**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 March 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 May
      14, 2007 there were 3,232,878 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 March 31, 2007 (Unaudited) and
                year
                ended June 30, 2006
            
            1Consolidated
                Statements of Operations for the three and nine months ended March
                31,
                2007 and 2006 (Unaudited)
            
            2Consolidated
                Statements of Stockholders’ Equity and Comprehensive Income for the nine
                months ended March 31, 2007 and 2006 (Unaudited)
            
            3Consolidated
                Statements of Cash Flows for the nine months ended March 31, 2007
                and 2006
                (Unaudited)
            
            4Notes
                to Consolidated Unaudited Financial Statements
            
            5Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            
            11Item
                3.
            Controls
                and Procedures
            
            19**PART
                II.****OTHER
                INFORMATION**Item
                1.
            Legal
                Proceedings
            
            20Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            20Item
                3.
            Defaults
                upon Senior Securities
            
            20Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            
            20Item
                5.
            Other
                Information
            
            21Item
                6.
            Exhibits
            
            21**Signatures**





i


**PART
      I. FINANCIAL INFORMATION**





**Item
      1. Financial Statements**




E QUITABLE
      FINANCIAL CORP.


Statements
      of Financial Condition





**March
                31,**
              **2007**
            
            **June
                30,**
              **2006****(Unaudited)****ASSETS**Cash
                and due from financial institutions
            
            $
            2,619,940
            
            $
            2,392,931Federal
                funds sold
            
            
            10,200,000
            
            
            1,700,000Cash
                and cash equivalents
            
            
            12,819,940
            
            
            4,092,931Securities
                available-for-sale, at fair value
            
            
            6,683,124
            
            
            9,429,663Securities
                held-to-maturity, fair value at March 31, 2007 -$740,438;
                and June 30, 2006-$888,342
            
            
            747,367
            
            
            915,184Federal
                Home Loan Bank stock, at cost
            
            
            2,413,600
            
            
            2,311,800Loans,
                net of allowance for loan losses of $989,776 at March 31,2007
                and $926,312 at June 30, 2006
            
            
            150,371,110
            
            
            153,408,146Premises
                and equipment, net
            
            
            6,947,744
            
            
            6,067,331Foreclosed
                assets, net
            
            
            291,900
            
            
            -Accrued
                interest receivable
            
            
            1,215,470
            
            
            1,153,751Other
                assets
            
            
            2,135,780
            
            
            1,382,255Total
                assets
            
            $
            183,626,035
            
            $
            178,761,061**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**LiabilitiesDepositsNoninterest-bearing
                deposits
            
            $
            6,372,372
            
            $
            5,748,057Interest-bearing
                deposits
            
            
            116,018,627
            
            
            116,173,516Total
                deposits
            
            
            122,390,999
            
            
            121,921,573Federal
                Home Loan Bank borrowings
            
            
            35,132,450
            
            
            30,604,426Advance
                payments from borrowers for taxes and insurance
            
            
            1,265,774
            
            
            893,846Accrued
                interest payable and other liabilities
            
            
            611,834
            
            
            246,540Common
                stock in ESOP subject to contingent repurchase obligation
            
            
            138,504
            
            
            61,033Total
                liabilities
            
            
            159,539,561
            
            
            153,727,418Commitments
                and contingenciesStockholders’
                equity:Preferred
                stock, $0.01 par value per share; authorized 1,000,000 shares, noshares
                are outstanding
            
            
            -
            
            
            -Common
                stock, $0.01 par value, 14,000,000 shares authorized; 3,297,509shares
              issued
                and outstanding at March 31, 2007 and June 30, 2006
            
            
            32,975
            
            
            32,975Additional
                paid-in capital
            
            
            13,620,310
            
            
            13,617,427Retained
                earnings
            
            
            11,783,863
            
            
            12,820,516Accumulated
                other comprehensive loss, net
            
            
            (54,020
            )
            
            (149,962
            )Unearned
                ESOP shares
            
            
            (1,158,150
            )
            
            (1,226,280
            )Reclassification
                of ESOP shares
            
            
            (138,504
            )
            
            (61,033
            )Total
                stockholders’ equity
            
            
            24,086,474
            
            
            25,033,643Total
                liabilities and stockholders’ equity
            
            $
            183,626,035
            
            $
            178,761,061




*See
      Notes to the Unaudited Consolidated Financial Statements.*




1


EQUITABLE
      FINANCIAL CORP.


Statements
      of Operations


(Unaudited)




**Three
                Months Ended**
              **March
                31,**
            
            **Nine
                Months Ended**
              **March
                31,****2007**
            
            **2006**
            
            **2007**
            
            **2006****Interest
                Income**Loans
            
            $
            2,484,792
            
            $
            2,134,775
            
            $
            7,358,838
            
            $
            6,044,519Securities
            
            
            115,688
            
            
            140,434
            
            
            378,466
            
            
            454,563Other
            
            
            39,273
            
            
            40,294
            
            
            66,141
            
            
            61,517Total
                interest income
            
            
            2,639,753
            
            
            2,315,503
            
            
            7,803,445
            
            
            6,560,599**Interest
                Expense**Deposits
            
            
            1,211,931
            
            
            888,192
            
            
            3,471,030
            
            
            2,408,080Federal
                Home Loan Bank borrowings
            
            
            481,702
            
            
            397,999
            
            
            1,445,165
            
            
            1,265,662****Total
                interest expense
            
            
            1,693,633
            
            
            1,286,191
            
            
            4,916,195
            
            
            3,673,742**Net
                interest income**
            
            
            946,120
            
            
            1,029,312
            
            
            2,887,250
            
            
            2,886,857Provision
                for loan losses
            
            
            128,231
            
            
            30,000
            
            
            188,231
            
            
            90,000**Net
                interest income after provision for loan losses**
            
            
            817,889
            
            
            999,312
            
            
            2,699,019
            
            
            2,796,857**Non-interest
                income**Service
                charges on deposit accounts
            
            
            92,129
            
            
            59,501
            
            
            251,878
            
            
            170,943Gain
                on sale of investments
            
            
            -
            
            
            354,189
            
            
            -
            
            
            694,583Brokerage
                fee income
            
            
            264,174
            
            
            242,505
            
            
            606,244
            
            
            609,119Loss
                on sale of loans
            
            
            (99,282
            )
            
            (1,739
            )
            
            (44,390
            )
            
