UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549







FORM
10-Q





[X]
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
quarterly period ended March 31, 2008





or





[  ]
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the transition period from _____ to
_____




Commission
File Number: 000-52995


HOME
      FEDERAL BANCORP, INC.
 (Exact
name of registrant as specified in its charter)
    Maryland
              26-0886727(State or
      other jurisdiction of incorporation
              (I.R.S.
      Employeror
      organization)
              I.D.
      Number)500 12thAvenue
      South, Nampa,
      Idaho
              83651(Address of
      principal executive offices)
              (Zip
      Code)Registrant’s
      telephone number, including area code:
              (208)
      466-4634


Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities 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 [X]
No [  ]





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 definition of “accelerated filer and large accelerated
filer” in Rule 12b-2 of the Exchange Act.  (Check one):


Large accelerated filer
[  ]                                                      Accelerated
filer
[X]                                    Non-accelerated
filer [  ]


Smaller reporting company
[  ]





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


Yes [  ]  No
[X]





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date:  Common Stock, $.01 par
value per share, 17,343,229 shares outstanding as of May 2, 2008.











HOME
FEDERAL BANCORP, INC.


FORM
10-Q


TABLE
OF CONTENTS








PART
1  - FINANCIAL INFORMATION





Item 1 -
Financial Statements


Page


Consolidated
      Balance Sheets as ofMarch 31, 2008 and September 30, 2007
                1Consolidated
      Statements of Income for the Three and Six Monthsended March 31, 2008 and 2007
                2Consolidated
      Statements of Stockholders’ Equity
                3Consolidated
      Statements of Cash Flows for the Six Monthsended
      March 31, 2008 and 2007
                5Selected
      Notes to Unaudited Interim Consolidated Financial Statements
                7










Item 2 -
      Management’s Discussion and Analysis of Financial Condition
              and Results of Operations
            12Item 3 -
      Quantitative and Qualitative Disclosures About Market
      Risk.
            25Item 4 - Controls
      and Procedures
            26PART II - OTHER
      INFORMATIONItem 1 - Legal
      Proceedings
            26Item 1A - Risk
      Factors
            26Item 2 -
      Unregistered Sales of Equity Securities and Use of Proceeds
            27Item 3 - Defaults
      upon Senior Securities
            27Item 4 - Submission
      of Matters to a Vote of Security Holders
            27Item 5 - Other
      Information
            27Item 6 -
      Exhibits
            28SIGNATURES
            29












Item
1.  Financial Statements





HOME
      FEDERAL BANCORP, INC. AND SUBSIDIARY
              CONSOLIDATED
      BALANCE SHEETS
              (In
      thousands, except share data) (Unaudited)
            
            March
      31,
              2008
            
            
            September
      30,
              2007ASSETSCash
      and amounts due from depository institutions
            
            $
            36,353
            
            
            $
            20,588Mortgage-backed
      securities available for sale, at fair value
            
            
            209,239
            
            
            
            162,258Federal
      Home Loan Bank of Seattle (“FHLB”) stock, at cost
            
            
            9,591
            
            
            
            9,591Loans
      receivable, net of allowance for loan losses
      of  $3,307and
      $2,988
            
            
            477,155
            
            
            
            480,118Loans
      held for sale
            
            
            2,751
            
            
            
            4,904Accrued
      interest receivable
            
            
            2,941
            
            
            
            2,804Property
      and equipment, net
            
            
            13,613
            
            
            
            12,364Mortgage
      servicing rights, net
            
            
            1,903
            
            
            
            2,047Bank
      owned life insurance
            
            
            11,377
            
            
            
            11,168Real
      estate and property owned
            
            
            452
            
            
            
            549Deferred
      income tax asset
            
            
            -
            
            
            
            1,245Other
      assets
            
            
            2,736
            
            
            
            2,318TOTAL
      ASSETS
            
            $
            768,111
            
            
            $
            709,954LIABILITIES
      AND STOCKHOLDERS’ EQUITYLIABILITIESDeposit
      accounts:Noninterest-bearing
      demand deposits
            
            $
            37,323
            
            
            $
            38,643Interest-bearing
      demand deposits
            
            
            142,820
            
            
            
            127,659Savings
      deposits
            
            
            24,524
            
            
            
            23,116Certificates
      of deposit
            
            
            191,439
            
            
            
            215,191Total
      deposit accounts
            
            
            396,106
            
            
            
            404,609Advances
      by borrowers for taxes and insurance
            
            
            1,429
            
            
            
            1,605Interest
      payable
            
            
            619
            
            
            
            731Deferred
      compensation
            
            
            4,889
            
            
            
            4,515FHLB
      advances
            
            
            155,553
            
            
            
            180,730Deferred
      income tax liability
            
            
            377
            
            
            
            -Other
      liabilities
            
            
            3,768
            
            
            
            5,127Total
      liabilities
            
            
            562,741
            
            
            
            597,317STOCKHOLDERS’
      EQUITYSerial
      preferred stock, $.01 par value; 10,000,000 authorized,issued
      and outstanding, none
            
            
            --
            
            
            
            --Common
      stock, $.01 par value; 90,000,000 authorized,issued
      and outstanding:
            
            
            173
            
            
            
            152Mar.
      31, 2008 – 17,386,517 issued, 17,343,229 outstandingSept.
      30, 2007 – 15,278,803 issued, 15,232,243 outstandingAdditional
      paid-in capital
            
            
            156,805
            
            
            
            59,613Retained
      earnings
            
            
            59,475
            
            
            
            58,795Unearned shares issued to employee stock ownership plan ("ESOP")
            
            
            (11,634
            )
            
            
            (3,698
            )Accumulated
      other comprehensive income (loss)
            
            
            551
            
            
            
            (2,225
            )Total
      stockholders’ equity
            
            
            205,370
            
            
            
            112,637TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
            
            $
            768,111
            
            
            $
            709,954





See
accompanying notes.








HOME
      FEDERAL BANCORP, INC. AND SUBSIDIARY
              CONSOLIDATED
      STATEMENTS OF INCOME
              (In
      thousands, except share data) (Unaudited)
            
            Three
      Months Ended
              March
      31,
            
            
            Six
      Months Ended
              March
      31,2008
            
            
            2007
            
            
            2008
            
            
            2007Interest
      and dividend income:Loan
      interest
            
            $
            7,770
            
            
            $
            8,470
            
            
            $
            15,846
            
            
            $
            16,997Investment
      interest
            
            
            510
            
            
            
            15
            
            
            
            774
            
            
            
            44Mortgage-backed
      security interest
            
            
            2,148
            
            
            
            2,244
            
            
            
            4,091
            
            
            
            4,550FHLB
      dividends
            
            
            31
            
            
            
            9
            
            
            
            50
            
            
            
            19Total
      interest and dividend income
            
            
            10,459
            
            
            
            10,738
            
            
            
            20,761
            
            
            
            21,610Interest
      expense:Deposits
            
            
            2,872
            
            
            
            3,005
            
            
            
            6,086
            
            
            
            6,015FHLB
      advances
            
            
            1,810
            
            
            
            2,372
            
            
            
            3,842
            
            
            
            4,735Total
      interest expense
            
            
            4,682
            
            
            
            5,377
            
            
            
            9,928
            
            
            
            10,750Net
      interest income
            
            
            5,777
            
            
            
            5,361
            
            
            
            10,833
            
            
            
            10,860Provision
      for loan losses
            
            
            378
            
            
            
            -
            
            
            
            665
            
            
            
            71Net
      interest income after provision for loan losses
            
            
            5,399
            
            
            
            5,361
            
            
            
            10,168
            
            
            
            10,789Noninterest
      income:Service
      charges and fees
            
            
            2,098
            
            
            
            2,222
            
            
            
            4,309
            
            
            
            4,636Gain
      on sale of loans
            
            
            162
            
            
            
            379
            
            
            
            347
            
            
            
            677Increase
      in cash surrender value of bank owned
              life insurance
            
            
            104
            
            
            
            99
            
            
            
            208
            
            
            
            199Loan
      servicing fees
            
            
            126
            
            
            
            142
            
            
            
            253
            
            
            
            286Mortgage
      servicing rights, net
            
            
            (76
            )
            
            
            (92
            )
            
            
            (144
            )
            
            
            (175
            )Other
            
            
            64
            
            
            
            11
            
            
            
            109
            
            
            
            21Total
      noninterest income
            
            
            2,478
            
            
            
            2,761
            
            
            
            5,082
            
            
            
            5,644Noninterest
      expense:Compensation
      and benefits
            
            
            4,053
            
            
            
            3,851
            
            
            
            7,752
            
            
            
            7,865Occupancy
      and equipment
            
            
            760
            
            
            
            727
            
            
            
            1,471
            
            
            
            1,429Data
      processing
            
            
            531
            
            
            
            493
            
            
            
            1,053
            
            
            
            1,001Advertising
            
            
            271
            
            
            
            300
            
            
            
            571
            
            
            
            596Postage
      and supplies
            
            
            171
            
            
            
            174
            
            
            
            321
            
            
            
            320Professional
      services
            
            
            191
            
            
            
            215
            
            
            
            403
            
            
            
            411Insurance
      and taxes
            
            
            140
            
            
            
            106
            
            
            
            225
            
            
            
            209Other
            
            
            302
            
            
            
            228
            
            
            
            485
            
            
            
            509Total
      noninterest expense
            
            
            6,419
            
            
            
            6,094
            
            
            
            12,281
            
            
            
            12,340Income
      before income taxes
            
            
            1,458
            
            
            
            2,028
            
            
            
            2,969
            
            
            
            4,093Income
      tax expense
            
            
            513
            
            
            
            787
            
            
            
            1,077
            
            
            
            1,583NET
      INCOME
            
            $
            945
            
            
            $
            1,241
            
            
            $
            1,892
            
            
            $
            2,510Earnings
      per common share:Basic
            
            $
            0.06
            
            
            $
            0.08
            (1)
            
            $
            0.12
            (1)
            
            $
            0.15
            (1)Diluted
            
            
            0.06
            
            
            
            0.07
            (1)
            
            
            0.12
            (1)
            
            
            0.15
            (1)Weighted
      average number of shares outstanding:Basic
            
            
            15,962,325
            
            
            
            16,576,439
            (1)
            
            
            16,352,427
            (1)
            
            
            16,562,244
            (1)Diluted
            
            
            15,978,217
            
            
            
            16,690,594
            (1)
            
            
            16,374,451
            (1)
            
            
            16,682,322
            (1)Dividends
      declared per share:
            
            $
            0.055
            
            
            $
            0.048
            (1)
            
            $
            0.103
            (1)
            
            $
            0.096
            (1)





(1)
Earnings per share, average common shares outstanding, and dividends per share
have been adjusted to reflect the impact of the second-step conversion and
reorganization of Home Federal Bancorp, Inc. (“Company”), which occurred on
December 19, 2007.





See
accompanying notes.








HOME
FEDERAL BANCORP, INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY


(In
thousands, except share data) (Unaudited)


UnearnedSharesIssued
      toEmployee
            
            
            AccumulatedAdditional
            
            
            
            
            
            Stock
            
            
            OtherCommon
      Stock
            
            
            Paid-In
            
            
            Retained
            
            
            Ownership
            
            
            ComprehensiveShares
            
            
            Amount
            
            
            Capital
            
            
            Earnings
            
            
            Plan
            
            
            Loss
            
            
            TotalBalance
      at Sept. 30, 2006
            
            
            15,169,114
            
            
            $
            152
            
            
            $
            57,222
            
            
            $
            54,805
            
            
            $
            (4,134
            )
            
            $
            (176
            )
            
            $
            107,869Restricted
      stock issued, net
              of forfeitures
            
            
            (6,924
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            --ESOP
      shares committed to
              be
      released
            
            
            
            
            
            
            
            
            
            
            357
            
            
            
            
            
            
            
            436
            
            
            
            
            
            
            
            793Exercise
      of stock options
            
            
            70,053
            
            
            
            
            
            
            
            854
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            854Share-based
      compensation
            
            
            
            
            
            
            
            
            
            
            1,036
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,036Excess
      tax benefits from
              equity compensation
              plans
            
            
            
            
            
            
            
            
            
            
            144
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            144Dividends
      paid
              ($0.190
      per share)  (1) (2)
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,281
            )
            
            
            
            
            
            
            
            
            
            
            (1,281
            )Comprehensive
      income:Net
      income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            5,271
            
            
            
            
            
            
            
            
            
            
            
            5,271Other
      comprehensive
              income:Change in unrealized
              holding loss on
              securities available for
              sale, net of taxes
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (100
            )
            
            
            (100
            )Change in unrealized
              holding loss resulting
              from transfer of
              securities from held to
              maturity to available
              for sale, net of taxes
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,949
            )
            
            
            (1,949
            )Comprehensive
      income:
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            3,222Balance
      at Sept. 30, 2007
            
            
            15,232,243
            
            
            
            152
            
            
            
            59,613
            
            
            
            58,795
            
            
            
            (3,698
            )
            
            
            (2,225
            )
            
            
            112,637Second
      Step Conversion(3)
            
            
            2,073,619
            
            
            
            21
            
            
            
            96,445
            
            
            
            
            
            
            
            (8,160
            )
            
            
            
            
            
            
            88,306Dissolution
      of  Mutual
              Holding Company
            
            
            
            
            
            
            
            
            
            
            50
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            50Restricted
      stock issued, net of forfeitures
            
            
            8,502
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            -ESOP
      shares committed to
              be released
            
            
            
            
            
            
            
            
            
            
            (149
            )
            
            
            
            
            
            
            224
            
            
            
            
            
            
            
            75Exercise
      of stock options
            
            
            28,865
            
            
            
            
            
            
            
            328
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            328Share-based
      compensation
            
            
            
            
            
            
            
            
            
            
            518
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            518Dividends
      paid
              ($0.103)
      per share)  (1) (2)
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,212
            )
            
            
            
            
            
            
            
            
            
            
            (1,212
            )Comprehensive
      income:Net
      income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,892
            
            
            
            
            
            
            
            
            
            
            
            1,892Other
      comprehensive income:Change
      in unrealized
              holding
      loss on
              securities available
              for
      sale, net of
              deferred income taxes
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,776
            
            
            
            2,776Comprehensive
      income:
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            4,668Balance
      at March. 31, 2008
            
            
            17,343,229
            
            
            $
            173
            
            
            $
            156,805
            
            
            $
            59,475
            
            
            $
            (11,634
            )
            
            $
            551
            
            
            $
            205,370








(1) Home
Federal MHC waived its receipt of dividends on the 8,979,246 shares that it
owned.


