10,650)       48,920      8.0%       (10,039)       58,959     10.2%
24 to 35 months                    96,665      16.4%       (11,404)      108,069     17.7%           661       107,408     18.6%
36 to 59 months                    30,655       5.2%       (13,110)       43,765      7.2%        16,206        27,559      4.8%
60 to 120 months                   85,675      14.6%        16,273        69,402     11.4%           629        68,773     11.9%
                              ----------------------- -------------  ----------------------  ------------  ----------------------
     Total certificate accounts   302,781      51.4%       (12,414)      315,195     51.7%        25,321       289,874     50.2%
                              ----------------------- -------------  ----------------------  ------------  ----------------------
          Total deposits      $   588,915     100.0%   $   (20,443)$     609,358    100.0%      $ 31,878 $     577,480    100.0%
                              ======================= =============  ======================  ============  ======================
</TABLE>

TABLE ABOVE CONTINUES BELOW

<TABLE>
<CAPTION>

                                              Balance
                                                at
                                Increase     June 30,      % of       Increase
                                Decrease)      2001      Deposits    (Decrease)
                                ---------      ----      --------    ----------
Withdrawable:
<S>                           <C>           <C>               <C>   <C>
Non-interest bearing          $      8,561  $    41,323       7.2%  $      1,828
Statement savings                    5,129       43,253       7.5%        (1,530)
Money market savings                (9,536)     131,514      22.9%        23,084
NOW                                 13,543       53,819       9.3%          (108)
                              ------------- ----------------------- -------------
     Total Withdrawable             17,697      269,909      46.8%        23,274
                              ------------- ----------------------- -------------
Certificates:
Less than one year                 (13,453)      40,628       7.0%       (16,515)
12 to 23 months                    (65,886)     124,845      21.7%        (1,457)
24 to 35 months                     13,201       94,207      16.3%          (387)
36 to 59 months                     15,650       11,909       2.1%         1,701
60 to 120 months                    33,728       35,045       6.1%        (2,966)
                              ------------- ----------------------- -------------
     Total certificate accounts    (16,760)     306,634      53.2%       (19,624)
                              ------------- ----------------------- -------------
          Total deposits      $        937  $   576,543     100.0%  $      3,650
                              ============= ======================= =============
</TABLE>

<PAGE>

     The following table  represents,  by various interest rate categories,  the
amounts of deposits  maturing during each of the three years following  December
31, 2003,  and the  percentage  of such  maturities to total  deposits.  Matured
certificates  which have not been  renewed  as of  December  31,  2003 have been
allocated based upon certain rollover assumptions.

<TABLE>
<CAPTION>
                                                                         DEPOSIT MATURITIES
                                                                       (Dollars in Thousands)

                                         1.99%        2.00%      3.00%      4.00%       5.00%
                                          or            to         to         to          to      Over               Percent of
                                         less         2.99%      3.99%      4.99%       5.99%     6.00%       Total    Total
                                         ----         -----      -----      -----       -----     -----       -----    -----

Certificate accounts maturing in
the twelve-month period ending:

<S>      <C> <C>                       <C>           <C>        <C>         <C>        <C>        <C>       <C>         <C>
December 31, 2004                      $74,060       $ 24,596   $ 49,152    $ 9,710    $ 4,326    $ 2,033   $ 163,877   54.1%
December 31, 2005                       14,502         21,096      1,509      9,511      4,081      4,023      54,722   18.1%
December 31, 2006                        1,119          1,607      1,620      9,913      7,501        471      22,231    7.3%
Thereafter                                   -            613      7,572     26,013     26,342      1,411      61,951   20.5%
                                  --------------------------------------------------------------------------------------------
Total                                  $89,681       $ 47,912   $ 59,853    $55,147    $42,250    $ 7,938   $ 302,781  100.0%
                                  ============================================================================================

</TABLE>

     Included in the deposit totals in the above table are savings  certificates
of deposit with balances exceeding $100,000.  The majority of these deposits are
from regular customers of HomeFederal Bank, excluding $33.4 million,  which were
from brokered  deposits.  The following  table provides a maturity  breakdown at
December  31, 2003,  of  certificates  of deposits  with  balances  greater than
$100,000, by various interest rate categories.
<TABLE>
<CAPTION>

                                                                ACCOUNTS GREATER THAN $100,000
                                                                   (Dollars in Thousands)

                                     1.99%     2.00%      3.00%     4.00%     5.00%
                                       or        to         to        to        to     Over                ercent of
                                      less     2.99%      3.99%     4.99%     5.99%    6.00%       Total    Total
                                      ----     -----      -----     -----     -----    -----       -----    -----

Certificate accounts maturing in
the twelve-month period ending:

<S>      <C> <C>                    <C>        <C>        <C>       <C>      <C>       <C>        <C>        <C>
December 31, 2004                   $29,065    $ 7,304    $ 9,536   $ 5,952  $ 1,099   $ 1,066    $ 54,022   52.8%
December 31, 2005                       526      3,582        100     6,171      432     2,555      13,366   13.0%
December 31, 2006                         -        473          -     1,320    1,692       100       3,585    3.5%
Thereafter                                -        127      1,535    15,291   13,787       698      31,438   30.7%
                                  ---------------------------------------------------------------------------------
Total                               $29,591    $11,486    $11,171   $28,734  $17,010   $ 4,419    $102,411  100.0%
                                  ====================================================================================
</TABLE>

<PAGE>

Borrowings

     HomeFederal  Bank  relies  upon  advances  (borrowings)  from  the  FHLB of
Indianapolis to supplement its supply of lendable funds, meet deposit withdrawal
requirements  and to  extend  the term of its  liabilities.  This  facility  has
historically been HomeFederal  Bank's major source of borrowings.  Advances from
the FHLB of Indianapolis  are typically  secured by HomeFederal  Bank's stock in
the FHLB of Indianapolis and a portion of HomeFederal Bank's mortgage loans.

     Each FHLB credit program has its own interest  rate,  which may be fixed or
variable,  and a range of  maturities.  Subject to the express limits in FIRREA,
the FHLB of  Indianapolis  may  prescribe  the  acceptable  uses to which  these
advances  may be put, as well as  limitations  on the size of the  advances  and
repayment  provisions.  At December  31,  2003,  HomeFederal  Bank had  advances
totaling $154.3 million outstanding from the FHLB of Indianapolis.

     The Company has a revolving note with LaSalle Bank N.A. whereby the Company
may borrow $17.5 million.  The note accrues interest at a variable rate based on
the ninety-day LIBOR index, on the date of the draw, plus 150 basis points.  The
ninety-day LIBOR index was 1.15% at December 31, 2003. Interest payments are due
ninety  days  after the date of any  principal  draws made on the loan and every
ninety days  thereafter.  Maturities  of senior debt based on minimum  scheduled
payments  as of  December  31,  2003 are:  2004 - $4.6  million  and 2006 - $7.6
million.  The Company used the funds to buy back shares of the Company's  common
stock.  The assets of the  Company  collateralize  the note.  Under terms of the
agreement,  the Company is bound by certain  restrictive debt covenants relating
to earnings,  net worth and various  financial  ratios. As of December 31, 2003,
the Company was in compliance with the debt covenants.

     As of December 31, 2003, the company has two swap  agreements  with LaSalle
Bank N.A. In the first  agreement  the Company will make fixed rate  payments at
5.6% and receive  variable rate payments at the three-month  LIBOR on a notional
amount of $4.6 million.  The maturity date of the first swap agreement is May 1,
2004. In the second agreement the Company will make fixed rate payments at 5.77%
and receive variable rate payments at the three-month LIBOR on a notional amount
of $4.6 million.  The maturity date of the second swap  agreement is February 1,
2006.  The two  interest  rate swaps are settled on a net basis.  The Company is
exposed to credit loss, in the event of nonperformance by LaSalle Bank N.A., for
the net interest rate  differential when floating rates exceed the fixed maximum
rate.  However,  the Company does not anticipate  nonperformance  by the counter
party.

     Other than the FHLB advances and the Senior Debt,  HomeFederal  Bank's only
borrowings in recent years have been short-term borrowings.  The following table
sets  forth  the  maximum  amount  of each  category  of  short-term  borrowings
(borrowings  with remaining  maturities of one year or less)  outstanding at any
month-end  during  the  periods  shown and the  average  aggregate  balances  of
short-term borrowings for such periods.
<TABLE>
<CAPTION>
                                             Twelve               Six
                                             Months             Months
                                              Ended              Ended                      Year Ended
                                       ------------------ ------------------ ----------------------------------------
(Dollars in Thousands)                    Dec 31, 2003       Dec 31, 2002        June 30, 2002       June 30, 2001
                                       ------------------ ------------------ ----------------------------------------
<S>                                    <C>                <C>                <C>                 <C>
Official check overnight remittance    $ 6,419            $ 4,727            $  9,248            $  4,961

FHLB advances                          $37,200            $ 1,400            $ 46,400            $ 73,500
Money Order remittance                 $     -            $     -            $     42            $     53
FHLB overnight remittance              $ 2,043            $     -            $      -            $  2,875

Average amount of total
  short-term borrowings outstanding    $31,491            $30,946            $ 40,385            $ 57,222
</TABLE>
<PAGE>
     The  following  table sets  forth the  amount of short  term FHLB  advances
outstanding at period end during the period shown and the weighted  average rate
of such FHLB advances.
<TABLE>
<CAPTION>


  (Dollars in Thousands)           Dec 31, 2003       Dec 31, 2002      June 30, 2002     June 30, 2001
                                   ---------------- ----------------- ------------------------------------
 FHLB advances:
<S>                               <C>              <C>               <C>               <C>
         Amount                   $    37,200      $     30,900      $     30,600      $     39,900
         Weighted average rate          5.4%              6.0%              6.4%              5.8%
</TABLE>

Service Corporation Subsidiaries

     On December  31, 2001  HomeFederal  Bank changed its charter from a Federal
savings bank charter to an Indiana commercial bank charter. Commercial banks are
not permitted to participate in real estate  development joint ventures.  One of
HomeFederal Bank's subsidiaries,  Home Savings Corporation ("HSC"), is a partner
in five real estate  development  joint  ventures for which exit  strategies are
either developed, or are currently being developed. HFB is currently mandated to
divest  itself of these  activities  by December  31,  2004,  with two  one-year
extensions   available,   subject  to  regulatory  approval.   HSC,  an  Indiana
corporation,  is currently  engaged in two types of activities:  (i) real estate
development  and  (ii)  full-service  securities  brokerage  services.  With the
exception of its  securities  brokerage  services,  all of HSC's  activities are
conducted through joint ventures in which it is an equity investor.

