UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K


(Mark
One)


x
            Annual
      report under Section 13 or 15(d) of the Securities Exchange Act of
      1934





For the
fiscal year ended June
30, 2008


OR


o
            Transition
      report under Section 13 or 15(d) of the Securities Exchange Act of
      1934





Commission
File Number 000-51117





HOME FEDERAL BANCORP, INC. OF
      LOUISIANA(Exact
      name of registrant as specified in its
charter)





Federal
            
            86-1127166(State
      or Other Jurisdiction of Incorporation or Organization)
            
            (I.R.S.
      Employer Identification Number)





624 Market Street, Shreveport,
      Louisiana
            
            71101(Address
      of Principal Executive Offices)
            
            (Zip
      Code)





Registrant's
Telephone
Number           (318) 222-1145





Securities
      registered under Section 12(b) of the Exchange Act:
            
            Title of each class
            
            Name of exchange on which
      registered





Securities
registered under Section 12(g) of the Exchange Act:


Common Stock (par value $.01 per
      share)(Title
      of Class)





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.





Yes
            o      No
      T





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.





Yes
            o      No
      T





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 5(d) of the Securities and Exchange Act of 1934 during
the preceding 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
            T      No
      o





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this
chapter) is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.





T





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of "large accelerated filer,"
"accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.





Large accelerated filer
            o
            Accelerated
      filer  oNon-accelerated
      filer
            o (Do not
      check if a smaller reporting company)
            Smaller
      reporting company   T





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





Yes
            o      No
      T





As of
September 26, 2008, the aggregate value of the 891,319 shares of Common Stock of
the Registrant issued and outstanding on such date, which excludes an aggregate
of 2.5 million shares held by all directors and executives officers of the
Registrant, the Registrant's Employee Stock Ownership Plan ("ESOP"), Employees'
Savings and Profit Sharing Plan ("401(k) Plan"), Recognition and Retention Plan
("RRP") Trust and 2.1 million shares held by Home Federal Mutual Holding Company
of Louisiana as a group, was approximately $6.7 million.  This figure
is based on the closing sales price of $7.50 per share of the Registrant's
Common Stock on September 26, 2008.  Although directors and executive
officers, the ESOP, RRP and 401(k) Plan were assumed to be "affiliates" of the
Registrant for purposes of this calculation, the classification is not to be
interpreted as an admission of such status.





Number of
shares of Common Stock outstanding as of September 26,
2008:  3,377,600





DOCUMENTS
INCORPORATED BY REFERENCE





List
hereunder the following documents incorporated by reference and the Part of the
Form 10-K into which the document is incorporated.


(1)
            Portions
      of the Annual Report to Shareholders are incorporated into Part II, Items
      5 through 8 and Part IV, Item 15 of this Form
  10-K.


(2)
            Portions
      of the Definitive Proxy Statement for the 2008 Annual Meeting of
      Shareholders are incorporated into Part III, Items 10 through
      14.













Home FederalBancorp Inc. of Louisiana


Form
10-K


For
the Year Ended June 30, 2008








PART
      I.Item 1.
            Business
            1Item 1A.
            Risk Factors
            22Item 1B.
            Unresolved Staff Comments
            24Item 2.
            Properties
            24Item 3.
            Legal Proceedings
            24Item 4.
            Submission of Matters to a Vote of Security
      Holders
            24PART
      II.Item 5.
            Market for Registrant's Common Equity, Related Stockholder
      Matters and Issuer Purchases of Equity Securities
            24Item 6.
            Selected Financial Data
            25Item 7.
            Management's Discussion and Analysis of Financial Condition
      and Results of Operations
            25Item 7A.
            Quantitative and Qualitative Disclosure About Market
      Risk
            25Item 8.
            Financial Statements and Supplementary
    Data
            25Item 9.
            Changes in and Disagreements with Accountants on Accounting
      and Financial Disclosure
            25Item 9A.
            Controls and Procedures
            25Item 9B.
            Other Information
            26PART
      III.Item 10.
            Directors, Executive Officers and Corporate
      Governance
            27Item 11.
            Executive Compensation
            27Item 12.
            Security Ownership of Certain Beneficial Owners and
      Management and Related Stockholder Matters
            27Item 13.
            Certain Relationships and Related Transactions and Director
      Independence
            27Item 14.
            Principal Accountant Fees and Services
            28PART
      IV.Item 15.
            Exhibits and Financial Statement
    Schedules
            28





i





PART
I





Item
1.Business





General





On
January 18, 2005, Home Federal Savings and Loan Association ("Home Federal
Savings and Loan" or the "Association"), completed its reorganization to the
mutual holding company form of organization and formed Home Federal Bancorp,
Inc. of Louisiana ("Home Federal Bancorp" or the "Company") to serve as the
stock holding company for the Association.  In connection with the
reorganization, the Company sold 1,423,583 shares of its common stock in a
subscription and community offering at a price of $10.00 per
share.  The Company also issued 60% of its then outstanding common
stock in the reorganization to Home Federal Mutual Holding Company of Louisiana,
or 2,135,375 shares.  As of June 30, 2008, Home Federal Mutual Holding
Company held 63.1% of Home Federal Bancorp's issued and outstanding common
stock.  The Association is a federally chartered, stock savings and
loan association and is subject to federal regulation by the Federal Deposit
Insurance Corporation and the Office of Thrift Supervision.  Services
are provided to its customers by three offices, all of which are located in the
City of Shreveport, Louisiana.  The area served by the Association is
primarily the Shreveport-Bossier City metropolitan area; however, loan and
deposit customers are found dispersed in a wider geographical area covering much
of northwest Louisiana.  In addition, Home Federal Savings and Loan
purchases packages of single family loans from a mortgage originator in Arkansas
that are secured by properties primarily located in predominantly rural areas of
Louisiana, Arkansas and Texas.  At June 30, 2008, such loans amounted
to $10.3 million, or 36.0% of the total loan portfolio, and had an average age
of approximately four years.





The
Company's only business activities are to hold all of the outstanding common
stock of Home Federal Savings and Loan.  The Company is authorized to
pursue other business activities permitted by applicable laws and regulations
for savings and loan holding companies, which may include the issuance of
additional shares of common stock to raise capital or to support mergers or
acquisitions and borrowing funds for reinvestment in Home Federal Savings and
Loan.





Home
Federal Bancorp does not own or lease any property, but instead uses the
premises, equipment and furniture of Home Federal Savings and
Loan.  At the present time, the Company employs only persons who are
officers of Home Federal Savings and Loan to serve as officers of Home Federal
Bancorp and may also use the support staff of Home Federal Savings and Loan from
time to time.  These persons are not separately compensated by Home
Federal Bancorp.





Home
Federal Savings and Loan is a federally chartered savings and loan association
located in Shreveport, Louisiana, which is the parish seat of Caddo
Parish.  Home Federal Savings and Loan's business consists primarily
of attracting deposits from the general public and using those funds to invest
in securities and originate single-family and consumer loans.





On
December 11, 2007, the Company entered into an Agreement and Plan of Merger with
First Louisiana Bancshares, Inc., pursuant to which the Company would acquire
First Louisiana Bancshares and its wholly-owned subsidiary, First Louisiana Bank
(the "Merger").  Simultaneously with the adoption of the Agreement and
Plan of Merger, Home Federal Mutual Holding Company adopted a Plan of Conversion
and Reorganization whereby Home Federal Mutual Holding Company would convert
from the mutual holding company form of organization to the fully public stock
holding company form of organization and offer shares of a new holding company
to its members and the general public in a subscription and community
offering.  At the close of the offering period, the orders received
were not sufficient to reach the minimum of the offering range. As a result, the
Company's second-step conversion and offering terminated and, as of August 14,
2008, the Company and First Louisiana Bancshares mutually agreed to terminate
the Agreement and Plan of Merger. Completion of the merger was contingent on
completion of the second-step conversion.





Market
Area





Our
primary market area for loans and deposits is in northwest Louisiana,
particularly Caddo Parish.  Shreveport is the parish seat for Caddo
Parish.  Our operating strategy is based on strong community
service.





Our
primary market area is suburban in nature, as indicated by the population
density of Caddo and Bossier Parishes.  Shreveport is the largest
population center in the regional market area served by us.  Services,
wholesale/retail trade, manufacturing, casino gaming and government constitute
the basis of a fairly diversified local economy.  Competition for
financial services in our primary market area is intense.





1





Competition





We face
significant competition both in attracting deposits and in making loans. Our
most direct competition for deposits has come historically from commercial
banks, credit unions and other savings institutions located in the primary
market area, including many large financial institutions which have greater
financial and marketing resources available to them. In addition, we face
significant competition for investors' funds from short-term money market
securities, mutual funds and other corporate and government
securities.  We do not rely upon any individual group or entity for a
material portion of our deposits. Our ability to attract and retain deposits
depends on our ability to generally provide a rate of return, liquidity and risk
comparable to that offered by competing investment opportunities.





Our
competition for real estate loans comes principally from mortgage banking
companies, commercial banks, other savings institutions and credit unions. We
compete for loan originations primarily through the interest rates and loan fees
we charge, and the efficiency and quality of services we provide
borrowers.  Factors which affect competition include general and local
economic conditions, current interest rate levels and volatility in the mortgage
markets. Competition may increase as a result of the continuing reduction of
restrictions on the interstate operations of financial
institutions.





Subsidiaries





At June
30, 2008, the Company had one subsidiary, the Association.  The
Association's only subsidiary at such date was Metro Financial Services, Inc.,
an inactive, wholly-owned subsidiary.





Employees





Home
Federal Savings and Loan had 17 full-time employees and 1 part-time employee at
June 30, 2008. None of these employees are covered by a collective bargaining
agreement, and we believe that we enjoy good relations with our
personnel.





Lending
Activities





General.  At June
30, 2008, our net loan portfolio amounted to $28.3 million, representing
approximately 20.5% of total assets at that date.  Historically, our
principal lending activity has been the origination of one- to four-family
residential loans.  At June 30, 2008, one- to four-family residential
loans amounted to $18.7 million, or 65.5% of the total loan
portfolio.  As part of our desire to diversify the loan portfolio, we
also offer consumer loans, which includes home equity loans, second mortgage
loans and lines of credit and amounted to $4.9 million, or 17.2% of the total
loan portfolio at June 30, 2008.





The types
of loans that we may originate are subject to federal and state laws and
regulations. Interest rates charged on loans are affected principally by the
demand for such loans and the supply of money available for lending purposes and
the rates offered by our competitors. These factors are, in turn, affected by
general and economic conditions, the monetary policy of the federal government,
including the Federal Reserve Board, legislative and tax policies, and
governmental budgetary matters.





A savings
institution generally may not make loans to one borrower and related entities in
an amount which exceeds 15% of its unimpaired capital and surplus, although
loans in an amount equal to an additional 10% of unimpaired capital and surplus
may be made to a borrower if the loans are fully secured by readily marketable
securities.  In addition, upon application the Office of Thrift
Supervision permits a savings institution to lend up to an additional 15% of
unimpaired capital and surplus to one borrower to develop domestic residential
housing units.  At June 30, 2008, our regulatory limit on loans-to-one
borrower was $4.2 million and the five largest loans or groups of loans-to-one
borrower, including related entities, aggregated $4.5 million, $440,000,
$418,000, $353,000 and $304,000.  Each of our five largest loans or
groups of loans was performing in accordance with its terms at June 30,
2008.  For our largest loan to one borrower, we utilized the higher
limit applicable for domestic residential housing units upon approval by the
Office of Thrift Supervision.  The $4.5 million group of loans is to a
limited partnership established by the Housing Authority of Bossier City,
Louisiana.  The loans are secured by a first mortgage lien on real
estate and low to moderate income rental units in Bossier City, Louisiana as
well as a conditional assignment of rents.





2





Loans to
or guaranteed by general obligations of a state or political subdivision are not
subject to the foregoing lending limits.





Loan Portfolio
Composition.  The following table shows the composition of our
loan portfolio by type of loan at the dates indicated.








