##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 
 FORM 10-K
 
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from ___________ to ___________
 Commission File Number: 000-53494
 Home Federal Holdings Corporation
  Georgia(State or Other Jurisdiction of Incorporation or Organization)
    
    26-1822378(I.R.S. Employer Identification No.)3626 Mundy Mill Road 
Gainesville, Georgia
    
    30504(Address of Principal Executive Offices)
    
    (Zip Code)
 Registrants telephone number, including area code:   Securities registered pursuant to Section 12(b) of the Act:   Securities registered pursuant to Section 12(g) of the Act:    Name of each exchange on which registered:
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated o
    
    Smaller reporting company þ
 o þ
  DOCUMENTS INCORPORATED BY REFERENCE




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##### 



HOME FEDERAL HOLDINGS CORPORATION
ANNUAL REPORT ON FORM 10-K
 TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    1Item 2. Managements Discussion and Analysis or Plan of Operations
    
    
    11Item 3. Legal Proceedings
    
    
    14Item 4. Submission of Matters to a Vote of Security Holders
    
    
    14PART IIItem 5. Financial Statements
    
    
    15Item 6. Changes in and Disagreements with Accountants on Account and Financial Disclosure
    
    
    26Item 7A. Controls and Procedures
    
    
    26Item 7B. Other Information
    
    
    26PART IIIItem 8. Directors, Executive Officers and Corporate Governance
    
    
    26Item 9. Executive Compensation
    
    
    31Item 10. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    34Item 11. Certain Relationships and Related Party Transactions
    
    
    35Item 12. Principal Accounting Fees and Services
    
    
    35Item 13. Exhibits, Financial Statement Schedules
    
    
    35Exhibit 10.21Exhibit 24Exhibit 31.1Exhibit 31.2Exhibit 32
   (i)




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##### Table of Contents



PART I
 
 Item 1. Business
  
    
    our lack of operating history;
 
    
    potential delays in the opening date of the bank;
 
    
    significant increases in competitive pressure in the banking and financial services
industries;
 
    
    changes in the interest rate environment which could reduce anticipated or actual
margins;
 
    
    changes in political conditions or the legislative or regulatory environment;
 
    
    general economic conditions, either nationally or regionally and especially in
primary service area, becoming less favorable than expected, resulting in, among other
things, a deterioration in credit quality;
 
    
    changes occurring in business conditions and inflation;
 
    
    changes in technology;
 
    
    the level of allowance for loan loss and the lack of seasoning of our loan
portfolio, once we open;
 
    
    the rate of delinquencies and amounts of charge-offs, once we open;
 
    
    the rates of loan growth, once we open;
 
    
    adverse changes in asset quality and resulting credit risk-related losses and
expenses;
 
    
    changes in monetary and tax policies;
 
    
    loss of consumer confidence and economic disruptions resulting from terrorist
activities;
 
    
    changes in the securities markets; and
 
    
    other risks and uncertainties detailed from time to time in our filings with the
Securities and Exchange Commission.
  1




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##### Table of Contents



General
  Location and Service Area
  Products and Services
  Lending Services
  Lending Policy.
  2




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##### Table of Contents



Loan Category
    
    Percentage of Loan PortfolioReal estate-related loans:Commercial real estate loans
    
    
    20
    %Construction and development loans
    
    
    15
    %Residential real estate loans
    
    
    36
    %Commercial loans to small- and medium-sized businesses
    
    
    8
    %Consumer loans
    
    
    18
    %Credit cards
    
    
    3
    %
  Loan Approval and Review .
 Lending Limits.
 
    
    15% of Home Federal Banks statutory capital base if the loan is not fully secured;
or
 
    
    25% of the Home Federal Banks statutory capital base if the entire amount of the
loan is fully secured.
   3




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Credit Risks.
    Real Estate Loans .
 
    
    Commercial Real Estate.Our commercial real estate loan terms generally will be
limited to five years or less, although payments may be structured on a longer
amortization basis. Interest rates may be fixed or adjustable, with an origination fee
generally being charged on each loan funded. We will attempt to reduce credit risk on
our commercial real estate loans by emphasizing loans on owner-occupied office and
retail buildings where the ratio of the loan principal to the value of the collateral
as established by independent appraisal does not exceed 80%. We will also project
minimum levels of net projected cash flow available for debt service based on the type
of loan. In addition, we may require personal guarantees from the principal owners of
the property supported by a review by our management of the principal owners personal
financial statements. Risks associated with commercial real estate loans include
fluctuations in the value of real estate, new job creation trends, tenant vacancy
rates and the quality of the borrowers management. We will attempt to limit our risk by
analyzing borrowers cash flow and collateral value on an ongoing basis.
  4




