----

----

**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**FORM        10-QSB**

**[X]  QUARTERLY        REPORT UNDER SECTION 13 OR 15(d)**

**OF        THE SECURITIES EXCHANGE ACT OF 1934**

**[   ]  TRANSITION        REPORT UNDER SECTION 13 OR 15(d)**

**OF        THE EXCHANGE ACT**

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

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

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Table            of Contents

**OCONEE        FINANCIAL CORPORATION AND SUBSIDIARY**

**INDEX**

|                            |                                                                                                                     | Page                  No. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|---------------------------|
| PART                  I                                                                                                                                      | FINANCIAL                  INFORMATION                                                                                   |                      |
|                                                                                                                                                         |                                                                                                                     |                      |
| Item                  1.                                                                                                                           | Financial                  Statements                                                                                    |                      |
|                                                                                                                                                         |                                                                                                                     |                      |
|                                                                                                                                                         | Consolidated                  Balance Sheet (unaudited) at June 30,                  2005                                | 3                         |
|                                                                                                                                                         |                                                                                                                     |                      |
|                                                                                                                                                         | Consolidated                  Statements of Earnings (unaudited) for the                  Three Months Ended and the Six |                      |
|                                                                                                                                                         | Months                  Ended June 30, 2005 and 2004                                                                     | 4                         |
|                                                                                                                                                         |                                                                                                                     |                      |
|                                                                                                                                                         | Consolidated                  Statements of Comprehensive Income (unaudited)                  for the Three Months and   |                      |
|                                                                                                                                                         | the                  Six Months Ended June 30, 2005 and                  2004                                            | 5                         |
|                                                                                                                                                         |                                                                                                                     |                      |
|                                                                                                                                                         | Consolidated                  Statements of Cash Flows (unaudited) for                  the Six Months                   |                      |
|                                                                                                                                                         | Ended                  June 30, 2005 and 2004                                                                            | 6-7                       |
|                                                                                                                                                         |                                                                                                                     |                      |
|                                                                                                                                                         | Notes                  to Financial Statements                  (unaudited)                                              | 8-9                       |
|                                                                                                                                                         |                                                                                                                     |                      |
| Item                  2.                                                                                                                           | Management's                  Discussion and Analysis of Financial                                                       |                      |
|                                                                                                                                                         | Condition                  and Results of Operations                                                                     | 10-13                     |
|                                                                                                                                                         |                                                                                                                     |                      |
| Item                  3.                                                                                                                           | Controls                  and Procedures                                                                                 | 14                        |
|                                                                                                                                                         |                                                                                                                     |                      |
| PART                  II                                                                                                                                     | OTHER                  INFORMATION                                                                                       |                      |
|                                                                                                                                                         |                                                                                                                     |                      |
| Item                  1.                                                                                                                           | Legal                  Proceedings                                                                                       | 15                        |
|                                                                                                                                                         |                                                                                                                     |                      |
| Item                  2.                                                                                                                           | Unregistered                  Sales of Equity Securities and Use of                  Proceeds                            | 15                        |
|                                                                                                                                                         |                                                                                                                     |                      |
| Item                  3.                                                                                                                           | Defaults                  Upon Senior Securities                                                                         | 15                        |
|                                                                                                                                                         |                                                                                                                     |                      |
| Item                  4.                                                                                                                           | Submission                  of Matters to a Vote of Security                  Holders                                    | 15                        |
|                                                                                                                                                         |                                                                                                                     |                      |
| Item                  5.                                                                                                                           | Other                  Information                                                                                       | 15                        |
|                                                                                                                                                         |                                                                                                                     |                      |
| Item                  6.                                                                                                                           | Exhibits                  and Reports on Form 8-K                                                                        | 16                        |

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Table            of Contents

