SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934
      For the Fiscal Year Ended December 31, 2006
                                       OR
[ ]   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934
      For the transition period from __________________ to _____________________

                         Commission File Number: 0-50820

                        First Clover Leaf Financial Corp.
                        ---------------------------------
             (Exact Name of Registrant as Specified in its Charter)

                Maryland                                20-4797391
    -------------------------------       ------------------------------------
    (State or Other Jurisdiction of       (I.R.S. Employer Identification No.)
    Incorporation or Organization)

6814 Goshen Road, Edwardsville, Illinois                  62025
----------------------------------------                  -----
(Address of Principal Executive Offices)                (Zip Code)

                                 (618) 656-6122
                 ----------------------------------------------
                 (Issuer's Telephone Number including area code)

           Securities Registered Pursuant to Section 12(b) of the Act:

                                                Name of Each Exchange
            Title of Class                       On Which Registered
            --------------                       -------------------

Common Stock, par value $0.10 per share      The NASDAQ Stock Market, LLC

           Securities Registered Pursuant to Section 12(g) of the Act:

                                      None
                                      ----
                                (Title of Class)

      Check whether the Issuer is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act. [ ]

      Check  whether  the Issuer (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the Registrant was required to file such
reports) and (2) has been subject to such requirements for the past 90 days.

1.    YES    X     NO
             --       --
2.    YES    X     NO
             --       --

      Check if there is no disclosure  of delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will 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-KSB
or any amendment to this Form 10-KSB. [ ]

      Indicate by check mark whether the Registrant is a shell company (as
      defined by Rule 12b-2 of the Exchange Act.) YES [ ] NO [X]

      State Issuer's revenues for its most recent fiscal year: $14.1 million

      The  aggregate  value of the voting  stock held by  non-affiliates  of the
Registrant,  computed by reference  to the closing  price of the common stock on
March 20, 2007 ($11.36 per share) was $87.1 million.

      As of March 28, 2007, there were 9,074,031 shares issued and outstanding
of the Registrant's Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

1.    Proxy Statement for the 2007 Annual Meeting of Stockholders (Parts II and
      III).

2.    Annual Report to Shareholders for the year ended December 31, 2006 (Part
      II).

      Transitional   Small  Business   Disclosure  Format:  YES [ ]  NO  [X]

<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS
-------------------------------

Forward-Looking Statements

      This Annual Report contains certain "forward-looking statements" which may
be identified by the use of words such as "believe," "expect," "anticipate,"
"should," "planned," "estimated" and "potential." Examples of forward-looking
statements include, but are not limited to, estimates with respect to our
financial condition, results of operations and business that are subject to
various factors which could cause actual results to differ materially from these
estimates and most other statements that are not historical in nature. These
factors include, but are not limited to, general and local economic conditions,
changes in interest rates, deposit flows, demand for mortgage, commercial and
other loans, real estate values, competition, changes in accounting principles,
policies, or guidelines, changes in legislation or regulation, and other
economic, competitive, governmental, regulatory, and technological factors
affecting our operations, pricing products and services.

General

      First Clover Leaf Financial Corp. ("First Clover Leaf") is a Maryland
corporation that was incorporated on March 17, 2006 and was formed by our
predecessor company, First Federal Financial Services, Inc., in connection with
the "second-step" conversion of First Federal Financial Services, MHC and the
simultaneous acquisition of Clover Leaf Financial Corp. and its wholly owned
savings bank subsidiary, Clover Leaf Bank, a former Illinois bank headquartered
in Edwardsville, Illinois. The second-step conversion and stock offering and the
simultaneous acquisition of Clover Leaf Financial Corp. were consummated on July
10, 2006. As a result of these transactions, Clover Leaf Financial Corp. was
merged with and into First Clover Leaf and Clover Leaf Bank was merged with and
into our wholly owned subsidiary, First Federal Savings and Loan Association of
Edwardsville, which was renamed First Clover Leaf Bank.

      Our principal asset is our ownership of 100% of the outstanding common
stock of First Clover Leaf Bank, a federal savings bank.

      At December 31, 2006, we had total consolidated assets of $410.3 million,
total loans, including loans held for sale, of $245.0 million, total deposits of
$270.8 million and stockholders' equity of $93.3 million. Our consolidated net
income for the year ended December 31, 2006 was $1.8 million.

      Our headquarters are located at 6814 Goshen Road, Edwardsville, Illinois
62025, and our telephone number is (618) 656-6122.

First Clover Leaf Bank

General

      We conduct our business through our four branch offices located in
Edwardsville, Illinois. Our principal business consists of attracting retail
deposits from the general public in the areas surrounding our office locations
and investing those deposits, together with funds generated from operations,
primarily in one- to four- family residential mortgage loans, commercial real
estate loans, multifamily mortgage loans, construction and land loans,
commercial business loans and consumer loans, and in investment securities. Our
revenues are derived principally from interest on loans and securities. Our
primary sources of funds are deposits and principal and interest payments on
loans and securities.

Competition

      We face intense competition within our market area both in making loans
and attracting deposits. The City of Edwardsville and the surrounding area have
a high concentration of financial institutions, including large commercial
banks, community banks and credit unions. We face additional competition for
deposits from short-term money market funds, brokerage firms, mutual funds and
insurance companies. Some of our competitors offer products and services that we
currently do not offer, such as trust services. Based on Federal Deposit
Insurance

                                        2

<PAGE>

Corporation data as of June 30, 2006, our market share of deposits was 6.7% of
all deposits in Madison County. Our primary focus is to build and develop
profitable customer relationships across all lines of business while maintaining
our role as a community bank.

Market Area

      We operate in a primarily suburban market area that has a stable
population and household base. According to the 2005 U.S. Census Report, from
2001 until 2005 the population of Madison County increased by approximately 3.6%
to 268,191 while the population of the City of Edwardsville increased 5.0% to
22,571. During the same period, the number of households in Madison County and
in the City of Edwardsville increased 5.0% and 6.6%, respectively. In 2005, per
capita income for Madison County and the City of Edwardsville was $23,851 and
$28,974, respectively, and the median household income was $46,761 and $53,711,
respectively. This compares to per capita income for the State of Illinois and
the United States of $27,097 and $26,228, respectively, and median household
income of $53,053 and $49,747, respectively, according to the 2005 U.S. Census
Report.

      Our primary lending area is concentrated in Madison County and the
southern portion of Macoupin County, Illinois. The City of Edwardsville is the
County Seat of Madison County and is considered a "bedroom community" for St.
Louis, Missouri, approximately 20 miles southwest of Edwardsville. The economy
of our market area is characterized by a large number of small retail
establishments and small industry. Additionally, major employers in our
immediate market area include Southern Illinois University-Edwardsville,
ConocoPhillips, the local school district and the Madison County government. Our
customer base is comprised primarily of middle-income families.

Lending Activities

      Historically, our principal lending activity has been the origination of
first mortgage loans for the purchase or refinancing of one- to four-family
residential real property. Through our July 2006 acquisition of Clover Leaf
Bank, we have recently increased our emphasis on the origination of commercial
real estate loans, commercial business loans, construction and land loans, as
well as home equity loans.

      One- to four-family residential real estate mortgage loans represented
$120.4 million, or 48.5%, of our loan portfolio at December 31, 2006, and
commercial real estate loans represented $ 68.6 million, or 27.7% of our loan
portfolio at December 31, 2006. Multi-family loans represented $8.9 million, or
3.6% of our loan portfolio at December 31, 2006. We also offer construction and
land loans secured by single-family properties and residential subdivisions.
Construction and land loans represented $17.2 million, or 6.9%, of our loan
portfolio at December 31, 2006. We offer commercial business loans, and these
loans represented $25.9 million , or 10.4% of our loan portfolio, at December
31, 2006. We originate consumer loans that are not secured by real estate,
including automobiles loans as well as home equity loans, which totaled $7.1
million, or 2.9% of our loan portfolio at December 31, 2006.

      Primarily as a result of our acquisition of Clover Leaf Bank, and in an
effort to increase our interest income and to reduce the risk to our net income
from changes in market interest rates, we have begun to emphasize the
origination of commercial real estate and commercial business loans. Compared to
our residential mortgage loans, which are typically originated at fixed rates of
interest, commercial real estate and commercial business loans generally have
higher interest rates and are more sensitive to changes in market interest rates
because they have adjustable interest rates and shorter terms to maturity.

                                        3

<PAGE>

      Loan Portfolio Composition. The following table sets forth the composition
of our loan portfolio by type of loan at the dates indicated.

<TABLE>
<CAPTION>
                                                                      At December 31,
                                         -----------------------------------------------------------------------
                                                  2006                    2005                      2004
                                         ---------------------   -----------------------   ---------------------
                                           Amount      Percent      Amount     Percent       Amount     Percent
                                         ---------   ----------   ---------   ----------   ---------   ---------
                                                                   (Dollars in thousands)
<S>                                      <C>         <C>          <C>         <C>          <C>         <C>
Real Estate Loans:
-----------------
   One- to four-family residential
      loans(1)........................   $ 120,355         48.5%  $  97,594         83.0%  $  92,585        81.0%
   Multi-family.......................       8,895          3.6       5,390          4.6       5,689         5.0
   Commercial.........................      68,577         27.7      11,074          9.4       7,755         6.8
   Construction and land..............      17,181          6.9       2,317          1.9       7,412         6.5
                                         ---------   ----------   ---------   ----------   ---------   ---------
      Total real estate loans.........     215,008         86.7     116,375         98.9     113,441        99.3
                                         ---------   ----------   ---------   ----------   ---------   ---------

Commercial business...................      25,907         10.4          --           --          --          --
                                         ---------   ----------   ---------   ----------   ---------   ---------

Consumer Loans:
--------------
   Automobile.........................       2,028          0.8       1,081          0.9         674         0.5
   Home equity........................       3,364          1.4          --           --          --          --
   Other..............................       1,733          0.7         176          0.2         181         0.2
                                         ---------   ----------   ---------   ----------   ---------   ---------
      Total consumer loans............       7,125          2.9       1,257          1.1         855         0.7
                                         ---------   ----------   ---------   ----------   ---------   ---------

Total loans...........................     248,040        100.0%    117,632        100.0%    114,296       100.0%
                                                     ==========               ==========               =========
Less:
Undisbursed portion of
   construction loans.................       1,257                    1,422                    1,546
Deferred loan origination fees, net...          48                      137                      161
Allowance for loan losses.............       1,710                      428                      428
                                         ---------                ---------                ---------

Total loans, net......................   $ 245,025                $ 115,645                $ 112,161
                                         =========                =========                =========
</TABLE>

<TABLE>
<CAPTION>
                                                         At December 31,
                                         ---------------------------------------------
                                                  2003                    2002
                                         ---------------------   ---------------------
                                           Amount     Percent      Amount     Percent
                                         ---------   ---------   ---------   ---------
                                                     (Dollars in thousands)
<S>                                      <C>         <C>         <C>         <C>
Real Estate Loans:
-----------------
   One- to four-family residential
      loans(1)........................   $  89,547        84.9%  $  82,379        87.1%
   Multi-family.......................       2,421         2.3       2,464         2.6
   Commercial.........................       5,038         4.8       3,944         4.2
   Construction and land..............       7,782         7.4       5,176         5.5
                                         ---------   ---------   ---------   ---------
      Total real estate loans.........     104,788        99.4      93,963        99.4
                                         ---------   ---------   ---------   ---------

Commercial business...................          --          --          --          --
                                         ---------   ---------   ---------   ---------

Consumer Loans:
--------------
   Automobile.........................         629         0.5         526         0.5
   Home equity........................          --          --          --          --
   Other..............................          92         0.1          58         0.1
                                         ---------   ---------   ---------   ---------
      Total consumer loans............         721         0.6         584         0.6
                                         ---------   ---------   ---------   ---------

Total loans...........................     105,509       100.0%     94,547       100.0%
                                                     =========               =========
Less:
Undisbursed portion of
   construction loans.................       3,745                   2,419
Deferred loan origination fees, net...         190                      34
Allowance for loan losses.............         429                     399
                                         ---------               ---------

Total loans, net......................   $ 101,145               $  91,695
                                         =========               =========
</TABLE>

----------
(1)   At December 31, 2006, includes loans held for sale of $1.0 million.

                                        4

<PAGE>

      Loan Portfolio Maturities and Yields. The following table summarizes the
scheduled repayments of our loan portfolio at December 31, 2006.