June 30,2008
            
            
            2007Amount
            
            
            %
            
            
            Amount
            
            
            %(Dollars
      in Thousands)Real
      estate loans:One-
      to four-family residential
            
            $
            18,736
            
            
            
            65.48
            %
            
            $
            16,669
            
            
            
            65.27
            %Other
      mortgage
            
            
            4,945
            
            
            
            17.28
            
            
            
            3,650
            
            
            
            14.29Total
      real estate loans
            
            
            23,681
            
            
            
            82.76
            
            
            
            20,319
            
            
            
            79.56Consumer
      loans:Home
      equity loans and second mortgage loans
            
            
            3,848
            
            
            
            13.45
            
            
            
            4,454
            
            
            
            17.43Savings
      accounts
            
            
            573
            
            
            
            2.00
            
            
            
            283
            
            
            
            1.11Equity
      lines of credit
            
            
            461
            
            
            
            1.61
            
            
            
            427
            
            
            
            1.67Other
            
            
            51
            
            
            
            .18
            
            
            
            57
            
            
            
            .23Total
      consumer loans
            
            
            4,933
            
            
            
            17.24
            
            
            
            5,221
            
            
            
            20.44Total
      loans
            
            
            28,614
            
            
            
            100.00
            %
            
            
            25,540
            
            
            
            100.00
            %Less:Allowance
      for loan losses
            
            
            (235
            )
            
            
            
            
            
            
            (235
            )Deferred
      loan fees
            
            
            (116
            )
            
            
            
            
            
            
            (94
            )Net
      loans(1)
            
            $
            28,263
            
            
            
            
            
            
            $
            25,211


_________________________





(1)
            Does
      not include loans held for sale amounting to $852,310 and $1,478,434 at
      June 30, 2008 and June 30, 2007,
respectively.





Origination of
Loans.  Our lending activities are subject to the written
underwriting standards and loan origination procedures established by the board
of directors and management. Loan originations are obtained through a variety of
sources, primarily consisting of referrals from real estate brokers and existing
customers. Written loan applications are taken by one of our loan
officers.  The loan officer also supervises the procurement of credit
reports, appraisals and other documentation involved with a loan.  As
a matter of practice, we obtain independent outside appraisals on substantially
all of our loans.  Under our lending policy, a title opinion must be
obtained for each real estate loan.  We also require fire and extended
coverage casualty insurance in order to protect the properties securing the real
estate loans.  Borrowers must also obtain flood insurance policies
when the property is in a flood hazard area.





Our loan
approval process is intended to assess the borrower's ability to repay the loan,
the viability of the loan and the value of the property that will secure the
loan.  Loans up to $417,000, the Fannie Mae conforming loan limit for
single-family mortgage loans for 2008, must be approved by our loan committee
which currently consists of the Chief Executive Officer, the principal financial
officer and the Vice President of Lending.  Loans in excess of
$417,000 must be approved by the board of directors.  In accordance
with past practice, all loans are ratified by our board of
directors.





During
fiscal 2008, we also purchased loans from a mortgage originator secured by
single-family housing primarily located in predominantly rural areas of
Louisiana, Arkansas and Texas.  The loans were generally secured by
rural properties and the seller retained servicing rights.  Although
the loans were originated with fixed-rates, Home Federal Savings and Loan
receives an adjustable-rate of interest equal to the Federal Housing Finance
Board rate, with rate floors and ceilings of approximately 5.0% and 8.0%,
respectively.  Under the terms of the loan agreements, the seller must
repurchase any loan that becomes more than 90 days delinquent.  At
June 30, 2008, we had approximately $10.3 million of such loans in our portfolio
with an average age of approximately four years.





3





The
following table shows total loans originated, sold and repaid during the periods
indicated.




Year Ended
    June 30,2008
            
            
            2007(In
      Thousands)Loan
      originations:One-
      to four-family residential
            
            $
            14,171
            
            
            $
            15,108Other
      mortgage
            
            
            1,455
            
            
            
            530Consumer
            
            
            2,860
            
            
            
            2,842Total
      loan originations
            
            
            18,486
            
            
            
            18,480Loans
      purchased
            
            
            3,455
            
            
            
            5,797Total
      loan originations and loans purchased
            
            
            21,941
            
            
            
            24,277Loans
      sold
            
            
            (13,611
            )
            
            
            (12,356
            )Loan
      principal repayments
            
            
            (5,882
            )
            
            
            (6,104
            )Total
      loans sold and principal repayments
            
            
            (19,493
            )
            
            
            (18,460
            )Increase
      (decrease) due to other items, net (1)
            
            
            604
            
            
            
            (1,472
            )Net
      increase in loan portfolio
            
            $
            3,052
            
            
            $
            4,345


_________________________





(1)
            Other
      items consist of deferred loan fees, the allowance for loan losses and
      loans held for sale at year end.





Although
federal laws and regulations permit savings institutions to originate and
purchase loans secured by real estate located throughout the United States, we
concentrate our lending activity to our primary market area in Caddo Parish,
Louisiana and the surrounding area.  Subject to our loans-to-one
borrower limitation, we are permitted to invest without limitation in
residential mortgage loans and up to 400% of our capital in loans secured by
non-residential or commercial real estate.  We also may invest in
secured and unsecured consumer loans in an amount not exceeding 35% of total
assets.  This 35% limitation may be exceeded for certain types of
consumer loans, such as home equity and property improvement loans secured by
residential real property.  In addition, we may invest up to 10% of
our total assets in secured and unsecured loans for commercial, corporate,
business or agricultural purposes.  At June 30, 2008, we were within
each of the above lending limits.





During
fiscal 2008 and 2007, we sold $13.6 million and $12.4 million of loans,
respectively.  We recognized gain on sale of loans of $5,639 during
fiscal 2008 and $3,127 during fiscal 2007.  Loans were sold during
these periods primarily to another financial institution. Such loans were sold
against forward sales commitments with servicing released and without recourse
after a certain amount of time, typically 90 days.  The loans sold
primarily consisted of long-term, fixed rate residential real estate
loans.  These loans were originated during a period of historically
low interest rates and were sold to reduce our interest rate risk.  We
will continue to sell loans in the future to the extent we believe the interest
rate environment is unfavorable and interest rate risk is
unacceptable.





4





Contractual Terms to Final
Maturities.  The following table shows the scheduled
contractual maturities of our loans as of June 30, 2008, before giving effect to
net items.  Demand loans, loans having no stated schedule of
repayments and no stated maturity, and overdrafts are reported as due in one
year or less.  The amounts shown below do not take into account loan
prepayments.





One- to Four- Family
      Residential
            
            
            Other Mortgage
            
            
            Consumer
            
            
            Total(In
      Thousands)Amounts
      due after June 30, 2008 in:One
      year or less
            
            $
            550
            
            
            $
            --
            
            
            $
            847
            
            
            $
            1,397After
      one year through two years
            
            
            21
            
            
            
            --
            
            
            
            104
            
            
            
            125After
      two years through three years
            
            
            76
            
            
            
            --
            
            
            
            125
            
            
            
            201After
      three years through five years
            
            
            193
            
            
            
            --
            
            
            
            725
            
            
            
            918After
      five years through ten years
            
            
            1,166
            
            
            
            --
            
            
            
            970
            
            
            
            2,136After
      ten years through fifteen years
            
            
            850
            
            
            
            810
            
            
            
            991
            
            
            
            2,651After
      fifteen years
            
            
            15,880
            
            
            
            4,135
            
            
            
            1,171
            
            
            
            21,186Total
            
            $
            18,736
            
            
            $
            4,945
            
            
            $
            4,933
            
            
            $
            28,614





The
following table sets forth the dollar amount of all loans, before net items, due
after June 30, 2008 which have fixed interest rates or which have floating or
adjustable interest rates.





Fixed-Rate
            
            
            Floating or Adjustable-Rate
            
            
            Total(In
      Thousands)One-
      to four-family residential
            
            $
            8,283
            
            
            $
            10,453
            
            
            $
            18,736Other
      mortgage
            
            
            4,945
            
            
            
            --
            
            
            
            4,945Consumer
            
            
            4,933
            
            
            
            --
            
            
            
            4,933Total
            
            $
            18,161
            
            
            $
            10,453
            
            
            $
            28,614





Scheduled
contractual maturities of loans do not necessarily reflect the actual expected
term of the loan portfolio. The average life of mortgage loans is substantially
less than their average contractual terms because of prepayments. The average
life of mortgage loans tends to increase when current mortgage loan rates are
higher than rates on existing mortgage loans and, conversely, decrease when
rates on current mortgage loans are lower than existing mortgage loan rates (due
to refinancing of adjustable-rate and fixed-rate loans at lower rates). Under
the latter circumstance, the weighted average yield on loans decreases as higher
yielding loans are repaid or refinanced at lower rates.





One- to Four-Family Residential Real
Estate Loans.  Our primary lending activity is the origination
of loans secured by single-family residences. At June 30, 2008, $18.7 million,
or 65.5%, of the total loan portfolio, before net items, consisted of one- to
four-family residential loans.





The
loan-to-value ratio, maturity and other provisions of the loans made by us
generally have reflected the policy of making less than the maximum loan
permissible under applicable regulations, in accordance with sound lending
practices, market conditions and underwriting standards established by
us.  Our current lending policy on one- to four-family residential
loans generally limits the maximum loan-to-value ratio to 80% or less of the
appraised value of the property although we will lend up to a 95% loan-to-value
ratio with private mortgage insurance.  These loans are amortized on a
monthly basis with principal and interest due each month and generally include
"due-on-sale" clauses.





At June
30, 2008, $8.3 million, or 44.2%, of our one- to four-family residential
mortgage loans were fixed-rate loans.  Fixed-rate loans generally have
maturities ranging from 15 to 30 years and are fully amortizing with monthly
loan payments sufficient to repay the total amount of the loan with interest by
the end of the loan term.  Our fixed-rate loans generally are
originated under terms, conditions and documentation which permit them to be
sold to U.S. Government-sponsored agencies, such as the Federal Home Loan
Mortgage Corporation, and other investors in the secondary mortgage market.
Consistent with our asset/liability management, we have sold a significant
portion of our long-term, fixed rate loans over the past two years.





Although
we offer adjustable rate loans, substantially all of the single-family loan
originations over the last few years have consisted of fixed-rate loans due to
the low interest rate environment.  The adjustable-rate loans held in
portfolio typically have interest rates which adjust on an annual
basis.  These loans generally have an annual cap of 2% on any increase
or decrease and a cap of 6% above or below the initial rate over the life of the
loan.  Such loans are underwritten based on the initial rate plus
2%.





5





Consumer Loans.  We
are authorized to make loans for a wide variety of personal or consumer
purposes.  We originate consumer loans in order to accommodate our
customers and because such loans generally have shorter terms and higher
interest rates than residential mortgage loans.  The consumer loans we
offer consist of home equity and second mortgage loans, loans secured by deposit
accounts with us, equity lines of credit and automobile loans. As part of our
lending strategy, we started to place a greater emphasis on the origination of
consumer loans.  However, we do not intend to materially expand our
product offerings and instead intend to focus on increasing the volume of our
current products, primarily home equity and second mortgage loans.  At
June 30, 2008, $4.9 million, or 17.2% of the total loan portfolio consisted of
consumer loans compared to $5.2 million, or 20.4% of the loan portfolio at June
30, 2007.





Of the
$4.9 million of consumer loans held at June 30, 2008, $3.8 million consisted of
home equity and second mortgage loans compared to $4.5 million of home equity
and second mortgage loans at June 30, 2007.  These loans are secured
by the underlying equity in the borrower's residence.  We do not
require that we hold the first mortgage on the properties that secure the second
mortgage loans.  The amount of our second mortgage loans generally
cannot exceed a loan-to-value ratio of 80% after taking into consideration the
first mortgage loan.  These loans are typically three-to-five year
balloon loans with fixed rates and contain an on-demand clause that allows us to
call the loan in at any time.





We offer
loans secured by deposit accounts held with us, which loans amounted to
$572,797, or 2.0% of the total loan portfolio at June 30, 2008.  Such
loans are originated for up to 90% of the account balance, with a hold placed on
the account restricting the withdrawal of the account balance.  The
interest rate on the loan is equal to the interest rate paid on the account plus
2%.  These loans typically are payable on demand with a maturity date
of one year.





We also
offer lines of credit secured by a borrower's equity in real estate which loans
amounted to $460,753 or 1.6% of the total loan portfolio at June 30,
2008.  The rates and terms of such lines of credit depend on the
history and income of the borrower, purpose of the loan and
collateral.  Lines of credit will not exceed 90% of the value of the
equity in the collateral.