     At December 31,  2003,  HomeFederal  Bank's  aggregate  investment  in HSC,
including  loans,  was $5.5 million.  For the year ended  December 31, 2003, HSC
reported  pretax  income of  $668,000  from these  operations.  HSC's  office is
located at 501 Washington Street, Columbus, Indiana. The consolidated statements
of operations of HomeFederal Bank and its subsidiaries included elsewhere herein
includes the operations of HSC. Intercompany balances and transactions have been
eliminated in the consolidation.

     The following  table sets forth certain  information  regarding each of the
joint ventures in which HSC was involved at December 31, 2003.

<TABLE>
<CAPTION>


                                                                       Date
                                                                       HSC                        Loans from Home
                                                                      Entered                       Savings Corp.
                                                                      into the       Equity         Outstanding
Name                          Type of Project                         Project      Investment    December 31, 2003
----                          ---------------                         --------     ----------    -----------------
<S>                                                                   <C>   <C>  <C>             <C>
 Heritage Woods II           Rental Apartment project of low income   11/15/89   $        46,000 $              -
                             housing (22 units)
 Broadmoor North             Real estate development                  12/15/99   $     1,227,000 $      1,168,000
 /Heathfield                 in Columbus, Indiana
 McCulloughs Run             Real estate development                   7/1/94    $     1,600,000 $      1,707,000
                             in Columbus, Indiana
 Bloomington Technology      Industrial park in Bloomington, Indiana  11/10/97   $       273,000 $              -
 Park, LLC
 Courtyard Homes at          Single family homes in Indianapolis,      6/14/99   $     1,581,000 $      1,299,000
 Sycamore Springs, LLC       Indiana

</TABLE>


     HSC markets  Raymond  James  Financial  full-service  securities  brokerage
services.  For the year ended  December  31,  2003,  HSC  received  $813,000  in
commissions from its Raymond James Financial activities.

     In November  1989, HSC invested  $184,000 as a limited  partner in Heritage
Woods II, a low  income  housing  project in  Columbus,  Indiana.  HSC  received
low-income  housing tax credits for 10 years from this project and must maintain
the investment for 15 years to avoid any tax credit recapture.

     On December  15,  1999,  HSC entered into a joint  venture  agreement  with
Breeden  Investment  Group,  Inc. to develop a 100 lot  residential  real estate
subdivision  ("Broadmoor   North/Heathfield").   Broadmoor  North/Heathfield  is
located on the north  central side of Columbus,  Indiana.  Loan  documents  were
executed on December 23, 1999 for land  acquisition  and development of phases I
and II in an amount not to exceed $2.2  million.  In addition to interest on the
loan,  HSC will receive 35% of the profits after all interest,  development  and
sales costs.

     On July 1, 1994,  HSC entered into a joint venture  agreement  with Breeden
Investment  Group,  Inc.  to develop a 320 lot  starter  home  subdivision  with
additional  multi-family and commercial land ("McCullough's Run").  McCullough's
Run is  located  on the east side of  Columbus,  Indiana.  Loan  documents  were
executed on July 1, 1994 for land  acquisition  and  development of phases I and
II. Subsequent  closings have encompassed the balance of six phases and on March
6, 2000 loan  documents  were  executed in an amount not to exceed $2.1 million.
The outstanding  loan balance of $1.7 million as of December 31, 2003,  reflects
the  development  costs  to date of all six  phases,  the  condominium  site and
commercial  acreage.  HSC is  entitled  to 50% of the  profit  from sale of lots
within McCullough's Run.

     On  November  29,  1997,  HSC  entered  into an LLC  agreement  with Curtis
Enterprises, Inc., and Gary B. Warstler to build up to eighty-five single family
homes at Crystal Lake at River Ridge in northern  Indianapolis,  Indiana. On May
1, 2000,  the LLC  agreement was amended when Mr.  Warstler  desired to withdraw
from the LLC and assign his percentage  share in the LLC equally between the two
remaining members.  The LLC purchases finished lots from RN Thompson Development
Corporation.  HSC has  provided  a line of credit in the amount of $3 million to
build the homes.  HSC is entitled to one third of the profits from homes started
before Mr. Warstler withdrew and 50% of the profits from homes started after Mr.
Warstler withdrew.  An agreement was signed on August 13, 2001, with RN Thompson
Development  Corporation to buy back the ten undeveloped  lots owned by the LLC.
The final lots were repurchased in June of 2003.

     On   November   10,   1997  HSC  entered   into  an  LLC   agreement   with
Wininger-Stolberg  HC, II, Inc. to develop the  Bloomington  Technology  Park in
Bloomington,  IN. The City of  Bloomington  and Monroe  County are  providing an
$800,000 grant to build  infrastructure.  HSC provided a matching amount,  which
has been  repaid  along with a fee of  $150,000.  The  eighty-two  acre site was
purchased from Otis Elevator Company,  Inc. and work started late spring,  1998.
HSC is  entitled  to 50% of all  profit  from  the  sale of lots in  Bloomington
Technology Park.

     On  June  14,  1999,   HSC  entered  into  an  LLC  agreement  with  Curtis
Enterprises,  Inc. to build 54 homes at Courtyard Homes at Sycamore  Springs,  a
planned community in Indianapolis,  Indiana. The LLC purchased the land and will
develop  lots and  build the  homes.  HSC has  provided  a line of credit in the
amount of $2  million to build the homes,  and is  entitled  to one third of the
profits from the home sales.

     In addition to the joint ventures that HSC participates in, the Company has
another  joint  venture which is not a real estate  development  joint  venture.
HomeFederal Bank organized another service corporation  subsidiary under Indiana
law, HomeFed Financial Corp,  ("HFF"). As a result of HomeFederal Bank's charter
conversion to a state commercial bank,  HomeFederal Bank's subsidiary,  HSC, was
required to divest itself of its ownership interest in Consortium  Partners.  On
December 31, 2001, Home Federal Bancorp  purchased HFF from HomeFederal Bank. On
the same date, HFF purchased the investment in Consortium Partners from HSC. HFF
has a 14% interest in Consortium Partners, a Louisiana  partnership,  which owns
50% of the outstanding  shares of the Family Financial Life Insurance Company of
New Orleans ("Family Financial"). The remaining 50% of the outstanding shares of
Family  Financial  is  owned  proportionately  by  the  partners  of  Consortium
Partners.  Family Financial  administers  programs for debt protection services,
life,  accident,  and  health  insurance  as well  as  annuity  products  to the
customers of the partners'  parent-thrifts and banks. HFF receives (1) dividends
paid on Family  Financial shares owned directly by it, (2) a pro rata allocation
of dividends received on shares held by Consortium  Partners,  which are divided
among  the  partners  based  on  the  actuarially  determined  value  of  Family
Financial's various lines of insurance generated by customers of these partners,
and (3)  commissions on sales of insurance  products made to customers.  For the
year ended  December 31,  2003,  HomeFederal  Bank had income of $316,000,  on a
consolidated  basis,  from  commissions  and dividends paid on Family  Financial
activities.

     HomeFederal  Bank also  organized  a  subsidiary  under  Nevada  law,  Home
Investments,   Inc.,  ("HII").   Effective  March  31,  2002,  HomeFederal  Bank
transferred  the management of  approximately  $90 million in securities to HII.
Home Investments, Inc. holds, services, manages, and invests that portion of the
Bank's investment  portfolio as may be transferred from time to time by the Bank
to HII. Home Investments Inc.'s,  investment policy mirrors that of the Bank. At
December 31, 2003, of the $136.9 million in  consolidated  investments  owned by
HomeFederal Bank, $103.7 million was held by Home Investments, Inc.

Employees

     As of December  31, 2003,  the Company  employed 280 persons on a full-time
basis and 13 persons on a part-time basis.  None of the Company's  employees are
represented by a collective bargaining group.  Management considers its employee
relations to be excellent.

Competition

     HomeFederal  Bank operates in south central Indiana and makes almost all of
its  loans to,  and  accepts  almost  all of its  deposits  from,  residents  of
Bartholomew,  Jackson, Jefferson,  Jennings, Johnson, Scott, Ripley, Washington,
Decatur, Monroe and Marion counties in Indiana.

     HomeFederal  Bank  is  subject  to  competition   from  various   financial
institutions,  including  state and  national  banks,  state and federal  thrift
associations,  credit unions and other companies or firms,  including  brokerage
houses,  that provide similar  services in the areas of HomeFederal  Bank's home
and branch offices. Also, in Seymour,  Columbus, North Vernon,  Batesville,  and
the  Greenwood  area,  HomeFederal  Bank must  compete  with  banks and  savings
institutions in Indianapolis. To a lesser extent, HomeFederal Bank competes with
financial and other  institutions  in the market areas  surrounding  Cincinnati,
Ohio and Louisville,  Kentucky. HomeFederal Bank also competes with money market
funds that currently are not subject to reserve requirements, and with insurance
companies with respect to its Individual Retirement and annuity accounts.

     Under current law, bank holding companies may acquire thrifts.  Thrifts may
also acquire  banks under  federal law.  Affiliations  between banks and thrifts
based in Indiana have increased the  competition  faced by HomeFederal  Bank and
the Company. See "Acquisitions or Dispositions and Branching."

     The  Gramm-Leach-Bliley  Act allows  insurers and other  financial  service
companies to acquire banks; removes various restrictions that previously applied
to bank holding company  ownership of securities  firms and mutual fund advisory
companies;  and establishes the overall regulatory  structure applicable to bank
holding companies that also engage in insurance and securities operations. These
provisions  in the Act may increase the level of  competition  HomeFederal  Bank
faces from securities firms and insurance companies.

     The primary  factors  influencing  competition  for  deposits  are interest
rates, service and convenience of office locations.  Competition is affected by,
among other things,  the general  availability  of lendable  funds,  general and
local economic conditions,  current interest rate levels, and other factors that
are not readily predictable.