(2)
Dividends per share have been adjusted to reflect the impact of the second-step
conversion and reorganization of the Company, which occurred on December 19,
2007.


(3) The
total effect on equity accounts from the second-step conversion and
reorganization has changed from the December 31, 2007 reported numbers due to
adjustments such as true-up of total new shares issued in relation to conversion
once total affect of fractional shares was known, payment of additional expenses
related to conversion in the quarter ended March 31, 2008, etc.





See
accompanying notes.








HOME
      FEDERAL BANCORP, INC. AND SUBSIDIARY
              CONSOLIDATED
      STATEMENTS OF CASH FLOWS
              (In
      thousands) (Unaudited)
            
            Six
      Months Ended
              March
      31,2008
            
            
            2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income
            
            $
            1,892
            
            
            $
            2,510Adjustments
      to reconcile net income to cash provided by operating
              activities:Depreciation
      and amortization
            
            
            796
            
            
            
            866Net
      accretion of premiums and discounts on investments
            
            
            (17
            )
            
            
            (33
            )Loss
      on sale of repossessed assets
            
            
            95
            
            
            
            -ESOP
      shares committed to be released
            
            
            75
            
            
            
            416Equity
      compensation expense
            
            
            518
            
            
            
            538Provision
      for loan losses
            
            
            665
            
            
            
            71Accrued
      deferred compensation expense, net
            
            
            373
            
            
            
            367Net
      deferred loan fees
            
            
            6
            
            
            
            109Deferred
      income tax benefit
            
            
            (229
            )
            
            
            (220
            )Excess
      tax benefit from equity compensation plans
            
            
            -
            
            
            
            (44
            )Net
      gain on sale of loans
            
            
            (347
            )
            
            
            (677
            )Proceeds
      from sale of loans held for sale
            
            
            25,406
            
            
            
            44,016Originations
      of loans held for sale
            
            
            (22,944
            )
            
            
            (43,814
            )Net
      decrease in value of mortgage servicing rights
            
            
            144
            
            
            
            175Net
      increase in value of bank owned life insurance
            
            
            (209
            )
            
            
            (200
            )Change
      in assets and liabilities:Interest
      receivable
            
            
            (137
            )
            
            
            84Other
      assets
            
            
            (423
            )
            
            
            (580
            )Interest
      payable
            
            
            (112
            )
            
            
            (116
            )Other
      liabilities
            
            
            (1,359
            )
            
            
            950Net
      cash provided by operating activities
            
            
            4,193
            
            
            
            4,418CASH
      FLOWS FROM INVESTING ACTIVITIES:Proceeds
      from maturity of mortgage-backed securities held to
    maturity
            
            
            -
            
            
            
            11,652Proceeds
      from maturity of mortgage-backed securities available for
              sale
            
            
            13,919
            
            
            
            1,445Purchase
      of mortgage-backed securities available for sale
            
            
            (56,257
            )
            
            
            (2,102
            )Purchases
      of property and equipment
            
            
            (2,031
            )
            
            
            (611
            )Net
      decrease (increase) in loans
            
            
            1,873
            
            
            
            (529
            )Proceeds
      from sale of repossessed assets
            
            
            452
            
            
            
            -Net
      cash (used) provided by investing activities
            
            
            (42,044
            )
            
            
            9,855CASH
      FLOWS FROM FINANCING ACTIVITIES:Net
      decrease in deposits
            
            
            (8,503
            )
            
            
            (8,063
            )Net
      decrease in advances by borrowers for taxes and insurance
            
            
            (176
            )
            
            
            (361
            )Proceeds
      from FHLB advances
            
            
            9,300
            
            
            
            137,760Repayment
      of FHLB advances
            
            
            (34,477
            )
            
            
            (149,024
            )Net
      proceeds from stock issuance and exchange pursuant to second step
      conversion
            
            
            88,356
            
            
            
            -Proceeds
      from exercise of stock options
            
            
            328
            
            
            
            182Excess
      tax benefit from equity compensation plans
            
            
            
            
            
            
            44Dividends
      paid
            
            
            (1,212
            )
            
            
            (638
            )Net
      cash provided (used) by financing activities
            
            
            53,616
            
            
            
            (20,100
            )NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
            
            
            15,765
            
            
            
            (5,827
            )CASH
      AND CASH EQUIVALENTS, BEGINNING OF PERIOD
            
            
            20,588
            
            
            
            18,385CASH
      AND CASH EQUIVALENTS, END OF PERIOD
            
            $
            36,353
            
            
            $
            12,558




(continues
on next page)














HOME
      FEDERAL BANCORP, INC. AND SUBSIDIARY
              CONSOLIDATED
      STATEMENTS OF CASH FLOWS (Continued)
              (In
      thousands) (Unaudited)
            
            Six
      Months Ended
              March
      31,2008
            
            
            2007SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid during the period for:Interest
            
            $
            10,040
            
            
            $
            10,866Income taxes
            
            
            1,760
            
            
            
            1,925NONCASH
      INVESTING AND FINANCING ACTIVITIES:Acquisition
      of real estate and other assets in settlement of loans
            
            
            780
            
            
            
            -Fair
      value adjustment to securities available for sale, net of
      taxes
            
            
            2,776
            
            
            
            102





See
accompanying notes.











HOME
FEDERAL BANCORP, INC. AND SUBSIDIARY


SELECTED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)











Note
1 - Basis of Presentation





The
consolidated financial statements presented in this quarterly report include the
accounts of Home Federal Bancorp, Inc., a Maryland corporation(the
“Company”), and its wholly-owned subsidiary, Home Federal Bank (the
“Bank”).  The financial statements of the Company have been prepared
in conformity with accounting principles generally accepted in the United States
of America for interim financial information and are unaudited.  All
significant intercompany transactions and balances have been
eliminated.  In the opinion of the Company’s management, all
adjustments consisting of normal recurring accruals necessary for a fair
presentation of the financial condition and results of operations for the
interim periods included herein have been made.





The
Company was formed as the new stock holding company for the Bank in connection
with the Bank’s second-step conversion from the mutual holding company structure
to the stock holding company structure (“Conversion”), which was completed on
December 19, 2007.  Prior to the completion of the Conversion, the
Bank was the subsidiary of Home Federal Bancorp, Inc., a federally-chartered
stock mid-tier holding company (“Mid-Tier”), and the Mid-Tier was a subsidiary
of Home Federal MHC, a federally-chartered mutual holding
company.  The Bank formed the mutual holding company structure in
December 2004.  As a result of the Conversion, Home Federal MHC and
the Mid-Tier ceased to exist and were replaced by the Company as the successor
to the Mid-Tier.  See Note 3 below for additional information
regarding the Conversion.





Certain
information and note disclosures normally included in the Company’s annual
consolidated financial statements have been condensed or omitted. Therefore,
these consolidated financial statements and notes thereto should be read in
conjunction with the Mid-Tier’s audited financial statements and notes included
in the Annual Report on Form 10-K for the year ended September 30, 2007 (“2007
Form 10-K”) filed with the Securities and Exchange Commission (“SEC”) on
December 14, 2007.





Note
2 - Summary of Significant Accounting Policies





The
preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect amounts
reported in the consolidated financial statements.  Changes in these
estimates and assumptions are considered reasonably possible and may have a
material impact on the consolidated financial statements, and thus actual
results could differ from the amounts reported and disclosed
herein.  The Company considers the allowance for loan losses, mortgage
servicing rights, and deferred income taxes to be critical accounting
estimates.





The
accounting estimate related to the allowance for loan losses is a critical
accounting estimate because it is highly susceptible to change from period to
period requiring management to make assumptions about future losses on
loans.  The impact of a sudden large loss could deplete the allowance
and potentially require increased provisions to replenish the allowance, which
would negatively affect earnings.





The most
critical accounting policy associated with mortgage servicing is the methodology
used to determine the fair value of capitalized mortgage servicing rights, which
requires the development of a number of estimates, the most critical of which is
the mortgage loan prepayment speeds assumptions.  The Company performs
a quarterly review of mortgage servicing rights for potential changes in
value.  This review may include an independent appraisal by an outside
party of the fair value of the mortgage servicing rights.





Deferred
income taxes are computed using the asset and liability approach as prescribed
in Statement of Financial Accounting Standards (“SFAS”) No. 109, Accounting for Income
Taxes.  Under this method, a deferred tax asset or liability is
determined based on the currently enacted tax rates applicable to the period in
which the differences between the financial statement carrying amounts and tax
basis of the existing assets and liabilities are expected to be reported in the
Company’s income tax returns.








Note
3 – Second-step Conversion and Reorganization





The
Company is a Maryland corporation that was formed as the new stock holding
company for Home Federal Bank in connection with the Conversion, which was
completed on December 19, 2007.





As part
of the Conversion, a total of 9,384,000 new shares of the Company were sold at
$10 per share in subscription, community and syndicated community offerings
through which the Company received proceeds of approximately $88.4 million, net
of offering costs of approximately $5.4 million. The Company contributed $48.3
million or approximately 50% of the net proceeds to the Bank in the form of a
capital contribution. The Company loaned $8.2 million to the Bank’s Employee
Stock Ownership Plan (the “ESOP”) and the ESOP used those funds to acquire
816,000 shares of the Company’s common stock at $10 per share. As part of the
Conversion, shares of outstanding common stock of the Mid-Tier were exchanged
for 1.136 shares of the Company’s common stock. No fractional shares were
issued. Instead, cash was paid to stockholders at $10 per share for any
fractional shares that would otherwise be issued. The exchange resulted in an
additional 853,133 outstanding shares of the Company for a total of 17,326,169
outstanding shares as of the closing of the second-step conversion on December
19, 2007.





The
Conversion was accounted for as a reorganization in corporate form with no
change in the historical basis of the Company’s assets, liabilities and equity.
All references to the number of shares outstanding, with the exception of those
reported on the Balance Sheet, are restated to give retroactive recognition to
the exchange ratio applied in the Conversion.





Note
4 – Income Taxes







At
October 1, 2007, the Company adopted Financial Accounting Standards Board
("FASB") Interpretation No. 48, Accounting for Uncertainty in Income
Taxes("FIN 48").  FIN 48 requires recognition and measurement
of uncertain tax positions using a "more-likely-than-not"
approach.  FIN 48 is effective for fiscal years beginning after
December 31, 2006.  The Company’s approach to adopting FIN 48
consisted of an examination of its financial statements, its income tax
provision, and its federal and state income tax returns.  The Company
analyzed its tax positions including the permanent and temporary differences as
well as the major components of income and expense.




As of
October 1, 2007, and March 31, 2008, the Company did not believe that it had any
uncertain tax positions that would rise to the level of having a material effect
on its financial statements.  In addition, the Company had no accrued
interest or penalties as of October 1, 2007 or March 31, 2008.  It is
the Company’s policy to record interest and penalties as a component of income
tax expense.  The adoption of this accounting standard did not have a
material impact on the Company’s financial position or results of
operations.







Note
5 - Earnings Per Share





Earnings
per share (“EPS”) is computed using the basic and diluted weighted average
number of common shares outstanding during the period. Basic EPS is computed by
dividing the Company’s net income by the weighted average number of common
shares outstanding for the period.  Diluted EPS is computed by
dividing net income by diluted weighted average shares outstanding, which
include common stock equivalent shares outstanding using the treasury stock
method, unless such shares are anti-dilutive. Common stock equivalents arise
from assumed conversion of outstanding stock options awarded under the Company’s
Stock Option and Incentive Plan (“SOP”) and from assumed vesting of shares
awarded but not released under the Company’s Recognition and Retention Plan
(“RRP”) plan.  ESOP shares are not considered outstanding for earnings
per share purposes until they are committed to be released.  The
decrease in weighted-average common shares outstanding for EPS purposes for the
quarter ended March 31, 2008 is primarily attributable to the 816,000 shares
that were acquired for the ESOP in connection with the
Conversion.





