**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C.  20549**
 
 **FORM
        10-QSB**
 
 (Mark
        One)
 
 x
              QUARTERLY
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
                  ACT OF 1934
 
 For
        the
        quarterly period
        ended September
        30,
        2007
 
 OR
 
 o
              TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                  ACT
 
 For
        the
        transition period from ____________ to ____________
  Commission
        File
        Number***:*********000-51117
 
 HOME
        FEDERAL BANCORP, INC. OF LOUISIANA
 
 (Exact
        name of small business issuer as specified in its charter)
 
 Federal
              
              86-1127166(State
                  or other jurisdiction of incorporation
                  or organization)
              
              (IRS
                  Employer Identification No.)
 
 624
        Market Street, Shreveport, Louisiana 71101
 
 (Address
        of principal executive offices)
 
 (318)
        222-1145
 
 (Issuer’s
        telephone number)
 
 
 (Former
        name, former address and former fiscal year, if changed since last
        report)
 
 Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
        for
        such shorter period that the registrant was required to file such reports),
        and
        (2) has been subject to such filing requirements for the past 90
        days.   Yes x     
No o
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act)   Yes o    
No x
 
 Shares
        of common stock, par value $.01
        per share, outstanding as of November 13, 2007: The registrant had 3,383,287
        shares of common stock outstanding, of which 2,135,375 shares were held by
        Home
        Federal Mutual Holding Company of Louisiana, the registrant’s mutual holding
        company, and 1,247,912 shares were held by the public and directors, officers
        and employees of the registrant, and the registrant’s employee benefit
        plans.
 
 Transitional
        Small Business Disclosure Format:     Yes o    
No x
  
 
  INDEX
 
 PagePART
                  I
              -
              FINANCIAL
                  INFORMATIONItem
                  1:
              
              Financial
                  Statements (Unaudited)Consolidated
                  Statements of Financial
                  Condition
              1Consolidated
                  Statements of Income
              2Consolidated
                  Statements of Changes in Stockholders'
                  Equity
              3Consolidated
                  Statements of Cash Flows
              4Notes
                  to Consolidated Financial
                  Statements
              6Item
                  2:
              
              Management’s
                  Discussion and Analysis or Plan of
                  Operation
              11Item
                  3:
              
              Controls
                  and Procedures
              15PART
                  II
              -
              OTHER
                  INFORMATIONItem
                  1:
              
              Legal
                  Proceedings
              16Item
                  2:
              
              Unregistered
                  Sales of Equity Securities and Use of
                  Proceeds
              16Item
                  3:
              
              Defaults
                  upon Senior Securities
              16Item
                  4:
              
              Submission
                  of Matters to a Vote of Security
                  Holders
              16Item
                  5:
              
              Other
                  information
              17Item
                  6:
              
              Exhibits
              17SIGNATURES
  
 
 **HOME
                    FEDERALBANCORP, INC. OF
                    LOUISIANA****CONSOLIDATED
                    STATEMENTS OF FINANCIAL CONDITION**September
                    30,
                  2007
                
                
                June
                    30,
                  2007(Unaudited)
                
                
                (Audited)**ASSETS**
                
                (In
                    Thousands)Cash
                    and Cash Equivalents
                
                $
                5,924
                
                
                $
                3,972Securities
                    Available-for-Sale
                
                
                87,279
                
                
                
                83,752Securities
                    Held-to-Maturity
                
                
                1,361
                
                
                
                1,408Loans
                    Held-for-Sale
                
                
                1,325
                
                
                
                1,478Loans
                    Receivable, Net
                
                
                27,023
                
                
                
                25,211Accrued
                    Interest Receivable
                
                
                520
                
                
                
                499Premises
                    and Equipment, Net
                
                
                921
                
                
                
                923Deferred
                    Tax Asset
                
                
                840
                
                
                
                1,476Other
                    Assets
                
                
                26
                
                
                
                66Total
                    Assets
                
                $
                125,219
                
                
                $
                118,785**LIABILITIES
                    AND STOCKHOLDERS’ EQUITY****LIABILITIES**Deposits
                
                $
                78,093
                
                
                $
                77,710Advances
                    from Borrowers for Taxes and Insurance
                
                
                256
                
                
                
                196Advances
                    from Federal Home Loan Bank of Dallas
                
                
                16,892
                
                
                
                12,368Other
                    Accrued Expenses and Liabilities
                
                
                748
                
                
                
                699Total
                    Liabilities
                
                
                95,989
                
                
                
                90,973**COMMITMENTS****STOCKHOLDERS’
                    EQUITY**Preferred
                    Stock – No Par Value; 2,000,000 Shares Authorized; None Issued and
                    Outstanding
                
                
                -
                
                
                
                -Common
                    stock - 8,000,000 shares of $.01 par value authorized; 3,558,958
                    shares
                    issued; 3,383,287 shares outstanding and 3,387,202 shares outstanding
                    at
                    September 30, 2007 and June 30, 2007, respectively
                
                
                14
                
                
                
                14Additional
                    paid-in capital
                
                
                13,526
                
                
                
                13,509Retained
                    Earnings - Partially Restricted
                
                
                20,490
                
                
                
                20,449Unearned
                    ESOP Stock
                
                
                (983
                )
                
                
                (997
                )Unearned
                    RRP Trust Stock
                
                
                (413
                )
                
                
                (551
                )Accumulated
                    Other Comprehensive Loss
                
                
                (1,595
                )
                
                
                (2,841
                )Treasury
                    Stock – At Cost
                
                
                (1,809
                )
                
                
                (1,771
                )Total
                    Stockholders’
                    Equity
                
                
                29,230
                
                
                
                27,812**TOTAL
                    LIABILITIES AND STOCKHOLDERS’****EQUITY**
                
                $
                125,219
                
                
                $
                118,785
  See
        accompanying notes to consolidated financial statements.
  1
 *Table
            of Contents*
  **HOMEFEDERAL
                    BANCORP, INC. OF
                    LOUISIANA****CONSOLIDATED
                    STATEMENTS OF INCOME**(Unaudited)For
                    the Three Months Ended September 30,2007
                
                
                2006**INTEREST
                    INCOME**
                
                (In
                    Thousands, Except Per Share Data)Loans,
                    Including Fees
                