<TABLE>
<CAPTION>
                                                                                   Commercial Real       Construction and
                             One- to Four-Family(2)        Multi-Family                Estate                 Land(3)
                             ----------------------   ----------------------   ----------------------   ---------------------
                                           Weighted                Weighted                 Weighted                Weighted
                                           Average                  Average                  Average                Average
                               Amount       Yield       Amount       Yield       Amount       Yield      Amount      Yield
                             ----------   ---------   ----------   ---------   ---------   ----------   --------   ---------
                                                                (Dollars in thousands)
<S>                          <C>          <C>         <C>          <C>         <C>         <C>          <C>        <C>
Due During the Years
Ending December 31,
2007 (1) .................   $    1,731        6.46%  $      857        6.86%  $  21,533        7.75%   $  4,202        7.70%
2008 to 2011 .............        9,471        6.23        2,986        6.58      36,942        6.62       7,393        6.59
2012 and beyond ..........      109,153        5.86        5,052        5.45      10,102        6.41       5,586        6.86
                             ----------               ----------   ---------   ---------                --------

   Total .................   $  120,355        6.18%  $    8,895        6.30%  $  68,577        6.93%   $ 17,181        7.05%
                             ==========               ==========               =========                ========
</TABLE>

 Commercial Business         Consumer Loans                Total
----------------------   ----------------------   -----------------------
              Weighted                 Weighted                  Weighted
              Average                  Average                   Average
  Amount       Yield       Amount       Yield       Amount        Yield
----------   ---------   ----------   ---------   ----------    ---------
                          (Dollars in thousands)

$   17,796        7.58%  $      937        7.53%  $   47,056         7.31%
     6,223        6.99        3,728        6.36       66,743         6.56
     1,888        7.96        2,460        7.03      134,241         6.60
----------               ----------               ----------

$   25,907        7.51%  $    7,125        6.97%  $  248,040         6.82%
==========               ==========               ==========

(1)   Includes demand loans, loans having no stated repayment schedule or
      maturity, and overdraft loans.

(2)   Includes loans held for sale.

(3)   Includes land acquisition loans.

      The following table sets forth the scheduled repayments of fixed- and
adjustable-rate loans at December 31, 2006 that are contractually due after
December 31, 2007.

                                                  Due After December 31, 2007
                                              ----------------------------------
                                                Fixed     Adjustable     Total
                                              ---------   ----------   ---------
                                                        (In thousands)

One- to four-family residential loans .....   $  75,499   $   43,125   $ 118,624
Multi-family ..............................       6,238        1,800       8,038
Commercial real estate ....................      45,304        1,740      47,044
Construction and land .....................      10,406        2,573      12,979
                                              ---------   ----------   ---------
   Total real estate loans ................     137,447       49,238     186,685

Commercial business .......................       7,496          615       8,111
Consumer loans ............................       5,379          809       6,188
                                              ---------   ----------   ---------

   Total loans ............................   $ 150,322   $   50,662   $ 200,984
                                              =========   ==========   =========

                                        5

<PAGE>

      One- to Four-Family Residential Real Estate Loans. Historically, we have
emphasized the origination of one- to four-family residential loans, virtually
all of which are collateralized by properties located in our market area. As of
December 31, 2006, these loans totaled $120.4 million, or 48.5% of our total
loan portfolio. Virtually all of our residential real estate loans have fixed
rates of interest. Currently, we do not offer adjustable interest rates on our
one- to four-family mortgage loans primarily because our customers prefer
fixed-rate mortgage loans in the relatively low interest rate environment that
currently exists. We generally sell most of the conforming loans that we
originate, but we generally retain the servicing rights on these loans. We
intend to sell a greater percentage of our residential real estate loan
originations on a servicing-retained basis. At December 31, 2006, we were
servicing $35.5 million in loans for others.

      We currently offer one- to four-family residential mortgage loans with
terms of 5, 7, 10, 15, 20, 30 and 40 years. Our five-year loans provide for
principal and interest amortization of up to 30 years with a balloon payment at
the end of the five-year term. All of our 10, 15, 20, 30 and 40-year loans
amortize over the term of the loan.

      For one- to four-family residential real estate loans, we may lend up to
80% of the property's appraised value, or up to 100% of the property's appraised
value if the borrower obtains private mortgage insurance. We require title
insurance on all of our one- to four-family mortgage loans, and we also require
that fire and extended coverage casualty insurance (and, if appropriate, flood
insurance) be maintained in an amount equal to at least the lesser of the loan
balance or the replacement cost of the improvements on the property. We require
a property appraisal for all mortgage loans that are underwritten to comply with
secondary market standards. Appraisals are conducted by independent appraisers
from a list approved by our board of directors. Our residential real estate
loans include "due-on-sale" clauses.

      Commercial Real Estate Loans. As a result of our acquisition of Clover
Leaf Bank, we have increased our emphasis on commercial real estate lending.
Loans secured by commercial real estate totaled $68.6 million, or 27.7% of our
total loan portfolio as of December 31, 2006. Our commercial real estate loans
are secured predominately by office buildings, and to a lesser extent warehouse
properties, and more specialized properties such as churches. We originate
commercial real estate loans with a typical term of five years with balloon
payments. These loans generally amortize over 15 to 20 years. We offer both
adjustable and fixed rates of interest on commercial real estate loans, with the
interest rate for adjustable rate loans tied to the prime interest rate. Our
largest commercial real estate loan at December 31, 2006 had a principal balance
of $2.7 million and was collateralized primarily by office and warehouse
buildings. This loan is performing in accordance with its repayment terms.

      Commercial real estate loans generally have higher interest rates than the
interest rates on residential mortgage loans, and are more sensitive to changes
in market interest rates because they often have adjustable interest rates and
shorter terms. Commercial real estate loans have significant additional risk
compared to one- to four-family residential mortgage loans, as they typically
involve large loan balances concentrated with single borrowers or groups of
related borrowers. In addition, the repayment of commercial real estate loans
typically depends on the successful operation of the related real estate
project, and thus may be subject to a greater extent than residential mortgage
loans to adverse conditions in the real estate market or in the economy
generally.

      In our underwriting of commercial real estate loans, we may lend up to 80%
of the property's appraised value in the case of loans secured by apartments,
and up to 75% of the property's appraised value on loans secured by other
commercial properties. We require independent appraisals for all commercial real
estate loans in excess of $250,000. For loans that do not exceed this amount, we
require that an officer prepare a memorandum of value detailing comparable
values based upon tax bills, prior appraisals, and income information on
revenue-producing property. Decisions to lend are based on the economic
viability of the property and the creditworthiness of the borrower.
Creditworthiness is determined by considering the character, experience,
management and financial strength of the borrower, and the ability of the
property to generate adequate funds to cover both operating expenses and debt
service. In evaluating whether to make a commercial real estate loan, we place
primary emphasis on the ratio of net cash flow to debt service on the property,
and we generally require a ratio of cash flow to debt service of at least 120%,
computed after deduction for a vacancy factor and property expenses we deem
appropriate.

                                        6

<PAGE>

      We require title insurance on all of our commercial real estate loans, and
we also require that fire and extended coverage casualty insurance (and, if
appropriate, flood insurance) be maintained. In addition, we generally require
that the borrower personally guarantee the repayment of the loan.

      Construction and Land Loans. We originate two types of residential
construction loans: (i) construction/speculative loans, and (ii)
construction/permanent loans. As of December 31, 2006, construction and land
loans totaled $17.2 million, or 6.9%, of our total loan portfolio.

      Construction/speculative loans are made to area homebuilders who do not
have, at the time the loan is originated, a signed contract with a homebuyer who
has a commitment for permanent financing with either First Clover Leaf Bank or
another lender. The homebuyer may enter into a purchase contract either during
or after the construction period. These loans have the risk that the builder
will have to make interest and principal payments on the loan, and finance real
estate taxes and other holding costs of the completed home for a significant
time after the completion of construction. Funds are disbursed in phases as
construction is completed. All construction/speculative loans require that the
builder-borrower personally guarantee the full repayment of the principal and
interest on the loan and make interest payments during the construction phase.
These loans are generally originated for a term of twelve months, with interest
rates that are tied to the prime lending rate, and with a loan-to-value ratio of
no more than 75% of the lower of cost or the estimated value of the completed
property. Generally, we limit our construction/speculative loans to one property
per borrower at any given time, and the largest number of
construction/speculative loans we have originated to a single borrower at any
given time was for seven properties. At December 31, 2006, the largest
outstanding concentration of credit to one builder consisted of a residential
subdivision development with an aggregate balance of $4.5 million, which were
performing in accordance with their repayment terms.

      Construction/permanent loans are made to either a homebuilder or a
homeowner who, at the time of construction, has a signed contract together with
a commitment for permanent financing from First Clover Leaf Bank or another
lender for the finished home. The construction phase of a loan generally lasts
up to six months, and the interest rate charged generally corresponds to the
rate of the committed permanent loan, with loan-to-value ratios of up to 80% (or
up to 100% if the borrower obtains private mortgage insurance) of the appraised
estimated value of the completed property or cost, whichever is less. Following
the initial 6-month period, construction/permanent loans convert to permanent
loans, regardless of whether the construction phase has been completed. At
December 31, 2006 the largest single outstanding construction loan of this type
had an outstanding balance of $1.5 million, and had a committed line of credit
of $1.5 million. At December 31, 2006, the loan was performing in accordance
with its repayment terms.

      Construction lending generally involves a greater degree of risk than
other one- to four-family mortgage lending. The repayment of the construction
loan is, to a great degree, dependent upon the successful and timely completion
of the home construction. Construction delays or the financial impairment of the
builder may further impair the borrower's ability to repay the loan.

      Our procedures for underwriting construction/speculative loans include an
assessment of the borrower's credit history and the borrower's ability to meet
other existing debt obligations, as well as payment of principal and interest on
the proposed loan. We use the same underwriting standards and procedures for
construction/permanent lending as we do for one- to four-family residential real
estate lending.

      We also originate land development loans to area homebuilders that are
secured by individual unimproved or improved residential building lots. Land
loans are generally offered with variable prime-based interest rates with terms
of up to two years. The maximum loan-to-value ratio is 65% of the lower of cost
or appraised value of the property.

      Multi-Family Loans. Loans secured by multi-family real estate totaled $8.9
million, or 3.6%, of our total loan portfolio at December 31, 2006. Multi-family
real estate loans generally are secured by apartment buildings and rental
properties. All of our multi-family real estate loans are secured by properties
located within our lending

                                        7

<PAGE>

area. At December 31, 2006, our largest multi-family real estate loan had a
principal balance of $2.6 million and was secured by an apartment complex. As of
December 31, 2006, none of our loans secured by multi-family real estate were
non-performing, except one loan of $395,000 which was a non-accrual loan.
Multi-family real estate loans generally are offered with adjustable interest
rates that adjust after one, three or five years. The interest rate adjustments
are tied to either a Treasury Bill Index tied to the adjustment period, or to a
Cost of Funds Index. Multi-family loans generally are originated for terms of up
to 15 years, but in some cases, we will make multi-family loans with terms of up
to 30 years.

      We consider a number of factors in originating multi-family real estate
loans. We evaluate the qualifications and financial condition of the borrower
(including credit history), profitability and expertise, as well as the value
and condition of the mortgaged property securing the loan. When evaluating the
qualifications of the borrower, we consider the financial resources of the
borrower, the borrower's experience in owning or managing similar property and
the borrower's payment history with us and other financial institutions. In
evaluating the property securing the loan, the factors we consider include the
net operating income of the mortgaged property before debt service and
depreciation, the debt service coverage ratio (the ratio of net operating income
to debt service), and the ratio of the loan amount to the appraised value of the
mortgaged property. Multi-family real estate loans are originated in amounts up
to 80% of the lower of the sale price or the appraised value of the mortgaged
property securing the loan. All multi-family real estate loans over $250,000 are
appraised by outside independent appraisers approved by the board of directors.
All multi-family real estate loans below $250,000 must either have an
independent appraisal or an opinion of value, which, generally, is the
property's tax bill. Borrowers are required to sign multi-family notes in their
individual (not corporate) capacity.

      Loans secured by multi-family real estate generally involve a greater
degree of credit risk than one- to four-family residential mortgage loans and
carry larger loan balances. This increased credit risk is a result of several
factors, including the concentration of principal in a limited number of loans
and borrowers, the effects of general economic conditions on income producing
properties, and the increased difficulty of evaluating and monitoring these
types of loans. Furthermore, the repayment of loans secured by multi-family real
estate typically depends upon the successful operation of the real estate
property securing the loan. If the cash flow from the project is reduced, the
borrower's ability to repay the loan may be impaired.

      Consumer Loans. Our consumer loans consist primarily of automobile loans,
home equity lines of credit and overdraft loans, loans secured by deposits and
securities, and unsecured personal loans. As of December 31, 2006, consumer
loans totaled $7.1 million, or 2.9%, of our total loan portfolio.