Consumer
loans generally have shorter terms and higher interest rates than residential
mortgage loans, but generally entail greater credit risk than residential
mortgage loans, particularly those loans secured by assets that depreciate
rapidly, such as automobiles, boats and recreational vehicles.  In
such cases, repossessed collateral for a defaulted consumer loan may not provide
an adequate source of repayment for the outstanding loan and the remaining
deficiency often does not warrant further substantial collection efforts against
the borrower.  In particular, amounts realizable on the sale of
repossessed automobiles may be significantly reduced based upon the condition of
the automobiles and the fluctuating demand for used automobiles.





Loan Origination and Other
Fees.  In addition to interest earned on loans, we generally
receive loan origination fees or "points" for originating loans. Loan points are
a percentage of the principal amount of the mortgage loan and are charged to the
borrower in connection with the origination of the loan.





Asset
Quality





General.  Our
collection procedures provide that when a loan is 15 days past due, a late
charge notice is sent to the borrower requesting payment.  If the
delinquency continues at 30 days, personal contact efforts are attempted, either
in person or by telephone.  If a loan becomes 60 days past due and no
progress has been made in resolving the delinquency, a collection letter from
legal counsel is sent and personal contact is attempted.  When a loan
continues in a delinquent status for 90 days or more, and a repayment schedule
has not been made or kept by the borrower, generally a notice of intent to
foreclose is sent to the borrower.  If the delinquency is not cured,
foreclosure proceedings are initiated.  In most cases, deficiencies
are cured promptly.  While we generally prefer to work with borrowers
to resolve such problems, we will institute foreclosure or other collection
proceedings when necessary to minimize any potential loss.





Loans are
placed on non-accrual status when management believes the probability of
collection of interest is doubtful.  When a loan is placed on
non-accrual status, previously accrued but unpaid interest is deducted from
interest income.  We generally discontinue the accrual of interest
income when the loan becomes 90 days past due as to principal or interest unless
the credit is well secured and we believe we will fully collect.





6





Real
estate and other assets we acquire as a result of foreclosure or by deed-in-lieu
of foreclosure are classified as real estate owned until sold. We held $52,000 of real
estate owned at June 30, 2008 compared to none at June 30, 2007.





Delinquent
Loans.  The following table shows the delinquencies in our loan
portfolio as of the dates indicated.





June 30, 2008
            
            
            June 30, 200730-89 Days Overdue
            
            
            90 or More Days
    Overdue
            
            
            30-89 Days Overdue
            
            
            90 or More Days
    OverdueNumber of Loans
            
            
            Principal Balance
            
            
            Number of Loans
            
            
            Principal Balance
            
            
            Number of Loans
            
            
            Principal Balance
            
            
            Number of Loans
            
            
            Principal Balance(Dollars
      in Thousands)One-
      to four-family residential loans
            
            
            --
            
            
            $
            --
            
            
            
            --
            
            
            $
            --
            
            
            
            2
            
            
            $
            123
            
            
            
            2
            
            
            $
            116Other
      mortgage loans
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --Consumer
      loans
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --Total
      delinquent loans
            
            
            --
            
            
            $
            --
            
            
            
            --
            
            
            $
            --
            
            
            
            2
            
            
            $
            123
            
            
            
            2
            
            
            $
            116Delinquent
      loans to total net loans
            
            
            
            
            
            
            --
            %
            
            
            
            
            
            
            --
            %
            
            
            
            
            
            
            .49
            %
            
            
            
            
            
            
            .46
            %Delinquent
      loans to total loans
            
            
            
            
            
            
            --
            %
            
            
            
            
            
            
            --
            %
            
            
            
            
            
            
            .48
            %
            
            
            
            
            
            
            .45
            %





Non-Performing
Assets.The following table shows the amounts of our
non-performing assets (defined as non-accruing loans, accruing loans 90 days or
more past due and real estate owned) at the dates indicated.  We did
not have troubled debt restructurings at either of the dates
indicated.





June 30,2008
            
            
            2007(Dollars
      in Thousands)Non-accruing
      loans:One-
      to four-family residential
            
            $
            --
            
            
            $
            116Other
      mortgage
            
            
            --
            
            
            
            --Consumer
            
            
            --
            
            
            
            --Total
      non-accruing loans
            
            $
            --
            
            
            $
            116Accruing
      loans 90 days or more past due:One-
      to four-family residential
            
            $
            --
            
            
            $
            --Other
      mortgage
            
            
            --
            
            
            
            --Consumer
            
            
            --
            
            
            
            --Total
      accruing loans 90 days or more past due
            
            
            --
            
            
            
            --Total
      non-performing loans(1)
            
            
            --
            
            
            
            116Real
      estate owned, net
            
            
            52
            
            
            
            --Total
      non-performing assets
            
            $
            52
            
            
            $
            116Total
      non-performing loans as a percent of loans, net
            
            
            --
            %
            
            
            .46
            %Total
      non-performing assets as a percent of total assets
            
            
            .04
            %
            
            
            .10
            %


_________________________





(1)
            Non-performing
      loans consist of non-accruing loans plus accruing loans 90 days or more
      past due.





Classified
Assets.  Federal regulations require that each insured savings
institution classify its assets on a regular basis. In addition, in connection
with examinations of insured institutions, federal examiners have authority to
identify problem assets and, if appropriate, classify them. There are three
classifications for problem assets: "substandard," "doubtful" and "loss."
Substandard assets have one or more defined weaknesses and are characterized by
the distinct possibility that the insured institution will sustain some loss if
the deficiencies are not corrected. Doubtful assets have the weaknesses of
substandard assets with the additional characteristic that the weaknesses make
collection or liquidation in full on the basis of currently existing facts,
conditions and values questionable, and there is a higher possibility of loss.
An asset classified loss is considered uncollectible and of such little value
that continuance as an asset of the institution is not warranted. Another
category designated "special mention" also must be established and maintained
for assets which do not currently expose an insured institution to a sufficient
degree of risk to warrant classification as substandard, doubtful or loss.
Assets classified as substandard or doubtful require the institution to
establish general allowances for loan losses. If an asset or portion thereof is
classified as loss, the insured institution must either establish specific
allowances for loan losses in the amount of 100% of the portion of the asset
classified loss, or charge-off such amount. General loss allowances established
to cover possible losses related to assets classified substandard or doubtful
may be included in determining an institution's regulatory capital, while
specific valuation allowances for loan losses do not qualify as regulatory
capital. Federal examiners may disagree with an insured institution's
classifications and amounts reserved.  There were no assets classified
as substandard at June 30, 2007.





7





Allowance for Loan
Losses.  At June 30, 2008, our allowance for loan losses
amounted to $235,000.  The allowance for loan losses is maintained at
a level believed, to the best of our knowledge, to cover all known and inherent
losses in the portfolio both probable and reasonable to estimate at each
reporting date.  The level of allowance for loan losses is based on
our periodic review of the collectability of the loans in light of historical
experience, the nature and volume of the loan portfolio, adverse situations that
may affect the borrower's ability to repay, estimated value of any underlying
collateral and prevailing conditions.  We are primarily engaged in
originating single-family residential loans.  Our management considers
the deficiencies of all classified loans in determining the amount of allowance
for loan losses required at each reporting date.  Our management
analyzes the probability of the correction of the substandard loans' weaknesses
and the extent of any known or inherent losses that we might sustain on
them.  A minimal provision for loan losses was made in the third
quarter of fiscal 2007.





While
management believes that it determines the size of the allowance based on the
best information available at the time, the allowance will need to be adjusted
as circumstances change and assumptions are updated. Future adjustments to the
allowance could significantly affect net income.





The
following table shows changes in our allowance for loan losses during the
periods presented. We did not have any
charge-offs or recoveries during fiscal 2008.  During fiscal year
2007, one consumer loan with a balance of $1,000 was charged off directly to the
provision for bad debt expense. There were no recoveries during fiscal
2007.





At or For the Year Ended
      June 30,2008
            
            
            2007(Dollars
      in Thousands)Total
      loans outstanding at end of period
            
            $
            28,614
            
            
            $
            25,540Average
      loans outstanding
            
            
            28,698
            
            
            
            23,680Allowance
      for loan losses, beginning of period
            
            
            235
            
            
            
            235Provision
      for loan losses
            
            
            -
            
            
            
            1Charge-offs
            
            
            -
            
            
            
            (1
            )Allowance
      for loan losses, end of period
            
            
            235
            
            
            
            235Allowance
      for loan losses as a percent of non-performing loans
            
            
            -
            %
            
            
            202.59
            %Allowance
      for loan losses as a percent of loans outstanding
            
            
            .82
            %
            
            
            .92
            %





8





The
following table shows how our allowance for loan losses is allocated by type of
loan at each of the dates indicated.





June 30,2008
            
            
            2007Amount of Allowance
            
            
            Loan Category as a % of Total
      Loans
            
            
            Amount of Allowance
            
            
            Loan Category as a % of Total
      Loans(Dollars
      in Thousands)One-
      to four-family residential
            
            $
            235
            
            
            
            65.48
            %
            
            $
            235
            
            
            
            65.27
            %Other
      mortgage
            
            
            --
            
            
            
            17.28
            
            
            
            --
            
            
            
            14.29Consumer
            
            
            --
            
            
            
            17.24
            
            
            
            --
            
            
            
            20.44Total
            
            $
            235
            
            
            
            100.00
            %
            
            $
            235
            
            
            
            100.00
            %





Investment
Securities





We have
authority to invest in various types of securities, including mortgage-backed
securities, U.S. Treasury obligations, securities of various federal agencies
and of state and municipal governments, certificates of deposit at federally
insured banks and savings institutions, certain bankers' acceptances and federal
funds.  Our investment strategy is established by the board of
directors.





The
following table sets forth certain information relating to our investment
securities portfolio at the dates indicated.





June 30,2008
            
            
            2007Amortized Cost
            
            
            Fair Value
            
            
            Amortized Cost
            
            
            Fair Value(In
      Thousands)Securities
      Held to Maturity:FHLB
      stock
            
            $
            1,196
            
            
            $
            1,196
            
            
            $
            779
            
            
            $
            779Mortgage-backed
      securities
            
            
            492
            
            
            
            507
            
            
            
            629
            
            
            
            643Total
      Securities Held to Maturity
            
            
            1,688
            
            
            
            1,703
            
            
            
            1,408
            
            
            
            1,422Securities
      Available for Sale:Corporate
      securities
            
            
            2,400
            
            
            
            2,163
            
            
            
            2,290
            
            
            
            2,227Mortgage-backed
      securities
            
            
            97,915
            
            
            
            94,161
            
            
            
            85,767
            
            
            
            81,525Total
      Securities Available for Sale
            
            
            100,315
            
            
            
            96,324
            
            
            
            88,057
            
            
            
            83,752Total
      Investment Securities
            
            $
            102,003
            
            
            $
            98,027
            
            
            $
            89,465
            
            
            $
            85,174





9





The
following table sets forth the amount of investment securities which
contractually mature during each of the periods indicated and the weighted
average yields for each range of maturities at June 30, 2008.  The
amounts reflect the fair value of our securities at June 30, 2008.





Amounts at June 30, 2008 Which Mature
      InOne Year or Less
            
            
            Weighted Average Yield
            
            
            Over One Year Through Five
      Years
            
            
            Weighted Average Yield
            
            
            Over Five Through Ten Years
            
            
            Weighted Average Yield
            
            
            Over Ten Years
            
            
            Weighted Average Yield(Dollars
      in Thousands)Bonds
      and other debt securities:Mortgage-backed
      securities
            
            $
            --
            
            
            
            --
            %
            
            $
            76
            
            
            
            6.08
            %
            
            $
            959
            
            
            
            5.28
            %
            
            $
            93,633
            
            
            
            4.98
            %Equity
      securities(1):ARM
      Fund
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            2,163
            
            
            
            4.67FHLB
      stock
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            1,196
            
            
            
            3.96Total
      investment securities andFHLB
      stock
            
            $
            --
            
            
            
            --
            %
            
            $
            76
            
            
            
            6.08
            %
            
            $
            959
            
            
            
            5.28
            %
            
            $
            96,992
            
            
            
            4.96
            %





________________________


(1)
            None
      of the listed equity securities has a stated
  maturity.





Our
investment in equity securities consists primarily of FHLB stock and a $2.4
million (book value) investment in an adjustable-rate mortgage fund (referred to
as the ARM Fund).  The fair value of the ARM Fund has traditionally
correlated with the interest rate environment.  At June 30, 2008, the
unrealized loss on this investment was $237,000.  Home Federal Bancorp
has the ability and the intent to hold such investment until it recovers its
value.  Home Federal Bancorp does not hold any Fannie Mae or Freddie
Mac common or preferred stock.  Management will continue to monitor
its investment portfolio to determine whether any investment securities which
have unrealized losses should be considered other than temporarily
impaired.