REGULATION

     Both the Company and HomeFederal  operate in highly regulated  environments
and  are  subject  to   supervision,   examination  and  regulation  by  several
governmental  regulatory  agencies,  including  the  Board of  Governors  of the
Federal Reserve System (the "Federal  Reserve"),  the Federal Deposit  Insurance
Corporation (the "FDIC"),  and the Indiana Department of Financial  Institutions
(the  "DFI").  The laws  and  regulations  established  by  these  agencies  are
generally  intended  to  protect  depositors,   not  shareholders.   Changes  in
applicable  laws,  regulations,  governmental  policies,  income  tax  laws  and
accounting  principles may have a material effect on the Company's  business and
prospects.  The following summary is qualified by reference to the statutory and
regulatory provisions discussed.

Home Federal Bancorp

     The  Bank  Holding  Company  Act.  Because  the  Company  owns  all  of the
outstanding  capital  stock of  HomeFederal,  it is registered as a bank holding
company  under the federal  Bank  Holding  Company Act of 1956 and is subject to
periodic  examination  by the  Federal  Reserve and  required  to file  periodic
reports  of its  operations  and any  additional  information  that the  Federal
Reserve may require.

     Investments,  Control,  and Activities.  With some limited exceptions,  the
Bank Holding Company Act requires every bank holding company to obtain the prior
approval of the Federal Reserve before acquiring another bank holding company or
acquiring more than 5% of the voting shares of a bank (unless it already owns or
controls the majority of such shares).

     Bank holding  companies are prohibited,  with certain  limited  exceptions,
from  engaging  in  activities  other than those of  banking or of  managing  or
controlling  banks.  They are also prohibited from acquiring or retaining direct
or indirect ownership or control of voting shares or assets of any company which
is  not a  bank  or  bank  holding  company,  other  than  subsidiary  companies
furnishing services to or performing services for their subsidiaries,  and other
subsidiaries engaged in activities which the Federal Reserve determines to be so
closely related to banking or managing or controlling  banks as to be incidental
to these  operations.  The Bank Holding  Company Act does not place  territorial
restrictions on such nonbank activities.

     Effective  March 11, 2000, the  Gramm-Leach  Bliley Act of 1999,  which was
signed into law on November 12, 1999,  allows a bank holding  company to qualify
as a "financial  holding company" and, as a result,  be permitted to engage in a
broader  range of  activities  that are  "financial in nature" and in activities
that are  determined to be incidental or  complementary  to activities  that are
financial in nature. The  Gramm-Leach-Bliley Act amends the Bank Holding Company
Act of 1956 to include a list of activities  that are  financial in nature,  and
the list  includes  activities  such as  underwriting,  dealing  in and making a
market in securities,  insurance underwriting and agency activities and merchant
banking.  The Federal Reserve is authorized to determine  other  activities that
are financial in nature or incidental or complementary  to such activities.  The
Gramm-Leach-Bliley  Act  also  authorizes  banks  to  engage  through  financial
subsidiaries  in certain  of the  activities  permitted  for  financial  holding
companies.

     In order for a bank  holding  company  to engage  in the  broader  range of
activities  that  are  permitted  by the  Gramm-Leach-Bliley  Act (1) all of its
depository  institutions  must be well  capitalized  and well managed and (2) it
must  file a  declaration  with  the  Federal  Reserve  that it  elects  to be a
"financial holding company." In addition, to commence any new activity permitted
by the  Gramm-Leach-Bliley  Act,  each  insured  depository  institution  of the
financial holding company must have received at least a "satisfactory" rating in
its most recent  examination  under the Community  Reinvestment Act. The Company
has elected to be a financial holding company.

     Dividends.  The Federal  Reserve's  policy is that a bank  holding  company
experiencing earnings weaknesses should not pay cash dividends exceeding its net
income  or which  could  only be funded in ways  that  weaken  the bank  holding
company's  financial  health,  such as by borrowing.  Additionally,  the Federal
Reserve  possesses  enforcement  powers over bank  holding  companies  and their
non-bank  subsidiaries  to prevent or remedy  actions that  represent  unsafe or
unsound  practices or violations of applicable  statutes and regulations.  Among
these powers is the ability to  proscribe  the payment of dividends by banks and
bank holding companies.

     Source of Strength.  In accordance with Federal Reserve policy, the Company
is  expected to act as a source of  financial  strength  to  HomeFederal  and to
commit  resources to support  HomeFederal in  circumstances in which the Company
might not otherwise do so.


HomeFederal Bank

     General Regulatory  Supervision.  HomeFederal as an Indiana commercial bank
and a member of the Federal  Reserve System is subject to examination by the DFI
and the Federal  Reserve.  The DFI and the Federal  Reserve  regulate or monitor
virtually  all  areas of  HomeFederal's  operations.  HomeFederal  must  undergo
regular  on-site  examinations  by the  Federal  Reserve and DFI and must submit
periodic reports to the Federal Reserve and the DFI.

     Lending  Limits.  Under  Indiana  law,  HomeFederal  may not make a loan or
extend  credit to a single or related group of borrowers in excess of 15% of its
unimpaired capital and surplus. Additional amounts may be lent, not in excess of
10% of unimpaired capital and surplus, if such loans or extensions of credit are
fully  secured by readily  marketable  collateral,  including  certain  debt and
equity  securities  but  not  including  real  estate.  At  December  31,  2003,
HomeFederal  did not have any  loans or  extensions  of  credit  to a single  or
related group of borrowers in excess of its lending limits.

     Deposit  Insurance.  Deposits  in  HomeFederal  are  insured by the Savings
Association  Insurance  Fund  of the  FDIC  up to a  maximum  amount,  which  is
generally  $100,000 per depositor subject to aggregation  rules.  HomeFederal is
subject to deposit insurance assessments by the FDIC pursuant to its regulations
establishing a risk-related  deposit insurance assessment system, based upon the
institution's  capital  levels and risk profile.  HomeFederal is also subject to
assessment for the Financing  Corporation  (FICO) to service the interest on its
bond  obligations.  The amount  assessed on individual  institutions,  including
HomeFederal,  by FICO is in addition  to the amount  paid for deposit  insurance
according to the risk-related assessment rate schedule. HomeFederal paid deposit
insurance assessments of $95,000 during the year ended December 31, 2003. Future
increases in deposit insurance premiums or changes in risk classification  would
increase HomeFederal's deposit related costs.

     The FDIC may  terminate  the deposit  insurance  of any insured  depository
institution if the FDIC  determines,  after a hearing,  that the institution has
engaged  or is  engaging  in unsafe or  unsound  practices,  is in an unsafe and
unsound  condition to continue  operations or has violated any  applicable  law,
regulation,  order or any condition  imposed in writing by, or written agreement
with, the FDIC. The FDIC may also suspend deposit insurance  temporarily  during
the hearing process for a permanent  termination of insurance if the institution
has no tangible capital.

     Transactions  with  Affiliates  and  Insiders.  HomeFederal  is  subject to
limitations  on the amount of loans or extensions  of credit to, or  investments
in, or certain other transactions with, affiliates and on the amount of advances
to third parties  collateralized by the securities or obligations of affiliates.
Furthermore,  within  the  foregoing  limitations  as to  amount,  each  covered
transaction  must meet  specified  collateral  requirements.  Compliance is also
required  with  certain  provisions  designed  to avoid the  acquisition  of low
quality  assets.  HomeFederal  is  also  prohibited  from  engaging  in  certain
transactions  with  certain  affiliates  unless  the  transactions  are on terms
substantially  the same,  or at least as  favorable to such  institution  or its
subsidiaries,  as those prevailing at the time for comparable  transactions with
nonaffiliated companies.

     Extensions of credit by HomeFederal to its executive  officers,  directors,
certain  principal  shareholders,  and their related  interests  must be made on
substantially the same terms, including interest rates and collateral,  as those
prevailing at the time for comparable  transactions with third parties,  and not
involve  more than the normal risk of  repayment  or present  other  unfavorable
features.

     Dividends.  Under  Indiana  law,  HomeFederal  is  prohibited  from  paying
dividends in an amount greater than its undivided profits,  or if the payment of
dividends would impair HomeFederal's capital. Moreover,  HomeFederal is required
to obtain the approval of the DFI and the Federal Reserve for the payment of any
dividend if the aggregate amount of all dividends paid by HomeFederal during any
calendar  year,  including  the  proposed  dividend,  would  exceed  the  sum of
HomeFederal's  retained  net  income  for the  year to date  combined  with  its
retained net income for the previous two years. For this purpose,  "retained net
income"  means  the net  income  of a  specified  period,  calculated  under the
consolidated  report  of  income  instructions,  less the  total  amount  of all
dividends declared for the specified period.

     Federal law generally  prohibits  HomeFederal from paying a dividend to its
holding   company   if  the   depository   institution   would   thereafter   be
undercapitalized.  The FDIC may prevent an insured bank from paying dividends if
the  bank is in  default  of  payment  of any  assessment  due to the  FDIC.  In
addition,  payment of dividends  by a bank may be  prevented  by the  applicable
federal  regulatory  authority if such payment is  determined,  by reason of the
financial condition of such bank, to be an unsafe and unsound banking practice.

     Branching and Acquisitions.  Branching by HomeFederal requires the approval
of the Federal Reserve and the DFI. Under current law,  Indiana  chartered banks
may establish  branches  throughout  the state and in other  states,  subject to
certain  limitations.  Congress authorized  interstate  branching,  with certain
limitations,  beginning  in 1997.  Indiana  law  authorizes  an Indiana  bank to
establish one or more branches in states other than Indiana  through  interstate
merger  transactions and to establish one or more interstate branches through de
novo branching or the  acquisition of a branch.  There are some states where the
establishment  of de novo branches by  out-of-state  financial  institutions  is
prohibited.

     Capital Regulations.  The federal bank regulatory  authorities have adopted
risk-based  capital  guidelines  for banks and bank holding  companies  that are
designed to make regulatory  capital  requirements more sensitive to differences
in risk  profiles  among  banks  and bank  holding  companies  and  account  for
off-balance sheet items.  Risk-based capital ratios are determined by allocating
assets  and  specified  off-balance  sheet  commitments  to four  risk  weighted
categories  of 0%,  20%,  50%,  or 100%,  with  higher  levels of capital  being
required for the categories perceived as representing greater risk.