**PART        I. FINANCIAL INFORMATION**

Financial 

**OCONEE        FINANCIAL CORPORATION AND SUBSIDIARY**

Balance 

| Assets                                                                                                                                                                              |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                |   |   |   |
| Cash                  and due from banks, including reserve requirements of                  $3,782,000                                                                             |   | $ | 8,193,983 |   |
| Federal                  funds sold                                                                                                                                                 |   |   | 5,064,000 |   |
|                                                                                                                                                                                |   |   |   |   |
| Cash                  and cash equivalents                                                                                                                                          |   |   | 13,257,983 |   |
|                                                                                                                                                                                |   |   |   |   |
| Investment                  securities available for sale                                                                                                                           |   |   | 50,763,408 |   |
| Other                  investments                                                                                                                                                  |   |   | 614,429 |   |
| Mortgage                  loans held for sale                                                                                                                                       |   |   | 1,728,777 |   |
|                                                                                                                                                                                |   |   |   |   |
| Loans                                                                                                                                                                               |   |   | 191,672,436 |   |
| Less:                  Allowance for loan losses                                                                                                                                    |   |   | (2,829,821 | ) |
|                                                                                                                                                                                |   |   |   |   |
| Loans,                  net                                                                                                                                                         |   |   | 188,842,615 |   |
|                                                                                                                                                                                |   |   |   |   |
| Premises                  and equipment, net                                                                                                                                        |   |   | 5,931,045 |   |
| Accrued                  interest receivable and other assets                                                                                                                       |   |   | 2,966,305 |   |
|                                                                                                                                                                                |   |   |   |   |
|  Total                  assets                                                                                                                                                 |   | $ | 264,104,562 |   |
|                                                                                                                                                                                |   |   |  |   |
| Liabilities                  and Stockholders’ Equity                                                                                                                         |
|                                                                                                                                                                                |   |   |  |   |
| Liabilities:                                                                                                                                                                        |   |   |  |   |
|        Deposit*s*                                                                                                                                |   |   |  |   |
|             Noninterest-bearing                                                                                         |   | $ | 32,178,259 |   |
|             Interest-bearing                                                                                            |   |   | 205,113,534 |   |
|                                                                                                                                                                                |   |   |   |   |
| Total                  deposits                                                                                                                                                     |   |   | 237,291,793 |   |
|                                                                                                                                                                                |   |   |   |   |
|        Securities                  sold under repurchase agreements                                                                              |   |   | 2,658,897 |   |
|        Accrued                  interest payable and other liabilities                                                                           |   |   | 719,374 |   |
|                                                                                                                                                                                |   |   |   |   |
| Total                  liabilities                                                                                                                                                  |   |   | 240,670,064 |   |
|                                                                                                                                                                                |   |   |   |   |
| Stockholders’                  equity:                                                                                                                                        |   |   |   |   |
|        Common                  stock, $2 par value;                                                                                              |   |   |   |   |
|              authorized                  1,500,000 shares;                                                         |   |   |   |   |
|              issued                  and outstanding 899,885 shares                                                |   |   | 1,799,770 |   |
|        Additional                  paid-in capital                                                                                               |   |   | 4,246,832 |   |
|        Retained                  earnings                                                                                                        |   |   | 17,071,282 |   |
|        Accumulated                  other comprehensive income                                                                                   |   |   | 316,614 |   |
|                                                                                                                                                                                |   |   |   |   |
|                    Total                  stockholders’ equity                 |   |   | 23,434,498 |   |
|                                                                                                                                                                                |   |   |  |   |
|                    Total                  liabilities and stockholders’ equity |   | $ | 264,104,562 |   |

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Table            of Contents