            (144,731
            )Other
                loan fees
            
            
            9,141
            
            
            33,523
            
            
            49,714
            
            
            142,979Other
                income
            
            
            25,786
            
            
            15,583
            
            
            76,041
            
            
            75,079Total
                non-interest income
            
            
            291,948
            
            
            703,562
            
            
            939,487
            
            
            1,547,972**Non-interest
                expenses******Salaries
                and employee benefits
            
            
            1,107,720
            
            
            843,947
            
            
            3,096,476
            
            
            2,440,994Director
                and committee fees
            
            
            27,300
            
            
            24,450
            
            
            76,200
            
            
            73,350Data
                processing fees
            
            
            105,781
            
            
            100,559
            
            
            243,037
            
            
            319,442Occupancy
                and equipment
            
            
            250,266
            
            
            180,794
            
            
            758,841
            
            
            555,205Regulatory
                fees and deposit insurance premium
            
            
            17,402
            
            
            15,710
            
            
            51,319
            
            
            44,731Advertising
                and public relations
            
            
            36,944
            
            
            94,633
            
            
            183,696
            
            
            251,844Contributions
                and donations
            
            
            17,451
            
            
            19,130
            
            
            56,754
            
            
            823,335Insurance
                and surety bond premiums
            
            
            15,631
            
            
            20,298
            
            
            67,212
            
            
            63,133Professional
                fees
            
            
            92,140
            
            
            112,081
            
            
            325,378
            
            
            221,532Supplies,
                telephone, postage
            
            
            57,520
            
            
            57,848
            
            
            201,980
            
            
            173,643ATM
                expenses
            
            
            8,789
            
            
            8,676
            
            
            25,693
            
            
            25,923Dues
                and subscriptions
            
            
            7,779
            
            
            8,247
            
            
            29,844
            
            
            37,505Other
                expenses
            
            
            69,248
            
            
            51,283
            
            
            235,652
            
            
            172,391Total
                non-interest expenses
            
            
            1,813,971
            
            
            1,537,656
            
            
            5,352,082
            
            
            5,203,028**Income
                (loss) before income taxes**
            
            
            (704,134
            )
            
            165,218
            
            
            (1,713,573
            )
            
            (858,199
            )Income
                tax expense (benefit)
            
            
            (292,631
            )
            
            48,963
            
            
            (676,923
            )
            
            (350,254
            )**Net
                income (loss)**
            
            
            (411,503
            )
            
            116,255
            
            
            (1,036,653
            )
            
            (507,945
            )**Basic
                and diluted earnings (loss) per share**
            
            $
            (0.13
            )
            $
            0.04
            
            $
            (0.33
            )
            $
            (0.13
            )




*See
      Notes to the Unaudited Consolidated Financial Statements* *.*




2


EQUITABLE
      FINANCIAL CORP.


Consolidated
      Statements of Stockholders’ Equity and Comprehensive Income


Nine
      Month s
      Ended
      March 31, 2007 and 2006


(Unaudited)





**Common**
              **Stock**
            
            **Additional**
              **Paid-In**
              **Capital**
            
            **Retained**
              **Earnings**
            
            **Unearned**
              **ESOP
                Shares**
            
            **Accumulated**
              **Other**
              **Comprehensive**
              **Income
                (Loss)**
            
            **Amount**
              **Reclassified**
              **On
                ESOP**
              **Shares**
            
            **Total**Balance
                at June 30, 2005
            
            $
            -
            
            $
            -
            
            $
            13,889,317
            
            $
            -
            
            $
            473,301
            
            $
            -
            
            $
            14,362,618Distribution
                to capitalize Equitable FinancialMHC
            
            
            -
            
            
            -
            
            
            (100,000
            )
            
            -
            
            
            -
            
            
            -
            
            
            (100,000
            )Issuance
                of common stock, net of offering costs
            
            
            32,348
            
            
            12,994,635
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            13,026,983Purchase
                of 129,262 shares of ESOP
            
            
            -
            
            
            -
            
            
            -
            
            
            (1,292,620
            )
            
            -
            
            
            -
            
            
            (1,292,620
            )Donation
                of 62,653 shares to Equitable CharitableFoundation
            
            
            627
            
            
            625,903
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            626,530Comprehensive
                loss:Net
                loss
            
            
            -
            
            
            -
            
            
            (507,945
            )
            
            -
            
            
            -
            
            
            -
            
            
            (507,945
            )Net
                decrease in fair value of securitiesclassified
                as available-for-sale, netof
                income taxes
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (591,773
            )
            
            -
            
            
            (591,773
            )Total
                comprehensive loss, net
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (1,099,718
            )Release
                of 4,363 unearned ESOP shares
            
            
            -
            
            
            (1,168
            )
            
            -
            
            
            34,831
            
            
            -
            
            
            -
            
            
            33,663Reclassification
                due to release and change in fairvalue
                of common stock in ESOP subject tocontingent
                repurchase obligation of ESOP shares
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (39,267
            )
            
            (39,267
            )Balance
                at March 31, 2006
            
            $
            32,975
            
            $
            13,619,370
            
            $
            13,281,372
            
            $
            (1,257,789
            )
            $
            (118,472
            )
            $
            (39,267
            )
            $
            25,518,189Balance
                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
            
            
            -
            
            
            -
            
            
            (1,036,653
            )
            
            -
            
            
            -
            
            
            -
            
            
            (1,036,653
            )Net
                increase in fair value of securitiesclassified
                as available-for-sale, net of incometaxes
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            95,942
            
            
            -
            
            
            95,942Total
                comprehensive loss, net
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (940,711
            )Release
                of 6,813 unearned ESOP shares
            
            
            -
            
            
            2,883
            
            
            -
            
            
            68,130
            
            
            -
            
            
            -
            
            
            71,013Reclassification
                due to release and change in fairvalue
                of common stock in ESOP subject tocontingent
                repurchase obligation of ESOP shares
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (77,471
            )
            
            (77,471
            )Balance
                at March 31, 2007
            
            $
            32,975
            
            $
            13,620,310
            
            $
            11,783,863
            
            $
            (1,158,150
            )
            $
            (54,020
            )
            $
            (138,504
            )
            $
            24,086,474




*See
      Notes to the Unaudited Consolidated Financial Statements.*




3


EQUITABLE
      FINANCIAL CORP.


