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| OCONEE FINANCIAL CORPORATION                           |
|--------------------------------------------------------|
| (Exact name of Registrant as specified in its Charter) |

| Georgia                                                        |   | 58-2442250                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |
|                                                           |   |                                 |
|                                                           |   |                                 |
| 35 North Main StreetWatkinsville, Georgia                      |   |  30677                          |
| (Address of principal executive offices)                       |   | (Zip Code)                           |

| 706-769-6611                                               |
|------------------------------------------------------------|
| (Registrant’s telephone number, including area code) |

| Large accelerated filer:    o                                                              | Accelerated filer: o              |
|-----------------------------------------------------------------------------------------------------------|-----------------------------------|
|                                                                                                      |                              |
| Non-accelerated filer:    o   (Do not check if a smaller reporting company) | Smaller reporting company: þ |

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|                                                                                                                                    | Page No. |
|-----------------------------------------------------------------------------------------------------------------------------------------|----------|
| PART I - FINANCIAL INFORMATION                                                                                                          |     |
|                                                                                                                                    |     |
| Item 1.  Financial Statements                                                                                                 |     |
|                                                                                                                                    |     |
| Consolidated Balance Sheets at June 30, 2009 and December 31, 2008                                                                      | 1        |
| Consolidated Statements of Operations (unaudited) for the Three Months and the Six Months Ended June 30, 2009 and 2008                  | 2        |
| Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the Three Months and the Six Months Ended June 30, 2009 and 2008 | 3        |
| Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2009 and 2008                                       | 4        |
| Notes to Consolidated Financial Statements (unaudited)                                                                                  | 6        |
|                                                                                                                                    |     |
| Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations                          | 13       |
|                                                                                                                                    |     |
| Item 3.  Quantitative and Qualitative Disclosures about Market Risk                                                           | 19       |
|                                                                                                                                    |     |
| Item 4T. Controls and Procedures                                                                                                        | 19       |
|                                                                                                                                    |     |
| PART II - OTHER INFORMATION                                                                                                             |     |
|                                                                                                                                    |     |
| Item 1. Legal Proceedings                                                                                                               | 20       |
|                                                                                                                                    |     |
| Item 1A. Risk Factors                                                                                                                   | 20       |
|                                                                                                                                    |     |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                                     | 20       |
|                                                                                                                                    |     |
| Item 3. Defaults Upon Senior Securities                                                                                                 | 20       |
|                                                                                                                                    |     |
| Item 4.  Submission of Matters to a Vote of Security Holders                                                                  | 20       |
|                                                                                                                                    |     |
| Item 5.  Other Information                                                                                                    | 20       |
|                                                                                                                                    |     |
| Item 6.  Exhibits                                                                                                             | 21       |

