**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**


**____________**





**FORM
      10-QSB**


(Mark
      One)





x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934





For
      the
      quarterly period ended December 31, 2007





OR





o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT





For
      the
      transition period from ______________ to _____________




Commission
      file number: 0-51514




**EQUITABLE
                FINANCIAL CORP.**(Exact
                name of small business issuer as specified in its charter)





**United
                States**
            
            **14-1941649**(State
                or other jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)





**113
                North Locust Street, Grand Island, Nebraska 68801**(Address
                of principal executive offices)**(308)
                382-3136**(Issuer’s
                telephone number)**Not
                Applicable**(Former
                name, former address and former fiscal year, if changed since last
                report)





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


Yes
                x
            No
                o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes
                o
            No
                x




As
      of
      February 1, 2007 there were 3,297,509 shares of the registrant’s common stock
      outstanding.





Transitional
      Small Business Disclosure Format (Check one):


Yes
                o
            No
                x




**EQUITABLE
      FINANCIAL CORP.**








**FORM
      10-QSB**





**Index**




***Page
                No.*****PART
                I. FINANCIAL INFORMATION**Item
                1.
            Financial
                Statements
            1Consolidated
                Statements of Financial Condition at December 31, 2007(Unaudited)
                and June 30, 2007
            1Consolidated
                Statements of Operations for the three and six months endedDecember
                31, 2007 and 2006 (Unaudited)
            2Consolidated
                Statements of Stockholders’ Equity and Comprehensive Incomefor
                the six months ended December 31, 2007 and 2006
                (Unaudited)
            3Consolidated
                Statements of Cash Flows for the six months endedDecember
                31, 2007 and 2006 (Unaudited)
            4Notes
                to Unaudited Consolidated Financial Statements
            5Item
                2.
            Management’s
                Discussion and Analysis or Plan of Operation
            10Item
                3.
            Controls
                and Procedures
            15**PART
                II. OTHER INFORMATION**Item
                1.
            Legal
                Proceedings
            16Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            16Item
                3.
            Defaults
                Upon Senior Securities
            16Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            16Item
                5.
            Other
                Information
            16Item
                6.
            Exhibits
            17**Signatures**





i


**PART
      I. FINANCIAL INFORMATION**





**Item
      1.   Financial Statements**


**E** **QUITABLE
      FINANCIAL CORP.**


**Statements
      of Financial Condition**




**December
                    31,**
                
                **June
                    30,****2007**
                
                **2007****(Unaudited)****ASSETS**Cash
                    and due from financial institutions
                
                $
                4,487,886
                
                $
                2,382,234Federal
                    funds sold
                
                
                5,100,000
                
                
                7,100,000Cash
                    and cash equivalents
                
                
                9,587,886
                
                
                9,482,234Securities
                    available-for-sale, at fair value
                
                
                4,572,263
                
                
                6,584,274Securities
                    held-to-maturity, fair value at December 31, 2007 -
                  $656,767;
                    and June 30, 2007-$684,464
                
                
                657,039
                
                
                702,030Federal
                    Home Loan Bank stock, at cost
                
                
                2,513,100
                
                
                2,447,500Loans,
                    net of allowance for loan losses of $1,139,597 at December 31,
                  2007
                    and $1,056,873 at June 30, 2007
                
                
                158,831,949
                
                
                153,329,552Premises
                    and equipment, net
                
                
                6,699,503
                
                
                6,850,891Foreclosed
                    assets, net
                
                
                —
                
                
                82,900Accrued
                    interest receivable
                
                
                1,096,039
                
                
                1,235,278Other
                    assets
                
                
                2,602,151
                
                
                2,119,652Total
                    assets
                
                $
                186,559,930
                
                $
                182,834,311**LIABILITIES
                    AND STOCKHOLDERS’ EQUITY**LiabilitiesDepositsNoninterest-bearing
                    deposits
                
                $
                8,554,143
                
                $
                6,465,861Interest-bearing
                    deposits
                
                
                122,570,964
                
                
                121,279,000Total
                    deposits
                
                
                131,125,107
                
                
                127,744,861Federal
                    Home Loan Bank borrowings
                
                
                30,974,834
                
                
                30,599,626Advance
                    payments from borrowers for taxes and insurance
                
                
                784,560
                
                
                794,930Accrued
                    interest payable and other liabilities
                
                
                840,360
                
                
                528,952Common
                    stock in ESOP subject to contingent repurchase obligation
                
                
                162,080
                
                
                151,679Total
                    liabilities
                
                
                163,886,941
                
                
                159,820,048Commitments
                    and contingenciesStockholders’
                    equity:Preferred
                    stock, $0.01 par value per share; authorized 1,000,000
                    shares,no
                    shares are outstanding
                
                
                —
                
                
                —Common
                    stock, $0.01 par value, 14,000,000 shares authorized;
                    3,297,509shares
                    issued and outstanding at December 31, 2007 and June 30, 2007.
                
                
                32,975
                
                
                32,975Additional
                    paid-in capital
                
                
                13,614,042
                
                
                13,619,515Retained
                    earnings
                
                
                10,991,322
                
                
                11,421,576Unearned
                    ESOP shares
                
                
                (1,090,020
                )
                
                (1,135,440
                )Treasury
                    stock, 64,631 shares at cost
                
                
                (694,783
                )
                
                (694,783
                )Accumulated
                    other comprehensive loss, net
                
                
                (18,467
                )
                
                (77,901
                )Reclassification
                    of ESOP shares
                
                
                (162,080
                )
                
                (151,679
                )Total
                    stockholders’ equity
                
                
                22,672,989
                
                
                23,014,263Total
                    liabilities and stockholders’ equity
                
                $
                186,559,930
                
                $
                182,834,311*See
                    Notes to the Unaudited Consolidated Financial
                    Statements*
 
 1


**EQUITABLE
      FINANCIAL CORP.**


**Statements
      of Operations**


**(Unaudited)**




**Three
                  Months Ended**
              
              **Six
                  Months Ended****December
                  31,**
              
              **December
                  31,****2007**
              
              **2006**
              
              **2007**
              
              **2006****Interest
                  Income**Loans
              
              $
              2,570,071
              
              $
              2,494,152
              
              $
              5,060,621
              
              $
              4,874,046Securities
              
              
              94,291
              
              
              125,860
              
              
              203,616
              
              
              262,778Other
              
              
              46,672
              
              
              12,113
              
              
              121,942
              
              
              26,868Total
                  interest income
              
              
              2,711,034
              
              
              2,632,125
              
              
              5,386,179
              
              
              5,163,692**Interest
                  Expense**Deposits
              
              
              1,289,081
              
              
              1,172,571
              
              
              2,623,588
              
              
              2,259,099Federal
                  Home Loan Bank borrowings
              
              
              383,922
              
              
              504,189
              
              
              741,388
              
              
              963,463Total
                  interest expense
              
              
              1,673,003
              
              
              1,676,760
              
              
              3,364,976
              
              
              3,222,562**Net
                  interest income**
              
              
              1,038,031
              
              
              955,365
              
              
              2,021,203
              
              
              1,941,130Provision
                  for loan losses
              
              
              60,000
              
              
              30,000
              
              
              120,000
              
              
              60,000**Net
                  interest income after provision for loan losses**
              
              
              978,031
              
              
              925,365
              
              
              1,901,203
              
              
              1,881,130**Non-interest
                  income**Service
                  charges on deposit accounts
              
              
              155,785
              
              
              83,935
              
              
              307,274
              
              
              159,749Brokerage
                  fee income
              
              
              242,610
              
              
              189,786
              
              
              453,663
              
              
              342,070Gain
                  on sale of loans
              
              
              45,455
              
              
              35,563
              
              
              72,085
              
              
              54,892Other
                  loan fees
              
              
              6,075
              
              
              20,768
              
              
              13,300
              
              
              40,573Other
                  income
              
              
              27,021
              
              
              25,566
              
              
              116,374
              
              
              50,255Total
                  non-interest income
              
              
              476,946
              
              
              355,618
              
              
              962,696
              
              
              647,539**Non-interest
                  expenses**Salaries
                  and employee benefits
              
              
              1,016,462
              
              
              1,086,650
              
              
              2,106,897
              
              
              1,988,756Director
                  and committee fees
              
              
              26,950
              
              
              24,450
              
              
              48,400
              
              
              48,900Data
                  processing fees
              
              
              135,705
              
              
              64,883
              
              
              267,051
              
              
              137,256Occupancy
                  and equipment
              
              
              223,931
              
              
              269,303
              
              
              454,670
              
              
              508,575Regulatory
                  fees and deposit insurance premium
              
              
              14,169
              
              
              19,011
              
              
              31,948
              
              
              33,917Loss
                  (gain) on sale of foreclosed assets
              
              
              (30,833
              )
              