Consolidated
      Statements of Cash Flows


(Unaudited)





**Nine
                Months Ended**
              **March
                31,****2007**
            
            **2006****Cash
                flows from operating activities:**Net
                loss
            
            $
            (1,036,653
            )
            $
            (507,945
            )Adjustments
                to reconcile net loss to net cash from operating activities:Depreciation
            
            
            305,600
            
            
            172,568Amortization
                of premiums and discounts
            
            
            10,218
            
            
            23,717Federal
                Home Loan Bank stock dividends
            
            
            (101,800
            )
            
            (77,854
            )Charitable
                Foundation donation
            
            
            -
            
            
            626,530ESOP
                expense
            
            
            71,013
            
            
            34,831Deferred
                loan origination costs, net
            
            
            (23,914
            )
            
            60,384Provision
                for loan losses
            
            
            188,231
            
            
            90,000Loss
                on sale of loans
            
            
            44,390
            
            
            144,731Loss
                on disposal of premises and equipment
            
            
            21,009
            
            
            -Loans
                originated for sale
            
            
            (6,218,624
            )
            
            -Proceeds
                from sale of loans originated for sale
            
            
            6,268,051
            
            
            -Gain
                on sale of stock
            
            
            -
            
            
            (694,583
            )Change
                in:Accrued
                interest receivable
            
            
            (61,719
            )
            
            (355,220
            )Other
                assets
            
            
            (714,873
            )
            
            (436,021
            )Accrued
                interest payable and other liabilities
            
            
            365,294
            
            
            (136,755
            )Net
                cash from operating activities
            
            
            (883,777
            )
            
            (1,055,617
            )**Cash
                flows from investing activities:**Net
                change in loans
            
            
            (5,680,698
            )
            
            (34,162,736
            )Proceeds
                from sale of loans
            
            
            8,079,625
            
            
            6,328,580Proceeds
                from sale of stock
            
            
            -
            
            
            705,650Principal
                repayments from securities available-for-sale
            
            
            2,884,437
            
            
            1,199,802Principal
                repayments from securities held-to-maturity
            
            
            165,066
            
            
            261,209Purchases
                of Federal Home Loan Bank stock
            
            
            -
            
            
            (214,046
            )Purchase
                of premises and equipment
            
            
            (1,207,022
            )
            
            (1,275,662
            )Net
                cash from investing activities
            
            
            4,241,408
            
            
            (27,157,203
            )**Cash
                flows from financing activities:**Net
                change in deposits
            
            
            469,426
            
            
            19,664,268Proceeds
                from Federal Home Loan Bank borrowings
            
            
            55,100,000
            
            
            53,200,000Repayments
                of Federal Home Loan Bank borrowings
            
            
            (50,571,976
            )
            
            (54,723,440
            )Net
                change in advance payments from borrowers for taxes and
                insurance
            
            
            371,928
            
            
            553,219Net
                proceeds from initial stock offering
            
            
            -
            
            
            13,025,815Purchase
                of ESOP shares
            
            
            -
            
            
            (1,292,620
            )Distribution
                to capitalize Equitable Financial MHC
            
            
            -
            
            
            (100,000
            )Net
                cash from financing activities
            
            
            5,369,378
            
            
            30,327,242Increase
                in cash and cash equivalents
            
            
            8,727,009
            
            
            2,114,422Cash
                and cash equivalents, beginning of period
            
            
            4,092,931
            
            
            2,159,699Cash
                and cash equivalents, end of period
            
            
            12,819,940
            
            
            4,274,121**Supplemental
                cash flow information:**Interest
                paid on deposits and borrowings
            
            
            4,750,103
            
            
            3,654,347Income
                taxes (refunded) paid
            
            
            (34,497
            )
            
            19,479**Supplemental
                noncash disclosure:**Common
                stock in ESOP subject to contingent repurchase obligation
            
            
            138,504
            
            
            61,033Transfer
                of loans to foreclosed real estate
            
            
            291,900
            
            
            -Donation
                of premises and equipment
            
            
            -
            
            
            34,126





*See
      notes to the Unaudited Consolidated Financial Statements*





4


**EQUITABLE
      FINANCIAL CORP.**


**Notes
      to the Unaudited Consolidated Financial Statements**


**March
      31, 2007**





**(1)**  **Basis
      of Presentation**





Equitable
      Financial Corp. (“Equitable Financial” or the “Company”) was organized as a
      federal corporation at the direction of Equitable Bank (the “Bank”) in
      connection with the mutual holding company reorganization of the Bank. The
      reorganization was completed on November 8, 2005. In the reorganization,
      Equitable Financial sold 43.1% of its outstanding shares of common stock
      (1,421,226 shares) to the public, contributed 1.9% of its outstanding shares
      of
      common stock (62,653 shares) plus $100,000 in cash to the Equitable Bank
      Charitable Foundation and issued 55% of its outstanding shares of common stock
      (1,813,630 shares) to Equitable Financial MHC, the mutual holding company of
      the
      Bank. In addition, a contribution of $100,000 was made to capitalize Equitable
      Financial MHC. In connection with the reorganization, the Bank changed its
      name
      to Equitable Bank from Equitable Savings Bank of Grand Island. Costs incurred
      in
      connection with the common stock offering (approximately $1.2 million) were
      recorded as a reduction of the proceeds from the offering. Net proceeds from
      the
      common stock offering amounted to approximately $13.0 million.





The
      unaudited consolidated financial statements as of and for the period ended
      March
      31, 2007 include the accounts of Equitable Financial and its wholly owned
      subsidiary, the Bank. The Company, through the Bank, operates in a single
      business segment, providing traditional banking services through its office
      network. The financial statements for the periods prior to November 8, 2005
      include only the accounts of the Bank, as the Company was not in existence
      during such period.





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, 2006. The results of operations for the three and nine-month
      periods ended March 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.





5





**(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.
      Such agency 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.





**(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
                March 31,**
            
            **Nine
                Months Ended**
              **March
                31,****2007**
            
            **2006**
            
            **2007**
            
            **2006****(Dollars
                in thousands)**Net
                income (loss)
            
            $
            (411,503
            )
            $
            116,255
            
            $
            (1,036,653
            )
            $
            (402,071
            )Weighted
                average sharesoutstanding
                for the quarter
            
            
            3,179,423
            
            
            3,171,035
            
            
            3,177,135
            
            
            3,169,989Earnings
                (loss) per share
            
            $
            (0.13
            )
            $
            0.04
            
            $
            (0.33
            )
            $
            (0.13
            )





6


The
      nine
      months ended March 31, 2006 earnings per share calculation is based on the
      earnings of the Company from November 8, 2005, the date of the initial public
      offering of the Company, through March 31, 2006.