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|                                                                                                                                                               |   | June 30, 2009 (unaudited) |        |   | December 31, 2008 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|-------------|--------|-------------------|--------|
| Assets                                                                                                                                                             |   |
|                                                                                                                                                               |   |                      |        |   |              |   |
| Cash and due from banks, including reserve requirements of $25,000                                                                                                 |   | $                         | 15,959,731  |   |              |   | 4,353,492 |   |
| Federal funds sold                                                                                                                                                 |   |                      | -           |   |              |   | 15,709,000 |   |
|                                                                                                                                                               |   |                      |        |   |              |   |   |   |
|                    Cash and cash equivalents                        |   |                      | 15,959,731  |   |              |   | 20,062,492 |   |
|                                                                                                                                                               |   |                      |        |   |              |   |   |   |
| Investment securities available for sale                                                                                                                           |   |                      | 86,031,622  |   |              |   | 79,761,570 |   |
| Other investments                                                                                                                                                  |   |                      | 556,300     |   |              |   | 679,229 |   |
| Mortgage loans held for sale                                                                                                                                       |   |                      | 4,562,863   |   |              |   | 1,638,561 |   |
|                                                                                                                                                               |   |                      |        |   |              |   |   |   |
| Loans, net of allowance for loan losses of $4,689,200 and $4,215,262                                                                                               |   |                      | 184,474,743 |   |              |   | 191,557,145 |   |
|                                                                                                                                                               |   |                      |        |   |              |   |   |   |
| Premises and equipment, net                                                                                                                                        |   |                      | 6,608,922   |   |              |   | 6,903,890 |   |
| Other real estate owned                                                                                                                                            |   |                      | 5,509,700   |   |              |   | 1,776,960 |   |
| Accrued interest receivable and other assets                                                                                                                       |   |                      | 6,370,283   |   |              |   | 5,775,732 |   |
|                                                                                                                                                               |   |                      |        |   |              |   |   |   |
|                    Total assets                                     |   | $                         | 310,074,164 |   |              |   | 308,155,549 |   |
|                                                                                                                                                               |   |                      |        |   |              |   |   |   |
| Liabilities and Stockholders’ Equity                                                                                                                         |   |
|                                                                                                                                                               |   |                      |        |   |              |   |   |   |
| Liabilities:                                                                                                                                                       |   |                      |        |   |              |   |   |   |
|        Deposits                                                                                                                 |   |                      |        |   |              |   |   |   |
|             Noninterest-bearing                                                                        |   | $                         | 29,693,497  |   |              |   | 27,413,165 |   |
|             Interest-bearing                                                                           |   |                      | 239,470,332 |   |              |   | 247,624,987 |   |
|                                                                                                                                                               |   |                      |        |   |              |   |   |   |
|                    Total deposits                                   |   |                      | 269,163,829 |   |              |   | 275,038,152 |   |
|                                                                                                                                                               |   |                      |        |   |              |   |   |   |
|        Securities sold under repurchase agreements                                                                              |   |                      | 15,290,735  |   |              |   | 6,453,272 |   |
|        Accrued interest payable and other liabilities                                                                           |   |                      | 973,808     |   |              |   | 866,937 |   |
|                                                                                                                                                               |   |                      |        |   |              |   |   |   |
|                    Total liabilities                                |   |                      | 285,428,372 |   |              |   | 282,358,361 |   |
|                                                                                                                                                               |   |                      |        |   |              |   |   |   |
| Stockholders’ equity:                                                                                                                                        |   |                      |        |   |              |   |   |   |
|        Common stock, $2 par value;                                                                                              |   |                      |        |   |              |   |   |   |
|              authorized 1,500,000 shares;                                                         |   |                      |        |   |              |   |   |   |
|              issued and outstanding 899,815 shares                                                |   |                      | 1,799,630   |   |              |   | 1,799,630 |   |
|        Additional paid-in capital                                                                                               |   |                      | 4,243,332   |   |              |   | 4,243,332 |   |
|        Retained earnings                                                                                                        |   |                      | 18,868,147  |   |              |   | 19,500,772 |   |
|        Accumulated other comprehensive income (loss)                                                                            |   |                      | (265,317    | )      |              |   | 253,454 |   |
|                                                                                                                                                               |   |                      |        |   |              |   |   |   |
|                    Total stockholders’ equity                 |   |                      | 24,645,792  |   |              |   | 25,797,188 |   |
|                                                                                                                                                               |   |                      |        |   |              |   |   |   |
|                    Total liabilities and stockholders’ equity |   | $                         | 310,074,164 |   |              |   | 308,155,549 |   |