              21,118
              
              
              (26,540
              )
              
              21,118Loss
                  on investment in low income housing partnerships
              
              
              7,065
              
              
              16,000
              
              
              14,565
              
              
              16,000Advertising
                  and public relations
              
              
              39,069
              
              
              64,310
              
              
              80,856
              
              
              146,752Contributions
                  and donations
              
              
              12,839
              
              
              17,784
              
              
              26,472
              
              
              39,303Insurance
                  and surety bond premiums
              
              
              41,584
              
              
              26,417
              
              
              107,169
              
              
              51,581Professional
                  fees
              
              
              132,168
              
              
              123,899
              
              
              233,146
              
              
              233,238Supplies,
                  telephone, postage
              
              
              50,411
              
              
              75,305
              
              
              104,817
              
              
              144,460ATM
                  expenses
              
              
              6,281
              
              
              7,235
              
              
              14,340
              
              
              16,904Dues
                  and subscriptions
              
              
              10,786
              
              
              8,700
              
              
              18,090
              
              
              22,065Other
                  expenses
              
              
              49,350
              
              
              63,141
              
              
              88,957
              
              
              129,286Total
                  non-interest expenses
              
              
              1,735,937
              
              
              1,888,206
              
              
              3,570,838
              
              
              3,538,111**Income
                  (loss) before income taxes**
              
              
              (280,960
              )
              
              (607,223
              )
              
              (706,939
              )
              
              (1,009,442
              )Income
                  tax expense (benefit)
              
              
              (111,844
              )
              
              (255,296
              )
              
              (276,685
              )
              
              (384,292
              )**Net
                  income (loss)**
              
              $
              (169,116
              )
              $
              (351,927
              )
              $
              (430,254
              )
              $
              (625,150
              )**Basic
                  and diluted earnings (loss) per share******
              
              $
              (0.05
              )
              $
              (0.11
              )
              $
              (0.14
              )
              $
              (0.20
              )*See
                  Notes to the Unaudited Consolidated Financial
                  Statements*






2


**EQUITABLE
        FINANCIAL CORP.**
 **Consolidated
        Statements of Stockholders’ Equity and Comprehensive
        Income**
 **Six
          Months Ended December 31, 2007 and 2006**
 **(Unaudited)**
  **Common
                  Stock**
              
              
              **Additional
                  Paid-In Capital**
              
              
              **Retained
                  Earnings**
              
              
              **Unearned
                  ESOP Shares**
              
              
              **Treasury
                  Stock**
              
              
              **Accumulated
                  Other Comprehensive Income**
              
              
              **Amount
                  Reclassified on ESOP Shares**
              
              
              **Total**Balance
                  at June 30, 2006
              
              $
              32,975
              
              
              $
              13,617,427
              
              
              $
              12,820,516
              
              
              $
              (1,226,280
              )
              
              $
              —
              
              
              $
              (149,962
              )
              
              $
              (61,033
              )
              
              $
              25,033,643Comprehensive
                  loss:Net
                  loss
              
              
              —
              
              
              
              —
              
              
              
              (625,150
              )
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (625,150
              )Change
                    in net unrealized gain (loss) on securities available-for-sale,
                    net of
                    income taxes
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              79,105
              
              
              
              —
              
              
              
              79,105Total
                  comprehensive loss, net
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (546,045
              )Release
                  of 4,542 unearned ESOP shares
              
              
              —
              
              
              
              2,202
              
              
              
              —
              
              
              
              45,420
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              47,622Reclassification
                        due to release and changes in fair value of common stock
                        in ESOP subject
                        to contingent repurchase obligation of ESOP
                        shares
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (70,285
              )
              
              
              (70,285
              )Balance
                  at December 31, 2006
              
              $
              32,975
              
              
              $
              13,619,629
              
              
              $
              12,195,366
              
              
              $
              (1,180,860
              )
              
              $
              —
              
              
              $
              (70,857
              )
              
              $
              (131,318
              )
              
              $
              24,464,935Balance
                  at June 30, 2007
              
              
              32,975
              
              
              
              13,619,515
              
              
              
              11,421,576
              
              
              
              (1,135,440
              )
              
              
              (694,783
              )
              
              
              (77,901
              )
              
              
              (151,679
              )
              
              
              23,014,263Comprehensive
                  loss:Net
                  loss
              
              
              —
              
              
              
              —
              
              
              
              (430,254
              )
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (430,254
              )Change
                    in net unrealized gain (loss) on securities available-for-sale,
                    net of
                    income taxes
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              59,434
              
              
              
              —
              
              
              
              59,434Total
                  comprehensive loss, net
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (370,820
              )Release
                  of 4,542 unearned ESOP shares
              
              
              —
              
              
              
              (5,473
              )
              
              
              —
              
              
              
              45,420
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              39,947Reclassification
                        due to release and changes in fair value of common stock
                        in ESOP subject
                        to contingent repurchase obligation of ESOP
                        shares
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (10,401
              )
              
              
              (10,401
              )Balance
                  at December 31, 2007
              
              $
              32,975
              
              
              $
              13,614,042
              
              
              $
              10,991,322
              
              
              $
              (1,090,020
              )
              
              $
              (694,783
              )
              
              $
              (18,467
              )
              
              $
              (162,080
              )
              
              $
              22,672,989*See
                  Notes to the Unaudited Consolidated Financial
                  Statements*
 
 3




**EQUITABLE
        FINANCIAL CORP.**
 **Consolidated
        Statements of Cash Flows**
 **(Unaudited)**


**Six
                  Months Ended****December
                  31,****2007**
              
              **2006****Cash
                  flows from operating activities:**Net
                  loss
              
              $
              (430,254
              )
              $
              (625,150
              )Adjustments
                  to reconcile net loss to net cash from operating activities:Depreciation
              
              
              188,450
              
              
              192,598Amortization
                  of premiums and discounts
              
              
              3,907
              
              
              7,078Federal
                  Home Loan Bank stock dividends
              
              
              (65,600
              )
              
              (67,200
              )ESOP
                  expense
              
              
              39,947
              
              
              47,622Deferred
                  loan origination costs, net
              
              
              (70,686
              )
              
              (20,699
              )Provision
                  for loan losses
              
              
              120,000
              
              
              60,000Gain
                  on sale of loans
              
              
              (72,085
              )
              
              (54,892
              )Deferred
                  taxes
              
              
              (276,685
              )
              
              (417,363
              )Loans
                  originated for sale
              
              
              (5,136,220
              )
              
              (3,925,324
              )Proceeds
                  from sale of loans
              
              
              5,783,115
              
              
              4,086,243(Gain)
                  loss on sale of foreclosed asset
              
              
              (26,540
              )
              
              21,118Change
                  in:Accrued
                  interest receivable
              
              
              139,239
              
              
              (71,564
              )Other
                  assets
              
              
              (228,552
              )
              
              (236,180
              )Accrued
                  interest payable and other liabilities
              
              
              311,408
              
              
              157,086Net
                  cash from operating activities
              
              
              279,444
              
              
              (846,627
              )**Cash
                  flows from investing activities:**Net
                  change in loans
              
              
              (6,199,104
              )
              
              (8,734,001
              )Proceeds
                  from sale of foreclosed asset
              
              
              174,143
              
              
              —Principal
                  repayments from securities available-for-sale
              
              
              2,098,927
              
              
              2,218,411Principal
                  repayments from securities held-to-maturity
              
              
              44,220
              
              
              89,202Purchases
                  of premises and equipment
              
              
              (37,062
              )
              
              (1,102,912
              )Net
                  cash from investing activities
              
              
              (3,918,876
              )
              
              (7,529,300
              )**Cash
                  flows from financing activities:**Net
                  change in deposits
              
              
              3,380,246
              
              
              313,680Proceeds
                  from Federal Home Loan Bank borrowings
              
              
              6,000,000
              
              
              34,100,000Repayments
                  of Federal Home Loan Bank borrowings
              
              
              (5,624,792
              )
              
              (26,929,372
              )Net
                  change in advance payments from borrowers for taxes and insurance
              
              
              (10,370
              )
              
              53,648Net
                  cash from financing activities
              
              
              3,745,084
              
              
              7,537,956Increase
                  in cash and cash equivalents
              
              
              105,652
              
              
              (837,971
              )Cash
                  and cash equivalents, beginning of period
              
              
              9,482,234
              
              
              4,092,931Cash
                  and cash equivalents, end of period
              
              $
              9,587,886
              
              $
              3,254,960**Supplemental
                  cash flow information:**Interest
                  paid on deposits and borrowings
              
              $
              3,264,421
              
              $
              3,155,253**Supplemental
                  noncash disclosure:**Common
                  stock in ESOP subject to contingent repurchase obligation
              
              $
              162,080
              
              $
              131,318Transfer
                  of loans to foreclosed real estate
              
              $
              64,704
              
              $
              82,900*See
                  Notes to the Unaudited Consolidated Financial
                  Statements*
 
 4




**EQUITABLE
        FINANCIAL CORP.**
 **Notes
        to the Unaudited Consolidated Financial Statements**
 **December
        31** **,
        2007**
 
 **(1)**
              **Basis
                  of Presentation**
 
 The
        unaudited consolidated financial statements as of and for the period ended
        December 31, 2007 include the accounts of Equitable Financial Corp. (“Equitable
        Financial” or the “Company”) and its wholly owned subsidiary, Equitable Bank
        (the “Bank”). The Company, through the Bank, operates in a single business
        segment, providing traditional banking services through its office network.
 