**(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 March 31, 2007,
      and
      June 30, 2006 are as follows:





**March
                31, 2007****Amortized
                Cost**
            
            **Gross
                Unrealized Gains**
            
            **Gross
                Unrealized Losses**
            
            **Fair
                Value**Available-for-sale:Mortgage-backed
                securities
            
            $
            1,787,044
            
            $
            12,001
            
            $
            36,397
            
            $
            1,762,648U.S.
                government securities andagency
                obligations
            
            
            3,985,000
            
            
            -
            
            
            49,540
            
            
            3,935,460Municipal
                obligations
            
            
            992,928
            
            
            734
            
            
            8,646
            
            
            985,016Total
                investment and mortgage-backed
                securities, available-for-sale
            
            $
            6,764,972
            
            $
            12,735
            
            $
            94,583
            
            $
            6,683,124





**June
                30, 2006****Amortized
                Cost**
            
            **Gross
                Unrealized Gains**
            
            **Gross
                Unrealized Losses**
            
            **Fair
                Value**Available-for-sale:Mortgage-backed
                securities
            
            $
            2,068,332
            
            $
            12,486
            
            $
            78,697
            
            $
            2,002,121U.S.
                government securities andagency
                obligations
            
            
            6,595,797
            
            
            -
            
            
            133,577
            
            
            6,462,220Municipal
                obligations
            
            
            992,748
            
            
            -
            
            
            27,426
            
            
            965,322Total
                investment and mortgage-backed
                securities, available-for-sale
            
            $
            9,656,877
            
            $
            12,486
            
            $
            239,699
            
            $
            9,429,663





Management
      believes that all unrealized losses as of March 31, 2007, are market-related,
      with no impairments. The unrealized losses are believed to be due to movements
      in interest rates and temporary in nature. As of March 31, 2007, we have the
      ability and intent to hold these securities to maturity. ****





**(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.




7





The
      following table sets forth the composition of our loan portfolio at the dates
      indicated.





**March
                31, 2007**
            
            **June
                30, 2006****Amount**
            
            **Percent**
            
            **Amount**
            
            **Percent****(Dollars
                in thousands)**Real
                estate-mortgage:One-
                to four-family
            
            $
            66,345
            
            
            43.95
            %
            $
            80,031
            
            
            51.98
            %Multi-family
            
            
            6,781
            
            
            4.49
            
            
            7,480
            
            
            4.86Nonresidential
            
            
            33,668
            
            
            22.30
            
            
            30,169
            
            
            19.59Total
                real estate-mortgage loans
            
            
            106,794
            
            
            70.74
            
            
            117,680
            
            
            76.43Construction
            
            
            5,243
            
            
            3.47
            
            
            3,790
            
            
            2.46Commercial
            
            
            24,439
            
            
            16.19
            
            
            17,480
            
            
            11.36Consumer:Home
                equity
            
            
            11,410
            
            
            7.56
            
            
            12,287
            
            
            7.98Other
                consumer
            
            
            3,084
            
            
            2.04
            
            
            2,726
            
            
            1.77Total
                consumer loans
            
            
            14,494
            
            
            9.60
            
            
            15,013
            
            
            9.75Total
                loans
            
            
            150,970
            
            
            100.00
            %
            
            153,963
            
            
            100.0
            %Deferred
                loan origination costs, net
            
            
            391
            
            
            
            
            
            371Allowance
                for loan losses
            
            
            (990
            )
            
            
            
            
            (926
            )Loans,
                net
            
            $
            150,371
            
            
            
            
            $
            153,408





**(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 nine months ended March 31, 2007 and 2006.





**Three
                months ended**
              **March
                31,**
            
            **Nine
                months ended**
              **March
                31,****2007**
            
            **2006**
            
            **2007**
            
            **2006****(Dollars
                in thousands)**Allowance
                at beginning of period
            
            $
            928
            
            $
            913
            
            $
            926
            
            $
            786Provision
                for loan losses
            
            
            128
            
            
            30
            
            
            188
            
            
            90Charge-offs
            
            
            (67
            )
            
            (12
            )
            
            (125
            )
            
            (25
            )Recoveries
            
            
            1
            
            
            -
            
            
            1
            
            
            80Allowance
                at end of period
            
            $
            990
            
            $
            931
            
            $
            990
            
            $
            931Allowance
                to nonaccrual loans
            
            
            2,531.97
            %
            
            1,980.85
            %
            
            2,531.97
            %
            
            1,980.85
            %Allowance
                to total loans outstanding at the end of the period
            
            
            0.66
            
            
            0.62
            
            
            0.66
            
            
            0.62Net
                charge-offs to average loans outstanding during the period
            
            
            0.04
            
            
            0.00
            
            
            0.08
            
            
            0.04




8




**(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.





The
      following table sets forth the balances of our deposit products at the dates
      indicated.




**March
                31, 2007**
            
            **June
                30, 2006****Amount**
            
            **%**
            
            **Amount**
            
            **%****(Dollars
                in thousands)**Noninterest-bearing
                accounts
            
            $
            6,372
            
            
            5.21
            %
            $
            5,748
            
            
            4.71
            %Interest-bearing
                NOW
            
            
            12,422
            
            
            10.15
            
            
            11,542
            
            
            9.47Money
                market
            
            
            9,616
            
            
            7.86
            
            
            5,878
            
            
            4.82Savings
                accounts
            
            
            4,298
            
            
            3.51
            
            
            4,445
            
            
            3.65Certificates
                of deposit
            
            
            89,683
            
            
            73.27
            
            
            94,309
            
            
            77.35Total
            
            $
            122,391
            
            
            100.00
            %
            $
            121,922
            
            
            100.00
            %





**(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 stock in connection with the 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. Divi dends
      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 Ended March 31,**
            
            **For
                the Nine Months Ended March 31,****2007**
            
            **2006**
            
            **2007**
            
            **2006**ESOP
                compensation expense
            
            $
            23,391
            
            $
            20,439
            
            $
            71,013
            
            $
            39,790ESOP
                shares allocated to employees
            
            
            2,271
            
            
            2,271
            
            
            6,813
            
            
            4,363ESOP
                shares allocated in prior periods
            
            
            11,176
            
            
            2,092
            
            
            6,634
            
            
            -ESOP
                shares unallocated
            
            
            115,815
            
            
            124,899
            
            
            115,815
            
            
            124,899Fair
                value of ESOP shares unallocated
            
            $
            1,192,895
            
            $
            1,124,091
            
            $
            1,192,895
            
            $
            1,124,091




9




**(9)**  **Equity
      Incentive Plan**





In
      November 2006, the Company’s stockholders approved the Equitable Financial Corp.
      2006 Equity Incentive 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 March 31, 2007 no options or
      shares have 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 has been recorded pertaining to this Plan as of March 31, 2007 as the
      Company has not implemented the stock award program.