----

|                                                                                                                                    |   | Three Months Ended |      |   | Six Months Ended |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-----------|--------|------------------|--------|
|                                                                                                                                    |   | 2009               |      |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Interest Income:                                                                                                                        |   |               |      |   |             |   |   |   |   |   |   |   |
|      Loans                                                                                                          |   | $                  | 2,425,889 |   |             |   | 2,870,703 |   |   | $ | 4,769,405 |   |   |   | 6,336,969 |   |
|      Investment securities:                                                                                         |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
|         Tax exempt                                                                              |   |               | 191,077   |   |             |   | 216,313 |   |   |   | 383,407 |   |   |   | 451,927 |   |
|         Taxable                                                                                 |   |               | 629,468   |   |             |   | 949,739 |   |   |   | 1,484,599 |   |   |   | 1,893,974 |   |
|      Federal funds sold and other                                                                                   |   |               | 27,045    |   |             |   | 74,047 |   |   |   | 993 |   |   |   | 229,409 |   |
|            Total interest income                                                      |   |               | 3,273,479 |   |             |   | 4,110,802 |   |   |   | 6,638,404 |   |   |   | 8,912,279 |   |
|                                                                                                                                    |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Interest Expense:                                                                                                                       |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
|      Deposits                                                                                                       |   |               | 1,413,071 |   |             |   | 2,050,375 |   |   |   | 2,959,568 |   |   |   | 4,472,631 |   |
|      Other                                                                                                          |   |               | 114,181   |   |             |   | 16,638 |   |   |   | 189,851 |   |   |   | 30,639 |   |
|            Total interest expense                                                     |   |               | 1,527,252 |   |             |   | 2,067,013 |   |   |   | 3,149,419 |   |   |   | 4,503,270 |   |
|                                                                                                                                    |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
|            Net interest income                                                        |   |               | 1,746,227 |   |             |   | 2,043,789 |   |   |   | 3,488,985 |   |   |   | 4,409,009 |   |
|                                                                                                                                    |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses                                                                                                               |   |               | -         |   |             |   | 172,400 |   |   |   | 1,100,000 |   |   |   | 230,000 |   |
|                                                                                                                                    |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
|               Net interest income after provision for loan losses |   |               | 1,746,227 |   |             |   | 1,871,389 |   |   |   | 2,388,985 |   |   |   | 4,179,009 |   |
|                                                                                                                                    |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Other Income:                                                                                                                           |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                    |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
|      Service charges on deposit accounts                                                                            |   |               | 310,832   |   |             |   | 381,794 |   |   |   | 626,186 |   |   |   | 751,889 |   |
|      Mortgage origination fees                                                                                 |   |               | 144,185   |   |             |   | 81,458 |   |   |   | 283,784 |   |   |   | 159,173 |   |
|      Securities gains, net                                                                                     |   |               | 206,377   |   |             |   | 197,264 |   |   |   | 105,948 |   |   |   | 197,264 |   |
|      Income on other real estate owned                                                                         |   |               | 267,915   |   |             |   | - |   |   |   | 267,915 |   |   |   | - |   |
|      Other operating income                                                                                         |   |               | 202,792   |   |             |   | 198,929 |   |   |   | 422,515 |   |   |   | 469,800 |   |
|            Total other income                                                         |   |               | 1,132,101 |   |             |   | 859,445 |   |   |   | 1,706,348 |   |   |   | 1,578,126 |   |
|                                                                                                                                    |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
|  Other Expense:                                                                                                                    |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
|      Salaries and other personnel expense                                                                           |   |               | 1,261,358 |   |             |   | 1,442,392 |   |   |   | 2,591,999 |   |   |   | 2,926,098 |   |
|      Net occupancy and equipment expense                                                                            |   |               | 345,980   |   |             |   | 345,678 |   |   |   | 702,153 |   |   |   | 699,311 |   |
|      Other operating expense                                                                                        |   |               | 1,160,516 |   |             |   | 680,836 |   |   |   | 1,787,091 |   |   |   | 1,293,679 |   |
|            Total other expense                                                        |   |               | 2,767,854 |   |             |   | 2,468,906 |   |   |   | 5,081,243 |   |   |   | 4,919,088 |   |
|                                                                                                                                    |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
|            Earnings (loss) before income taxes                                        |   |               | 110,474   |   |             |   | 261,928 |   |   |   | (985,910 | ) |   |   | 838,047 |   |
|                                                                                                                                    |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Income taxes (benefit)                                                                                                                  |   |               | 44,188    |   |             |   | 12,925 |   |   |   | (353,286 | ) |   |   | 134,195 |   |
|                                                                                                                                    |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
|            Net earnings (loss)                                                   |   | $                  | 66,286    |   |             |   | 249,003 |   |   | $ | (632,624 | ) |   |   | 703,852 |   |
|                                                                                                                                    |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (loss) per common share based on average                                                                                       |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
|      outstanding shares of 899,815                                                                                  |   | $                  | 0.07      |   |             |   | 0.28 |   |   | $ | (0.70 | ) |   |   | 0.78 |   |

----

|                                                                                                                                         |   | Three Months Ended |     |   | Six Months Ended |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|----------|--------|------------------|--------|
|                                                                                                                                         |   | 2009               |     |   | 2008             |   |   | 2009 |   |   | 2008 |   |
|                                                                                                                                         |   |               |     |   |             |   |   |   |   |   |   |   |
| Net earnings (loss)                                                                                                                     |   | $                  | 66,286   |   |             |   | 249,003 |   |   | $ | (632,624 | ) |   |   | 703,852 |   |
|                                                                                                                                         |   |               |     |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive loss, net of tax benefit:                                                                                                |   |               |     |   |             |   |   |   |   |   |   |   |   |   |   |   |
|    Unrealized losses on securities available for sale:                                                                        |   |               |     |   |             |   |   |   |   |   |   |   |   |   |   |   |
|          Holding losses arising during period, net of tax benefit                                    |   |               |     |   |             |   |   |   |   |   |   |   |   |   |   |   |
|              of ($149,063), (712,386), ($277,199) and  ($464,745) |   |               | (243,622 | )      |             |   | (1,164,289 | ) |   |   | (453,041 | ) |   |   | (759,556 | ) |
|                                                                                                                                         |   |               |     |   |             |   |   |   |   |   |   |   |   |   |   |   |
|     Reclassification adjustments for gains included in net                                                               |   |               |     |   |             |   |   |   |   |   |   |   |   |   |   |   |
|       Earnings (loss), net of tax of $78,341, $74,881, $40,218 and $74,881                                     |   |               | (128,036 | )      |             |   | (122,383 | ) |   |   | (65,730 | ) |   |   | (122,383 | ) |
|                                                                                                                                         |   |               |     |   |             |   |   |   |   |   |   |   |   |   |   |   |
|          Total other comprehensive loss                                                              |   |               | (371,658 | )      |             |   | (1,286,672 | ) |   |   | (518,771 | ) |   |   | (881,939 | ) |
|                                                                                                                                         |   |               |     |   |             |   |   |   |   |   |   |   |   |   |   |   |
|          Comprehensive loss                                                                          |   | $                  | (305,372 | )      |             |   | (1,037,669 | ) |   | $ | (1,151,395 | ) |   |   | (178,087 | ) |