                $
                515
                
                
                $
                370Investment
                    Securities
                
                
                66
                
                
                
                76Mortgage-Backed
                    Securities
                
                
                1,109
                
                
                
                1,069Other
                    Interest-Earning Assets
                
                
                37
                
                
                
                39Total
                    Interest Income
                
                
                1,727
                
                
                
                1,554**INTEREST
                    EXPENSE**Deposits
                
                
                770
                
                
                
                626Federal
                    Home Loan Bank Borrowings
                
                
                196
                
                
                
                145Total
                    Interest Expense
                
                
                966
                
                
                
                771Net
                    Interest Income
                
                
                761
                
                
                
                783**PROVISION
                    FOR LOAN LOSSES**
                
                
                --
                
                
                
                --Net
                    Interest Income afterProvision
                    for Loan Losses
                
                
                761
                
                
                
                783**NON-INTEREST
                    INCOME**Gain
                    on Sale of Loans
                
                
                1
                
                
                
                --Gain
                    on Sale of Investments
                
                
                22
                
                
                
                --Other
                    Income
                
                
                15
                
                
                
                57Total
                    Non-Interest Income
                
                
                38
                
                
                
                57**NON-INTEREST
                    EXPENSE**Compensation
                    and Benefits
                
                
                394
                
                
                
                368Occupancy
                    and Equipment
                
                
                44
                
                
                
                46Data
                    Processing
                
                
                17
                
                
                
                17Audit
                    and Professional Fees
                
                
                41
                
                
                
                55Franchise
                    and Bank Shares Tax
                
                
                38
                
                
                
                39Other
                    Expense
                
                
                95
                
                
                
                76Total
                    Non-Interest Expense
                
                
                629
                
                
                
                601Income
                    Before Income Taxes
                
                
                170
                
                
                
                239**PROVISION
                    FOR INCOME TAX EXPENSE**
                
                
                58
                
                
                
                81Net
                    Income
                
                $
                112
                
                
                $
                158**INCOME
                    PER COMMON SHARE:**Basic
                
                $
                0.03
                
                
                $
                0.05Diluted
                
                $
                0.03
                
                
                $
                0.05**DIVIDENDS
                    DECLARED**
                
                $
                0.06
                
                
                $
                0.06
  See
          accompanying notes to consolidated financial statements.
  2
 *Table
              of Contents*
 **HOME
        FEDERAL BANCORP, INC. OF LOUISIANA**
 
 **CONSOLIDATED
        STATEMENTS OF CHANGES IN STOCKHOLDERS’
EQUITY**
 **THREE
        MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**
 
 Common
                    Stock
              
              
              Additional
                Paid-in
                Capital
              
              
              Unearned
                ESOP
                  Stock
              
              
              Unearned
                RRP
                Trust
                Stock
              
              
              Retained
                Earnings
              
              
              Treasury Stock
              
              
              Accumulated
                Other
                Comprehensive
                Income
                    (Loss)
              
              
              Total
                Stockholders’
                Equity(In
                  Thousands)**BALANCE
                  – JUNE 30, 2006**
              
              $
              14
              
              
              $
              13,445
              
              
              $
              (1,053
              )
              
              $
              (688
              )
              
              $
              20,149
              
              
              $
              (211
              )
              
              $
              (3,116
              )
              
              $
              28,540Net
                  Income
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              158
              
              
              
              --
              
              
              
              --
              
              
              
              158Other
                  Comprehensive Loss:Changes
                  in Unrealized Gain on Securities Available-for- Sale, Net of Tax
                  Effects
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              1,813
              
              
              
              1,813RRP
                  Shares Earned
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              137
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              137Stock
                  Options Vested
              
              
              --
              
              
              
              15
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              15ESOP
                  Compensation Earned
              
              
              --
              
              
              
              1
              
              
              
              14
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              15Dividends
                  Declared
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              (85
              )
              
              
              --
              
              
              
              --
              
              
              
              (85
              )Acquisition
                  Treasury Stock
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              (38
              )
              
              
              --
              
              
              
              (38
              )**BALANCE
                  – SEPTEMBER 30, 2006**
              
              $
              14
              
              
              $
              13,461
              
              
              $
              (1,039
              )
              
              $
              (551
              )
              
              $
              20,222
              
              
              $
              (249
              )
              
              $
              (1,303
              )
              
              $
              30,555**BALANCE
                  – JUNE 30, 2007**
              
              $
              14
              
              
              $
              13,509
              
              
              $
              (997
              )
              
              $
              (551
              )
              
              $
              20,449
              
              
              $
              (1,771
              )
              
              $
              (2,841
              )
              
              $
              27,812Net
                  Income
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              112
              
              
              
              --
              
              
              
              --
              
              
              
              112Other
                  Comprehensive Loss:Changes
                  in Unrealized Gain  on Securities Available-for- Sale, Net of
                  Tax Effects
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              1,246
              
              
              
              1,246RRP
                  Shares Earned
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              138
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              138Stock
                  Options Vested
              
              
              --
              
              
              
              17
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              17ESOP
                  Compensation Earned
              
              
              --
              
              
              
              --
              
              
              
              14
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              14Dividends
                  Declared
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              (71
              )
              
              
              --
              
              
              
              --
              
              
              
              (71
              )Acquisition
                  Treasury Stock
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              (38
              )
              
              
              --
              
              
              
              (38
              )**BALANCE
                  – SEPTEMBER 30, 2007**
              
              $
              14
              
              
              $
              13,526
              
              
              $
              (983
              )
              
              $
              (413
              )
              
              $
              20,490
              
              
              $
              (1,809
              )
              
              $
              (1,595
              )
              
              $
              29,230
  See
        accompanying notes to consolidated financial statements.
  3
 *Table
            of Contents*
  **HOMEFEDERAL
                  BANCORP, INC. OF
                  LOUISIANA****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS**(Unaudited)Three
                  Months EndedSeptember
                  30,2007
              
              
              2006(In
                  Thousands)**CASH
                  FLOWS FROM OPERATING ACTIVITIES**Net
                  Income
              
              $
              112
              
              
              $
              158Adjustments
                  to Reconcile Net Income to NetCash
                  (Used in) Provided by Operating ActivitiesNet
                  Amortization and Accretion on Securities
              