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
    
    Construction and Development Loans.Our construction and development loans will
be made both on a pre-sold and speculative basis. If the borrower has entered into an
agreement to sell the property prior to beginning construction, then the loan is
considered to be on a pre-sold basis. If the borrower has not entered into an agreement
to sell the property prior to beginning construction, then the loan is considered to be
on a speculative basis. Construction and development loans are generally made with a
term of nine months and interest is paid periodically. The ratio of the loan principal
to the value of the collateral as established by independent appraisal will not
generally exceed 80%. Additionally, speculative loans will be based on the borrowers
financial strength and cash flow position. Loan proceeds will be disbursed based on the
percentage of completion and only after the project has been inspected by an
experienced construction lender or appraiser. Risks associated with construction loans
include fluctuations in the value of real estate and new job creation trends.
 
    
    Residential Real Estate.Our residential real estate loans will consist of
residential first and second mortgage loans and residential construction loans. We will
offer fixed and variable rates on our mortgages with the amortization of first
mortgages with three years and beyond. We will offer maturity dates with balloon terms
for up to five years and beyond. These loans will be made consistent with our appraisal
policy and with the ratio of the loan principal to the value of collateral as
established by independent appraisal generally not to exceed 80% to 90%. We expect
these loan to value ratios will be sufficient to compensate for fluctuations in real
estate market value and to minimize losses that could result from a downturn in the
residential real estate market. We will not make any subprime or low documentation real
estate loans.
 Commercial Loans.
 Consumer Loans.
 Credit Cards.
  5




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Investments
  Deposit Services
  Other Banking Services
  Employees
  SUPERVISION AND REGULATION
  General
   
    
    it may acquire direct or indirect ownership or control of any voting shares of any
bank if, after the acquisition, the bank holding company will directly or indirectly
own or control more than 5% of the banks voting shares;
  6




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
    
    it or any of its non-bank subsidiaries may acquire all or substantially all of the
assets of any bank; or
 
    
    it may merge or consolidate with any other bank holding company.
       7




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Payment of Dividends
    Capital Adequacy
      8




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Support of Subsidiary Institutions
  Prompt Corrective Action
   Community Reinvestment Act
   
    
    a lending test, which compares the institutions market share of loans in low- and
moderate-income areas to its market share of loans in its entire service area;
  9




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##### Table of Contents




    
    a service test, which evaluates the provision of services that promote the
availability of credit to low- moderate-income areas; and
 
    
    an investment test, which evaluates the institutions record of investments in
organizations designed to foster community development, small- and minority-owed
businesses and affordable housing lending, including state and local government housing
or revenue bonds.
  Privacy
  Restrictions on Transactions with Affiliates
  
    
    a banks loans or extensions of credit to affiliates;
 
    
    a banks investment in affiliates;
 
    
    assets a bank may purchase from affiliates, except for real and personal property
exempted by the Federal Reserve;
 
    
    the amount of loans or extensions of credit to third parties collateralized by the
securities or obligations of affiliates; and
 
    
    a banks guarantee, acceptance or letter of credit issued on behalf of an affiliate.
    10




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Monetary Policy
  
 Item 2. Managements Discussion and Analysis or Plan of Operations
     Financial Results and Plan of Operation
    11




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Liquidity and Interest Rate Sensitivity
 Organizational Period.
  12




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Going Concern and Managements Plan.
   Commencement of Banking Operations.
    13




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Capital Adequacy
     
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
   14




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tem 5. Financial Statements
  REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM Board of Directors 
Home Federal
Holdings Corporation 
Oakwood, Georgia We have audited the accompanying
balance sheet of Home Federal Holdings Corporation (A Development Stage
Company) (the “Company”), as of December 31, 2008 and
January 31, 2008 and the related statements of operations, changes in
stockholder’s deficit, and cash flows for the periods from
February 1, 2008 to December 31, 2008, February 1, 2007, date of
inception, to January 31, 2008, and February 1, 2007, date of
inception, to December 31, 2008. These financial statements are the
responsibility of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our audit. We conducted our audit in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are fee of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provide a reasonable basis for our opinion. In our opinion, the financial
statements referred to above present fairly, in all material respects, the
financial position of Home Federal Holdings Corporation as of December 31,
2008 and January 31, 2008 and the results of their operations and cash
flows for the periods from February 1, 2008 to December 31, 2008,
February 1, 2007, date of inception, to January 31, 2008, and
February 1, 2007, date of inception, to December 31, 2008 in
conformity with accounting principles generally accepted in the United States
of America. The accompanying financial
statements have been prepared assuming that the Company will continue as a
going concern. As discussed in Note 2 to the financial statements, the Company
will require substantial additional capital and debt financing to continue
operating activities until such time as the Company can generate positive cash
flows from operations. This condition raises substantial doubt about the
Company’s ability to continue as a going concern. Management’s
plans to raise additional funds and begin operations are also described in Note
2. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.  Atlanta, Georgia 
April 14, 2009  15