**OCONEE        FINANCIAL CORPORATION AND SUBSIDIARY**

Statements 

|                                                                                                                                                                                   |   |  **Three                  Months Ended** |      |  **Six                  Months Ended** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|-----------|---------------------------------------------|--------|
|                                                                                                                                                                                   |   | **2005**                                      |      | **2004**                                    |   | **2005** |   | **2004** |   |
| Interest                  Income:                                                                                                                                                      |   |                                          |      |                                        |   |   |   |   |  |   |   |  |   |
|                       Loans                                                                                                                                        |   | $                                             | 3,286,159 |                                        |   | 2,779,949 |   |   | 6,511,088 |   |   | 5,639,270 |   |
|                       Investment securities:                                                                                                                       |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
|                            Tax exempt                                                                                                     |   |                                          | 191,487   |                                        |   | 198,496 |   |   | 385,275 |   |   | 409,566 |   |
|                            Taxable                                                                                                        |   |                                          | 268,145   |                                        |   | 323,409 |   |   | 552,283 |   |   | 655,135 |   |
|                       Federal funds sold and other                                                                                                                 |   |                                          | 117,242   |                                        |   | 22,818 |   |   | 165,382 |   |   | 50,921 |   |
|                               Total interest income                                                                        |   |                                          | 3,863,033 |                                        |   | 3,324,672 |   |   | 7,614,028 |   |   | 6,754,892 |   |
|                                                                                                                                                                                   |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
| Interest                  Expense:                                                                                                                                                     |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
|                       Deposits                                                                                                                                     |   |                                          | 1,200,575 |                                        |   | 826,061 |   |   | 2,266,214 |   |   | 1,839,700 |   |
|                       Other                                                                                                                                        |   |                                          | 11,434    |                                        |   | 5,449 |   |   | 19,149 |   |   | 9,217 |   |
|                               Total interest expense                                                                       |   |                                          | 1,212,009 |                                        |   | 831,510 |   |   | 2,285,363 |   |   | 1,848,917 |   |
|                                                                                                                                                                                   |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
|                               Net interest income                                                                          |   |                                          | 2,651,024 |                                        |   | 2,493,162 |   |   | 5,328,665 |   |   | 4,905,975 |   |
|                                                                                                                                                                                   |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
| Provision                  for loan losses                                                                                                                                             |   |                                          | 204,000   |                                        |   | 90,000 |   |   | 408,000 |   |   | 180,000 |   |
|                                                                                                                                                                                   |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
|                    Net                  interest income after provision for loan losses |   |                                          | 2,447,024 |                                        |   | 2,403,162 |   |   | 4,920,665 |   |   | 4,725,975 |   |
|                                                                                                                                                                                   |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
| Other                  Income:                                                                                                                                                         |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                   |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
|                       Service charges on deposit accounts                                                                                                          |   |                                          | 487,330   |                                        |   | 264,162 |   |   | 768,994 |   |   | 503,129 |   |
|      Mortgage                  banking income                                                                                                                 |   |                                          | 108,916   |                                        |   | 119,650 |   |   | 182,665 |   |   | 269,586 |   |
|                       Securities gains, net                                                                                                                        |   |                                          | 6,282     |                                        |   | - |   |   | 6,282 |   |   | 24,137 |   |
|                       Other operating income                                                                                                                       |   |                                          | 113,099   |                                        |   | 240,868 |   |   | 266,962 |   |   | 389,959 |   |
|                               Total other income                                                                           |   |                                          | 715,627   |                                        |   | 624,680 |   |   | 1,224,903 |   |   | 1,186,811 |   |
|                                                                                                                                                                                   |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
|  Other                  Expense:                                                                                                                                                  |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
|                       Salaries and other personnel expense                                                                                                         |   |                                          | 1,295,154 |                                        |   | 1,253,186 |   |   | 2,606,570 |   |   | 2,532,011 |   |
|                       Net occupancy and equipment expense                                                                                                          |   |                                          | 323,382   |                                        |   | 346,248 |   |   | 637,393 |   |   | 612,226 |   |
|                       Other operating expense                                                                                                                      |   |                                          | 559,290   |                                        |   | 573,688 |   |   | 1,092,616 |   |   | 1,091,086 |   |
|                               Total other expense                                                                          |   |                                          | 2,177,826 |                                        |   | 2,173,122 |   |   | 4,336,579 |   |   | 4,235,323 |   |
|                                                                                                                                                                                   |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
|                               Earnings before income taxes                                                                 |   |                                          | 984,825   |                                        |   | 854,720 |   |   | 1,808,989 |   |   | 1,677,463 |   |
|                                                                                                                                                                                   |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
| Income                  taxes                                                                                                                                                          |   |                                          | 291,934   |                                        |   | 240,690 |   |   | 529,935 |   |   | 468,198 |   |
|                                                                                                                                                                                   |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
|                               Net earnings                                                                            |   | $                                             | 692,891   |                                        |   | 614,030 |   |   | 1,279,054 |   |   | 1,209,265 |   |
|                                                                                                                                                                                   |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
| Earnings                  per common share based on average outstanding                                                                                                                |   |                                          |      |                                        |   |   |   |   |   |   |   |   |   |
|                       shares of 899,885 in each period of 2005 and 2004:                                                                                           |   | $                                             | 0.77      |                                        |   | 0.68 |   |   | 1.42 |   |   | 1.34 |   |