              
              (34
              )
              
              
              (65
              )Gain
                  on Sale of Investments
              
              
              (22
              )
              
              
              --Amortization
                  of Deferred Loan Fees
              
              
              (4
              )
              
              
              (2
              )Depreciation
                  of Premises and Equipment
              
              
              14
              
              
              
              16ESOP
                  Expense
              
              
              14
              
              
              
              15Stock
                  Option Expense
              
              
              17
              
              
              
              15Recognition
                  and Retention Plan Expense
              
              
              37
              
              
              
              34Deferred
                  Income Tax
              
              
              (6
              )
              
              
              (5
              )Changes
                  in Assets and LiabilitiesLoans
                  Held-for-Sale – Originations
              
              
              (5,358
              )
              
              
              --Loans
                  Held-for-Sale – Principal Repayments
              
              
              5,511
              
              
              
              --Accrued
                  Interest Receivable
              
              
              (21
              )
              
              
              (13
              )Other
                  Operating Assets
              
              
              39
              
              
              
              26Other
                  Operating Liabilities
              
              
              149
              
              
              
              134Net
                  Cash Provided by Operating Activities
              
              
              448
              
              
              
              313**CASH
                  FLOWS FROM INVESTING ACTIVITIES**Loan
                  Originations and Purchases, Net of Principal Collections
              
              
              (1,811
              )
              
              
              219Deferred
                  Loan Fees Collected
              
              
              4
              
              
              
              2Acquisition
                  of Premises and Equipment
              
              
              (12
              )
              
              
              (26
              )Activity
                  in Available-for-Sale Securities:Proceeds
                  from Sales of Securities
              
              
              1,913
              
              
              
              --Principal
                  Payments on Mortgage-backed Securities
              
              
              3,929
              
              
              
              4,361Purchases
                  of Securities
              
              
              (7,423
              )
              
              
              (4,538
              )Activity
                  in Held-to-Maturity SecuritiesProceeds
                  from Redemption or Maturity of Investments
              
              
              --
              
              
              
              --Principal
                  Payments on Mortgage-Backed Securities
              
              
              47
              
              
              
              34Purchases
                  of Securities
              
              
              --
              
              
              
              (68
              )Net
                  Cash Used in Investing Activities
              
              
              (3,353
              )
              
              
              (16
              )
 See
          accompanying notes to consolidated financial statements.
  4
 *Table
              of Contents*
 
 **HOME
                    FEDERAL BANCORP, INC. OF LOUISIANA****CONSOLIDATED
                    STATEMENTS OF CASH FLOWS (Continued)**(Unaudited)Three
                    Months EndedSeptember
                    30,2007
                
                
                2006**CASH
                    FLOWS FROM FINANCING ACTIVITIES**
                
                (In
                    Thousands)Net
                    Increase in Deposits
                
                
                383
                
                
                
                2,157Proceeds
                    from Federal Home Loan Bank Advances
                
                
                5,500
                
                
                
                2,750Repayments
                    of Advances from Federal Home Loan Bank
                
                
                (976
                )
                
                
                (857
                )Net
                    Increase in Mortgage-Escrow Funds
                
                
                59
                
                
                
                38Dividends
                    Paid
                
                
                (71
                )
                
                
                (85
                )Acquisition
                    of Treasury Stock
                
                
                (38
                )
                
                
                (38
                )Net
                    Cash Provided by Financing Activities
                
                
                4,857
                
                
                
                3,965**NET
                    INCREASE IN CASH AND CASH EQUIVALENTS**
                
                
                1,952
                
                
                
                4,262**CASH
                    AND CASH EQUIVALENTS - BEGINNING**OF PERIOD
                
                
                3,972
                
                
                
                4,930**CASH
                    AND CASH EQUIVALENTS - END OF PERIOD**
                
                $
                5,924
                
                
                $
                9,192**SUPPLEMENTARY
                    CASH FLOW INFORMATION**Interest
                    Paid on Deposits and Borrowed Funds
                
                $
                914
                
                
                $
                748Income
                    Taxes Paid
                
                
                --
                
                
                
                1Market
                    Value Adjustment for Gain on SecuritiesAvailable-for-Sale
                
                
                1,889
                
                
                
                2,747
  See
        accompanying notes to consolidated financial statements.
  5
 *Table
            of Contents*
  **HOME
        FEDERAL BANCORP, INC. OF LOUISIANA**
  **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
  1.           SUMMARY
        OF ACCOUNTING POLICIES
 
 **Basis
        of Presentation**
 
 The
        consolidated financial statements include the accounts of Home Federal Bancorp,
        Inc. of Louisiana (the “Company”) and its subsidiary, Home Federal Savings and
        Loan Association (the “Association”).  These consolidated financial
        statements were prepared in accordance with instructions for Form 10-QSB
        and
        Regulation S-X and do not include information or footnotes necessary for
        a
        complete presentation of financial condition, results of operations, and
        cash
        flows in conformity with accounting principles generally accepted in the
        United
        States of America. However, in the opinion of management, all adjustments
        (consisting of normal recurring adjustments) necessary for a fair presentation
        of the financial statements have been included. The results of operations
        for
        the three month period ended September 30, 2007, is not necessarily indicative
        of the results which may be expected for the fiscal year ending June 30,
        2008.
 
 **Use
        of Estimates**
 
 In
        preparing consolidated financial statements in conformity with accounting
        principles generally accepted in the United States of America, management
        is
        required to make estimates and assumptions that affect the reported amounts
        of
        assets and liabilities as of the date of the Consolidated Statements of
        Financial Condition and reported amounts of revenues and expenses during
        the
        reporting period.  Actual results could differ from those
        estimates.  Material estimates that are particularly susceptible to
        significant change in the near term relate to the allowance for loan
        losses.
 
 **Nature
        of Operations**
 
 On
        January 18, 2005, Home Federal Savings and Loan Association (the “Association”),
        completed its reorganization to the mutual holding company form of organization
        and formed Home Federal Bancorp, Inc. of Louisiana (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 2,135,375 shares of common stock in
        the reorganization to Home Federal Mutual Holding Company of Louisiana, or
        63.1%
        of our outstanding common stock at September 30, 2007.  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.
 