     The capital  guidelines  divide a bank holding  company's or bank's capital
into two  tiers.  The first tier  ("Tier I")  includes  common  equity,  certain
non-cumulative  perpetual  preferred  stock  and  minority  interests  in equity
accounts  of  consolidated   subsidiaries,   less  goodwill  and  certain  other
intangible  assets (except  mortgage  servicing rights and purchased credit card
relationships,  subject  to  certain  limitations).  Supplementary  ("Tier  II")
capital  includes,   among  other  items,  cumulative  perpetual  and  long-term
limited-life preferred stock, mandatory convertible  securities,  certain hybrid
capital instruments, term subordinated debt and the allowance for loan and lease
losses, subject to certain limitations, less required deductions. Banks and bank
holding  companies are required to maintain a total risk-based  capital ratio of
8%, of which 4% must be Tier I capital.  The federal  banking  regulations  may,
however, set higher capital requirements when a bank's particular  circumstances
warrant.  Banks experiencing or anticipating  significant growth are expected to
maintain capital ratios,  including tangible capital  positions,  well above the
minimum levels.

     Also required by the  regulations  is the  maintenance  of a leverage ratio
designed to supplement the risk-based capital guidelines. This ratio is computed
by dividing Tier I capital, net of all intangibles,  by the quarterly average of
total  assets.  The  minimum  leverage  ratio  is 3% for the most  highly  rated
institutions,  and 1% to 2% higher for institutions not meeting those standards.
Pursuant to the  regulations,  banks must maintain  capital levels  commensurate
with the level of risk,  including the volume and severity of problem loans,  to
which they are exposed.

     The following is a summary of the Company's  and  HomeFederal's  regulatory
capital and capital requirements at December 31, 2003.
<TABLE>
<CAPTION>

                                                                                               To Be Categorized As
                                                                                                "Well Capitalized"
                                                                                                   Under Prompt
                                                                         For Capital             Corrective Action
                                                  Actual              Adequacy Purposes             Provisions
                                         ----------------------------------------------------------------------------
                                             Amount      Ratio        Amount      Ratio         Amount      Ratio
---------------------------------------------------------------------------------------------------------------------
As of December 31, 2003
Total risk-based capital
    (to risk-weighted assets)
<S>                                      <C>              <C>      <C>          <C>         <C>                <C>
    HomeFederal Bank                     $     96,739     14.35%   $ 53,927     8.0%        $ 67,409           10.0%
    Home Federal Bancorp Consolidated    $     90,164     13.36%   $ 54,003     8.0%        $ 67,504           10.0%

Tier 1 risk-based capital
    (to risk-weighted assets)
    HomeFederal Bank                     $     89,233     13.24%   $ 26,964     4.0%        $ 40,446            6.0%
    Home Federal Bancorp Consolidated    $     82,658     12.24%   $ 27,002     4.0%        $ 40,503            6.0%

Tier 1 leverage capital
    (to average assets)
    HomeFederal Bank                     $     89,223     10.36%   $ 34,437     4.0%        $ 43,046            5.0%
    Home Federal Bancorp Consolidated    $     82,658      9.61%   $ 34,418     4.0%        $ 43,022            5.0%
</TABLE>

     Prompt  Corrective  Regulatory  Action.  Federal law  provides  the federal
banking regulators with broad powers to take prompt corrective action to resolve
the problems of  under-capitalized  institutions.  The extent of the regulators'
powers  depends on whether the  institution  in question is "well  capitalized,"
"adequately capitalized," "undercapitalized,"  "significantly undercapitalized,"
or "critically  undercapitalized," as defined by regulation.  Depending upon the
capital category to which an institution is assigned, the regulators' corrective
powers include:  requiring the submission of a capital restoration plan; placing
limits on asset growth and restrictions on activities; requiring the institution
to issue additional  capital stock (including  additional voting stock) or to be
acquired;  restricting  transactions  with affiliates;  restricting the interest
rate the institution  may pay on deposits;  ordering a new election of directors
of the  institution;  requiring that senior  executive  officers or directors be
dismissed;   prohibiting   the   institution   from   accepting   deposits  from
correspondent banks;  requiring the institution to divest certain  subsidiaries;
prohibiting  the payment of principal  or interest on  subordinated  debt;  and,
ultimately,  appointing  a receiver for the  institution.  At December 31, 2003,
HomeFederal was categorized as "well  capitalized,"  meaning that  HomeFederal's
total  risk-based  capital ratio exceeded 10%,  HomeFederal's  Tier I risk-based
capital  ratio  exceeded  6%,  HomeFederal's  leverage  ratio  exceeded  5%, and
HomeFederal  was not subject to a  regulatory  order,  agreement or directive to
meet and maintain a specific capital level for any capital measure.

     Other  Regulations.  Interest and other charges collected or contracted for
by  HomeFederal  are  subject to state usury laws and  federal  laws  concerning
interest rates.  HomeFederal's  loan operations are also subject to federal laws
applicable to credit transactions, such as the:

o    Truth-In-Lending  Act,  governing  disclosures  of credit terms to consumer
     borrowers;

o    Home Mortgage Disclosure Act of 1975,  requiring financial  institutions to
     provide  information to enable the public and public officials to determine
     whether a financial  institution  is fulfilling its obligation to help meet
     the housing needs of the community it serves;

o    Equal Credit  Opportunity Act,  prohibiting  discrimination on the basis of
     race, creed or other prohibited factors in extending credit;

o    Fair Credit  Reporting  Act of 1978,  governing  the use and  provision  of
     information to credit reporting agencies;

o    Fair Debt Collection Act,  governing the manner in which consumer debts may
     be collected by collection agencies; and

o    Rules and  regulations  of the various  federal  agencies  charged with the
     responsibility of implementing such federal laws.

     The deposit operations of HomeFederal also are subject to the:

o    Right  to  Financial   Privacy  Act,  which  imposes  a  duty  to  maintain
     confidentiality of consumer financial records and prescribes procedures for
     complying with administrative subpoenas of financial records; and

o    Electronic  Funds  Transfer  Act,  and  Regulation  E issued by the Federal
     Reserve to implement  that Act,  which  governs  automatic  deposits to and
     withdrawals  from deposit  accounts and customers'  rights and  liabilities
     arising from the use of  automated  teller  machines  and other  electronic
     banking service.

     State Bank  Activities.  Under federal law, as  implemented  by regulations
adopted by the FDIC, FDIC-insured state banks are prohibited, subject to certain
exceptions,  from making or retaining  equity  investments  of a type,  or in an
amount,  that  are  not  permissible  for  a  national  bank.  Federal  law,  as
implemented by FDIC  regulations,  also prohibits  FDIC-insured  state banks and
their subsidiaries, subject to certain exceptions, from engaging as principal in
any  activity  that is not  permitted  for a  national  bank or its  subsidiary,
respectively,  unless the bank meets,  and could  continue to meet,  its minimum
regulatory capital  requirements and the FDIC determines that the activity would
not pose a significant risk to the deposit insurance fund of which the bank is a
member.   Impermissible   investments   and  activities   must  be  divested  or
discontinued within certain time frames set by the FDIC. It is not expected that
these restrictions will have a material impact on the operations of HomeFederal.

     Enforcement  Powers.  Federal  regulatory  agencies  may  assess  civil and
criminal    penalties    against    depository    institutions    and    certain
"institution-affiliated parties," including management, employees, and agents of
a financial institution, as well as independent contractors and consultants such
as attorneys and  accountants  and others who  participate in the conduct of the
financial   institution's   affairs.   In  addition,   regulators  may  commence
enforcement  actions against  institutions and  institution-affiliated  parties.
Possible  enforcement  actions  include the  termination  of deposit  insurance.
Furthermore,  regulators  may issue  cease-and-desist  orders  to,  among  other
things,  require  affirmative  action  to  correct  any  harm  resulting  from a
violation or practice, including restitution, reimbursement, indemnifications or
guarantees against loss. A financial institution may also be ordered to restrict
its growth, dispose of certain assets, rescind agreements or contracts,  or take
other actions as determined by the regulator to be appropriate.

     Recent Legislative  Developments.  On November 12, 1999,  President Clinton
signed into law the  Gramm-Leach-Bliley  Financial Services Modernization Act of
1999 -- federal  legislation  which  modernizes the laws governing the financial
services industry.  The new law establishes a comprehensive  framework to permit
affiliations among commercial banks,  insurance companies,  securities firms and
other financial service providers. As a result of this legislation, bank holding
companies  are  permitted to engage in a wider  variety of financial  activities
than  permitted  under prior law,  particularly  with respect to  insurance  and
securities activities. To the extent the law permits banks, securities firms and
insurance companies to affiliate, the financial services industry may experience
further consolidation. This could result in a growing number of larger financial
institutions that offer wider varieties of financial services than are currently
offered by the  Company  and that  could  aggressively  compete  in the  markets
currently served by the Company. The law also increases commercial banks' access
to loan  funding  by the  Federal  Home  Loan  Bank  System,  and  includes  new
provisions   in  the  privacy  area,   restricting   the  ability  of  financial
institutions  to  share  nonpublic  personal  customer  information  with  third
parties.

     On October 26, 2001, President Bush signed the USA Patriot Act of 2001 (the
"Patriot  Act").  The Patriot Act is intended to strengthen  the ability of U.S.
Law Enforcement to combat terrorism on a variety of fronts. The potential impact
of the Patriot Act on financial  institutions is significant  and  wide-ranging.
The  Patriot  Act  contains   sweeping   anti-money   laundering  and  financial
transparency laws and requires  financial  institutions to implement  additional
policies and  procedures  with respect to, or  additional  measures  designed to
address,  any or all the  following  matters,  among others:  money  laundering,
suspicious activities and currency transaction  reporting,  and currency crimes.
In addition,  financial  institutions  are required  under this statute to adopt
reasonable  procedures  to verify the identity of any person  seeking to open an
account and maintain records to verify such person's identity.