      Automobile loans are generally offered with maturities of up to 60 months
for new automobiles, while loans secured by used automobiles have maximum terms
that vary depending on the age of the automobile. We require all borrowers to
maintain collision insurance on automobiles securing loans in excess of $1,000,
with First Clover Leaf Bank listed as loss payee. In those instances where the
borrower fails to maintain adequate insurance coverage, we are further protected
against loss through a third-party policy insurance coverage. Our automobile
loan portfolio totaled $2.0 million or 0.8%, of total loans at December 31,
2006.

      At December 31, 2006, home equity lines of credit totaled $3.4 million or
1.4%, of total loans. Home equity lines of credit are generally made for
owner-occupied homes, and are secured by first or second mortgages on
residential properties. Through our acquisition of Clover Leaf Bank, we have
increased our originations of home equity loans through targeted marketing. We
generally offer home equity lines of credit with a maximum loan to appraised
value ratio of 100% (including senior liens on the subject property). We
currently offer these loans for terms of up to five years and with adjustable
rates that are tied to the prime lending rate. Clover Leaf Bank previously
offered these products with a maximum loan to appraised value of 85% with terms
of up to 10 years, and we still retain some of these longer-term loans.

      Consumer loans generally entail greater credit risk than residential
mortgage loans, particularly in the case of loans that are unsecured or are
secured by assets that tend to depreciate in value, such as automobiles. In
these cases, repossessed collateral for a defaulted consumer loan may not
provide an adequate source of repayment for the outstanding loan and the
remaining value often does not warrant further substantial collection efforts
against the

                                        8

<PAGE>

borrower. Further, consumer loan collections depend on the borrower's continuing
financial stability, and therefore are more likely to be adversely affected by
job loss, divorce, illness or personal bankruptcy.

      Our procedures for underwriting consumer loans include an assessment of
the borrower's credit history and ability to meet other existing debt
obligations, as well as payments of principal and interest on the proposed
loans. The stability of the borrower's monthly income may be determined by
verification of gross monthly income from primary employment, and additionally
from any verifiable secondary income. Although the borrower's creditworthiness
is a primary consideration, the underwriting process also includes a comparison
of the value of the collateral security, if any, to the proposed loan amount. We
require independent appraisals for all consumer loans in excess of $50,000. For
loans that do not exceed this amount, we require that an officer prepare a
memorandum of value detailing comparable values based upon tax bills or other
available information.

      Commercial Business Loans. We currently offer commercial business loans to
existing customers in our market area, some of which are secured in part by
additional real estate collateral. We make various types of secured and
unsecured commercial business loans for the purpose of financing equipment
acquisition, expansion, working capital and other general business purposes. The
terms of these loans are generally for less than five years. Equipment loans
usually involve a one-time disbursement of funds, with repayment over the term
of the loan, while operating lines of credit involve multiple disbursements and
revolving notes that can be renewed annually. The loans are either negotiated on
a fixed-rate basis or carry variable interest rates indexed to the prime rate.
At December 31, 2006, we had commercial business loans outstanding with an
aggregate balance of $25.9 million, or 10.4%, of the total loan portfolio. As of
December 31, 2006, our largest commercial business loan consisted of a $12.0
million line of credit with a balance of $10.0 million, which was secured
primarily by accounts receivable, and was performing in accordance with its
terms. At December 31, 2006, $1.0 million of this loan had been sold by First
Clover Leaf Bank to First Clover Leaf Financial Corp.

      Through our acquisition of Clover Leaf Bank, we have increased our
emphasis on commercial business lending. These loans tend to have higher rates
of interest than residential mortgage loans, and are more sensitive to changes
in market interest rates because they often have adjustable interest rates and
shorter terms. In addition, commercial business lending gives us greater access
to commercial borrowers that may open transactional checking accounts with First
Clover Leaf Bank.

      Commercial credit decisions are based upon a complete credit review of the
borrower. A determination is made as to the borrower's ability to repay in
accordance with the proposed terms as well as an overall assessment of the
credit risks involved. Personal guarantees of borrowers are generally required.
In evaluating a commercial business loan, we consider debt service capabilities,
actual and projected cash flows and the borrower's inherent industry risks.
Credit agency reports of the borrower's credit history as well as bank checks
and trade investigations supplement the analysis of the borrower's
creditworthiness. Collateral supporting a secured transaction is also analyzed
to determine its marketability and liquidity. Commercial business loans
generally bear higher interest rates than residential loans, but they also may
involve a higher risk of default since their repayment generally depends on the
successful operation of the borrower's business.

      Repayment of our commercial business loans is often dependent on the cash
flows of the borrower, which may be unpredictable, and the collateral securing
these loans may fluctuate in value. Our commercial business loans are originated
primarily based on the identified cash flow of the borrower and secondarily on
the underlying collateral provided by the borrower. Most often, this collateral
consists of accounts receivable, inventory, equipment or real estate. Credit
support provided by the borrower for most of these loans and the probability of
repayment is based on the projected cash flow of the company or liquidation of
the pledged collateral and enforcement of a personal guarantee, if any. As a
result, in the case of loans secured by accounts receivable, the availability of
funds for the repayment of these loans may be substantially dependent on the
ability of the borrower to collect amounts due from its customers. The
collateral securing other loans may depreciate over time, may be difficult to
appraise and may fluctuate in value based on the success of the business.

      Loan Originations, Purchases, Sales and Servicing. Although we originate
both fixed-rate and adjustable-rate loans, our ability to generate each type of
loan depends upon borrower demand, market interest rates,

                                        9

<PAGE>

borrower preference for fixed- versus adjustable-rate loans, and the interest
rates offered on each type of loan by competing lenders in our market area. This
includes banks, savings institutions, credit unions, mortgage banking companies,
and life insurance companies. Loan originations are derived from a number of
sources, including existing or prior customers and walk-in customers.

      Loan originations are adversely affected by rising interest rates, which
typically result in decreased loan demand. Accordingly, the volume of our loan
originations and the interest rates we can charge on loans vary from period to
period. One- to four-family residential mortgage loans are generally
underwritten to conform to Fannie Mae and Freddie Mac seller/servicer
guidelines, and are currently originated on a fixed interest rate basis only. We
generally sell most of our conforming loans but retain the servicing rights on
loans that we originate, which means that we will continue to collect payments
on the loans and supervise foreclosure proceedings, if necessary. We retain a
portion of the interest paid by the borrower on the loans, generally 25 basis
points, as consideration for our services. We currently service $35.5 million of
loans for others.

      Loan Approval Procedures and Authority. Our lending activities are subject
to written underwriting standards and loan origination procedures adopted by
management and the Board of Directors. For single family, owner-occupied real
estate loans, the President of First Clover Leaf Bank is authorized to approve
loans up to $500,000, while the Senior Vice President - Chief Lending Officer is
authorized to approve loans up to $350,000. For secured commercial real estate
loans and construction and land loans, the President and Senior Vice President -
Chief Lending Officer are authorized to approve loans up to $350,000 and
$250,000, respectively; for secured consumer loans, these officers may approve
loans up to $100,000 and $75,000, respectively; and for overdrafts and unsecured
credits, these officers may approve loans up to $50,000 and $25,000,
respectively. When acting together, these officers may approve new loans in
amounts up to 150% of their combined lending limits, and may approve renewals of
commercial business and commercial real estate loans in amounts up to 200% of
their combined lending limits where there has been no deterioration in either
the payment pattern or financial strength of the borrower. However, the entire
Board of Directors must approve all loans in excess of $3.0 million. In
addition, the Board of Directors generally ratifies all pre-authorized loan
approvals.

      Loans to One Borrower. At December 31, 2006, the maximum amount that First
Clover Leaf Bank could have loaned to any one borrower under the 15% limit of
risk-based capital was approximately $9.7 million. At that date, the largest
lending relationship with the Bank totaled $9.0 million and consisted of one
loan secured primarily by accounts receivable.

Asset Quality

      Loan Delinquencies and Collection Procedures. When a borrower fails to
make required payments on a loan, we take a number of steps to induce the
borrower to correct the delinquency and restore the loan to a current status. We
will send a borrower a reminder notice 15 days after an account becomes
delinquent, and our employees are authorized to use their discretion whether
direct telephone contact is required at that time. If the borrower does not
remit the entire payment due by the end of the month, we try to make direct
contact with the borrower to arrange a payment plan. If a satisfactory payment
plan is not established within 50 days of a delinquency, we will send a demand
letter to the borrower. If a satisfactory payment plan has not been arranged
within 60 days following a delinquency, we may instruct our attorneys to
institute foreclosure proceedings depending on the loan-to-value ratio or our
relationship with the borrower. Foreclosed property is held as other real estate
owned.

      Our policies require that management continuously monitor the status of
the loan portfolio and report to the Board of Directors on a monthly basis.
These reports include information on delinquent loans and foreclosed real estate
and our actions and plans to cure the delinquent status of the loans and to
dispose of any real estate acquired through foreclosure.

      Non-Accrual Loans. All loans are reviewed on a regular basis and are
placed on non-accrual status when, in the opinion of management, there is
reasonable probability of loss of principal or the collection of additional
interest is deemed insufficient to warrant further accrual. Generally, we place
all loans 90 days or more past due on non-accrual status. In addition, we place
any loan on non-accrual status if any part of it is classified as loss or if any
part has been charged-off. When a loan is placed on non-accrual status, total
interest accrued and unpaid to date is

                                       10

<PAGE>

reversed. Subsequent payments are either applied to the outstanding principal
balance or recorded as interest income, depending on the assessment of the
ultimate collectibility of the loan. Loans are charged-off no later than 120
days following their delinquency, unless the loans are well-collateralized or in
the process of collection.

      As of December 31, 2006, our total non-accrual loans amounted to $1.4
million compared to $4,000 at December 31, 2005. As of December 31, 2006, the
largest non-accrual loan was secured by an apartment complex and amounted to
$395,000.

      Non-Performing and Impaired Loans and Non-Performing Assets. The table
below sets forth the amount and categories of our non-performing and impaired
loans and non-performing assets at the dates indicated. At each date presented,
we had no troubled debt restructurings (loans for which a portion of interest or
principal has been forgiven and loans modified at interest rates materially less
than current market rates).

<TABLE>
<CAPTION>
                                                                                 At December 31,
                                                       -------------------------------------------------------------------
                                                           2006         2005          2004         2003          2002
                                                       -----------   -----------   -----------   -----------   -----------
                                                                             (Dollars in thousands)
<S>                                                    <C>           <C>           <C>           <C>           <C>
Non-accrual loans:
   One- to four-family .............................   $       579   $        --   $        --   $        --   $        --
   Multi-family ....................................           395            --            --            --            --
   Commercial real estate ..........................           396            --            --            --            --
   Consumer ........................................             1             4            --            --            --
                                                       -----------   -----------   -----------   -----------   -----------
      Total non-accrual loans ......................         1,371             4            --            --            --
                                                       -----------   -----------   -----------   -----------   -----------
Accruing loans delinquent 90 days or more:
   One- to four-family .............................            16            --            --           140           119
   Consumer ........................................            --            11             3            --            --
                                                       -----------   -----------   -----------   -----------   -----------
      Total accruing loans delinquent 90
         days or more ..............................            16            11             3           140           119
                                                       -----------   -----------   -----------   -----------   -----------
      Total non-performing loans ...................         1,387            15             3           140           119

Other impaired loans:
   Commercial real estate ..........................           918            --            --            --            --
   Construction and land ...........................         1,467            --            --            --            --
   Commercial business .............................           149            --            --            --            --
                                                       -----------   -----------   -----------   -----------   -----------
      Total other impaired loans ...................         2,534            --            --            --            --
                                                       -----------   -----------   -----------   -----------   -----------

Total non-performing and impaired loans ............   $     3,921            15             3           140           119
                                                       -----------   -----------   -----------   -----------   -----------

Real estate owned:
   One- to four-family .............................            --            --            --            --            --
                                                       -----------   -----------   -----------   -----------   -----------
      Total real estate owned ......................            --            --            --            --            --
                                                       -----------   -----------   -----------   -----------   -----------

Total non-performing and impaired assets ...........   $     3,921   $        15   $         3   $       140   $       119
                                                       ===========   ===========   ===========   ===========   ===========
Allowance for loan losses attributable to
   non-performing and impaired loans ...............   $       396   $         4   $        --   $        14   $        11

Ratios:
   Non-performing and impaired loans
      to total loans ...............................          1.60%         0.01%         0.00%         0.13%         0.13%
   Non-performing and impaired assets
      to total assets ..............................          0.96          0.01          0.00          0.12          0.10
</TABLE>

                                       11

<PAGE>

      For the year ended December 31, 2006, $58,000 of gross interest income
would have been recorded had our non-accruing loans been current in accordance
with their original terms. Interest income recognized on such loans for 2006 was
immaterial.