 **Cash
        and Cash Equivalents**
 
 For
        purposes of the Consolidated Statements of Cash Flows, cash and cash equivalents
        include cash on hand, balances due from banks, and federal funds sold, all
        of
        which mature within ninety days.
 6
 *Table
              of Contents*
  **HOME
          FEDERAL BANCORP, INC. OF LOUISIANA**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**
  **Securities**
 
 The
        Company classifies its debt and equity investment securities into one of
        three
        categories:  held-to-maturity, available-for-sale, or
        trading.  Investments in nonmarketable equity securities and debt
        securities, in which the Company has the positive intent and ability to hold
        to
        maturity, are classified as held-to-maturity and carried at amortized
        cost.  Investments in debt securities that are not classified as
        held-to-maturity and marketable equity securities that have readily determinable
        fair values are classified as either trading or available-for-sale
        securities.  Securities that are acquired and held principally for the
        purpose of selling in the near term are classified as trading
        securities.  Investments in securities not classified as trading or
        held-to-maturity are classified as available-for-sale.
 
 Trading
        account and available-for-sale securities are carried at fair
        value.  Unrealized holding gains and losses on trading securities are
        included in earnings while net unrealized holding gains and losses on
        available-for-sale securities are excluded from earnings and reported in
        other
        comprehensive income.  Purchase premiums and discounts are recognized
        in interest income using the interest method over the term of the
        securities.  Declines in the fair value of held-to-maturity and
        available-for-sale securities below their cost that are deemed to be other
        than
        temporary are reflected in earnings as realized losses.  In estimating
        other-than-temporary impairment losses, management considers (1) the length
        of
        time and the extent to which the fair value has been less than cost, (2)
        the
        financial condition and near-term prospects of the issuer, and (3) the intent
        and ability of the Association to retain its investment in the issuer for
        a
        period of time sufficient to allow for any anticipated recovery in fair
        value.  Gains and losses on the sale of securities are recorded on the
        trade date and are determined using the specific identification
        method.
 
 **Loans
        Held For Sale**
 
 Loans
        originated and intended for sale in the secondary market are carried at the
        lower of cost or estimated fair value in the aggregate.  Net
        unrealized losses, if any, are recognized through a valuation allowance by
        charges to income.
 
 **Loans**
 
 Loans
        receivable are stated at unpaid principal balances, less allowances for loan
        losses and unamortized deferred loan fees.  Net nonrefundable fees
        (loan origination fees, commitment fees, discount points) and costs associated
        with lending activities are being deferred and subsequently amortized into
        income as an adjustment of yield on the related interest earning assets using
        the interest method.  Interest income on contractual loans receivable
        is recognized on the accrual method.  Unearned discount on property
        improvement and automobile loans is deferred and amortized on the interest
        method over the life of the loan.
 
 **Allowance
        for Loan Losses**
 
 The
        allowance for loan losses is established as losses are estimated to have
        occurred through a provision for loan losses charged to
        earnings.  Loan losses are charged against the allowance when
        management believes the uncollectibility of a loan balance is
        confirmed.  Subsequent recoveries, if any, are credited to the
        allowance.
 
 The
        allowance for loan losses is evaluated on a regular basis by management and
        is
        based upon management’s periodic review of the collectibility 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 the underlying collateral and prevailing economic
        conditions.  The evaluation is inherently subjective as it requires
        estimates that are susceptible to significant revision as more information
        becomes available.
 7
 *Table
              of Contents*
  **HOME
          FEDERAL BANCORP, INC. OF LOUISIANA**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**
 A
        loan is
        considered impaired when, based on current information or events, it is probable
        that the Association will be unable to collect the scheduled payments of
        principal and interest when due according to the contractual terms of the
        loan
        agreement.  When a loan is impaired, the measurement of such
        impairment is based upon the fair value of the collateral of the
        loan.  If the fair value of the collateral is less than the recorded
        investment in the loan, the Association will recognize the impairment by
        creating a valuation allowance with a corresponding charge against
        earnings.
 
 An
        allowance is also established for uncollectible interest on loans classified
        as
        substandard. Substandard loans are those, which are in excess of ninety days
        delinquent.  The allowance is established by a charge to interest
        income equal to all interest previously accrued and income is subsequently
        recognized only to the extent that cash payments are received.  When,
        in management’s judgment, the borrower’s ability to make periodic interest and
        principal payments is back to normal, the loan is returned to accrual
        status.
 
 **Off-Balance
        Sheet Credit Related Financial Instruments**
 
 In
        the
        ordinary course of business, the Association has entered into commitments
        to
        extend credit.  Such financial instruments are recorded when they are
        funded.
  **Premises
        and Equipment**
 
 Land
        is
        carried at cost.  Buildings and equipment are carried at cost less
        accumulated depreciation computed on the straight-line method over the estimated
        useful lives of the assets.
  **Income
        Taxes**
 
 Deferred
        income tax assets and liabilities are determined using the liability (or
        balance
        sheet) method.  Under this method, the net deferred tax asset or
        liability is determined based on the tax effects of the temporary differences
        between the book and tax bases of the various assets and liabilities and
        gives
        current recognition to changes in tax rates and laws.
 
 **Comprehensive
        Income**
 
 Accounting
        principles generally accepted in the United States of America require that
        recognized revenue, expenses, gains and losses be included in net
        income.  Although certain changes in assets and liabilities, such as
        unrealized gains and losses on available-for-sale securities, are reported
        as a
        separate component of the equity section of the Consolidated Statements of
        Financial Condition, such items, along with net income, are components of
        comprehensive income.
 8
 *Table
              of Contents*
  **HOME
          FEDERAL BANCORP, INC. OF LOUISIANA**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**
 2. EARNINGS
        PER SHARE
 
 Basic
        earnings per common share is computed based on the weighted average number
        of
        shares outstanding.  Diluted earnings per share is computed based on
        the weighted average number of shares outstanding and common share equivalents
        that would arise from the exercise of dilutive securities. Earnings per share
        for the three ended September 30, 2007 and 2006 were calculated as
        follows:
 
 Three
                    Months Ended
                  September
                    30, 2007
              
              
              Three
                    Months Ended
                  September
                    30, 2006Basic
              
