**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, 2008





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
      1, 2008 there were 3,238,154 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, 2008 (Unaudited) and
                June
                30, 2007
            1Consolidated
                Statements of Operations for the Three and Nine Months Ended March
                31,
                2008 and 2007 (Unaudited)
            2Consolidated
                Statements of Stockholders’ Equity and Comprehensive Income for the Nine
                Months Ended March 31, 2008 and 2007 (Unaudited)
            3Consolidated
                Statements of Cash Flows for the Nine Months Ended March 31, 2008
                and 2007
                (Unaudited)
            4Notes
                to Unaudited Consolidated Financial Statements
            5Item
                2.
            Management’s
                Discussion and Analysis or Plan of Operation
            10Item
                3.
            Controls
                and Procedures
            15**PART
                II. OTHER INFORMATION**Item
                1.
            Legal
                Proceedings
            16Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            16Item
                3.
            Defaults
                Upon Senior Securities
            16Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            16Item
                5.
            Other
                Information
            16Item
                6.
            Exhibits
            17**Signatures**




i


**PART
      I. FINANCIAL INFORMATION**





**Item
      1. Financial Statements**


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


**Statements
      of Financial Condition**





**March
                            31,**
                        
                        
                        **June
                            30,****2008**
                        
                        
                        **2007****(Unaudited)****ASSETS**Cash
                            and due from financial institutions
                        
                        $
                        10,804,768
                        
                        $
                        2,382,234Federal
                            funds sold
                        
                        
                        5,300,000
                        
                        
                        7,100,000Cash
                            and cash equivalents
                        
                        
                        16,104,768
                        
                        
                        9,482,234Time
                            deposits with financial institutions
                        
                        
                        11,287,000
                        
                        
                        -Securities
                            available-for-sale, at fair value
                        
                        
                        6,449,163
                        
                        
                        6,584,274Securities
                            held-to-maturity, fair value at March 31, 2008 -
                        
                        
                        628,478
                        
                        
                        702,030$635,574;
                            and June 30, 2007 - $684,464Federal
                            Home Loan Bank stock, at cost
                        
                        
                        3,098,100
                        
                        
                        2,447,500Loans,
                            net of allowance for loan losses of $1,241,009 at March
                            31,
                        
                        
                        164,805,256
                        
                        
                        153,329,5522008
                            and $1,056,873 at June 30, 2007Premises
                            and equipment, net
                        
                        
                        6,604,577
                        
                        
                        6,850,891Foreclosed
                            assets, net
                        
                        
                        3,581
                        
                        
                        82,900Accrued
                            interest receivable
                        
                        
                        1,358,480
                        
                        
                        1,235,278Other
                            assets
                        
                        
                        2,659,283
                        
                        
                        2,119,652Total
                            assets
                        
                        $
                        212,998,686
                        
                        $
                        182,834,311**LIABILITIES
                            AND STOCKHOLDERS’ EQUITY**LiabilitiesDepositsNoninterest-bearing
                            deposits
                        
                        $
                        8,287,976
                        
                        $
                        6,465,861Interest-bearing
                            deposits
                        
                        
                        121,800,236
                        
                        
                        121,279,000Total
                            deposits
                        
                        
                        130,088,212
                        
                        
                        127,744,861Federal
                            Home Loan Bank borrowings
                        
                        
                        58,823,000
                        
                        
                        30,599,626Advance
                            payments from borrowers for taxes and insurance
                        
                        
                        1,094,112
                        
                        
                        794,930Accrued
                            interest payable and other liabilities
                        
                        
                        849,690
                        
                        
                        528,952Common
                            stock in ESOP subject to contingent repurchase obligation
                        
                        
                        202,779
                        
                        
                        151,679Total
                            liabilities
                        
                        
                        191,057,793
                        
                        
                        159,820,048Commitments
                            and contingenciesStockholders’
                            equity:Preferred
                            stock, $0.01 par value per share; authorized 1,000,000
                            shares,no
                            shares outstanding at March 31, 2008 and June 30, 2007.
                        
                        
                        -
                        
                        
                        -Common
                            stock, $0.01 par value, 14,000,000 shares authorized;
                            3,297,509shares
                            issued at March 31, 2008 and June 30, 2007.
                        
                        
                        32,975
                        
                        
                        32,975Additional
                            paid-in capital
                        
                        
                        13,611,771
                        
                        
                        13,619,515Retained
                            earnings
                        
                        
                        10,797,844
                        
                        
                        11,421,576Unearned
                            ESOP shares
                        
                        
                        (1,067,310
                        )
                        
                        (1,135,440
                        )Treasury
                            stock, at cost; 123,986 and 64,631 shares at March 31,
                            2008and
                            June 30, 2007, respectively
                        
                        
                        (1,232,579
                        )
                        
                        (694,783
                        )Accumulated
                            other comprehensive gain (loss), net
                        
                        
                        971
                        
                        
                        (77,901
                        )Reclassification
                            of ESOP shares
                        
                        
                        (202,779
                        )
                        
                        (151,679
                        )Total
                            stockholders’ equity
                        
                        
                        21,940,893
                        
                        
                        23,014,263Total
                            liabilities and stockholders’ equity
                        
                        $
                        212,998,686
                        
                        $
                        182,834,311*See
                            Notes to the Unaudited Consolidated Financial
                            Statements*


1




**EQUITABLE
      FINANCIAL CORP.**


**Statements
      of Operations**


**(Unaudited)**




**Three
                  Months Ended**
              
              **Nine
                  Months Ended****March
                  31,**
              
              **March
                  31,****2008**
              
              **2007**
              
              **2008**
              
              **2007****Interest
                  Income**Loans
              
              $
              2,640,773
              
              $
              2,484,792
              
              $
              7,701,394
              
              $
              7,358,838Securities
              
              
              116,154
              
              
              115,688
              
              
              319,770
              
              
              378,466Other
              
              
              77,272
              
              
              39,273
              
              
              199,214
              
              
              66,141Total
                  interest income
              
              
              2,834,199
              
              
              2,639,753
              
              
              8,220,378
              
              
              7,803,445**Interest
                  Expense**Deposits
              
              
              1,227,171
              
              
              1,211,931
              
              
              3,850,759
              
              
              3,471,030Federal
                  Home Loan Bank borrowings
              
              
              481,854
              
              
              481,702
              
              
              1,223,242
              
              
              1,445,165Total
                  interest expense
              
              
              1,709,025
              
              
              1,693,633
              
              
              5,074,001
              
              
              4,916,195**Net
                  interest income**
              
              
              1,125,174
              
              
              946,120
              
              
              3,146,377
              
              
              2,887,250Provision
                  for loan losses
              
              
              104,470
              
              
              128,231
              
              
              224,470
              
              
              188,231**Net
                  interest income after provision for loan losses**
              
              
              1,020,704
              
              
              817,889
              
              
              2,921,907
              
              
              2,699,019**Non-interest
                  income**Service
                  charges on deposit accounts
              
              
              134,039
              
              
              92,129
              
              
              441,313
              
              
              251,878Brokerage
                  fee income
              
              
              327,197
              
              
              264,174
              
              
              780,860
              
              
              606,244Gain
                  (loss) on sale of loans
              
              
              49,030
              
              
              (99,282
              )
              
              121,115
              
              
              (44,390
              )Other
                  loan fees
              
              
              7,381
              
              
              9,141
              
              
              20,681
              
              
              49,714Other
                  income
              
              
              21,011
              
              
              25,786
              
              
              137,385
              
              
              76,041Total
                  non-interest income
              
              
              538,658
              
              
              291,948
              
              
              1,501,354
              
              
              939,487**Non-interest
                  expenses**Salaries
                  and employee benefits
              
              
              1,097,470
              
              
              1,107,720
              
              
              3,204,367
              
              
              3,096,476Director
                  and committee fees
              
              
              26,450
              
              
              27,300
              
              
              74,850
              
              
              76,200Data
                  processing fees
              
              
              144,581
              
              
              105,781
              
              
              411,632
              
              
              243,037Occupancy
                  and equipment
              
              
              237,581
              
              
              250,266
              
              
              692,251
              
              
              758,841Regulatory
                  fees and deposit insurance premium
              
              
              30,781
              
              
              17,402
              
              
              62,729
              
              
              51,319(Gain)
                  loss on sale of foreclosed assets
              
              
              (2,885
              )
              