----

|                                                                                                                                                                                                                |   | 2009   |         |   | 2008   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------|--------|--------|--------|
| Cash flows from operating activities:                                                                                                                                                                               |   |   |         |   |   |   |
|      Net earnings (loss)                                                                                                                                                                   |   | $      | (632,624     | )      |   | $      | 703,852 |   |
|          Adjustments to reconcile net earnings (loss) to net                                                                                                           |   |   |         |   |   |   |   |   |
|             cash used by operating activities:                                                                                                          |   |   |         |   |   |   |   |   |
|                 Provision for loan losses                                                                                           |   |   | 1,100,000    |   |   |   | 230,000 |   |
|                 Depreciation, amortization and accretion                                                                            |   |   | 267,499      |   |   |   | 315,560 |   |
|                 Gains on sales of securities                                                                                        |   |   | (105,948     | )      |   |   | (197,264 | ) |
|                 Loss on sales of other real estate owned                                                                            |   |   | 10,433       |   |   |   | - |   |
|                 Change in assets and liabilities:                                                                                   |   |   |         |   |   |   |   |   |
|                     Interest receivable and other assets                                                        |   |   | (277,134     | )      |   |   | (241,628 | ) |
|                     Interest payable and other liabilities                                                      |   |   | 106,871      |   |   |   | (184,494 | ) |
|                     Mortgage loans held for sale                                                                |   |   | (2,924,302   | )      |   |   | (2,514,927 | ) |
|                                                                                                                                                                                                                |   |   |         |   |   |   |   |   |
|                            Net cash used by operating activities             |   |   | (2,455,205   | )      |   |   | (1,888,901 | ) |
|                                                                                                                                                                                                                |   |   |         |   |   |   |   |   |
| Cash flows from investing activities:                                                                                                                                                                               |   |   |         |   |   |   |   |   |
|      Proceeds from sales of investment securities available for sale                                                                                                                       |   |   | 7,488,766    |   |   |   | 7,320,481 |   |
|      Proceeds from calls, maturities, and paydowns of                                                                                                                                      |   |   |         |   |   |   |   |   |
|          investment securities available for sale                                                                                                                      |   |   | 113,583,426  |   |   |   | 22,362,201 |   |
|      Purchases of investment securities available for sale                                                                                                                                 |   |   | (127,918,938 | )      |   |   | (21,066,435 | ) |
|      Proceeds from redemption of other investments                                                                                                                                         |   |   | 22,500       |   |   |   | 27,500 |   |
|      Net change in loans                                                                                                                                                                   |   |   | 2,066,763    |   |   |   | 9,517,740 |   |
|      Purchases of premises and equipment                                                                                                                                                   |   |   | (25,649      | )      |   |   | (150,658 | ) |
|      Proceeds from sales of other real estate                                                                                                                                              |   |   | 172,436      |   |   |   | 157,306 |   |
|                                                                                                                                                                                                                |   |   |         |   |   |   |   |   |
|                             Net cash (used) provided by investing activities |   |   | (4,610,696   | )      |   |   | 18,168,135 |   |
|                                                                                                                                                                                                                |   |   |         |   |   |   |   |   |
| Cash flows from financing activities:                                                                                                                                                                               |   |   |         |   |   |   |   |   |
|      Net change in deposits                                                                                                                                                                |   |   | (5,874,323   | )      |   |   | (8,463,859 | ) |
|      Net change in securities sold under repurchase agreements                                                                                                                             |   |   | 8,837,463    |   |   |   | 280,167 |   |
|      Dividends paid                                                                                                                                                                        |   |   | -            |   |   |   | (1,034,787 | ) |
|                                                                                                                                                                                                                |   |   |         |   |   |   |   |   |
|                            Net cash provided (used) by financing activities  |   |   | 2,963,140    |   |   |   | (9,218,479 | ) |
|                                                                                                                                                                                                                |   |   |         |   |   |   |   |   |
| Net (decrease) increase in cash and cash equivalents                                                                                                                                                                |   |   | (4,102,761   | )      |   |   | 7,060,755 |   |
|                                                                                                                                                                                                                |   |   |         |   |   |   |   |   |
| Cash and cash equivalents at beginning of period                                                                                                                                                                    |   |   | 20,062,492   |   |   |   | 20,889,937 |   |
|                                                                                                                                                                                                                |   |   |         |   |   |   |   |   |
| Cash and cash equivalents at end of period                                                                                                                                                                          |   | $      | 15,959,731   |   |   | $      | 27,950,692 |   |