      At December 31, 2006, we had no loans which were not currently classified
as non-accrual, 90 days past due or impaired, but where known information about
possible credit problems of borrowers caused management to have serious concerns
as to the ability of the borrowers to comply with present loan repayment terms
and would result in disclosure as non-accrual, 90 days past due or impaired.

      Real Estate Owned. Real estate owned consists of property acquired through
formal foreclosure or by deed in lieu of foreclosure and is recorded at the
lower of recorded investment or fair value. Write-downs from recorded investment
to fair value which are required at the time of foreclosure are charged to the
allowance for loan losses. After transfer, the property is carried at the lower
of recorded investment or fair value, less estimated selling expenses.
Adjustments to the carrying value of the properties that result from subsequent
declines in value are charged to operations in the period in which the declines
occur. At December 31, 2006, we held no real estate owned.

      Classification of Assets. Our policies, consistent with regulatory
guidelines, require that we classify loans and other assets, such as securities,
that are considered to be of lesser quality, as substandard, doubtful, or loss
assets. An asset is considered substandard if it is inadequately protected by
the current net worth and paying capacity of the obligor or of the collateral
pledged, if any. Substandard assets include those characterized by the distinct
possibility that the savings institution will sustain some loss if the
deficiencies are not corrected. Assets classified as doubtful have all of the
weaknesses inherent in those classified substandard with the added
characteristic that the weaknesses present make collection or liquidation in
full, on the basis of currently existing facts, conditions, and values, highly
questionable and improbable. Assets classified as loss are those considered
uncollectable and of such little value that their continuance as assets is not
warranted. Assets that do not expose us to risk sufficient to warrant
classification in one of the aforementioned categories, but which possess some
weaknesses, are required to be designated as special mention by management.

      When we classify assets as either substandard or doubtful, we allocate for
analytical purposes a portion of our general valuation allowances to these
assets as deemed prudent by management. General allowances represent loss
allowances that have been established to recognize the probable risk associated
with lending activities, but which have not been allocated to particular problem
assets. When we classify problem assets as loss, we are required either to
establish a specific allowance for losses equal to 100% of the amount of the
assets so classified, or to charge-off the amount of the assets. Our
determination as to the classification of assets and the amount of valuation
allowances is subject to review by regulatory agencies, which can order the
establishment of additional loss allowances. Management regularly reviews our
asset portfolio to determine whether any assets require classification in
accordance with applicable regulatory guidelines and accounting principles
generally accepted in the United States of America .

      On the basis of management's review of our assets, at December 31, 2006,
we had classified $3.3 million of our assets as substandard and $0 as doubtful.

                                       12

<PAGE>

      The following table sets forth certain information with respect to our
loan portfolio delinquencies at the dates indicated.

<TABLE>
<CAPTION>
                                                       Loans Delinquent For
                                        -------------------------------------------------
                                               60-89 Days             90 Days and Over               Total
                                        -----------------------   -----------------------   -----------------------
                                          Number       Amount       Number       Amount       Number       Amount
                                        ----------   ----------   ----------   ----------   ----------   ----------
                                                                   (Dollars in thousands)
<S>                                     <C>          <C>          <C>          <C>          <C>          <C>
At December 31, 2006
--------------------
   One- to four-family residential ..            2   $       94            4   $      102            6   $      196
   Multi-family......................           --           --            1          395            1          395
   Commercial Business...............            2          147            1           18            3          165
   Consumer..........................            2           28           --           --            2           28
                                        ----------   ----------   ----------   ----------   ----------   ----------
      Total..........................            6   $      269            6   $      515           12   $      784
                                        ==========   ==========   ==========   ==========   ==========   ==========

At December 31, 2005
--------------------
   One- to four-family residential ..            1   $       52           --   $       --            1   $       52
   Multi-family......................            1            2           --           --            1            2
   Consumer..........................           --           --            4           15            4           15
                                        ----------   ----------   ----------   ----------   ----------   ----------
      Total..........................            2   $       54            4   $       15            6   $       69
                                        ==========   ==========   ==========   ==========   ==========   ==========

At December 31, 2004
--------------------
   One- to four-family residential ..            2   $      152           --   $       --            2   $      152
   Consumer..........................           --           --            1            3            1            3
                                        ----------   ----------   ----------   ----------   ----------   ----------
      Total..........................            2   $      152            1   $        3            3   $      155
                                        ==========   ==========   ==========   ==========   ==========   ==========

At December 31, 2003
--------------------
   One- to four-family residential ..            1   $       41            3   $      140            4   $      181
                                        ----------   ----------   ----------   ----------   ----------   ----------
      Total..........................            1   $       41            3   $      140            4   $      181
                                        ==========   ==========   ==========   ==========   ==========   ==========

At December 31, 2002
--------------------
   One- to four-family residential ..            4   $      148            2   $      114            6   $      262
   Consumer..........................           --           --            3            5            3            5
                                        ----------   ----------   ----------   ----------   ----------   ----------
      Total..........................            4   $      148            5   $      119            9   $      267
                                        ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>

                                       13

<PAGE>

   Allowance for Loan Losses. The following table sets forth activity in our
allowance for loan losses for the years indicated.

<TABLE>
<CAPTION>
                                                                                     At or For the Years Ended
                                                                                            December 31,
                                                               -----------------------------------------------------------------
                                                                   2006           2005         2004          2003        2002
                                                               ------------   -----------   -----------   ----------   ---------
                                                                                       (Dollars in thousands)
<S>                                                            <C>            <C>           <C>           <C>          <C>
Balance at beginning of year................................   $        428   $       428   $       429   $      399   $     399
                                                               ------------   -----------   -----------   ----------   ---------
Charge-offs:
   Consumer.................................................             (1)           --            (1)          --          --
                                                               ------------   -----------   -----------   ----------   ---------
      Total charge-offs.....................................             (1)           --            (1)          --          --
                                                               ------------   -----------   -----------   ----------   ---------
Recoveries:
   Consumer.................................................              5            --            --           --          --
                                                               ------------   -----------   -----------   ----------   ---------
      Total recoveries......................................              5            --            --           --          --
                                                               ------------   -----------   -----------   ----------   ---------

Net (charge-offs) recoveries................................              4            --            (1)          --          --
                                                               ------------   -----------   -----------   ----------   ---------
Allowance acquired..........................................            911            --            --           --          --
                                                               ------------   -----------   -----------   ----------   ---------
Provision for loan losses...................................            367            --            --           30          --
                                                               ------------   -----------   -----------   ----------   ---------

Balance at end of year......................................   $      1,710   $       428   $       428   $      429   $     399
                                                               ============   ===========   ===========   ==========   =========

Ratios:
Net charge-offs (recoveries) to average loans outstanding...           0.00%         0.00%         0.00%        0.00%       0.00%
Allowance for loan losses to non-performing
   and impaired loans.....................................            43.61      2,853.33     14,266.67       306.43      335.29
Allowance for loan losses to total loans....................           0.70          0.37          0.38         0.41        0.42
</TABLE>

                                       14

<PAGE>

      The allowance for loan losses is a valuation account that reflects our
evaluation of the credit losses inherent in our loan portfolio. We maintain the
allowance through provisions for loan losses that we charge to income. We charge
losses on loans against the allowance for loan losses when we believe the
collection of loan principal is unlikely.

      Our evaluation of risk in maintaining the allowance for loan losses
includes the review of all loans on which the collectibility of principal may
not be reasonably assured. We consider the following factors as part of this
evaluation: our historical loan loss experience, the nature and volume of the
loan portfolio, adverse situations that may affect the borrower's ability to
repay, estimated value of any underlying collateral, peer group information and
prevailing economic conditions. There may be other factors that may warrant our
consideration in maintaining an allowance at a level sufficient to provide for
probable losses. This evaluation is inherently subjective as it requires
estimates that are susceptible to significant revision as more information
becomes available or as future events change. Although we believe that we have
established and maintained the allowance for loan losses at adequate levels,
future additions may be necessary if economic and other conditions in the future
differ substantially from the current operating environment.

      In addition, the Office of Thrift Supervision, as an integral part of its
examination process, periodically reviews our loan portfolio and the related
allowance for loan losses. The Office of Thrift Supervision may require us to
increase the allowance for loan losses based on its judgments of information
available to it at the time of its examination, thereby adversely affecting our
results of operations.

                                       15

<PAGE>

      Allocation of Allowance for Loan Losses. The following tables set forth
the allowance for loan losses allocated by loan category, the total loan
balances by category, and the percent of loans in each category to total loans
at the dates indicated. The allowance for loan losses allocated to each category
is not necessarily indicative of future losses in any particular category and
does not restrict the use of the allowance to absorb losses in other categories.

<TABLE>
<CAPTION>
                                                                    At December 31,
                              --------------------------------------------------------------------------------------
                                                 2006                                         2005
                              ----------------------------------------   -------------------------------------------
                                                           Percent of                                    Percent of
                                                            Loans in                                      Loans in
                               Allowance       Loan           Each       Allowance           Loan           Each
                               for Loan     Balances by    Category to   for Loan         Balances by    Category to
                                Losses       Category      Total Loans    Losses           Category      Total Loans
                              ----------   -------------   -----------   ---------        -----------    -----------
                                                                 (Dollars in thousands)
<S>                           <C>          <C>             <C>           <C>              <C>            <C>
Real Estate Loans:
   One- to four-family ....   $      400   $     120,355          48.5%  $     353        $    97,594           83.0%
   Multi-family ...........           65           8,895           3.6          19              5,390            4.6
   Commercial .............          753          68,577          27.7          40             11,074            9.4
   Construction and land ..          324          17,181           6.9           8              2,317            1.9
Commercial business .......          145          25,907          10.4          --                 --             --
Consumer ..................           23           7,125           2.9           8              1,257            1.1
                              ----------   -------------   -----------   ---------        -----------    -----------
   Total allocated
   allowance ..............   $    1,710   $     248,040         100.0%  $     428        $   117,632          100.0%
                                           =============   ===========                    ===========    ===========
Unallocated allowance .....           --                                        --
                              ----------                                 ---------
   Total ..................   $    1,710                                 $     428
                              ==========                                 =========

<CAPTION>
                                           At December 31,
                              ----------------------------------------
                                                2004
                              ----------------------------------------
                                                           Percent of
                                                            Loans in
                               Allowance       Loan           Each
                               for Loan     Balances by    Category to
                                Losses       Category      Total Loans
                              ----------   -------------   -----------
                                       (Dollars in thousands)
<S>                           <C>          <C>             <C>
Real Estate Loans:
   One- to four-family ....   $      344   $      92,585          81.0%
   Multi-family ...........           19           5,689           5.0
   Commercial .............           29           7,755           6.8
   Construction and land ..           28           7,412           6.5
Commercial business .......           --              --            --
Consumer ..................            8             855           0.7
                              ----------   -------------   -----------
   Total allocated
   allowance ..............   $      428   $     114,296         100.0%
                                           =============   ===========
Unallocated allowance .....           --
                              ----------
   Total ..................   $      428
                              ==========
</TABLE>

<TABLE>
<CAPTION>
                                                               At December 31,
                              --------------------------------------------------------------------------------
                                                2003                                     2002
                              ----------------------------------------   -------------------------------------
                                                            Percent of                             Percent of
                                                             Loans in                               Loans in
                               Allowance       Loan           Each       Allowance      Loan          Each
                               for Loan     Balances by    Category to   for Loan    Balances by   Category to
                                Losses       Category      Total Loans    Losses      Category     Total Loans
                              ----------   -------------   -----------   ---------   -----------   -----------
                                                           (Dollars in thousands)
<S>                           <C>          <C>             <C>           <C>         <C>           <C>
Real Estate Loans:
   One- to four-family ....   $      353   $      89,547          84.9%  $     329   $    82,379          87.1%
   Multi-family ...........            9           2,421           2.3           9         2,464           2.6
   Commercial .............           20           5,038           4.8          16         3,944           4.2
   Construction and land ..           31           7,782           7.4          21         5,176           5.5
Commercial business .......           --              --            --          --            --            --
Consumer ..................            4             721           0.6           8           584           0.6
                              ----------   -------------   -----------   ---------   -----------   -----------
   Total allocated
   allowance ..............   $      417   $     105,509         100.0%  $     383   $    94,547         100.0%
                                           =============   ===========               ===========   ===========
Unallocated allowance .....           12                                        16
                              ----------                                 ---------
   Total ..................   $      429                                 $     399
                              ==========                                 =========
</TABLE>

                                       16

<PAGE>

      Management evaluates the total balance of the allowance for loan losses
based on several factors that are not loan specific but are reflective of the
losses inherent in the loan portfolio, including management's periodic review of
loan collectibility in light of historical experience, the nature and volume of
the loan portfolio, adverse situations that may affect the borrower's ability to
repay, estimated value of any underlying collateral, prevailing economic
conditions such as housing trends, inflation rates and unemployment rates,
geographic concentrations of loans within First Clover Leaf Bank's immediate
market area, and both peer financial institution historic loan loss experience
and allowance for loan loss levels.