              15,249
              
              
              (29,425
              )
              
              9,881Loss
                  on investment in low income housing partnerships
              
              
              14,015
              
              
              5,059
              
              
              28,580
              
              
              21,059Advertising
                  and public relations
              
              
              26,581
              
              
              36,944
              
              
              107,437
              
              
              183,696Contributions
                  and donations
              
              
              12,202
              
              
              17,451
              
              
              38,674
              
              
              56,754Insurance
                  and surety bond premiums
              
              
              43,676
              
              
              15,631
              
              
              150,845
              
              
              67,212Professional
                  fees
              
              
              66,988
              
              
              92,140
              
              
              300,134
              
              
              325,378Supplies,
                  telephone, postage
              
              
              56,770
              
              
              57,520
              
              
              161,587
              
              
              201,980ATM
                  expenses
              
              
              2,847
              
              
              8,789
              
              
              17,187
              
              
              25,693Dues
                  and subscriptions
              
              
              7,332
              
              
              7,779
              
              
              25,422
              
              
              29,844Other
                  expenses
              
              
              63,719
              
              
              48,940
              
              
              152,676
              
              
              204,712Total
                  non-interest expenses
              
              
              1,828,108
              
              
              1,813,971
              
              
              5,398,946
              
              
              5,352,082**Income
                  (loss) before income taxes**
              
              
              (268,746
              )
              
              (704,134
              )
              
              (975,685
              )
              
              (1,713,576
              )Income
                  tax expense (benefit)
              
              
              (75,268
              )
              
              (292,631
              )
              
              (351,953
              )
              
              (676,923
              )**Net
                  income (loss)**
              
              $
              (193,478
              )
              $
              (411,503
              )
              $
              (623,732
              )
              $
              (1,036,653
              )**Basic
                  and diluted earnings (loss) per share******
              
              $
              (0.06
              )
              $
              (0.13
              )
              $
              (0.20
              )
              $
              (0.33
              )*See
                  Notes to the Unaudited Consolidated Financial
                  Statements*


2


**EQUITABLE
      FINANCIAL CORP.**


**Consolidated
      Statements of Stockholders’ Equity and Comprehensive
      Income**


**Nine
        Months Ended March 31, 2008 and 2007**


**(Unaudited)**







**Common
                    Stock**
                
                **Additional
                    Paid-In Capital**
                
                **Retained
                    Earnings**
                
                **Unearned
                    ESOP Shares**
                
                **Treasury
                    Stock**
                
                **Accumulated
                    Other Comprehensive Income**
                
                **Amount
                    Reclassified on ESOP Shares**
                
                **Total**Balance
                    at June 30, 2006
                
                $
                32,975
                
                $
                13,617,427
                
                $
                12,820,516
                
                $
                (1,226,280
                )
                $
                -
                
                $
                (149,962
                )
                $
                (61,033
                )
                $
                25,033,643Comprehensive
                    loss:Net
                    loss
                
                
                -
                
                
                -
                
                
                (1,036,653
                )
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,036,653
                )Change
                    in net unrealized gain (loss) on securitiesavailable-for-sale,
                    net of income taxes
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                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 changes 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
                )
                $
                24,086,474Balance
                    at June 30, 2007
                
                
                32,975
                
                
                13,619,515
                
                
                11,421,576
                
                
                (1,135,440
                )
                
                (694,783
                )
                
                (77,901
                )
                
                (151,679
                )
                
                23,014,263Comprehensive
                    loss:Net
                    loss
                
                
                -
                
                
                -
                
                
                (623,732
                )
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (623,732
                )Change
                    in net unrealized gain (loss) on securitiesavailable-for-sale,
                    net of income taxes
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                78,872
                
                
                -
                
                
                78,872Total
                    comprehensive loss, net
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (544,860
                )Release
                    of 6,813 unearned ESOP shares
                
                
                -
                
                
                (7,744
                )
                
                -
                
                
                68,130
                
                
                -
                
                
                -
                
                
                -
                
                
                60,386Purchase
                    of 59,355 of treasury stock, at cost
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (537,796
                )
                
                -
                
                
                -
                
                
                (537,796
                )Reclassification
                    due to release and changes in fairvalue
                    of common stock in ESOP subject tocontingent
                    repurchase obligation of ESOP shares
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (51,100
                )
                
                (51,100
                )Balance
                    at March 31, 2008
                
                $
                32,975
                
                $
                13,611,771
                
                $
                10,797,844
                
                $
                (1,067,310
                )
                $
                (1,232,579
                )
                $
                971
                
                $
                (202,779
                )
                $
                21,940,893*See
                    Notes to the Unaudited Consolidated Financial
                    Statements*


3


**EQUITABLE
      FINANCIAL CORP.**


**Consolidated
      Statements of Cash Flows**


**(Unaudited)**




**Nine
                  Months Ended****March
                  31,****2008**
              
              **2007****Cash
                  flows from operating activities:**Net
                  loss
              
              $
              (623,732
              )
              $
              (1,036,653
              )Adjustments
                  to reconcile net loss to net cash from operating activities:Depreciation
              
              
              283,376
              
              
              305,600Amortization
                  of premiums and discounts
              
              
              (29,898
              )
              
              10,218Federal
                  Home Loan Bank stock dividends
              
              
              (96,600
              )
              
              (101,800
              )ESOP
                  expense
              
              
              60,386
              
              
              71,013Deferred
                  loan origination costs, net
              
              
              (68,852
              )
              
              (23,914
              )Provision
                  for loan losses
              
              
              224,470
              
              
              188,231(Gain)
                  loss on sale of loans
              
              
              (121,115
              )
              
              44,390Loss
                  on disposal of premises and equipment
              
              
              -
              
              
              21,009Deferred
                  taxes
              
              
              (351,953
              )
              
              (675,597
              )Loans
                  originated for sale
              
              
              (8,973,070
              )
              
              (6,218,624
              )Proceeds
                  from sale of loans
              
              
              9,001,044
              
              
              6,268,051(Gain)
                  loss on sale of foreclosed asset
              
              
              (29,425
              )
              
              9,881Loss
                  on investment from low income housing
              
              
              28,580
              
              
              21,059Change
                  in:Accrued
                  interest receivable
              
              
              (123,202
              )
              
              (61,719
              )Other
                  assets
              
              
              (235,833
              )
              
              (70,216
              )Accrued
                  interest payable and other liabilities
              
              
              320,738
              
              
              365,294Net
                  cash from operating activities
              
              
              (735,086
              )
              
              (883,777
              )**Cash
                  flows from investing activities:**Net
                  change in loans
              
              
              (11,627,522
              )
              
              (5,680,698
              )Proceeds
                  from sale of loans
              
              
              -
              
              
              8,079,625Proceeds
                  from sale of foreclosed asset
              
              
              177,028
              
              
              -Principal
                  repayments from securities available-for-sale
              
              
              5,218,039
              
              
              2,884,437Purchases
                  of securities available-for-sale
              
              
              (4,932,333
              )
              
              -Principal
                  repayments from securities held-to-maturity
              
              
              72,359
              
              
              165,066Time
                  deposits placed with financial institutions
              
              
              (11,287,000
              )
              
              -Purchase
                  of Federal Home Loan Bank Stock
              
              
              (554,000
              )
              
              -Purchases
                  of premises and equipment
              
              
              (37,062
              )
              
              (1,207,022
              )Net
                  cash from investing activities
              
              
              (22,970,491
              )
              
              4,241,408**Cash
                  flows from financing activities:**Net
                  change in deposits
              
              
              2,343,351
              
              
              469,426Proceeds
                  from Federal Home Loan Bank borrowings
              
              
              34,500,000
              
              
              55,100,000Repayments
                  of Federal Home Loan Bank borrowings
              
              
              (6,276,626
              )
              
              (50,571,976
              )Net
                  change in advance payments from borrowers for taxes and insurance
              
              
              299,182
              
              
              371,928Purchase
                  of treasury stock
              
              
              (537,796
              )
              