              
              Diluted
              
              
              Basic
              
              
              DilutedNet
                  income
              
              $
              112,328
              
              
              $
              112,328
              
              
              $
              158,013
              
              
              $
              158,013Weighted
                  average shares outstanding
              
              
              3,236,285
              
              
              
              3,236,285
              
              
              
              3,367,898
              
              
              
              3,367,898Effect
                  of unvested common stock awards
              
              
              --
              
              
              
              3,382
              
              
              
              --
              
              
              
              4,332Adjusted
                  weighted average shares used in  earnings per share
                  computation
              
              
              3,236,285
              
              
              
              3,239,667
              
              
              
              3,367,898
              
              
              
              3,372,230Earnings
                  per share
              
              $
              .03
              
              
              $
              .03
              
              
              $
              .05
              
              
              $
              .05
 
 3.           RECOGNITION
        AND RETENTION PLAN
 
 On
        August
        10, 2005, the shareholders of the Company approved the establishment of the
        Home
        Federal Bancorp, Inc. of Louisiana 2005 Recognition and Retention Plan and
        Trust
        Agreement (the “Recognition Plan”) for the benefit of directors, officers, and
        employees as an incentive to retain personnel of experience and ability in
        key
        positions.  The aggregate number of shares of the Company’s common
        stock subject to award under the Recognition Plan totaled 69,756
        shares.  During fiscal 2006, the Company purchased 69,756 shares at an
        aggregate cost of $688,439.  As the shares were acquired for the
        Recognition Plan, the purchase price of these shares was recorded as a contra
        equity account.  As the shares are distributed, the contra equity
        account is reduced.  During the quarter ended September 30, 2007,
        14,017 shares vested and were released from the Recognition Plan Trust and
        42,078 shares remained in the Recognition Plan Trust at September 30,
        2007.
 
 Recognition
        Plan shares are earned by recipients at a rate of 20% of the aggregate number
        of
        shares covered by the Recognition Plan award over five
        years.  Generally, if the employment of an employee or service as a
        non-employee director is terminated prior to the fifth anniversary of the
        date
        of grant of Recognition Plan share award, the recipient shall forfeit the
        right
        to any shares subject to the award that have not been earned.  In the
        case of death or disability of the recipient or a change in control of the
        Company, the Recognition Plan awards will be vested and shall be distributed
        as
        soon as practicable thereafter.  As of September 30, 2007, 1,490
        awards had been forfeited and vesting was accelerated on 597 shares as a
        result
        of the death of one of the participants.
 
 The
        present cost associated with the Recognition Plan is based on a share price
        of
        $9.85, which represents the market price of the Company’s stock on August 18,
        2005, the date on which the Recognition Plan shares were granted.  The
        cost is being recognized over five years.
 
 4.           STOCK
        OPTION PLAN
 
 On
        August
        10, 2005, the shareholders of the Company approved the establishment of the
        Home
        Federal Bancorp, Inc. of Louisiana 2005 Stock Option Plan (the “Option Plan”)
        for the benefit of directors, officers, and other key employees.  The
        aggregate number of shares of common stock reserved for issuance under the
        Option Plan totaled 174,389.  Both incentive stock options and
        non-qualified stock options may be granted under the Option Plan.
 9
 *Table
                of Contents*
  **HOME
            FEDERAL BANCORP, INC. OF LOUISIANA**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**
 On
        August
        18, 2005, the Company granted 174,389 options to directors, officers and
        employees.  Under the Option Plan, the exercise price of each option
        cannot be less than the fair market value of the underlying common stock
        as of
        the date of the option grant, which was $9.85, and the maximum term is ten
        years.  Incentive stock options and non-qualified stock options
        granted under the Option Plan become vested and exercisable at a rate of
        20% per
        year over five years, commencing one year from the date of the grant, with
        an
        additional 20% vesting on each successive anniversary of the date the option
        was
        granted.  No vesting shall occur after an employee’s employment or
        service as a director is terminated.  As of September 30, 2007, 3,532
        stock options had been forfeited and are available for future
        grant.  In the event of the death or disability of an employee or
        director or change in control of the Company, the unvested options shall
        become
        vested and exercisable.  The Company accounts for the Option Plan
        under the guidance of SFAS No. 123(R).
 
 5.           RECENT
        ACCOUNTING PRONOUNCEMENTS
 
 In
        February 2006, the FASB issued SFAS No. 155, *Accounting for Certain Hybrid
        Financial Instruments*.  This Statement amends FASB Statements No.
        133, *Accounting for Derivative Instruments and Hedging Activities*, and
        Statement No. 140, *Accounting for Transfers and Servicing of Financial
        Assets and Extinguishments of Liabilities*.  This Statement
        permits fair value remeasurement for any hybrid financial instrument that
        contains an embedded derivative that otherwise would require bifurcation,
        clarifies which interest-only strips and principal-only strips are not subject
        to the requirements of SFAS No. 133, establishes a requirement to evaluate
        interests in securities financial assets to identify interests that are
        freestanding derivatives or that are hybrid financial instruments that contain
        an embedded derivative requiring bifurcation, and clarifies that concentrations
        of credit risk in the form of subordination are not embedded
        derivatives.  This Statement is effective for all financial
        instruments acquired or issued after the beginning of an entity’s first fiscal
        year that begins after September 15, 2006.
 
 In
        March
        2006, the FASB issued SFAS No. 156, *Accounting for Servicing of Financial
        Assets*.  This Statement requires an entity to recognize a
        servicing asset or servicing liability each time it undertakes an obligation
        to
        service a financial asset by entering into a servicing contract in certain
        prescribed situations.  In addition, SFAS No. 156 requires that all
        separately recognized servicing assets and servicing liabilities be measured
        at
        fair value, if practicable.  The FASB recommends that entities should
        adopt this Statement as of the beginning of its first fiscal year that begins
        after September 15, 2006.
 