Investment Activities

      We are permitted under federal law to invest in various types of liquid
assets, including U.S. Government obligations, securities of various federal
agencies and of state and municipal governments, deposits at the Federal Home
Loan Bank of Chicago, certificates of deposit of federally insured institutions,
certain bankers' acceptances and federal funds. Within certain regulatory
limits, we may also invest a portion of our assets in commercial paper and
corporate debt securities. First Clover Leaf Bank is also required to invest in
Federal Home Loan Bank stock.

      SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," requires that securities be categorized as "held to maturity,"
"trading securities" or "available for sale," based on management's intent as to
the ultimate disposition of each security. SFAS No. 115 allows debt securities
to be classified as "held to maturity" and reported in financial statements at
amortized cost only if the reporting entity has the positive intent and ability
to hold those securities to maturity. Securities that might be sold in response
to changes in market interest rates, changes in the security's prepayment risk,
increases in loan demand, or other similar factors cannot be classified as "held
to maturity."

      Debt and equity securities held for current resale are classified as
"trading securities." These securities are reported at fair value, and
unrealized gains and losses on the securities are included in earnings. We do
not currently use or maintain a trading account. Debt and equity securities not
classified as either "held to maturity" or "trading securities" are classified
as "available for sale." These securities are reported at fair value, and
unrealized gains and losses on the securities are excluded from earnings and
reported, net of deferred taxes, as a separate component of equity. We have
classified all of our securities as available for sale at December 31, 2006.

      All of our securities carry market risk insofar as increases in market
interest rates may cause a decrease in their market value. Many also carry
prepayment risk insofar as they may be called prior to maturity in times of low
market interest rates, so that we may have to invest the funds at a lower
interest rate. Investments in securities are made based on certain
considerations, which include the interest rate, tax considerations, yield,
settlement date and maturity of the security, our liquidity position, and
anticipated cash needs and sources. The effect that the proposed security would
have on our credit and interest rate risk and risk-based capital is also
considered. We purchase securities to provide necessary liquidity for day-to-day
operations, and when investable funds exceed loan demand.

      Generally,   our  investment  policy,  as  established  by  the  Board  of
Directors,  is to invest  funds among  various  categories  of  investments  and
maturities based upon our liquidity needs,  asset/liability management policies,
investment quality, marketability and performance objectives.

      Our investment policy does not permit engaging directly in hedging
activities or purchasing high-risk mortgage derivative products.

      Our debt securities are mainly  composed of securities  issued by the U.S.
Government and government agencies (primarily the Federal Home Loan Bank, Fannie
Mae and Freddie Mac) and investment  grade corporate debt  securities,  although
from time to time we make other  investments as permitted by applicable laws and
regulations.

                                       17

<PAGE>

      Available-for-Sale Portfolio. The following table sets forth the
composition of our available-for-sale portfolio at the dates indicated. For
further information see Notes 1 and 3 of the Notes to Consolidated Financial
Statements.

<TABLE>
<CAPTION>
                                                                     At December 31,
                                       ------------------------------------------------------------------------
                                                2006                     2005                     2004
                                       ----------------------   ----------------------   ----------------------
                                       Amortized                Amortized                Amortized
                                          Cost     Fair Value     Cost      Fair Value      Cost     Fair Value
                                       ---------   ----------   ---------   ----------   ---------   ----------
                                                                     (In thousands)
<S>                                    <C>         <C>          <C>         <C>          <C>         <C>
Investment Securities:
   Federal agency obligations ......   $  35,652   $   35,622   $   8,402   $    8,255   $   9,501   $    9,499
   Corporate .......................       3,597        3,461       4,849        4,689       4,854        4,835
   State and municipal securities ..       3,357        3,336          --           --          --           --
   Mortgage-backed securities ......       3,375        3,413          --           --          --           --
                                       ---------   ----------   ---------   ----------   ---------   ----------

   Total investment securities
      available for sale ...........   $  45,981   $   45,832   $  13,251   $   12,944   $  14,355   $   14,334
                                       =========   ==========   =========   ==========   =========   ==========
</TABLE>

      Held-to-Maturity Portfolio. The following table sets forth the composition
of our held-to-maturity portfolio at the dates indicated.

<TABLE>
<CAPTION>
                                                                    At December 31,
                                       ------------------------------------------------------------------------
                                                2006                     2005                     2004
                                       ----------------------   ----------------------   ----------------------
                                       Amortized                Amortized                Amortized
                                          Cost     Fair Value      Cost     Fair Value      Cost     Fair Value
                                       ---------   ----------   ---------   ----------   ---------   ----------
                                                                     (In thousands)
<S>                                    <C>         <C>          <C>         <C>          <C>         <C>
   Mortgage-backed securities held
      to maturity .............        $      --   $       --   $     353   $      338   $     472   $      465
                                       =========   ==========   =========   ==========   =========   ==========
</TABLE>

                                       18

<PAGE>

      Portfolio Maturities and Yields. The composition and maturities of the
investment securities portfolio and the mortgage-backed securities portfolio at
December 31, 2006 are summarized in the following table. Maturities are based on
the final contractual payment dates, and do not reflect the impact of
prepayments or early redemptions that may occur. State and municipal securities
yields have not been adjusted to a tax-equivalent basis.

<TABLE>
<CAPTION>
                                          More than One Year  More than Five Years     More than Ten
                       One Year or Less   through Five Years   through Ten Years           Years              Total Securities
                      ------------------  ------------------  --------------------  ------------------  ----------------------------
                                Weighted            Weighted            Weighted              Weighted                     Weighted
                      Amortized  Average  Amortized  Average  Amortized  Average    Amortized  Average   Amortized   Fair   Average
                        Cost      Yield     Cost      Yield      Cost     Yield       Cost      Yield      Cost     Value    Yield
                      --------- --------  --------- --------  --------- ----------  --------- --------  --------- -------- --------
                                                                  (Dollars in thousands)
<S>                   <C>       <C>       <C>       <C>       <C>       <C>         <C>       <C>       <C>       <C>      <C>
Available for Sale:
Investment
   Securities
   U.S. Government
      and agency
      securities .... $   5,291     5.24% $  19,610     5.20% $   9,751       5.33% $   1,000     6.22% $  35,652 $ 35,622     5.27%
   Corporate bonds ..       501     3.97      2,249     4.10         --         --        847     5.06      3,597    3,461     4.31
   State and
      municipal
      securities ....        --       --         --       --        357       5.05      3,000     5.00      3,357    3,336     5.01
   Mortgage-backed
      securities ....         8     8.50      2,301     5.26        906       5.86        160     6.48      3,375    3,413     5.49
                      ---------           ---------           ---------             ---------           --------- --------

   Total debt
      securities
      available for
      sale ......     $   5,800     5.13% $  24,160     5.10% $  11,014       5.36% $   5,007     5.30% $  45,981 $ 45,832     5.19%
                      ========= ========  ========= ========  ========= ==========  ========= ========  ========= ======== ========
</TABLE>

                                       19

<PAGE>

Sources of Funds

      General. Deposits are our primary source of funds for lending and other
investment purposes. In addition to deposits, we derive funds primarily from
principal and interest payments on loans. Loan repayments are a relatively
stable source of funds, while deposit inflows and outflows are significantly
influenced by market interest rates. Borrowings may be used on a short-term
basis to compensate for reductions in the availability of funds from other
sources, and may be used on a longer-term basis for general business purposes.

      Deposits. Residents of our primary market area are our main source of
deposits. Deposit account terms vary, with the principal differences being the
minimum balance required, the time periods the funds must remain on deposit and
the interest rate. From time to time, we supplement our funding with brokered
deposits, which totaled $681,000 at December 31, 2006. Our deposit products
include demand and NOW, money market, savings, and term certificate accounts.
Through our acquisition of Clover Leaf Bank and in connection with our emphasis
on the origination of commercial business loans, we have begun to promote money
market accounts with adjustable interest rates. Interest rates paid, maturity
terms, service fees and withdrawal penalties are established by First Clover
Leaf Bank on a periodic basis. Management determines the rates and terms based
on rates paid by our competitors, our needs for funds or liquidity, growth goals
and federal and state regulations.

                                       20

<PAGE>

     Interest-Bearing  Deposit  Accounts by Type. The following table sets forth
the average  balances of our  interest-bearing  deposits in the various types of
deposit programs for the periods indicated.

<TABLE>
<CAPTION>
                                                                    Years Ended December 31,
                                    -----------------------------------------------------------------------------------------------
                                                 2006                             2005                             2004
                                    ------------------------------   ------------------------------   -----------------------------
                                                          Weighted                         Weighted                        Weighted
                                     Average               Average   Average               Average     Average             Average
                                     Balance    Percent     Rate     Balance     Percent     Rate      Balance   Percent     Rate
                                    ---------   -------   --------   ---------   -------   --------   --------   -------   --------
<S>                                 <C>         <C>       <C>        <C>         <C>       <C>        <C>        <C>       <C>
                                                                         (Dollars in Thousands)
Interest-bearing transaction ...    $  20,012     12.46%    3.18%    $      --        --%      --%    $     --        --%      --%
Savings deposits ...............       31,971     19.90     2.10        25,774     25.76     1.87       29,261     29.60     1.60
                                    ---------   -------              ---------   -------              --------   -------
                                       51,983     32.36     2.52        25,774     25.76     1.87       29,261     29.60     1.60

Certificates of deposit ........      108,652     67.64     4.27        74,275     74.24     3.35       69,587     70.40     2.91
                                    ---------   -------              ---------   -------              --------   -------
   Total interest-bearing
     deposits ..................    $ 160,635    100.00%    3.70%    $ 100,049    100.00%    2.97%    $ 98,848    100.00%    2.53%
                                    =========   =======              =========   =======              ========   =======
</TABLE>

                                       21

<PAGE>

     Time  Deposit  Balances  and  Maturities.  The  following  table sets forth
certificates  of deposit by time  remaining  until  maturity as of December  31,
2006.

<TABLE>
<CAPTION>
                                                                   Maturity
                                                   ---------------------------------------------
                                                   3 Months   Over 3 to 6   Over 6 to    Over 12
                                                    or Less      Months     12 Months    Months      Total
                                                   --------   -----------   ---------   --------   ---------
                                                                            (In thousands
<S>                                                <C>        <C>           <C>         <C>        <C>
Certificates of deposit less than $100,000 ......  $ 28,903   $    15,477   $  37,205   $ 40,953   $ 122,538
Certificates of deposit of $100,000 or more(1) ..     3,075         1,719       7,324      6,535      18,653
                                                   --------   -----------   ---------   --------   ---------
   Total of certificates of deposit .............  $ 31,978   $    17,196   $  44,529   $ 47,488   $ 141,191
                                                   ========   ===========   =========   ========   =========
</TABLE>

----------
(1)   The weighted average interest rates for these accounts, by maturity
      period, were: 4.13% for 3 months or less; 4.79% for over 3 to 6 months;
      4.91% for over 6 to 12 months; and 4.59% for over 12 months. The overall
      weighted average interest rate for accounts of $100,000 or more was 4.66%.

Borrowings. Our borrowings consist of Federal Home Loan Bank advances, reverse
repurchase agreements and subordinated debentures. At December 31, 2006, we had
$10.3 million in advances and access to additional Federal Home Loan Bank
advances of up to $61.7 million, and we had $29.4 million in securities sold
under agreements to repurchase. In connection with our acquisition of Clover
Leaf, we assumed subordinated debentures that Clover Leaf originally issued in
May 2005 through a newly formed special purpose trust. For additional
information on our subordinated debentures, please see note 11 to our
Consolidated Financial Statements contained within our Annual Report to
Stockholders.

Subsidiary Activities

      First Clover Leaf Financial Corp.'s only subsidiary is First Clover Leaf
Bank. First Clover Leaf Bank's only subsidiary is Clover Leaf Financial
Services, an insurance agency that sells credit life and disability insurance
policies.

Personnel

      As of December 31, 2006, we had 44 full-time employees and eight part-time
employees. Our employees are not represented by any collective bargaining group.
Management believes that we have good relations with our employees.