The
following table presents the computation of basic and diluted EPS for the
periods indicated:




Three
      Months Ended
              March
      31,
            
            
            Six
      Months Ended
              March
      31,2008
            
            
            2007
            
            
            2008
            
            
            2007(in
      thousands, except share and per share data)Basic
      EPS:Income
      available to common stockholders
            
            $
            945
            
            
            $
            1,241
            
            
            $
            1,892
            
            
            $
            2,510Weighted-average
      common shares outstanding
            
            
            15,962,325
            
            
            
            16,576,439
            
            
            
            16,352,427
            
            
            
            16,562,244Basic
      EPS
            
            $
            0.06
            
            
            $
            0.08
            
            
            $
            0.12
            
            
            $
            0.15Diluted
      EPS:Income
      available to common stockholders
            
            $
            945
            
            
            $
            1,241
            
            
            $
            1,892
            
            
            $
            2,510Weighted-average
      common shares outstanding
            
            
            15,962,325
            
            
            
            16,576,439
            
            
            
            16,352,427
            
            
            
            16,562,244Net
      effect of dilutive SOP awards
            
            
            -
            
            
            
            66,454
            
            
            
            -
            
            
            
            71,947Net
      effect of dilutive RRP awards
            
            
            15,892
            
            
            
            47,701
            
            
            
            22,024
            
            
            
            48,131Weighted-average
      common shares outstanding and common stock equivalents
            
            
            15,978,217
            
            
            
            16,690,594
            
            
            
            16,374,451
            
            
            
            16,682,322Diluted
      EPS
            
            $
            0.06
            
            
            $
            0.07
            
            
            $
            0.12
            
            
            $
            0.15








Note
6 - Mortgage-Backed Securities




Mortgage-backed
securities available for sale consisted of the following:




March
      31, 2008Amortized
              Cost
            
            
            Gross
              Unrealized
              Gains
            
            
            Gross
              Unrealized
              Losses
            
            
            Fair
              Value(in
      thousands)Agency
      mortgage-backed securities
            
            $
            204,888
            
            
            $
            1,626
            
            
            $
            (533
            )
            
            $
            205,981Non-agency
      mortgage-backed securities
            
            
            3,433
            
            
            
            -
            
            
            
            (175
            )
            
            
            3,258Total
            
            $
            208,321
            
            
            $
            1,626
            
            
            $
            (708
            )
            
            $
            209,239September 30,
      2007Agency
      mortgage-backed securities
            
            $
            162,503
            
            
            $
            191
            
            
            $
            (3,823
            )
            
            $
            158,871Non-agency
      mortgage-backed securities
            
            
            3,464
            
            
            
            -
            
            
            
            (77
            )
            
            
            3,387Total
            
            $
            165,967
            
            
            $
            191
            
            
            $
            (3,900
            )
            
            $
            162,258























The fair
value of temporarily impaired securities, the amount of unrealized losses and
the length of time these unrealized losses existed as of March 31, 2008 were as
follows:







Less
      than 12 months
            
            
            12
      months or longer
            
            
            TotalFair
              Value
            
            
            Unrealized
              Losses
            
            
            Fair
              Value
            
            
            Unrealized
              Losses
            
            
            Fair
              Value
            
            
            Unrealized
              Losses(in
      thousands)Mortgage-backedsecurities,
      availablefor
      sale
            
            $
            61,923
            
            
            $
            (343
            )
            
            $
            20,164
            
            
            $
            (365
            )
            
            $
            82,087
            
            
            $
            (708
            )


Management
has evaluated these securities and has determined that the decline in the value
is temporary and not related to the underlying credit quality of the issuers or
an industry specific event.  The declines in value are on securities
that have contractual maturity dates and future principal payments will be
sufficient to recover the current amortized cost of the
securities.  The Company has the ability and intent to hold the
securities for a reasonable period of time for a forecasted recovery of the
amortized cost.




As of
March 31, 2008, the Bank had pledged mortgage-backed securities with an
amortized cost of $86.4 million and a fair value of $86.4 million as collateral
for FHLB advances.  Mortgage-backed securities with an amortized cost
of $6.3 million and a fair value of $6.4 million at March 31, 2008, were pledged
to the Federal Reserve Bank as collateral for treasury tax and loan funds held
by the Bank and for borrowings from the discount window.  The Company
has also pledged a mortgage-backed security with an amortized cost of $2.1
million and a fair value of $2.1 million as collateral for a $1.5 million
revolving line of credit from the Bank.  As of March 31, 2008, there
was no balance owed on the line of credit.







Note
7 - Loans Receivable




Loans
receivable are summarized as follows:




March
      31, 2008
            
            
            September
      30, 2007Balance
            
            
            Percent
              of
      Total
            
            
            Balance
            
            
            Percent
              of
      Total(dollars
      in thousands)Real
      Estate:One-
      to four-family residential
            
            $
            230,016
            
            
            
            47.78
            %
            
            $
            249,545
            
            
            
            51.55
            %Multi-family
      residential
            
            
            6,770
            
            
            
            1.41
            
            
            
            6,864
            
            
            
            1.42Commercial
            
            
            144,149
            
            
            
            29.94
            
            
            
            133,823
            
            
            
            27.64Total
      real estate
            
            
            380,935
            
            
            
            79.13
            
            
            
            390,232
            
            
            
            80.61Real
      Estate Construction:One-
      to four-family residential
            
            
            18,745
            
            
            
            3.89
            
            
            
            20,545
            
            
            
            4.24Multi-family
      residential
            
            
            1,768
            
            
            
            0.37
            
            
            
            1,770
            
            
            
            0.36Commercial
            
            
            12,981
            
            
            
            2.70
            
            
            
            13,691
            
            
            
            2.83Acquisition
      and land development
            
            
            10,270
            
            
            
            2.13
            
            
            
            8,208
            
            
            
            1.69Total
      real estate construction
            
            
            43,764
            
            
            
            9.09
            
            
            
            44,214
            
            
            
            9.12Consumer:Home
      equity
            
            
            48,932
            
            
            
            10.16
            
            
            
            42,990
            
            
            
            8.88Automobile
            
            
            2,073
            
            
            
            0.43
            
            
            
            2,173
            
            
            
            0.45Other
      consumer
            
            
            1,258
            
            
            
            0.26
            
            
            
            1,405
            
            
            
            0.29Total
      consumer
            
            
            52,263
            
            
            
            10.85
            
            
            
            46,568
            
            
            
            9.62Commercial
      business
            
            
            4,497
            
            
            
            0.93
            
            
            
            3,122
            
            
            
            0.65481,459
            
            
            
            100.00
            %
            
            
            484,136
            
            
            
            100.00
            %Less:Deferred
      loan fees
            
            
            997
            
            
            
            
            
            
            
            1,030Allowance
      for loan losses
            
            
            3,307
            
            
            
            
            
            
            
            2,988Loans
      receivable, net
            
            $
            477,155
            
            
            
            
            
            
            $
            480,118







Note
8 – Mortgage Servicing Rights




Mortgage
servicing rights represent the fair value of the future loan servicing fees from
the right to service loans for others.  The unpaid principal balances
of loans serviced at March 31, 2008 and September 30, 2007 were $177.0 million
and $191.6 million, respectively.  Loans serviced for others are not
included in the Consolidated Balance Sheets.  In general, during
periods of falling interest rates, the mortgage loans prepay faster and the
value of the mortgage servicing asset declines.  Conversely, during
periods of rising rates, the value of mortgage servicing rights generally
increases as a result of slower rates of prepayments.  The Company
does not use derivatives to hedge fluctuations in the fair value of the
servicing rights.





As of
October 1, 2006, the Company adopted SFAS No. 156,Accounting for Servicing of
Financial Assets, to measure mortgage servicing rights using the fair
value method.  As a result, the Company will measure each class of
mortgage servicing rights at fair value at each reporting date, and report
changes in fair value in earnings in the period in which the change
occurs.  Prior to the adoption of SFAS No. 156, the Company elected to
account for its mortgage servicing rights using the amortization method
previously required by SFAS No. 140.





The
Company has identified two classes of mortgage servicing assets based upon the
nature of the collateral, interest rate mechanism and nature of the
loan.  The Company uses an independent third party to periodically
value the residential mortgage servicing rights using information such as
anticipated prepayment speeds, discount rates and servicing fees associated with
the type of loans sold.








Upon the
change from the amortization method to fair value accounting under SFAS No. 156,
the calculation of amortization and the assessment of impairment were
discontinued.  Those measurements have been replaced by adjustments to
fair value that encompass market-driven valuation changes.  Under the
fair value method, the changes in fair value are reported in “Mortgage servicing
rights, net” on the Consolidated Statements of Income.





The
following table lists the classes of servicing rights and the activities in the
balance of each class for the periods indicated:





Three
      Months Ended
              March
      31,
            
            
            Six
      Months Ended
              March
      31,Servicing
      Right Classes
            
            2008
            
            
            2007
            
            
            2008
            
            
            2007(in
      thousands)One-
      to four-family residential loans:Beginning
      Balance
            
            $
            1,967
            
            
            $
            2,387
            
            
            $
            2,033
            
            
            $
            2,468Additions
      for new mortgage
              servicing
      rights capitalized
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            3Adjustments
      to fair value
            
            
            (73
            )
            
            
            (89
            )
            
            
            (139
            )
            
            
            (173
            )Ending
      Balance
            
            $
            1,894
            
            
            $
            2,298
            
            
            $
            1,894
            
            
            $
            2,298Commercial
      real estate loans:Beginning
      Balance
            
            $
            12
            
            
            $
            22
            
            
            $
            14
            
            
            $
            24Adjustments
      to fair value
            
            
            (3
            )
            
            
            (3
            )
            
            
            (5
            )
            
            
            (5
            )Ending
      Balance
            
            $
            9
            
            
            $
            19
            
            
            $
            9
            
            
            $
            19





The
amount of contractually specified servicing fees for one- to four-family
residential loans for the three and six months ended March 31, 2008 were
$126,000 and $253,000, respectively.  The servicing fees for one- to
four-family residential loans are recorded in “Loan Servicing Fees” on the
Consolidated Statements of Income.  The amount of contractually
specified servicing fees for commercial real estate loans, as well as late fees
and other ancillary fees earned for the periods indicated, were immaterial in
amount.





Item
2.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations







Forward-Looking
Statements





This
report contains forward-looking statements, which can be identified by the use
of words such as “believes,” “intends,” “expects,” “anticipates,” “estimates” or
similar expressions.  Forward-looking statements include, but are not
limited to:





·
            statements
      of our goals, intentions and
expectations;


·
            statements
      regarding our business plan, prospects, growth and operating
      strategies;


·
            statements
      regarding the quality of our loan and investment portfolios;
      and


·
            estimates
      of our risks and future costs and
benefits.





These
forward-looking statements are subject to significant risks and
uncertainties.  Actual results may differ materially from those
contemplated by the forward-looking statements as a result of, among others, the
following factors:





·
            general
      economic conditions, including real estate values, either nationally or in
      the Company’s market area, that are worse than
  expected;


·
            changes
      in the interest rate environment that reduce the Company’s interest
      margins or reduce the fair value of financial
  instruments;


·
            increased
      competitive pressures among financial services
  companies;


·
            changes
      in consumer spending, borrowing and savings
  habits;


·
            legislative
      or regulatory changes that adversely affect the Company’s
      business;


·
            adverse
      changes in the securities markets;
and





·
            changes
      in accounting policies and practices, as may be adopted by the bank
      regulatory agencies, the Public Company Accounting Oversight Board or the
      Financial Accounting Standards
Board.





These
factors should be considered in evaluating the forward-looking statements, and
undue reliance should not be placed on such statements.  The Company
undertakes no obligation to publish revised forward-looking statements to
reflect the occurrence of unanticipated events or circumstances after the date
hereof.





Overview





The
Company is the successor to Home Federal MHC and the Mid-Tier in connection with
the Conversion, which was completed on December 19, 2007.





On May
11, 2007, the Boards of Directors of the Company, Home Federal MHC and the Bank
adopted a Plan of Conversion and Reorganization (the “Plan”) pursuant to which
the Bank reorganized from the mutual holding company structure to the stock
holding company structure. Pursuant to the terms of the Plan, shares of
outstanding common stock of the Mid-Tier were exchanged for 1.136 shares of the
Company’s common stock. No fractional shares were issued.  The
exchange ratio was designed to preserve the aggregate percentage ownership
interest of the existing public shareholders of Mid-Tier following the sale of
10,200,000 shares of the Company’s common stock to the Bank’s eligible account
holders, to the Bank’s tax-qualified employee benefit plans and to members of
the general public. The Conversion was approved by the Bank’s depositors, the
Company’s stockholders (including the approval of a majority of the shares held
by persons other than Home Federal MHC) and regulatory agencies.  The
Company’s common stock is traded on the NASDAQ Global Select Market under the
symbol “HOME” and is included in the America’s Community Bankers NASDAQ
Index.





The Bank
was founded in 1920 as a building and loan association and reorganized as a
federal mutual savings and loan association in 1936.  On December 6,
2004, the Bank reorganized into the two-tiered mutual holding company form of
organization. In connection with that transaction, the Mid-Tier sold 40.00% of
its outstanding shares of common stock (6,083,500 shares) to the public and
issued 59.04% of its outstanding shares of common stock (8,979,246 shares) to
Home Federal MHC, the mutual holding company parent of the
Mid-Tier.  In connection with that transaction, the Mid-Tier also
established and capitalized the Foundation with a $1.8 million one-time
contribution, which consisted of 146,004 shares of its common stock and $365,010
in cash. As part of that transaction the Bank converted from a
federally-chartered mutual savings and loan association to a federally-chartered
stock savings bank and became the wholly owned subsidiary of the
Mid-Tier.