              -Net
                  cash from financing activities
              
              
              30,328,111
              
              
              5,369,378Increase
                  in cash and cash equivalents
              
              
              6,622,534
              
              
              8,727,009Cash
                  and cash equivalents, beginning of period
              
              
              9,482,234
              
              
              4,092,931Cash
                  and cash equivalents, end of period
              
              $
              16,104,768
              
              $
              12,819,940**Supplemental
                  cash flow information:**Interest
                  paid on deposits and borrowings
              
              $
              5,022,959
              
              $
              4,750,103Income
                  taxes (refunded) paid
              
              $
              -
              
              $
              (34,497
              )**Supplemental
                  noncash disclosure:**Common
                  stock in ESOP subject to contingent repurchase obligation
              
              $
              202,779
              
              $
              138,504Transfer
                  of loans to foreclosed real estate
              
              $
              68,284
              
              $
              291,900*See
                  Notes to the Unaudited Consolidated Financial
                  Statements*




4


**EQUITABLE
      FINANCIAL CORP.**


**Notes
      to the Unaudited Consolidated Financial Statements**


**March
      31, 2008**





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





The
      unaudited consolidated financial statements as of and for the period ended
      March
      31, 2008 include the accounts of Equitable Financial Corp. (“Equitable
      Financial” or the “Company”) and its wholly owned subsidiary, Equitable Bank
      (the “Bank”). The Company, through the Bank, operates in a single business
      segment, providing traditional banking services through its office network.





The
      accompanying consolidated financial statements have not been audited by
      independent auditors. All significant intercompany accounts and transactions
      have been eliminated in consolidation. All adjustments that are, in the opinion
      of management, necessary for the fair presentation of the interim financial
      statements have been included. Such adjustments were of a normal recurring
      nature. The unaudited consolidated financial statements have been prepared
      in
      accordance with U.S. generally accepted accounting principles for interim
      financial information in accordance with instructions to Form 10-QSB and Article
      10 of Regulation S-X promulgated by the Securities and Exchange Commission
      and,
      therefore, do not include all of the information and notes required for complete
      audited financial statements. The unaudited consolidated financial statements
      should be read in conjunction with the audited consolidated financial statements
      and notes thereto included in our Annual Report on Form 10-KSB for the year
      ended June 30, 2007, which was filed with the Securities and Exchange Commission
      on September 28, 2007. The results of operations for the three and nine month
      periods ended March 31, 2008 are not necessarily indicative of the results
      that
      may be expected for the entire year or any other interim period.





In
      preparing financial statements in conformity with U.S. generally accepted
      accounting principles, management is required to make estimates and assumptions
      that affect the reported amounts of assets and liabilities and the disclosure
      of
      contingent assets and liabilities at the date of the financial statements and
      income and expenses during the reporting period. Actual results could differ
      significantly from those estimates. Material estimates that are particularly
      susceptible to significant change in the near term relate to determination
      of
      the allowance for loan losses, deferred tax valuation and the fair values of
      financial instruments.





Certain
      prior period amounts have been reclassified to correspond with the current
      period presentations.





**(2)**
            **Critical
                Accounting Policies**





*Allowance
      for Loan Losses* .
      The
      allowance for loan losses is the amount estimated by management as necessary
      to
      cover probable incurred credit losses in the loan portfolio at the statement
      of
      financial condition date. The allowance is established through the provision
      for
      loan losses, which is charged to income. Determining the amount of the allowance
      for loan losses necessarily involves a high degree of judgment. Among the
      material estimates required to establish the allowance are the following: loss
      exposure at default; the amount and timing of future cash flows on impacted
      loans; value of collateral; and determination of loss factors to be applied
      to
      the various elements of the portfolio. All of these estimates are susceptible
      to
      significant change. Management reviews the level of the allowance on a quarterly
      basis and establishes the provision for loan losses based upon an evaluation
      of
      the portfolio, past loss experience, current economic conditions and other
      factors related to the collectibility of the loan portfolio. Although we believe
      that we use the best information available to establish the allowance for loan
      losses, future adjustments to the allowance may be necessary if economic
      conditions differ substantially from the assumptions used in making the
      evaluation. In addition, the Office of Thrift Supervision, as an integral part
      of its examination process, periodically reviews our allowance for loan losses
      and may require us to recognize adjustments to the allowance based on its
      judgments about information available to it at the time of its examination.
      A
      large loss could deplete the allowance and require increased provisions to
      replenish the allowance, which would negatively affect earnings.





*Mortgage
      Servicing Rights.* The
      estimated value of mortgage servicing rights are capitalized upon the sale
      of
      loans. The estimated value takes into consideration contractually known amounts,
      such as loan balance, term and interest rate. These estimates are impacted
      by
      loan prepayment speeds, servicing costs, and discount rates used to compute
      a
      present value of the cash flow stream. Changes in these estimates impact fair
      value and could require the creation of a valuation allowance or recovery.
      The
      fair value of mortgage servicing rights is highly sensitive to changes in
      assumptions. Changes in prepayment speed assumptions have the most significant
      impact on the fair value of mortgage servicing rights. Generally, as interest
      rates decline, prepayments accelerate with increased refinance activity, which
      results in a decrease in the fair value of mortgage servicing rights. As
      interest rates rise, prepayments generally slow, which results in an increase
      in
      the fair value of mortgage servicing rights. All estimates are reviewed for
      reasonableness on a quarterly basis and adjusted as necessary to reflect current
      and anticipated market conditions. Thus, any measurement of fair value is
      limited by the conditions existing and the assumptions utilized as of a
      particular point in time, and those assumptions may not be appropriate if
      applied at a different point in time.





5


**(3)**
            **Earnings
                Per Share**





Basic
      earnings (loss) per share is computed by dividing income available to common
      stockholders by the weighted average number of common stock outstanding for
      the
      period. Weighted
      average common shares outstanding during the period includes allocated and
      committed-to-be-released employee stock ownership plan shares. D iluted
      earnings (loss) per share shows the dilutive effect, if any, of additional
      common shares issuable under stock options. The Company has no common stock
      equivalents; consequently, basic and diluted earnings (loss) per share are
      the
      same.





**Three
                  Months Ended**
              
              **Nine
                  Months Ended****March
                  31,**
              
              **March
                  31,****2008**
              
              **2007**
              
              **2008**
              
              **2007**Net
                  (loss)
              
              $
              (193,478
              )
              $
              (411,503
              )
              $
              (623,732
              )
              $
              (1,036,653
              )Weighted
                  average shares outstanding for the period
              
              
              3,098,456
              
              
              3,179,423
              
              
              3,113,185
              
              
              3,177,135(Loss)
                  per share
              
              $
              (0.06
              )
              $
              (0.13
              )
              $
              (0.20
              )
              $
              (0.33
              )




**(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, 2008,
      and
      June 30, 2007 are as follows:




**March
                  31, 2008****Amortized
                  Cost**
              
              **Gross
                  Unrealized Gains**
              
              **Gross
                  Unrealized Losses**
              
              **Fair
                  Value**Available
                  for sale:Mortgage-backed
                  securities
              
              
              1,479,849
              
              
              8,132
              
              
              (6,661
              )
              
              1,481,320U.S.
                  government-sponsored entity securities
              
              
              4,967,843
              
              
              -
              
              
              -
              
              
              4,967,843Municipal
                  obligations
              
              
              -
              
              
              -
              
              
              -
              
              
              -Total
                  investment and mortgage-backed securities, available for
                  sale
              
              $
              6,447,692
              
              $
              8,132
              
              $
              (6,661
              )
              $
              6,449,163**June
                  30, 2007****Amortized
                  Cost**
              
              
              **Gross**
                **Unrealized**
                **Gains**
              
              
              **Gross**
                **Unrealized**
                **Losses**
              
              
              **Fair
                  Value**Available
                  for sale:Mortgage-backed
                  securities
              
              
              1,724,293
              
              
              10,494
              
              
              (64,497
              )
              
              1,670,290U.S.
                  government-sponsored entity securities
              
              
              3,985,000
              
              
              -
              
              
              (43,736
              )
              
              3,941,264Municipal
                  obligations
              
              
              993,012
              
              
              -
              
              
              (20,292
              )
              
              972,720Total
                  investment and mortgage-backed securities, available for
                  sale
              
              $
              6,702,305
              
              $
              10,494
              
              $
              (128,525
              )
              $
              6,584,274




Management
      believes that all unrealized losses as of March 31, 2008, were market-related,
      with no impairments. The unrealized losses are believed to be due to movements
      in interest rates and temporary in nature. As of March 31, 2008, we had the
      ability and intent to hold these securities until a market price recovery or
      maturity. ****





6


**(5)**
            **Loan
                Portfolio Composition**





We
      originate commercial (including agriculture), consumer, one-to four-family
      residential, multi-family and non-residential real estate and construction
      loans. The Company currently places emphasis on originating non-residential
      real
      estate, construction and commercial loans.