----

|                                                                                   |   | 2009   |      |   | 2008   |   |
|----------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Supplemental cash flow information:                                                    |   |   |      |   |   |   |
|      Cash paid for interest                                   |   | $      | 3,186,842 |   |   | $      | 4,728,526 |   |
|      Cash paid for taxes                                      |   | $      | -         |   |   | $      | 167,500 |   |
|                                                                                   |   |   |      |   |   |   |   |   |
| Noncash investing and financing activities:                                            |   |   |      |   |   |   |   |   |
|      Transfer from loans to other real estate owned           |   | $      | 3,760,486 |   |   | $      | 155,920 |   |
|      Change in net unrealized losses on investment securities |   |   |      |   |   |   |   |   |
|         available for sale, net of tax benefit |   | $      | (518,771  | )      |   | $      | (881,939 | ) |
|      Change in dividends payable                              |   | $      | -         |   |   | $      | 1,034,787 |   |

----

|                                         |   | Six Months Ended June 30, |      |
|----------------------------------------------|--------|---------------------------|-----------|
|                                         |   | 2009                      |      |   | 2008 |   |
|                                         |   |                      |      |   |   |   |
| Balance at beginning of year                 |   | $                         | 4,215,262 |   |   |   | 3,335,825 |   |
| Amounts charged off                          |   |                      | (646,533  | ) |   |   | (85,141 | ) |
| Recoveries on amounts previously charged off |   |                      | 20,471    |   |   |   | 15,878 |   |
| Provision for loan losses                    |   |                      | 1,100,000 |   |   |   | 230,000 |   |
|                                         |   |                      |      |   |   |   |   |   |
| Balance at June 30                           |   | $                         | 4,689,200 |   |   |   | 3,496,562 |   |

----

----

|                |   | Balance atJune 30, 2009 |   |   |      |   |   |      |   |   |      |   |
|---------------------|--------|-------------------------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
|                |   | (In thousands)          |   |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
| Assets              |   |                    |   |   |      |   |   |      |   |   |      |   |
| Securities          |   | $                       | 86,032 |   |      | $      | -      |      |   | $      | 86,032    |   |   | $ | - |   |
| Loans held for sale |   |                    | 4,563  |   |      |   | -      |      |   |   | 4,563     |   |   |   | - |   |

|                |   | Balance atDecember 31, 2008 |   |   |      |   |   |      |   |   |      |   |
|---------------------|--------|-----------------------------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
|                |   | (In thousands)              |   |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
| Assets              |   |                        |   |   |      |   |   |      |   |   |      |   |
| Securities          |   | $                           | 79,762 |   |      | $      | -      |      |   | $      | 79,762    |   |   | $ | - |   |
| Loans held for sale |   |                        | 1,639  |   |      |   | -      |      |   |   | 1,639     |   |   |   | - |   |

|              |   | Balance at June 30, 2009 |   |   |      |   |   |      |   |   |      |   |
|-------------------|--------|-------------------------------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
|              |   | (In thousands)                |   |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
| Assets            |   |                          |   |   |      |   |   |      |   |   |      |   |
| Impaired loans    |   | $                             | 11,435 |   |      | $      | -      |      |   | $      | -         |   |   | $ | 11,435 |   |
| Foreclosed assets |   |                          | 5,510  |   |      |   | -      |      |   |   | -         |   |   |   | 5,510 |   |