The Bank
is a community-oriented financial institution dedicated to serving the financial
service needs of consumers and businesses within its market area.  The
Bank’s primary business is attracting deposits from the general public and using
these funds to originate loans.  The Bank emphasizes the origination
of commercial business loans, commercial real estate loans, construction,
residential development, consumer loans, loans secured by first mortgages on
owner-occupied, and residential real estate.  As a result of a
comprehensive and continuing review of its strategic business plan, the Company
continues to expand its commercial and small business banking programs,
including a variety of loan and deposit products.





The Bank
serves the Treasure Valley region of southwestern Idaho, that includes Ada,
Canyon, Elmore and Gem counties, through its 16 full-service banking offices and
one loan center.  Nearly 40% of the state’s population lives and works
in the four counties served by Home Federal Bank.  Ada County has the
largest population and includes the city of Boise, the state
capitol.  Home Federal Bank maintains its largest branch presence in
Ada County with eight locations, followed by Canyon County with five branches,
including the Company’s corporate headquarters in Nampa.  The two
remaining branches are located in Elmore and Gem Counties.





The local
economy is primarily urban with the city of Boise being the most populous of the
markets that the Bank serves, followed by Nampa, the state’s second largest
city.  The area has experienced a slowdown in the residential housing
market similar to the Nation as a whole.  Housing prices have
declined, and single-family housing permits have decreased from prior year
levels.  The regional economy is well diversified with government,
healthcare, manufacturing, service, high technology, call centers and
construction providing sources of employment.  In addition,
agriculture and related industries continue to be key components of the economy
in southwestern Idaho.  Generally, sources of employment are
concentrated in Ada and Canyon counties and include the headquarters of Micron
Technology and J.R. Simplot Company.  Other major employers include
Hewlett-Packard, Supervalu, two regional medical centers and Idaho state
government agencies.  The city of Boise is also home to Boise State
University, the state’s largest and fastest growing university.





Critical
Accounting Policies





Allowance
for Loan Losses.Management recognizes that loan losses may occur over
the life of a loan and that the allowance for loan losses must be maintained at
a level necessary to absorb specific losses on impaired loans and probable
losses inherent in the loan portfolio. The Company’s Asset Liability Management
Committee assesses the allowance for loan losses on a quarterly basis. The
Committee analyzes several different factors including delinquency rates,
charge-off rates and the changing risk profile of our loan portfolio, as well as
local economic conditions such as unemployment rates, bankruptcies and vacancy
rates of business and residential properties.





The
Company believes that the accounting estimate related to the allowance for loan
losses is a critical accounting estimate because it is highly susceptible to
change from period to period, requiring management to make assumptions about
future losses on loans. The impact of a sudden large loss could deplete the
allowance and require increased provisions to replenish the allowance, which
would negatively affect earnings.





The
Company’s methodology for analyzing the allowance for loan losses consists of
specific allocations on significant individual credits and a general allowance
amount, including a range of losses. The specific allowance component is
determined when management believes that the collectibility of a specific large
loan has been impaired and a loss is probable. The general allowance component
relates to assets with no well-defined deficiency or weakness and takes into
consideration loss that is inherent within the portfolio but has not been
realized. The general allowance is determined by applying a historical loss
percentage to various types of loans with similar characteristics and classified
loans that are not analyzed specifically. Due to the imprecision in calculating
inherent and potential losses, a range is added to the general allowance to
provide an allowance for loan losses that is adequate to cover losses that may
arise as a result of changing economic conditions and other qualitative factors
that may alter our historical loss experience.





The
allowance is increased by the provision for loan losses, which is charged
against current period operating results and decreased by the amount of actual
loan charge-offs, net of recoveries.





The
Company also estimates a reserve related to unfunded loan
commitments.  In assessing the adequacy of the reserve, the Company
uses a similar approach used in the development of the allowance for loan
losses.  The reserve for unfunded loan commitments is included in
other liabilities on the Consolidated Balance Sheets.  The provision
for unfunded commitments is charged to noninterest expense.





Mortgage
Servicing Rights.Mortgage servicing rights represent the present value
of the future loan servicing fees from the right to service loans for others.
The most critical accounting policy associated with mortgage servicing is the
methodology used to determine the fair value of capitalized mortgage servicing
rights, which requires the development of a number of estimates, the most
critical of which are the mortgage loan prepayment rate assumptions. The
mortgage loan prepayment rate assumptions are significantly impacted by interest
rates. In general, during periods of falling interest rates, the mortgage loans
prepay faster and the value of our mortgage servicing asset declines.
Conversely, during periods of rising rates, the value of mortgage servicing
rights generally increases due to slower rates of prepayments. The Company
performs a quarterly review of mortgage servicing rights for potential changes
in value. This review may include an independent appraisal by an outside party
of the fair value of the mortgage servicing rights.





Deferred
Income Taxes.Deferred income taxes are reported for temporary
differences between items of income or expense reported in the financial
statements and those reported for income tax purposes. Deferred taxes are
computed using the asset and liability approach as prescribed in SFAS No. 109,
Accounting for Income Taxes. Under this method, a deferred tax asset or
liability is determined based on the enacted tax rates that will be in effect
when the differences between the financial statement carrying amounts and tax
basis of existing assets and liabilities are expected to be reported in an
institution’s income tax returns. The deferred tax provision for the year is
equal to the net change in the net deferred tax asset from the beginning to the
end of the year, less amounts applicable to the change in value related to
investments available for sale. The effect on deferred taxes of a change in tax
rates is recognized as income in the period that includes the enactment date.
The primary differences between financial statement income and taxable income
result from depreciation expense, mortgage servicing rights, loan loss reserves,
deferred compensation, mark to market adjustments on our available for sale
securities, and dividends received from the Federal Home Loan Bank of Seattle.
Deferred income taxes do not include a liability for pre-1988 bad debt
deductions allowed to thrift institutions that may be recaptured if the
institution fails to qualify as a bank for income tax purposes in the
future.








Comparison
of Financial Condition at March 31, 2008 and September 30, 2007





General.  Total
assets increased $58.2 million, or 8.2%, to $768.1 million at March 31, 2008
from $710.0 million at September 30, 2007.  The increase in total
assets was attributable primarily to $88.4 million in net proceeds raised from
the Company’s second-step conversion and stock offering completed on December
19, 2007.  Cash and due from other banks increased $15.8 million, or
76.6%, to $36.4 million.  Loans receivable, net, decreased $3.0
million, or 0.6%, to $477.2 million.  Mortgage-backed securities
increased $47.0 million, or 28.9%, to $209.2 million.  Total deposits
decreased $8.5 million, or 2.1%, to $396.1 million.  FHLB advances
decreased $25.2 million, or 13.9%, to $155.6 million.





Assets.  For the six
months ended March 31, 2008, total assets increased $58.2
million.  The increases and decreases were primarily concentrated in
the following asset categories:





Increase
      (decrease)Balance
      at
              March
      31,
              2008
            
            
            Balance
      at
              September
      30,
              2007
            
            
            Amount
            
            
            Percent(dollars
      in thousands)Cash
      and amounts due from
              depository institutions
            
            $
            36,353
            
            
            $
            20,588
            
            
            $
            15,765
            
            
            
            76.6
            %Mortgage-backed
      securities,
              available for sale
            
            
            209,239
            
            
            
            162,258
            
            
            
            46,981
            
            
            
            28.9Loans
      receivable, net of
              allowance for loan losses
            
            
            477,155
            
            
            
            480,118
            
            
            
            (2,963
            )
            
            
            (0.6
            )





Cash and
amounts due from depository institutions increased $15.8 million to $36.4
million at March 31, 2008, from $20.6 million at September 30,
2007.  The higher cash balance at March 31, 2008 is due to a portion
of the proceeds from the Company’s second-step conversion and stock offering
being invested in overnight funds at the end of the most recent
quarter.





Mortgage-backed
securities increased $47.0 million to $209.2 million at March 31, 2008, from
$162.3 million at September 30, 2007.  The increase was primarily
attributable to mortgage-backed securities purchased with proceeds from the
Company’s second-step conversion and stock offering.





Loans
receivable, net, decreased $3.0 million to $477.2 million at March 31, 2008,
from $480.1 million at September 30, 2007.  One- to four-family
residential mortgage loans decreased $19.9 million as the Company sold a
majority of the one-to four-family loans that were
originated.  Commercial loans increased $11.6 million to $155.4
million at December 31, 2007 from $143.8 million at September 30, 2007.
Construction loans decreased $102,000 to $43.8 million at March 31, 2008 from
$43.9 million at September 30, 2007.  The Bank has made significant
progress in building commercial and small business banking programs, including
the addition of an experienced commercial banking team to expand the commercial
banking activities, including business banking, cash management and other
products associated with a full-service commercial bank.











Deposits.  Deposits
decreased $8.5 million, or 2.1%, to $396.1 million at March 31, 2008, from
$404.6 million at September 30, 2007.  The increase in
interest-bearing demand deposits was primarily attributed to growth in money
market accounts as the Bank continued its emphasis on deposit products
associated with a full-service commercial bank.  The decrease in
certificates of deposit was primarily the result of choosing not to match rates
offered by local competitors that in many cases exceeded the Bank’s cost of
alternative funding sources.  The following table details the changes
in deposit accounts:





Increase
      (decrease)Balance
      at
              March
      31,
              2008
            
            
            Balance
      at
              September
      30,
              2007
            
            
            Amount
            
            
            Percent(dollars
      in thousands)Noninterest-bearing
      demand deposits
            
            $
            37,323
            
            
            $
            38,643
            
            
            $
            (1,320
            )
            
            
            (3.4
            )%Interest-bearing
      demand deposits
            
            
            142,820
            
            
            
            127,659
            
            
            
            15,161
            
            
            
            11.9Savings
      deposits
            
            
            24,524
            
            
            
            23,116
            
            
            
            1,408
            
            
            
            6.1Certificates
      of deposit
            
            
            191,439
            
            
            
            215,191
            
            
            
            (23,752
            )
            
            
            (11.0
            )Total
      deposit accounts
            
            $
            396,106
            
            
            $
            404,609
            
            
            $
            (8,503
            )
            
            
            (2.10
            )%





Borrowings.  FHLB
advances decreased $25.2 million, or 13.9%, to $155.6 million at March 31, 2008,
from $180.7 million at September 30, 2007.  The decrease resulted from
maturing advances funded from excess liquidity.  The Bank uses FHLB
advances as an alternative funding source to deposits, manage funding costs,
reduce interest rate risk, and to leverage the balance sheet.





Deferred Income Tax
Asset/Liability.  The Company had a deferred tax asset of $1.2
million at September 30, 2007 versus a deferred tax liability of $377,000 at
March 31, 2008.  This change primarily resulted from a shift from an
unrealized loss on the Company’s mortgage-backed securities’ portfolio as of
September 30, 2007 to an unrealized gain as of March 31, 2008.





Equity.  Stockholders’
equity increased $92.7 million, or 82.3%, to $205.4 million at March 31, 2008,
from $112.6 million at September 30, 2007.  The increase was primarily
attributable to the $88.4 million in net proceeds received from the second-step
conversion and stock offering.  The Company sold approximately 9.4
million shares of stock in its subscription, community and syndicated community
offerings and issued approximately 7.1 million additional shares of its stock in
exchange for the previously outstanding shares of Home Federal Bancorp, Inc.,
the Bank’s former “mid-tier” holding company.  A portion of the
offering proceeds were used to make a loan to the Company’s employee stock
ownership plan, which purchased 816,000 shares of the Company’s common stock for
an aggregate cost of $8.2 million.  In addition, other significant
activity among equity accounts over the past six months included $1.9 million in
net income, the allocation of earned employee stock ownership plan shares,
equity compensation and the exercise of stock options totaling $921,000, and a
$2.8 million increase in the market value of mortgage-backed securities, offset
by $1.2 million in cash dividends paid to stockholders.  On March 14,
2008, the Company paid $0.055 per share in cash dividends to stockholders of
record as of February 27, 2008.







Comparison
of Operating Results for the Three Months ended March 31, 2008 and March 31,
2007





General.  Net income
for the three months ended March 31, 2008 was $945,000, or $0.06 per diluted
share, compared to net income of $1.2 million, or $0.07 per diluted share, for
the three months ended March 31, 2007.  Earnings per share for the
prior period have been adjusted to reflect the impact of the second-step
conversion and reorganization of the Company, which occurred on December 19,
2007.





Net Interest
Income.  Net interest income increased $416,000, or 7.8%, to
$5.8 million for the three months ended March 31, 2008, from $5.4 million for
the three months ended March 31, 2007.  The increase in net interest
income was primarily attributable to a lower balance of FHLB
advances.  The decrease in FHLB advances resulted from maturing
advances funded from excess liquidity.





The
Company’s net interest margin increased 15 basis points to 3.15% for the quarter
ended March 31, 2008, from 3.00% for the same quarter last year.  This
increase was primarily attributable to the interest earnings on the proceeds of
the second-step conversion and reorganization of the Company.  In
addition, the deposit mix shift toward lower cost deposits also contributed to
the increase.





The
following table sets forth the impacts to the Company’s net interest income from
changes in balances of interest earning assets and interest bearing liabilities
as well as changes in interest rates.  The rate column shows the
effects attributable to changes in rate (changes in rate multiplied by prior
volume). The volume column shows the effects attributable to changes in volume
(changes in volume multiplied by prior rate).  Changes attributable to
both rate and volume, which cannot be segregated, are allocated proportionately
to the changes in rate and volume.





