----

----

| Oconee      Financial Corporation                          |
|------------------------------------------------------------|
| (Exact      name of registrant as specified in itscharter) |

| Georgia                                             |   | 58-2442250                                    |
|-----------------------------------------------------|--------|-----------------------------------------------|
| (State      of Incorporation)                       |   | (I.R.S.      EmployerIdentification      No.) |
|                                                |   |                                          |
|                                                |   |                                          |
| 35      North Main StreetWatkinsville,      Georgia |   |  30677                                   |
| (Address      of principalexecutive      offices)   |   | (Zip      Code)                               |

| Large      Accelerated Filer  o | Accelerated      Filer  o         |
|--------------------------------------|----------------------------------------|
| Non-Accelerated      Filer o         | Smaller      Reporting Company  x |

----

| INDEX                               |
|-------------------------------------|
|                                |   |
| PART      I - FINANCIAL INFORMATION |
|                                |   | Page      No. |
|                                | Item      1.   Financial Statements  |   |
|                                | Consolidated      Balance Sheets at March 31, 2008 and December 31, 2007  | 1 |
|                                | Consolidated      Statements of Earnings (unaudited) for the Three Months Ended March 31,      2008 and 2007  | 2 |
|                                | Consolidated      Statements of Comprehensive Income (Loss) (unaudited) for the Three Months      Ended March 31, 2008 and 2007  | 3 |
|                                | Consolidated      Statements of Cash Flows (unaudited) for the Three Months Ended March 31,      2008 and 2007  | 4 |
|                                | Notes      to Consolidated Financial Statements (unaudited)  | 6 |
|                                | Item 2.       Management’s      Discussion and Analysis of Financial Condition and Results of      Operations  | 9 |
|                                | Item      3.  Quantitative and Qualitative Disclosures about Market      Risk  | 13 |
|                                | Item      4.  Controls and Procedures  | 13 |
| PART      II - OTHER INFORMATION    |
|                                |   |   |
|                                | Item      1. Legal Proceedings | 14 |
|                                |   |   |
|                                | Item      1A. Risk Factors | 14 |
|                                |   |   |
|                                | Item      2. Unregistered Sales of Equity Securities and Use of    Proceeds | 14 |
|                                |   |   |
|                                | Item      3. Defaults Upon Senior Securities | 14 |
|                                |   |   |
|                                | Item      4. Submission of Matters to a Vote of Security Holders | 14 |
|                                |   |   |
|                                | Item      5.  Other Information | 14 |
|                                |   |   |
|                                | Item      6.  Exhibits | 14 |