----

|              |   | Balance at December 31, 2008 |   |   |      |   |   |      |   |   |      |   |
|-------------------|--------|-----------------------------------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
|              |   | (In thousands)                    |   |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
| Assets            |   |                              |   |   |      |   |   |      |   |   |      |   |
| Impaired loans    |   | $                                 | 17,531 |   |      | $      | -      |      |   | $      | -         |   |   | $ | 17,531 |   |
| Foreclosed assets |   |                              | 1,782  |   |      |   | -      |      |   |   | -         |   |   |   | 1,782 |   |

|                               |   | Carrying       |    |   | Estimated  |   |
|------------------------------------|--------|----------------|---------|--------|------------|--------|
|                               |   | Amount         |    |   | Fair Value |   |
| Assets:                            |   | (In thousands) |    |
| Cash and cash equivalents          |   | $              | 15,960  |   |       |   | 15,960 |   |
| Investment securities              |   | $              | 86,032  |   |       |   | 86,032 |   |
| Restricted equity securities       |   | $              | 556     |   |       |   | 556 |   |
| Mortgage loans held for sale       |   | $              | 4,563   |   |       |   | 4,563 |   |
| Loans, net                         |   | $              | 184,475 |   |       |   | 186,088 |   |
|                               |   |           |    |   |       |   |   |   |
| Liabilities:                       |   |           |    |   |       |   |   |   |
| Deposits and securities sold under |   |           |    |   |       |   |   |   |
| repurchase agreement               |   | $              | 284,455 |   |       |   | 285,604 |   |

----

|                          |   |  June 30, 2009       |       |
|-------------------------------|--------|---------------------------|------------|
|                          |   | Amortized  Cost |       |   | GrossUnrealized Gains |   |   | GrossUnrealized Losses |   |   | EstimatedFair  Value |   |
|                          |   |                      |       |   |   |   |   |   |   |   |   |   |
| Government sponsored agencies |   | $                         | 46,692,787 |   |   |   | 89,627 |   |   |   | 259,737 |   |   |   | 46,522,677 |   |
| State, county and municipal   |   |                      | 16,707,164 |   |   |   | 124,334 |   |   |   | 524,377 |   |   |   | 16,307,121 |   |
| Mortgage-backed securities    |   |                      | 21,440,410 |   |   |   | 497,293 |   |   |   | 40,221 |   |   |   | 21,897,482 |   |
| Other debt securities         |   |                      | 1,618,917  |   |   |   | - |   |   |   | 314,575 |   |   |   | 1,304,342 |   |
|                          |   |                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                         |   | $                         | 86,456,278 |   |   |   | 711,254 |   |   |   | 1,138,910 |   |   |   | 86,031,622 |   |

|                          |   |  December 31, 2008   |       |
|-------------------------------|--------|---------------------------|------------|
|                          |   | Amortized  Cost |       |   | GrossUnrealized Gains |   |   | GrossUnrealized Losses |   |   | EstimatedFair  Value |   |
|                          |   |                      |       |   |   |   |   |   |   |   |   |   |
| Government sponsored agencies |   | $                         | 37,171,757 |   |   |   | 959,666 |   |   |   | - |   |   |   | 38,131,423 |   |
| State, county and municipal   |   |                      | 17,714,238 |   |   |   | 84,212 |   |   |   | 993,961 |   |   |   | 16,804,489 |   |
| Mortgage-backed securities    |   |                      | 22,846,975 |   |   |   | 517,867 |   |   |   | 790 |   |   |   | 23,364,052 |   |
| Other debt securities         |   |                      | 1,620,067  |   |   |   | - |   |   |   | 158,461 |   |   |   | 1,461,606 |   |
|                          |   |                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                         |   | $                         | 79,353,037 |   |   |   | 1,561,745 |   |   |   | 1,153,212 |   |   |   | 79,761,570 |   |

|                          |   | June 30, 2009       |       |
|-------------------------------|--------|---------------------|------------|
|                          |   | Less than 12 Months |       |   | 12 Months or More |   |
|                          |   | EstimatedFairValue  |       |   | UnrealizedLosses |   |   | EstimatedFairValue |   |   | UnrealizedLosses |   |
|                          |
| Government sponsored agencies |   | $                   | 37,704,678 |   |   |   | 259,737 |   |   |   | - |   |   |   | - |   |
| State, county and municipal   |   |                | 6,154,621  |   |   |   | 176,061 |   |   |   | 2,900,638 |   |   |   | 348,316 |   |
| Mortgage-backed securities    |   |                | 2,205,531  |   |   |   | 40,221 |   |   |   | - |   |   |   | - |   |
| Other debt securities         |   |                | -          |   |   |   | - |   |   |   | 1,618,917 |   |   |   | 314,575 |   |
|                          |   |                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   | $                   | 46,064,830 |   |   |   | 476,019 |   |   |   | 4,519,555 |   |   |   | 662,891 |   |