 The
        accompanying consolidated financial statements have not been audited by
        independent auditors. All significant intercompany accounts and transactions
        have been eliminated in consolidation. All adjustments that are, in the opinion
        of management, necessary for the fair presentation of the interim financial
        statements have been included. Such adjustments were of a normal recurring
        nature. The unaudited consolidated financial statements have been prepared
        in
        accordance with U.S. generally accepted accounting principles for interim
        financial information in accordance with instructions to Form 10-QSB and
        Article
        10 of Regulation S-X promulgated by the Securities and Exchange Commission
        and,
        therefore, do not include all of the information and notes required for complete
        audited financial statements. The unaudited consolidated financial statements
        should be read in conjunction with the audited consolidated financial statements
        and notes thereto included in our Annual Report on Form 10-KSB for the year
        ended June 30, 2007, which was filed with the Securities and Exchange Commission
        on September 28, 2007. The results of operations for the three and six months
        period ended December 31, 2007 are not necessarily indicative of the results
        that may be expected for the entire year or any other interim period.
 
 In
        preparing financial statements in conformity with U.S. generally accepted
        accounting principles, management is required to make estimates and assumptions
        that affect the reported amounts of assets and liabilities and the disclosure
        of
        contingent assets and liabilities at the date of the financial statements
        and
        income and expenses during the reporting period. Actual results could differ
        significantly from those estimates. Material estimates that are particularly
        susceptible to significant change in the near term relate to determination
        of
        the allowance for loan losses, deferred tax valuation and the fair values
        of
        financial instruments.
 
 Certain
        prior period amounts have been reclassified to correspond with the current
        period presentations.
 
 **(2)**
              **Critical
                  Accounting Policies**
 
 *Allowance
        for loan losses* .
        The
        allowance for loan losses is the amount estimated by management as necessary
        to
        cover probable incurred credit losses in the loan portfolio at the statement
        of
        financial condition date. The allowance is established through the provision
        for
        loan losses, which is charged to income. Determining the amount of the allowance
        for loan losses necessarily involves a high degree of judgment. Among the
        material estimates required to establish the allowance are the following:
        loss
        exposure at default; the amount and timing of future cash flows on impacted
        loans; value of collateral; and determination of loss factors to be applied
        to
        the various elements of the portfolio. All of these estimates are susceptible
        to
        significant change. Management reviews the level of the allowance on a quarterly
        basis and establishes the provision for loan losses based upon an evaluation
        of
        the portfolio, past loss experience, current economic conditions and other
        factors related to the collectibility of the loan portfolio. Although we
        believe
        that we use the best information available to establish the allowance for
        loan
        losses, future adjustments to the allowance may be necessary if economic
        conditions differ substantially from the assumptions used in making the
        evaluation. In addition, the Office of Thrift Supervision, as an integral
        part
        of its examination process, periodically reviews our allowance for loan losses
        and may require us to recognize adjustments to the allowance based on its
        judgments about information available to it at the time of its examination.
        A
        large loss could deplete the allowance and require increased provisions to
        replenish the allowance, which would negatively affect earnings.
 
 *Mortgage
        Servicing Rights.* The
        estimated value of mortgage servicing rights are capitalized upon the sale
        of
        loans. The estimated value takes into consideration contractually known amounts,
        such as loan balance, term and interest rate. These estimates are impacted
        by
        loan prepayment speeds, servicing costs, and discount rates used to compute
        a
        present value of the cash flow stream. Changes in these estimates impact
        fair
        value and could require the creation of a valuation allowance or recovery.
        The
        fair value of mortgage servicing rights is highly sensitive to changes in
        assumptions. Changes in prepayment speed assumptions have the most significant
        impact on the fair value of mortgage servicing rights. Generally, as interest
        rates decline, prepayments accelerate with increased refinance activity,
        which
        results in a decrease in the fair value of mortgage servicing rights. As
        interest rates rise, prepayments generally slow, which results in an increase
        in
        the fair value of mortgage servicing rights. All estimates are reviewed for
        reasonableness on a quarterly basis and adjusted as necessary to reflect
        current
        and anticipated market conditions. Thus, any measurement of fair value is
        limited by the conditions existing and the assumptions utilized as of a
        particular point in time, and those assumptions may not be appropriate if
        applied at a different point in time.
 
 5
 **(3)**
              **Earnings
                  Per Share**
 
 Basic
        earnings (loss) per share is computed by dividing income available to common
        stockholders by the weighted average number of common stock outstanding for
        the
        period. Weighted
        average common shares outstanding during the period includes allocated and
        committed-to-be-released employee stock ownership plan shares. D iluted
        earnings (loss) per share shows the dilutive effect, if any, of additional
        common shares issuable under stock options. The Company has no common stock
        equivalents; consequently, basic and diluted earnings (loss) per share are
        the
        same.
 
 **Three
                    Months Ended**
                
                **Six
                    Months Ended****December
                    31,**
                
                **December
                    31,****2007**
                
                **2006**
                
                **2007**
                
                **2006**Net
                    (loss)
                
                $
                (169,116
                )
                $
                (351,927
                )
                $
                (430,254
                )
                $
                (625,150
                )Weighted
                    average shares outstanding for the period
                
                
                3,121,605
                
                
                3,177,152
                
                
                3,120,470
                
                
                3,176,017(Loss)
                    per share
                
                $
                (0.05
                )
                $
                (0.11
                )
                $
                (0.14
                )
                $
                (0.20
                )
  **(4)**
              **Investment
                  and mortgage-backed
                  securities**
 
 The
        carrying value, gross unrealized gains and losses and fair value of investment
        and mortgage-backed securities by major security category at December 31,
        2007,
        and June 30, 2007 are as follows:
 
 **December
                    31, 2007****Amortized
                    Cost**
                
                **Gross
                    Unrealized Gains**
                
                **Gross
                    Unrealized Losses**
                
                **Fair
                    Value**Available
                    for sale:Mortgage-backed
                    securities
                
                $
                1,607,093
                
                $
                11,145
                
                $
                (41,289
                )
                $
                1,576,949U.S.
                    government-sponsored entity securities
                
                
                2,000,000
                
                
                155
                
                
                (2,645
                )
                
                1,997,510Municipal
                    obligations
                
                
                993,149
                
                
                6,085
                
                
                (1,430
                )
                
                997,804Total
                    investment and mortgage-backed securities, available for
                    sale
                
                $
                4,600,242
                
                $
                17,385
                
                $
                (45,364
                )
                $
                4,572,263
  **June
                    30, 2007****Amortized
                    Cost**
                
                **Gross
                    Unrealized Gains**
                
                **Gross
                    Unrealized Losses**
                
                **Fair
                    Value**Available
                    for sale:Mortgage-backed
                    securities
                
                $
                1,724,293
                
                $
                10,494
                
                $
                (64,497
                )
                $
                1,670,290U.S.
                    government-sponsored entity securities
                
                
                3,985,000
                
                
                —
                
                
                (43,736
                )
                
                3,941,264Municipal
                    obligations
                
                
                993,012
                
                
                —
                
                
                (20,292
                )
                
                972,720Total
                    investment and mortgage-backed securities, available for
                    sale
                
                $
                6,702,305
                
                $
                10,494
                
                $
                (128,525
                )
                $
                6,584,274
  Management
        believes that all unrealized losses as of December 31, 2007, were
        market-related, with no impairments. The unrealized losses are believed to
        be
        due to movements in interest rates and temporary in nature. As of December
        31,
        2007, we had the ability and management intent to hold these securities until
        a
        market price recovery or maturity. ****
 
 6
 **(5)**
              **Loan
                  Portfolio Composition**
 
 We
        originate commercial (including agriculture), consumer, one-to four-family
        residential, multi-family and non-residential real estate and construction
        loans. Recently, we have increased our emphasis on originating non-residential
        real estate, construction and commercial loans.
 