     On July 30, 2002,  President Bush signed into law the Sarbanes-Oxley Act of
2002  (the   "Sarbanes-Oxley   Act").  The   Sarbanes-Oxley   Act  represents  a
comprehensive  revision  of  laws  affecting  corporate  governance,  accounting
obligations and corporate  reportings.  The  Sarbanes-Oxley Act is applicable to
all companies  with equity or debt  securities  registered  under the Securities
Exchange Act of 1934. In particular, the Sarbanes-Oxley Act establishes: (i) new
requirements  for  audit  committees,  including  independence,  expertise,  and
responsibilities;   (ii)   additional   responsibilities   regarding   financial
statements for the Chief Executive  Officer and Chief  Financial  Officer of the
reporting  company;  (iii) new standards for auditors and  regulation of audits;
(iv) increased  disclosure and reporting  obligations for the reporting  company
and their directors and executive officers;  and (v) new and increased civil and
criminal penalties for violation of the securities laws.  Although we anticipate
that we will incur  additional  expense in complying  with the provisions of the
Sarbanes-Oxley  Act and the resulting  regulations,  management  does not expect
that such compliance will have a material impact on our results of operations or
financial condition.

     Effect  of  Governmental  Monetary  Policies.  HomeFederal's  earnings  are
affected by domestic economic conditions and the monetary and fiscal policies of
the United States government and its agencies.  The Federal  Reserve's  monetary
policies  have had, and are likely to continue to have,  an important  impact on
the  operating  results  of  commercial  banks  through  its power to  implement
national  monetary  policy in order,  among other things,  to curb  inflation or
combat a  recession.  The  monetary  policies of the Federal  Reserve have major
effects upon the levels of bank loans, investments and deposits through its open
market  operations  in United  States  government  securities  and  through  its
regulation  of the discount  rate on  borrowings of member banks and the reserve
requirements  against  member bank  deposits.  It is not possible to predict the
nature or impact of future changes in monetary and fiscal policies.

Federal Home Loan Bank System

     HomeFederal is a member of the FHLB of Indianapolis, which is one of twelve
regional  FHLBs.  Each FHLB serves as a reserve or central  bank for its members
within its assigned region. The FHLB is funded primarily from funds deposited by
banks  and  savings   associations   and  proceeds  derived  from  the  sale  of
consolidated  obligations  of the FHLB system.  It makes loans to members (i.e.,
advances) in accordance with policies and procedures established by the Board of
Directors of the FHLB.  All FHLB  advances  must be fully  secured by sufficient
collateral  as  determined  by the  FHLB.  The  Federal  Housing  Finance  Board
("FHFB"), an independent agency, controls the FHLB System, including the FHLB of
Indianapolis.

     As a member of the FHLB,  HomeFederal  is required to purchase and maintain
stock  in the  FHLB of  Indianapolis  in an  amount  equal to at least 1% of its
aggregate unpaid residential mortgage loans, home purchase contracts, or similar
obligations  at the beginning of each year. At December 31, 2003,  HomeFederal's
investment  in stock of the FHLB of  Indianapolis  was $10.0  million.  The FHLB
imposes  various  limitations on advances such as limiting the amount of certain
types  of  real  estate-related  collateral  to 30% of a  member's  capital  and
limiting  total  advances to a member.  Interest rates charged for advances vary
depending upon maturity,  the cost of funds to the FHLB of Indianapolis  and the
purpose of the borrowing.

     The FHLBs are  required  to provide  funds for the  resolution  of troubled
savings  associations  and to contribute to affordable  housing programs through
direct loans or interest subsidies on advances targeted for community investment
and low- and moderate-income  housing projects.  For the year ended December 31,
2003,  dividends  paid  by the  FHLB  of  Indianapolis  to  HomeFederal  totaled
approximately $487,000, for an annualized rate of 4.9%.

Limitations on Rates Paid for Deposits

     Regulations  promulgated  by the FDIC place  limitations  on the ability of
insured  depository  institutions  to  accept,  renew or roll over  deposits  by
offering  rates of interest which are  significantly  higher than the prevailing
rates of interest on deposits offered by other insured  depository  institutions
having the same type of charter in the  institution's  normal market area. Under
these regulations,  "well-capitalized" depository institutions may accept, renew
or  roll  such  deposits  over  without  restriction,  "adequately  capitalized"
depository  institutions  may accept,  renew or roll such  deposits  over with a
waiver from the FDIC (subject to certain  restrictions on payments of rates) and
"undercapitalized"  depository  institutions may not accept,  renew or roll such
deposits   over.   The   regulations   contemplate   that  the   definitions  of
"well-capitalized,"  "adequately-capitalized" and "undercapitalized" will be the
same as the  definition  adopted by the  agencies to  implement  the  corrective
action provisions of FDICIA.  Management does not believe that these regulations
will have a materially adverse effect on HomeFederal's current operations.

Federal Reserve System

     Under  regulations  of the  Federal  Reserve,  HomeFederal  is  required to
maintain reserves against its transaction  accounts  (primarily checking and NOW
accounts) and non-personal  money market deposit  accounts.  The effect of these
reserve requirements is to increase HomeFederal's cost of funds.  HomeFederal is
in compliance with its reserve requirements.

Federal Securities Law

     The shares of Common Stock of the Company are registered with the SEC under
the Securities  Exchange Act of 1934 (the "1934 Act"). The Company is subject to
the  information,  proxy  solicitation,  insider trading  restrictions and other
requirements of the 1934 Act and the rules of the SEC thereunder. If the Company
has fewer than 300 shareholders, it may deregister its shares under the 1934 Act
and cease to be subject to the foregoing requirements.

     Shares of Common  Stock held by persons who are  affiliates  of the Company
may not be resold without registration unless sold in accordance with the resale
restrictions  of Rule 144 under the Securities Act of 1933 (the "1933 Act").  If
the Company meets the current public  information  requirements  under Rule 144,
each affiliate of the Company who complies with the other conditions of Rule 144
(including a one-year  holding period for  restricted  securities and conditions
that require the  affiliate's  sale to be aggregated with those of certain other
persons)  will be able to sell in the public  market,  without  registration,  a
number of shares not to exceed, in any three-month  period, the greater of (i) l
% of the outstanding  shares of the Company or (ii) the average weekly volume of
trading in such shares during the preceding four calendar weeks.

Community Reinvestment Act Matters

     Federal law requires  that  ratings of  depository  institutions  under the
Community Reinvestment Act of 1977 ("CRA") be disclosed. The disclosure includes
both a  four-unit  descriptive  rating -- using terms such as  satisfactory  and
unsatisfactory -- and a written  evaluation of each  institution's  performance.
Each FHLB is required to establish standards of community  investment or service
that its members must maintain for continued  access to long-term  advances from
the FHLBs. The standards take into account a member's  performance under the CRA
and its record of lending to first-time  homebuyers.  The FHLBs have established
an  "Affordable  Housing  Program" to subsidize the interest rate of advances to
member associations engaged in lending for long-term,  low- and moderate-income,
owner-occupied and affordable rental housing at subsidized rates. HomeFederal is
participating  in this program.  The examiners have determined that  HomeFederal
has a satisfactory record of meeting community credit needs.

Taxation

Federal Taxation

     Beginning  with the six months ended December 31, 2002, the Company and its
subsidiary  file a  consolidated  federal income tax return on the accrual basis
for each fiscal year ending December 31.  Previously,  the Company's  fiscal and
tax years ended June 30th.  The  consolidated  federal income tax return has the
effect of eliminating  intercompany  distributions,  including dividends, in the
computation of  consolidated  taxable  income.  Income of the Company  generally
would not be taken into account in determining the bad debt deduction allowed to
HomeFederal,  regardless of whether a consolidated tax return is filed. However,
certain  "functionally  related"  losses of the Company  would be required to be
taken into  account in  determining  the  permitted  bad debt  deduction  which,
depending  upon  the  particular  circumstances,   could  reduce  the  bad  debt
deduction.

     Historically, HomeFederal had been permitted to compute bad debt deductions
using either the bank  experience  method or the  percentage  of taxable  income
method. However, for years beginning after December 31, 1995, HomeFederal was no
longer able to use the  percentage  of taxable  income  method of computing  its
allocable  tax bad debt  deduction.  HomeFederal  is  required  to  compute  its
allocable  deduction using the experience  method.  As a result of the repeal of
the  percentage of taxable  income  method,  reserves taken after 1987 using the
percentage of taxable income method generally must be included in future taxable
income over a six-year  period,  although a two-year  delay may be permitted for
institutions meeting a residential  mortgage loan origination test.  HomeFederal
began recapturing approximately $2.3 million over a six-year period beginning in
fiscal 1999. In addition,  the pre-1988 reserve, in which no deferred taxes have
been recorded, will not have to be recaptured into income unless (i) HomeFederal
no longer  qualifies as a bank under the Code, or (ii) excess dividends are paid
out by HomeFederal.

     Depending on the composition of its items of income and expense, a bank may
be  subject  to the  alternative  minimum  tax.  A bank must pay an  alternative
minimum  tax equal to the  amount (if any) by which 20% of  alternative  minimum
taxable income ("AMTI"),  as reduced by an exemption varying with AMTI,  exceeds
the regular tax due. AMTI equals regular  taxable income  increased or decreased
by certain tax preferences and adjustments, including depreciation deductions in
excess of that  allowable  for  alternative  minimum  tax  purposes,  tax-exempt
interest on most private  activity bonds issued after August 7, 1986 (reduced by
any related interest expense disallowed for regular tax purposes), the amount of
the bad debt reserve  deduction  claimed in excess of the deduction based on the
experience  method and 75% of the excess of adjusted  current earnings over AMTI
(before this adjustment and before any alternative tax net operating loss). AMTI
may be reduced only up to 90% by net operating loss carryovers,  but alternative
minimum  tax paid that is  attributable  to most  preferences  (although  not to
post-August 7, 1986 tax-exempt interest) can be credited against regular tax due
in later years.

State Taxation

     HomeFederal  is subject to Indiana's  Financial  Institutions  Tax ("FIT"),
which is imposed at a flat rate of 8.5% on "adjusted  gross  income."  "Adjusted
gross  income,"  for purposes of FIT,  begins with taxable  income as defined by
Section 63 of the Code,  and thus,  incorporates  federal  tax law to the extent
that it affects the  computation of taxable  income.  Federal  taxable income is
then adjusted by several Indiana  modifications.  Other  applicable  state taxes
include generally applicable sales and use taxes plus real and personal property
taxes.

     HomeFederal's  state  income tax returns  have not been audited in the last
five years.