                           SUPERVISION AND REGULATION

General

      First Clover Leaf Bank is a federally chartered savings bank. First Clover
Leaf Bank was formerly named First Federal Savings and Loan Association of
Edwardsville, and was re-named First Clover Leaf Bank in connection with our
acquisition of Clover Leaf Bank in July 2006.

      First Clover Leaf Bank is regulated and supervised by the Office of Thrift
Supervision and the Federal Deposit Insurance Corporation. This regulation and
supervision establishes a comprehensive framework of activities in which a
financial institution may engage and is intended primarily for the protection of
the Federal Deposit Insurance Corporation's deposit insurance funds and
depositors. Under this system of federal regulation, financial institutions are
periodically examined to ensure that they satisfy applicable standards with
respect to their capital adequacy, assets, management, earnings, liquidity and
sensitivity to market interest rates. After completing an examination, the
federal agency critiques the financial institution's operations and assigns its
rating (known as an institution's CAMELS). Under federal law, an institution may
not disclose its CAMELS rating to the public. First Clover Leaf Bank also is a
member of, and owns stock in, the Federal Home Loan Bank of Chicago, which is
one of the twelve regional banks in the Federal Home Loan Bank System. First
Clover Leaf Bank also is regulated to a

                                       22

<PAGE>

lesser extent by the Board of Governors of the Federal Reserve System, governing
reserves to be maintained against deposits and other matters. The Office of
Thrift Supervision examines First Clover Leaf Bank and prepares reports for the
consideration of its board of directors on any operating deficiencies.

      Any change in these laws or regulations, whether by the Federal Deposit
Insurance Corporation, the Office of Thrift Supervision, or Congress, could have
a material adverse impact on us and our operations.

Supervisory Agreement

      First Clover Leaf Bank was formerly named First Federal Savings and Loan
Association of Edwardsville, and was re-named First Clover Leaf Bank in
connection with our acquisition of Clover Leaf Bank in July 2006. On December
16, 2004, First Federal Savings and Loan Association of Edwardsville entered
into a Supervisory Agreement with the Office of Thrift Supervision. The
Supervisory Agreement, previously disclosed on a Current Report on Form 8-K
filed on February 2, 2005, facilitates corrective actions concerning certain
regulatory compliance issues, including violations of the Bank Secrecy Act. In
addition, the Office of Thrift Supervision assessed civil money penalties
against First Federal Savings & Loan Association of Edwardsville in the amount
of $7,700 for its failure to purchase and maintain flood insurance in an
appropriate amount on 14 loans and its failure to obtain signed and dated flood
notices from the borrowers on eight loans.

      The Supervisory Agreement was based upon First Federal Savings & Loan
Association of Edwardsville's August 2004 Report of Examination in which the
Office of Thrift Supervision concluded that grounds existed for the initiation
of an administrative proceeding against First Federal Savings & Loan Association
of Edwardsville. Without admitting or denying that such grounds existed, First
Federal Savings & Loan Association of Edwardsville determined to enter into the
Supervisory Agreement to cooperate with the Office of Thrift Supervision and as
evidence of First Federal Savings & Loan Association of Edwardsville's intent to
comply with all applicable laws and regulations and engage in safe and sound
practices.

      Pursuant to the terms of the Supervisory Agreement, First Federal Savings
& Loan Association of Edwardsville agreed as follows:

      (1)   to adopt an anti-money laundering and Bank Secrecy Act compliance
            program that ensures compliance with its requirements and that,
            among other things, requires the accurate and timely completion and
            filing of currency transaction reports, designates a primary Bank
            Secrecy Act officer, provides for annual independent testing by a
            qualified third party of the Bank Secrecy Act compliance program,
            provides First Federal Savings & Loan Association of Edwardsville
            personnel with comprehensive Bank Secrecy Act training, and provides
            for internal controls to ensure First Federal's ongoing compliance
            with its Bank Secrecy Act compliance program.

      (2)   to adopt a Customer Identification Program and an Office of Foreign
            Assets Control policy.

      (3)   to develop and implement a comprehensive training program for
            operational and supervisory adherence to the requirements of the
            Bank Secrecy Act and regulations thereunder.

      (4)   to review and amend its Flood Disaster Protection Act policies and
            procedures to ensure that appropriate flood insurance is obtained
            and maintained upon all properties securing a loan from First
            Federal Savings & Loan Association of Edwardsville. The board of
            directors will review all loans made on or after March 1, 2001
            through the effective date of the Supervisory Agreement to ensure
            that all loans subject to the Flood Disaster Protection Act and
            regulations thereunder comply with such laws and regulations.

      (5)   to comply with the requirement of the Equal Credit Opportunity Act,
            including the nondiscriminatory loan underwriting standards
            thereunder, and to review its business practices at least annually
            to ensure compliance therewith.

                                       23

<PAGE>

      (6)   at least annually, to require First Federal Savings & Loan
            Association of Edwardsville's security officer to report to the
            board of directors on the administration and effectiveness of First
            Federal Savings & Loan Association of Edwardsville's security
            program as required by the Bank Protection Act.

      (7)   for the board of directors of First Federal Savings & Loan
            Association of Edwardsville to appoint a regulatory compliance
            committee of at least three directors, the majority of whom must be
            independent, to monitor and coordinate compliance with the
            Supervisory Agreement and to submit to the full board quarterly
            written progress reports and actions taken to comply with the
            Supervisory Agreement. The progress reports must be signed by each
            director and filed with the Regional Director of the Office of
            Thrift Supervision.

      The Supervisory Agreement will remain in effect until terminated, modified
or suspended in writing by the Office of Thrift Supervision.

      First Clover Leaf Bank believes that it has adopted and implemented the
various plans, policies and procedures required by the Supervisory Agreement.
However, a failure to comply with the Supervisory Agreement could result in the
initiation of a formal enforcement action by the Office of Thrift Supervision,
including the imposition of additional civil money penalties. While the
Supervisory Agreement has resulted in additional regulatory compliance expenses
for First Clover Leaf Bank, the amount of such expenses have not had a material
financial impact on us.

Federal Banking Regulation

      Business Activities. A federal savings association derives its lending and
investment powers from the Home Owners' Loan Act, as amended, and the
regulations of the Office of Thrift Supervision. Under these laws and
regulations, First Clover Leaf Bank may invest in mortgage loans secured by
residential and commercial real estate, commercial business and consumer loans,
certain types of debt securities and certain other loans and assets. First
Clover Leaf Bank also may establish subsidiaries that may engage in activities
not otherwise permissible for First Clover Leaf Bank directly, including real
estate investment, securities brokerage and insurance agency.

      Capital Requirements. Office of Thrift Supervision regulations require
savings associations to meet three minimum capital standards: a 1.5% tangible
capital ratio, a 4% leverage ratio (3% for institutions receiving the highest
rating on the CAMELS rating system) and an 8% risk-based capital ratio. The
prompt corrective action standards discussed below, in effect, establish a
minimum 2% tangible capital standard.

      The risk-based capital standard for savings associations requires the
maintenance of Tier 1 (core) and total capital (which is defined as core capital
and supplementary capital) to risk-weighted assets of at least 4% and 8%,
respectively. In determining the amount of risk-weighted assets, all assets,
including certain off-balance sheet assets, are multiplied by a risk-weight
factor of 0% to 100%, assigned by the Office of Thrift Supervision capital
regulation based on the risks inherent in the type of asset. Core capital is
defined as common stockholders' equity (including retained earnings), certain
noncumulative perpetual preferred stock and related surplus and minority
interests in equity accounts of consolidated subsidiaries, less intangibles
other than certain mortgage servicing rights and credit card relationships. The
components of supplementary capital currently include cumulative preferred
stock, long-term perpetual preferred stock, mandatory convertible securities,
subordinated debt and intermediate preferred stock, allowance for loan and lease
losses up to a maximum of 1.25% of risk-weighted assets, and up to 45% of net
unrealized gains on available-for-sale equity securities with readily
determinable fair market values. Overall, the amount of supplementary capital
included as part of total capital cannot exceed 100% of core capital.

      At December 31, 2006, First Clover Leaf Bank's capital exceeded all
applicable requirements.

      Loans to One Borrower. A federal savings association generally may not
make a loan or extend credit to a single or related group of borrowers in excess
of 15% of unimpaired capital and surplus on an unsecured basis. An additional
amount may be loaned, equal to 10% of unimpaired capital and surplus, if the
loan is secured by readily

                                       24

<PAGE>

marketable collateral, which generally does not include real estate. As of
December 31, 2006, First Clover Leaf Bank was in compliance with the
loans-to-one-borrower limitations.

      Qualified Thrift Lender Test. As a federal savings association, First
Clover Leaf Bank is subject to a qualified thrift lender, or "QTL," test. Under
the QTL test, First Clover Leaf Bank must maintain at least 65% of its
"portfolio assets" in "qualified thrift investments" in at least nine months of
the most recent 12-month period. "Portfolio assets" generally means total assets
of a savings institution, less the sum of specified liquid assets up to 20% of
total assets, goodwill and other intangible assets, and the value of property
used in the conduct of the savings association's business.

      "Qualified thrift investments" include various types of loans made for
residential and housing purposes, investments related to such purposes,
including certain mortgage-backed and related securities, and loans for
personal, family, household and certain other purposes up to a limit of 20% of
portfolio assets. "Qualified thrift investments" also include 100% of an
institution's credit card loans, education loans and small business loans. First
Clover Leaf Bank also may satisfy the QTL test by qualifying as a "domestic
building and loan association" as defined in the Internal Revenue Code of 1986.

      A savings association that fails the QTL test must either convert to a
bank charter or operate under specified restrictions. At December 31, 2006,
First Clover Leaf Bank maintained portfolio assets in qualified thrift
investments in excess of the percentage required to qualify the Bank under the
QTL test.

      Capital Distributions. Office of Thrift Supervision regulations govern
capital distributions by a federal savings association, which include cash
dividends, stock repurchases and other transactions charged to the institution's
capital account. A savings association must file an application for approval of
a capital distribution if:

      o     the total capital distributions for the applicable calendar year
            exceed the sum of the savings association's net income for that year
            to date plus the savings association's retained net income for the
            preceding two years;

      o     the savings association would not be at least adequately capitalized
            following the distribution;

      o     the distribution would violate any applicable statute, regulation,
            agreement or Office of Thrift Supervision-imposed condition; or

      o     the savings association is not eligible for expedited treatment of
            its filings.

      Even if an application is not otherwise required, every savings
association that is a subsidiary of a holding company must still file a notice
with the Office of Thrift Supervision at least 30 days before the board of
directors declares a dividend or approves a capital distribution.

      The Office of Thrift Supervision may disapprove a notice or application
if:

      o     the savings association would be undercapitalized following the
            distribution;

      o     the proposed capital distribution raises safety and soundness
            concerns; or

      o     the capital distribution would violate a prohibition contained in
            any statute, regulation or agreement.

      Liquidity. A federal savings association is required to maintain a
sufficient amount of liquid assets to ensure its safe and sound operation.

      Community Reinvestment Act and Fair Lending Laws. All savings associations
have a responsibility under the Community Reinvestment Act and related
regulations of the Office of Thrift Supervision to help meet the credit needs of
their communities, including low- and moderate-income neighborhoods. In
connection with its examination of a federal savings association, the Office of
Thrift Supervision is required to assess the savings association's record of
compliance with the Community Reinvestment Act. In addition, the Equal Credit
Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in
their lending practices on the basis of characteristics specified in those
statutes. A savings association's failure to comply with the provisions of

                                       25

<PAGE>

the Community Reinvestment Act could, at a minimum, result in regulatory
restrictions on its activities. The failure to comply with the Equal Credit
Opportunity Act and the Fair Housing Act could result in enforcement actions by
the Office of Thrift Supervision, as well as other federal regulatory agencies
and the Department of Justice. First Clover Leaf Bank received a "satisfactory"
Community Reinvestment Act rating in its most recent federal examination.

      Transactions with Related Parties. A federal savings association's
authority to engage in transactions with its "affiliates" is limited by Office
of Thrift Supervision regulations and by Sections 23A and 23B of the Federal
Reserve Act. The term "affiliates" for these purposes generally means any
company that controls or is under common control with an institution. First
Clover Leaf Financial Corp. and its non-savings institution subsidiaries will be
affiliates of First Clover Leaf Bank. In general, transactions with affiliates
must be on terms that are as favorable to the savings association as comparable
transactions with non-affiliates. In addition, certain types of these
transactions are restricted to an aggregate percentage of the savings
association's capital. Collateral in specified amounts must usually be provided
by affiliates in order to receive loans from the savings association. In
addition, Office of Thrift Supervision regulations prohibit a savings
association from lending to any of its affiliates that are engaged in activities
that are not permissible for bank holding companies and from purchasing the
securities of any affiliate, other than a subsidiary.