**(10)**  **Recent
      Accounting Pronouncements**





In
      June
      2006, the Financial Accounting Standards Board (“FASB”) issued FASB
      Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”),
      which was issued to require that all tax positions be evaluated using consistent
      criteria and measurement and further supplemented by enhanced disclosure. FIN
      48, an interpretation of FASB Statement No. 109, “Accounting for Income Taxes,”
prescribes the minimum recognition threshold a tax position is required to
      meet
      before being recognized in the financial statements. This interpretation
      provides clear criteria for subsequently recognizing, derecognizing and
      measuring such tax positions for financial statement purposes, as well as
      provides guidance on accrual of interest and penalties, accounting in interim
      periods, disclosure and transition. FIN 48 is effective for fiscal years
      beginning after December 15, 2006 or January 1, 2007 for calendar year-end
      companies. Differences between the amounts recognized in the statements of
      financial position prior to the adoption of FIN 48 and the amounts reported
      after adoption would be accounted for as a cumulative-effect adjustment recorded
      to the beginning balance of retained earnings. The cumulative-effect adjustment
      would not apply to those items that would not have been recognized in earnings,
      such as the effect of adopting FIN 48 on tax positions related to business
      combinations. The Company is currently evaluating the impact of the statement
      on
      its financial position, results of operations and liquidity.





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 Company will
      adopt
      the statement on January 1, 2008. 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.




10





In
      September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) 108, which was
      issued to address the diversity in practice in quantifying financial statement
      misstatements and the potential under current practices for the build up of
      improper amounts on the balance sheet. The Company is in the process of
      evaluating the potential impact of the standard for future periods.





Also
      in
      September 2006, under EITF 06-5: Accounting for Purchases of Life Insurance
      -
      Determining the Amount That Could be Realized in Accordance with FASB Technical
      Bulletin No. 85-4, “Accounting for Purchases of Life Insurance,” the task force
      reached a consensus that a policyholder should consider any additional amounts
      included in the contractual terms of the policy in determining the amount that
      could be realized under the insurance contract. The task force agreed that
      contractual limitations should be considered when determining the realizable
      amounts. Those amounts that are recoverable by the policyholder at the
      discretion of the insurance company should be excluded from the amount that
      could be realized. The task force also agreed that fixed amounts that are
      recoverable by the policyholder in future periods in excess of one year from
      the
      surrender of the policy should be recognized at their present value. The task
      force also reached a consensus that a policyholder should determine the amount
      that could be realized under the life insurance contract assuming the surrender
      of an individual-life by individual life policy. The task force also noted
      that
      any amount ultimately realized by the policyholder upon the assumed surrender
      of
      the final policy shall be included in the amount that could be realized under
      the insurance contract. The issue should be effective for fiscal years beginning
      after December 15, 2006, but early adoption is permitted. The Company is
      currently evaluating the impact of this interpretation on its financial
      condition and results of operations.





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 and results of operations.





**(11)**  **Subsequent
      Events**





On
      April
      19, 2007, the Company announced that it had authorized the funding of a trust
      to
      repurchase up to 64,631 of the Company’s outstanding shares. The shares acquired
      by the trust will be used to fund restricted stock awards under the Company’s
      2006 Equity Incentive Plan. **** On
      May 1,
      2007 the trust purchased all 64,631 shares.  The cost per share was $10.75
      for a total cost of $695,000. The Company had not made any restricted stock
      grants as of May 1, 2007.





**Item
      2. Management’s Discussion and Analysis or Plan of
      Operation**





Management’s
      discussion and analysis of the financial condition and results of operations
      at
      and for the three and nine months ended March 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 document.




11





**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.





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**





Equitable
      Financial was organized on November 8, 2005 in connection with the Bank’s mutual
      holding company reorganization. The information as of and for the three and
      nine
      months ended March 31, 2007 includes Equitable Financial’s information. The
      information in this report for the periods prior to November 8, 2005 and
      including the financial statements and related financial data, relates to the
      Bank only.





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 savings 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 March 31, 2007 were $183.63 million, an increase of $4.87 million
      or
      2.72% from total assets of $178.76 million at June 30, 2006. Total liabilities
      at March 31, 2007 were $159.54 million, compared to $153.73 million at June
      30,
      2006, an increase of $5.81 million or 3.78%. Stockholders’ equity at March 31,
      2007 was $24.09 million compared to $25.03 million at June 30, 2006, a decrease
      of $947,000 or 3.78%.




12





***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 decreased $3.04
      million, or 1.98%, to $150.37 million at March 31, 2007 compared to $153.41
      million at June 30, 2006. We incurred a decrease in loans of $8.26 million
      due
      to selling a portion of our one-to four-family residential real estate
      portfolio. The sale of these longer term, lower coupon loans will improve our
      interest rate risk position. We believe that this restructuring is the right
      decision for the long-term profitability of the Company and our effort to create
      value for our stockholders. This decrease was offset by an increase of loan
      originations generated in our expanded branch network in Grand Island, North
      Platte and Omaha, Nebraska.





***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 March 31, 2007. There were no accruing loans past due 90
      days
      or more for the period ended March 31, 2007.





**March
                31,**
              **2007**
            
            **June
                30,**
              **2006****(Dollars
                in thousands)**Non-accrual
                loans:Real
                estate-mortgage
            
            $
            387
            
            $
            452Consumer
            
            
            4
            
            
            38Total
                non-accrual loans
            
            
            391
            
            
            490Loans
                90 days, still on accrual
            
            
            ─
            
            
            65Foreclosed
                assets, net
            
            
            292
            
            
            ─Total
                non-performing assets
            
            $
            683
            
            $
            555Total
                non-accrual loans to total loans
            
            
            0.26
            %
            
            0.32
            %Total
                non-accrual loans to total assets
            
            
            0.21
            
            
            0.27Total
                non-performing assets to total assets
            
            
            0.37
            
            
            0.31





Non-accrual
      loans decreased $99,000 to $391,000 at March 31, 2007, compared to $490,000
      at
      June 30, 2006.