----

|                                                                                                                                                                    |   | March      31, 2008(unaudited) |        |   | December      31, 2007 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|-------------|--------|-----------------------------|--------|
| Assets                                                                                                                                                                  |   |
|                                                                                                                                                                    |   |                           |        |   |                        |   |
| Cash      and due from banks, including reserve requirements of    $25,000                                                                                              |   | $                              | 4,938,096   |   |                        |   | 5,365,937 |   |
| Federal      funds sold                                                                                                                                                 |   |                           | 25,998,000  |   |                        |   | 15,524,000 |   |
|                                                                                                                                                                    |   |                           |        |   |                        |   |   |   |
|                    Cash      and cash equivalents                        |   |                           | 30,936,096  |   |                        |   | 20,889,937 |   |
|                                                                                                                                                                    |   |                           |        |   |                        |   |   |   |
| Investment      securities available for sale                                                                                                                           |   |                           | 89,723,542  |   |                        |   | 91,434,194 |   |
| Other      investments                                                                                                                                                  |   |                           | 679,229     |   |                        |   | 706,729 |   |
| Mortgage      loans held for sale                                                                                                                                       |   |                           | 1,541,600   |   |                        |   | 1,063,183 |   |
|                                                                                                                                                                    |   |                           |        |   |                        |   |   |   |
| Loans,      net of allowance for loan losses of $3,362,485 and    $3,335,825                                                                                            |   |                           | 188,769,928 |   |                        |   | 196,495,440 |   |
|                                                                                                                                                                    |   |                           |        |   |                        |   |   |   |
| Premises      and equipment, net                                                                                                                                        |   |                           | 7,283,212   |   |                        |   | 7,394,096 |   |
| Accrued      interest receivable and other assets                                                                                                                       |   |                           | 3,397,934   |   |                        |   | 3,329,403 |   |
|                                                                                                                                                                    |   |                           |        |   |                        |   |   |   |
|                    Total      assets                                     |   | $                              | 322,331,541 |   |                        |   | 321,312,982 |   |
|                                                                                                                                                                    |   |                           |        |   |                        |   |   |   |
| Liabilities and      Stockholders’ Equity                                                                                                                         |   |
|                                                                                                                                                                    |   |                           |        |   |                        |   |   |   |
| Liabilities:                                                                                                                                                            |   |                           |        |   |                        |   |   |   |
|        Deposits                                                                                                                      |   |                           |        |   |                        |   |   |   |
|             Noninterest-bearing                                                                             |   | $                              | 32,373,120  |   |                        |   | 31,544,102 |   |
|             Interest-bearing                                                                                |   |                           | 255,654,821 |   |                        |   | 254,980,466 |   |
|                                                                                                                                                                    |   |                           |        |   |                        |   |   |   |
|                    Total      deposits                                   |   |                           | 288,027,941 |   |                        |   | 286,524,568 |   |
|                                                                                                                                                                    |   |                           |        |   |                        |   |   |   |
|        Securities      sold under repurchase agreements                                                                              |   |                           | 2,966,299   |   |                        |   | 3,156,300 |   |
|        Accrued      interest payable and other liabilities                                                                           |   |                           | 1,142,988   |   |                        |   | 2,297,382 |   |
|                                                                                                                                                                    |   |                           |        |   |                        |   |   |   |
|                    Total      liabilities                                |   |                           | 292,137,228 |   |                        |   | 291,978,250 |   |
|                                                                                                                                                                    |   |                           |        |   |                        |   |   |   |
| 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                                                                                                        |   |                           | 23,381,979  |   |                        |   | 22,927,131 |   |
|        Accumulated      other comprehensive income                                                                                   |   |                           | 769,372     |   |                        |   | 364,639 |   |
|                                                                                                                                                                    |   |                           |        |   |                        |   |   |   |
|                    Total      stockholders’ equity                 |   |                           | 30,194,313  |   |                        |   | 29,334,732 |   |
|                                                                                                                                                                    |   |                           |        |   |                        |   |   |   |
|                    Total      liabilities and stockholders’ equity |   | $                              | 322,331,541 |   |                        |   | 321,312,982 |   |