      First Clover Leaf Bank's authority to extend credit to its directors,
executive officers and 10% stockholders, as well as to entities controlled by
such persons, is currently governed by the requirements of Sections 22(g) and
22(h) of the Federal Reserve Act and Regulation O of the Federal Reserve Board.
Among other things, these provisions require that extensions of credit to
insiders (i) be made on terms that are substantially the same as, and follow
credit underwriting procedures that are not less stringent than, those
prevailing for comparable transactions with unaffiliated persons and that do not
involve more than the normal risk of repayment or present other unfavorable
features, and (ii) not exceed certain limitations on the amount of credit
extended to such persons, individually and in the aggregate, which limits are
based, in part, on the amount of First Clover Leaf Bank's capital. In addition,
extensions of credit in excess of certain limits must be approved by First
Clover Leaf Bank's board of directors.

      Enforcement. The Office of Thrift Supervision has primary enforcement
responsibility over federal savings institutions and has the authority to bring
enforcement action against all "institution-affiliated parties," including
stockholders, and attorneys, appraisers and accountants who knowingly or
recklessly participate in wrongful action likely to have an adverse effect on an
insured institution. Formal enforcement action may range from the issuance of a
capital directive or cease and desist order to removal of officers and/or
directors of the institution, receivership, conservatorship or the termination
of deposit insurance. Civil penalties cover a wide range of violations and
actions, and range up to $25,000 per day, unless a finding of reckless disregard
is made, in which case penalties may be as high as $1 million per day. The
Federal Deposit Insurance Corporation also has the authority to recommend to the
Director of the Office of Thrift Supervision that enforcement action be taken
with respect to a particular savings institution. If action is not taken by the
Director, the Federal Deposit Insurance Corporation has authority to take action
under specified circumstances.

      Standards for Safety and Soundness. Federal law requires each federal
banking agency to prescribe certain standards for all insured depository
institutions. These standards relate to, among other things, internal controls,
information systems and audit systems, loan documentation, credit underwriting,
interest rate risk exposure, asset growth, compensation, and other operational
and managerial standards as the agency deems appropriate. The federal banking
agencies adopted Interagency Guidelines Prescribing Standards for Safety and
Soundness to implement the safety and soundness standards required under federal
law. The guidelines set forth the safety and soundness standards that the
federal banking agencies use to identify and address problems at insured
depository institutions before capital becomes impaired. The guidelines address
internal controls and information systems, internal audit systems, credit
underwriting, loan documentation, interest rate risk exposure, asset growth,
compensation, fees and benefits. If the appropriate federal banking agency
determines that an institution fails to meet any standard prescribed by the
guidelines, the agency may require the institution to submit to the agency an
acceptable plan to achieve compliance with the standard. If an institution fails
to meet these standards, the appropriate federal banking agency may require the
institution to submit a compliance plan.

                                       26

<PAGE>

      Prompt Corrective Action Regulations. Under the prompt corrective action
regulations, the Office of Thrift Supervision is required and authorized to take
supervisory actions against undercapitalized savings associations. For this
purpose, a savings association is placed in one of the following five categories
based on the savings association's capital:

      o     well-capitalized (at least 5% leverage capital, 6% tier 1 risk-based
            capital and 10% total risk-based capital);

      o     adequately capitalized (at least 4% leverage capital, 4% tier 1
            risk-based capital and 8% total risk-based capital);

      o     undercapitalized (less than 3% leverage capital, 4% tier 1
            risk-based capital or 8% total risk-based capital);

      o     significantly undercapitalized (less than 3% leverage capital, 3%
            tier 1 risk-based capital or 6% total risk-based capital); and

      o     critically undercapitalized (less than 2% tangible capital).

      Generally, the banking regulator is required to appoint a receiver or
conservator for a savings association that is "critically undercapitalized." The
regulation also provides that a capital restoration plan must be filed with the
Office of Thrift Supervision within 45 days of the date a bank receives notice
that it is "undercapitalized," "significantly undercapitalized" or "critically
undercapitalized." In addition, numerous mandatory supervisory actions become
immediately applicable to the savings association, including, but not limited
to, restrictions on growth, investment activities, capital distributions and
affiliate transactions. The Office of Thrift Supervision may also take any one
of a number of discretionary supervisory actions against undercapitalized
savings associations, including the issuance of a capital directive and the
replacement of senior executive officers and directors.

      At December 31, 2006, First Clover Leaf Bank met the criteria for being
considered "well-capitalized."

      Insurance of Deposit Accounts. Deposit accounts in First Clover Leaf Bank
are insured by the Federal Deposit Insurance Corporation generally up to a
maximum of $100,000 per separately insured depositor and up to a maximum of
$250,000 for self-directed retirement accounts. First Clover Leaf Bank's
deposits, therefore, are subject to Federal Deposit Insurance Corporation
deposit insurance assessments.

      On February 15, 2006, federal legislation to reform federal deposit
insurance was enacted. This new legislation required, among other things, that
the Federal Deposit Insurance Corporation adopt regulations increasing the
maximum amount of federal deposit insurance coverage per separately insured
depositor beginning in 2010 (with a cost of living adjustment to become
effective in five years) and modifying the deposit fund's reserve ratio for a
range between 1.15% and 1.50% of estimated insured deposits.

      On November 2, 2006, the Federal Deposit Insurance Corporation adopted
final regulations establishing a risk-based assessment system that will enable
the Federal Depoist Insurance Corporation to more closely tie each financial
institution's premiums to the risk it poses to the deposit insurance fund. Under
the new risk-based assessment system, which becomes effective in the beginning
of 2007, the Federal Deposit Insurance Corporation will evaluate the risk of
each financial institution based on three primary sources of information: (1)
its supervisory rating, (2) its financial ratios, and (3) its long-term debt
issuer rating, if the institution has one. The new rates for nearly all of the
financial institution industry will vary between five and seven cents for every
$100 of domestic deposits. At the same time, the Federal Deposit Insurance
Corporation also adopted final regulations designating the reserve ratio for the
deposit insurance fund during 2007 at 1.25% of estimated insured deposits.

      Effective March 31, 2006, the Federal Deposit Insurance Corporation merged
the Bank Insurance Fund and the Savings Association Insurance Fund into a single
insurance fund called the Deposit Insurance Fund. The merger of the two separate
insurance funds did not affect the authority of the Financing Corporation, a
mix-ownership government corporation, to impose and collect, with approval of
the Federal Deposit Insurance Corporation, assessments for anticipated payments,
insurance costs and custodial fees on bonds issued by the Financing Corporation
in the 1980s to recapitalize the Federal Savings and Loan Insurance Corporation.
The bonds issued by the Financing Corporation are due to mature in 2017 through
2019. For the quarter ended December 31, 2006, the

                                       27

<PAGE>

Financing Corporation assessment was equal to 1.24 basis points for each $100 in
domestic deposits maintained at an institution.

      Prohibitions Against Tying Arrangements. Federal savings associations are
prohibited, subject to some exceptions, from extending credit to or offering any
other service, or fixing or varying the consideration for such extension of
credit or service, on the condition that the customer obtain some additional
service from the institution or its affiliates or not obtain services of a
competitor of the institution.

      Federal Home Loan Bank System. First Clover Leaf Bank is a member of the
Federal Home Loan Bank System, which consists of 12 regional Federal Home Loan
Banks. The Federal Home Loan Bank System provides a central credit facility
primarily for member institutions. As a member of the Federal Home Loan Bank of
Chicago, First Clover Leaf Bank is required to acquire and hold shares of
capital stock in the Federal Home Loan Bank in an amount at least equal to 1% of
the aggregate principal amount of its unpaid residential mortgage loans and
similar obligations at the beginning of each year, or 1/20 of its borrowings
from the Federal Home Loan Bank, whichever is greater. As of December 31, 2006,
First Clover Leaf Bank was in compliance with this requirement and held $4.3
million of excess stock in the Federal Home Loan Bank of Chicago.

Federal Reserve System

      Federal Reserve Board regulations require savings associations to maintain
non-interest-earning reserves against their transaction accounts, such as
negotiable order of withdrawal and regular checking accounts. As of December 31,
2006, First Clover Leaf Bank was in compliance with these reserve requirements.
The balances maintained to meet the reserve requirements imposed by the Federal
Reserve Board may be used to satisfy liquidity requirements imposed by the
Office of Thrift Supervision.

The USA PATRIOT Act

      The USA PATRIOT Act gives the federal government new powers to address
terrorist threats through enhanced domestic security measures, expanded
surveillance powers, increased information sharing and broadened anti-money
laundering requirements. The Act also requires the federal banking regulators to
take into consideration the effectiveness of controls designed to combat
money-laundering activities in determining whether to approve a merger or other
acquisition application of an FDIC-insured institution. As such, if we or First
Clover Leaf Bank were to engage in a merger or other acquisition, the
effectiveness of its anti-money-laundering controls would be considered as part
of the application process. First Clover Leaf Bank believes it has established
policies, procedures and systems that comply with the applicable requirements of
the law.

Holding Company Regulation

      General. First Clover Leaf Financial Corp. is a unitary savings and loan
holding company, subject to regulation and supervision by the Office of Thrift
Supervision. The Office of Thrift Supervision has enforcement authority over
First Clover Leaf Financial Corp. and its non-savings institution subsidiaries.
Among other things, this authority permits the Office of Thrift Supervision to
restrict or prohibit activities that are determined to be a risk to First Clover
Leaf Bank.

      Under prior law, a unitary savings and loan holding company generally had
no regulatory restrictions on the types of business activities in which it could
engage, provided that its subsidiary savings association was a qualified thrift
lender. The Gramm-Leach-Bliley Act of 1999, however, restricts unitary savings
and loan holding companies not existing on, or applied for before, May 4, 1999
to those activities permissible for financial holding companies or for multiple
savings and loan holding companies. First Clover Leaf Financial Corp. is not a
grandfathered unitary savings and loan holding company and, therefore, is
limited to the activities permissible for financial holding companies or for
multiple savings and loan holding companies. A financial holding company may
engage in activities that are financial in nature, including underwriting equity
securities and insurance, incidental to financial activities or complementary to
a financial activity. A multiple savings and loan holding company is generally
limited to activities permissible for bank holding companies under Section
4(c)(8) of the Bank Holding

                                       28

<PAGE>

Company Act, subject to the prior approval of the Office of Thrift Supervision,
and certain additional activities authorized by Office of Thrift Supervision
regulations.

      Federal law prohibits a savings and loan holding company, directly or
indirectly, or through one or more subsidiaries, from acquiring control of
another savings institution or holding company thereof, without prior written
approval of the Office of Thrift Supervision. It also prohibits the acquisition
or retention of, with specified exceptions, more than 5% of the equity
securities of a company engaged in activities that are not closely related to
banking or financial in nature or acquiring or retaining control of an
institution that is not federally insured. In evaluating applications by holding
companies to acquire savings institutions, the Office of Thrift Supervision must
consider the financial and managerial resources and future prospects of the
savings institution involved, the effect of the acquisition on the risk to the
insurance fund, the convenience and needs of the community and competitive
factors.

Federal Securities Laws

      First Clover Leaf Financial Corp.'s common stock is registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934.
First Clover Leaf Financial Corp. is subject to the information, proxy
solicitation, insider trader restrictions and other requirements under the
Securities Exchange of 1934.

      First Clover Leaf Financial Corp. common stock held by persons who are
affiliates (generally officers, directors and principal stockholders) of First
Clover Leaf Financial Corp. may not be resold without registration or unless
sold in accordance with certain resale restrictions. If First Clover Leaf
Financial Corp. meets specified current public information requirements, each
affiliate of First Clover Leaf Financial Corp. is able to sell in the public
market, without registration, a limited number of shares in any three-month
period.

Sarbanes-Oxley Act of 2002

      The Sarbanes-Oxley Act of 2002 addresses, among other issues, corporate
governance, auditing and accounting, executive compensation, and enhanced and
timely disclosure of corporate information. As directed by the Sarbanes-Oxley
Act of 2002, our Chief Executive Officer and Chief Financial Officer each are
required to certify that our quarterly and annual reports do not contain any
untrue statement of a material fact. The rules adopted by the Securities and
Exchange Commission under the Sarbanes-Oxley Act of 2002 have several
requirements, including having these officers certify that: they are responsible
for establishing, maintaining and regularly evaluating the effectiveness of our
internal controls; they have made certain disclosures to our auditors and the
audit committee of the board of directors about our internal controls; and they
have included information in our quarterly and annual reports about their
evaluation and whether there have been significant changes in our internal
controls or in other factors that could significantly affect internal controls.
We will be subject to further reporting and audit requirements beginning with
the year ending December 31, 2007 under the requirements of the Sarbanes-Oxley
Act.