Foreclosed
      assets increased $292,000 during the period ended March 31, 2007 which
      represented two real estate foreclosures.





***Securities.*** Our
      securities portfolio consists primarily of U.S. Government-sponsored entity
      securities and mortgage-backed securities. Securities available-for-sale
      decreased $2.75 million, or 29.13%, between June 30, 2006 and March 31, 2007.
      The decrease was the result of maturities and repayments in the portfolio of
      $2.88 million and an increase in the market value of the portfolio of $145,000.
      Securities held-to-maturity decreased $168,000, or 18.34%, between June 30,
      2006
      and March 31, 2007. This decrease was the result of repayments of $165,000
      and
      net amortization of $3,000. 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
      noninterest-bearing accounts, interest-bearing NOW accounts, money market
      accounts, savings accounts and certificates of deposit. Total deposits increased
      to $122.39 million from $121.92 million during the nine months ended March
      31,
      2007, an increase of $470,000 or 0.39%. Although core deposits increased $5.10
      million, or 18.45%, certificates decreased $4.63 million or 4.91%. The decrease
      in certificates was primarily the result of maturities in brokered certificates
      of $7.34 million from June 30, 2006 to March 31, 2007, partially offset by
      an
      increase in certificates due to new branch locations.




13





***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 $4.53 million to $35.13 million at March 31, 2007 from $30.60 million
      at June 30, 2006. The increase was in floating rate advances, which the Company
      believes is the most favorable funding product that coincides with its interest
      rate projections. The advances outstanding at March 31, 2007 mature in 2006
      through 2014.





**Results
      of Operations for the Three Months Ended March 31, 2007 and
      2006**





***Overview.*** We
      recorded a net loss of $412,000 during the three months ended March 31, 2007,
      compared to net income of $116,000 during the three months ended March 31,
      2006.
      The loss was due to an increase in operating expenses to fund our expansion
      into
      other communities. Additionally, we sold stock for a gain of $354,000 during
      the
      three months ended March 31, 2006, with no similar transaction occurring in
      the
      same period ending 2007. Also contributing to the loss was the sale of one-to
      four-family loans with a gross realized loss of $183,000 and recording of
      $98,000 of provision over the amount recorded for March 31, 2006.





***Net
      Interest Income.*** The
      following table summarizes changes in interest income and expense for the three
      months ended March 31, 2007 and 2006.





**Three
                Months**
              **Ended
                March 31,****2007**
            
            **2006**
            
            **%
                Change****(Dollars
                in Thousands)****Interest
                Income:**Loans
            
            $
            2,485
            
            $
            2,135
            
            
            16.39
            %Securities
            
            
            116
            
            
            140
            
            
            (17.14
            )Other
            
            
            39
            
            
            40
            
            
            (2.50
            )Total
                interest income
            
            
            2,640
            
            
            2,315
            
            
            14.04**Interest
                Expense:**Deposits
            
            
            1,212
            
            
            888
            
            
            36.49Federal
                Home Loan Bankborrowings
            
            
            482
            
            
            398
            
            
            21.11Total
                interest expense
            
            
            1,694
            
            
            1,286
            
            
            31.73Net
                interest income
            
            $
            946
            
            $
            1,029
            
            
            (8.07
            )%





14





The
      following table summarizes average balances and average yield and costs for
      the
      three months ended March 31, 2007 and 2006.





**Three
                months ended March 31,****2007**
            
            **2006****Average**
              **Balance**
            
            **Interest
                Income**
            
            **Yield/**
              **Cost**
            
            **Average**
              **Balance**
            
            **Interest
                Income**
            
            **Yield/**
              **Cost****(Dollars
                in thousands)**Loans,
                net
            
            $
            160,002
            
            $
            2,485
            
            
            6.21
            %
            $
            147,778
            
            $
            2,135
            
            
            5.78
            %Securities
                and other
            
            
            12,942
            
            
            155
            
            
            4.79
            
            
            17,366
            
            
            180
            
            
            4.15Total
                interest-bearing assets
            
            
            172,944
            
            
            2,640
            
            
            6.11
            
            
            165,144
            
            
            2,315
            
            
            5.61Total
                interest-bearing deposits
            
            
            121,602
            
            
            1,212
            
            
            3.99
            
            
            113,479
            
            
            888
            
            
            3.13FHLB
                borrowings
            
            
            36,559
            
            
            482
            
            
            5.27
            
            
            32,155
            
            
            398
            
            
            4.95Total
                interest-bearing liabilities
            
            
            158,161
            
            
            1,694
            
            
            4.28
            
            
            145,634
            
            
            1,286
            
            
            3.53Interest
                rate spread
            
            
            
            
            
            
            
            
            1.83
            
            
            
            
            
            
            
            
            2.08Net
                interest margin
            
            
            
            
            
            
            
            
            2.19
            
            
            
            
            
            
            
            
            2.49





Net
      interest income for the three months ended March 31, 2007 decreased $83,000,
      or
      8.07%, compared to the same period last year, as a result of a decrease in
      the
      interest rate spread of 0.25% and a decrease in net interest margin of 0.30%.
      This variation in net interest margin results from the change in our asset
      composition from mortgage loans to commercial loans. This change has increased
      our yield on earning assets. However, due to the Company being more liability
      sensitive, the cost of funding these loans has increased more dramatically
      than
      the yield on the assets in the current rate environment.





***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 this quarter our evaluation resulted in
      a
      provision of $128,000 compared to $30,000 for the period ended March 31, 2006.
      This increased provision is a result of a significant change in the composition
      of the type of loans we are holding. From June 30, 2006 to March 31, 2007 our
      one-to four-family real estate loans that bear a low degree of risk decreased
      $13.69 million. However, during the same period we had an increase in all other
      loan types of $10.69 million. The majority of this increase was in commercial
      loans which bear a higher degree of risk than one-to four-family real estate
      loans. Our strategy to continue changing from a traditional thrift to a
      commercial bank warrants the increase in the provision. The net charge-offs
      of
      $67,000 for the three months ended March 31, 2007 represented the write off
      of
      one real estate loan and one commercial loan.