 In
        June
        2006, the FASB issued Interpretation Number (FIN) 48, *Accounting for
        Uncertainty in Income Taxes (as amended)*.  This Interpretation
        clarifies the accounting for uncertainty in income taxes recognized in an
        enterprise’s financial statements in accordance with SFAS No. 109,
*Accounting for Income Taxes*.  This Interpretation prescribes
        a recognition threshold and measurement attribute for the financial statement
        recognition and measurement of a tax position taken or expected to be taken
        in a
        tax return.  This Interpretation also provides guidance on
        derecognition, classification, interest and penalties, accounting in interim
        periods, disclosure, and transition.  This Interpretation is effective
        for fiscal beginning after December 15, 2006.
  10
 *Table
            of Contents*
 **MANAGEMENT’S
          DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
          (Continued)**
  **ITEM
        2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
        OPERATION**
 
 **General**
 
 The
        Company was formed by the Association in connection with the Association’s
        reorganization and commenced operations on January 18, 2005.  The
        Company’s results of operations are primarily dependent on the results of the
        Association, which became a wholly owned subsidiary upon completion of the
        reorganization.  The Association’s results of operations depend, to a
        large extent, on net interest income, which is the difference between the
        income
        earned on its loan and investment portfolios and the cost of funds, consisting
        of the interest paid on deposits and borrowings.  Results of
        operations are also affected by provisions for loan losses and loan sale
        activities.  Non-interest expense principally consists of compensation
        and employee benefits, office occupancy and equipment expense, data processing
        and other expense.  Our results of operations are also significantly
        affected by general economic and competitive conditions, particularly changes
        in
        interest rates, government policies and actions of regulatory
        authorities.  Future changes in applicable law, regulations or
        government policies may materially impact our financial conditions and results
        of operations.
 
 **Critical
        Accounting Policies**
 
 *Allowance
        for Loan Losses.*  The Company has identified the calculation of
        the allowance for loan losses as a critical accounting policy, due to the
        higher
        degree of judgment and complexity than its other significant accounting
        policies.  Provisions for loan losses are based upon management’s
        periodic valuation and assessment of the overall loan portfolio and the
        underlying collateral, trends in non-performing loans, current economic
        conditions and other relevant factors in order to maintain the allowance
        for
        loan losses at a level believed by management to represent all known and
        inherent losses in the portfolio that are both probable and reasonably
        estimable.  Although management uses the best information available,
        the level of the allowance for loan losses remains an estimate which is subject
        to significant judgment and short-term change.
 
 *Income
        Taxes.*Deferred income tax assets and liabilities are determined using the
        liability (or balance sheet) method.  Under this method, the net
        deferred tax asset or liability is determined based on the tax effects of
        the
        temporary differences between the book and tax bases of the various assets
        and
        liabilities and gives current recognition to changes in tax rates and
        laws.  The realization of our deferred tax assets principally depends
        upon our achieving projected future taxable income.  We may change our
        judgments regarding future profitability due to future market conditions
        and
        other factors.  We may adjust our deferred tax asset balances if our
        judgments change.
 
 Discussion
        of Financial Condition Changes from June 30, 2007 to September 30,
        2007
 
 At
        September 30, 2007, total assets amounted to $125.2 million compared to $118.8
        million at June 30, 2007, an increase of approximately $6.4 million, or
        5.4%.  This increase was primarily due to an increase in cash and cash
        equivalents of $1.9 million, or 49.1%, an increase in investment securities
        of
        $3.5 million, or 4.1%, and a net increase in loans receivable and loans held
        for
        sale of $1.7 million, or 6.2% These increases were offset by a decrease in
        the
        Company’s deferred tax asset of $636,000, or 43.1%.
 11
 *Table
              of Contents*
 **MANAGEMENT’S
            DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
            (Continued)**
 The
        increase in cash and cash equivalents was due primarily to proceeds received
        from the sale of $1.9 million of investment securities during the quarter
        ended
        September 30, 2007.  The increase in investment securities was
        primarily due to purchases of securities available-for-sale funded through
        advances from the Federal Home Loan Bank of Dallas, combined with an increase
        in
        the market value of such securities.  The increase in the market value
        of available-for-sale securities reduced the deferred tax asset associated
        with
        unrealized loss associated with these securities.  The $1.8 million
        increase in loans receivable was primarily due to the purchase of first mortgage
        loans originated by another mortgage loan company.
 
 The
        Company’s total liabilities amounted to $96.0 million at September 30, 2007, an
        increase of approximately $5.0 million, or 5.5%, compared to total liabilities
        of $91.0 million at June 30, 2007.  The primary reason for the
        increase in liabilities was due to the $4.5 million, or 36.6%, increase in
        advances from the Federal Home Loan Bank and a $383,000 increase in customer
        deposits.
 
 Stockholders’
        equity increased $1.4 million, or 5.1%, to $29.2 million at September 30,
        2007
        compared to $27.8 million at June 30, 2007.  This increase was
        primarily the result of the change in the Company’s Accumulated Other
        Comprehensive Loss associated with unrealized gain on securities
        available-for-sale of $1.3 million, the recognition of net income of $112,000
        for the three months ended September 30, 2007, and the distribution of shares
        associated with the Company’s Recognition Plan of $138,000.  These
        increases were offset by dividends of $71,000 paid during the quarter ended
        September 30, 2007, and the acquisition of treasury shares of
        $38,000.
 
 The
        Association is required to meet minimum capital standards promulgated by
        the
        Office of Thrift Supervision (“OTS”).  At September 30, 2007, Home
        Federal Savings and Loan’s regulatory capital was well in excess of the minimum
        capital requirements.
 
 Comparison
        of Operating Results for the Three Month Periods Ended September 30, 2007
        and
        2006
 
 General
 
 Net
        income amounted to $112,000 for the three months ended September 30, 2007
        compared to $158,000 for the same period in 2006, a decrease of $46,000,
        or
        29.1%.  The decrease was primarily due to decreases in net interest
        income and an increase in non-interest expense, partially offset by a decrease
        in income tax expense.
 
 Net
        Interest Income
 
 Net
        interest income for the three months ended September 30, 2007, was $761,000,
        a
        decrease of $22,000 in comparison to $783,000 for the three months ended
        September 30, 2006.  This decrease was due primarily to the $144,000
        and $51,000 increases in interest expense incurred on deposit accounts and
        advances from the Federal Home Loan Bank, respectively, partially offset
        by
        increases of $145,000 and $40,000in interest income and fees on loans and
        mortgage-backed securities, respectively.
 