Mortgage-backed
securities represent a participation interest in a pool of one- to four-family
or multi-family mortgages. The mortgage originators use intermediaries
(generally U.S. Government agencies and government-sponsored enterprises) to
pool and repackage the participation interests in the form of securities, with
investors receiving the principal and interest payments on the mortgages. Such
U.S. Government agencies and government-sponsored enterprises guarantee the
payment of principal and interest to investors.





Mortgage-backed
securities are typically issued with stated principal amounts, and the
securities are backed by pools of mortgages that have loans with interest rates
that are within a range and have varying maturities. The underlying pool of
mortgages, i.e.,
fixed-rate or adjustable-rate, as well as prepayment risk, are passed on to the
certificate holder. The life of a mortgage-backed pass-through security
approximates the life of the underlying mortgages.





Our
mortgage-backed securities consist of Ginnie Mae securities ("GNMA"), Freddie
Mac securities ("FHLMC") and Fannie Mae securities ("FNMA").  Ginnie
Mae is a government agency within the Department of Housing and Urban
Development which is intended to help finance government-assisted housing
programs. Ginnie Mae securities are backed by loans insured by the Federal
Housing Administration, or guaranteed by the Veterans
Administration.  The timely payment of principal and interest on
Ginnie Mae securities is guaranteed by Ginnie Mae and backed by the full faith
and credit of the U.S. Government.  Freddie Mac is a private
corporation chartered by the U.S. Government.  Freddie Mac issues
participation certificates backed principally by conventional mortgage
loans.  Freddie Mac guarantees the timely payment of interest and the
ultimate return of principal on participation certificates.  Fannie
Mae is a private corporation chartered by the U.S. Congress with a mandate to
establish a secondary market for mortgage loans.  Fannie Mae
guarantees the timely payment of principal and interest on Fannie Mae
securities.  Freddie Mac and Fannie Mae securities are not backed by
the full faith and credit of the U.S. Government, but because Freddie Mac and
Fannie Mae are U.S. Government-sponsored enterprises, these securities are
considered to be among the highest quality investments with minimal credit
risks. In September 2008, the Federal Housing Finance Agency was appointed as
conservator of Fannie Mae and Freddie Mac. The U.S. Department of the Treasury
agreed to provide capital as needed to ensure that Fannie Mae and Freddie Mac
continue to provide liquidity to the housing and mortgage markets.





10





Mortgage-backed
securities generally yield less than the loans which underlie such securities
because of their payment guarantees or credit enhancements which offer nominal
credit risk. In addition, mortgage-backed securities are more liquid than
individual mortgage loans and may be used to collateralize our borrowings or
other obligations.





The
following table sets forth the composition of our mortgage-backed securities
portfolio at each of the dates indicated.  The amounts reflect the
fair value of our mortgage-backed securities at June 30, 2008 and
2007.





June 30,2008
            
            
            2007(In
      Thousands)Fixed
      rate:GNMA
            
            $
            338
            
            
            $
            433FHLMC
            
            
            12,458
            
            
            
            6,962FNMA
            
            
            79,903
            
            
            
            72,293Total
      fixed rate
            
            
            92,699
            
            
            
            79,688Adjustable
      rate:GNMA
            
            
            181
            
            
            
            292FNMA
            
            
            1,192
            
            
            
            1,492FHLMC
            
            
            596
            
            
            
            696Total
      adjustable-rate
            
            
            1,969
            
            
            
            2,480Total
      mortgage-backed securities
            
            $
            94,668
            
            
            $
            82,168





Information
regarding the contractual maturities and weighted average yield of our
mortgage-backed securities portfolio at June 30, 2008 is presented
below.  Due to repayments of the underlying loans, the actual
maturities of mortgage-backed securities generally are substantially less than
the scheduled maturities. The amounts reflect the fair value of our
mortgage-backed securities at June 30, 2008.








Amounts at June 30, 2008 Which Mature
      InOne Year or Less
            
            
            Weighted Average
Yield
            
            
            Over One through Five
      Years
            
            
            Weighted Average
Yield
            
            
            Over Five Years
            
            
            Weighted Average
Yield(In
      Thousands)Fixed
      rate:GNMA
            
            $
            --
            
            
            
            --
            %
            
            $
            76
            
            
            
            6.08
            %
            
            $
            262
            
            
            
            7.70
            %FHLMC
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            12,458
            
            
            
            4.88FNMA
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            79,903
            
            
            
            4.99Total
      fixed-rate
            
            
            --
            
            
            
            --
            
            
            
            76
            
            
            
            6.08
            
            
            
            92,623
            
            
            
            4.98Adjustable
      rate:GNMA
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            181
            
            
            
            4.40FNMA
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            1,192
            
            
            
            4.99FHLMC
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            596
            
            
            
            5.07Total
      adjustable-rate
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            1,969
            
            
            
            4.96Total
            
            $
            --
            
            
            
            --
            %
            
            $
            76
            
            
            
            6.08
            %
            
            $
            94,592
            
            
            
            4.98
            %





11





The
following table sets forth the purchases, sales and principal repayments of our
mortgage-backed securities during the periods indicated.





At or For the Year Ended
      June 30,2008
            
            
            2007(Dollars
      in Thousands)Mortgage-backed
      securities at beginning of period
            
            $
            86,396
            
            
            $
            85,019Purchases
            
            
            38,907
            
            
            
            31,261Repayments
            
            
            (11,720
            )
            
            
            (11,133
            )Sales
            
            
            (15,358
            )
            
            
            (18,918
            )Amortizations
      of premiums and discounts, net
            
            
            182
            
            
            
            167Mortgage-backed
      securities at end of period
            
            
            98,407
            
            
            $
            86,396Weighted
      average yield at end of period
            
            
            4.98
            %
            
            
            5.07
            %





Sources
of Funds





General.  Deposits
are our primary source of funds for lending and other investment purposes. In
addition to deposits, principal and interest payments on loans and investment
securities are a source of funds. Loan repayments are a relatively stable source
of funds, while deposit inflows and outflows are significantly influenced by
general interest rates and money market conditions. Borrowings may also be used
on a short-term basis to compensate for reductions in the availability of funds
from other sources and on a longer-term basis for general business
purposes.





Deposits.  We
attract deposits principally from residents of Louisiana and particularly from
Caddo Parish and to a lesser extent from Bossier Parish.  Deposit
account terms vary, with the principal differences being the minimum balance
required, the time periods the funds must remain on deposit and the interest
rate.  We have not solicited deposits from outside Louisiana or paid
fees to brokers to solicit funds for deposit.





We
establish interest rates paid, maturity terms, service fees and withdrawal
penalties on a periodic basis. Management determines the rates and terms based
on rates paid by competitors, the need for funds or liquidity, growth goals and
federal regulations.  We attempt to control the flow of deposits by
pricing our accounts to remain generally competitive with other financial
institutions in the market area.





The
following table shows the distribution of, and certain other information
relating to, our deposits by type of deposit, as of the dates
indicated.





June 30,2008
            
            
            2007Amount
            
            
            %
            
            
            Amount
            
            
            %(Dollars
      in Thousands)Certificate
      accounts:0.00%
      - 0.99%
            
            $
            9
            
            
            
            .00
            %
            
            $
            9
            
            
            
            .00
            %1.00%
      - 1.99%
            
            
            127
            
            
            
            .16
            
            
            
            194
            
            
            
            .252.00%
      - 2.99%
            
            
            9,074
            
            
            
            11.58
            
            
            
            1,543
            
            
            
            1.993.00%
      - 3.99%
            
            
            12,840
            
            
            
            16.39
            
            
            
            12,164
            
            
            
            15.654.00%
      - 4.99%
            
            
            24,724
            
            
            
            31.56
            
            
            
            18,388
            
            
            
            23.665.00%
      - 5.99%
            
            
            15,334
            
            
            
            19.57
            
            
            
            30,705
            
            
            
            39.52Total
      certificate accounts
            
            
            62,108
            
            
            
            79.26
            
            
            
            63,003
            
            
            
            81.07Transaction
      accounts:Savings
            
            
            4,836
            
            
            
            6.17
            
            
            
            4,473
            
            
            
            5.76NOW
            
            
            8,533
            
            
            
            10.89
            
            
            
            7,293
            
            
            
            9.38Money
      market
            
            
            2,882
            
            
            
            3.68
            
            
            
            2,941
            
            
            
            3.79Total
      transaction accounts
            
            
            16,251
            
            
            
            20.74
            
            
            
            14,707
            
            
            
            18.93Total
      deposits
            
            $
            78,359
            
            
            
            100.00
            %
            
            $
            77,710
            
            
            
            100.00
            %





12





The
following table shows the average balance of each type of deposit and the
average rate paid on each type of deposit for the periods
indicated.





Year Ended
    June 30,2008
            
            
            2007Average Balance
            
            
            Interest Expense
            
            
            Average Rate Paid
            
            
            Average Balance
            
            
            Interest Expense
            
            
            Average Rate Paid(Dollars
      in Thousands)Savings
            
            $
            4,546
            
            
            $
            22
            
            
            
            .49
            %
            
            $
            4,630
            
            
            $
            23
            
            
            
            .49
            %NOW
            
            
            7,176
            
            
            
            16
            
            
            
            .22
            
            
            
            6,983
            
            
            
            15
            
            
            
            .21Money
      market
            
            
            2,999
            
            
            
            12
            
            
            
            .40
            
            
            
            3,030
            
            
            
            12
            
            
            
            .40Certificates
      of deposit
            
            
            63,893
            
            
            
            2,985
            
            
            
            4.67
            
            
            
            60,344
            
            
            
            2,710
            
            
            
            4.49Total
      deposits
            
            $
            78,614
            
            
            $
            3,035
            
            
            
            3.86
            %
            
            $
            74,987
            
            
            $
            2,760
            
            
            
            3.68
            %





The
following table shows our savings flows during the periods
indicated.





Year Ended June 30,2008
            
            
            2007(In
      Thousands)Total
      deposits at beginning of period
            
            $
            77,710
            
            
            $
            71,279Net
      deposits (withdrawals)
            
            
            (1,117
            )
            
            
            4,866Interest
      credited
            
            
            1,766
            
            
            
            1,565Total
      increase in deposits
            
            $
            650
            
            
            $
            6,431





The
following table presents, by various interest rate categories and maturities,
the amount of certificates of deposit at June 30, 2008.





Balance at June 30, 2008
                Maturing in the 12 Months Ending June
      30,Certificates of
    Deposit
            
            2009
            
            
            2010
            
            
            2011
            
            
            Thereafter
            
            
            Total(In
      Thousands)Less
      than 2.00%
            
            $
            129
            
            
            $
            7
            
            
            $
            --
            
            
            $
            --
            
            
            $
            1362.00%
      - 2.99%
            
            
            8,386
            
            
            
            688
            
            
            
            --
            
            
            
            --
            
            
            
            9,0743.00%
      - 3.99%
            
            
            9,446
            
            
            
            2,363
            
            
            
            556
            
            
            
            475
            
            
            
            12,8404.00%
      - 4.99%
            
            
            11,505
            
            
            
            5,551
            
            
            
            3,451
            
            
            
            4,217
            
            
            
            24,7245.00%
      - 5.99%
            
            
            12,038
            
            
            
            1,818
            
            
            
            520
            
            
            
            958
            
            
            
            15,334Total
      certificate accounts
            
            $
            41,504
            
            
            $
            10,427
            
            
            $
            4,527
            
            
            $
            5,650
            
            
            $
            62,108





The
following table shows the maturities of our certificates of deposit in excess of
$100,000 at June 30, 2008 by time remaining to maturity.