----

|                                                                                                                                                                       |   | 2008   |      |   | 2007   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Interest      Income:                                                                                                                                                      |   |   |      |   |   |   |
|           Loans                                                                                                                                        |   | $      | 3,466,266 |   |   |   | 4,471,860 |   |
|           Investment securities:                                                                                                                       |   |   |      |   |   |   |   |   |
|                Tax exempt                                                                                                     |   |   | 235,614   |   |   |   | 254,278 |   |
|                Taxable                                                                                                        |   |   | 944,235   |   |   |   | 931,429 |   |
|           Federal funds sold and other                                                                                                                 |   |   | 155,362   |   |   |   | 81,958 |   |
|                   Total interest income                                                                        |   |   | 4,801,477 |   |   |   | 5,739,525 |   |
|                                                                                                                                                                       |   |   |      |   |   |   |   |   |
| Interest      Expense:                                                                                                                                                     |   |   |      |   |   |   |   |   |
|           Deposits                                                                                                                                     |   |   | 2,422,256 |   |   |   | 2,758,433 |   |
|           Other                                                                                                                                        |   |   | 14,001    |   |   |   | 15,199 |   |
|                   Total interest expense                                                                       |   |   | 2,436,257 |   |   |   | 2,773,632 |   |
|                                                                                                                                                                       |   |   |      |   |   |   |   |   |
|                   Net interest income                                                                          |   |   | 2,365,220 |   |   |   | 2,965,893 |   |
|                                                                                                                                                                       |   |   |      |   |   |   |   |   |
| Provision      for loan losses                                                                                                                                             |   |   | 57,600    |   |   |   | 80,000 |   |
|                                                                                                                                                                       |   |   |      |   |   |   |   |   |
|                    Net      interest income after provision for loan losses |   |   | 2,307,620 |   |   |   | 2,885,893 |   |
|                                                                                                                                                                       |   |   |      |   |   |   |   |   |
| Other      Income:                                                                                                                                                         |   |   |      |   |   |   |   |   |
|                                                                                                                                                                       |   |   |      |   |   |   |   |   |
|           Service charges on deposit accounts                                                                                                          |   |   | 370,095   |   |   |   | 335,828 |   |
|      Mortgage      origination fees                                                                                                               |   |   | 77,715    |   |   |   | 86,556 |   |
|           Other operating income                                                                                                                       |   |   | 270,871   |   |   |   | 209,308 |   |
|                   Total other income                                                                           |   |   | 718,681   |   |   |   | 631,692 |   |
|                                                                                                                                                                       |   |   |      |   |   |   |   |   |
|  Other      Expense:                                                                                                                                                  |   |   |      |   |   |   |   |   |
|           Salaries and other personnel expense                                                                                                         |   |   | 1,483,706 |   |   |   | 1,509,847 |   |
|           Net occupancy and equipment expense                                                                                                          |   |   | 353,633   |   |   |   | 373,577 |   |
|           Other operating expense                                                                                                                      |   |   | 612,843   |   |   |   | 548,576 |   |
|                   Total other expense                                                                          |   |   | 2,450,182 |   |   |   | 2,432,000 |   |
|                                                                                                                                                                       |   |   |      |   |   |   |   |   |
|                   Earnings before income taxes                                                                 |   |   | 576,119   |   |   |   | 1,085,585 |   |
|                                                                                                                                                                       |   |   |      |   |   |   |   |   |
| Income      taxes                                                                                                                                                          |   |   | 121,270   |   |   |   | 296,009 |   |
|                                                                                                                                                                       |   |   |      |   |   |   |   |   |
|                   Net earnings                                                                            |   | $      | 454,849   |   |   |   | 789,576 |   |
|                                                                                                                                                                       |   |   |      |   |   |   |   |   |
| Earnings      per common share based on average outstanding                                                                                                                |   |   |      |   |   |   |   |   |
|           shares of 899,815                                                                                                                            |   | $      | 0.51      |   |   |   | 0.88 |   |

----

|                                                                                                          |   | 2008   |    |   | 2007   |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                                                          |   |   |    |   |   |   |
| Net      earnings                                                                                        |   | $      | 454,849 |   |   |   | 789,576 |   |
|                                                                                                          |   |   |    |   |   |   |   |   |
| Other      comprehensive income, net of taxes:                                                                |   |   |    |   |   |   |   |   |
|           Unrealized gains on securities available for sale:                              |   |   |    |   |   |   |   |   |
|                Holding gains arising during period, net of taxes |   |   |    |   |   |   |   |   |
|                   of $247,641 and $16,747         |   |   | 404,733 |   |   |   | 27,369 |   |
|                                                                                                          |   |   |    |   |   |   |   |   |
|                Total other comprehensive income                  |   |   | 404,733 |   |   |   | 27,369 |   |
|                                                                                                          |   |   |    |   |   |   |   |   |
|                Comprehensive income                              |   | $      | 859,582 |   |   |   | 816,945 |   |