 The
        Company’s average interest rate spread was 1.72% for the three months ended
        September 30, 2007, compared to 2.00% for the three months ended September
        30,
        2006.  The Company’s net interest margin was 2.52% for the three
        months ended September 30, 2007, compared to 2.81% for the three months ended
        September 30, 2006.  The decrease in net interest income and net
        interest margin is attributable primarily to the increase in interest expense
        and the average cost associated with deposits and advances from the Federal
        Home
        Loan Bank.
 12
 *Table
              of Contents*
 **MANAGEMENT’S
            DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
            (Continued)**
 Provision
        for Losses on Loans
 
 Based
        on
        an analysis of historical experience, the volume and type of lending conducted
        by Home Federal, the status of past due principal and interest payments,
        general
        economic conditions, particularly as such conditions relate to Home Federal’s
        market area, the decrease in the loan portfolio and other factors related
        to the
        collectibility of Home Federal’s loan portfolio, no provisions for loan losses
        were made during the three months ended September 30, 2007 or
        2006.  The Association’s allowance for loan losses was $235,000, or
        approximately 1% of total loans, at September 30, 2007 and at September 30,
        2006.  Home Federal did not have any non-performing loans at September
        30, 2007 or 2006.  There can be no assurance that the loan loss
        allowance will be sufficient to cover losses on nonperforming assets in the
        future.
 
 Non-interest
        Income
 
 Total
        non-interest income amounted to $38,000 for the three months ended September
        30,
        2007, compared to $57,000 for the same period in 2006.  The decrease
        was primarily due to a decrease of $42,000 in other income partially offset
        by
        gain on sale of investments amounting to $22,000.
 
 Non-interest
        Expense
 
 Total
        non-interest expense increased $28,000, or 4.7%, for the three months ended
        September 30, 2007 compared to the prior year period.  The increase
        was primarily due to an increase of $26,000, or 7.1%, in compensation and
        benefits expense, and a $19,000, or 25.0%, increase in other operating expenses
        partially offset by a $14,000, or 25.5%, decrease in professional
        fees.
 
 The
        increase in compensation and benefits expenses was a result of normal
        compensation increases including Stock Options and Recognition and Retention
        plan expenses.  Compensation expense recognized by the Company for its
        Stock Option and Recognition and Retention Plans amounted to $17,000 and
        $37,000
        for the three months ended September 30, 2007, and $16,000 and $34,000,
        respectively, for the three months ended September 30, 2006.
 
 Effective
        January 1, 2006, the Company, through its subsidiary Home Federal Savings
        and
        Loan Association, became subject to the Louisiana bank shares
        tax.  This tax is assessed on the Association’s equity and
        earnings.  For the three months ended September 30, 2007, the Company
        recognized expense of $36,000 pertaining to this assessment.
 
 The
        decrease in audit and professional fees was due primarily to a decrease in
        legal
        fees of approximately $20,000, offset by an increase of approximately $5,000
        in
        audit fees.  During the three months ended September 30, 2006, the
        Company incurred additional legal fees associated with its various filings
        with
        the SEC as well as consultation for other general business
        matters.  The increase in other operating expense was due primarily to
        a $23,000 increase in telephone expense and service charges for the quarter
        ended September 30, 2007 compared to the 2006 quarter.
 
 Income
        Taxes
 
 Income
        taxes amounted to $58,000 and $81,000 for the three months ended September
        30,
        2007 and 2006, respectively, resulting in an effective tax rate of 34% for
        both
        periods.  The decrease in income taxes for the three months ended
        September 30, 2007, was due to decreased income before income
        taxes.
 13
 *Table
              of Contents*
 **MANAGEMENT’S
            DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
            (Continued)**
 Liquidity
        and Capital Resources
 
 Home
        Federal Savings and Loan maintains levels of liquid assets deemed adequate
        by
        management.  The Association adjusts its liquidity levels to fund
        deposit outflows, repay its borrowings and to fund loan
        commitments.  Home Federal Savings and Loan also adjusts liquidity as
        appropriate to meet asset and liability management objectives.
 
 Home
        Federal Savings and Loan’s primary sources of funds are deposits, amortization
        and prepayment of loans and mortgage-backed securities, maturities of investment
        securities and other short-term investments, loan sales and earnings and
        funds
        provided from operations.  While scheduled principal repayments on
        loans and mortgage-backed securities are a relatively predictable source
        of
        funds, deposit flows and loan prepayments are greatly influenced by general
        interest rates, economic conditions and competition.  The Association
        sets the interest rates on its deposits to maintain a desired level of total
        deposits.  In addition, Home Federal Savings and Loan invests excess
        funds in short-term interest-earning accounts and other assets, which provide
        liquidity to meet lending requirements.  Home Federal Savings and
        Loan’s deposit accounts with the Federal Home Loan Bank of Dallas amounted to
        $2.4 million at September 30, 2007.
 
 A
        significant portion of Home Federal Savings and Loan’s liquidity consists of
        securities classified as available-for-sale and cash and cash
        equivalents.  Home Federal Savings and Loan’s primary sources of cash
        are net income, principal repayments on loans and mortgage-backed securities
        and
        increases in deposit accounts.  If Home Federal Savings and Loan
        requires funds beyond its ability to generate them internally, borrowing
        agreements exist with the Federal Home Loan Bank of Dallas which provides
        an
        additional source of funds.  At September 30, 2007, Home Federal
        Savings and Loan had $16.9 million in advances from the Federal Home Loan
        Bank
        of Dallas.
 
 At
        September 30, 2007, Home Federal Savings and Loan had outstanding loan
        commitments of $2.4 million to originate loans.  At September 30,
        2007, certificates of deposit scheduled to mature in less than one year,
        totaled
        $38.7 million.
 
 Based
        on
        prior experience, management believes that a significant portion of such
        deposits will remain with us, although there can be no assurance that this
        will
        be the case. In addition, the cost of such deposits could be significantly
        higher upon renewal, in a rising interest rate environment.  Home
        Federal Savings and Loan intends to utilize its high levels of liquidity
        to fund
        its lending activities.  If additional funds are required to fund
        lending activities, Home Federal Savings and Loan intends to sell its securities
        classified as available-for-sale as needed.
 