Item 2.  Properties.

     At December  31, 2003,  HomeFederal  conducted  its business  from its main
office  at  501  Washington  Street,  Columbus,  Indiana,  and  17  full-service
branches. HomeFederal owns two buildings that it uses for certain administrative
operations  located at 218 West Second Street,  Seymour,  and 211 North Chestnut
Street,  Seymour.  The  headquarters  of its  securities  operations,  conducted
through its service Company  subsidiary,  are located at 501 Washington  Street,
Columbus,  Indiana.  Information concerning these properties, as of December 31,
2003, is presented in the following table:
<PAGE>
<TABLE>
<CAPTION>
                                                          Net Book Value of
                                                               Property,          Approximate
         Description and                 Owned or           Furniture and           Square             Lease
              Address                     Leased               Fixtures            Footage          Expiration
         ---------------                 --------         -----------------       -----------       ----------
 Principal Office
<S>                                            <C>        <C>                       <C>               <C>
   501 Washington Street                       Owned      $      4,257,312          21,600            N/A

 Operations Center
   218 West Second Street                      Owned      $      1,352,543          20,000            N/A

 Loan Processing Center
   211 North Chestnut                          Owned      $        305,065           5,130            N/A

 Branch Offices:
 Columbus Branches:
   1020 Washington Street                      Owned      $        439,306             800            N/A
   3805 25th Street                            Owned      $        277,428           5,800            N/A
   2751 Brentwood Drive                        Owned      $        426,875           3,200            N/A
   4330 West Jonathon Moore Pike               Owned      $        562,770           2,600            N/A

 Hope Branch                                  Leased      $
   8475 North State Road 9, Suite 4                                126,247           1,500          03/2007

 Austin Branch
   67 West Main Street                         Owned      $         55,636           3,600            N/A

 Brownstown Branch                                                                                 Month to
   101 North Main Street                      Leased      $         13,757           2,400           Month

 North Vernon Branches
   111 North State Street                      Owned      $        306,070           1,900            N/A

   1540 North State Street                    Leased      $         22,948           1,600      Month to Month

 Osgood Branch
   South Buckeye Street                        Owned      $         98,567           1,280            N/A

 Salem Branch
   1208 South Jackson                                     $
                                               Owned               665,855           1,860            N/A
 Seymour Branches
   222 W. Second Street                        Owned      $      1,667,487           9,200            N/A
   1117 East Tipton Street                     Owned      $        366,799           6,800            N/A

 Batesville Branch
   12 West Pearl Street                        Owned      $        531,275           2,175            N/A

 Madison Branch
   201 Clifty Drive                            Owned      $        412,494           2,550            N/A

 Greensburg Branch
   115 East North Street                      Leased      $         10,077           2,440      Month to Month

 Greenwood Branch
   8740 South Emerson Avenue                   Owned      $      2,084,720           5,000            N/A

 Closed Office:
   10204 Lantern Rd., Fishers, Indiana        Leased      $          6,649           1,000           7/04
</TABLE>
<PAGE>

     HomeFederal  owns its computer and data  processing  equipment that is used
for accounting, financial forecasting, and general ledger work. HomeFederal also
has  contracted  for  the  data  processing  and  reporting  services  of  Bisys
headquartered  in Cherry Hill,  New Jersey.  The contract  with Bisys expires in
October 2006.

Item 3.   Legal Proceedings.

     The Company and the Bank are  involved  from time to time as  plaintiff  or
defendant in various  legal  actions  arising in the normal  course of business.
While  the  ultimate  outcome  of these  proceedings  cannot be  predicted  with
certainty,  it is the  opinion  of  management  that  the  resolution  of  these
proceedings  should not have a  material  effect on the  Company's  consolidated
financial position or results of operations.

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

     No matter was submitted to a vote of the Company's  shareholders during the
quarter ended December 31, 2003.

Item 4.5.  Executive Officers of Home Federal Bancorp.

     Presented below is certain information  regarding the executive officers of
HFB who are not also directors.

                                              Position with HFB

              S. Elaine Pollert           Executive Vice President

              Lawrence E. Welker          Executive Vice President, Treasurer,
                                          Chief Financial Officer and Secretary

              Charles R. Farber           Executive Vice President

     S. Elaine Pollert (age 44) has been employed by HomeFederal since 1986. She
was elected Vice President Branch  Administration in 1989, Senior Vice President
Retail Banking in 1996, and Executive Vice President in 1998.

     Lawrence E. Welker (age 56) has been employed by HomeFederal since 1979. He
was  Controller  from 1979 to 1982. In 1982,  he was elected as Chief  Financial
Officer and Treasurer, and in 1994 he became an Executive Vice President.

     Charles R. Farber (age 54) has been  employed  by  HomeFederal  since March
2002 as its Executive Vice President.  He served as Law Firm  Administrator  for
the  Indianapolis,  Indiana law firm Locke Reynolds LLP from 2000 to 2002. Prior
thereto,  he  served  for  28  years  at  Peoples  Bank  and  Trust  Company  in
Indianapolis,  Indiana,  with his final position at Peoples Bank and Trust being
Executive Vice President.

PART II

Item 5. Market for Registrant's Common Equity,  Related Stockholder Matters, and
Issuer Purchases of Equity Securities.

     HFB's common stock ("Common  Stock") is quoted on the National  Association
of Securities  Dealers Automated  Quotation System  ("NASDAQ"),  National Market
System,  under the symbol "HOMF." For certain  information  related to the stock
prices and dividends paid by HFB, see "Quarterly  Results of Operations" on page
4 of HFB's  Shareholder  Annual Report for the year ended December 31, 2003 (the
"Shareholder  Annual  Report").   As  of  December  31,  2003,  there  were  470
shareholders of record of HFB's Common Stock.

     It is  currently  the policy of HFB's Board of Directors to continue to pay
quarterly  dividends,  but any  future  dividends  are  subject  to the  Board's
discretion  based on its  consideration  of HFB's operating  results,  financial
condition, capital, income tax considerations, regulatory restrictions and other
factors.

     Since HFB has no independent  operations or other  subsidiaries to generate
income, its ability to accumulate  earnings for the payment of cash dividends to
its  shareholders  is directly  dependent upon the ability of HomeFederal to pay
dividends to the Company.  For a discussion  of the  regulatory  limitations  on
HomeFederal's  ability  to pay  dividends  see  Item 1,  "Business-Regulation  -
HomeFederal  Savings  Bank -  Dividends",  and on the  Company's  ability to pay
dividends, see Item 1, "Business-Regulation - Home Federal Bancorp - Dividends".

     Income of  HomeFederal  appropriated  to bad debt reserves and deducted for
federal  income tax purposes is not available  for payment of cash  dividends or
other  distributions  to HFB  without  the  payment of federal  income  taxes by
HomeFederal on the amount of such income deemed removed from the reserves at the
then-current  income tax rate. At December 31, 2003,  approximately $2.1 million
of  HomeFederal's  retained income  represented bad debt deductions for which no
federal income tax provision had been made. See "Taxation--Federal  Taxation" in
Item 1 hereof.

     On November 22, 1994,  the Board of Directors of HFB declared a dividend of
one common share  purchase  right (a "Right" or "Rights")  for each  outstanding
share of  Common  Stock.  The  dividend  was  paid on  December  6,  1994 to the
shareholders  of record as of  November  22,  1994.  If and when  Rights  become
exercisable,  each Right will entitle the registered holder to purchase from HFB
one Common Share at a purchase price of $80.00 (the "Purchase  Price"),  subject
to  adjustment  as  described  in the Rights  Agreement  between the Company and
LaSalle  National  Bank,  Chicago,  Illinois,  (the  "Rights  Agreement")  which
specifies  the  terms of the  Rights.  The  Rights  will be  represented  by the
outstanding Common Share  certificates and the Rights cannot be bought,  sold or
otherwise  traded  separately  from the Common  Shares  until the  "Distribution
Date," which is the earliest to occur of (i) 10 calendar days following a public
announcement  that a person or group (an  "Acquiring  Person")  has (a) acquired
beneficial  ownership  of 15% or more of the  outstanding  Common  Shares or (b)
become the beneficial  owner of an amount of the outstanding  Common Shares (but
not less than 10%) which the Board of Directors determines to be substantial and
which  ownership  the  Board  of  Directors  determines  is  intended  or may be
reasonably  anticipated,  in general, to cause HFB to take actions determined by
the Board of Directors to be not in HFB's best long-term  interests (an "Adverse
Person"), or (ii) 10 business days following the commencement or announcement of
an intention to make a tender offer or exchange offer the  consummation of which
would result in the beneficial  ownership by a person or group of 30% or more of
such outstanding Common Shares.

     The  Rights  have  certain  anti-takeover  effects.  The  Rights  may cause
substantial  dilution to a person or group that attempts to acquire HFB on terms
not  approved  by the Board of  Directors  of HFB,  except  pursuant to an offer
conditioned on a substantial number of Rights being acquired.  The Rights should
not  interfere  with any merger or other  business  combination  approved by the
Board of  Directors  since the Rights may be  redeemed  by HFB at $.01 per Right
prior to the time that a person or group has  acquired  beneficial  ownership of
15% or more of the  Common  Shares.  The  Rights  will  expire  at the  close of
business on November 22, 2004.

     The Company  sold no equity  securities  during the period  covered by this
report that were not registered under the Securities Act of 1933.

     The Company  repurchased no shares during the fiscal quarter ended December
31, 2003.

     The disclosures  regarding equity  compensation  plans required by Reg. ss.
229.201(d) is set forth in Item 12 hereof.

Item 6.    Selected Financial Data.

     The  information  required by this item is incorporated by reference to the
material under the heading "Summary of Selected Consolidated  Financial Data" on
page 3 of the Shareholder Annual Report.

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.

     The information required by this item is incorporated by reference to pages
6 to 18 of the Shareholder Annual Report.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

     The information  required by this item is incorporated by reference to page
14 of the Shareholder Annual Report.

Item 8.  Financial Statements and Supplementary Data.

     The Company's Consolidated Financial Statements and Notes thereto contained
on pages 20 to 40 of the Shareholder  Annual Report are  incorporated  herein by
reference.  HFB's  Quarterly  Results of  Operations  contained on page 5 of the
Shareholder Annual Report are incorporated herein by reference.

Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure.

     There are no such changes and disagreements during the applicable period.

Item 9A.  Controls and Procedures.

     As  of  December  31,  2003,  an  evaluation  was  carried  out  under  the
supervision and with the  participation of the Company's  management,  including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of
our  disclosure  controls  and  procedures  (as  defined in  Exchange  Act Rules
13a-15(e) and 15d-15(e)  under the  Securities  Exchange Act of 1934).  Based on
their  evaluation,  our Chief Executive Officer and Chief Financial Officer have
concluded that the Company's disclosure controls and procedures are, to the best
of  their  knowledge,  effective  to  ensure  that  information  required  to be
disclosed by the Company in reports that it files or submits  under the Exchange
Act is recorded,  processed,  summarized  and  reported  within the time periods
specified in Securities and Exchange Commission rules and forms.

     Our Chief  Executive  Officer and Chief  Financial  Officer have  concluded
that,  during the Company's  fiscal quarter ended December 31, 2003,  there have
been no  significant  changes in the  Company's  internal  controls  or in other
factors that could  significantly  affect its internal  controls,  including any
corrective  actions  with  regard  to  significant   deficiencies  and  material
weaknesses.

PART III

Item 10.  Directors and Executive Officers of the Registrant.

     The  information  required  by this  item  with  respect  to  directors  is
incorporated  by reference to page 2 to 3 of the Company's  Proxy  Statement for
its  annual  shareholder  meeting  to be held in April  2004  (the  "2004  Proxy
Statement"). Information concerning the Company's executive officers who are not
also directors is included in Item 4.5 in Part I of this report.

     The  information  required by this item with respect to the compliance with
Section  16(a)  of the  Securities  Exchange  Act of  1934  is  incorporated  by
reference to page 13 of the 2004 Proxy Statement.

     The  information  required  by this item with  respect  to  members  of the
Company's  Audit  Committee  and  whether any such  members  qualify as an Audit
Committee  Financial  Expert is  incorporated by reference to page 6 of the 2004
Proxy Statement.

     The  Company has adopted an Ethics  Policy  that  applies to all  officers,
employees,  and  directors  of the Company and its  subsidiaries.  A copy of the
Ethics Policy is attached as Exhibit 14 to this Annual Report.

Item 11.  Executive Compensation.

     The   information   required  by  this  item  with   respect  to  executive
compensation  is incorporated by reference to page 6 through page 12 of the 2004
Proxy Statement.

Item 12.  Security  Ownership of Certain  Beneficial  Owners and  Management and
Related Stockholder Matters.

     Other  information  referred by this item is  incorporated  by reference to
pages 1 to 3 of the 2004 Proxy Statement.

Equity Compensation Plan Information

     The following  table provides the  information  about the Company's  common
stock  that may be issued  upon the  exercise  of options  and rights  under all
existing equity compensation plans as of December 31, 2003.
<TABLE>
<CAPTION>

                                                                                             Number of securities
                                                                                            remaining available for
                                                                                             future issuance under
                              Number of securities to                                         equity compensation
                              be issued upon exercise           Weighted-average                  plans as of
                              of outstanding options,          exercise price of               December 31, 2003
                               warrants and rights as             outstanding                (excluding securities
                                         of                    options, warrants                 reflected in
                                 December 31, 2003                 and rights                     column (a))
Plan category                           (a)                           (b)                             (c)
--------------------------    -------------------------    ---------------------------    ----------------------------

Equity compensation
plans approved by
<S>                                   <C>                           <C>                            <C>
security holders                      771,268(1)                    $ 20.30(1)                     310,631(1)

Equity compensation
plans not approved by
security holders                        ---                           ---                             ---
                              -------------------------    ---------------------------    ----------------------------
Total                                 771,268                       $ 20.30                        310,631
                              =========================    ===========================    ============================
</TABLE>

(1)  Includes the following  plans:  the Company's 1993 stock option plan,  1995
     stock option plan,  1997 stock option plan and 2001 stock option plan,  and
     individual awards of options to directors.

Item 13.  Certain Relationships and Related Transactions.

     The information  required by this item is incorporated by reference to page
13 of the 2004 Proxy Statement.

Item 14.  Principal Accountant Fees and Services.

     The information  required by this item is incorporated by reference to page
14 of the 2004 Proxy Statement.
<PAGE>


PART IV

Item 15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.

     (a)  List the following documents filed as a part of the report:
<TABLE>
<CAPTION>

Financial Statements                                                                       Page in 2003
                                                                                            Shareholder
                                                                                           Annual Report

Consolidated Balance Sheets as of December 31, 2003, December 31, 2002,
<S>                                                                                             <C>
     and June 30, 2002                                                                          20

Consolidated Statements of Income for the twelve month period ended
     December 31, 2003 and the six month period ended December 31, 2002,
     and for each of the years in the two-year period ended June 30, 2002                       21

Consolidated Statements of Shareholders' Equity for the twelve month period
     ended December 31,    2003 and the six month period ended December 31, 2002,
     and for each of the years in the two-year period ended June 30, 2002                       22

Consolidated Statements of Cash Flows for the twelve month period ended
     December 31, 2003 and the six month period ended December 31, 2002,
     and for each of the years in the two-year period ended June 30, 2002                       23

Notes to Consolidated Financial Statements                                                      24

Report of Deloitte & Touche LLP Independent Auditor                                             41
</TABLE>

     (b)  Reports on Form 8-K Registrant filed a Form 8-K dated October 17, 2003
          concerning the  Registrant's  financial  results for the quarter ended
          September 30, 2003.

     (c)  The exhibits filed herewith or  incorporated  by reference  herein are
          set forth on the Exhibit Index on page 34.

     (d)  All  schedules are omitted as the required  information  either is not
          applicable or is included in the Consolidated  Financial Statements or
          related notes.
<PAGE>

                                   SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange
          Act of 1934, as amended, the Registrant has duly caused this report to
          be signed on behalf of the undersigned,  thereto duly authorized, this
          10th day of March 2004.


                                             HOME FEDERAL BANCORP
DATE: March 10, 2004                         By:/s/ John K. Keach. Jr.
                                                --------------------------
                                                John K. Keach, Jr., President
                                                and Chief Executive Officer

     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this 10th day of March 2004.


/s/  Lawrence E. Welker                      /s/ John K. Keach. Jr.
-----------------------------                --------------------------------
Lawrence E. Welker, Executive                John K. Keach, Jr.,
Vice President, Treasurer,                   Chairman of the Board,
Chief Financial Officer and Secretary        President and Chief
(Principal Financial Officer)                Executive Officer
                                             (Principal Executive
                                             Officer)


/s/ Melissa  A. McGill                       /s/John K. Keach. Jr.
-----------------------------                --------------------------------
Melissa A. McGill,                           John K. Keach, Jr., Director
Sr. Vice President and Controller
(Principal Accounting Officer)

/s/ Gregory J. Pence                         /s/ John T. Beatty
-----------------------------                --------------------------------
Gregory J. Pence, Director                   John T. Beatty, Director

/s/ David W. Laitinen                        /s/ Harold Force
-----------------------------                --------------------------------
David W. Laitinen, Director                  Harold Force, Director

/s/ John M. Miller                           /s/ Harvard W. Nolting. Jr.
-----------------------------                --------------------------------
John M. Miller, Director                     Harvard W. Nolting, Jr., Director
<PAGE>



                                  EXHIBIT INDEX
Reference to
Regulation S-K
Exhibit                                                               Sequential
Number                                   Document                    Page Number

 3(a)     Articles of  Incorporation  (incorporated  by reference from
          Exhibit B to Registrant's Registration Statement on Form S-4
          (Registration No. 33-55234)).

 3(b)     Code of By-Laws (incorporated by reference from Exhibit C to
          Registrant's    Registration    Statement    on   From   S-4
          (Registration  No.   33-55234));   amendment  thereto  dated
          October 22, 2002  (incorporated  by  reference  from Exhibit
          3(b)  of  Registrant's   Transition   Report  on  Form  10-K
          Transition  Report for the six  months  ended  December  31,
          2002)

 4(a)     Articles of  Incorporation  (incorporated  by reference from
          Exhibit B to Registrant's Registration Statement on Form S-4
          (Registration No.33-55234)).

 4(b)     Code of By-Laws (incorporated by reference from Exhibit C to
          Registrant's    Registration    Statement    on   From   S-4
          (Registration No. 33-55234).

 10(a)    Stock Option Plan  (incorporated  by reference  from Exhibit
          10(a) to  Registrant's  Registration  Statement  on Form S-4
          (Registration No. 33-55234).

 10(b)    1993 Stock  Option  Plan  (incorporated  by  reference  from
          Exhibit 10(b) to  Registrant's  Form 10-K for the year ended
          June 30, 1994).

 10(c)    Employment  Agreement with Lawrence E. Welker  (incorporated
          by reference from Exhibit 10(c) to Registrants  Registration
          Statement on Form S-4 (Registration No.  33-55234));  first,
          second  and  third  Amendments   thereto   (incorporated  by
          reference to Exhibit 10(c) of Registrant's Form 10-K for the
          year  ended  June  30,  1998);   fourth  amendment   thereto
          (incorporated  by reference to Exhibit 10(c) of Registrant's
          Form 10-K for the year ended June 30, 2001); fifth amendment
          thereto  (incorporated  by reference  from Exhibit  l0(c) to
          Registrant's Form 10-K the fiscal year ended June 30, 2002).

 10(d)    Employment  Agreement with John K. Keach, Jr.  (incorporated
          by reference from Exhibit 10(d) to Registrant's Registration
          Statement on Form S-4 (Registration No.  33-55234));  first,
          second  and  third  amendments   thereto   (incorporated  by
          reference to Exhibit 10(d) of Registrant's Form 10-K for the
          year  ended  June  30,  1998);   fourth  amendment   thereto
          (incorporated by reference to Exhibit 10 (d) of Registrant's
          Form 10-K for the year ended June 30, 2001); fifth amendment
          thereto  (incorporated  by reference  from Exhibit  l0(d) to
          Registrant's  Form 10-K for the  fiscal  year ended June 30,
          2002).