Quarter
      Ending:
            
            Amount
            
            
            Weighted Average Rate(Dollars
      in Thousands)September
      30, 2008
            
            $
            1,460
            
            
            
            4.34
            %December
      31, 2008
            
            
            3,678
            
            
            
            4.39March
      31, 2009
            
            
            902
            
            
            
            3.81June
      30, 2009
            
            
            1,578
            
            
            
            3.33After
      June 30, 2009
            
            
            3,744
            
            
            
            4.88Total
      certificates of deposit with balances in excess of
$100,000
            
            $
            11,362
            
            
            
            4.35
            %





Borrowings.  We may
obtain advances from the Federal Home Loan Bank of Dallas upon the security of
the common stock we own in that bank and certain of our residential mortgage
loans and mortgage-backed and other investment securities, provided certain
standards related to creditworthiness have been met. These advances are made
pursuant to several credit programs, each of which has its own interest rate and
range of maturities. Federal Home Loan Bank advances are generally available to
meet seasonal and other withdrawals of deposit accounts and to permit increased
lending.





13





As of
June 30, 2008, we were permitted to borrow up to an aggregate total of $107.6
million from the Federal Home Loan Bank of Dallas. We had $26.9 million and
$12.4 million of Federal Home Loan Bank advances outstanding at June 30, 2008
and 2007, respectively.





The
following table shows certain information regarding our borrowings at or for the
dates indicated:





At or For the Year Ended
      June 30,2008
            
            
            2007(Dollars
      in Thousands)FHLB
      advances:Average
      balance outstanding
            
            $
            20,602
            
            
            $
            14,883Maximum
      amount outstanding at any month-end during the period
            
            $
            27,293
            
            
            $
            16,695Balance
      outstanding at end of period
            
            $
            26,876
            
            
            $
            12,368Average
      interest rate during the period
            
            
            4.53
            %
            
            
            4.63
            %Weighted
      average interest rate at end of period
            
            
            4.27
            %
            
            
            4.68
            %





At June
30, 2008, $9.6 million of our borrowings were short-term (maturities of one year
or less).  Such short-term borrowings had a weighted average interest
rate of 4.09% at June 30, 2008.





REGULATION





Set forth
below is a brief description of certain laws relating to the regulation of Home
Federal Bancorp, Home Federal Mutual Holding Company and Home Federal Savings
and Loan.  This description does not purport to be complete and is
qualified in its entirety by reference to applicable laws and
regulations.





General





Home
Federal Savings and Loan, as a federally chartered savings and loan association,
is subject to federal regulation and oversight by the Office of Thrift
Supervision extending to all aspects of its operations.  Home Federal
Savings and Loan also is subject to regulation and examination by the Federal
Deposit Insurance Corporation, which insures our deposits to the maximum extent
permitted by law, and requirements established by the Federal Reserve
Board.  Federally chartered savings institutions are required to file
periodic reports with the Office of Thrift Supervision and are subject to
periodic examinations by the Office of Thrift Supervision and the Federal
Deposit Insurance Corporation.  The investment and lending authority
of savings institutions are prescribed by federal laws and regulations, and such
institutions are prohibited from engaging in any activities not permitted by
such laws and regulations.  Such regulation and supervision primarily
is intended for the protection of depositors and not for the purpose of
protecting shareholders.





Federal
law provides the federal banking regulators, including the Office of Thrift
Supervision and Federal Deposit Insurance Corporation, with substantial
enforcement powers. The Office of Thrift Supervision's enforcement authority
over all savings institutions and their holding companies includes, among other
things, the ability to assess civil money penalties, to issue cease and desist
or removal orders and to initiate injunctive actions.  In general,
these enforcement actions may be initiated for violations of laws and
regulations and unsafe or unsound practices.  Other actions or
inactions may provide the basis for enforcement action, including misleading or
untimely reports filed with the Office of Thrift Supervision.  Any
change in such regulations, whether by the Federal Deposit Insurance
Corporation, Office of Thrift Supervision or Congress, could have a material
adverse impact on Home Federal Mutual Holding Company, Home Federal Bancorp and
Home Federal Savings and Loan and our operations.





Regulation
of Home Federal Bancorp, Inc. and Home Federal Mutual Holding
Company





Holding Company
Acquisitions.  Home Federal Bancorp and Home Federal Mutual
Holding Company are savings and loan holding companies under the Home Owners'
Loan Act, and are registered with the Office of Thrift
Supervision.  Federal law generally prohibits a savings and loan
holding company, without prior Office of Thrift Supervision approval, from
acquiring the ownership or control of any other savings institution or savings
and loan holding company, or all, or substantially all, of the assets or more
than 5% of the voting shares of the savings institution or savings and loan
holding company. These provisions also prohibit, among other things, any
director or officer of a savings and loan holding company, or any individual who
owns or controls more than 25% of the voting shares of such holding company,
from acquiring control of any savings institution not a subsidiary of such
savings and loan holding company, unless the acquisition is approved by the
Office of Thrift Supervision.





14





The
Office of Thrift Supervision may not approve any acquisition that would result
in a multiple savings and loan holding company controlling savings institutions
in more than one state, subject to two exceptions: (1) the approval of
interstate supervisory acquisitions by savings and loan holding companies; and
(2) the acquisition of a savings institution in another state if the laws of the
state of the target savings institution specifically permit such
acquisitions.  The states vary in the extent to which they permit
interstate savings and loan holding company acquisitions.





Holding Company
Activities.  Home Federal Bancorp and Home Federal Mutual
Holding Company operate as unitary savings and loan holding
companies.  Although savings and loan holding companies are not
subject to specific capital requirements or specific restrictions on the payment
of dividends or other capital distributions, federal regulations do prescribe
such restrictions on subsidiary savings institutions, as described
below.  Home Federal Savings and Loan must notify the Office of Thrift
Supervision 30 days before declaring any dividend.  In addition, the
financial impact of a holding company on its subsidiary institution is a matter
that is evaluated by the Office of Thrift Supervision and the agency has
authority to order cessation of activities or divestiture of subsidiaries deemed
to pose a threat to the safety and soundness of the institution.





Waivers of Dividends by Home Federal
Mutual Holding Company.  It is the policy of a number of mutual
holding companies to waive the receipt of dividends declared by their subsidiary
companies.  Office of Thrift Supervision regulations require Home
Federal Mutual Holding Company to notify the Office of Thrift Supervision of any
proposed waiver of its receipt of any dividends.  The Office of Thrift
Supervision reviews dividend waiver notices on a case-by-case basis, and, in
general, does not object to any such waiver if the waiver of cash dividends
would not be detrimental to the safe and sound operation of the subsidiary
institution.  Home Federal Mutual Holding Company waived all its
dividends paid by Home Federal Bancorp during the fiscal year ended June 30,
2008.  Under Office of Thrift Supervision regulations, public
stockholders are not diluted because of any dividends waived by Home Federal
Mutual Holding Company would not be considered in determining an appropriate
exchange ratio in the event Home Federal Mutual Holding Company converts to
stock form.





Federal Securities
Laws.  Home Federal Bancorp registered its common stock with
the Securities and Exchange Commission under Section 12(g) of the Securities
Exchange Act of 1934.  The Company is subject to the proxy and tender
offer rules, insider trading reporting requirements and restrictions, and
certain other requirements under the Securities Exchange Act of
1934.  Pursuant to Office of Thrift Supervision regulations and our
plan of stock issuance, we have agreed to maintain such registration for a
minimum of three years following the reorganization in January
2005.





The Sarbanes-Oxley
Act.  As a public company, Home Federal Bancorp is subject to
the Sarbanes-Oxley Act of 2002, which implements a broad range of corporate
governance and accounting measures for public companies designed to promote
honesty and transparency in corporate America and better protect investors from
corporate wrongdoing.  The Sarbanes-Oxley Act's principal legislation
and the derivative regulation and rule-making promulgated by the Securities and
Exchange Commission includes:





●
            the
      creation of an independent accounting oversight
  board;





●
            auditor
      independence provisions that restrict non-audit services that accountants
      may provide to their audit clients;





●
            additional
      corporate governance and responsibility measures, including the
      requirement that the chief executive officer and chief financial officer
      certify financial statements;





●
            a
      requirement that companies establish and maintain a system of internal
      control over financial reporting and that a company's management provide
      an annual report regarding its assessment of the effectiveness of such
      internal control over financial reporting to the company's independent
      accountants and that such accountants provide an attestation report with
      respect to management's assessment of the effectiveness of the company's
      internal control over financial
reporting;





15





●
            the
      forfeiture of bonuses or other incentive-based compensation and profits
      from the sale of an issuer's securities by directors and senior officers
      in the twelve month period following initial publication of any financial
      statements that later require
restatement;





●
            an
      increase in the oversight of, and enhancement of certain requirements
      relating to audit committees of public companies and how they interact
      with the company's independent
auditors;





●
            the
      requirement that audit committee members must be independent and are
      absolutely barred from accepting consulting, advisory or other
      compensatory fees from the issuer;





●
            the
      requirement that companies disclose whether at least one member of the
      committee is a "financial expert" (as such term is defined by the
      Securities and Exchange Commission) and if not, why
  not;





●
            expanded
      disclosure requirements for corporate insiders, including accelerated
      reporting of stock transactions by insiders and a prohibition on insider
      trading during pension blackout
periods;





●
            a
      prohibition on personal loans to directors and officers, except certain
      loans made by insured financial
institutions;




●
            disclosure
      of a code of ethics and the requirement of filing of a Form 8-K for a
      change or waiver of such code;





●
            mandatory
      disclosure by analysts of potential conflicts of interest;
    and





●
            a
      range of enhanced penalties for fraud and other
  violations.





Although
Home Federal Bancorp anticipates that it will incur additional expense in
complying with the provisions of the Sarbanes-Oxley Act and the resulting
regulations, management does not expect that such compliance will have a
material impact on its results of operations or financial
condition.





Home
Federal Savings and Loan Association





General.  As the
primary federal regulator of Home Federal Savings and Loan, the Office of Thrift
Supervision has extensive authority over the operations of federally-chartered
savings institutions.  As part of this authority, Home Federal Savings
and Loan is required to file periodic reports with the Office of Thrift
Supervision and is subject to periodic examinations by the Office of Thrift
Supervision and the Federal Deposit Insurance Corporation.  The
investment and lending authority of savings institutions are prescribed by
federal laws and regulations, and such institutions are prohibited from engaging
in any activities not permitted by such laws and regulations.  Such
regulation and supervision is primarily intended for the protection of
depositors and the Deposit Insurance Fund, formerly the Savings Association
Insurance Fund, administered by the Federal Deposit Insurance
Corporation.





The
Office of Thrift Supervision's enforcement authority over all savings
institutions and their holding companies includes, among other things, the
ability to assess civil money penalties, to issue cease and desist or removal
orders and to initiate injunctive actions.  In general, these
enforcement actions may be initiated for violations of laws and regulations and
unsafe or unsound practices.  Other actions or inactions may provide
the basis for enforcement action, including misleading or untimely reports filed
with the Office of Thrift Supervision.





Insurance of
Accounts.  The deposits of Home Federal Savings and Loan are
insured to the maximum extent permitted by the Deposit Insurance Fund and are
backed by the full faith and credit of the U.S. Government.  As
insurer, the Federal Deposit Insurance Corporation is authorized to conduct
examinations of, and to require reporting by, insured
institutions.  It also may prohibit any insured institution from
engaging in any activity determined by regulation or order to pose a serious
threat to the Federal Deposit Insurance Corporation.  The Federal
Deposit Insurance Corporation also has the authority to initiate enforcement
actions against savings institutions, after giving the Office of Thrift
Supervision an opportunity to take such action.





16





Each FDIC
insured institution is assigned to one of three capital groups which are based
solely on the level of an institution's capital – "well
capitalized," "adequately capitalized," and "undercapitalized."  These
capital levels are defined in the same manner as under the prompt corrective
action system discussed below.  These three groups are then divided
into three subgroups which reflect varying levels of supervisory concern, from
those which are considered to be healthy to those which are considered to be of
substantial supervisory concern.  Assessment rates for insured
institutions are determined semi-annually by the Federal Deposit Insurance
Corporation and currently range from zero basis points for well-capitalized
healthy institutions, such as Home Federal Saving and Loan, to 27 basis points
for undercapitalized institutions with substantial supervisory
concern.  As a result of the recent bank failures, however, the FDIC
risk-based assessment rate may increase in future periods in order to
recapitalize the deposit insurance fund.





In
addition, all institutions with deposits insured by the Federal Deposit
Insurance Corporation are required to pay assessments to fund interest payments
on bonds issued by the Financing Corporation ("FICO"), a mixed-ownership
government corporation established to recapitalize the predecessor to the
Savings Association Insurance Fund.  The FICO assessment rate set for
the second quarter of 2008 was 0.0122% of insured deposits and is adjusted
quarterly.  These assessments will continue until the Financing
Corporation bonds mature in 2019.