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




**March
                  31, 2008**
              
              **June
                  30, 2007****Amount**
              
              **Percent**
              
              **Amount**
              
              **Percent****(Dollars
                  in thousands)**Real
                  estate-mortgage:One-to
                  four-family
              
              $
              60,924
              
              
              36.8
              %
              $
              65,266
              
              
              42.4
              %Multi-family
              
              
              9,657
              
              
              5.8
              %
              
              6,874
              
              
              4.4
              %Nonresidential
              
              
              43,680
              
              
              26.4
              %
              
              37,019
              
              
              24.1
              %Total
                  real estate-mortgage loans
              
              
              114,261
              
              
              69.0
              %
              
              109,159
              
              
              70.9
              %Construction
              
              
              5,353
              
              
              3.2
              %
              
              4,810
              
              
              3.1
              %Commercial
              
              
              28,572
              
              
              17.3
              %
              
              24,154
              
              
              15.7
              %Consumer:Home
                  equity
              
              
              13,366
              
              
              8.1
              %
              
              12,323
              
              
              8.0
              %Other
                  consumer
              
              
              3,998
              
              
              2.4
              %
              
              3,513
              
              
              2.3
              %Total
                  consumer loans
              
              
              17,364
              
              
              10.5
              %
              
              15,836
              
              
              10.3
              %Total
                  loans
              
              
              165,550
              
              
              100.0
              %
              
              153,959
              
              
              100.0
              %Deferred
                  loan origination costs, net
              
              
              496
              
              
              
              
              
              428Allowance
                  for loan losses
              
              
              (1,241
              )
              
              
              
              
              (1,057
              )Loans,
                  net
              
              $
              164,805
              
              
              
              
              $
              153,330


**(6)**
            **Allowance
                for Loan Losses**





The
      allowance for loan losses is a valuation allowance for probable incurred credit
      losses in the loan portfolio. We evaluate the allowance for loan losses on
      a
      quarterly basis. When additional allowances are necessary, a provision for
      loan
      losses is charged to earnings. Although the Company did experience an increase
      in non-performing loans during the quarter the amount is comprised of
      three loans, none of which the Company anticipates any loss.





The
      following table summarizes the activity in the provision for loan losses for
      the
      three and nine months ended March 31, 2008 and 2007.





**Three
                  Months Ended**
              
              **Nine
                  Months Ended****March
                  31,**
              
              **March
                  31,****2008**
              
              **2007**
              
              **2008**
              
              **2007****(Dollars
                  in thousands)**
              
              **(Dollars
                  in thousands)**Allowance
                  at beginning of period
              
              $
              1,140
              
              $
              928
              
              $
              1,057
              
              $
              926Provision
                  for loan losses
              
              
              104
              
              
              128
              
              
              224
              
              
              188Charge-offs
              
              
              (5
              )
              
              (67
              )
              
              (55
              )
              
              (125
              )Recoveries
              
              
              2
              
              
              1
              
              
              15
              
              
              1Allowance
                  at end of period
              
              $
              1,241
              
              $
              990
              
              $
              1,241
              
              $
              990Allowance
                  to nonaccrual loans
              
              
              168.2
              %
              
              253.2
              %
              
              168.2
              %
              
              253.2
              %Allowance
                  to total loans outstanding at the end of the period
              
              
              0.7
              %
              
              0.7
              %
              
              0.7
              %
              
              0.7
              %Net
                  charge-offs to average loans outstanding during the period
              
              
              0.0
              %
              
              0.0
              %
              
              0.0
              %
              
              0.1
              %




7




**(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, 2008**
              
              **June
                  30, 2007****Amount**
              
              **Percent**
              
              **Amount**
              
              **Percent****(Dollars
                  in thousands)**Noninterest-bearing
                  accounts
              
              $
              8,288
              
              
              6.4
              %
              $
              6,466
              
              
              5.1
              %Interest-bearing
                  NOW
              
              
              14,189
              
              
              10.9
              %
              
              12,424
              
              
              9.7
              %Money
                  market
              
              
              18,848
              
              
              14.5
              %
              
              14,317
              
              
              11.2
              %Savings
                  accounts
              
              
              4,302
              
              
              3.3
              %
              
              4,398
              
              
              3.4
              %Certificates
                  of deposit
              
              
              84,461
              
              
              64.9
              %
              
              90,140
              
              
              70.6
              %Total
              
              $
              130,088
              
              
              100.0
              %
              $
              127,745
              
              
              100.0
              %





**(8)**
            **Employee
                Stock Ownership Plan**





On
      November 8, 2005, the Company adopted an employee stock ownership plan (the
      “ESOP”) for the benefit of substantially all employees. The ESOP borrowed
      approximately $1.3 million from the Company and used those funds to acquire
      129,262 shares of the Company’s common stock in connection with the Bank’s
      reorganization at a price of $10.00 per share.





Shares
      purchased by the ESOP with the loan proceeds are held in a suspense account
      and
      are allocated to ESOP participants on a pro rata basis as principal and interest
      payments are made by the ESOP to the Company. The loan is secured by shares
      purchased with the loan proceeds and will be repaid by the ESOP with funds
      from
      the Company’s discretionary contributions to the ESOP and earnings on ESOP
      assets. Annual principal and interest payments of approximately $145,000 are
      to
      be made by the ESOP.





We
      account for our ESOP in accordance with Statement of Position 93-6, *Employers’
      Accounting for Employee Stock Ownership Plans* .
      Accordingly, as shares are committed to be released from collateral, we report
      employee compensation expense equal to the average market price of the shares
      and the shares become outstanding for earnings per share (“EPS”) computations.
      Dividends on allocated ESOP shares reduce retained earnings; dividends on
      unearned ESOP shares reduce accrued interest.





Because
      participants may require the Company to purchase their ESOP shares upon
      termination of their employment, the appraised fair value of all earned and
      allocated ESOP shares may become a liability.




**For
                  the Three Months**
              
              **For
                  the Nine Months****Ended
                  March 31,**
              
              **Ended
                  March 31,****2008**
              
              **2007**
              
              **2008**
              
              **2007**ESOP
                  compensation expense
              
              $
              20,439
              
              $
              23,391
              
              $
              60,386
              
              $
              71,013ESOP
                  shares allocated to employees
              
              
              2,271
              
              
              2,271
              
              
              6,813
              
              
              6,813ESOP
                  shares allocated in prior periods
              
              
              20,260
              
              
              11,176
              
              
              15,718
              
              
              6,634ESOP
                  shares unallocated
              
              
              106,731
              
              
              115,815
              
              
              106,731
              
              
              115,815Fair
                  value of ESOP shares unallocated
              
              $
              960,579
              
              $
              1,192,895
              
              $
              960,579
              
              $
              1,192,895


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





In
      November 2006, the Company’s stockholders approved the Equitable Financial Corp.
      2006 Equity Incentive Plan (the “Plan”). The Plan provides for the grant of
      options and stock awards to directors, officers, and employees of the Company.
      Under the terms of the Plan, 226,208 shares of the Company’s common stock were
      reserved for issuance. Of the 226,208 shares of common stock, 161,577 shares
      were reserved for issuance upon the exercise of stock options and 64,631 shares
      were registered for restricted stock awards. As of March 31, 2008 no options
      or
      stock awards had been granted.