                                    TAXATION

Federal Taxation

      General. First Clover Leaf Financial Corp. and First Clover Leaf Bank file
a consolidated tax return and are subject to federal income taxation in the same
general manner as other corporations, with some exceptions discussed below.
First Clover Leaf Financial Corp.'s and First Clover Leaf Bank's tax returns
have not been audited during the past five years. The following discussion of
federal taxation is intended only to summarize certain pertinent federal income
tax matters and is not a comprehensive description of the tax rules applicable
to First Clover Leaf Financial Corp. or First Clover Leaf Bank.

      Method of Accounting. For federal income tax purposes, First Clover Leaf
Financial Corp. and First Clover Leaf Bank currently report their income and
expenses on the accrual method of accounting and use a tax year ending December
31 for filing their federal income tax returns.

                                       29

<PAGE>

      Bad Debt Reserves. Prior to the Small Business Protection Act of 1996 (the
"1996 Act"), we were permitted to establish a reserve for bad debts and to make
annual additions to the reserve. These additions could, within specified formula
limits, be deducted in arriving at our taxable income. We were required to use
the specific charge off method in computing our bad debt deduction beginning
with our 1996 federal tax return. Savings institutions were required to
recapture any excess reserves over those established as of December 31, 1987
(base year reserve). At December 31, 2006, First Clover Leaf Bank had no
reserves subject to recapture.

      Taxable Distributions and Recapture. Prior to the 1996 Act, bad debt
reserves created prior to January 1, 1988 were subject to recapture into taxable
income if First Clover Leaf Bank failed to meet certain thrift asset and
definitional tests. Federal legislation has eliminated these thrift related
recapture rules. At December 31, 2006, our total federal pre-1988 base year
reserve was approximately $3.0 million. However, under current law, pre-1988
base year reserves remain subject to recapture if First Clover Leaf Bank makes
certain non-dividend distributions, repurchases any of its stock, pays dividends
in excess of tax earnings and profits, or ceases to maintain a bank charter.

      Alternative Minimum Tax. The Internal Revenue Code of 1986, as amended
(the "Code") imposes an alternative minimum tax ("AMT") at a rate of 20% on a
base of regular taxable income plus certain tax preferences ("alternative
minimum taxable income" or "AMTI"). The AMT is payable to the extent such AMTI
is in excess of an exemption amount and the AMT exceeds the regular income tax.
Net operating losses can offset no more than 90% of AMTI. Certain payments of
alternative minimum tax may be used as credits against regular tax liabilities
in future years. First Clover Leaf Bank has not been subject to the alternative
minimum tax and has no such amounts available as credits for carryover.

      Net Operating Loss Carryovers. A financial institution may carry back net
operating losses to the preceding two taxable years and forward to the
succeeding 20 taxable years. At December 31, 2006, First Clover Leaf Bank had no
net operating loss carryforwards for federal income tax purposes.

      Corporate Dividends-Received Deduction. First Clover Leaf Financial Corp.
may exclude from its income 100% of dividends received from First Clover Leaf
Bank as a member of the same affiliated group of corporations. The corporate
dividends-received deduction is 80% in the case of dividends received from
corporations with which a corporate recipient does not file a consolidated
return, and corporations which own less than 20% of the stock of a corporation
distributing a dividend may deduct only 70% of dividends received or accrued on
their behalf.

State Taxation

      Illinois State Taxation. First Clover Leaf Financial Corp. is required to
file Illinois income tax returns and pay tax at a stated tax rate of 7.30% of
Illinois taxable income. For these purposes, Illinois taxable income generally
means federal taxable income subject to certain modifications, primarily the
exclusion of interest income on United States obligations.

                                       30

<PAGE>

ITEM 2.     DESCRIPTION OF PROPERTY
-----------------------------------

      The following table provides certain information with respect to our
offices as of December 31, 2006:

                                                                 Net Book Value
          Location             Leased or Owned   Year Acquired  of Real Property
          --------             ---------------   -------------  ----------------
                                                                 (In thousands)
Main Office
6814 Goshen Road                    Owned             2005          $ 2,615
Edwardsville, Illinois 62025

200 East Park                       Owned             1976              937
Edwardsville, Illinois 62025

2143 Route 157                      Owned             1999            1,726
Edwardsville, Illinois 62025

300 St. Louis Street                Owned             1964              750
Edwardsville, Illinois 62025

      The net book value of our premises,  land and equipment was  approximately
$6.9 million at December 31, 2006.

ITEM 3.     LEGAL PROCEEDINGS
-----------------------------

      We are  involved,  from time to time, as plaintiff or defendant in various
legal  actions  arising in the normal  course of our  business.  At December 31,
2006, we were not involved in any legal proceedings,  the outcome of which would
be material to our financial condition or results of operations.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------------------

      None

                                     PART II

ITEM 5.     MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
---------------------------------------------------------------------------
            BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES
            ----------------------------------------------

      (a) The information required by this item is incorporated by reference to
our Annual Report to Shareholders. No equity securities were sold during the
year ended December 31, 2006 that were not registered under the Securities Act.

      (b) Not applicable.

      (c) First Clover Leaf Financial Corp. did not repurchase any of its equity
securities during the year ended December 31, 2006.

ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
---------------------------------------------------------------------

      The information contained in the section captioned "Management's
Discussion and Analysis of Financial Condition and Results of Operations" is
incorporated by reference to our Annual Report to Shareholders.

                                       31

<PAGE>

ITEM 7.     FINANCIAL STATEMENTS
--------------------------------

      The consolidated financial statements included in our Annual Report to
Shareholders are incorporated herein by reference.

ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
---------------------------------------------------------------------------
            FINANCIAL DISCLOSURE
            --------------------

      Information required by this item is incorporated herein by reference from
our definitive Annual Meeting Proxy Statement (the "Proxy Statement"),
specifically the section captioned "Proposal II - Ratification of Appointment of
Auditors."

ITEM 8A.    CONTROLS AND PROCEDURES
-----------------------------------

      Under  the  supervision  and with  the  participation  of our  management,
including our Chief Executive Officer and Chief Financial Officer,  we evaluated
the  effectiveness  of the design and operation of our  disclosure  controls and
procedures (as defined in Rule  13a-15(e)  under the Exchange Act) as of the end
of the period  covered by this  report.  Based upon that  evaluation,  the Chief
Executive  Officer and Chief  Financial  Officer  concluded  that our disclosure
controls and procedures  were effective in timely  alerting them to the material
information  relating to us (or our  consolidated  subsidiaries)  required to be
included in our periodic SEC filings.  There were no significant changes made in
our  internal  controls  during  the period  covered  by this  report or, to our
knowledge,  in other  factors that could  significantly  affect  these  controls
subsequent to the date of their evaluation.

ITEM 8B.    OTHER INFORMATION
-----------------------------

      None.

                                    PART III

ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND
-------------------------------------------------------------------------
            CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
            -------------------------------------------------------------------
            ACT
            ---

      First  Clover Leaf  Financial  Corp.  has  adopted a Code of Conduct  that
applies to First Clover Leaf  Financial  Corp.'s  principal  executive  officer,
principal  financial officer and all other employees and directors.  The Code of
Conduct was filed as Exhibit 14 to our Form  10-KSB for the year ended  December
31, 2004, and is incorporated herein by reference thereto.

      Information  concerning  directors and executive  officers of First Clover
Leaf  Financial  Corp.  is  incorporated  herein  by  reference  from the  Proxy
Statement,   specifically  the  section  captioned   "Proposal   I--Election  of
Directors." In addition,  see "Executive  Officers of the Company" in Item 1 for
information concerning our executive officers.

ITEM 10.    EXECUTIVE COMPENSATION
----------------------------------

      Information  concerning  executive  compensation is incorporated herein by
reference  from  the  Proxy  Statement,   specifically  the  section   captioned
"Executive Compensation."

ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
------------------------------------------------------------------------------
            RELATED STOCKHOLDER MATTERS
            ---------------------------

      Information concerning security ownership of certain owners and management
is incorporated  herein by reference from the Proxy Statement,  specifically the
section captioned "Voting Securities and Principal Holder Thereof."

                                       32

<PAGE>

ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
------------------------------------------------------------------------
INDEPENDENCE
------------

      Information concerning relationships and transactions is incorporated
herein by reference from the Proxy Statement, specifically the section captioned
"Transactions with Certain Related Persons."

ITEM 13.    EXHIBITS
--------------------

      The following exhibits are either filed or attached as part of this report
or are incorporated herein by reference:

      3.1   Articles of Incorporation of First Clover Leaf Financial Corp. (1)

      3.2   Bylaws of First Clover Leaf Financial Corp. (1)

      4     Form of common stock certificate of First Clover Leaf Financial
            Corp. (1)

      10.1  Employee Stock Ownership Plan (2)

      10.2  Description of Bonus Plan (2)

      10.3  Employment Agreement of Larry W. Mosby (3)

      10.4  Employment Agreement of Donald Engelke (3)

      10.5  Employment Agreement of Dennis M. Terry

      10.6  Employment Agreement of Lisa M. Fowler

      10.7  Employment Agreement of Darlene F. McDonald

      13    Annual Report to Shareholders

      14    Code of Conduct (4)

      21    Subsidiaries of the Registrant

      31.1  Certification of Chief Executive Officer pursuant to Section 302 of
            the Sarbanes-Oxley Act of 2002

      31.2  Certification of Chief Financial Officer pursuant to Section 302 of
            the Sarbanes-Oxley Act of 2002

      32    Certification of Chief Executive Officer and Chief Financial Officer
            pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

----------

(1)   Incorporated by reference to the Registration Statement on Form SB-2 of
      First Clover Leaf Financial Corp. (File No. 333-132423), originally filed
      with the Securities and Exchange Commission on March 14, 2006.

(2)   Incorporated by reference to the Registration Statement on Form SB-2 of
      First Federal Financial Services, Inc. (File No. 333- 113615) , originally
      filed with the Securities and Exchange Commission on March 15, 2004.

                                       33

<PAGE>

(3)   Incorporated by reference to the Registrant's Current Report on Form 8-K
      filed on February 6, 2006.

(4)   Incorporated by reference to the Annual Report on Form 10-KSB of First
      Federal Financial Services, Inc for the year ended December 31, 2004,
      filed with the Commission on March 31, 2005.

ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES
--------------------------------------------------

      Information concerning principal accountant fees and services is
incorporated herein by reference from the Proxy Statement, specifically the
section captioned "Proposal II-Ratification of Appointment of Auditors."

                                       34

<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                           First Clover Leaf Financial Corp.

Date: March 30, 2007                       By: /s/ Dennis M. Terry
                                               ---------------------------------
                                               Dennis M. Terry, President and
                                               Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

By: /s/ Dennis M. Terry                               By: /s/ Joseph Helms
    -----------------------------------------------       ----------------------
     Dennis M. Terry, President, and Chief                Joseph Helms
       Executive Officer                                  Chairman of the Board
     (Principal Executive Officer)

Date: March 30, 2007                                  Date: March 30, 2007

By: /s/ Darlene F. McDonald                           By: /s Nina Baird
    -----------------------------------------------       ----------------------
     Darlene F. McDonald, Senior Vice President           Nina Baird
       and Chief Financial Officer                        Director
      (Principal Financial and Accounting Officer)

Date: March 30, 2007                                  Date: March 30, 2007

By: /s/ Harry Gallatin                                By: /s Dean Pletcher
    -----------------------------------------------       ----------------------
     Harry Gallatin                                       Dean Pletcher
     Director                                             Director

Date: March 30, 2007                                  Date: March 30, 2007

By: /s/ Robert Richards                               By: /s Joseph Stevens
    -----------------------------------------------       ----------------------
     Robert Richards                                      Joseph Stevens
     Director                                             Director

Date: March 30, 2007                                  Date: March 30, 2007

By: /s/ Larry Mosby
    -----------------------------------------------
     Larry Mosby
     Director

Date: March 30, 2007

                                       35

<PAGE>

By: /s/ Donald Engelke                                By: /s/ Dennis E. Ulrich
    -----------------------------------------------       ----------------------
    Donald Engelke                                        Dennis E. Ulrich
    Director                                              Director

Date: March 30, 2007                                  Date: March 30, 2007

By: /s/ Joseph J. Gugger                              By: /s/ Robert W. Schwartz
    -----------------------------------------------       ----------------------
    Joseph J. Gugger                                      Robert W. Schwartz
    Director                                              Director

Date: March 30, 2007                                  Date: March 30, 2007

                                       36