 10(f)    HomeFederal  Savings Bank Excess Benefit Plan Agreement with
          John K.  Keach,  Jr.  dated April 1, 2001  (incorporated  by
          reference  to Exhibit 10 (f) of  Registrant's  Form 10-K for
          the year ended June 30, 2001).

 10(g)    1999 Stock option plan  incorporated by reference to Exhibit
          J to the  registrant's  proxy  statement for its 1999 Annual
          shareholder's meeting.

 10(i)    Stock  Option   Agreement  with  Harvard  W.  Nolting,   Jr.
          (incorporated by reference from Exhibit 10(i) to HomeFederal
          Bank's Form 10-K for the fiscal year ended June 30, 1991).

 10(j)    Stock Option Agreement with David W. Laitinen  (incorporated
          by reference from Exhibit 10(j) to  HomeFederal  Bank's Form
          10-K for the fiscal year ended June 30, 1991).

 10(k)    Stock Option Agreement with John T. Beatty  (incorporated by
          reference from Exhibit 10(k) to HomeFederal Bank's Form 10-K
          for the fiscal year ended June 30, 1991).

 10(l)    Stock Option  Agreement with Harold Force  (incorporated  by
          reference from Exhibit 10(l) to HomeFederal Bank's Form 10-K
          for the fiscal year ended June 30, 1991).

 10(n)    Supplemental  Executive  Retirement Plan with John K. Keach,
          Jr.  dated  April 1,  2001(incorporated  by  reference  from
          Exhibit 10(n) to  Registrant's  Form 10-K for the year ended
          June 30, 2002).

 10(o)    Supplemental  Executive  Retirement  Plan with  Lawrence  E.
          Welker dated April 1, 2001  (incorporated  by reference from
          Exhibit 10(o) to  Registrant's  Form 10-K for the year ended
          June 30, 2002).

 10(p)    Supplemental  Executive  Retirement Plan with Elaine Pollert
          dated April 1,  2001(incorporated  by reference from Exhibit
          10(p) to Registrant's  Form 10-K for the year ended June 30,
          2002).

 10(v)    Deferred  Compensation  Agreement  with  John K.  Keach,  Sr
          (incorporated by reference from Exhibit 10(v) to HomeFederal
          Bank Form 10-K for the fiscal year ended June 30,  1992) and
          First   Amendment   to   Deferred   Compensation   Agreement
          (incorporated   by   Reference   from   Exhibit   10(v)   to
          Registrant's Form 10-K for the year ended June 30, 1994) and
          Second   Amendment   to  Deferred   Compensation   Agreement
          (incorporated   by   reference   from   Exhibit   10(v)   to
          Registrant's Form 10-K for the year ended June 30, 1998).

 10(w)    Employment Agreement with S. Elaine Pollert (incorporated by
          reference from Exhibit l0(w) to  HomeFederal  Bank Form 10-K
          for  the  fiscal  year  ended  June  30,  1998);  and  First
          Amendment to Employment Agreement (incorporated by reference
          from Exhibit  10(w) to  Registrant's  Form 10-K for the year
          ended June 30, 1998); second amendment thereto (incorporated
          by reference  from Exhibit 10(w) to  Registrant's  Form 10-K
          for the  year  ended  June 30,  2002);  third  amendment  to
          Employment Agreement (incorporated by reference from Exhibit
          l0(w) to  Registrant's  Form 10-K for the fiscal  year ended
          June 30, 2002).

 10(x)    Supplemental   Executive  Retirement  Plan  with  Gerald  L.
          Armstrong dated April 1, 2001(incorporated by reference from
          Exhibit 10(x) to  Registrant's  Form 10-K for the year ended
          June 30, 2002).

10(ab)    Stock   Option    Agreement   with   Gerald   L.   Armstrong
          (incorporated   by   reference   from   Exhibit   10(ab)  to
          HomeFederal  Bank Form 10-K for the  fiscal  year ended June
          30, 1992).

10(ac)    Director  Deferred  Compensation  Agreement with John Beatty
          (incorporated   by   reference   from   Exhibit   l0(ac)  to
          HomeFederal  Bank Form 10-K for the  fiscal  year ended June
          30, 1992); first and second amendments thereto (incorporated
          by reference from Exhibit 10(ac) to  Registrant's  Form 10-K
          for the year ended June 30, 1998).

10(ad)    Director  Deferred  Compensation  Agreement with Lewis Essex
          (incorporated   by   reference   from   Exhibit   10(ad)  to
          HomeFederal  Bank Form 10-K for the  fiscal  year ended June
          30, 1992); first and second amendments thereto (incorporated
          by reference from Exhibit 10(ad) to  Registrant's  Form 10-K
          for the year ended June 30, 1998).

10(ae)    Director Deferred  Compensation  Agreement with Harold Force
          (incorporated   by   reference   from   Exhibit   10(ae)  to
          HomeFederal  Bank Form l0-K for the  fiscal  year ended June
          30,  1992);  first,  second  and  third  amendments  thereto
          (incorporated   by   reference   from   Exhibit   10(ae)  to
          Registrant's Form 10-K for the year ended June 30, 1998).

10(af)    Director  Deferred  Compensation  Agreement  with  David  W.
          Laitinen  (incorporated  by reference from Exhibit 10(af) to
          HomeFederal  Bank Form 10-K for the  fiscal  year ended June
          30,  1992);  first,  second  and  third  amendments  thereto
          (incorporated   by   reference   from   Exhibit   10(af)  to
          Registrant's Form 10-K for the year ended June 30, 1998).

10(ag)    Director  Deferred   Compensation   Agreement  with  William
          Nolting  (incorporated  by reference  from Exhibit 10(ag) to
          HomeFederal  Bank Form 10-K for the  fiscal  year ended June
          30,   1992);   );  first  and  second   amendments   thereto
          (incorporated   by   reference   from   Exhibit   10(ag)  to
          Registrant's Form 10-K for the year ended June 30, 1998).

10(ah)    Non-Qualified  Stock Option  Agreement,  dated  December 22,
          1992,  with John T. Beatty  (incorporated  by reference from
          Exhibit 10(ah) to Registrant's  Form 10-K for the year ended
          June 30, 1994).

10(ai)    Non-Qualified  Stock Option  Agreement,  dated  December 22,
          1992,  with Lewis W. Essex  (incorporated  by reference from
          Exhibit 10(ai) to Registrant's  Form 10-K for the year ended
          June 30, 1994).

10(aj)    Non-Qualified  Stock Option  Agreement,  dated  December 22,
          1992,  with Harold Force  (incorporated  by  reference  from
          Exhibit 10(aj) to Registrant's  Form 10-K for the year ended
          June 30, 1994).

10(ak)    Non-Qualified  Stock Option  Agreement,  dated  December 22,
          1992, with David W. Laitinen (incorporated by reference from
          Exhibit 10(ak) to Registrant's  Form 10-K for the year ended
          June 30, 1994).

10(al)    Non-Qualified  Stock Option  Agreement,  dated  December 22,
          1992, with Harvard W. Nolting, Jr (incorporated by reference
          from Exhibit 10 (al) to Registrant's  Form 10-K for the year
          ended June 30, 1994).

10(am)    Non-Qualified Stock Option Agreement,  dated August 24,1993,
          with John T. Beatty  (incorporated by reference from Exhibit
          10(am) to Registrant's Form 10-K for the year ended June 30,
          1994).

10(an)    Non-Qualified Stock Option Agreement,  dated August 24,1993,
          with Lewis W. Essex  (incorporated by reference from Exhibit
          10(an) to Registrant's Form 10-K for the year ended June 30,
          1994).

10(ao)    Non-Qualified Stock Option Agreement, dated August 24, 1993,
          with Harold Force  (incorporated  by reference  from Exhibit
          10(ao) to Registrant's Form 10-K for the year ended June 30,
          1994).

10(ap)    Non-Qualified Stock Option Agreement, dated August 24, 1993,
          with  David W.  Laitinen  (incorporated  by  reference  from
          Exhibit 10(ap) to Registrant's  Form 10-K for the year ended
          June 30, 1994).

10(aq)    Non-Qualified Stock Option Agreement, dated August 24, 1993,
          with Harvard W. Nolting, Jr. (incorporated by reference from
          Exhibit 10 (aq) to Registrant's Form 10-K for the year ended
          June 30, 1994).

10(ar)    Rights  Agreement,  dated as of November 22,  1994,  between
          Registrant and LaSalle National Bank, Chicago,  Illinois, as
          Rights Agent  (incorporated  by reference  from Exhibit 1 to
          Registrant's  Registration  Statement on Form 8-A filed with
          the SEC on December 5, 1994),  first amendment thereto dated
          November  25, 1994  (incorporated  by  reference  to Exhibit
          10(ar) to  Registrant's  Form 10-K for the fiscal year ended
          June 30, 2000).

10(as)    1995 Stock  Option  Plan  (incorporated  by  reference  from
          Exhibit  A to  Registrant's  Proxy  Statement  for its  1995
          annual shareholder meeting).

10(at)    2001 stock  option  plan  (incorporated  by  reference  from
          Exhibit B to the  Registrant's  Proxy Statement for its 2001
          annual shareholder meeting.

10(au)    Employment Agreement with Charles R. Farber (incorporated by
          reference from Exhibit l0(au) to Registrant's  Form 10-K for
          the fiscal year ended June 30, 2002).

10(av)    Executive  Supplemental  Retirement  Income  Agreement  with
          Charles R. Farber dated  November 1, 2002  (incorporates  by
          reference  to  Exhibit  10(av)  to  Registrant's  Transition
          Report on Form 10-K for the six months  ended  December  31,
          2003).

  13      Home Federal Bancorp Annual Report December 31, 2003.

  14      Code of Ethics

  21      Subsidiaries of the Registrant (incorporated by reference to
          Exhibit  21 of the  Registrant's  Transition  Report on Form
          10-K for the six months ended December 31, 2002).

 23.1     Independent Auditors' Consent.

 31.1     Certification   of  John  K.  Keach,   Jr.  required  by  12
          C.F.R.ss.240.13a-14(a)

 31.2     Certification   of  Lawrence   E.  Welker   required  by  12
          C.F.R.ss.240.13a-14(a)

  32      Certification  pursuant  to  18  U.S.C.ss.1350,  as  adopted
          pursuant to Section 906 of the Sarbanes-Oxley Act of 2002