***Non-interest
      Income.***   During
      the quarter ended March 31, 2007 non-interest income decreased $412,000 from
      the
      comparable period in 2006. For the three months ended March 31, 2006, a gain
      of
      $354,000 was recorded on the sale of Freddie Mac common stock; no such sales
      were made during the same period of 2007. Additionally, we incurred a loss
      of
      $183,000 from the sale of longer term, lower coupon one-to four-family loans,
      for which we retained the servicing. The sale of these longer term, lower coupon
      loans will improve our interest rate risk position. We believe that this
      restructuring is the right decision for the long-term profitability of the
      Company and our effort to create value for our stockholders. The change in
      other
      loan fees was due to loan activity. This decrease in income was offset by the
      recording of $65,000 of mortgage servicing rights resulting from the sale of
      loans. An increase in service charges on deposit accounts, brokerage fee income
      and other income of $65,000 is a result of activity generated by additional
      branches.




15





***Non-interest
      Expenses.***  Total
      non-interest expenses increased **** $276,000,
      for the three months ended March 31, 2007, from the three months ended March
      31,
      2006. Increases in salaries and employee benefits of $264,000 and in occupancy
      and equipment of $70,000 occurred during the period ended March 31, 2007. These
      increases were the result of operating three recently added facilities in Omaha,
      North Platte and Grand Island. These increases were offset by a reduction in
      advertising expense of $58,000.





***Income
      Taxes.*** The
      Company recorded a tax benefit of $293,000 during the three months ended March
      31, 2007 compared to tax expense of $49,000 during the three months ended March
      31, 2006. The tax benefit and expense at March 31, 2007 and 2006 were calculated
      based on the tax items and the operating loss or income recorded during the
      respective quarters.





**Results
      of Operations for the Nine Months Ended March 31, 2007 and
      2006**





***Overview.*** We
      recorded a net loss of $1,037,000 during the nine months ended March 31, 2007,
      compared to a net loss of $508,000 during the nine months ended March 31, 2006.
      The loss was due to an increase in operating expenses to fund our expansion
      into
      other communities and increases in professional fees due to the conversion
      to
      stock ownership of our Company. Additionally, we sold stock for a gain of
      $695,000 during the nine months ended March 31, 2006, with no similar
      transaction occurring in the same period ending 2007. Also contributing to
      the
      increased loss is the sale of one-to four-family real estate loans for a gross
      realized loss of $183,000 and recording of $98,000 of provision over the amount
      recorded for the nine months ended March 31, 2007.





***Net
      Interest Income.*** The
      following table summarizes changes in interest income and expense for the nine
      months ended March 31, 2007 and 2006.





**Nine
                Months**
              **Ended
                March 31,****2007**
            
            **2006**
            
            **%
                Change****(Dollars
                in Thousands)****Interest
                Income:**Loans
            
            $
            7,359
            
            $
            6,045
            
            
            21.74
            %Securities
            
            
            378
            
            
            455
            
            
            (16.92
            )Other
            
            
            66
            
            
            61
            
            
            8.20Total
                interest income
            
            
            7,803
            
            
            6,561
            
            
            18.93**Interest
                Expense:**Deposits
            
            
            3,471
            
            
            2,408
            
            
            44.14Federal
                Home Loan BankBorrowings
            
            
            1,445
            
            
            1,266
            
            
            14.14Total
                interest expense
            
            
            4,916
            
            
            3,674
            
            
            33.81Net
                interest income
            
            $
            2,887
            
            $
            2,887
            
            
            0.00
            %





16





The
      following table summarizes average balances and average yield and costs for
      the
      nine months ended March 31, 2007 and 2006.





**Nine
                months ended March 31,****2007**
            
            **2006****Average**
              **Balance**
            
            **Interest
                Income**
            
            **Yield/**
              **Cost**
            
            **Average**
              **Balance**
            
            **Interest
                Income**
            
            **Yield/**
              **Cost****(Dollars
                in thousands)**Loans,
                net
            
            $
            157,644
            
            $
            7,359
            
            
            6.22
            %
            $
            141,355
            
            $
            6,045
            
            
            5.70
            %Securities
                and other
            
            
            12,327
            
            
            444
            
            
            4.80
            
            
            16,464
            
            
            516
            
            
            4.18Total
                interest-bearing assets
            
            
            169,971
            
            
            7,803
            
            
            6.12
            
            
            157,819
            
            
            6,561
            
            
            5.54Total
                interest-bearing deposits
            
            
            118,795
            
            
            3,471
            
            
            3.90
            
            
            108,078
            
            
            2,408
            
            
            2.97FHLB
                borrowings
            
            
            36,190
            
            
            1,445
            
            
            5.32
            
            
            34,223
            
            
            1,266
            
            
            4.93Total
                interest-bearing liabilities
            
            
            154,985
            
            
            4,916
            
            
            4.23
            
            
            142,301
            
            
            3,674
            
            
            3.44Interest
                rate spread
            
            
            
            
            
            
            
            
            1.89
            
            
            
            
            
            
            
            
            2.10Net
                interest margin
            
            
            
            
            
            
            
            
            2.26
            
            
            
            
            
            
            
            
            2.44





Although
      net interest income is the same for the nine months ended March 31, 2007 and
      2006 our net interest margin decreased by 0.18%. This variation in net interest
      margin results from the change in our asset composition from mortgage loans
      to
      commercial loans. This change has increased our yield on earning assets.
      However, due to the Company being more liability sensitive, the cost of funding
      these loans has increased more dramatically than the yield on the assets in
      the
      current rate environment.





***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. For the nine months ended March 31, 2007 we
      recorded $188,000 of provision compared to $90,000 for the same period in 2006.
      This rise of $98,000 in the provision is a result of a significant change in
      the
      composition of our loan portfolio. From June 30, 2006 to March 31, 2007 our
      one-to four-family real estate loans that bear a low degree of risk decreased
      $13.69 million. However, during the same period we had an increase in all other
      loan types of $10.69 million. The majority of this increase was in commercial
      loans which bear a higher degree of risk than one-to four-family real estate
      loans. Our strategy to continue changing from a traditional thrift to a
      commercial bank warrants the increase in the provision. The higher recovery
      amount in 2006 was due to the Company’s charge off of a commercial property in
      the period ended June 30, 2005 and then a subsequent recovery of $80,000 in
      the
      quarter ended September 30, 2005 on the same property. The charge-offs for
      the
      nine months ended March 31, 2007 represented the write off of two real estate
      loans and one commercial loan.