8


When
      the
      Company commences the restricted stock award program, compensation expense
      will
      be recognized over the vesting period of the shares based on the market value
      of
      the Company’s common stock at the issue date. The unamortized cost of shares not
      yet vested is reported as a reduction of stockholders’ equity. No compensation
      expense had been recorded pertaining to the Plan as of March 31, 2008 as the
      Company had not implemented the stock award program. At March 31, 2008, the
      Company had funded a trust that purchased 64,631 shares of stock for the
      restricted stock awards program for approximately $695,000.





**(10)**
            **Income
                Taxes**





The
      Company adopted the provisions of Financial Accounting Standards Board (“FASB”)
      Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”),
      effective July 1, 2007. FIN 48 provides clarification on accounting for
      uncertainty in income taxes recognized in an enterprise’s financial statements
      in accordance with FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48
      prescribes a recognition threshold and measurement attribute for the financial
      statement recognition and measurement of a tax position taken or expected to
      be
      taken in a tax return. As a result of the Company’s evaluation of the
      implementation of FIN 48, no significant income tax uncertainties were
      identified. Therefore, the Company recognized no adjustment for unrecognized
      income tax benefits during the three and nine months ended March 31, 2008.
      Corporate tax returns for the years 2004 through 2007 remain open to examination
      by taxing authorities.





**(11)**
            **Recent
                Accounting Pronouncements**





In
      September 2006, the FASB issued FASB Statement No. 157, “Fair Value
      Measurements,” to provide guidance on how to measure fair value, which would
      apply broadly to financial and non-financial assets and liabilities that are
      measured at fair value under other authoritative accounting pronouncements.
      The
      statement defines fair value, provides a hierarchy that prioritizes inputs
      that
      should be used in valuation techniques used to measure fair value, and expands
      current disclosures about the use of fair value to measure assets and
      liabilities. The disclosures focus on the methods used for the measurements
      and
      their effect on earnings and would apply whether the assets were measured at
      fair value in all periods, such as trading securities, or in only some periods,
      such as for impaired assets. A transition adjustment would be recognized as
      a
      cumulative-effect adjustment to beginning retained earnings for the fiscal
      year
      in which the statement is initially adopted. This adjustment is measured as
      the
      difference between the carrying amounts and the fair values of those financial
      instruments at the date of adoption. The statement is effective for fiscal
      years
      beginning after November 15, 2007 (or January 1, 2008 for calendar-year
      companies) and interim periods within those fiscal years for financial assets
      and liabilities. The FASB has provided for a one-year deferral of the
      implementation of this standard for other nonfinancial assets and liabilities.
      The fair value disclosures required by this statement will be effective for
      the
      first interim period in which the statement is adopted. The Company is currently
      evaluating the impact of the statement on its financial position, results of
      operations and liquidity.





In
      September 2006, the Emerging Issues Task Force (“EITF”) reached a final
      consensus on 06-04 “Accounting for Deferred Compensation and Postretirement
      Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements.” The
      consensus stipulates that an agreement by an employer to share a portion of
      the
      proceeds of a life insurance policy with an employee during the postretirement
      period is a postretirement benefit arrangement required to be accounted for
      under SFAS No. 106 or Accounting Principles Board Opinion (“APB”) No. 12,
“Omnibus Opinion - 1967.” The consensus concludes that the purchase of a
      split-dollar life insurance policy does not constitute a settlement under SFAS
      No. 106 and, therefore, a liability for the postretirement obligation must
      be
      recognized under SFAS No. 106 if the benefit is offered under an arrangement
      that constitutes a plan or under APB No. 12 if it is not part of a plan. Issue
      06-04 is effective for annual or interim reporting periods beginning after
      December 15, 2007. The Company does not feel EITF 06-04 will have any impact
      on
      its financial condition because their split-dollar life insurance policy ends
      upon retirement of the covered employee.




In
      February 2007, FASB issued SFAS No. 159, “The Fair Value Option for Financial
      Assets and Financial Liabilities-Including an amendment of FASB Statement No.
      115” (“SFAS 159”).  SFAS 159 expands the use of fair value accounting but
      does not affect existing standards which require assets and liabilities to
      be
      carried at fair value.  Under SFAS 159, a company may elect to use fair
      value to measure accounts and loans receivable, available-for-sale and
      held-to-maturity securities, equity method investments, accounts payable,
      guarantees, issued debt and other eligible financial instruments.  SFAS 159
      is effective for fiscal years beginning after November 15, 2007. The Company
      is
      in the process of determining the effects if any this statement will have on
      its
      financial condition, results of operations and liquidity.





9


In
      March
      2007, the Emerging Issues Task Force (“EITF”) reached a final conclusion on
      Issue 06-10, “Accounting for Collateral Assignment Split-Dollar Life Insurance
      Arrangement.” The consensus concludes that a liability must be recognized for
      the postretirement obligation related to a collateral assignment split-dollar
      life insurance arrangement in accordance with SFAS No. 106 or APB No. 12. Any
      assets should be recognized and measured based on the nature and substance
      of
      the collateral assignment split-dollar life insurance arrangement. The effective
      date of EITF 06-10 is for fiscal years beginning after December 15, 2007. The
      Company does not feel EITF06-10 will have a financial statement impact because
      its split-dollar life insurance agreement ends upon retirement or termination
      of
      the covered employee.





In
      December 2007, the FASB issued SFAS No. 141(revised), “Business Combinations”.
      The Statement establishes principles and requirements for how an acquirer
      recognizes and measures tangible assets acquired, liabilities assumed, goodwill
      and any noncontrolling interests and identifies related disclosure requirements
      for business combinations. Measurement requirements will result in all assets,
      liabilities, contingencies and contingent consideration being recorded at fair
      value on the acquisition date, with limited exceptions. Acquisition costs and
      restructuring costs will generally be expensed as incurred. This Statement
      is
      effective for business combinations for which the acquisition date is on or
      after the beginning of the first annual reporting period beginning on or after
      December 15, 2008.





In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements - an amendment of ARB No. 51”. The Statement
      establishes accounting and reporting standards for noncontrolling interests
      in a
      subsidiary and for the deconsolidation of a subsidiary. Minority interests
      will
      be recharacterized as noncontrolling interests and classified as a component
      of
      equity. It also establishes a single method of accounting for changes in a
      parent’s ownership interest in a subsidiary and requires expanded disclosures.
      This Statement is effective for fiscal years beginning on or after December
      15,
      2008. The Company does not expect the adoption of this Statement will have
      a
      material impact on its financial position, results of operations, and
      liquidity.





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





Management’s
      discussion and analysis of the Company’s financial condition and results of
      operations at and for the three and nine months ended March 31, 2008 and 2007
      is
      intended to assist in understanding the financial condition and results of
      operations of the Company. The information contained in this section should
      be
      read in conjunction with the Unaudited Consolidated Financial Statements and
      the
      notes and tables thereto, appearing in Part I, Item 1 of this
      report.





**Forward-Looking
      Statements**





This
      quarterly report contains forward-looking statements that are based on
      assumptions and may describe future plans, strategies and expectations of
      Equitable Financial MHC, Equitable Financial and Equitable Bank. These
      forward-looking statements are generally identified by use of the words
“believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar
      expressions.





Equitable
      Financial MHC, Equitable Financial and Equitable Bank’s ability to predict
      results or the actual effect of future plans or strategies is inherently
      uncertain. Factors which could have a material adverse effect on the operations
      of Equitable Financial and its subsidiary include, but are not limited to,
      changes in interest rates, national and regional economic conditions,
      legislative and regulatory changes, monetary and fiscal policies of the U.S.
      government, including policies of the U.S. Treasury and the Federal Reserve
      Board, the quality and composition of the loan or investment portfolios, demand
      for loan products, deposit flows, competition, demand for financial services
      in
      Equitable Financial and Equitable Bank’s market area, changes in real estate
      market values in Equitable Financial and Equitable Bank’s market area, changes
      in relevant accounting principles and guidelines and inability of third party
      service providers to perform.





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.





10


**General**





The
      Company is headquartered in Grand Island, Nebraska and is a community-oriented
      financial institution dedicated to serving the financial services needs of
      consumers and businesses within our market areas, including North Platte and
      Omaha. The Bank is engaged primarily in the business of attracting deposits
      from
      the general public and using such funds to originate commercial (including
      agriculture), consumer, one-to four-family residential, multi-family and
      non-residential real estate and construction loans.