 Home
        Federal Savings and Loan is required to maintain regulatory capital sufficient
        to meet tangible, core and risk-based capital ratios of at least 1.5%, 3.0%
        and
        8.0%, respectively.  At September 30, 2007, Home Federal Savings and
        Loan exceeded each of its capital requirements with ratios of 21.95%, 21.95%
        and
        78.85%, respectively.
 
 In
        connection with the Association’s reorganization to the mutual holding company
        form of organization, Home Federal Bancorp, Inc., the parent holding company
        of
        the Association, sold 1,423,583 shares of its common stock in a subscription
        and
        community offering, which was completed on January 18, 2005 at a price of
        $10.00
        per share.  This includes 113,887 shares acquired by the Association’s
        Employee Stock Ownership Plan.  The Company has invested 50% of the
        net proceeds from the reorganization in the Association.
 14
 *Table
              of Contents*
 **MANAGEMENT’S
            DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
            (Continued)**
 Off-Balance
          Sheet Arrangements
 
 At
        September 30, 2007, the Association did not have any off-balance sheet
        arrangements, as defined by Securities and Exchange Commission
        rules.
 
 Impact
        of Inflation and Changing Prices
 
 The
        financial statements and related financial data presented herein have been
        prepared in accordance with instructions to Form 10-QSB, which require the
        measurement of financial position and operating results in terms of historical
        dollars, without considering changes in relative purchasing power over time
        due
        to inflation.
 
 Unlike
        most industrial companies, virtually all of the Association’s assets and
        liabilities are monetary in nature.  As a result, interest rates
        generally have a more significant impact on a financial institution’s
        performance than does the effect of inflation.
 
 Forward-Looking
        Statements
 
 This
        Form
        10-QSB contains certain forward-looking statements and information relating
        to
        the Company that are based on the beliefs of management as well as assumptions
        made by and information currently available to management.  In
        addition, in those and other portions of this document, the words “anticipate,”
“believe,” “estimate,” “except,” “intend,” “should” and similar expressions, or
        the negative thereof, as they relate to the Company or the Company’s management,
        are intended to identify forward-looking statements.  Such statements
        reflect the current views of the Company with respect to future looking events
        and are subject to certain risks, uncertainties and
        assumptions.  Should one or more of these risks or uncertainties
        materialize or should underlying assumptions prove incorrect, actual results
        may
        vary from those described herein as anticipated, believed, estimated, expected
        or intended.  The Company does not intend to update these
        forward-looking statements.
 
 
 **ITEM
        3.                      CONTROLS AND PROCEDURES**
 
 Under
        the
        supervision and with the participation of our management, including our Chief
        Executive Officer and our principal financial officer, we evaluated the
        effectiveness of the design and operation of our disclosure controls and
        procedures (as defined in Rules 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
        upon that evaluation, the Chief Executive Officer and the principal financial
        officer have concluded that, as of the end of the period covered by this
        report,
        our disclosure controls and procedures are effective to ensure that information
        required to be disclosed in the reports that the Company files or submits
        under
        the Securities Exchange Act of 1934, is recorded, processed, summarized and
        reported within the applicable time periods specified by the Securities and
        Exchange Commission’s rules and forms. There has been no change in the Company’s
        internal control over financial reporting during the Company’s most recent
        fiscal quarter that has materially affected, or is reasonably likely to
        materially affect, the Company’s internal control over financial
        reporting.
 
 15
 *Table
            of Contents*
  **PARTII**
  **ITEM
        1. LEGAL PROCEEDINGS**
 
 The
        Company is not involved in any pending legal proceedings other than routine
        legal proceedings occurring in the ordinary course of business, which involve
        amounts in the aggregate believed by management to be immaterial to the
        financial condition of the Company.
 
 **ITEM
        2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
        PROCEEDS**
 
 (a)          
        Not applicable.
 
 (b)          
        Not applicable.
 
 (c) Purchases
        of Equity Securities
 
 The
        following table represents the repurchasing activity of the stock repurchase
        program during the first 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
                  Programs**Month
                  #1 July 1, 2007 – July 31, 2007
              
              ****
              **--**
              
              
              $
              **--**
              
              
              ****
              **--**
              
              
              
              98,724Month
                  #2 August 1, 2007 – August 31, 2007
              
              
              3,915
              
              
              $
              9.85
              
              
              
              3,915
              
              
              
              94,809Month
                  #3 September 1, 2007 – September 30, 2007
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              94,809Total
              
              
              3,915
              
              
              $
              9.85
              
              
              
              3,915
              
              
              
              94,809
 
 *Notes
        to this table:*
 
 (a)
              On
                  May 10, 2007, the Company issued a press release announcing that
                  the Board
                  of Directors authorized a second stock repurchase program (the
                  "program")
                  on May 9, 2007.
 
 (b)
              The
                  Company was authorized to repurchase 10% or 128,122 of the outstanding
                  shares other than shares held by Home Federal Mutual Holding
                  Company.
 
 (c)
              The
                  program has an expiration date of May 9,
                  2008.
 
 **ITEM
        3. DEFAULTS UPON SENIOR SECURITIES**
 
 Not
        applicable.
 
 **ITEM
        4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
        HOLDERS**
 
 Not
        applicable.
 
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  **ITEM5.
        OTHER INFORMATION**
 
 Not
        applicable.
 
 **ITEM
        6. EXHIBITS**
 
 The
        following Exhibits are filed as part of this report:
 
 No.
              
              Description31.1
              
              Rule
                  13a-14(a)/15d-14(a) Certification of Chief Executive Officer31.2
              
              Rule
                  13a-14(a)/15d-14(a) Certification of Chief Financial Officer32.0
              
              Certification
                  Pursuant to 18 U.S.C Section 1350
 
 17
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 **SIGNATURES**
 
 In
        accordance with the requirements of
        the Exchange Act, the registrant caused this report to be signed on its behalf
        by the undersigned, thereunto duly authorized.
 Date:
                November
                    14, 2007
                
                By:
                /s/
                  Daniel
                  R. HerndonDaniel
                    R. HerndonPresident
                    and Chief Executive OfficerDate:
                November
                    14, 2007
                
                By:
                /s/
                  Clyde
                  D. PattersonClyde
                    D. PattersonExecutive
                    Vice President(principal
                    financial officer)
   *Table
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