***Non-interest
      Income.***   The
      $608,000 decrease in non-interest income was partially due to a gain of $695,000
      recorded for the nine months ended March 31, 2006 on the sale of Freddie Mac
      common stock, no such sales were made during the same period of 2007. The change
      in other loan fees was due to loan activity. These decreases of non-interest
      income were offset by a loss on sale of loans of $44,000 during the period
      ended
      2007 compared to a loss during 2006 of $145,000. In addition, the bank had
      an
      increase of $81,000 in service charges on deposit accounts for the period ended
      March 31, 2007 attributable to an increase in activity from additional branches.





***Non-interest
      Expenses.***  Total
      non-interest expenses increased **** $149,000,
      for the nine months ended March 31, 2007, from the nine months ended March
      31,
      2006. During 2006, a contribution expense of $726,000 was recorded in connection
      with the establishment of the Equitable Charitable Foundation, no comparable
      expenditures were made in 2007. Increases in salaries and employee benefits
      of
      $655,000 and occupancy and equipment of $204,000 occurred during the nine month
      period ended March 31, 2007. These increases were the result of operating three
      recently added facilities in Omaha, North Platte and Grand Island. The Company
      also recorded increases in professional fees of $104,000 and supplies,
      telephone, and postage of $28,000. These increases were offset by decreases
      in
      data processing fees of $76,000 and advertising and public relations of $68,000.
      Additionally, an increase in state sales and use tax expense, due to an audit
      by
      the Nebraska Department of Revenue, contributed $21,000 to the increase in
      other
      expense. Our non-interest expenses are likely to continue to increase as a
      result of recognizing additional annual employee compensation and benefit
      expenses stemming from the shares purchased or granted to employees and
      executives under new benefit plans.




17





***Income
      Taxes.*** The
      Company recorded a tax benefit of $677,000 during the nine months ended March
      31, 2007 compared to a tax benefit of $350,000 during the nine months ended
      March 31, 2006. The tax benefits at March 31, 2007 and 2006 were calculated
      based on the tax items and the operating loss recorded during the respective
      periods.





**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.





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 March 31, 2007, cash and cash equivalents totaled $12.82 million,
      an
      increase of $8.73 million over June 30, 2006. This additional liquidity
      generated from the loan sale in the quarter ended March 31, 2007 will be used
      to
      fund higher yielding commercial loans. Securities classified as
      available-for-sale whose market value exceeds our cost, which provide additional
      sources of liquidity, totaled $778,000 at March 31, 2007. Total securities
      classified as available-for-sale were $6.68 million at March 31, 2007. Of this
      amount, $4.97 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 March 31, 2007, we
      had
      the ability to borrow a total of approximately $66.80 million from the Federal
      Home Loan Bank of Topeka. On March 31, 2007, we had $35.13 million of borrowings
      outstanding. It is our intention to hold these advances to maturity. Future
      growth of our loan portfolio resulting from our expansion efforts may require
      us
      to borrow additional funds.





At
      March
      31, 2007, we had $12.70 million in loan commitments outstanding, which consisted
      of $675,000 in mortgage loan commitments, $4.43 million in unused home equity
      lines of credit, and $216,000 in personal lines of credit and $7.38 million
      in
      commercial lines of credit. Certificates of deposit due within one year of
      March
      31, 2007 totaled $68.39 million, or 76.26%, of certificates of deposit. We
      believe the large percentage of certificates of deposit that mature within
      one
      year reflects customers’ hesitancy to invest their funds for long periods in the
      current interest rate environment. 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 March 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.




18





***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 March 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.





**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
      nine months ended March 31, 2007 and the year ended June 30, 2006, 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**





Since
      March 31, 2005, we have opened the following new offices: a full-service branch
      in Grand Island; a full-service branch in North Platte; and a full-service
      branch in Omaha. The construction for the new Grand Island and North Platte
      locations has been completed and all costs have been capitalized as of March
      31,
      2007. We currently lease our initial location in Omaha with the annual lease
      expenses of $120,000.





**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, and based on the material weakness in the
      Company’s internal control over financial reporting set forth below, 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 not 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.




19





In
      connection with its audit of the Company’s consolidated financial statements for
      the year ended June 30, 2006, Crowe Chizek and Company LLC (“Crowe Chizek”), the
      Company’s independent registered public accounting firm at that time, advised the
      Board
      of Directors, the Audit Committee and management of
      certain significant internal control deficiencies that they considered to be,
      in
      the aggregate, a material weakness. A material weakness is a significant
      deficiency, or combination of significant deficiencies, that results in more
      than a remote likelihood that a material misstatement of the annual or interim
      financial statements will not be prevented or detected.





In
      particular, in connection with the audit for the year ended June 30, 2006,
      Crowe
      Chizek identified several adjustments and corrections that had to be
      incorporated into the consolidated financial statements as a result of Crowe
      Chizek’s audit. These adjustments encompassed various areas, including real
      estate taxes, income taxes, compensation, rent and capitalized interest.
      According to Crowe Chizek, these adjustments and corrections indicated that
      management’s internal review process over financial reporting was not
      appropriately designed and implemented. Specifically, Crowe Chizek advised
      the
      Board of Directors, the Audit Committee and management that: (a) a formal
      procedure was not in place to ensure that entries were recorded in accordance
      with U.S. generally accepted accounting principles and that the posting of
      these
      entries was appropriately reviewed; and (b) when there were departures from
      U.S.
      generally accepted accounting principles, a formal procedure was not in place
      to
      ensure that an analysis of the potential differences was completed, conclusions
      as to materiality documented and remediation steps determined on a quarterly
      and
      annual basis.





In
      order
      to remediate this material weakness identified by Crowe Chizek and to improve
      the effectiveness of the Company’s disclosure controls, management is in the
      process of designing, implementing and continuing to enhance disclosure controls
      to correct the material weakness set forth above. During the quarter ended
      December 31, 2006, the Company employed an internal auditor to further enhance
      its internal control environment. Management will continue to monitor, evaluate
      and test the operating effectiveness of these controls.





**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 quarter ended
      March 31, 2007 and at March 31, 2007, the Company had not publicly announced
      repurchase plans or programs.





**Item
      3.**  **Defaults upon Senior Securities**





Not
      Applicable.





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




Not
      Applicable.




20





**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.




21


**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:
              May
              15, 2007
            By:
            /s/
                Richard L. HarbaughRichard
                L. Harbaugh
              President
                and Chief Executive Officer
              (principal
                executive officer) Dated:
              May
              15, 2007
            By:
            /s/
                Kim E. MarcoKim
                E. Marco
              Executive
                Vice President and
              Chief
                Financial Officer
              (principal
                financial and accounting
                officer)


22