Three
      Months Ended March 31, 2008
              Compared
      to Three Months Ended
              March 31,
      2007Increase
      (Decrease) Due toRate
            
            
            Volume
            
            
            Total(in
      thousands)Interest-earning
      assets:Loans
      receivable, net
            
            $
            (142
            )
            
            $
            (523
            )
            
            $
            (665
            )Loans
      held for sale
            
            
            -
            
            
            
            (35
            )
            
            
            (35
            )Investment
      securities, including interest-
              bearing deposits in other banks
            
            
            (7
            )
            
            
            502
            
            
            
            495Mortgage-backed
      securities
            
            
            (34
            )
            
            
            (62
            )
            
            
            (96
            )FHLB
      stock
            
            
            22
            
            
            
            -
            
            
            
            22Total
      net change in income on interest-
              earning assets
            
            $
            (161
            )
            
            $
            (118
            )
            
            $
            (279
            )Interest-bearing
      liabilities:Savings
      deposits
            
            $
            20
            
            
            $
            (1
            )
            
            $
            19Interest-bearing
      demand deposits
            
            
            10
            
            
            
            (21
            )
            
            
            (11
            )Money
      market accounts
            
            
            (12
            )
            
            
            148
            
            
            
            136Certificates
      of deposit
            
            
            52
            
            
            
            (329
            )
            
            
            (277
            )Total
      deposits
            
            
            70
            
            
            
            (203
            )
            
            
            (133
            )FHLB
      advances
            
            
            61
            
            
            
            (623
            )
            
            
            (562
            )Total
      net change in expense on interest-
              bearing liabilities
            
            $
            131
            
            
            $
            (826
            )
            
            $
            (695
            )Total
      increase in net interest income
            
            
            
            
            
            
            
            
            
            $
            416
















Interest and Dividend
Income.  Total interest and dividend income for the three
months ended March 31, 2008 decreased $279,000, or 2.6%, to $10.5 million, from
$10.7 million for the three months ended March 31, 2007.  The decrease
during the quarter is primarily attributable to a decrease on yields earned on
interest earning assets.





The
following table compares detailed average earning asset balances, associated
yields, and resulting changes in interest and dividend income:





Three
      Months Ended March 31,2008
            
            
            2007
            
            
            Increase/Average
              Balance
            
            
            Yield
            
            
            Average
              Balance
            
            
            Yield
            
            
            (Decrease)
      in Interest and Dividend
              Income
      from
              2007(dollars
      in thousands)Loans
      receivable, net
            
            $
            479,822
            
            
            
            6.45
            %
            
            $
            512,191
            
            
            
            6.56
            %
            
            $
            (665
            )Loans
      held for sale
            
            
            2,266
            
            
            
            6.09
            
            
            
            4,504
            
            
            
            6.13
            
            
            
            (35
            )Investment
      securities, available for
              sale, including interest-bearing
              deposits in other banks
            
            
            57,900
            
            
            
            3.52
            
            
            
            1,158
            
            
            
            5.18
            
            
            
            495Mortgage-backed
      securities
            
            
            182,865
            
            
            
            4.70
            
            
            
            188,113
            
            
            
            4.77
            
            
            
            (96
            )FHLB
      stock
            
            
            9,591
            
            
            
            1.29
            
            
            
            9,591
            
            
            
            0.38
            
            
            
            22Total
      interest-earning assets
            
            $
            732,444
            
            
            
            5.71
            %
            
            $
            715,557
            
            
            
            6.00
            %
            
            $
            (279
            )





Interest
Expense.  Interest expense decreased $695,000, or 12.9%, to
$4.7 million for the three months ended March 31, 2008 from $5.4 million for the
three months ended March 31, 2007.  The average balance of total
interest-bearing liabilities decreased $75.9 million, or 12.8%, to $518.5
million for the three months ended March 31, 2008 from $594.4 million for the
three months ended March 31, 2007.  The largest single contributing
factor to the decrease in interest bearing liabilities was the decrease in
average FHLB advances of $54.3 million.





The
following table details average balances, cost of funds and the change in
interest expense:





Three
      Months Ended March 31,2008
            
            
            2007
            
            
            Increase/Average
              Balance
            
            
            Cost
            
            
            Average
              Balance
            
            
            Cost
            
            
            (Decrease)
      in Interest
              Expense
      from
              2007(dollars
      in thousands)Savings
      deposits
            
            $
            22,776
            
            
            
            0.70
            %
            
            $
            23,380
            
            
            
            0.36
            %
            
            $
            19Interest-bearing
      demand
              deposits
            
            
            78,726
            
            
            
            0.62
            
            
            
            92,586
            
            
            
            0.58
            
            
            
            (11
            )Money
      market deposits
            
            
            59,902
            
            
            
            2.75
            
            
            
            38,409
            
            
            
            2.87
            
            
            
            136Certificates
      of deposit
            
            
            199,652
            
            
            
            4.60
            
            
            
            228,346
            
            
            
            4.51
            
            
            
            (277
            )FHLB
      advances
            
            
            157,444
            
            
            
            4.60
            
            
            
            211,721
            
            
            
            4.48
            
            
            
            (562
            )Total
      interest-bearing liabilities
            
            $
            518,500
            
            
            
            3.61
            %
            
            $
            594,442
            
            
            
            3.62
            %
            
            $
            (695
            )





Provision for Loan
Losses.  A provision for loan losses of $378,000 was
established in connection with an analysis of the loan portfolio for the quarter
ended March 31, 2008, compared to no provision for loan losses for the same
quarter of the prior year.  The increase in the provision reflects a
potential increased level of risk associated with the Bank’s one to four family
residential construction loans given the slowdown in the local residential real
estate market, and impairments specifically identified with a purchased
portfolio of $26.5 million one-to-four family residential loans secured by
property located primarily in the Western United States.  While the
Bank’s credit quality remains solid, Management continues to keep a watchful eye
on the local market closely monitoring and





managing
credit quality, specifically acquisition and development and real estate
construction loans.  The Bank has recognized and identified the risk
of acquisition and development lending and has limited its exposure in this
area.  The Bank does not originate or purchase one- to four-family
subprime loans.  While management believes the estimates and
assumptions used in its determination of the adequacy of the allowance are
reasonable, there can be no assurance that such estimates and assumptions will
not be proven incorrect in the future, or that the actual amount of future
provisions will not exceed the amount of past provisions or that any increased
provision that may be required will not adversely impact the Company’s financial
condition and results of operations.  In addition, the determination
of the amount of the allowance for loan losses is subject to review by bank
regulators, as part of the routine examination process, which may result in the
establishment of additional reserves based upon their judgment of information
available to them at the time of their examination.





Standard
provisions for loan losses are established based upon the type of loan and the
risk factors associated with that loan type.  As the Bank increases
its commercial loan portfolio, the Bank anticipates it will increase its
allowance for loan losses based upon the higher risk characteristics associated
with commercial loans.





The
following table details selected activity associated with the allowance for loan
losses:





At
      or For the Three Months
              Ended
      March 31,2008
            
            
            2007(dollars
      in thousands)Provision
      for loan losses
            
            $
            378
            
            
            $
            -Net
      charge-offs
            
            
            87
            
            
            
            4Allowance
      for loan losses
            
            
            3,307
            
            
            
            2,849Allowance
      for loan losses as a percentage of gross
              loans
      receivable at the end of the period
            
            
            0.69
            %
            
            
            0.56
            %Nonperforming
      loans
            
            $
            1,852
            
            
            $
            273Allowance
      for loan losses as a percentage of
              nonperforming
      loans at the end of the period
            
            
            178.56
            %
            
            
            1,043.59
            %Nonaccrual
      and 90 days or more past due loans as a
              percentage
      of loans receivable at the end of the
              period
            
            
            0.39
            
            
            
            0.05Loans
      receivable, net
            
            $
            477,155
            
            
            $
            503,688





Noninterest
Income.  Noninterest income decreased $283,000, or 10.3%, to
$2.5 million for the three months ended March 31, 2008 from $2.8 million for the
three months ended March 31, 2007.  The decrease was primarily
attributable to a $217,000 decrease in gain on sale of one-to four-family
residential loans in the secondary market.  The decrease in the gain
on sale of loans is a result of lower volume of sold loans consistent with the
slowdown in the local residential real estate market.





The
following table provides a detailed analysis of the changes in components of
noninterest income:





Three
      Months Ended
              March
      31,
            
            
            Increase
      (decrease)2008
            
            
            2007
            
            
            Amount
            
            
            Percent(dollars
      in thousands)Service
      fees and charges
            
            $
            2,098
            
            
            $
            2,222
            
            
            $
            (124
            )
            
            
            (5.6
            )%Gain
      on sale of loans
            
            
            162
            
            
            
            379
            
            
            
            (217
            )
            
            
            (57.3
            )Increase
      in cash surrender value
              of
      bank owned life insurance
            
            
            104
            
            
            
            99
            
            
            
            5
            
            
            
            5.0Loan
      servicing fees
            
            
            126
            
            
            
            142
            
            
            
            (16
            )
            
            
            (11.3
            )Mortgage
      servicing rights, net
            
            
            (75
            )
            
            
            (92
            )
            
            
            17
            
            
            
            18.5Other
            
            
            63
            
            
            
            11
            
            
            
            52
            
            
            
            472.7Total
      noninterest income
            
            $
            2,478
            
            
            $
            2,761
            
            
            $
            (283
            )
            
            
            10.3
            %





Noninterest
Expense.  Noninterest expense increased $325,000, or 5.3%, to
$6.4 million for the three months ended March 31, 2008 from $6.1 million for the
three months ended March 31, 2007.








The
following table provides a detailed analysis of the changes in components of
noninterest expense:





Three
      Months Ended
              March
      31,
            
            
            Increase
      (decrease)2008
            
            
            2007
            
            
            Amount
            
            
            Percent(dollars
      in thousands)Compensation
      and benefits
            
            $
            4,053
            
            
            $
            3,851
            
            
            $
            202
            
            
            
            5.3
            %Occupancy
      and equipment
            
            
            760
            
            
            
            727
            
            
            
            33
            
            
            
            4.5Data
      processing
            
            
            531
            
            
            
            493
            
            
            
            38
            
            
            
            7.7Advertising
            
            
            271
            
            
            
            300
            
            
            
            (29
            )
            
            
            (9.7
            )Other
            
            
            804
            
            
            
            723
            
            
            
            81
            
            
            
            11.2Total
      noninterest expense
            
            $
            6,419
            
            
            $
            6,094
            
            
            $
            325
            
            
            
            5.3
            %





Compensation
and benefits increased $202,000, or 5.3%, to $4.1 million for the quarter ended
March 31, 2008 from $3.9 million for the same quarter a year ago.  The
majority of the increase is attributable to the hiring of additional employees
related to the Bank’s ongoing emphasis in commercial banking.





The
Company’s efficiency ratio, which is the percentage of noninterest expense to
net interest income plus noninterest income, was 77.8% for the three months
ended March 31, 2008 compared to 75.0% for the three months ended March 31,
2007. The increase in efficiency ratio was primarily attributable to an increase
in expenses.  By definition, a lower efficiency ratio would be an
indication that the Company is more efficiently utilizing resources to generate
net interest income and other fee income.





Income Tax
Expense.Income tax expense decreased $274,000, or 34.8%, to
$513,000 for the three months ended March 31, 2008 from $787,000 for the same
period a year ago.  Income before income taxes was $1.5 million for
the three months ended March 31, 2008 compared to $2.0 million for the three
months ended March 31, 2007.  The Company’s combined federal and state
effective income tax rate for the current quarter was 35.2% compared to 38.8%
for the same quarter of the prior fiscal year.  The decrease in the
effective income tax rate was primarily attributable to a decrease in expenses
not deductible for tax purposes.





Comparison
of Operating Results for the Six Months ended March 31, 2008 and March 31,
2007





General.  Net income
for the six months ended March 31, 2008 was $1.9 million, or $0.12 per diluted
share, compared to net income of $2.5 million, or $0.15 per diluted share, for
the six months ended March 31, 2007.  Earnings per share for the prior
period have been adjusted to reflect the impact of the second-step conversion
and reorganization of the Company, which occurred on December 19,
2007.





Net Interest
Income.  Net interest income decreased $27,000, or less than
one percent, to $10.8 million for the six months ended March 31, 2008, from
$10.9 million for the six months ended March 31, 2007.  Net interest
income was relatively flat as total interest and dividend income and interest
expense decreased $849,000 and $822,000 respectively between the two
periods.





The
Company’s net interest margin increased five basis points to 3.07% for the six
months ended March 31, 2008, from 3.02% for the same period last
year.  This increase was primarily attributable to the interest
earnings on the proceeds of the second-step conversion and reorganization of the
Company.


























The
following table sets forth the impacts to the Company’s net interest income from
changes in balances of interest earning assets and interest bearing liabilities
as well as changes in interest rates.  The rate column shows the
effects attributable to changes in rate (changes in rate multiplied by prior
volume). The volume column shows the effects attributable to changes in volume
(changes in volume multiplied by prior rate).  Changes attributable to
both rate and volume, which cannot be segregated, are allocated proportionately
to the changes in rate and volume.