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Home Federal Holdings Corporation
(A Development Stage Company)
Balance Sheets
December 31, 2008 and January 31, 2008
 December 31,
    
    
    January 31,2008
    
    
    2008AssetsCash
    
    $
    5,739
    
    
    $
    5,472Fixed assets, less accumulated depreciation of $18,352 and $3,497,
respectively
    
    
    1,945,916
    
    
    
    26,338Deferred issuance costs
    
    
    420,413
    
    
    
    79,476Total assets
    
    $
    2,372,068
    
    
    $
    111,286Liabilities and Stockholders DeficitLiabilitiesAccrued liabilities
    
    $
    399,155
    
    
    $
    130,323Lines of credit
    
    
    1,927,256
    
    
    
    576,075Note payable
    
    
    1,522,400
    
    
    
    Total liabilities
    
    $
    3,848,811
    
    
    $
    706,398Stockholders DeficitSpecial stock, no par, 1,000,000 shares authorized, no shares issued
    
    
    
    
    
    
    Common stock, par value $.01 per share, 10,000,000 authorized, 10
shares issued
    
    
    
    
    
    
    Paid-in capital
    
    
    100
    
    
    
    100Stock subscription receivable
    
    
    (100
    )
    
    
    (100
    )Deficit accumulated during development stage
    
    
    (1,476,743
    )
    
    
    (595,112
    )Total stockholders deficit
    
    
    (1,476,743
    )
    
    
    (595,112
    )Total liabilities and stockholders deficit
    
    $
    2,372,068
    
    
    $
    111,286
   16




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Home Federal Holdings Corporation
(A Development Stage Company)
Statements of Operations
For the Periods February 1, 2007, Date of Inception, to December 31, 2008,
February 1, 2008 to December 31, 2008,
and February 1, 2007, Date of Inception, to January 31, 2008
 February 1,
    
    
    
    
    
    
    February 1,2007,
    
    
    
    
    
    
    2007,Date of
    
    
    February 1,
    
    
    Date ofInception,
    
    
    2008
    
    
    Inception,to
    
    
    to
    
    
    toDecember 31,
    
    
    December 31,
    
    
    January 31,2008
    
    
    2008
    
    
    2008Income
    
    $
    239
    
    
    $
    239
    
    
    $
    ExpensesConsulting expenses
    
    $
    463,875
    
    
    $
    151,900
    
    
    $
    311,975Salaries and benefits
    
    
    428,261
    
    
    
    428,261
    
    
    
    Professional fees
    
    
    215,076
    
    
    
    79,155
    
    
    
    135,921Rent
    
    
    97,125
    
    
    
    63,875
    
    
    
    33,250Interest expense
    
    
    75,446
    
    
    
    57,009
    
    
    
    18,437Telephone and utilities expense
    
    
    33,460
    
    
    
    23,288
    
    
    
    10,172Training expense
    
    
    12,458
    
    
    
    940
    
    
    
    11,518Other operating costs
    
    
    151,281
    
    
    
    77,442
    
    
    
    73,839Total expenses
    
    
    1,476,982
    
    
    
    881,870
    
    
    
    595,112Net loss and deficit accumulated during the
development stage
    
    $
    (1,476,743
    )
    
    $
    (881,631
    )
    
    $
    (595,112
    )
   17




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Home Federal Holdings Corporation
(A Development Stage Company)
Statements of Changes in Stockholders Deficit
For the Periods February 1, 2008 to December 31, 2008
and February 1, 2007, Date of Inception, to January 31, 2008
 DeficitCommon
    
    
    
    
    
    
    
    
    
    
    AccumulatedSpecial
    
    
    
    
    
    
    Stock
    
    
    
    
    
    
    Stock
    
    
    InSpecial
    
    
    Stock
    
    
    Common
    
    
    Par
    
    
    Paid In
    
    
    Subscription
    
    
    DevelopmentShares
    
    
    Par Value
    
    
    Shares
    
    
    Value
    
    
    Capital
    
    
    Receivable
    
    
    Stage
    
    
    TotalBalance, February 1, 2007
(Date of Inception)
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Common stock subscription,
January 23, 2008
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    100
    
    
    
    (100
    )
    
    
    
    
    
    
    Net loss, February 1, 2007
(Date of Inception) to
January 31, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (595,112
    )
    
    
    (595,112
    )Balance, January 31, 2008
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    100
    
    
    
    (100
    )
    
    
    (595,112
    )
    
    
    (595,112
    )Net loss,
February 1, 2008
(Date of Inception) to
December 31, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (881,631
    )
    