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**OCONEE        FINANCIAL CORPORATION AND SUBSIDIARY**

Statements 

|                                                                                                                                                  |   |  **Three                  Months Ended** |    | **Six                  Months Ended** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|---------|---------------------------------------|--------|
|                                                                                                                                                  |   | **2005**                                      |    | **2004**                              |   | **2005** |   | **2004** |   |
|                                                                                                                                                  |   |                                          |    |                                  |   |   |   |   |   |
| Net                  earnings                                                                                                                    |   | $                                             | 692,891 |                                  |   | 614,030 |   |   | 1,279,054 |   |   | 1,209,265 |   |
|                                                                                                                                                  |   |                                          |    |                                  |   |   |   |   |   |   |   |   |   |
| Other                  comprehensive income, net of tax:                                                                                              |   |                                          |    |                                  |   |   |   |   |   |   |   |   |   |
|                       Unrealized gains on securities available for sale:                                                          |   |                                          |    |                                  |   |   |   |   |   |   |   |   |   |
|                            Holding gains arising during period, net of (benefit) tax                     |   |                                          |    |                                  |   |   |   |   |   |   |   |   |   |
|                               of $85,868, ($708,880), ($107,529) and ($440,174)           |   |                                          | 140,339 |                                  |   | (1,158,561 | ) |   | (175,740 | ) |   | (728,898 | ) |
|                            Reclassification adjustments for gains included in                  net  |   |                                          |    |                                  |   |   |   |   |   |   |   |   |   |
|                               earnings, net of tax of $2,385,$0,$2,385 and $9,162         |   |                                          | (3,897  | )                                     |   | - |   |   | (3,897 | ) |   | (14,975 | ) |
|                                                                                                                                                  |   |                                          |    |                                  |   |   |   |   |   |   |   |   |   |
|                            Total other comprehensive (loss) income                                       |   |                                          | 136,442 |                                  |   | (1,158,561 | ) |   | (179,637 | ) |   | (743,873 | ) |
|                                                                                                                                                  |   |                                          |    |                                  |   |   |   |   |   |   |   |   |   |
|                            Comprehensive income                                                          |   | $                                             | 829,333 |                                  |   | (544,531 | ) |   | 1,099,417 |   |   | 465,392 |   |