Six
      Months Ended March 31, 2008
              Compared
      to Six Months Ended
              March
      31, 2007Increase
      (Decrease) Due toRate
            
            
            Volume
            
            
            Total(in
      thousands)Interest-earning
      assets:Loans
      receivable, net
            
            $
            (47
            )
            
            $
            (1,054
            )
            
            $
            (1,101
            )Loans
      held for sale
            
            
            (2
            )
            
            
            (48
            )
            
            
            (50
            )Investment
      securities, including interest-
              bearing deposits in other banks
            
            
            (39
            )
            
            
            769
            
            
            
            730Mortgage-backed
      securities
            
            
            (7
            )
            
            
            (452
            )
            
            
            (459
            )FHLB
      stock
            
            
            31
            
            
            
            -
            
            
            
            31Total
      net change in income on interest-
              earning assets
            
            $
            (64
            )
            
            $
            (785
            )
            
            $
            (849
            )Interest-bearing
      liabilities:Savings
      deposits
            
            $
            43
            
            
            $
            (3
            )
            
            $
            40Interest-bearing
      demand deposits
            
            
            88
            
            
            
            (96
            )
            
            
            (8
            )Money
      market accounts
            
            
            87
            
            
            
            296
            
            
            
            383Certificates
      of deposit
            
            
            572
            
            
            
            (916
            )
            
            
            (344
            )Total
      deposits
            
            
            790
            
            
            
            (719
            )
            
            
            71FHLB
      advances
            
            
            402
            
            
            
            (1,295
            )
            
            
            (893
            )Total
      net change in expense on interest-
              bearing liabilities
            
            $
            1,192
            
            
            $
            (2,014
            )
            
            $
            (822
            )Total
      decrease in net interest income
            
            
            
            
            
            
            
            
            
            $
            (27
            )


























Interest and Dividend
Income.  Total interest and dividend income for the six months
ended March 31, 2008 decreased $849,000, or 3.9%, to $20.8 million, from $21.6
million for the six months ended March 31, 2007.  The decrease during
the period was attributable to both a decrease in the average balance of
interest-earning assets of $12.7 million as well as a drop in yields earned on
interest-earning assets of 13 basis points.





The
following table compares detailed average earning asset balances, associated
yields, and resulting changes in interest and dividend income:





Six
      Months Ended March 31,2008
            
            
            2007
            
            
            Increase/Average
              Balance
            
            
            Yield
            
            
            Average
              Balance
            
            
            Yield
            
            
            (Decrease)
      in Interest and Dividend
              Income
      from
              2007(dollars
      in thousands)Loans
      receivable, net
            
            $
            481,309
            
            
            
            6.52
            %
            
            $
            513,622
            
            
            
            6.54
            %
            
            $
            (1,101
            )Loans
      held for sale
            
            
            2,472
            
            
            
            6.24
            
            
            
            3,239
            
            
            
            6.30
            
            
            
            (50
            )Investment
      securities, available for
              sale,
      including interest-bearing
              deposits
      in other banks
            
            
            41,073
            
            
            
            3.77
            
            
            
            1,691
            
            
            
            5.20
            
            
            
            730Mortgage-backed
      securities
            
            
            171,724
            
            
            
            4.76
            
            
            
            190,683
            
            
            
            4.77
            
            
            
            (459
            )FHLB
      stock
            
            
            9,591
            
            
            
            1.04
            
            
            
            9,591
            
            
            
            0.40
            
            
            
            31Total
      interest-earning assets
            
            $
            706,169
            
            
            
            5.88
            %
            
            $
            718,826
            
            
            
            6.01
            %
            
            $
            (849
            )





Interest
Expense.  Interest expense decreased $822,000, or 7.6%, to $9.9
million for the six months ended March 31, 2008 from $10.8 million for the six
months ended March 31, 2007.  The average balance of total
interest-bearing liabilities decreased $66.9 million, or 11.2%, to $530.7
million for the six months ended March 31, 2008 from $597.6 million for the six
months ended March 31, 2007.  The largest single contributing factor
to the decrease in interest bearing liabilities was the decrease in average FHLB
advances of $45.3 million.





The
following table details average balances, cost of funds and the change in
interest expense:





Six
      Months Ended March 31,2008
            
            
            2007
            
            
            Increase/Average
              Balance
            
            
            Cost
            
            
            Average
              Balance
            
            
            Cost
            
            
            (Decrease)
      in Interest
              Expense
      from
              2007(dollars
      in thousands)Savings
      deposits
            
            $
            22,691
            
            
            
            0.68
            %
            
            $
            23,402
            
            
            
            0.32
            %
            
            $
            40Interest-bearing
      demand
              deposits
            
            
            78,284
            
            
            
            0.69
            
            
            
            93,729
            
            
            
            0.60
            
            
            
            (8
            )Money
      market deposits
            
            
            55,749
            
            
            
            3.13
            
            
            
            36,247
            
            
            
            2.70
            
            
            
            383Certificates
      of deposit
            
            
            206,830
            
            
            
            4.70
            
            
            
            231,744
            
            
            
            4.49
            
            
            
            (344
            )FHLB
      advances
            
            
            167,172
            
            
            
            4.60
            
            
            
            212,466
            
            
            
            4.46
            
            
            
            (893
            )Total
      interest-bearing liabilities
            
            $
            530,726
            
            
            
            3.74
            %
            
            $
            597,588
            
            
            
            3.60
            %
            
            $
            (822
            )





Provision for Loan
Losses.  A provision for loan losses of $665,000 was
established in connection with an analysis of the loan portfolio for the six
months ended March 31, 2008, compared to a provision for loan losses of $71,000
established for the same period of the prior year.  The increase in
the provision reflects a potential increased level of risk associated with the
Bank’s one to four family residential construction loans given the slowdown in
the local





residential
real estate market, and impairments specifically identified with a purchased
portfolio of $26.5 million one-to-four family residential loans secured by
property located primarily in the Western United States.





The
following table details selected activity associated with the allowance for loan
losses:





At
      or For the Six Months
              Ended
      March 31,2008
            
            
            2007(dollars
      in thousands)Provision
      for loan losses
            
            $
            665
            
            
            $
            71Net
      charge-offs
            
            
            347
            
            
            
            5Allowance
      for loan losses
            
            
            3,307
            
            
            
            2,849Allowance
      for loan losses as a percentage of gross
              loans receivable at the end of the period
            
            
            0.69
            %
            
            
            0.56
            %Nonperforming
      loans
            
            $
            1,852
            
            
            $
            273Allowance
      for loan losses as a percentage of
              nonperforming loans at the end of the period
            
            
            178.56
            %
            
            
            1,043.59
            %Nonaccrual
      and 90 days or more past due loans as a
              percentage of loans receivable at the end of the
              period
            
            
            0.39
            
            
            
            0.05Loans
      receivable, net
            
            $
            477,155
            
            
            $
            503,688





Noninterest
Income.  Noninterest income decreased $562,000, or 10.0%, to
$5.1 million for the six months ended March 31, 2008 from $5.6 million for the
six months ended March 31, 2007.  The decrease was primarily
attributable to a $327,000, or 7.1%, decrease in service fees and charges and a
$330,000 decrease in gain on sale of one-to four-family residential loans in the
secondary market.  Service charges and fees decreased as deposit
balances decreased.  The decrease in the gain on sale of loans is a
result of lower volume of loans sold consistent with the slowdown in the
residential real estate market.





The
following table provides a detailed analysis of the changes in components of
noninterest income:





Six
      Months Ended
              March
      31,
            
            
            Increase
      (decrease)2008
            
            
            2007
            
            
            Amount
            
            
            Percent(dollars
      in thousands)Service
      fees and charges
            
            $
            4,309
            
            
            $
            4,636
            
            
            $
            (327
            )
            
            
            (7.1
            )%Gain
      on sale of loans
            
            
            347
            
            
            
            677
            
            
            
            (330
            )
            
            
            (48.7
            )Increase
      in cash surrender value
              of bank owned life insurance
            
            
            208
            
            
            
            199
            
            
            
            9
            
            
            
            4.5Loan
      servicing fees
            
            
            253
            
            
            
            286
            
            
            
            (33
            )
            
            
            (11.5
            )Mortgage
      servicing rights, net
            
            
            (143
            )
            
            
            (175
            )
            
            
            32
            
            
            
            18.3Other
            
            
            108
            
            
            
            21
            
            
            
            87
            
            
            
            414.3Total
      noninterest income
            
            $
            5,082
            
            
            $
            5,644
            
            
            $
            (562
            )
            
            
            (10.0
            )%





Noninterest
Expense.  Noninterest expense decreased $59,000, or 0.5%, to
$12.3 million for the six months ended March 31, 2008 from $12.3 million for the
six months ended March 31, 2007.





The
following table provides a detailed analysis of the changes in components of
noninterest expense:





Six
      Months Ended
              March
      31,
            
            
            Increase
      (decrease)2008
            
            
            2007
            
            
            Amount
            
            
            Percent(dollars
      in thousands)Compensation
      and benefits
            
            $
            7,752
            
            
            $
            7,865
            
            
            $
            (113
            )
            
            
            (1.4
            )%Occupancy
      and equipment
            
            
            1,471
            
            
            
            1,429
            
            
            
            42
            
            
            
            2.9Data
      processing
            
            
            1,053
            
            
            
            1,001
            
            
            
            52
            
            
            
            5.2Advertising
            
            
            571
            
            
            
            596
            
            
            
            (25
            )
            
            
            (4.2
            )


Other
            
            
            1,434
            
            
            
            1,449
            
            
            
            (15
            )
            
            
            (1.0
            )Total
      noninterest expense
            
            $
            12,281
            
            
            $
            12,340
            
            
            $
            (59
            )
            
            
            0.5
            %











The
Company’s efficiency ratio, which is the percentage of noninterest expense to
net interest income plus noninterest income, was 77.2% for the six months ended
March 31, 2008 compared to 74.8% for the six months ended March 31, 2007. The
increase in efficiency ratio was primarily attributable to a decrease in
revenues.  By definition, a lower efficiency ratio would be an
indication that the Company is more efficiently utilizing resources to generate
net interest income and other fee income.





Income Tax
Expense.Income tax expense decreased $506,000, or 32.0%, to
$1.1 million for the six months ended March 31, 2008 from $1.6 million for the
same period a year ago.  Income before income taxes was $3.0 million
for the six months ended March 31, 2008 compared to $4.1 million for the six
months ended March 31, 2007.  The Company’s combined federal and state
effective income tax rate for the six months ended March 31, 2008 was 36.3%
compared to 38.7% for the same period of the prior fiscal year.  The
decrease in the effective income tax rate was primarily attributable to a
decrease in expenses not deductible for tax purposes.








Liquidity,
Commitments and Capital Resources





Liquidity.  The
Company actively analyzes and manages the Bank’s liquidity with the objectives
of maintaining an adequate level of liquidity and to ensure the availability of
sufficient cash flows to support loan growth, fund deposit withdrawals, fund
operations and satisfy other financial commitments.  See the
"Consolidated Statements of Cash Flows" contained in Item 1 - Financial
Statements, included herein.





The
primary sources of funds are customer deposits, loan repayments, loan sales,
maturing investment securities, and FHLB advances.  These sources of
funds, together with retained earnings and equity, are used to make loans,
acquire investment securities and other assets, and fund continuing
operations.  While maturities and the scheduled amortization of loans
are a predictable source of funds, deposit flows and mortgage prepayments are
greatly influenced by the level of interest rates, economic conditions and
competition.  Management believes that the Company’s current liquidity
position and forecasted operating results are sufficient to fund all of the
Bank’s existing commitments.





At March
31, 2008, the Bank maintained a line of credit with the FHLB equal to 40% of
total assets to the extent the Bank provides qualifying collateral and holds
sufficient FHLB stock.  At March 31, 2008, the Bank was in compliance
with the collateral requirements and $128.2 million of the line of credit was
available.  In addition, the Company holds readily saleable loans and
mortgage-backed securities available for sale for liquidity
purposes.





During
the quarter ended June 30, 2007, the Company transferred its entire portfolio of
held-to-maturity mortgage-backed securities to available for sale to meet the
additional liquidity needs associated with increasing commercial banking
activities.  As a result, the Company had an additional $168.0 million
of mortgage-backed securities available for liquidity purposes.





At March
31, 2008, certificates of deposit amounted to $191.4 million, or 48.3% of total
deposits, including $153.0 million that are scheduled to mature by March 31,
2009.  Historically, the Bank has been able to retain a significant
amount of deposits as they mature.  Management believes the Company
has adequate resources to fund all loan commitments through deposits, FHLB
advances, loan repayments, maturing investment securities, and the sale of
mortgage loans in the secondary markets.





Off-Balance Sheet
Arrangements.  The Bank is party to financial instruments with
off-balance sheet risk in the normal course of business in order to meet the
financing needs of the Bank’s customers.  These financial instruments
generally include commitments to originate mortgage, commercial and consumer
loans, and involve to varying degrees, elements of credit and interest rate risk
in excess of the amount recognized in the balance sheet.  The Bank’s
maximum exposure to credit loss in the event of nonperformance by the borrower
is represented by the contractual amount of those
instruments.  Because some commitments may expire without being drawn
upon, the total commitment amounts do not necessarily represent future cash
requirements.  The same credit policies are used in making commitments
as are used for on-balance sheet instruments.  Collateral is required
in instances where deemed necessary.





Undisbursed
balances of loans closed include funds not disbursed but committed for
construction projects.  Unused lines of credit include funds not
disbursed, but committed to, home equity, commercial and consumer lines of
credit.