 The
        following table sets forth the composition of our loan portfolio at the dates
        indicated.
  **December
                    31, 2007**
                
                **June
                    30, 2007****Amount**
                
                **Percent**
                
                **Amount**
                
                **Percent****(Dollars
                    in thousands)**Real
                    estate-mortgage:One-to
                    four-family
                
                $
                63,550
                
                
                39.9
                %
                $
                65,266
                
                
                42.4
                %Multi-family
                
                
                7,494
                
                
                4.7
                %
                
                6,874
                
                
                4.4
                %Nonresidential
                
                
                38,064
                
                
                23.9
                %
                
                37,019
                
                
                24.1
                %Total
                    real estate-mortgage loans
                
                
                109,108
                
                
                68.5
                %
                
                109,159
                
                
                70.9
                %Construction
                
                
                3,868
                
                
                2.4
                %
                
                4,810
                
                
                3.1
                %Commercial
                
                
                29,087
                
                
                18.2
                %
                
                24,154
                
                
                15.7
                %Consumer:Home
                    equity
                
                
                13,457
                
                
                8.4
                %
                
                12,323
                
                
                8.0
                %Other
                    consumer
                
                
                3,954
                
                
                2.5
                %
                
                3,513
                
                
                2.3
                %Total
                    consumer loans
                
                
                17,411
                
                
                10.9
                %
                
                15,836
                
                
                10.3
                %Total
                    loans
                
                
                159,474
                
                
                100.0
                %
                
                153,959
                
                
                100.0
                %Deferred
                    loan origination costs, net
                
                
                498
                
                
                
                
                
                428Allowance
                    for loan losses
                
                
                (1,140
                )
                
                
                
                
                (1,057
                )Loans,
                    net
                
                $
                158,832
                
                
                
                
                $
                153,330
  **(6)**
              **Allowance
                  for Loan Losses**
 
 The
        allowance for loan losses is a valuation allowance for probable incurred
        credit
        losses in the loan portfolio. We evaluate the allowance for loan losses on
        a
        quarterly basis. When additional allowances are necessary, a provision for
        loan
        losses is charged to earnings.
 
 The
        following table summarizes the activity in the provision for loan losses
        for the
        three and six months ended December 31, 2007 and 2006.
 
 **Three
                    Months Ended**
                
                **Six
                    Months Ended****December
                    31,**
                
                **December
                    31,****2007**
                
                **2006**
                
                **2007**
                
                **2006****(Dollars
                    in thousands)**
                
                **(Dollars
                    in thousands)**Allowance
                    at beginning of period
                
                $
                1,103
                
                $
                955
                
                $
                1,057
                
                $
                926Provision
                    for loan losses
                
                
                60
                
                
                30
                
                
                120
                
                
                60Charge-offs
                
                
                (24
                )
                
                (57
                )
                
                (50
                )
                
                (58
                )Recoveries
                
                
                1
                
                
                -
                
                
                13
                
                
                -Allowance
                    at end of period
                
                $
                1,140
                
                $
                928
                
                $
                1,140
                
                $
                928Allowance
                    to nonaccrual loans
                
                
                63.2
                %
                
                416.1
                %
                
                63.2
                %
                
                416.1
                %Allowance
                    to total loans outstanding at the end of the period
                
                
                0.7
                %
                
                0.6
                %
                
                0.7
                %
                
                0.6
                %Net
                    charge-offs to average loans outstanding during the period
                
                
                0.0
                %
                
                0.0
                %
                
                0.0
                %
                
                0.0
                %
  **(7)**
              **Deposits**
 
 Our
        primary source of funds is our deposit accounts, which are comprised of
        noninterest-bearing accounts, interest-bearing NOW accounts, money market
        accounts, savings accounts and certificates of deposit.
 
 7
  The
        following table sets forth the balances of our deposit products at the dates
        indicated.
  **December
                    31, 2007**
                
                **June
                    30, 2007****Amount**
                
                **Percent**
                
                **Amount**
                
                **Percent****(Dollars
                    in thousands)**Noninterest-bearing
                    accounts
                
                $
                8,554
                
                
                6.5
                %
                $
                6,466
                
                
                5.1
                %Interest-bearing
                    NOW
                
                
                13,149
                
                
                10.0
                %
                
                12,424
                
                
                9.7
                %Money
                    market
                
                
                17,480
                
                
                13.3
                %
                
                14,317
                
                
                11.2
                %Savings
                    accounts
                
                
                3,872
                
                
                3.0
                %
                
                4,398
                
                
                3.4
                %Certificates
                    of deposit
                
                
                88,070
                
                
                67.2
                %
                
                90,140
                
                
                70.6
                %Total
                
                $
                131,125
                
                
                100.0
                %
                $
                127,745
                
                
                100.0
                %
 
 **(8)**
              **Employee
                  Stock Ownership Plan**
 
 On
        November 8, 2005, the Company adopted an employee stock ownership plan (the
        “ESOP”) for the benefit of substantially all employees. The ESOP borrowed
        approximately $1.3 million from the Company and used those funds to acquire
        129,262 shares of the Company’s common stock in connection with the Bank’s
        reorganization at a price of $10.00 per share.
 
 Shares
        purchased by the ESOP with the loan proceeds are held in a suspense account
        and
        are allocated to ESOP participants on a pro rata basis as principal and interest
        payments are made by the ESOP to the Company. The loan is secured by shares
        purchased with the loan proceeds and will be repaid by the ESOP with funds
        from
        the Company’s discretionary contributions to the ESOP and earnings on ESOP
        assets. Annual principal and interest payments of approximately $145,000
        are to
        be made by the ESOP.
 
 We
        account for our ESOP in accordance with Statement of Position 93-6, *Employers’
        Accounting for Employee Stock Ownership Plans* .
        Accordingly, as shares are committed to be released from collateral, we report
        employee compensation expense equal to the average market price of the shares
        and the shares become outstanding for earnings per share (“EPS”) computations.
        Dividends on allocated ESOP shares reduce retained earnings; dividends on
        unearned ESOP shares reduce accrued interest.
 
 Because
        participants may require the Company to purchase their ESOP shares upon
        termination of their employment, the appraised fair value of all earned and
        allocated ESOP shares may become a liability.
  **For
                    the Three Months**
                
                **For
                    the Six Months****Ended
                    December 31,**
                
                **Ended
                    December 31,****2007**
                
                **2006**
                
                **2007**
                
                **2006**ESOP
                    compensation expense
                
                $
                18,168
                
                $
                26,684
                
                $
                39,947
                
                $
                47,622ESOP
                    shares allocated to employees
                
                
                2,271
                
                
                2,271
                
                
                4,542
                
                
                4,542ESOP
                    shares allocated in prior periods
                
                
                17,989
                
                
                8,905
                
                
                15,718
                
                
                6,634ESOP
                    shares unallocated
                
                
                109,002
                
                
                118,086
                
                
                109,002
                
                
                118,086Fair
                    value of ESOP shares unallocated
                
                $
                872,016
                
                $
                1,387,511
                
                $
                872,016
                
                $
                1,387,511
  **(9)**
              **Equity
                  Incentive Plan**
 
 In
        November 2006, the Company’s stockholders approved the Equitable Financial Corp.
        2006 Equity Incentive Plan (the “Plan”). The Plan provides for the grant of
        options and stock awards to directors, officers, and employees of the Company.
        Under the terms of the Plan, 226,208 shares of the Company’s common stock were
        reserved for issuance. Of the 226,208 shares of common stock, 161,577 shares
        were reserved for issuance upon the exercise of stock options and 64,631
        shares
        were registered for restricted stock awards. As of December 31, 2007 no options
        or stock awards had been granted.
 
 When
        the
        Company commences the restricted stock award program, compensation expense
        will
        be recognized over the vesting period of the shares based on the market value
        of
        the Company’s common stock at the issue date. The unamortized cost of shares not
        yet vested is reported as a reduction of stockholders’ equity. No compensation
        expense had been recorded pertaining to the Plan as of December 31, 2007
        as the
        Company had not implemented the stock award program. At December 31, 2007,
        the
        Company had purchased 64,631 shares of Treasury stock for the restricted
        stock
        awards program for approximately $695,000.
  8
  **(10)**
              **Income
                  Taxes**
 
 The
        Company adopted the provisions of Financial Accounting Standards Board (“FASB”)
        Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”),
        effective July 1, 2007. The Interpretation provides clarification on accounting
        for uncertainty in income taxes recognized in an enterprise’s financial
        statement in accordance with FASB Statement No. 109, “Accounting for Income
        Taxes.” The Interpretation prescribes a recognition threshold and measurement
        attribute for the financial statement recognition and measurement of a tax
        position taken or expected to be taken in a tax return. As a result of the
        Company’s evaluation of the implementation of FIN 48, no significant income tax
        uncertainties were identified. Therefore, the Company recognized no adjustment
        for unrecognized income tax benefits during the three and six months ended
        December 31, 2007. Corporate tax returns for the years 2004 through 2007
        remain
        open to examination by taxing authorities.
 