    
    (881,631
    )Balance, December 31, 2008
    
    
    
    
    
    $
    
    
    
    
    10
    
    
    $
    
    
    
    $
    100
    
    
    $
    (100
    )
    
    $
    (1,476,743
    )
    
    $
    (1,476,743
    )
   18




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Home Federal Holdings Corporation
(A Development Stage Company)
Statements of Cash Flows
For the Periods February 1, 2007, Date of Inception, to December 31, 2008,
February 1, 2008 to December 31, 2008,
and February 1, 2007, Date of Inception, to January 31, 2008
 February 1,
    
    
    
    
    
    
    February 1,2007,
    
    
    
    
    
    
    2007,Date of
    
    
    February 1,
    
    
    Date ofInception,
    
    
    2008
    
    
    Inception,to
    
    
    to
    
    
    toDecember 31,
    
    
    December 31,
    
    
    January 31,2008
    
    
    2008
    
    
    2008Operating ActivitiesReconciliation of net loss to net cash used in
operating activities:Net loss
    
    $
    (1,476,743
    )
    
    $
    (881,631
    )
    
    $
    (595,112
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation expense
    
    
    18,352
    
    
    
    14,405
    
    
    
    3,947(Increase) Decrease in prepaid rent
    
    
    
    
    
    
    7,000
    
    
    
    (7,000
    )(Increase) Decrease in deposits
    
    
    
    
    
    
    6,250
    
    
    
    (6,250
    )Increase in deferred issuance costs
    
    
    (420,413
    )
    
    
    (354,187
    )
    
    
    (66,226
    )Increase (Decrease) in accrued liabilities
    
    
    399,155
    
    
    
    268,832
    
    
    
    130,323Net cash used in operating activities
    
    
    (1,479,649
    )
    
    
    (939,331
    )
    
    
    (540,318
    )Investing ActivitiesPurchase of fixed assets
    
    
    (1,964,268
    )
    
    
    (1,933,983
    )
    
    
    (30,285
    )Net cash used in investing activities
    
    
    (1,964,268
    )
    
    
    (1,933,983
    )
    
    
    (30,285
    )Financing ActivitiesProceeds from borrowings
    
    
    3,449,656
    
    
    
    2,873,581
    
    
    
    576,075Net cash provided by financing activities
    
    
    3,449,656
    
    
    
    2,873,581
    
    
    
    576,075Net increase in cash
    
    
    5,739
    
    
    
    267
    
    
    
    5,472Cash at beginning of period
    
    
    
    
    
    
    5,472
    
    
    
    Cash at end of period
    
    $
    5,739
    
    
    $
    5,739
    
    
    $
    5,472Supplemental disclosure of cash flow informationCash paid for interest
    
    $
    75,446
    
    
    $
    59,432
    
    
    $
    16,014
   19




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Home Federal Holdings Corporation
(A Development Stage Company)
 Notes to the Financial Statements
 Note 1  Organization and Summary of Accounting Policies
    Accounting and Reporting by Development Stage
Enterprises
 Basis of Presentation
  Estimates
  Fixed Assets
  Fiscal Year
   20




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Home Federal Holdings Corporation
(A Development Stage Company)
 Notes to the Financial Statements
 Note 1  Organization and Summary of Accounting Policies (continued)
 Stock Compensation Plan
 Share-Based Payments"
 Organization Costs
 Reporting on the
Costs of Start-Up Activities.
 Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes
(FIN 48) Accounting for Income Taxes.
 Business
Combinations
 Disclosures
about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No.133 and FASB
Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161.
  21




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Home Federal Holdings Corporation
(A Development Stage Company)
 Notes to the Financial Statements
 Note 1  Organization and Summary of Accounting Policies (continued)
 Effective Date of FASB Statements No. 157 Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting
Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or
Measurement Under Statement 13
 Determining the Fair Value of a Financial Asset
When the Market for That Asset is not active. Fair Value Measurements Accounting Changes and Error
Corrections
 Noncontrolling Interests in
Consolidated Financial Statements  an amendment of ARB No. 51
 Disclosures about Derivative Instruments and Hedging
Activities,
 The Hierarchy of Generally Accepted
Accounting Principles. The Meaning of
Present Fairly in Conformity with Generally Accepted Accounting Principles.
  22




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Home Federal Holdings Corporation
(A Development Stage Company)
 Notes to the Financial Statements
 Note 2  Liquidity and Going Concern Considerations
     Note 3  Fixed Assets
  December 31, 2008
    
    
    January 31, 2008Furniture and equipment
    
    $
    53,757
    
    
    $
    30,285Building
    
    
    590,661
    
    
    
    Land
    
    
    1,319,850
    
    
    
    1,964,268
    
    
    