The
Federal Deposit Insurance Corporation may terminate the deposit insurance of any
insured depository institution, including Home Federal Savings and Loan, if it
determines after a hearing that the institution has engaged or is engaging in
unsafe or unsound practices, is in an unsafe or unsound condition to continue
operations, or has violated any applicable law, regulation, order or any
condition imposed by an agreement with the Federal Deposit Insurance
Corporation.  It also may suspend deposit insurance temporarily during
the hearing process for the permanent termination of insurance, if the
institution has no tangible capital.  If insurance of accounts is
terminated, the accounts at the institution at the time of the termination, less
subsequent withdrawals, shall continue to be insured for a period of six months
to two years, as determined by the Federal Deposit Insurance
Corporation.  Management is aware of no existing circumstances which
would result in termination of Home Federal Savings and Loan's deposit
insurance.





On
February 8, 2006, President George W. Bush signed into law legislation that
merged the Bank Insurance Fund and the Savings Association Insurance Fund to
form the Deposit Insurance Fund, eliminated any disparities in bank and thrift
risk-based premium assessments, reduced the administrative burden of maintaining
and operating two separate funds and established certain new insurance coverage
limits and a mechanism for possible periodic increases.  The
legislation also gave the FDIC greater discretion to identify the relative risks
all institutions present to the Deposit Insurance Fund and set risk-based
premiums.





Major
provisions in the legislation include:





●
            Merging
      the Savings Association Insurance Fund and Bank Insurance Fund, which
      became effective March 31, 2006.





●
            Maintaining
      basic deposit and municipal account insurance coverage at $100,000 but
      providing for a new basic insurance coverage for retirement accounts of
      $250,000.  Insurance coverage for basic deposit and retirement
      accounts could be increased for inflation every five years in $10,000
      increments beginning in 2011.





●
            Providing
      the FDIC with the ability to set the designated reserve ratio within a
      range of between 1.15% and 1.50%, rather than maintaining 1.25% at all
      times regardless of prevailing economic
  conditions.





●
            Providing
      a one-time assessment credit of $4.7 billion to banks and savings
      associations in existence on December 31, 1996.  The
      institutions qualifying for the credit may use it to offset future
      premiums with certain limitations.





●
            Requiring
      the payment of dividends of 100% of the amount that the insurance fund
      exceeds 1.5% of the estimated insured deposits and the payment of 50% of
      the amount that the insurance fund exceeds 1.35% of the estimated insured
      deposits (when the reserve is greater than 1.35% but no more than
      1.5%).





17





Regulatory Capital
Requirements.  Federally insured savings institutions are
required to maintain minimum levels of regulatory capital.  The Office
of Thrift Supervision has established capital standards consisting of a
"tangible capital requirement," a "leverage capital requirement" and "a
risk-based capital requirement."  The Office of Thrift Supervision
also is authorized to impose capital requirements in excess of these standards
on individual institutions on a case-by-case basis.





Current
Office of Thrift Supervision capital standards require savings institutions to
satisfy the following capital requirements:





●
            tangible
      capital requirement -- "tangible" capital equal to at least 1.5% of
      adjusted total assets;





●
            leverage
      capital requirement -- "core" capital equal to at least 3.0% of adjusted
      total assets; and





●
            risk-based
      capital requirement --"total" capital (a combination of core and
      "supplementary" capital) equal to at least 8.0% of "risk-weighted"
      assets.





Core
capital generally consists of common stockholders' equity (including retained
earnings).  Tangible capital generally equals core capital minus
intangible assets, with only a limited exception for purchased mortgage
servicing rights.  Home Federal Savings and Loan had no intangible
assets at June 30, 2008.  Both core and tangible capital are further
reduced by an amount equal to a savings institution's debt and equity
investments in subsidiaries engaged in activities not permissible to national
banks (other than subsidiaries engaged in activities undertaken as agent for
customers or in mortgage banking activities and subsidiary depository
institutions or their holding companies).  These adjustments do not
affect Home Federal Savings and Loan's regulatory capital.





In
determining compliance with the risk-based capital requirement, a savings
institution is allowed to include both core capital and supplementary capital in
its total capital, provided that the amount of supplementary capital included
does not exceed the savings institution's core capital.  Supplementary
capital generally consists of general allowances for loan losses up to a maximum
of 1.25% of risk-weighted assets, together with certain other
items.  In determining the required amount of risk-based capital,
total assets, including certain off-balance sheet items, are multiplied by a
risk weight based on the risks inherent in the type of assets.  The
risk weights range from 0% for cash and securities issued by the U.S. Government
or unconditionally backed by the full faith and credit of the U.S. Government to
100% for loans (other than qualifying residential loans weighted at 80%) and
repossessed assets.





Savings
institutions must value securities available for sale at amortized cost for
regulatory capital purposes.  This means that in computing regulatory
capital, savings institutions should add back any unrealized losses and deduct
any unrealized gains, net of income taxes, on debt securities reported as a
separate component of GAAP capital.





At June
30, 2008, Home Federal Savings and Loan exceeded all of its regulatory capital
requirements, with tangible, core and risk-based capital ratios of 20.21%,
20.21% and 73.08%, respectively.





Any
savings institution that fails any of the capital requirements is subject to
possible enforcement actions by the Office of Thrift Supervision or the Federal
Deposit Insurance Corporation.  Such actions could include a capital
directive, a cease and desist order, civil money penalties, the establishment of
restrictions on the institution's operations, termination of federal deposit
insurance and the appointment of a conservator or receiver.  The
Office of Thrift Supervision's capital regulation provides that such actions,
through enforcement proceedings or otherwise, could require one or more of a
variety of corrective actions.





Prompt Corrective
Action.  The following table shows the amount of capital
associated with the different capital categories set forth in the prompt
corrective action regulations.





Capital Category
            
            Total Risk-Based
    Capital
            
            Tier 1 Risk-Based
    Capital
            
            Tier 1 Leverage
    CapitalWell
      capitalized
            
            10%
      or more
            
            6%
      or more
            
            5%
      or moreAdequately
      capitalized
            
            8%
      or more
            
            4%
      or more
            
            4%
      or moreUndercapitalized
            
            Less
      than 8%
            
            Less
      than 4%
            
            Less
      than 4%Significantly
      undercapitalized
            
            Less
      than 6%
            
            Less
      than 3%
            
            Less
      than 3%





In
addition, an institution is "critically undercapitalized" if it has a ratio of
tangible equity to total assets that is equal to or less than
2.0%.  Under specified circumstances, a federal banking agency may
reclassify a well capitalized institution as adequately capitalized and may
require an adequately capitalized institution or an undercapitalized institution
to comply with supervisory actions as if it were in the next lower category
(except that the Federal Deposit Insurance Corporation may not reclassify a
significantly undercapitalized institution as critically
undercapitalized).





18





An
institution generally must file a written capital restoration plan which meets
specified requirements within 45 days of the date that the institution receives
notice or is deemed to have notice that it is undercapitalized, significantly
undercapitalized or critically undercapitalized.  A federal banking
agency must provide the institution with written notice of approval or
disapproval within 60 days after receiving a capital restoration plan, subject
to extensions by the agency.  An institution which is required to
submit a capital restoration plan must concurrently submit a performance
guaranty by each company that controls the institution.  In addition,
undercapitalized institutions are subject to various regulatory restrictions,
and the appropriate federal banking agency also may take any number of
discretionary supervisory actions.





At June
30, 2008, Home Federal Savings and Loan was deemed a well capitalized
institution for purposes of the above regulations and as such is not subject to
the above mentioned restrictions.





The table
below sets forth Home Federal Savings and Loan's capital position relative to
its regulatory capital requirements at June 30, 2008.





Actual
            
            
            Required for Capital Adequacy
      Purposes
            
            
            To Be Well Capitalized Under Prompt Corrective
      Action Provisions
            
            
            Excess Over Well-Capitalized
      ProvisionsAmount
            
            
            Ratio
            
            
            Amount
            
            
            Ratio
            
            
            Amount
            
            
            Ratio
            
            
            Amount
            
            
            Ratio(Dollars
      in Thousands)Total
      risk-based capital
            
            $
            28,547
            
            
            
            73.08
            %
            
            $
            3,125
            
            
            
            8.00
            %
            
            $
            3,906
            
            
            
            10.00
            %
            
            $
            24,641
            
            
            
            86.32
            %Tier
      1 risk-based capital
            
            
            28,314
            
            
            
            72.48
            
            
            
            2,101
            
            
            
            1.50
            
            
            
            2,344
            
            
            
            6.00
            
            
            
            25,970
            
            
            
            91.72Tier
      1 leverage Capital
            
            
            28,314
            
            
            
            20.21
            
            
            
            4,203
            
            
            
            3.00
            
            
            
            7,005
            
            
            
            5.00
            
            
            
            21,309
            
            
            
            75.26





Capital
Distributions.  Office of Thrift Supervision regulations govern
capital distributions by savings institutions, which include cash dividends,
stock repurchases and other transactions charged to the capital account of a
savings institution to make capital distributions.  A savings
institution must file an application for Office of Thrift Supervision approval
of the capital distribution if either (1) the total capital distributions for
the applicable calendar year exceed the sum of the institution's net income for
that year to date plus the institution's retained net income for the preceding
two years, (2) the institution would not be at least adequately capitalized
following the distribution, (3) the distribution would violate any applicable
statute, regulation, agreement or Office of Thrift Supervision-imposed
condition, or (4) the institution is not eligible for expedited treatment of its
filings.  If an application is not required to be filed, savings
institutions which are a subsidiary of a savings and loan holding company (as
well as certain other institutions) must still file a notice with the Office of
Thrift Supervision at least 30 days before the board of directors declares a
dividend or approves a capital distribution.





Qualified Thrift Lender
Test.  All savings institutions are required to meet a
qualified thrift lender, or QTL, test to avoid certain restrictions on their
operations.  A savings institution can comply with the QTL test by
either qualifying as a domestic building and loan association as defined in the
Internal Revenue Code or meeting the Office of Thrift Supervision QTL
test.





Currently,
the Office of Thrift Supervision QTL test requires that 65% of an institution's
"portfolio assets" (as defined) consist of certain housing and consumer-related
assets on a monthly average basis in nine out of every 12 months. To be a
qualified thrift lender under the IRS test, the savings institution must meet a
"business operations test" and a "60 percent assets test," each defined in the
Internal Revenue Code.





If the
savings institution fails to maintain its QTL status, the holding company's
activities are restricted.  In addition, it must discontinue any
non-permissible business, although the Office of Thrift Supervision may grant a
grace period up to two years for good cause.  Nonetheless, any company
that controls a savings institution that is not a qualified thrift lender must
register as a bank holding company within one year of the savings institution's
failure to meet the QTL test.





19





Statutory
penalty provisions require an institution that fails to remain a QTL to either
become a national bank or be prohibited from the following:





●
            Making
      any new investments or engaging in any new activity not allowed for both a
      national bank and a savings
association;





●
            Establishing
      any new branch office unless allowable for a national bank;
      and





●
            Paying
      dividends unless allowable for a national
bank.





Three
years from the date a savings association should have become or ceases to be a
QTL, by failing to meet either QTL test, the institution must comply with the
following restriction:





●
            Dispose
      of any investment or not engage in any activity unless the investment or
      activity is allowed for both a national bank and a savings
      association.





At June
30, 2008, the qualified thrift investments of Home Federal Savings and Loan were
approximately 95.51% of its portfolio assets.





Affiliate Transaction
Restrictions.  Federal laws strictly limit the ability of
savings institutions to engage in transactions with their affiliates, including
their savings and loan holding companies.  Except for certain
exceptions set forth in the Office of Thrift Supervision regulations, a savings
association must comply with sections 23A and 23B of the Federal Reserve Act and
Regulation W which implements those statutory provisions.  Those
statutory and regulatory provisions apply to transactions between a subsidiary
institution and its parent company or the non-savings institution subsidiaries
of the savings and loan holding company and are limited to 10% of a savings
institution's capital and surplus and, with respect to such parent company and
all such non-savings institution subsidiaries, to an aggregate of 20% of the
savings institution's capital and surplus.  Further, loans and
extensions of credit generally are required to be secured by eligible collateral
in specified amounts.  Federal law also requires that all transactions
between a savings institution and its affiliates be on terms as favorable to the
savings institution as transactions with non-affiliates.  Home Federal
Savings and Loan believes that all transactions between it and its affiliates at
June 30, 2008 were on terms as favorable to it as its transactions with
non-affiliates.