 **(11)**
              **Recent
                  Accounting Pronouncements**
 
 In
        September 2006, the FASB issued FASB Statement No. 157, “Fair Value
        Measurements,” to provide guidance on how to measure fair value, which would
        apply broadly to financial and non-financial assets and liabilities that
        are
        measured at fair value under other authoritative accounting pronouncements.
        The
        statement defines fair value, provides a hierarchy that prioritizes inputs
        that
        should be used in valuation techniques used to measure fair value, and expands
        current disclosures about the use of fair value to measure assets and
        liabilities. The disclosures focus on the methods used for the measurements
        and
        their effect on earnings and would apply whether the assets were measured
        at
        fair value in all periods, such as trading securities, or in only some periods,
        such as for impaired assets. A transition adjustment would be recognized
        as a
        cumulative-effect adjustment to beginning retained earnings for the fiscal
        year
        in which the statement is initially adopted. This adjustment is measured
        as the
        difference between the carrying amounts and the fair values of those financial
        instruments at the date of adoption. The statement is effective for fiscal
        years
        beginning after November 15, 2007 (or January 1, 2008 for calendar-year
        companies) and interim periods within those fiscal years. The fair value
        disclosures required by this statement will be effective for the first interim
        period in which the statement is adopted. The Company is currently evaluating
        the impact of the statement on its financial position, results of operations
        and
        liquidity.
 
 In
        September 2006, the Emerging Issues Task Force (“EITF”) reached a final
        consensus 06-04 “Accounting for Deferred Compensation and Postretirement Benefit
        Aspects of Endorsement Split-Dollar Life Insurance Arrangements.” The consensus
        stipulates that an agreement by an employer to share a portion of the proceeds
        of a life insurance policy with an employee during the postretirement period
        is
        a postretirement benefit arrangement required to be accounted for under SFAS
        No.
        106 or Accounting Principles Board Opinion (“APB”) No. 12, “Omnibus Opinion -
        1967.” The consensus concludes that the purchase of a split-dollar life
        insurance policy does not constitute a settlement under SFAS No. 106 and,
        therefore, a liability for the postretirement obligation must be recognized
        under SFAS No. 106 if the benefit is offered under an arrangement that
        constitutes a plan or under APB No. 12 if it is not part of a plan. Issue
        06-04
        is effective for annual or interim reporting periods beginning after December
        15, 2007. The Company has endorsement split-dollar life insurance policies
        and
        is currently assessing the financial statement impact of implementing EITF
        06-04.
  In
        February 2007, FASB issued SFAS No. 159, “The Fair Value Option for Financial
        Assets and Financial Liabilities-Including an amendment of FASB Statement
        No.
        115” (“SFAS 159”).  SFAS 159 expands the use of fair value accounting but
        does not affect existing standards which require assets and liabilities to
        be
        carried at fair value.  Under SFAS 159, a company may elect to use fair
        value to measure accounts and loans receivable, available-for-sale and
        held-to-maturity securities, equity method investments, accounts payable,
        guarantees, issued debt and other eligible financial instruments.  SFAS 159
        is effective for fiscal years beginning after November 15, 2007. The Company
        is
        in the process of determining the effects if any this statement will have
        on its
        financial condition, results of operations and liquidity.
 
 In
        March
        2007, the Emerging Issues Task Force (“EITF”) reached a final conclusion on
        Issue 06-10, “Accounting for Collateral Assignment Split-Dollar Life Insurance
        Arrangement.” The consensus concludes that a liability must be recognized for
        the postretirement obligation related to a collateral assignment split-dollar
        life insurance arrangement in accordance with SFAS No. 106 or APB No. 12.
        Any
        assets should be recognized and measured based on the nature and substance
        of
        the collateral assignment split-dollar life insurance arrangement. The effective
        date of EITF 06-10 is for fiscal years beginning after December 15, 2007.
        The
        Company is currently assessing the financial statement impact of implementing
        EITF 06-10.
 
 9
 In
        December 2007, FASB issued SFAS No. 141(revised), “Business Combinations”. The
        Statement establishes principles and requirements for how an acquirer recognizes
        and measures tangible assets acquired, liabilities assumed, goodwill and
        any
        noncontrolling interests and identifies related disclosure requirements for
        business combinations. Measurement requirements will result in all assets,
        liabilities, contingencies and contingent consideration being recorded at
        fair
        value on the acquisition date, with limited exceptions. Acquisition costs
        and
        restructuring costs will generally be expensed as incurred. This Statement
        is
        effective for business combinations for which the acquisition date is on
        or
        after the beginning of the first annual reporting period beginning on or
        after
        December 15, 2008.
 
 In
        December 2007, FASB issued SFAS No. 160, “Noncontrolling Interests in
        Consolidated Financial Statements - an amendment of ARB No. 51”. The Statement
        establishes accounting and reporting standards for noncontrolling interests
        in a
        subsidiary and for the deconsolidation of a subsidiary. Minority interests
        will
        be recharacterized as noncontrolling interests and classified as a component
        of
        equity. It also establishes a single method of accounting for changes in
        a
        parent’s ownership interest in a subsidiary and requires expanded disclosures.
        This Statement is effective for fiscal years beginning on or after December
        15,
        2008. The Company does not expect the adoption of this Statement will have
        a
        material impact on its financial position, results of operations, and
        liquidity.
 
 
 **(12)**
              **Subsequent
                  Events**
 
 Subsequent
        to December 31, 2007, the Company repurchased 16,718 shares of the Company’s
        outstanding common stock. The cost of these shares was approximately $132,745.
        On October 17, 2007, the Company announced that the Company's Board of Directors
        approved the repurchase of up to 59,355 shares of the Company's outstanding
        common stock, which is 4.0% of the outstanding shares not held by Equitable
        Financial MHC.
 
 On
        January 11, 2008, the Company sold its entire portfolio of tax free municipal
        bonds at a price approximating book value.
 
 **Item
        2.   Management’s Discussion and Analysis or Plan of
        Operation**
 
 Management’s
        discussion and analysis of the Company’s financial condition and results of
        operations at and for the three and six months ended December 31, 2007 and
        2006
        is intended to assist in understanding the financial condition and results
        of
        operations of the Company. The information contained in this section should
        be
        read in conjunction with the Unaudited Consolidated Financial Statements
        and the
        notes and tables thereto, appearing in Part I, Item 1 of this
        report.
 
 **Forward-Looking
        Statements**
 
 This
        quarterly report contains forward-looking statements that are based on
        assumptions and may describe future plans, strategies and expectations of
        Equitable Financial MHC, Equitable Financial and Equitable Bank. These
        forward-looking statements are generally identified by use of the words
“believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar
        expressions.
 
 Equitable
        Financial MHC, Equitable Financial and Equitable Bank’s ability to predict
        results or the actual effect of future plans or strategies is inherently
        uncertain. Factors which could have a material adverse effect on the operations
        of Equitable Financial and its subsidiary include, but are not limited to,
        changes in interest rates, national and regional economic conditions,
        legislative and regulatory changes, monetary and fiscal policies of the U.S.
        government, including policies of the U.S. Treasury and the Federal Reserve
        Board, the quality and composition of the loan or investment portfolios,
        demand
        for loan products, deposit flows, competition, demand for financial services
        in
        Equitable Financial and Equitable Bank’s market area, changes in real estate
        market values in Equitable Financial and Equitable Bank’s market area, changes
        in relevant accounting principles and guidelines and inability of third party
        service providers to perform.
 
 10
 These
        risks and uncertainties should be considered in evaluating forward-looking
        statements and undue reliance should not be placed on such statements. Except
        as
        required by applicable law or regulation, Equitable Financial does not
        undertake, and specifically disclaims any obligation, to release publicly
        the
        result of any revisions that may be made to any forward-looking statements
        to
        reflect events or circumstances after the date of the statements or to reflect
        the occurrence of anticipated or unanticipated events.
 
 **General**
 
 The
        Company is headquartered in Grand Island, Nebraska and is a community-oriented
        financial institution dedicated to serving the financial services needs of
        consumers and businesses within our market areas, including North Platte
        and
        Omaha. The Bank is engaged primarily in the business of attracting deposits
        from
        the general public and using such funds to originate commercial (including
        agriculture), consumer, one-to four-family residential, multi-family and
        non-residential real estate and construction loans.
 