    30,285Accumulated depreciation
    
    
    (18,352
    )
    
    
    (3,947
    )$
    1,945,916
    
    
    $
    26,338
   23




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Home Federal Holdings Corporation
(A Development Stage Company)
 Notes to the Financial Statements
 Note 4  Debt
     Note 5  Commitments
     24




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Home Federal Holdings Corporation
(A Development Stage Company)
 Notes to the Financial Statements
 Note 5  Commitments (continued)
   Note 6  Income Taxes
      December 31, 2008
    
    
    January 31, 2008Deferred tax asset relating to organization
expenses and net operating loss carryforward
    
    $
    558,000
    
    
    $
    226,000Less valuation allowance
    
    
    (558,000
    )
    
    
    (226,000
    )Net deferred taxes
    
    $
    
    
    
    $
    
 Note 7  Subsequent Events
    25




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Item 6.
    Changes in and Disagreements with Accountants on Account and Financial Disclosure
  
 Item 7A. Controls and Procedures
   
 Item 7B. Other Information
  
 PART III
 
 Item 8. Directors, Executive Officers and Corporate Governance
 General
  Name
    
    Age
    
    Positions to be HeldRobert B. Wise
    
    
    69
    
    
    Chief Executive Officer, Vice-Chairman, DirectorClyde A. McArthur
    
    
    53
    
    
    President, Chief Financial Officer, DirectorRita B. Gray
    
    
    58
    
    
    DirectorWilliam G. Bagwell
    
    
    61
    
    
    DirectorJohn K. Bailey
    
    
    49
    
    
    DirectorJohn W. Bailey
    
    
    61
    
    
    DirectorRandall L. Crow
    
    
    55
    
    
    Chairman, DirectorRicky D. Davis
    
    
    56
    
    
    DirectorLawrence R. Dunn
    
    
    61
    
    
    DirectorTrent P. Gaites
    
    
    59
    
    
    DirectorSidney A. Howell
    
    
    44
    
    
    DirectorDaniel Olejnik
    
    
    54
    
    
    DirectorHenry C. Schmerler
    
    
    68
    
    
    DirectorH. Phillip Wilburn
    
    
    58
    
    
    Director
   26




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Name
    
    Age
    
    Positions to be HeldRobert B. Wise
    
    
    69
    
    
    Chief Executive Officer, Chief Lending Officer, Vice-Chairman, DirectorClyde A. McArthur
    
    
    53
    
    
    President, DirectorRita B. Gray
    
    
    58
    
    
    Chief Financial Officer, DirectorWilliam G. Bagwell
    
    
    61
    
    
    DirectorJohn K. Bailey
    
    
    49
    
    
    DirectorRandall L. Crow
    
    
    55
    
    
    Chairman, DirectorRicky D. Davis
    
    
    56
    
    
    DirectorLawrence R. Dunn
    
    
    61
    
    
    DirectorTrent P. Gaites
    
    
    59
    
    
    DirectorDaniel Olejnik
    
    
    54
    
    
    DirectorHenry C. Schmerler
    
    
    68
    
    
    DirectorH. Phillip Wilburn
    
    
    58
    
    
    Director
   Robert B. Wise
 Clyde A. McArthur
  27




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##### Table of Contents



Rita B. Gray
 William G. (Gary) Bagwell
 John K. Bailey
 J ohn W. Bailey
 Randall L. Crow
 Ricky D. Davis
 Lawrence R. Dunn
  28




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##### Table of Contents



Trent P. Gaites
 Sidney A. Howell
 Daniel Olejnik
 Henry C. Schmerler
 H. Phillip Wilburn
 Board Meetings
  Committees of the Boards of Directors
  Audit Committee.
  29




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##### Table of Contents



Compensation Committee. ex officio
 Nominating and Governance Committee.
  Asset/Liability/Investment Committee. ex officio
 Audit, Compliance and CRA Committee.
 Compensation Committee. ex officio
 Executive Committee.
 Loan Committee.
  30




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##### Table of Contents



Shareholder Communication Policy
  Code of Business Conduct and Ethics
  
 Item 9. Executive Compensation
  Option
    
    
    All OtherSalary
    
    
    Bonus
    
    
    Awards
    
    
    Compensation
    
    
    TotalName and Principal Position
    
    Year
    
    

($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)Robert A. Wise
Chief Executive Officer
    
    
    2008
    
    
    $
    81,920
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    81,920Clyde A. McArthur
Chief Financial Officer
    
    
    2008
    
    
    $
    95,953
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    95,953
 Employment/Consulting Agreements
      31




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##### Table of Contents



Director Compensation
  Stock Incentive Plan
 General.
 Administration.
  Option Terms.
   32




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##### Table of Contents



Change of Control .
 Termination of Options.
 Reorganizations.
 Amendment and Termination of the Plan.
 Federal Income Tax Consequences.
 Incentive Stock Options.
  33




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##### Table of Contents



Non-Qualified Options.
   