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**OCONEE        FINANCIAL CORPORATION AND SUBSIDIARY**

Consolidated

|                                                                                                                                                                                                                                |   | **2005** |        | **2004** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|-------------|----------|--------|
| Cash                  flows from operating activities:                                                                                                                                                                              |   |     |        |     |   |   |   |
|      Net                  earnings                                                                                                                                                                         |   | $        | 1,279,054   |     |   | 1,209,265 |   |
|          Adjustments                  to reconcile net earnings to net                                                                                                                 |   |     |        |     |   |   |   |
|             cash                  provided by operating activities:                                                                                                     |   |     |        |     |   |   |   |
|                 Provision                  for loan losses                                                                                          |   |     | 408,000     |     |   | 180,000 |   |
|                 Depreciation,                  amortization and accretion                                                                           |   |     | 350,664     |     |   | 434,273 |   |
|                 Gain                  on sale of investment securities                                                                              |   |     | (6,282      | )        |   | (24,137 | ) |
|                 Loss                  (gain) on sales and disposals of fixed assets                                                                 |   |     | 5,666       |     |   | (127,479 | ) |
|                 Gain                  on sale of other real estate owned                                                                            |   |     | (19,485     | )        |   | (27,906 | ) |
|                 Change                  in assets and liabilities:                                                                                  |   |     |        |     |   |   |   |
|                     Interest                  receivable and other assets                                                       |   |     | (275,438    | )        |   | (403,971 | ) |
|                     Interest                  payable and other liabilities                                                     |   |     | 31,725      |     |   | 90,673 |   |
|                     Mortgage                  loans held for sale                                                               |   |     | (601,077    | )        |   | 2,353,451 |   |
|                                                                                                                                                                                                                                |   |     |        |     |   |   |   |
|                            Net                  cash provided by operating activities        |   |     | 1,172,827   |     |   | 3,684,169 |   |
|                                                                                                                                                                                                                                |   |     |        |     |   |   |   |
| Cash                  flows from investing activities:                                                                                                                                                                              |   |     |        |     |   |   |   |
|      Proceeds                  from sale of investment securities                                                                                                                                          |   |     | 339,131     |     |   | 853,580 |   |
| Proceeds                  from calls, maturities, and paydowns of                                                                                                                                                                   |   |     |        |     |   |   |   |
| investment                  securities available for sale                                                                                                                                                                           |   |     | 8,563,869   |     |   | 5,406,405 |   |
| Purchases                  of investment securities available for sale                                                                                                                                                              |   |     | (13,220,154 | )        |   | (4,662,452 | ) |
| Purchases                  of other securities                                                                                                                                                                                      |   |     | (10,100     | )        |   | - |   |
|      Net                  change in loans                                                                                                                                                                  |   |     | (5,716,454  | )        |   | (3,153,800 | ) |
| Purchases                  of premises and equipment                                                                                                                                                                                |   |     | (272,531    | )        |   | (1,904,296 | ) |
| Proceeds                  from sale of premises and equipment                                                                                                                                                                       |   |     | -           |     |   | 261,777 |   |
| Proceeds                  from sale of other real estate owned                                                                                                                                                                      |   |     | 539,123     |     |   | 522,331 |   |
|                                                                                                                                                                                                                                |   |     |        |     |   |   |   |
|                                              Net cash used by investing activities           |   |     | (9,777,116  | )        |   | (2,676,455 | ) |
|                                                                                                                                                                                                                                |   |     |        |     |   |   |   |
| Cash                  flows from financing activities:                                                                                                                                                                              |   |     |        |     |   |   |   |
|      Net                  change in deposits                                                                                                                                                               |   |     | 5,538,690   |     |   | (5,277,706 | ) |
|      Net                  change in securities sold under repurchase agreements                                                                                                                            |   |     | 1,470,101   |     |   | 754,847 |   |
|      Dividends                  paid                                                                                                                                                                       |   |     | (899,885    | )        |   | (899,885 | ) |
|                                                                                                                                                                                                                                |   |     |        |     |   |   |   |
|                            Net                  cash used (provided) by financing activities |   |     | 6,108,906   |     |   | (5,422,744 | ) |
|                                                                                                                                                                                                                                |   |     |        |     |   |   |   |
| Net                  decrease in cash and cash equivalents                                                                                                                                                                          |   |     | (2,495,383  | )        |   | (4,415,030 | ) |
|                                                                                                                                                                                                                                |   |     |        |     |   |   |   |
| Cash                  and cash equivalents at beginning of period                                                                                                                                                                   |   |     | 15,753,366  |     |   | 17,994,802 |   |
|                                                                                                                                                                                                                                |   |     |        |     |   |   |   |
| Cash                  and cash equivalents at end of period                                                                                                                                                                         |   | $        | 13,257,983  |     |   | 13,579,772 |   |

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**OCONEE        FINANCIAL CORPORATION AND SUBSIDIARY**

|                                                                                                  |   | **2005** |      | **2004** |   |
|-------------------------------------------------------------------------------------------------------|--------|----------|-----------|----------|--------|
|                                                                                                  |   |     |      |     |   |
|                                                                                                  |   |     |      |     |   |
| Supplemental                  cash flow information:                                                  |   |     |           |     |   |  |   |
|      Cash                  paid for interest                                 |   | $        | 2,243,786 |     | $      | 1,950,727 |   |
|      Cash                  paid for taxes                                    |   | $        | 578,000   |     | $      | 632,000 |   |
|                                                                                                  |   |     |      |     |   |   |   |
| Noncash                  investing and financing activities:                                          |   |     |      |     |   |   |   |
|      Transfer                  from loans to other real estate owned         |   | $        | -         |     | $      | 468,884 |   |
|      Change                  in dividends payable                            |   | $        | 899,885   |     | $      | 899,885 |   |
|      Change                  in net unrealized gain on investment securities |   |     |      |     |   |   |   |
|         available                  for sale, net of tax       |   | $        | (179,637  | )        | $      | (743,873 | ) |
|                                                                                                  |   |     |      |     |   |   |   |
|                                                                                                  |   |     |      |     |   |   |   |
|                                                                                                  |   |     |      |     |   |   |   |

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**OCONEE        FINANCIAL CORPORATION AND SUBSIDIARY**

Notes

| (1) | Basis                  of Presentation |
|-----|----------------------------------------|

| (2) | Net                  Earnings Per Common Share |
|-----|------------------------------------------------|