----

|                                                                                                                                                                                                                     |   | 2008   |        |   | 2007   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Cash      flows from operating activities:                                                                                                                                                                               |   |   |        |   |   |   |
|      Net      earnings                                                                                                                                                                          |   | $      | 454,849     |   |   |   | 789,576 |   |
|          Adjustments      to reconcile net earnings to net                                                                                                                  |   |   |        |   |   |   |   |   |
|             cash      (used) provided by operating activities:                                                                                               |   |   |        |   |   |   |   |   |
|                 Provision      for loan losses                                                                                           |   |   | 57,600      |   |   |   | 80,000 |   |
|                 Depreciation,      amortization and accretion                                                                            |   |   | 136,467     |   |   |   | 131,006 |   |
|                 Change      in assets and liabilities:                                                                                   |   |   |        |   |   |   |   |   |
|                     Interest      receivable and other assets                                                        |   |   | (316,172    | )      |   |   | (13,545 | ) |
|                     Interest      payable and other liabilities                                                      |   |   | (119,607    | )      |   |   | (163,621 | ) |
|                     Mortgage      loans held for sale                                                                |   |   | (478,417    | )      |   |   | 45,150 |   |
|                                                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
|                            Net      cash (used) provided by operating activities  |   |   | (265,280    | )      |   |   | 868,566 |   |
|                                                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
| Cash      flows from investing activities:                                                                                                                                                                               |   |   |        |   |   |   |   |   |
|      Proceeds      from calls, maturities, and paydowns of                                                                                                                                      |   |   |        |   |   |   |   |   |
|          investment      securities available for sale                                                                                                                      |   |   | 15,979,698  |   |   |   | 1,038,905 |   |
|      Purchases      of investment securities available for sale                                                                                                                                 |   |   | (13,568,872 | )      |   |   | (627,707 | ) |
|      Purchases      of other investments                                                                                                                                                        |   |   | -           |   |   |   | (36,400 | ) |
|      Proceeds      from sale of other investments                                                                                                                                               |   |   | 27,500      |   |   |   | - |   |
|      Net      change in loans                                                                                                                                                                   |   |   | 7,667,912   |   |   |   | (1,172,927 | ) |
|      Purchases      of premises and equipment                                                                                                                                                   |   |   | (73,384     | )      |   |   | (655,571 | ) |
|                                                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
|                                  Net cash provided (used) by investing activities |   |   | 10,032,854  |   |   |   | (1,453,700 | ) |
|                                                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
| Cash      flows from financing activities:                                                                                                                                                                               |   |   |        |   |   |   |   |   |
|      Net      change in deposits                                                                                                                                                                |   |   | 1,503,373   |   |   |   | (3,414,863 | ) |
|      Net      change in securities sold under repurchase agreements                                                                                                                             |   |   | (190,001    | )      |   |   | (177,291 | ) |
|      Dividends      paid                                                                                                                                                                        |   |   | (1,034,787  | )      |   |   | (1,124,769 | ) |
|                                                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
|                            Net      cash provided (used) by financing activities  |   |   | 278,585     |   |   |   | (4,716,923 | ) |
|                                                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
| Net      increase (decrease) in cash and cash equivalents                                                                                                                                                                |   |   | 10,046,159  |   |   |   | (5,302,057 | ) |
|                                                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
| Cash      and cash equivalents at beginning of period                                                                                                                                                                    |   |   | 20,889,937  |   |   |   | 15,077,988 |   |
|                                                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
| Cash      and cash equivalents at end of period                                                                                                                                                                          |   | $      | 30,936,096  |   |   |   | 9,775,931 |   |

----

|                                                                                        |   | 2008   |      |   |        2007 |   |
|---------------------------------------------------------------------------------------------|--------|--------|-----------|--------|------------------|--------|
|                                                                                        |   |   |      |   |             |   |   |   |
| Supplemental      cash flow information:                                                    |   |   |      |   |             |   |   |   |
|      Cash      paid for interest                                   |   | $      | 2,526,969 |   |             | $      | 2,709,396 |   |
|      Cash      paid for taxes                                      |   | $      | 5,000     |   |             | $      | 5,000 |   |
|                                                                                        |   |   |      |   |             |   |   |   |
| Noncash      investing and financing activities:                                            |   |   |      |   |             |   |   |   |
|      Transfer      from loans to other real estate owned           |   | $      | 155,920   |   |             | $      | - |   |
|      Change      in net unrealized losses on investment securities |   |   |      |   |             |   |   |   |
|         available      for sale, net of taxes       |   | $      | 404,733   |   |             | $      | 27,369 |   |
|      Change      in dividends payable                              |   | $      | 1,034,787 |   |             | $      | 1,124,769 |   |