The
      Federal Deposit Insurance Corporation, through the Deposit Insurance Fund,
      insures the Bank’s deposit accounts up to the applicable legal limits. The Bank
      is a member of the Federal Home Loan Bank System.





**Statement
      of Financial Condition Analysis**





***Overview*** **.** Total
      assets at March 31, 2008 were $213.0 million, an increase of $30.2 million
      or
      16.5% from total assets of $182.8 million at June 30, 2007. Total liabilities
      at
      March 31, 2008 were $191.1 million, compared to $159.8 million at June 30,
      2007,
      an increase of $31.3 million or 19.6%. Stockholders’ equity at March 31, 2008
      was $21.9 million compared to $23.0 million at June 30, 2007, a decrease of
      $1.1
      million or 4.8%.





***Loans.*** ** We
      originate commercial (including agriculture), consumer, one-to four-family
      residential, multi-family and non-residential real estate and construction
      loans. The Company places heightened emphasis on originating non-residential
      real estate, construction and commercial loans. Loans, net increased $11.5
      million, or 7.5%, to $164.8 million at March 31, 2008 compared to $153.3 million
      at June 30, 2007. This increase was primarily due to commercial loans increasing
      $4.4 million, nonresidential real estate loans increasing $6.7 million,
      multi-family real estate loans increasing $2.8 million, and consumer home equity
      loans increasing $1.0 million. This activity is in line with our continued
      emphasis on originating non-residential real estate, construction and commercial
      loans. These increases were offset by a decrease in 1-4 family residential
      real
      estate of $4.3 million.





***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, 2008. There was one loan 90 days or more past due
      that was accruing interest at March 31, 2008.




**March
                  31,**
              
              **June
                  30,****2008**
              
              **2007****(Dollars
                  in thousands)**Non-accrual
                  loans:Real
                  estate-mortgage
              
              $
              353
              
              $
              466Construction
              
              
              220
              
              
              -Commercial
              
              
              37
              
              
              -Consumer
              
              
              128
              
              
              3Total
                  non-accrual loans
              
              
              738
              
              
              469Loans
                  90 days, still on accrual
              
              
              25
              
              
              -Foreclosed
                  assets, net
              
              
              4
              
              
              83Total
                  non-performing assets
              
              $
              767
              
              $
              552Total
                  non-accrual loans to total loans
              
              
              0.4
              %
              
              0.3
              %Total
                  non-accrual loans to total assets
              
              
              0.3
              %
              
              0.3
              %Total
                  non-performing assets to total assets
              
              
              0.4
              %
              
              0.3
              %


Non-accrual
      loans increased $269,000 to $738,000 at March 31, 2008, compared to $469,000
      at
      June 30, 2007. The increase in construction loans is due to one loan that is
      backed by 1-4 family residential real estate. During April 2008, the customers
      sold the house and the Company received the full value of the principal balance
      of the loan. The increase in consumer loans is primarily due to one customer
      with a loan balance of $122,000. This loan is a home equity loan that is secured
      by two residential real estate properties. The customer is awaiting approval
      to
      sell the house. In the event the customer does not sell the house, the Bank
      will
      foreclose. The Company believes based on recent appraisals the property will
      be
      sufficient to cover the principal balance of the loan when sold.





11


During
      the nine months ended March 31, 2008 we sold two homes that were foreclosed
      on
      for $177,000. The book value of these assets was $148,000. One house was
      foreclosed on prior to June 30, 2007 with a book value of $83,000 and the other
      house was foreclosed on during the nine month period ended March 31, 2008 with
      a
      book value of $65,000.





***Investments
      and Mortgage-backed Securities.*** Our
      securities portfolio consists primarily of U.S. Government-sponsored entity
      securities and mortgage-backed securities. Securities available-for-sale
      decreased $135,000, or 2.1%, between June 30, 2007 and March 31, 2008. The
      decrease was the result of net maturities and repayments in the portfolio of
      $286,000 and an increase in the market value of the portfolio of $120,000.
      Securities held-to-maturity decreased $74,000 between June 30, 2007 and March
      31, 2008. This decrease was due to repayments. The Company evaluates its
      securities with significant declines in fair value on a quarterly basis to
      determine whether they should be considered temporarily or other than
      temporarily impaired. The unrealized losses on investments is attributable
      to
      changes in interest rates, rather than credit quality, and the Company has
      the
      ability and management intent to hold these securities until a market price
      recovery or maturity. The Company purchased $11.3 million in time deposits
      with
      financial institutions during the quarter ended March 31, 2008. All of the
      time
      deposits will mature at 90 days or longer.





***Deposits.*** Our
      primary source of funds is our deposit accounts, which are comprised of
      non-interest-bearing accounts, interest-bearing NOW accounts, money market
      accounts, savings accounts and certificates of deposit. Total deposits increased
      to $130.1 million from $127.7 million during the nine months ended March 31,
      2008, an increase of $2.4 million or 1.9%. The increase was partially due to
      an
      increase in core deposits of $8.0 million resulting from an increase in
      non-interest bearing checking accounts of $1.8 million and an increase in the
      Company’s interest bearing checking accounts of $1.8 million with higher yields
      from new customers. Also contributing was an increase in money market accounts
      of $4.4 million. The increase in money market accounts was primarily due to
      one
      existing customer depositing funds with the Bank due to the sale of a business
      venture. This deposit is highly volatile and not likely to remain with the
      Company for an extended period of time as we anticipate the money will be
      transferred into investments with greater returns. Additionally, the increase
      in
      money market accounts is also partially due to new customers. Offsetting the
      increase in core deposits was a decrease in certificates of deposit of $6.0
      million. This decrease in certificates was primarily due to a decrease in
      brokered certificates of $5.5 million. We continue to utilize brokered
      certificates to reduce the overall cost-of-funds.





***Borrowings*** .
      We
      utilize borrowings from the Federal Home Loan Bank of Topeka to supplement
      our
      supply of funds for loans and investments. Federal Home Loan Bank borrowings
      increased $28.2 million to $58.8 million at March 31, 2008 from $30.6 million
      at
      June 30, 2007. The Company advanced additional funds during the nine months
      ended March 31, 2008, to mitigate interest rate risk by using long-term low-cost
      funds due to the declining rate environment. The funding from these advances
      was
      used to purchase multiple time deposits with various financial instituions.
      The
      advances outstanding at March 31, 2008 mature in 2008 through 2018.





**Results
      of Operations for the Three and Nine Months Ended March 31, 2008 and
      2007**





***Overview.*** We
      recorded a net loss of $193,000 during the three months ended March 31, 2008,
      compared to a net loss of $412,000 during the three months ended March 31,
      2007,
      a decrease of $219,000. Our net loss for the nine months ended March 31, 2008
      was $624,000 compared to $1,037,000 at March 31, 2007, a decrease of $413,000.
      The decrease in our net loss is largely due to an increase in net interest
      income of $150,000 and $200,000 for the three and nine month periods ended
      March
      31, 2008, respectively. Also contributing significantly is the sale of loans
      during the three month period ended March 31, 2007 with a gross loss of
      $183,000. There was not a similar transaction that occurred during the period
      ended March 31, 2008. Additionally, the Company experienced an increase in
      service charges on deposit accounts of $42,000 and $189,000 for the three and
      nine month periods ended March 31, 2008, respectively and an increase in
      brokerage fee income of $63,000 and $175,000 for the three and nine month
      periods ended March 31, 2008, respectively. Offsetting these decreases in the
      net loss was an additional $39,000 of data processing fees for the three month
      period and $169,000 for the nine month period. Additionally, the income tax
      benefit recognized during the three months ended March 31 decreased by $217,000
      and during the nine months ended March 31 decreased by $325,000.




***Net
      Interest Income.*** ****** Net
      interest income is the most significant component of our earnings and consists
      of interest income on interest-earning assets offset by interest expense on
      interest-bearing liabilities. Changes in net interest income result from changes
      in volume, net interest spread and net interest margin. Volume relates to the
      level of interest-earning assets and interest-bearing liabilities. Net interest
      spread refers to the difference between the yield on interest-earning assets
      and
      the rate paid on interest-bearing liabilities. Net interest margin refers to
      net
      interest income divided by total interest-earning assets and is influenced
      by
      the level and mix of interest-earning assets and interest-bearing liabilities.