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**OCONEE        FINANCIAL CORPORATION AND SUBSIDIARY**

| (3) | Allowance                  for Loan Losses |
|-----|--------------------------------------------|

|                                                          |   | **2005**  |   | **2004**  |
|---------------------------------------------------------------|--------|-----------|--------|-----------|
|                                                          |   |      |   |      |
| Balance                  at beginning of year                 | $      | 2,531,330 |   | 2,669,204 |
| Amounts                  charged off                          |   | (159,987) |   | (140,123) |
| Recoveries                  on amounts previously charged off |   | 50,478    |   | 173,274   |
| Provision                  for loan losses                    |   | 408,000   |   | 180,000   |
|                                                          |   |      |   |      |
| Balance                  at June 30                           | $      | 2,829,821 |   | 2,882,355 |

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**MANAGEMENT’SDISCUSSION        AND ANALYSIS OF        FINANCIAL**

**CONDITION        AND RESULTS OF OPERATIONS**

**Forward-Looking        Statements**

**Financial        Condition**

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**Results        of Operations**

** **

**Interest        rate sensitivity**

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Table            of Contents

**Liquidity**

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Table            of Contents

**Contractual        Obligations and Commitments**

**Capital**

| Risk-Based                  Capital Ratios               |
|----------------------------------------------------------|
|                                                     |
| Tier                  1 Capital, Actual                  |   | 8.7% |
| Tier                  1 Capital minimum requirement      |   | 4.0% |
|                                                     |   |   |
| Excess                                                   |   | 4.7% |
|                                                     |   |   |
| Total                  Capital, Actual                   |   | 12.9% |
| Total                  Capital minimum requirement       |   | 8.0% |
|                                                     |   |   |
| Excess                                                   |   | 4.9% |
|                                                     |   |   |
| Leverage                  Ratio                          |   |   |
|                                                     |   |   |
| Tier                  1 Capital to adjusted total assets |   | 8.7% |
| Minimum                  leverage requirement            |   |  3.0% |
|                                                     |   |   |
| Excess                                                   |   | 5.7% |

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**CONTROLSAND        PROCEDURES**

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Table            of Contents

**PART        II. OTHER INFORMATION**

**OCONEE        FINANCIAL CORPORATION AND SUBSIDIARY**

Item        1.            Legal        Proceedings

Item        2.            Unregistered        Sales of Equity Securities and Use of Proceeds

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 2,                  2005. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------|

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

|  | 2. | The                  election * of the following directors to serve the current year                  term: |
|--|----|-------------------------------------------------------------------------------------------------------------|

| G.                  Robert Bishop                                                                                                                     | Carl                  R. Nichols   |  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|--|
| Jimmy                  L. Christopher                                                                                                                 | Ann                  B. Powers     |  |
| Douglas                  D. Dickens                                                                                                                   | Jerry                  K. Wages    |  |
| John                  A. Hale                                                                                                                         | Virginia                  S. Wells |  |
| B.                  Amrey Harden                                                                                                                      | Tom                  F. Wilson     |  |
| Henry                  C. Maxey                                                                                                                       |                               |
|                                                                                                                                                  |                               |
| A                  tabulation of votes concerning the above issue is as                  follows:                                                     |
|                                                                                                                                                  |                               |
| Shares                  voted in favor                                                                                                           | 659,389                            |  |
| Shares                  voted in person against                                                                                                       | 0                                  |  |
| Shares                  abstained from voting                                                                                                         | 0                                  |  |
|                                                                                                                                                  |                               |
| Total                  shares represented                                                                                                             | 659,389                            |  |
| Total                  shares outstanding                                                                                                             | 899,885                            |  |
|                                                                                                                                                  |                               |
| *                  Directors were elected by slate, not individually. Vote tabulation                  is                  therefore by slate.   |

 

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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.                                                                 |
|            |     |                                                                                                                                                                                                                                                       |

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Table            of Contents

**OCONEE        FINANCIAL CORPORATION AND SUBSIDIARY**

**SIGNATURES**

|   |           OCONEE                  FINANCIAL CORPORATION  By:                     /s/ B. Amrey                  Harden                                                                                                  B.                  Amrey Harden, President and CEO       (Principal                  Executive Officer)  Date:                       August                  12, 2005    By:                   /s/ Jerry K. Wages,                  Sr.                                                                                                Jerry                  K. Wages, Sr. Executive Vice President and CFO        Date:                       August                  12, 2005                                                                                          By:                   /s/ Steven A.                  Rogers                                                                                                     Steven                  A. Rogers       Vice                  President and Controller       (Principal                  Accounting Officer)  Date:                       August                  12, 2005                                                                                       |
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