 The
        Federal Deposit Insurance Corporation, through the Deposit Insurance Fund,
        insures the Bank’s deposit accounts up to the applicable legal limits. The Bank
        is a member of the Federal Home Loan Bank System.
 
 **Statement
        of Financial Condition Analysis**
 
 ***Overview*** **.** Total
        assets at December 31, 2007 were $186.6 million, an increase of $3.8 million
        or
        2.1% from total assets of $182.8 million at June 30, 2007. Total liabilities
        at
        December 31, 2007 were $163.9 million, compared to $159.8 million at June
        30,
        2007, an increase of $4.1 million or 2.6%. Stockholders’ equity at December 31,
        2007 was $22.7 million compared to $23.0 million at June 30, 2007, a decrease
        of
        $300,000 or 1.3%.
 
 ***Loans.*** ** We
        originate commercial (including agriculture), consumer, one-to four-family
        residential, multi-family and non-residential real estate and construction
        loans. Recently, we have increased our emphasis on originating non-residential
        real estate, construction and commercial loans. Loans, net increased $5.5
        million, or 3.6%, to $158.8 million at December 31, 2007 compared to $153.3
        million at June 30, 2007. This increase was primarily due to commercial loans
        increasing $4.9 million and consumer home equity loans increasing $1.1 million.
        This activity is in line with our continued emphasis on originating
        non-residential real estate, construction and commercial loans.
 
 ***Non-performing
        Assets.*** The
        following table provides information with respect to our non-performing assets
        at the dates indicated. The Company had no troubled debt restructurings during
        the quarter ended December 31, 2007. There were no accruing loans past due
        90
        days or more for the period ended December 31, 2007.
  **December
                    31,**
                
                **June
                    30,****2007**
                
                **2007****(Dollars
                    in thousands)**Non-accrual
                    loans:Real
                    estate-mortgage
                
                $
                657
                
                $
                466Commercial
                
                
                1,013
                
                
                —Consumer
                
                
                134
                
                
                3Total
                    non-accrual loans
                
                
                1,804
                
                
                469Foreclosed
                    assets, net
                
                
                —
                
                
                83Total
                    non-performing assets
                
                $
                1,804
                
                $
                552Total
                    non-accrual loans to total loans
                
                
                1.1
                %
                
                0.3
                %Total
                    non-accrual loans to total assets
                
                
                1.0
                %
                
                0.3
                %Total
                    non-performing assets to total assets
                
                
                1.0
                %
                
                0.3
                %
 
 Non-accrual
        loans increased $1.3 million to $1.8 million at December 31, 2007, compared
        to
        $469,000 at June 30, 2007. The increase in real estate-mortgage non-accrual
        loans is largely attributable to one loan becoming over 90 days past due
        at
        December 31, 2007. These loans are secured by residential real estate with
        a
        value exceeding the loan balance. The Bank expects to receive the full balance
        of each of the loans. The increase in non-accrual commercial loans is largely
        due to one loan with a balance of $900,000. This loan will be restructured
        after
        December 31, 2007. The increase in consumer loans is primarily due to one
        customer with a loan balance of $122,000. This loan is a home equity loan
        that
        is secured by residential real estate. The customer is awaiting approval
        to sell
        the house. In the event the customer does not sell the house, the Bank will
        foreclose.
 
 11
 During
        the six months ended December 31, 2007 we sold two foreclosed assets for
        $174,000, the book value of these assets was $148,000. One house was foreclosed
        on prior to the current year with a fair value of $83,000 and the other house
        was foreclosed on during the six month period ending December 31, 2007 with
        a
        fair value of $65,000.
 
 ***Securities.*** Our
        securities portfolio consists primarily of U.S. Government-sponsored entity
        securities and mortgage-backed securities. Securities available-for-sale
        decreased $2.0 million, or 30.6%, between June 30, 2007 and December 31,
        2007.
        The decrease was the result of maturities and repayments in the portfolio
        of
        $2.1 million and an increase in the market value of the portfolio of $90,000.
        Securities held-to-maturity decreased $45,000, or 6.4%, between June 30,
        2007
        and December 31, 2007. This decrease was the result of repayments. The Company
        evaluates its securities with significant declines in fair value on a quarterly
        basis to determine whether they should be considered temporarily or other
        than
        temporarily impaired. The unrealized losses on investments is attributable
        to
        changes in interest rates, rather than credit quality, and the Company has
        the
        ability and management intent to hold these securities until a market price
        recovery or maturity.
 
 ***Deposits.*** Our
        primary source of funds is our deposit accounts, which are comprised of
        non-interest-bearing accounts, interest-bearing NOW accounts, money market
        accounts, savings accounts and certificates of deposit. Total deposits increased
        to $131.1 million from $127.7 million during the six months ended December
        31,
        2007, an increase of $3.4 million or 2.7%. The increase was partially due
        to an
        increase in core deposits of $5.4 million resulting from an increase in
        non-interest business checking accounts of $2.2 million from new customers
        and
        an increase in money market accounts of $3.2 million. The increase in money
        market accounts was primarily due to two existing customers depositing money
        with the Bank due to the sale of business ventures. These deposits are highly
        volatile and not likely to remain with the Company for an extended period
        of
        time as we anticipate the money will be transferred into investments with
        greater returns. Offsetting the increase in core deposits was a decrease
        in
        certificates of deposit of $2.1 million. This decrease in certificates was
        primarily due to a decrease in brokered certificates of $2.0 million. We
        continue to utilize brokered certificates to reduce the overall
        cost-of-funds.
 
 ***Borrowings*** .
        We
        utilize borrowings from the Federal Home Loan Bank of Topeka to supplement
        our
        supply of funds for loans and investments. Federal Home Loan Bank borrowings
        increased $375,000 to $31.0 million at December 31, 2007 from $30.6 million
        at
        June 30, 2007. The advances outstanding at December 31, 2007 mature in 2008
        through 2015.
 
 **Results
        of Operations for the Three and Six Months Ended December 31, 2007 and
        2006**
 
 ***Overview.*** We
        recorded a net loss of $169,000 during the three months ended December 31,
        2007,
        compared to a net loss of $352,000 during the three months ended December
        31,
        2006, a decrease in net loss of $183,000. Our net loss for the six months
        ended
        December 31, 2007 was $430,000 compared to $625,000 at December 31, 2006,
        a
        decrease in net loss of $195,000. The decrease in our net loss is largely
        due to
        an increase in non-interest income of $121,000 for the three month period
        and
        $315,000 for the six month period. Additionally, a decrease in non-interest
        expenses for the three months ended December 31, 2007 of $152,000 contributed
        to
        the decrease in net loss. For the six months end December 31, 2007, we incurred
        an increase in the provision for loan losses of $60,000 and non-interest
        expenses of $33,000 that offset the increase from non-interest
        income.
  ***Net
        Interest Income.*** ****** Net
        interest income is the most significant component of our earnings and consists
        of interest income on interest-earning assets offset by interest expense
        on
        interest-bearing liabilities. Changes in net interest income result from
        changes
        in volume, net interest spread and net interest margin. Volume relates to
        the
        level of interest-earning assets and interest-bearing liabilities. Net interest
        spread refers to the difference between the yield on interest-earning assets
        and
        the rate paid on interest-bearing liabilities. Net interest margin refers
        to net
        interest income divided by total interest-earning assets and is influenced
        by
        the level and mix of interest-earning assets and interest-bearing liabilities.
  Net
        interest income before provision for loan losses totaled $1.0 million for
        the
        three months ended December 31, 2007; an increase of $100,000, compared to
        $955,000 for the three months ended December 31, 2006. The increase in net
        interest income was primarily attributable to a $23.0 million increase in
        the
        average balance of commercial loans which hold a higher interest rate than
        the
        one-to four family residential real estate loans that were typically on our
        portfolio. For the six months ended December 31, 2007, our net interest income
        before provision for loan losses totaled $2.0 million, an increase of $100,000,
        compared to $1.9 million for the six months ended December 31, 2006. This
        increase in net interest income is also attributable to the increase in average
        balance of commercial loans, which we continue to emphasize and which on
        average
        carry a higher interest rate than mortgage loans. However, this increase
        was
        partially offset by an increase in interest expense from deposit accounts
        due to
        an increase in the average balance of high yield money market accounts of
        $6.0
        million.
  12
  The
        following table summarizes average balances and average yield and costs for
        the
        three months ended December 31, 2006.
 **Three
                    Months Ended December 31,****2007**
                