 Item 10.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  Number of
    
    
    PercentageShares
    
    
    ofBeneficially
    
    
    OutstandingName
    
    Owned
    
    
    SharesRobert B. Wise, Chief Executive Officer, Vice-Chairman and
Director
    
    
    
    
    
    
    *Clyde A. McArthur, President, Chief Financial Officer, Director
    
    
    10
    
    
    
    100
    %Rita B. Gray, Director
    
    
    
    
    
    
    *William G. Bagwell, Director
    
    
    
    
    
    
    *John K. Bailey, Director
    
    
    
    
    
    
    *
    %John W. Bailey, Director
    
    
    
    
    
    
    *
    %Randall L. Crow, Director
    
    
    
    
    
    
    *
    %Ricky D. Davis, Director
    
    
    
    
    
    
    *Lawrence R. Dunn, Director
    
    
    
    
    
    
    *Trent P. Gaites, Director
    
    
    
    
    
    
    *Sidney A. Howell, Director
    
    
    
    
    
    
    *Daniel Olejnik, Director
    
    
    
    
    
    
    *Henry C. Schmerler, Director
    
    
    
    
    
    
    *
    %H. Phillip Wilburn, Director
    
    
    
    
    
    
    *Executive Officers and Directors as a Group
    
    
    10
    
    
    
    100
    %
 
 *
    
    Less than 1% of the outstanding common stock.  34




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##### Table of Contents



Item 11. Certain Relationships and Related Party Transactions
  
    
    will be on substantially the same terms, including price or interest rate and
collateral, as those prevailing at the time for comparable transactions with unrelated
parties, and any banking transactions will not be expected to involve more than the
normal risk of collectibility or present other unfavorable features to us;
 
    
    will be on terms no less favorable than could be obtained from an unrelated third
party; and
 
    
    will be approved by a majority of the directors who do not have an interest in the
transaction.
 
 Item 12. Principal Accounting Fees and Services
  Year EndedDecember 31, 2008Audit Fees
    
    $
    7,649Audit-Related Fees
    
    $
    5,717Tax Fees
    
    $
    750All Other Fees
    
    
    Total
    
    $
    14,116
 Audit Fees.
 Audit-Related Fees.
 Tax Fees.
 All Other Fees.
 
 Item 13. Exhibits, Financial Statement Schedules
   Report of
Independent Registered Public Accounting FirmBalance Sheets as of December 31, 2008 and January 31, 2008Statements of Operations for the Periods February 1, 2007, Date of Inception, to
December 31, 2008, February 1, 2008 to December 31, 2008, and February 1, 2007,
Date of Inception, to January 31, 2008Statements
of Changes in Stockholders Deficit for the Periods from February 1,
2008 to December 31, 2008 and February 1, 2007, Date of Inception, to January
31, 2008Statements of Cash Flows for the Periods from February 1, 2007, Date of
Inception, to December 31, 2008, February 1, 2008 to December 31, 2008, and
February 1, 2007, Date of Inception, to January 31, 2008Notes to the Financial Statements
  35




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##### Table of Contents



ExhibitNumber
    
    Description3.1
    
    
    Articles of Incorporation of Home Federal Holdings Corporation (Incorporated by
reference to Exhibit 3.1 of the Companys registration statement on Form S-1 (File No.
333-143840), as filed with the Securities and Exchange Commission on June 10, 2008).3.2
    
    
    Bylaws of Home Federal Holdings Corporation (Incorporated by reference to Exhibit
3.2 of the Companys registration statement on Form S-1 (File No. 333-143840), as filed
with the Securities and Exchange Commission on June 10, 2008).4.1
    
    
    Specimen Common Stock Certificate (Incorporated by reference to Exhibit 4.1 of
the Companys registration statement on Form S-1 (File No. 333-143840), as filed with
the Securities and Exchange Commission on June 10, 2008).4.2
    
    
    See Exhibits 3.1 and 3.2 for provisions of the Articles of Incorporation and
Bylaws defining rights of holders of the Common Stock.4.3
    
    
    Form of Subscriber Warrant Certificate (contained in Exhibit 10.8) (Incorporated
by reference to Exhibit 4.3 of the Companys registration statement on Form S-1 (File
No. 333-143840), as filed with the Securities and Exchange Commission on June 10, 2008).5.1
    
    
    Legal Opinion of Troutman Sanders LLP (Incorporated by reference to Exhibit 5.1
of the Companys registration statement on Form S-1 (File No. 333-143840), as filed with
the Securities and Exchange Commission on September 4, 2008).10.1
    