|                          |   | December 31, 2008   |       |
|-------------------------------|--------|---------------------|------------|
|                          |   | Less than 12 Months |       |   | 12 Months or More |   |
|                          |   | EstimatedFairValue  |       |   | UnrealizedLosses |   |   | EstimatedFairValue |   |   | UnrealizedLosses |   |
|                          |
| Government sponsored agencies |   | $                   | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| State, county and municipal   |   |                | 10,833,908 |   |   |   | 907,749 |   |   |   | 692,675 |   |   |   | 86,212 |   |
| Mortgage-backed securities    |   |                | 208,311    |   |   |   | 790 |   |   |   | - |   |   |   | - |   |
| Other debt securities         |   |                | 1,620,067  |   |   |   | 158,461 |   |   |   | - |   |   |   | - |   |
|                          |   |                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   | $                   | 12,662,286 |   |   |   | 1,067,000 |   |   |   | 692,675 |   |   |   | 86,212 |   |

----

|                       |   | Amortized  Cost |       |   | EstimatedFair Value |   |
|----------------------------|--------|---------------------------|------------|--------|---------------------|--------|
| Due within one year        |   | $                         | 18,425,645 |   |                |   | 18,438,654 |   |
| Due from one to five years |   |                      | 2,035,454  |   |                |   | 2,046,796 |   |
| Due from five to ten years |   |                      | 9,243,232  |   |                |   | 9,189,975 |   |
| Due after ten years        |   |                      | 35,314,537 |   |                |   | 34,458,715 |   |
| Mortgage-backed securities |   |                      | 21,440,410 |   |                |   | 21,897,482 |   |
|                       |   |                      |       |   |                |   |   |   |
|                       |   | $                         | 86,459,278 |   |                |   | 86,031,622 |   |

|                  |   | Three Months EndedJune 30, |      |   | Six Months EndedJune 30, |   |
|-----------------------|--------|----------------------------|-----------|--------|--------------------------|--------|
|                  |   | 2009                       |      |   | 2008                     |   |   | 2009 |   |   | 2008 |   |
|                  |   |                       |      |   |                     |   |   |   |   |   |   |   |
| Proceeds from sales   |   | $                          | 7,488,766 |   |                     |   | 7,320,481 |   |   |   | 7,488,766 |   |   |   | 7,320,481 |   |
|                  |   |                       |      |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Gross gains realized  |   | $                          | 206,377   |   |                     |   | 197,264 |   |   |   | 206,377 |   |   |   | 197,264 |   |
| Gross losses realized |   |                       | -         |   |                     |   | - |   |   |   | 100,429 |   |   |   | - |   |
|                  |   |                       |      |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net gain realized     |   | $                          | 206,377   |   |                     |   | 197,264 |   |   |   | 105,948 |   |   |   | 197,264 |   |

|                                     |   | June 30, 2009 |    |   | December 31, 2008 |   |
|------------------------------------------|--------|---------------|---------|--------|-------------------|--------|
| Federal Home Loan Bank Stock             |   | $             | 556,300 |   |              |   | 606,300 |   |
| Silverton Financial Services, Inc. Stock |   |          | -       |   |              |   | 100,429 |   |
|                                     |   | $             | 556,300 |   |              |   | 706,729 |   |

----

----

----

|                                                                                 |   | Amount         |    |   | Percentage |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|---------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | (In thousands) |    |   |       |   |
| Commercial, financial and agricultural                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $              | 27,253  |   |       |   | 14.4 | % |
| Real estate – mortgage                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |           | 108,076 |   |       |   | 57.1 | % |
| Real estate – commercial construction                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |           | 46,053  |   |       |   | 24.4 | % |
| Real estate – consumer construction                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |           | 770     |   |       |   | 0.4 | % |
| Consumer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           | 7,012   |   |       |   | 3.7 | % |
| Total loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $              | 189,164 |   |       |   | 100.0 | % |

|                                    |   | June 30, 2009 |   |   | December 31, 2008 |   |   | June 30, 2008 |   |
|-----------------------------------------|--------|---------------|--------|--------|-------------------|--------|--------|---------------|--------|
| Other real estate                       |   | $             | 5,510  |   |              |   | 1,777  |          |   |   | - |   |
| Repossessions                           |   |          | 13     |   |              |   | 5      |          |   |   | 6 |   |
| Non-accrual loans                       |   |          | 27,231 |   |              |   | 28,772 |          |   |   | 16,287 |   |
| Accruing loans 90 days or more past due |   |          | 2,126  |   |              |   | 24     |          |   |   | 16 |   |