                
                **2006****Average
                    Balance**
                
                **Interest
                    Income**
                
                **Yield/
                    Cost**
                
                
                **Average
                    Balance**
                
                **Interest
                    Income**
                
                **Yield/
                    Cost****(Dollars
                    in thousands)**Loans,
                    net
                
                $
                157,521
                
                $
                2,570
                
                
                6.53
                %
                
                $
                159,077
                
                $
                2,494
                
                
                6.27
                %Securities
                    and other
                
                
                12,774
                
                
                141
                
                
                4.42
                %
                
                
                11,114
                
                
                138
                
                
                4.97
                %Total
                    interest-bearing assets
                
                
                170,295
                
                
                2,711
                
                
                6.37
                %
                
                
                170,191
                
                
                2,632
                
                
                6.19
                %Total
                    interest-bearing deposits
                
                
                122,222
                
                
                1,289
                
                
                4.22
                %
                
                
                113,960
                
                
                1,173
                
                
                4.12
                %FHLB
                    borrowings
                
                
                28,834
                
                
                384
                
                
                5.33
                %
                
                
                36,972
                
                
                504
                
                
                5.45
                %Total
                    interest-bearing liabilities
                
                $
                151,056
                
                $
                1,673
                
                
                4.43
                %
                
                $
                150,932
                
                $
                1,677
                
                
                4.44
                %Interest
                    rate spread
                
                
                
                
                
                
                
                
                1.94
                %
                
                
                
                
                
                
                
                
                1.75
                %Net
                    interest margin
                
                
                
                
                
                
                
                
                2.44
                %
                
                
                
                
                
                
                
                
                2.24
                %
 
 Interest
        rate spread increased during the three months ended December 31, 2007 by
        19
        basis points from 1.75% to 1.94%. This is primarily due to an increase of
        26
        basis points in the average yield for loans. The increase in yield on loans
        is
        due to our continuing emphasis on the non-residential real estate, commercial,
        and construction loans, which generally are based on higher rate indices
        than
        one-to four-family loans. The increases in these loan categories resulted
        in an
        increase in our net interest margin of 20 basis points.
  **Six
                    Months Ended December 31,****2007**
                
                
                **2006****Average
                    Balance**
                
                **Interest
                    Income**
                
                **Yield/
                    Cost**
                
                
                **Average
                    Balance**
                
                **Interest
                    Income**
                
                **Yield/
                    Cost****(Dollars
                    in thousands)**Loans,
                    net
                
                $
                154,816
                
                $
                5,061
                
                
                6.54
                %
                
                $
                156,496
                
                $
                4,874
                
                
                6.23
                %Securities
                    and other
                
                
                13,915
                
                
                326
                
                
                4.69
                %
                
                
                11,933
                
                
                290
                
                
                4.90
                %Total
                    interest-bearing assets
                
                
                168,731
                
                
                5,387
                
                
                6.39
                %
                
                
                168,429
                
                
                5,164
                
                
                6.13
                %Total
                    interest-bearing deposits
                
                
                122,273
                
                
                2,624
                
                
                4.29
                %
                
                
                112,668
                
                
                2,259
                
                
                4.01
                %FHLB
                    borrowings
                
                
                27,632
                
                
                741
                
                
                5.36
                %
                
                
                36,010
                
                
                963
                
                
                5.35
                %Total
                    interest-bearing liabilities
                
                $
                149,905
                
                $
                3,365
                
                
                4.49
                %
                
                $
                148,678
                
                $
                3,222
                
                
                4.33
                %Interest
                    rate spread
                
                
                
                
                
                
                
                
                1.90
                %
                
                
                
                
                
                
                
                
                1.80
                %Net
                    interest margin
                
                
                
                
                
                
                
                
                2.40
                %
                
                
                
                
                
                
                
                
                2.31
                %
  Interest
        rate spread increased during the six months ended December 31, 2007 by 10
        basis
        points from 1.80% to 1.90%. This is due to an increase of 31 basis points
        in the
        average yield for loans. The increase in yield on loans is due to our continuing
        emphasis on the non-residential real estate, commercial, and construction
        loans.
        The increase in the average yield on loans was offset by an increase in the
        average cost of funds for deposit accounts of 28 basis points. The increase
        in
        cost of funds was due to an increase in the average balance of high yield
        money
        market accounts. These changes resulted in an increase in our net interest
        margin of 9 basis points.
 
 13
 
 ***Provision
        for Loan Losses.*** The
        allowance for loan losses is a valuation allowance for probable incurred
        credit
        losses in the loan portfolio. We evaluate the allowance for loan losses on
        a
        quarterly basis. When additional allowances are necessary, a provision for
        loan
        loss is charged to earnings. During the quarter ended December 31, 2007 our
        evaluation resulted in a provision of $60,000 compared to $30,000 for the
        three
        months ended December 31, 2006. For the six months ended December 31, 2007
        the
        provision increased $60,000 to $120,000 compared to $60,000 at the six months
        ended December 31, 2006. The increased provisions are a result of the continuing
        change in the composition of loans from residential real estate to
        non-residential real estate and commercial loans. Based on our allowance
        evaluation, the Company did not see a marked deterioration in area economic
        indicators despite the appearance of national signs of distress. 
Additionally, the Company’s evaluation of qualitative factors did not yield any
        unusual signs of distress.
 
 ***Non-interest
        Income.***   During
        the quarter ended December 31, 2007 non-interest income increased $121,000
        from
        the comparable period in 2006. Service charges on deposit accounts increased
        by
        $72,000 as a result of our focus on reducing the amount of charges reversed
        for
        customers. Brokerage fee income increased $53,000 as a result of increased
        productivity in our investment departments. For the six months ended December
        31, 2007 non-interest income increased $315,000 from $648,000 to $963,000.
        This
        increase is also due to an increase in service charges on deposit accounts
        of
        $148,000 and brokerage fee income of $112,000. Additionally other income
        increased by $66,000. The primary reason for this increase was a referral
        fee of
        $60,000 received for one loan.
 
 ***Non-interest
        Expenses.***  Total
        non-interest expenses decreased $152,000 for the three months ended December
        31,
        2007, from the prior three month period ended December 31, 2006. Decreases
        in
        salaries and employee benefits of $70,000 in addition to $52,000 of net proceeds
        on the sale of foreclosed assets accounted for the majority of the decrease.
        Other significant changes include a $45,000 reduction in occupancy and equipment
        expenses that had been incurred in the comparable quarter as the Bank remodeling
        was completed. Additional decreases resulted in savings of $25,000 in
        advertising and public relations, $25,000 in supplies, telephone, postage
        and
        $14,000 in other expenses. These decreases were offset by an increase of
        $71,000
        in data processing fees.
 
 For
        the
        six months ended December 31, 2007 non-interest expenses increased $33,000
        from
        the six months ended December 31, 2006. During the six month period we incurred
        increases in salaries and employee benefits of $118,000, data processing
        fees of
        $130,000 and insurance and surety bond premiums of $56,000. These increases
        were
        the result of ongoing operational expense incurred in the continuing expansion
        of the company’s products, services and locations. These increases were offset
        by decreases of $54,000 in occupancy and equipment, $66,000 in advertising
        and
        public relations, $40,000 in supplies, telephone and postage, $13,000 in
        contributions and donations and other expenses of $40,000. Also offsetting
        the
        increases was the net proceeds of $48,000 on the sale of foreclosed assets.
 
 ***Income
        Taxes.*** The
        Company recorded a tax benefit of $112,000 during the three months ended
        December 31, 2007 compared to a tax benefit of $255,000 during the three
        months
        ended December 31, 2006. For the six months ended December 31, 2007, the
        Company
        recorded a tax benefit of $277,000 compared to a tax benefit of $384,000
        during
        the six months ended December 31, 2006. The tax benefit at December 31, 2007
        and
        2006 were calculated based on the tax items and the operating loss or income
        recorded during the respective quarters.
 
 **Liquidity
        and Capital Management**
 
 ***Liquidity
        Management.*** Liquidity is the ability to meet current and future financial obligations
        of a
        short-term nature. Our primary sources of funds consist of deposit in-flows,
        loan repayments, maturities and sales of securities, and Federal Home Loan
        Bank
        borrowings. While maturities and scheduled amortization of loans and securities
        are predictable sources of funds, deposit flows and loan prepayments are
        greatly
        influenced by general interest rates, economic conditions and
        competition.
 
 We
        regularly adjust our investments in liquid assets based upon our assessment
        of
        (1) expected loan demand, (2) expected deposit flows, (3) yields available
        on
        interest-earning deposits and securities and (4) the objectives of our
        asset/liability management policy.
 