    
    Form of Proposed Amended and Restated Employment Agreement by and among Home
Federal Holdings Corporation and Robert B. Wise (Incorporated by reference to Exhibit
10.1 of the Companys registration statement on Form S-1 (File No. 333-143840), as filed
with the Securities and Exchange Commission on October 31, 2008).10.2
    
    
    Form of Proposed Amended and Restated Employment Agreement by and among Home
Federal Holdings Corporation and Clyde A. McArthur (Incorporated by reference to Exhibit
10.2 of the Companys registration statement on Form S-1 (File No. 333-143840), as filed
with the Securities and Exchange Commission on October 31, 2008).10.3
    
    
    Form of Proposed Amended and Restated Employment Agreement by and among Home
Federal Bank (In Organization) and Rita B. Gray (Incorporated by reference to Exhibit
10.3 of the Companys registration statement on Form S-1 (File No. 333-143840), as filed
with the Securities and Exchange Commission on October 31, 2008).10.4
    
    
    Commercial Line of Credit Agreement and Note, dated June 25, 2007, between HFHC
Group, LLC d/b/a F/K/A Home Federal Savings Bank and Nexity Bank (Incorporated by
reference to Exhibit 10.2 of the Companys registration statement on Form S-1 (File No.
333-143840), as filed with the Securities and Exchange Commission on June 10, 2008).10.5
    
    
    Commercial Promissory Note, dated February 6, 2007, between Home Federal Savings
Bank and Nexity Bank (Incorporated by reference to Exhibit 10.3 of the Companys
registration statement on Form S-1 (File No. 333-143840), as filed with the Securities and Exchange
Commission on June 10, 2008).
  36




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##### Table of Contents



ExhibitNumber
    
    Description10.6
    
    
    Organizing Line of Credit  Change In Terms Agreement, dated September 18, 2007,
between HFHC Group, LLC d/b/a F/K/A Home Federal Savings Bank and Nexity Bank
(Incorporated by reference to Exhibit 10.4 of the Companys registration statement on
Form S-1 (File No. 333-143840), as filed with the Securities and Exchange Commission on
June 10, 2008).10.7
    
    
    Organizing Line of Credit  Change In Terms Agreement, dated January 29, 2008,
between Home Federal Bank, National Association (in Organization), as Borrower and Nexity
Bank, as Lender (Incorporated by reference to Exhibit 10.5 of the Companys registration
statement on Form S-1 (File No. 333-143840), as filed with the Securities and Exchange
Commission on June 10, 2008).10.8
    
    
    Organizing Line of Credit  Change In Terms Agreement, dated June 6, 2008, between
HFHC Group, LLC d/b/a F/K/A Home Federal Savings Bank and Nexity Bank (Incorporated by
reference to Exhibit 10.8 of the Companys registration statement on Form S-1 (File No.
333-143840), as filed with the Securities and Exchange Commission on September 4, 2008).10.9
    
    
    Home Federal Holdings Corporation 2008 Stock Incentive Plan (Incorporated by
reference to Exhibit 10.6 of the Companys registration statement on Form S-1 (File No.
333-143840), as filed with the Securities and Exchange Commission on June 10, 2008).10.10
    
    
    Form of Escrow Agreement, by and between Home Federal Holdings Corporation and
Nexity Bank (included as Appendix A to the prospectus) (Incorporated by reference to
Exhibit 10.10 of the Companys registration statement on Form S-1 (File No. 333-143840),
as filed with the Securities and Exchange Commission on June 10, 2008).10.11
    
    
    Form of Subscriber Warrant Agreement (Incorporated by reference to Exhibit 10.8 of
the Companys registration statement on Form S-1 (File No. 333-143840), as filed with the
Securities and Exchange Commission on June 10, 2008).10.12
    
    
    Form of Director Warrant Agreement (Incorporated by reference to Exhibit 10.9 of the
Companys registration statement on Form S-1 (File No. 333-143840), as filed with the
Securities and Exchange Commission on June 10, 2008).10.13
    
    
    Form of Organizer Warrant Agreement (Incorporated by reference to Exhibit 10.10 of
the Companys registration statement on Form S-1 (File No. 333-143840), as filed with the
Securities and Exchange Commission on June 10, 2008).10.14
    
    
    Form of Consulting Agreement between Home Federal Holdings Corporation and Bank
Resources, Inc., dated February 5, 2008 (Incorporated by reference to Exhibit 10.14 of the
Companys registration statement on Form S-1 (File No. 333-143840), as filed with the
Securities and Exchange Commission on September 4, 2008).10.15
    