12


Net
      interest income before provision for loan losses totaled $1.1 million for the
      three months ended March 31, 2008, an increase of $150,000, compared to $946,000
      for the three months ended March 31, 2007. The increase in net interest income
      was primarily attributable to a $29.0 million increase in the average balance
      of
      commercial loans which hold a higher interest rate than the one-to four family
      residential real estate loans that were typically on our portfolio. For the
      nine
      months ended March 31, 2008, our net interest income before provision for loan
      losses totaled $3.1 million, an increase of $200,000, compared to $2.9 million
      for the nine months ended March 31, 2007. This increase in net interest income
      is also attributable to the increase in average balance of commercial loans,
      which we continue to emphasize and which on average carry a higher interest
      rate
      than mortgage loans. However, this increase was partially offset by an increase
      in interest expense from deposit accounts due to an increase in the average
      balance of high yield money market accounts of $6.6 million.






The
      following table summarizes average balances and average yield and costs for
      the
      three months ended March 31, 2008 and 2007.




**Three
                  Months Ended March 31,****2008**
              
              
              **2007****Average
                  Balance**
              
              **Interest
                  Income**
              
              **Yield/
                  Cost**
              
              
              **Average
                  Balance**
              
              **Interest
                  Income**
              
              **Yield/
                  Cost****(Dollars
                  in thousands)**Loans,
                  net
              
              $
              164,644
              
              $
              2,641
              
              
              6.42
              %
              
              $
              160,002
              
              $
              2,485
              
              
              6.21
              %Securities
                  and other
              
              
              19,326
              
              
              193
              
              
              3.99
              %
              
              
              12,942
              
              
              155
              
              
              4.79
              %Total
                  interest-bearing assets
              
              
              183,970
              
              
              2,834
              
              
              6.16
              %
              
              
              172,944
              
              
              2,640
              
              
              6.11
              %Total
                  interest-bearing deposits
              
              
              123,555
              
              
              1,227
              
              
              3.97
              %
              
              
              121,602
              
              
              1,212
              
              
              3.99
              %FHLB
                  borrowings
              
              
              41,418
              
              
              482
              
              
              4.65
              %
              
              
              36,559
              
              
              482
              
              
              5.27
              %Total
                  interest-bearing liabilities
              
              $
              164,973
              
              $
              1,709
              
              
              4.14
              %
              
              $
              158,161
              
              $
              1,694
              
              
              4.28
              %Interest
                  rate spread
              
              
              
              
              
              
              
              
              2.02
              %
              
              
              
              
              
              
              
              
              1.83
              %Net
                  interest margin
              
              
              
              
              
              
              
              
              2.45
              %
              
              
              
              
              
              
              
              
              2.19
              %





Interest
      rate spread increased during the three months ended March 31, 2008 by 19 basis
      points from 1.83% to 2.02%. This is primarily due to an increase of 21 basis
      points in the average yield for loans. The increase in yield on loans is due
      to
      our continuing emphasis on the non-residential real estate, commercial, and
      construction loans, which generally are based on higher rate indices than one-to
      four-family loans. The increases in these loan categories resulted in an
      increase in our net interest margin of 26 basis points.




13


**Nine
                  Months Ended March 31,****2008**
              
              
              **2007****Average
                  Balance**
              
              **Interest
                  Income**
              
              **Yield/
                  Cost**
              
              
              **Average
                  Balance**
              
              **Interest
                  Income**
              
              **Yield/
                  Cost****(Dollars
                  in thousands)**Loans,
                  net
              
              $
              158,068
              
              $
              7,701
              
              
              6.50
              %
              
              $
              157,644
              
              $
              7,359
              
              
              6.22
              %Securities
                  and other
              
              
              15,706
              
              
              519
              
              
              4.41
              %
              
              
              12,327
              
              
              444
              
              
              4.80
              %Total
                  interest-bearing assets
              
              
              173,774
              
              
              8,220
              
              
              6.31
              %
              
              
              169,971
              
              
              7,803
              
              
              6.12
              %Total
                  interest-bearing deposits
              
              
              122,698
              
              
              3,851
              
              
              4.18
              %
              
              
              118,795
              
              
              3,471
              
              
              3.90
              %FHLB
                  borrowings
              
              
              32,194
              
              
              1,223
              
              
              5.07
              %
              
              
              36,190
              
              
              1,445
              
              
              5.32
              %Total
                  interest-bearing liabilities
              
              $
              154,892
              
              $
              5,074
              
              
              4.37
              %
              
              $
              154,985
              
              $
              4,916
              
              
              4.23
              %Interest
                  rate spread
              
              
              
              
              
              
              
              
              1.94
              %
              
              
              
              
              
              
              
              
              1.89
              %Net
                  interest margin
              
              
              
              
              
              
              
              
              2.41
              %
              
              
              
              
              
              
              
              
              2.26
              %




Interest
      rate spread increased during the nine months ended March 31, 2008 by 5 basis
      points from 1.89% to 1.94%. This is primarily due to an increase of 28 basis
      points in the average yield for loans. The increase in yield on loans is due
      to
      our continuing emphasis on the non-residential real estate, commercial, and
      construction loans. The increase in the average yield on loans was offset by
      an
      increase in the average cost of funds for deposit accounts of 28 basis points.
      The increase in cost of funds was due to an increase in the average balance
      of
      high yield money market accounts. These changes resulted in an increase in
      our
      net interest margin of 15 basis points.




***Provision
      for Loan Losses.*** The
      allowance for loan losses is a valuation allowance for probable incurred credit
      losses in the loan portfolio. We evaluate the allowance for loan losses on
      a
      quarterly basis. When additional allowances are necessary, a provision for
      loan
      loss is charged to earnings. During the quarter ended March 31, 2008 our
      evaluation resulted in a provision of $104,000 compared to $128,000 for the
      three months ended March 31, 2007. For the nine months ended March 31, 2008
      the
      provision increased $36,000 to $224,000 compared to $188,000 at the nine months
      ended March 31, 2007. The increased provisions are a result of the continuing
      shift in the composition of the Bank’s loan portfolio from residential real
      estate loans to non-residential real estate and commercial loans and continuing
      deteriorations in economic indicators.





***Non-interest
      Income.*** During
      the quarter ended March 31, 2008 non-interest income increased $247,000 from
      the
      comparable period in 2007. Service charges on deposit accounts increased by
      $42,000 as a result of our focus on increasing service charge fees. Brokerage
      fee income increased $63,000 as a result of increased productivity in our
      investment departments. Gain on sale of loans increased $148,000 due to a sale
      occurring during the three months ended March 31, 2007 with a gross loss of
      $183,000. There was no similar transaction during the three months ended March
      31, 2008. For the nine months ended March 31, 2008, non-interest income
      increased $562,000 from $939,000 to $1,501,000. This increase is also due to
      an
      increase in service charges on deposit accounts of $189,000 and brokerage fee
      income of $175,000. For the nine months ended March 31, 2008 the gain on sale
      of
      loans increased $166,000 due to no like kind sale of loans resulting in a loss
      during the nine months ended March 31, 2008. Additionally, other income
      increased by $66,000. The primary reason for this increase was a referral fee
      of
      $60,000 received for one loan.





***Non-interest
      Expenses.***  Total
      non-interest expenses increased $14,000 for the three months ended March 31,
      2008, from the prior three month period ended March 31, 2007. This increase
      was
      primarily due to an increase in data processing fees of $38,000 Offsetting
      this
      increase was a decrease in professional fees of $25,000. While the Company
      did
      not experience significant differences in most of the non-interest expenses,
      the
      Company did experience slight decreases in salaries and employee benefits,
      advertising and public relations, and professional fees as a result of its
      efforts to address non-interest expense.





For
      the
      nine months ended March 31, 2008 non-interest expenses increased $47,000 from
      the nine months ended March 31, 2007. During the nine month period we incurred
      increases in salaries and employee benefits of $108,000, data processing fees
      of
      $169,000 and insurance and surety bond premiums of $84,000. These increases
      were
      the result of ongoing operational expense incurred in the continuing expansion
      of the Company’s products, services and locations. These increases were offset
      by decreases of $67,000 in occupancy and equipment, $76,000 in advertising
      and
      public relations, professional fees of $25,000, $40,000 in supplies, telephone
      and postage, $18,000 in contributions and donations and other expenses of
      $52,000. Also offsetting the increases was the net proceeds of $40,000 on the
      sale of foreclosed assets.