Privacy Requirements of the
Gramm-Leach-Bliley Act.  The Gramm-Leach-Bliley Act of 1999
provided for sweeping financial modernization for commercial banks, savings
banks, securities firms, insurance companies, and other financial institutions
operating in the United States. Among other provisions, the Gramm-Leach-Bliley
Act places limitations on the sharing of consumer financial information with
unaffiliated third parties. Specifically, the Gramm-Leach-Bliley Act requires
all financial institutions offering financial products or services to retail
customers to provide such customers with the financial institution's privacy
policy and provide such customers the opportunity to "opt out" of the sharing of
personal financial information with unaffiliated third parties.





Anti-Money
Laundering.  On October 26, 2001, in response to the events of
September 11, 2001, the President of the United States signed into law the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (referred to as the USA PATRIOT
Act).  The USA PATRIOT Act significantly expands the responsibilities
of financial institutions, including savings and loan associations, in
preventing the use of the U.S. financial system to fund terrorist activities.
Title III of the USA PATRIOT Act provides for a significant overhaul of the U.S.
anti-money laundering regime. Among other provisions, it requires financial
institutions operating in the United States to develop new anti-money laundering
compliance programs, due diligence policies and controls to ensure the detection
and reporting of money laundering. Such compliance programs are intended to
supplement existing compliance requirements, also applicable to financial
institutions, under the Bank Secrecy Act and the Office of Foreign Assets
Control Regulations.  We have established policies and procedures to
ensure compliance with the USA PATRIOT Act's provisions, and the impact of the
USA PATRIOT Act on our operations has not been material.





Federal Home Loan Bank
System.  Home Federal Savings and Loan is a member of the
Federal Home Loan Bank of Dallas, which is one of 12 regional Federal Home Loan
Banks that administers the home financing credit function of savings
institutions.  Each Federal Home Loan Bank serves as a reserve or
central bank for its members within its assigned region.  It is funded
primarily from proceeds derived from the sale of consolidated obligations of the
Federal Home Loan Bank System.  It makes loans to members (i.e., advances) in accordance
with policies and procedures established by the Board of Directors of the
Federal Home Loan Bank.  At June 30, 2008, Home Federal Savings and
Loan had $26.9 million of Federal Home Loan Bank advances.





20





As a
member, Home Federal Savings and Loan is required to purchase and maintain stock
in the Federal Home Loan Bank of Dallas in an amount equal to at least 1% of its
aggregate unpaid residential mortgage loans or similar obligations at the
beginning of each year.  At June 30, 2008, Home Federal Savings and
Loan had $1,196,100 in Federal Home Loan Bank stock, which was in compliance
with this requirement.





The
Federal Home Loan Banks are required to provide funds for the resolution of
troubled savings institutions and to contribute to affordable housing programs
through direct loans or interest subsidies on advances targeted for community
investment and low- and moderate-income housing projects.  These
contributions have adversely affected the level of Federal Home Loan Bank
dividends paid in the past and could do so in the future.  These
contributions also could have an adverse effect on the value of Federal Home
Loan Bank stock in the future.





Federal Reserve
System.  The Federal Reserve Board requires all depository
institutions to maintain reserves against their transaction accounts (primarily
NOW and Super NOW checking accounts) and non-personal time
deposits.  Because required reserves must be maintained in the form of
vault cash or a noninterest-bearing account at a Federal Reserve Bank, the
effect of this reserve requirement is to reduce an institution's earning assets.
At June 30, 2008, Home Federal Savings and Loan had met its reserve
requirement.





TAXATION





Federal
Taxation





General.  Home
Federal Bancorp, Home Federal Mutual Holding Company and Home Federal Savings
and Loan are subject to federal income taxation in the same general manner as
other corporations with some exceptions listed below.  The following
discussion of federal, state and local income taxation is only intended to
summarize certain pertinent income tax matters and is not a comprehensive
description of the applicable tax rules.  Home Federal Savings and
Loan's federal and state income tax returns for taxable years through December
31, 2004 have been closed for purposes of examination by the Internal Revenue
Service or the Louisiana Department of Revenue.  As a result, all tax
returns through that date may no longer be audited by either tax
authority.





Method of
Accounting.  For federal income tax purposes, Home Federal
Savings and Loan reports income and expenses on the accrual method of accounting
and used a December 31 tax year in 2004 for filing its federal income tax return
and transitioned to a June 30 tax year in 2005.





Bad Debt
Reserves.  The Small Business Job Protection Act of 1996
eliminated the use of the reserve method of accounting for bad debt reserves by
savings associations, effective for taxable years beginning after
1995.  Prior to that time, Home Federal Savings and Loan was permitted
to establish a reserve for bad debts and to make additions to the
reserve.  These additions could, within specified formula limits, be
deducted in arriving at taxable income.  As a result of the Small
Business Job Protection Act of 1996, savings associations must use the
experience method in computing their bad debt deduction beginning with their
1996 federal tax return.  In addition, federal legislation required
the recapture over a six year period of the excess of tax bad debt reserves at
December 31, 1995 over those established as of December 31, 1987.





Taxable Distributions and
Recapture.  Prior to the Small Business Job Protection Act of
1996, bad debt reserves created prior to January 1, 1988 were subject to
recapture into taxable income if Home Federal Savings and Loan failed to meet
certain thrift asset and definitional tests.  New federal legislation
eliminated these savings association related recapture
rules.  However, under current law, pre-1988 reserves remain subject
to recapture should Home Federal Savings and Loan make certain non-dividend
distributions or cease to maintain a bank charter.





At June
30, 2008, the total federal pre-1988 reserve was approximately $3.3
million.  The reserve reflects the cumulative effects of federal tax
deductions by Home Federal Savings and Loan for which no federal income tax
provisions have been made.





Alternative Minimum
Tax.  The Internal Revenue Code imposes an alternative minimum
tax at a rate of 20% on a base of regular taxable income plus certain tax
preferences.  The alternative minimum tax is payable to the extent
such alternative minimum tax income is in excess of the regular income
tax.  Net operating losses,of which Home Federal
Savings and Loan has none, can offset no more than 90% of alternative minimum
taxable income. Certain payments of alternative minimum tax may be used as
credits against regular tax liabilities in future years.  Home Federal
Savings and Loan has not been subject to the alternative minimum tax or any such
amounts available as credits for carryover.





21





Net Operating Loss Carryovers.
For net operating losses in tax years beginning before August 6, 1997, Home
Federal Savings and Loan may carry back net operating losses to the three years
preceding the loss year and then forward to fifteen years following the loss
years.  For net operating losses in years beginning after August 5,
1997, net operating losses can be carried back to the two years preceding the
loss year and forward to the 20 years following the loss year.  At
June 30, 2008, Home Federal Savings and Loan had no net operating loss carry
forwards for federal income tax purposes.





Corporate Dividends-Received
Deduction.  Home Federal Bancorp may exclude from its income
100% of dividends received from Home Federal Savings and Loan as a member of the
same affiliated group of corporations.  The corporate dividends
received deduction is 80% in the case of dividends received from corporations
which a corporate recipient owns less than 80%, but at least 20% of the
distribution corporation. Corporations which own less than 20% of the stock of a
corporation distributing a dividend may deduct only 70% of dividends
received.





State
Taxation





Home
Federal Bancorp is subject to the Louisiana Corporation Income Tax based on our
Louisiana taxable income.  The Corporation Income Tax applies at
graduated rates from 4% upon the first $25,000 of Louisiana taxable income to 8%
on all Louisiana taxable income in excess of $200,000.  For these
purposes, "Louisiana taxable income" means net income which is earned by us
within or derived from sources within the State of Louisiana, after adjustments
permitted under Louisiana law, including a federal income tax
deduction.  In addition, Home Federal Savings and Loan will be subject
to the Louisiana Shares Tax which is imposed on the assessed value of a
company's stock.  The formula for deriving the assessed value is to
calculate 15% of the sum of:





(a)
            20%
      of our capitalized earnings, plus





(b)
            80%
      of our taxable stockholders' equity,
minus





(c)
            50%
      of our real and personal property
assessment





Various
items may also be subtracted in calculating a company's capitalized
earnings.





Item
1A.  Risk Factors





Our
results of operations are significantly dependant on economic conditions and
related uncertainties.





The
operations of savings associations are affected, directly and indirectly, by
domestic and international economic and political conditions and by the
governmental monetary and fiscal policies.  Conditions such as
inflation, recession, unemployment, volatile interest rates, real estate values,
government monetary policy, international conflicts, the actions of terrorists,
and other factors beyond our control may adversely affect our results of
operations.  Changes in interest rates, in particular, could adversely
affect our net interest income and have a number of other adverse effects on our
operations, as discussed in the risk factor below.  Adverse economic
conditions also could result in an increase in loan delinquencies, foreclosures
and nonperforming assets and a decrease in the value of the property or other
collateral which secures our loans, all of which could adversely affect our
results of operations.  We are particularly sensitive to changes in
economic conditions and related uncertainties in the metropolitan Shreveport/
Bossier City area because we derive substantially all of our loans, deposits and
other business from this area.  Accordingly, we remain subject to the
risks associated with prolonged declines in our local economy.





Changes
in interest rates could have a material adverse effect on our
operations.





The
operations of financial institutions such as us are dependant to a large extent
on net interest income, which is the difference between the interest income
earned on interest-earning assets such as loans and investment securities and
the interest expense paid on interest-bearing liabilities such as deposits and
borrowings.  Changes in the general level of interest rates can affect
our net interest income by affecting the difference between the weighted average
yield earned on our interest-earning assets and the weighted average rate paid
on our interest-bearing liabilities, or interest rate spread, and the average
life of our interest-earning assets and interest-bearing
liabilities.  Changes in interest rates also can affect our ability to
originate loans; the value of our interest-earning assets and our ability to
realize gains from the sale of such assets; our ability to obtain and retain
deposits in competition with other available investment alternatives; the
ability of our borrowers to repay adjustable or variable rate loans; and the
fair value of the derivatives carried on our balance sheet, derivative hedge
effectiveness testing and the amount of ineffectiveness recognized in our
earnings.  Interest rates are highly sensitive to many factors beyond
our control.  Although we believe that the estimated maturities of our
interest-earning assets currently are well balanced in relation to the estimated
maturities of our interest-bearing liabilities (which involves various estimates
as to how changes in the general level of interest rates will impact these
assets and liabilities), there can be no assurance that our profitability would
not be adversely affected during any period of changes in interest
rates.





22





Our
allowance for losses on loans and leases may not be adequate to cover probable
losses.





We have
established an allowance for loan losses which we believe is adequate to offset
probable losses on our existing loans and leases.  There can be no
assurance that any future declines in real estate market conditions, general
economic conditions or changes in regulatory policies will not require us to
increase our allowance for loan and lease losses, which would adversely affect
our results of operations.





Our
FDIC insurance premium could be substantially higher in the future which would
have an adverse effect on our future earnings.





As a
result of the recent bank failures, we expect that the FDIC risk-based insurance
assessment rate will increase in order to recapitalize the deposit insurance
fund.  Since January 1, 2007 our FDIC insurance assessment has been
substantially reduced by a $126,000 special one time credit.  The
remaining credit as of June 30, 2008 is $76,000.  Accordingly, our
FDIC assessment could be substantially higher in future periods depending on the
premium rates set by the FDIC for such periods and the depletion of our one time
credit.  Any increases in our FDIC insurance premium rates will reduce
our future earnings.





We
are subject to extensive regulation which could adversely affect our business
and operations.





We are
subject to extensive federal and state governmental supervision and regulation,
which are intended primarily for the protection of depositors.  In
addition, we are subject to changes in federal and state laws, as well as
changes in regulations, governmental policies and accounting
principles.  The effects of any such potential changes cannot be
predicted but could adversely affect the business and our operations in the
future.





We
face strong competition which may adversely affect our
profitability.





We are
subject to vigorous competition in all aspects and areas of our business from
banks and other financial institutions, including savings and loan associations,
savings banks, finance companies, credit unions and other providers of financial
services, such as money market mutual funds, brokerage firms, consumer finance
companies and insurance companies.  We also compete with non-financial
institutions, including retail stores that maintain their own credit programs
and governmental agencies that make available low cost or guaranteed loans to
certain borrowers.  Certain of our competitors are larger financial
institutions with substantially greater resources, lending limits, larger branch
systems and a wider array of commercial banking services.  Competition
from both bank and non-bank organizations will continue.