    
    Purchase and Sale Agreement, dated September 9, 2008, between SunTrust Bank and Home
Federal Holdings Corporation (Incorporated by reference to Exhibit 10.15 of the Companys
registration statement on Form S-1 (File No. 333-143840), as filed with the Securities and
Exchange Commission on October 31, 2008).10.16
    
    
    Loan Agreement, dated October 9, 2008, between Peoples State Bank of Commerce and
Home Federal Holdings Corporation (Incorporated by reference to Exhibit 10.16 of the
Companys registration statement on Form S-1 (File No. 333-143840), as filed with the
Securities and Exchange Commission on October 31, 2008).10.17
    
    
    $750,000 Revolver Note, dated October 9, 2008, in favor of Peoples State Bank of
Commerce (Incorporated by reference to Exhibit 10.17 of the Companys registration
statement on Form S-1 (File No. 333-143840), as filed with the Securities and Exchange Commission on
October 31, 2008).
  37




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##### Table of Contents



ExhibitNumber
    
    Description10.18
    
    
    Form of Continuing Guaranty Agreement in favor of Peoples State Bank of Commerce
(Incorporated by reference to Exhibit 10.18 of the Companys registration statement on
Form S-1 (File No. 333-143840), as filed with the Securities and Exchange Commission on
October 31, 2008).10.19
    
    
    Term Loan Agreement, dated November 6, 2008, between Peoples State Bank of Commerce
and Home Federal Holdings Corporation (Incorporated by reference to Exhibit 10.1 of the
Companys Current Report on Form 10-Q (File No. 333-53494), as filed with the Securities
and Exchange Commission on December 29, 2008).10.20
    
    
    $1,522,400 Term Note, dated November 6, 2008, in favor of Peoples State Bank of
Commerce (Incorporated by reference to Exhibit 10.2 of the Companys Current Report on
Form 10-Q (File No. 333-53494), as filed with the Securities and Exchange Commission on
December 29, 2008).10.21
    
    
    Deed to Secure Debt, dated November 6, 2008, in favor of Peoples State Bank of
Commerce by Home Federal Holdings Corporation.24
    
    
    Power of Attorney.31.1
    
    
    Certification of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32
    
    
    Certification of the Chief Executive Officer and Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    
    Form of Subscription and Investment Agreement (included as Appendix B to the
prospectus) (Incorporated by reference to Exhibit 99.1 of the Companys registration
statement on Form S-1 (File No. 333-143840), as filed with the Securities and Exchange
Commission on June 10, 2008).
  38




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##### Table of Contents



SIGNATURES
   HOME FEDERAL HOLDINGS CORPORATION/s/ Robert B. WiseRobert B. WiseChief Executive Officer/s/ Clyde A. McArthurClyde A. McArthurPresident and Chief Financial Officer  Signature
    
    Title
    
    Date/s/ Robert B. Wise

Robert B. Wise
    
    Chief Executive Officer,
Vice-Chairman and Director
(Principal Executive Officer)
    
    April 16, 2009/s/ Clyde A. McArthur

Clyde A. McArthur
    
    President, Chief Financial
Officer and Director
(Principal Financial and
Accounting Officer)
    
    April 16, 2009/s/ William G. Bagwell*
    
    Director
    
    April 16, 2009William G. Bagwell/s/ John K. Bailey*
    
    Director
    
    April 16, 2009John K. Bailey/s/ John W. Bailey*
    
    Director
    
    April 16, 2009John W. Bailey/s/ Randall L. Crow*
    
    Chairman of the Board
    
    April 16, 2009Randall L. Crow/s/ Ricky D. Davis*
    
    Director
    
    April 16, 2009Ricky D. Davis/s/ Lawrence R. Dunn*
    
    Director
    
    April 16, 2009Lawrence R. Dunn
  39




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##### Table of Contents



Signature
    
    Title
    
    Date/s/ Trent P. Gaites*
    
    Director
    
    April 16, 2009Trent P. Gaites/s/ Rita B. Gray*
    
    Director
    
    April 16, 2009Rita B. Gray/s/ Sidney a. Howell*
    
    Director
    
    April 16, 2009Sidney A. Howell/s/ Daniel Olejnik*
    
    Director
    
    April 16, 2009Daniel Olejnik/s/ Henry C. Schmerler*
    
    Director
    
    April 16, 2009Henry C. Schmerler/s/ H. Phillip Wilburn*
    
    Director
    
    April 16, 2009H. Phillip Wilburn
 *By:
    /s/Clyde A. McArthurClyde A. McArthurAttorney-in-Fact  40




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description10.21
    
    
    Deed to Secure Debt, dated November 6, 2008, in favor of Peoples State Bank of
Commerce by Home Federal Holdings Corporation.24
    
    
    Power of Attorney.31.1
    
    
    Certification of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32
    
    
    Certification of the Chief Executive Officer and Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  41