14


***Income
      Taxes.*** The
      Company recorded a tax benefit of $75,000 during the three months ended March
      31, 2008 compared to a tax benefit of $293,000 during the three months ended
      March 31, 2007. For the nine months ended March 31, 2008, the Company recorded
      a
      tax benefit of $352,000 compared to a tax benefit of $677,000 during the nine
      months ended March 31, 2007. The tax benefit at March 31, 2008 and 2007 were
      calculated based on the tax items and the operating loss or income recorded
      during the respective quarters.





**Liquidity
      and Capital Management**





***Liquidity
      Management.*** Liquidity is the ability to meet current and future financial obligations of
      a
      short-term nature. Our primary sources of funds consist of deposit in-flows,
      loan repayments, maturities and sales of securities, and Federal Home Loan
      Bank
      borrowings. While maturities and scheduled amortization of loans and securities
      are predictable sources of funds, deposit flows and loan prepayments are greatly
      influenced by general interest rates, economic conditions and
      competition.





We
      regularly adjust our investments in liquid assets based upon our assessment
      of
      (1) expected loan demand, (2) expected deposit flows, (3) yields available
      on
      interest-earning deposits and securities and (4) the objectives of our
      asset/liability management policy.





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, 2008, cash and cash equivalents totaled $16.1 million,
      an
      increase of $6.6 million from June 30, 2007. Securities classified as
      available-for-sale whose market value exceeds or equaled our cost, which provide
      additional sources of liquidity, totaled $5.5 million at March 31, 2008. Total
      securities classified as available-for-sale were $6.4 million at March 31,
      2008.
      Of this amount, $701,000 was 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, 2008, we
      had
      the ability to borrow a total of approximately $74.6 million from the Federal
      Home Loan Bank of Topeka. On March 31, 2008, we had $58.8 million of borrowings
      outstanding. It is our intention to hold these advances to maturity.
      Additionally, the Company has the ability to borrow $5.0 million from Wells
      Fargo and $4.4 million from Bankers Bank of the West. The balance in both of
      these lines of credit is zero at March 31, 2008. Future growth of our loan
      portfolio resulting from our expansion efforts may require us to borrow
      additional funds.





At
      March
      31, 2008, we had $16.2 million in loan commitments outstanding, which consisted
      of $884,000 million in mortgage loan commitments, $3.3 million in unused home
      equity lines of credit, $204,000 in personal lines of credit and $11.8 million
      in commercial lines of credit. Certificates of deposit due within one year
      of
      March 31, 2008 totaled $69.1 million, or 81.8%, of certificates of deposit.
      We
      believe the large percentage of certificates of deposit that mature within
      one
      year reflects the flat yield curve. If these maturing deposits do not remain
      with us, we will be required to seek other sources of funds, including other
      certificates of deposit and borrowings. Depending on market conditions, we
      may
      be required to pay higher rates on such deposits or other borrowings than we
      currently pay on the certificates of deposit due on or before March 31, 2009.
      We
      believe, however, based on past experience that a significant portion of our
      certificates of deposit will remain with us. We have the ability to attract
      and
      retain deposits by adjusting the interest rates offered.





***Capital
      Management.*** We
      are
      subject to various regulatory capital requirements administered by the Office
      of
      Thrift Supervision, including a risk-based capital measure. The risk-based
      capital guidelines include both a definition of capital and a framework for
      calculating risk-weighted assets by assigning balance sheet assets and
      off-balance sheet items to broad risk categories. At March 31, 2008, 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.





15


On
      February 28, 2008, the Company announced the completion of its previously
      disclosed stock repurchase program under which the Company acquired 59,355
      shares of its common stock. The average share price of the shares was $9.06
      per
      share and the aggregate repurchase price was approximately $538,000.





On
      March
      20, 2008, the Company issued a press release announcing that the Company’s Board
      of Directors approved the repurchase of up to 71,226 shares of the Company’s
      outstanding common stock, which is 5.0% of the outstanding shares not held
      by
      Equitable Financial MHC.





**Off-Balance
      Sheet Arrangements**





In
      the
      normal course of operations, we engage in a variety of financial transactions
      that, in accordance with U.S. generally accepted accounting principles, are
      not
      recorded in our financial statements. These transactions involve, to varying
      degrees, elements of credit, interest rate and liquidity risk. Such transactions
      are used primarily to manage customers’ requests for funding and take the form
      of loan commitments and lines of credit. We currently have no plans to engage
      in
      hedging activities in the future.





For
      the
      nine months ended March 31, 2008 and the year ended June 30, 2007, we did not
      engage in any off-balance sheet transactions reasonably likely to have a
      material effect on our financial condition, results of operations or cash flows.





**Commitments**





We
      currently lease our initial location in Omaha for $120,000
      annually.





**Item
      3. Controls and Procedures**





The
      Company’s management, including the Company’s principal executive officer and
      principal financial officer, have evaluated the effectiveness of the Company’s
“disclosure controls and procedures,” as such term is defined in Rule 13a-15(e)
      promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”). Based upon their evaluation, the principal executive officer and
      principal financial officer concluded that, as of the end of the period covered
      by this report, the Company’s disclosure controls and procedures were effective
      for the purposes of ensuring that the information required to be disclosed
      in
      the reports that the Company files or submits under the Exchange Act with the
      Securities and Exchange Commission (the “SEC”) (1) is recorded, processed,
      summarized and reported within the time periods specified in the SEC’s rules and
      forms, and (2) is accumulated and communicated to the Company’s management,
      including its principal executive and principal financial officers, as
      appropriate to allow timely decisions regarding required disclosure.





**PART
      II. OTHER INFORMATION**





**Item
      1.**  **Legal Proceedings**





Equitable
      Financial is not involved in any pending legal proceedings. Equitable Bank
      is
      not involved in any pending legal proceedings other than routine legal
      proceedings occurring in the ordinary course of business. Such routine legal
      proceedings, in the aggregate, are believed by management to be immaterial
      to
      its financial condition, results of operations or cash flows.








16




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





The
      following table sets forth information regarding the Company’s repurchases of
      its common stock during the quarter ended March 31, 2008.





**Period**
            
            **Total**
              **Number
                of**
              **Shares**
              **Purchased**
            
            **Average**
              **Price
                Paid**
              **Per
                Share**
            
            **Total
                Number**
              **Of
                Shares**
              **Purchased**
              **as
                Part of**
              **Publicly**
              **Announced
                Plans**
              **or**
              **Programs**
            
            **Maximum**
              **Number
                of Shares**
              **that
                May Yet Be**
              **Purchased
                Under**
              **the
                Plans or**
              **Programs**January
                1, 2008 through
              January
                31, 2008 (1)
            
            6,718
            
            $7.11
            
            6,718
            
            52,637February
                1, 2008 through
              February
                29, 2008
            
            52,637
            
            $9.31
            
            52,637
            
            _March
                1, 2008 through
              March
                31, 2008 (2)
            
            _
            
            _
            
            _
            
            71,226





(1)
            On
                October 17, 2007, the Company announced that its Board of Directors
                had
                approved its first stock repurchase program authorizing the Company
                to
                purchase up to 59,355 shares of the Company’s common stock. This
                repurchase program was completed on February 27,
                2008.


(2)
            On
                March 20, 2008, the Company announced that its Board of Directors
                had
                approved its second stock repurchase program authorizing the Company
                to
                purchase up to 71,226 shares of the Company’s common
                stock.





17


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





Not
      Applicable.





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




Not
      Applicable.





**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.




18


**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 14, 2008
            By:
            /s/ Richard L. HarbaughRichard
                L. Harbaugh
              President
                and Chief Executive Officer
              (principal
                executive officer)Title


Dated:
              May 14, 2008
            By:
            /s/ Kim E. MarcoKim
                E. Marco
              Executive
                Vice President and Chief Financial Officer
              (principal
                financial and accounting
                officer)