----

|                                              |   | Three      Months Ended March 31, |      |
|---------------------------------------------------|--------|-----------------------------------|-----------|
|                                              |   | 2008                              |      |   | 2007 |   |
|                                              |   |                              |      |   |   |   |
| Balance      at beginning of year                 |   | $                                 | 3,335,825 |   |   |   | 3,080,661 |   |
| Amounts      charged off                          |   |                              | (39,430   | ) |   |   | (12,590 | ) |
| Recoveries      on amounts previously charged off |   |                              | 8,490     |   |   |   | 9,981 |   |
| Provision      for loan losses                    |   |                              | 57,600    |   |   |   | 80,000 |   |
|                                              |   |                              |      |   |   |   |   |   |
| Balance      at March 31                          |   | $                                 | 3,362,485 |   |   |   | 3,158,052 |   |

----

----

|                               |   |                |   |   | Fair      Value Measurements at March 31, 2008 Using                                                   |   |
|------------------------------------|--------|---------------------|--------|--------|--------------------------------------------------------------------------------------------------------|--------|
|                               |   |                |   |   | (in      thousands)                                                                                    |   |
| Description                        |   | March      31, 2008 |   |   | Quoted      Prices In      Active Markets      for Identical      Assets (Level      1) |   |   | Significant      Other      Observable Inputs      (Level      2) |   |   | Significant      Unobservable Inputs (Level      3) |   |
|                               |   |                |   |   |                                                                                                   |   |   |   |   |   |   |   |
| Securities      Available for Sale |   | $                   | 89,724 |   |                                                                                                   | $      | - |   |   | $ | 89,724 |   |   | $ | - |   |
|                               |   |                |   |   |                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Loans      Available for Sale      |   |                | 1,542  |   |                                                                                                   |   | - |   |   |   | - |   |   |   | 1,542 |   |
|                               |   |                |   |   |                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Real Estate Owned       |   |                | 156    |   |                                                                                                   |   | - |   |   |   | 169 |   |   |   | - |   |
|                               |   |                |   |   |                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Impaired      Loans                |   |                | 3,719  |   |                                                                                                   |   | - |   |   |   | - |   |   |   | 3,719 |   |

----

|                                         |   | March      31, |       |
|----------------------------------------------|--------|----------------|------------|
|                                         |   | 2008           |       |   | 2007 |   |
| Other      real estate                       |   | $              | 155,921    |   |   |   | 739,777 |   |
| Repossessions                                |   |           | 58,895     |   |   |   | 0 |   |
| Non-accrual      loans                       |   |           | 10,497,196 |   |   |   | 1,316,208 |   |
| Accruing      loans 90 days or more past due |   |           | 236,523    |   |   |   | 7,127 |   |

----

----

----

| Risk-Based Capital      Ratios               |
|----------------------------------------------|
|                                         |
| Tier      1 Capital, Actual                  |   | 13.4% |
| Tier      1 Capital minimum requirement      |   | 4.0% |
|                                         |   |   |
| Excess                                       |   | 9.4% |
|                                         |   |   |
| Total      Capital, Actual                   |   | 14.6% |
| Total      Capital minimum requirement       |   | 8.0% |
|                                         |   |   |
| Excess                                       |   | 6.6% |
|                                         |   |   |
| Leverage      Ratio                          |   |   |
|                                         |   |   |
| Tier      1 Capital to adjusted total assets |   | 9.1% |
| Minimum      leverage requirement            |   |  3.0% |
|                                         |   |   |
| Excess                                       |   | 6.1% |

----

----

Item 1.     LegalProceedings

Item 1A.   RiskFactors

Item 3.  Defaults Upon SeniorSecurities

Item 4.  Submission of Matters to aVote of Security Holders

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 Jerry K. Wages, Senior Executive 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:         May      15,      2008                                                                      By: /s/ Jerry K.      Wages                                                                          Jerry      K. Wages, Sr. Executive Vice President and CFO        Date:         May      15,      2008                                                                      By:      /s/ Steven A.      Rogers                                                                  Steven      A. Rogers       Vice      President and Controller       (Principal      Accounting Officer)  Date:         May      15,      2008                                                                    |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

----