Our
ability to successfully compete may be reduced if we are unable to make
technological advances.





The
banking industry is experiencing rapid changes in technology.  In
addition to improving customer services, effective use of technology increases
efficiency and enables financial institutions to reduce cost.  As a
result, our future success will depend in part on our ability to address our
customers' needs by using technology.  We cannot assure you that we
will be able to effectively develop new technology-driven products and services
or be successful in marketing these products to our customers.  Many
of our competitors have far greater resources that we have to invest in
technology.





23





Item
1B.  Unresolved Staff Comments





Not
applicable.





Item
2.  Properties





At June
30, 2008, Home Federal Savings and Loan conducted its business from its
headquarters office located in Shreveport, Louisiana and two full service branch
offices.





The
following table sets forth certain information relating to Home Federal Savings
and Loan's offices and parcel of land for a future branch office at June 30,
2008.





Description/Address
            
            Leased/Owned
            
            Net Book Value of Property
            
            
            Amount of Deposits(In
      Thousands)Building
            
            Owned
            
            $
            154
            
            
            $
            30,603624
      Market Street
              Shreveport,
      LABuilding/ATM
            
            Owned(1)
            
            
            15
            
            
            
            33,4416363
      Youree Dr.
              Shreveport,
      LABuilding/ATM
            
            Owned
            
            
            180
            
            
            
            16,1238990
      Mansfield Rd.
              Shreveport,
      LALot
      2
            
            Owned
            
            
            436
            
            
            
            N/ARiver
      Crest, Unit #1
              Bossier
      Parish, LA


______________________





(1)
            The
      building is owned by Home Federal Savings and Loan but the land is subject
      to an operating lease which is renewable on November 30, 2008 for a five
      year period.





Item
3.  Legal Proceedings





Home
Federal Bancorp and Home Federal Savings and Loan are not involved in any
pending legal proceedings other than nonmaterial legal proceedings occurring in
the ordinary course of business.





Item 4.
Submissionof Matters to a Vote of Security Holders





Not
applicable











PART
II





Item
5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities





(a)
            The
      information required herein, to the extent applicable, is incorporated by
      reference from page 56 of Home Federal's 2008 Annual Report to
      Shareholders filed as Exhibit 13 hereto ("2008 Annual
      Report").





The
information for all equity based and individual compensation arrangements is
incorporated by reference from Item 11 hereof.





(b)
            Not
      applicable.





24





(c)
            The
      following table represents the repurchasing activity of the stock
      repurchase program during the fourth quarter of fiscal
    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 ProgramsMonth
      #1 April 1, 2008 -- April 30, 2008
            
            
            --
            
            
            $
            --
            
            
            
            --
            
            
            
            94,809Month
      #2 May 1, 2008 -- May 31, 2008
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            94,809Month
      #3 June 1, 2008 -- June 30, 2008
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --Total
            
            
            --
            
            
            $
            --
            
            
            
            --
            
            
            
            --





Notes
to this table:





(a)
            On
      May 10, 2007, the Company issued a press release announcing that the Board
      of Directors authorized a stock repurchase program to repurchase 10%, or
      128,122 shares, of the outstanding shares other than shares held by Home
      Federal Mutual Holding Company (the "second repurchase
      program").





(b)
            The
      second repurchase program had an expiration date of May 15,
      2008.





Item
6.  SelectedFinancial Data





The
information required by this section is included in the section titled "Selected
Consolidated Financial Data" of the Company's 2008 Annual Report to Shareholders
and is hereby incorporated herein by reference from exhibit 13.0
hereto.





Item
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations





The
information required herein is incorporated by reference from pages 4 to 11 of
the 2008 Annual Report.





Item
7A.  Quantitative and Qualitative Disclosure About Market
Risk





Not
Applicable.





Item
8. Financial Statements and Supplementary
Data





The
information required herein is incorporated by reference from pages 13 to 55 of
the 2008 Annual Report.





Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure





Not
applicable





Item 9A.
Controlsand Procedures





(a)
            Our
      management evaluated, with the participation of our principal executive
      officer and principal financial officer, the effectiveness of our
      disclosure controls and procedures (as defined in Rule 13a-15(e) and
      15d-15(e) under the Securities Exchange Act of 1934) as of the end of the
      period covered by this report.  Based on such evaluation, our
      principal executive officer and principal financial officer have concluded
      that our disclosure controls and procedures are designed to ensure that
      information required to be disclosed by us in the reports that we file or
      submit under the Securities Exchange Act of 1934 is recorded, processed,
      summarized and reported within the time periods specified in the SEC's
      rules and regulations and are operating in an effective
      manner.





25





(b)
            Management's
      Report on Internal Control Over Financial
  Reporting





Management
is responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Exchange Act Rule
13a-15(f).  The Company's internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors of
the Company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the
Company's assets that could have a material effect on the financial
statements.





Internal
control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements prepared for external purposes in accordance with generally
accepted accounting principles. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect
misstatements.  Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.





Under the
supervision and with the participation of management, including our principal
executive officer and principal financial officer, we conducted an evaluation of
the effectiveness of our internal control over financial reporting based on the
framework in Internal Control -- Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on our evaluation under the framework in Internal Control --
Integrated Framework, management concluded that our internal control over
financial reporting was effective as of June 30, 2008.





This
Annual Report does not include an attestation report of the Company's registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the Company to provide only management's report
in this Annual Report.





(c)
            No
      change in the Company's internal control over financial reporting (as
      defined in rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act
      of 1934) occurred during the most recent fiscal quarter that has
      materially affected, or is reasonably likely to materially affect, its
      internal control over financial
reporting.





Item 9B.Other Information





Not
applicable





26





PART
III





Item
10.Directors, Executive Officers and Corporate
Governance





The
information required herein is incorporated by reference from the sections
captioned "Information with Respect to Nominees for Director, Continuing
Directors and Executive Officers" and "Beneficial Ownership of Common Stock by
Certain Beneficial Owners and Management -Section 16(a) Beneficial Ownership
Reporting Compliance" in the Registrant's Proxy Statement to be filed with the
Securities and Exchange Commission within 120 days of June 30, 2008 ("Proxy
Statement").





Code of
Ethics.Home Federal Bancorp has adopted a Code of Ethics that
applies to its principal executive officer and principal financial officer, as
well as directors, other officers and employees of Home Federal Bancorp and Home
Federal Savings and Loan.  A copy of the Code of Ethics may be
obtained without charge upon request made to Clyde D. Patterson, Home Federal
Bancorp, Inc., 624 Market Street, Shreveport, Louisiana 71101.





Item 11.
Executive Compensation





The
information required herein is incorporated by reference from the section
captioned "Management Compensation" in the Proxy Statement.





Item
12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters





Security Ownership of Certain
Beneficial Owners and Management.The information required
herein is incorporated by reference from the section captioned "Beneficial
Ownership of Common Stock by Certain Beneficial Owners and Management" in the
Proxy Statement.





Equity Compensation Plan
Information.  The following table provides information as of
June 30, 2008 with respect to shares of common stock that may be issued under
our existing equity compensation plans, which consist of the 2005 Stock Option
Plan and 2005 Recognition and Retention Plan, both of which were approved by our
shareholders.





Plan Category
            
            Number of securities to be issued upon exercise of
      outstanding options, warrants and rights
              (a)
            
            
            Weighted-average exercise price of outstanding
      options, warrants and rights
              (b)
            
            
            Number of securities remaining available for
      future issuance under equity compensation plans (excluding securities
      reflected in column (a))
              (c)Equity
      compensation plans approved by security holders
            
            
            198,938
            (1)
            
            $
            9.85
            (1)
            
            
            15,005Equity
      compensation plans not approved by security holders
            
            
            --
            
            
            
            --
            
            
            
            --Total
            
            
            198,938
            
            
            $
            9.85
            
            
            
            15,005


___________________





(1)
            Includes
      38,795 shares subject to restricted stock grants which were not vested as
      of June 30, 2008.  The weighted-average exercise price excludes
      such restricted stock grants.





Item
13. Certain Relationships and Related Transactions and Director
Independence





The
information required herein is incorporated by reference from the section
captioned "Indebtedness of Management and Related Party Transactions" in the
Proxy Statement.





27





Item 14.Principal Accountant Fees and Services





The
information required herein is incorporated by reference from the section
captioned "Ratification of Appointment of Independent Registered Public
Accounting Firm -- Audit Fees" in the Proxy Statement.





PART
IV





Item
15.  Exhibits and Financial Statement
Schedules





(a)  The
following documents are filed as part of this report and are incorporated herein
by reference from the Registrant's 2008 Annual Report:





Report of
Independent Registered Public Accounting Firm.





Consolidated
Balance Sheets as of June 30, 2008 and June 30, 2007.





Consolidated
Statements of Income for the Years Ended June 30, 2008 and 2007.





Consolidated
Statements of Comprehensive Income (Loss) for the Years Ended June 30, 2008 and
2007.





Consolidated
Statements of Changes in Stockholders' Equity for the Years Ended June 30, 2008
and 2007.





Consolidated
Statements of Cash Flows for the Years Ended June 30, 2008 and
2007.





Notes to
Consolidated Financial Statements.





The
following exhibits are filed as part of the Form 10-K, and this list includes
the Exhibit Index:





No.
              
              Exhibits
              
              Location3.1
              
              Federal
      Stock Charter of Home Federal Bancorp, Inc. of Louisiana
              
              (1)3.2
              
              Bylaws
      of Home Federal Bancorp, Inc. of Louisiana
              
              (1)4.0
              
              Stock
      Certificate of Home Federal Bancorp, Inc. of Louisiana
              
              (1)10.1
              
              Home
      Federal Bancorp, Inc. of Louisiana 2005 Stock Option Plan
              
              (2)10.2
              
              Home
      Federal Bancorp, Inc. of Louisiana 2005 Recognition and Retention Plan and
      Trust Agreement
              
              (2)13.0
              
              Annual
      Report to Shareholders
              
              Filed
      Herewith23.0
              
              Consent
      of LaPorte, Sehrt, Romig & Hand
              
              Filed
      Herewith31.1
              
              Rule
      13a-14(a)/15d-14(a) Certification of the Chief Executive
      Officer
              
              Filed
      Herewith31.2
              
              Rule
      13a-14(a)/15d-14(a) Certification of the Chief Financial
      Officer
              
              Filed
      Herewith32.0
              
              Section
      1350 Certifications
              
              Filed
      Herewith


______________________________





(1)
            Incorporated
      herein by reference from Home Federal Bancorp's Registration Statement on
      Form SB-2, as amended, filed with the SEC on September 15, 2004 (File No.
      333-119026).





(2)
            Incorporated
      herein by reference from Home Federal Bancorp's Definitive Schedule 14A
      filed with the SEC on June 29, 2005 (File No.
  000-51117).





28





SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant had duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.





HOME
      FEDERAL BANCORP, INC. OF LOUISIANADate:
            September
      29, 2008
            By:
            /s/
      Daniel R. HerndonDaniel
      R. HerndonChairman,
      President, and Chief Executive
Officer





Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.





Name
            
            Title
            
            Date/s/
      Daniel R. HerndonDaniel
      R. Herndon
            
            Chairman
      of the Board, President and Chief Executive Officer
            
            September
      29, 2008/s/ Walter T.
      Colquitt IIIWalter
      T. Colquitt III
            
            Director
            
            September
      29, 2008/s/ David A. Herndon
      IIIDavid
      A. Herndon III
            
            Director
            
            September
      29, 2008/s/
      Scott D. LawrenceScott
      D. Lawrence
            
            Director
            
            September
      29, 2008/s/ Mark M.
    HarrisonMark
      M. Harrison
            
            Director
            
            September
      29, 2008/s/ Clyde D.
      PattersonClyde
      D. Patterson
            
            Director
      and Executive Vice President  (Principal Financial and
      Accounting Officer)
            
            September
      29, 2008/s/ Henry M.
    HearneHenry
      M. Hearne
            
            Director
            
            September
      29, 2008/s/ Woodus K.
      HumphreyWoodus
      K. Humphrey
            
            Director
            
            September
      29, 2008/s/ Amos L. Wedgeworth
      Jr.Amos
      L. Wedgeworth Jr.
            
            Director
            
            September
      29, 2008






29