----

|                                      |   | 2009   |   |   | 2008   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|
| Balance at January 1                      |   |   | 1,777  |   |   |   | - |   |
| Transfer from loans to other real estate  |   |   | 3,760  |   |   |   | 156 |   |
| Capital improvements on other real estate |   |   | 156    |   |   |   | - |   |
| Sales of other real estate                |   |   | (162   | )      |   |   | (156 | ) |
| Write-downs on other real estate          |   |   | (21    | )      |   |   | - |   |
| Balance at June 30                        |   |   | 5,510  |   |   |   | - |   |

|                                   |   | Allocation of Allowance for Loan Losses |   |   | % of Allowance for Loan Losses |   |   | % of Loans byCategory toTotal Loans |   |
|----------------------------------------|--------|-----------------------------------------|--------|--------|--------------------------------|--------|--------|-------------------------------------|--------|
| Commercial, financial and agricultural |   | $                                       | 977    |   |                           |   | 20.8%  |                                |   |   | 14.4% |   |
| Real Estate - Commercial Construction  |   |                                    | 1,182  |   |                           |   | 25.2%  |                                |   |   | 24.4% |   |
| Consumer                               |   |                                    | 178    |   |                           |   | 3.8%   |                                |   |   | 3.7% |   |
| Real Estate - Mortgage                 |   |                                    | 1,712  |   |                           |   | 36.5%  |                                |   |   | 57.1% |   |
| Unallocated                            |   |                                    | 640    |   |                           |   | 13.7%  |                                |   |   | 0.4% |   |
| Total                                  |   | $                                       | 4,689  |   |                           |   | 100.0% |                                |   |   | 100.0% |   |

----

----

----

| Risk-Based Capital Ratios               |
|-----------------------------------------|
|                                    |
| Tier 1 Capital, Actual                  |   | 11.6% |
| Tier 1 Capital minimum requirement      |   | 4.0% |
|                                    |   |   |
| Excess                                  |   | 7.6% |
|                                    |   |   |
| Total Capital, Actual                   |   | 12.9% |
| Total Capital minimum requirement       |   | 8.0% |
|                                    |   |   |
| Excess                                  |   | 4.9% |
|                                    |   |   |
| Leverage Ratio                          |   |   |
|                                    |   |   |
| Tier 1 Capital to adjusted total assets |   | 7.9% |
| Minimum leverage requirement            |   |  3.0% |
|                                    |   |   |
| Excess                                  |   | 4.9% |

----

----

Item 1.     Legal Proceedings

Item 1A.  Risk Factors

Item 3.     Defaults Upon Senior Securities

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

|   | (a) | Oconee Financial Corporation’s annual meeting of stockholders was held on May 4, 2009. |
|--------|-----|----------------------------------------------------------------------------------------------|

|   | (b) | The following is a summary of matters submitted to a vote of security holders: |
|--------|-----|--------------------------------------------------------------------------------|

| G. Robert Bishop     | Henry C. Maxey    |
|----------------------|-------------------|
| Jimmy L. Christopher | Ann B. Powers     |
| Douglas D. Dickens   | Jerry K. Wages    |
| J. Albert Hale, Sr.  | Virginia S. Wells |
| B. Amrey Harden      | Tom F. Wilson     |

| Shares voted in favor          | 677,551 |
|--------------------------------|---------|
| Shares voted in person against | 0       |
| Shares abstained from voting   | 0       |
|                           |    |
| Total shares represented       | 677,551 |
| Total shares outstanding       | 899,815 |

----

Item 6.    Exhibits

| (a)   | Exhibits |                                                                                                                                                                          |
|-----------------|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            | 31.1     | Certification by B. Amrey Harden, CEO and President of the Corporation, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                            |
|            | 31.2     | Certification by Steven A. Rogers, Vice President and Chief Financial Officer of the Corporation, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  |
|            | 32       | Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                       |

----

|   |           OCONEE FINANCIAL CORPORATION  By:  /s/ B. Amrey Harden                                                         B. Amrey Harden, President and CEO       (Principal Executive Officer) Date:    August 14, 2009                                                           By:  /s Steven A. Rogers                                            Steven A. Rogers, Vice President and CFO       Date:    August 14, 2009                                                           |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

----