 14
 Our
        most
        liquid assets are cash and cash equivalents. The levels of these assets depend
        on our operating, financing, lending and investing activities during any
        given
        period. At December 31, 2007, cash and cash equivalents totaled $9.6 million,
        an
        increase of $100,000 from June 30, 2007. Securities classified as
        available-for-sale whose market value exceeds our cost, which provide additional
        sources of liquidity, totaled $1.5 million at December 31, 2007. Total
        securities classified as available-for-sale were $4.6 million at December
        31,
        2007. Of this amount, $3.8 million were pledged to secure certain depository
        relationships, such as certificates of deposit and checking accounts held
        by
        various municipal entities and a charitable organization. In addition, at
        December 31, 2007, we had the ability to borrow a total of approximately
        $54.8
        million from the Federal Home Loan Bank of Topeka. On December 31, 2007,
        we had
        $31.0 million of borrowings outstanding. It is our intention to hold these
        advances to maturity. Additionally, the Company has the ability to borrow
        $5.0
        million from Wells Fargo and $4.4 million from Bankers Bank of the West.
        The
        balance in both of these lines of credit is zero at December 31, 2007. Future
        growth of our loan portfolio resulting from our expansion efforts may require
        us
        to borrow additional funds.
 
 At
        December 31, 2007, we had $24.5 million in loan commitments outstanding,
        which
        consisted of $1.9 million in mortgage loan commitments, $3.4 million in unused
        home equity lines of credit, and $196,000 in personal lines of credit and
        $18.9
        million in commercial lines of credit. Certificates of deposit due within
        one
        year of December 31, 2007 totaled $75.2 million, or 85.4%, of certificates
        of
        deposit. We believe the large percentage of certificates of deposit that
        mature
        within one year reflects the flat yield curve. If these maturing deposits
        do not
        remain with us, we will be required to seek other sources of funds, including
        other certificates of deposit and borrowings. Depending on market conditions,
        we
        may be required to pay higher rates on such deposits or other borrowings
        than we
        currently pay on the certificates of deposit due on or before December 31,
        2008.
        We believe, however, based on past experience that a significant portion
        of our
        certificates of deposit will remain with us. We have the ability to attract
        and
        retain deposits by adjusting the interest rates offered.
 
 ***Capital
        Management.*** We
        are
        subject to various regulatory capital requirements administered by the Office
        of
        Thrift Supervision, including a risk-based capital measure. The risk-based
        capital guidelines include both a definition of capital and a framework for
        calculating risk-weighted assets by assigning balance sheet assets and
        off-balance sheet items to broad risk categories. At December 31, 2007, we
        exceeded all of our regulatory capital requirements. We are considered “well
        capitalized” under regulatory guidelines.
 
 We
        also
        manage our capital for maximum stockholder benefit. The capital from our
        recently completed stock offering significantly increased our liquidity and
        capital resources. Over time, the initial level of liquidity will be reduced,
        as
        net proceeds from the stock offering are used for general corporate purposes,
        including the funding of lending activities. We may use capital management
        tools
        such as cash dividends and common stock repurchases.
 
 After
        December 31, 2007 the Company repurchased 14,718 shares of outstanding common
        stock for approximately $118,500. On October 17, 2007, the Company announced
        that the Company's Board of Directors approved the repurchase of up to 59,355
        shares of the Company's outstanding common stock, which is 4.0% of the
        outstanding shares not held by Equitable Financial MHC.
 
 **Off-Balance
        Sheet Arrangements**
 
 In
        the
        normal course of operations, we engage in a variety of financial transactions
        that, in accordance with U.S. generally accepted accounting principles, are
        not
        recorded in our financial statements. These transactions involve, to varying
        degrees, elements of credit, interest rate and liquidity risk. Such transactions
        are used primarily to manage customers’ requests for funding and take the form
        of loan commitments and lines of credit. We currently have no plans to engage
        in
        hedging activities in the future.
 
 For
        the
        six months ended December 31, 2007 and the year ended June 30, 2007, we did
        not
        engage in any off-balance sheet transactions reasonably likely to have a
        material effect on our financial condition, results of operations or cash
        flows.
 
 **Commitments**
 
 We
        currently lease our initial location in Omaha for $120,000
        annually.
  15
 **Item
        3.   Controls and Procedures**
 
 The
        Company’s management, including the Company’s principal executive officer and
        principal financial officer, have evaluated the effectiveness of the Company’s
“disclosure controls and procedures,” as such term is defined in Rule 13a-15(e)
        promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
        Act”). Based upon their evaluation, the principal executive officer and
        principal financial officer concluded that, as of the end of the period covered
        by this report, the Company’s disclosure controls and procedures were effective
        for the purposes of ensuring that the information required to be disclosed
        in
        the reports that the Company files or submits under the Exchange Act with
        the
        Securities and Exchange Commission (the “SEC”) (1) is recorded, processed,
        summarized and reported within the time periods specified in the SEC’s rules and
        forms, and (2) is accumulated and communicated to the Company’s management,
        including its principal executive and principal financial officers, as
        appropriate to allow timely decisions regarding required disclosure.
 
 **PART
        II. OTHER INFORMATION**
 
 **Item
        1.**  **Legal Proceedings**
 
 Equitable
        Financial is not involved in any pending legal proceedings. Equitable Bank
        is
        not involved in any pending legal proceedings other than routine legal
        proceedings occurring in the ordinary course of business. Such routine legal
        proceedings, in the aggregate, are believed by management to be immaterial
        to
        its financial condition, results of operations or cash flows.
 
 **Item
        2.**  **Unregistered Sales of Equity Securities and Use of
        Proceeds**
 
 The
        Company did not repurchase any of its common stock during the six months
        ended
        December 31, 2007. On October 17, 2007, the Company announced that the Company's
        Board of Directors approved the repurchase of up to 59,355 shares of the
        Company's outstanding common stock, which is 4.0% of the outstanding shares
        not
        held by Equitable Financial MHC.
 
 After
        December 31, 2007 the Company repurchased 14,718 shares of outstanding common
        stock for approximately $118,500.
 
 **Item
        3.**  **Defaults upon Senior Securities**
 
 Not
        Applicable.
 
 **Item
        4.**  **Submission of Matters to a Vote of Security Holders**
  The
        Annual Meeting of Shareholders of Equitable Financial was held on November
        20,
        2007. The results of the vote on the matters presented at the meeting are
        as
        follows:
 
 1.
              The
                  following individuals were elected as directors, each for the terms
                  set
                  forth below:
 
 *Nominees
        for Three-Year Terms*
 Votes
                    For
                
                Votes
                    WithheldRichard
                    L. Harbaugh
                
                
                2,724,617
                
                
                259,301Gary
                    L. Hedman
                
                
                2,730,606
                
                
                253,131Jonas
                    A. Proffitt, M.D.
                
                
                2,671,305
                
                
                261,300
 *Nominees
        for One-Year Terms*
 
 Votes
                    For
                
                Votes
                    WithheldVincent
                    J. Dugan
                
                
                2,730,606
                
                
                253,131Thomas
                    E. Gdowski
                
                
                2,698,352
                
                
                285,565
  2.
              The
                  appointment of McGladrey & Pullen, LLP as the Company’s independent
                  registered public accounting firm for the fiscal year ended June
                  30, 2008
                  was ratified by shareholders by the following
                  vote:
 For
                
                Against
                
                Abstain2,704,706
                
                169,700
                
                109,512
 
 16
 **Item
        5.**  **Other Information**
 
 None.
  **Item
        6.**  **Exhibits**
  3.1
              Charter
                  of Equitable Financial Corp. (1)
  3.2
              Bylaws
                  of Equitable Financial Corp. (1)
  4.0
              Stock
                  Certificate of Equitable Financial Corp.
                  (2)
  31.1
              Rule
                  13a-14(a)/15d-14(a) Certification of Chief Executive
                  Officer
  31.2
              Rule
                  13a-14(a)/15d-14(a) Certification of Chief Financial
                  Officer
  32.0
              Section
                  1350 Certification
  
 (1)
              Incorporated
                  by reference into this document from the Exhibits filed with the
                  Securities and Exchange Commission on the Quarterly Report on Form
                  10-QSB
                  on February 14, 2006.
  (2)
              Incorporated
                  by reference into this document from the Exhibits filed with the
                  Securities and Exchange Commission on the Registration Statement
                  on Form
                  SB-2, and any amendments thereto, Registration No. 333-126617.
  17
  **SIGNATURES**
 
 In
        accordance with the requirements of the Exchange Act, the registrant caused
        this
        report to be signed on its behalf by the undersigned thereunto duly
        authorized.
  EQUITABLE
                FINANCIAL CORP.Dated:
                February 13, 2008
              By:
              /s/
                Richard L. HarbaughRichard
                  L. Harbaugh
                President
                  and Chief Executive Officer
                (principal
                  executive officer)
  Dated:
                February 13, 2008
              By:
              /s/
                Kim E. MarcoKim
                  E. Marco
                Executive
                  Vice President and Chief Financial Officer
                (principal
                  financial and accounting officer)