Commercial
letters of credit are conditional commitments issued to guarantee the
performance of a customer to a third party.  Those guarantees are
primarily used to support public and private borrowing
arrangements.  The credit risk involved in issuing letters of credit
is essentially the same as that involved in extending loan facilities to
customers.





The
following is a summary of commitments and contingent liabilities with
off-balance sheet risks as of March 31, 2008:




Contract
      or
              Notional
      Amount(in
      thousands)Commitments
      to originate loans:Fixed
      rate
            
            $
            8,481Adjustable
      rate
            
            
            13,007Undisbursed
      balance of loans closed
            
            
            8,375Unused
      lines of credit
            
            
            43,041Commercial
      letters of credit
            
            
            -Total
            
            $
            72,904





Capital.Consistent
with the Bank’s goal to operate a sound and profitable financial organization,
efforts are ongoing to actively seek to maintain a “well capitalized”
institution in accordance with regulatory standards. The Bank’s total regulatory
capital was $145.1 million at March 31, 2008, or 20.5%, of total assets on that
date. As of March 31, 2008, the Bank exceeded all regulatory capital
requirements. The Bank’s regulatory capital ratios at March 31, 2008 were as
follows: Tier 1 capital 20.4%; Tier 1 (core) risk-based capital 30.9%; and total
risk-based capital 31.6%. The applicable regulatory capital requirements to be
considered well capitalized are 5%, 6% and 10%, respectively.





Item
3.  Quantitative and Qualitative Disclosures about Market
Risk





The
Company’s Board of Directors has established an asset and liability management
policy to guide management in maximizing net interest spread by managing the
differences in terms between interest-earning assets and interest-bearing
liabilities while maintaining acceptable levels of liquidity, capital adequacy,
interest rate sensitivity, credit risk and profitability.  The Asset
Liability Management Committee, consisting of certain members of senior
management, communicate, coordinate and manage asset/liability positions
consistent with the business plan and Board-approved policies, as well as to
price savings and lending products, and to develop new products.





One of
the Bank’s primary financial objectives is to generate ongoing
profitability.  The Bank’s profitability depends primarily on its net
interest income, which is the difference between the income it receives on its
loan and investment portfolio and its cost of funds, which consists of interest
paid on deposits and borrowings.  The rates the Company earns on
assets and pay on liabilities generally are established contractually for a
period of time.  Market interest rates change over
time.  The Bank’s loans generally have longer maturities than the
deposits.  Accordingly, the Company’s results of operations, like
those of other financial institutions, are affected by changes in interest rates
and the interest rate sensitivity of assets and liabilities.  The Bank
measures its interest rate sensitivity on a quarterly basis using an internal
model.





Management
employs various strategies to manage the Company’s interest rate sensitivity
including: (1) selling long-term fixed-rate mortgage loans in the secondary
market; (2) borrowing intermediate to long-term funds at fixed rates from the
FHLB; (3) originating commercial and consumer loans at shorter maturities or at
variable rates; (4) originating adjustable rate mortgage loans; (5)
appropriately modifying loan and deposit pricing to capitalize on the then
current market opportunities; and (6) increasing lower cost core deposits, such
as savings and checking accounts. At March 31, 2008, the Company had no
off-balance sheet derivative financial instruments, and the Bank did not
maintain a trading account for any class of financial instruments or engage in
hedging activities or purchase high risk derivative
instruments.  Furthermore, the Company is not subject to foreign
currency exchange rate risk or commodity price risk.









Item
4.  Controls and Procedures







(a)
Evaluation of Disclosure Controls and Procedures.





An
evaluation of the Company’s disclosure controls and procedures (as defined in
Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) was
carried out under the supervision and with the participation of the Company’s
Chief Executive Officer, Chief Financial Officer, and other members of the
Company’s management team as of the end of the period covered by this quarterly
report.  The Company’s Chief Executive Officer and Chief Financial
Officer concluded that as of March 31, 2008 the Company’s disclosure controls
and procedures were effective in ensuring that the information required to be
disclosed by the Company in the reports it files or submits under the Act is (i)
accumulated and communicated to the Company’s management (including the Chief
Executive Officer and Chief Financial Officer) in a timely manner, and (ii)
recorded, processed, summarized, and reported within the time periods specified
in the SEC’s rules and forms.





(b)
Changes in Internal Controls.





There
have been no changes in the Company’s internal control over financial reporting
(as defined in 13a-15(f) of the Exchange Act) that occurred during the quarter
ended March 31, 2008, that have materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.  A number of internal control procedures were, however,
modified during the quarter in conjunction with the Bank's internal control
testing.  The Company also continued to implement suggestions from its
internal auditor and independent auditors to strengthen existing
controls.





The
Company intends to continually review and evaluate the design and effectiveness
of its disclosure controls and procedures and to improve its controls and
procedures over time and to correct any deficiencies that it may discover in the
future. The goal is to ensure that senior management has timely access to all
material financial and non-financial information concerning the Company's
business.  While the Company believes the present design of its
disclosure controls and procedures is effective to achieve its goal, future
events affecting its business may cause the Company to modify its disclosure
controls and procedures.  The Company does not expect that its
disclosure controls and procedures and internal control over financial reporting
will prevent every error or instance of fraud.  A control procedure,
no matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control procedure are
met.  Because of the inherent limitations in all control procedures,
no evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been
detected.  These inherent limitations include the realities that
judgments in decision-making can be faulty, and that breakdowns in controls or
procedures can occur because of simple error or
mistake.  Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management
override of the control.  The design of any control procedure is based
in part upon certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions; over time, controls become
inadequate because of changes in conditions, or the degree of compliance with
the policies or procedures may deteriorate.  Because of the inherent
limitations in a cost-effective control procedure, misstatements due to error or
fraud may occur and not be detected.








PART II - OTHER
INFORMATION





Item 1.  Legal
Proceedings





From time
to time, the Company is engaged in legal proceedings in the ordinary course of
business, none of which are currently considered to have a material impact on
the Company’s financial position or results of operations.





Item 1A.  Risk
Factors










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





Not
applicable.





Stock
Repurchases.  The Company did not repurchase any shares of its
outstanding common stock during the six months ended March 31,
2008.  In addition, the Company has no publicly announced plans to
repurchase any shares of its common stock.





Item 3.  Defaults
Upon Senior Securities





Not
applicable.





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





Not
applicable.





Item 5.  Other
Information





Not
applicable.











Item
6.  Exhibits





2.1
            Plan
      of Conversion and Reorganization (1)3.1
            Articles
      of Incorporation of the Registrant (2)3.2
            Bylaws
      of the Registrant (2)10.1
            Amended
      Employment Agreement entered into by Home Federal Bank with Len E.
      Williams10.2
            Employment
      Agreement entered into by Home Federal Bancorp, Inc. with Len E.
      Williams10.3
            Amended
      Employment Agreement entered into by Home Federal Bank with Daniel L.
      Stevens10.4
            Amended
      Employment Agreement entered into by Home Federal Bancorp, Inc. with
      Daniel L. Stevens10.5
            Form
      of Amended Severance Agreement for Executive Officers
  (7)10.6
            Form
      of Amended Severance Agreement for new Executive Officers
    (7)10.7
            Form
      of Home Federal Savings and Loan Association of Nampa Employee Severance
      Compensation Plan (2)10.8
            Form
      of Director Indexed Retirement Agreement entered into by Home Federal
      Savings and Loan Association of Nampa with each of its Directors
      (2)10.9
            Form
      of Director Deferred Incentive Agreement entered into by Home Federal
      Savings and Loan Association of Nampa with each of its Directors
      (2)10.10
            Form
      of Split Dollar Agreement entered into by Home Federal Savings and Loan
      Association of Nampa with Daniel L. Stevens, N. Charles Hedemark, Fred H.
      Helpenstell, M.D., Richard J. Schrandt, James R. Stamey and Robert A.
      Tinstman (2)10.11
            Form
      of Executive Deferred Incentive Agreement, and amendment thereto, entered
      into by Home Federal Savings and Loan Association of Nampa with Daniel L.
      Stevens, Robert A. Schoelkoph, and Lynn A. Sander (2)10.12
            Form
      of Amended and Restated Salary Continuation Agreement entered into by Home
      Federal Savings and Loan Association of Nampa with Daniel L. Stevens, Len
      E. Williams, Steven E. Emerson, Robert A. Schoelkoph, and Lynn A. Sander
      (2)10.13
            2005
      Stock Option and Incentive Plan approved by stockholders on June 23, 2005
      and Form of Incentive Stock Option Agreement and Non-Qualified Stock
      Option Agreement  (3)10.14
            2005
      Recognition and Retention Plan approved by stockholders on June 23, 2005
      and Form of Award Agreement  (3)10.15
            Form
      of new Director Retirement Plan entered into by Home Federal Bank with
      each of its Directors (4)10.16
            Transition
      Agreement with Daniel L. Stevens (5)10.17
            Agreement
      Regarding Terms of Employment Offer with Len E. Williams
    (5)10.18
            Agreement
      Regarding Terms of Employment Offer with Steven K. Eyre
  (6)31.1
            Certification
      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act31.2
            Certification
      of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act32
            Certification
      Pursuant to Section 906 of the Sarbanes-Oxley
  Act





______




(1)
            Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated
      May 11, 2007.(2)
            Filed as an exhibit to the Registrant's Registration Statement on Form S-1
      (333-35817).(3)
            Filed as an exhibit to the Registrant’s Registration Statement on Form S-8
      (333-127858).(4)
            Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated
      October 21, 2005.(5)
            Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated
      August 21, 2006.(6)
            Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated
      November 15, 2007.


(7)
            Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for
      the quarter ended December
              31, 2007.




















SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.







Home Federal
      Bancorp, Inc.Date:  May
      9, 2008
            /s/ Len
      E. WilliamsLen E.
      WilliamsPresident
      andChief Executive
      Officer(Principal Executive
      Officer)Date:  May
      9, 2008
            /s/ Robert
      A. SchoelkophRobert A.
      SchoelkophSenior Vice
      President andChief Financial
      Officer(Principal Financial
      and Accounting Officer)











EXHIBIT
      INDEX10.1
            Amended
      Employment Agreement entered into by Home Federal Bank with Len E.
      Williams10.2
            Employment
      Agreement entered into by Home Federal Bancorp, Inc. with Len E.
      Williams10.3
            Amended
      Employment Agreement entered into by Home Federal Bank with Daniel L.
      Stevens10.4
            Amended
      Employment Agreement entered into by Home Federal Bancorp, Inc. with
      Daniel L. Stevens31.1
            Certification
      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act31.2
            Certification
      of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act32
            Certification
      Pursuant to Section 906 of the Sarbanes-Oxley
  Act








EXHIBIT 10.1Amended Employment Agreement enteredinto by Home Federal Bank with Len E. Williams  
 AMENDED EMPLOYMENT AGREEMENT
 THIS AMENDED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as
of this 30th day of
January, 2008 by and includes the amendments made on December 21, 2007 between
Home Federal Bank (the “Savings Bank”), and Len E. Williams (the
“Employee”).  References to the “Company” mean Home Federal Bancorp, Inc.,
a Maryland corporation.
  WHEREAS, the Employee has made and will continue to make a major contribution to
the success of the Savings Bank in the position of President and Chief Executive
Officer;
  WHEREAS, the Board of Directors of the Savings Bank (the “Board of Directors”)
recognizes that the possibility of a change in control of the Savings Bank or
the Company may occur and that such possibility, and the uncertainty and
questions which may arise among management, may result in the departure or
distraction of key management to the detriment of the Savings
Bank;
  WHEREAS, the Board of Directors believes that it is in the best interests of the
Savings Bank to enter into this Agreement with the Employee in order to assure
continuity of management of the Savings Bank and its subsidiaries;
and
  WHEREAS, the Board of Directors has approved and authorized the execution of
this Agreement with the Employee; and
 NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as
follows:
  1.  Definitions .
  (a)   “Change in Control” means (i) any “person,” as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) (other than the Company, any Consolidated Subsidiaries (as
hereinafter defined), any person (as hereinabove defined) acting on behalf of
the Company as underwriter pursuant to an offering who is temporarily holding
securities in connection with such offering, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, or any
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company),
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
25% or more of the combined voting power of the Company's then outstanding
securities; (ii) individuals who are members of the Board on the Effective Date
(the “Incumbent Board”) cease for any reason to constitute at least a majority
thereof, provided that
any person becoming a director subsequent to the Effective Date whose election
was approved by a vote of at least three-quarters of the directors comprising
the Incumbent Board or whose nomination for election by the Company's
stockholders was approved by the nominating committee serving under an Incumbent
Board or who was appointed as a result of a change at the direction of the
Office of Thrift Supervision (“OTS”) or the Federal Deposit Insurance
Corporation (“FDIC”), shall be considered a member of the Incumbent Board; (iii)
the stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than (1) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by
      
 remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation or (2) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person (as
hereinabove defined) acquires more than 25% of the combined voting power of the
Company's then outstanding securities; or (iv) the stockholders of the Company
approve a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of the Company's
assets (or any transaction having a similar effect); provided that the term “Change in Control” shall not
include an acquisition of securities by an employee benefit plan of the Savings
Bank or the Company or a change in the composition of the Board at the direction
of the OTS or the FDIC.
  (b)     The term “Consolidated Subsidiaries” means any subsidiary
or subsidiaries of the Company (or its successors) that are part of the
affiliated group (as defined in Section 1504 of the Internal Revenue Code of
1986, as amended (the “Code”), without regard to subsection (b) thereof) that
includes the Savings Bank, including but not limited to the
Company.
  (c)      The term “Date of Termination” means the
date upon which the Employee experiences a Separation from Service from the
Savings Bank, as specified in a notice of termination pursuant to Section 8 of
this Agreement or the date a succession becomes effective under Section
10.
  (d)      The term “Effective Date” means September 11, 2006,
the original effective date of this Agreement.
  (e)      The term “Involuntary Termination” means the
Employee’s Separation from Service (i) by the Savings Bank without the
Employee's express written consent; or (ii) by the Employee by reason of a
material diminution of or interference with his duties, responsibilities or
benefits, including (without limitation), if the termination of employment
occurs within 30 days of  any of the following actions unless consented to
in writing by the Employee:  (1) a requirement that the Employee be based
at any place other than Nampa, Idaho, or within a radius of 35 miles from the
location of the Savings Bank's administrative offices as of the Effective Date,
except for reasonable travel on Savings Bank business; (2) a material demotion
of the Employee; (3) a material reduction in the number or seniority of
personnel reporting to the Employee or a material reduction in the frequency
with which, or in the nature of the matters with respect to which such personnel
are to report to the Employee, other than as part of a Savings Bank-wide
reduction in staff; (4) a reduction in the Employee's salary or a material
adverse change in the Employee's perquisites, benefits, contingent benefits or
vacation, other than as part of an overall program applied uniformly and with
equitable effect to all members of the senior management of the Savings Bank;
(5) a material permanent increase in the required hours of work or the workload
of the Employee; or (6) the failure of the Board of Directors (or a board of
directors of a successor of the Savings Bank) to elect the Employee as President
and Chief Executive Officer of the Savings Bank (or a successor of the Savings
Bank) or any action by the Board of Directors (or a board of directors of a
successor of the Savings Bank) removing the Employee from such office.  The
term “Involuntary Termination” does not include Termination for Cause,
Separation from Service due to death or permanent disability pursuant to Section
7(f) of this Agreement, retirement or suspension or temporary or permanent
prohibition from participation in the conduct of the Savings Bank's affairs
under Section 8 of the Federal Deposit Insurance Act
(“FDIA”).
      
   (f)         The term “Section 409A”
shall mean Section 409A of the Code and the regulations and guidance of general
applicability issued thereunder.
  (g)        The term “Separation from Service”
shall have the same meaning as in Section 409A.
  (h)        The terms “Termination for Cause”
and “Terminated for Cause” mean the Employee’s Separation from Service with
 the Savings Bank because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of a fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule, or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this
Agreement.   The Employee shall not be deemed to have been Terminated
for Cause unless and until there shall have been delivered to the Employee a
copy of a resolution, duly adopted by the Board of Directors at a meeting of the
Board duly called and held for such purpose (after reasonable notice to the
Employee and an opportunity for the Employee, together with the Employee's
counsel, to be heard before the Board), stating that in the good faith opinion
of the Board of Directors the Employee has engaged in conduct described in the
preceding sentence and specifying the particulars thereof in
detail.
  2.  Term . 
The initial term of this Agreement shall be a period of one year, commencing on
the Effective Date, subject to earlier termination as provided herein. Beginning
on the first anniversary of the Effective Date, the term of this Agreement shall
be extended for a period of two years, provided
that(i) neither the Employee nor the Company has given notice
to the other in writing at least 90 days prior to the end of such two-year term
that this Agreement shall not be extended further; and (ii) prior to the end of
such two-year term, the Board of Directors, or a committee of the Board of
Directors which has been delegated authority to act on such matters by the Board
of Directors (“Committee”), explicitly reviews and approves the extension. 
Assuming the Employee’s employment has not been previously terminated pursuant
to the preceding sentence, or otherwise under this Agreement, on the third
anniversary of the Effective Date, the term of this Agreement shall be extended
for a period of three years, provided
that (i) neither the Employee nor the Company has given notice to the
other in writing at least 90 days prior to the end of such three-year term that
the term of this Agreement shall not be extended further; and (ii) prior to the
end of such three-year term, the Board of Directors, or the Committee,
explicitly reviews and approves the extension.  Assuming the Employee’s
employment has not been previously terminated pursuant to the preceding
sentence, or otherwise under this Agreement, on the sixth anniversary of the
Effective Date, and on each anniversary thereafter, the term of this Agreement
shall be extended for a period of one year, provided
that (i) neither the Employee nor the Company has given notice
to the other in writing at least 90 days prior to such anniversary that the term
of this Agreement shall not be extended further; and (ii) prior to such
anniversary, the Board of Directors, or the Committee, explicitly reviews and
approves the extension.  Reference herein to the term of this Agreement
shall refer to both such initial term and such extended
terms.
  3.  Employment .  The Employee shall be
employed as the President and Chief Executive Officer of the Savings Bank. 
As such, the Employee shall render all services and possess the powers as are
customarily performed by persons situated in similar executive capacities, and
shall have such other powers and duties as the Board of Directors may prescribe
from time to time.  The Employee shall also render services to the Company
or any subsidiary or subsidiaries of the Company or Savings Bank as requested by
the Savings Bank from time to time consistent with his executive position. 
The Employee shall devote his best efforts and reasonable time and
      
   attention to
the business and affairs of the Savings Bank to the extent necessary to
discharge his responsibilities hereunder.  The Employee may (i) serve on
charitable or civic boards or committees and, in addition, on such corporate
boards as are approved in a resolution adopted by a majority of the Board of
Directors or the Committee, which approval shall not be withheld unreasonably
and (ii) manage personal investments, so long as such activities do not
interfere materially with performance of his responsibilities hereunder.
  4.  Cash Compensation .
  (a)        Salary .  The Savings Bank agrees to pay the
Employee during the term of this Agreement a base salary (the “Salary”) in the
annualized amount of $200,000.    The Salary shall be paid no
less frequently than monthly and shall be subject to customary tax
withholding.  The amount of the Employee's Salary shall be increased (but
shall not be decreased) from time to time in accordance with the amounts of
salary approved by the Board of Directors or the Committee or the board of
directors or the appropriate committee of the Savings Bank after the Effective
Date.  The amount of the Salary shall be reviewed by the Board of Directors
or the Committee at least annually during the term of this
Agreement.
  (b)        Bonuses .   The Employee shall be
entitled to participate in an equitable manner with all other executive officers
of the Savings Bank in such performance-based and discretionary bonuses, if any,
as are authorized and declared by the Board of Directors or the Committee for
executive officers.
  (c)       Expenses .  The
Employee shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Employee in performing services under this Agreement in
accordance with the policies and procedures applicable to the executive officers
of the Savings Bank, provided
that the Employee accounts for such expenses as required under
such policies and procedures.
  5.  Benefits .
  (a)        Participation in Benefit Plans .  The
Employee shall be entitled to participate, to the same extent as executive
officers of the Savings Bank generally, in all plans of the Savings Bank
relating to pension, retirement, thrift, profit-sharing, savings, group or other
life insurance, hospitalization, medical and dental coverage, travel and
accident insurance, education, cash bonuses, and other retirement or employee
benefits or combinations thereof.  In addition, the Employee shall be
entitled to be considered for benefits under all of the stock and stock option
related plans in which the Savings Bank's executive officers are eligible or
become eligible to participate.  It is specifically intended that the
Employee will be eligible to participate in Tier One of the Savings Bank’s
executive year-end cash incentive plan, commencing October 1, 2006.
  (b)        Fringe Benefits .  The Employee shall be
eligible to participate in, and receive benefits under, any other fringe benefit
plans or perquisites which are or may become generally available to the Savings
Bank's executive officers, including but not limited to supplemental retirement,
deferred compensation program, supplemental medical or life insurance plans,
company cars, club dues, physical examinations, financial planning and tax
preparation services.
      
   6.  Vacations; Leave .  The Employee shall be entitled
to (i) annual paid vacation in accordance with the policies established by the
Board of Directors or the Committee for executive officers (but not less than
four weeks), with such vacation accruing annually and available beginning after
the end of a 90-day orientation period; (ii) voluntary leaves of absence, with
or without pay, from time to time at such times and upon such conditions as the
Board of Directors or the Committee may determine in its discretion; and (iii)
six days of sick leave annually, without carryover, accruing annually beginning
with the Effective Date.
  7.   Termination of Employment .
  (a)        Involuntary Termination .  The Board of
Directors may terminate the Employee's employment at any time, but, except in
the case of Termination for Cause, termination of employment shall not prejudice
the Employee's right to compensation or other benefits under this
Agreement.  In the event of Involuntary Termination other than after a
Change in Control which occurs during the term of this Agreement, the Savings
Bank shall (i) if the Involuntary Termination occurs prior to the first
anniversary of the Effective Date, pay to the Employee a lump-sum severance
amount equal to one year’s Salary as in effect immediately prior to the Date of
Termination, or (ii) if the Involuntary Termination occurs after the first
anniversary of the Effective Date, pay to the Employee during the remaining term
of this Agreement the Salary at the rate in effect immediately prior to the Date
of Termination, and (iii) provide to the Employee during the remaining term of
this Agreement substantially the same group life insurance, hospitalization,
medical, dental, prescription drug and other health benefits, and long-term
disability insurance (if any) for the benefit of the Employee and his dependents
and beneficiaries who would have been eligible for such benefits if the Employee
had not suffered Involuntary Termination, on terms substantially as favorable to
the Employee, including amounts of coverage and deductibles and other costs to
him, as if he had not suffered Involuntary Termination.  Notwithstanding
the foregoing, if the taxable payments under this Section 7(a) would extend over
a period of time sufficient for such payments not to be considered severance
payments under Section 409A (and as such considered deferred compensation), then
the final payment that could be made without causing the payments to be
considered deferred compensation under Section 409A shall include the present
value of the remaining payments, with such present value determined using the
applicable discount rate used for purposes of determining present value under
Section 280G of the Code.
  (b)        Termination for Cause .    In the event
of Termination for Cause, the Savings Bank shall pay to the Employee the Salary
and provide benefits under this Agreement only through the Date of Termination,
and shall have no further obligation to the Employee under this
Agreement.
  (c)        Voluntary Termination .  The Employee's employment
may be voluntarily terminated by the Employee at any time upon at least 90 days'
written notice to the Savings Bank or such shorter period as may be agreed upon
between the Employee and the Board of Directors.  In the event of such
voluntary termination, the Savings Bank shall be obligated to continue to pay to
the Employee the Salary and provide benefits under this Agreement only through
the Date of Termination, at the time such payments are due, and shall have no
further obligation to the Employee under this Agreement.
  (d)        Change in Control .  In the event of the
Employee’s Involuntary Termination within 12 months after a Change in Control,
and which occurs at any time following the first anniversary of the Effective
Date while the Employee is employed under this
      
  Agreement,
the Savings Bank shall (i) pay to the Employee in a lump sum in cash within 25
business days after the Date of Termination an amount equal to 299% of the
Employee's “base amount” as defined in Section 280G of the Code; and (ii)
provide to the Employee during the remaining term of this Agreement
substantially the same group life insurance, hospitalization, medical, dental,
prescription drug and other health benefits, and long-term disability insurance
(if any) for the benefit of the Employee and his dependents and beneficiaries
who would have been eligible for such benefits if the Employee had not suffered
Involuntary Termination, on terms substantially as favorable to the Employee,
including amounts of coverage and deductibles and other costs to him, as if he
had not suffered Involuntary Termination; provided, however, that no payment
shall be made under this Section 7(d) that would cause the Savings Bank to be
“undercapitalized” for purposes of 12 C.F.R. 565.4 or any successor
provision.
  (e)        Death .  In the event of the death of the
Employee while employed under this Agreement and prior to any termination of
employment, the Savings Bank shall pay to the Employee's estate, or such person
as the Employee may have previously designated in writing, the Salary which was
not previously paid to the Employee and which he would have earned if he had
continued to be employed under this Agreement through the last day of the
calendar month in which the Employee died, together with the benefits provided
hereunder through such date.
  (f)         Disability .  If the Employee becomes
entitled to benefits under the terms of the then-current disability plan, if
any, of the Savings Bank (the “Disability Plan”) or becomes otherwise unable to
fulfill his duties under this Agreement, he shall be entitled to receive such
group and other disability benefits, if any, as are then provided by the Savings
Bank for executive employees.  In the event of such disability, this
Agreement shall not be suspended, except that (i) the obligation to pay the
Salary to the Employee shall be reduced in accordance with the amount of
disability income benefits received by the Employee, if any, pursuant to this
paragraph such that, on an after-tax basis, the Employee shall realize from the
sum of disability income benefits and the Salary the same amount as he would
realize on an after-tax basis from the Salary if the obligation to pay the
Salary were not reduced pursuant to this Section 7(f); and (ii) upon a
resolution adopted by a majority of the disinterested members of the Board of
Directors or the Committee, the Savings Bank may discontinue payment of the
Salary beginning six months following a determination that the Employee has
become entitled to benefits under the Disability Plan or otherwise unable to
fulfill his duties under this Agreement. If the Employee’s disability does not
constitute a disability within the meaning of Section 409A, then payments under
this Section 7(f) shall not commence until the earlier of the Employee’s death
or the sixth month anniversary of the Employee’s Separation from Service, with
any delayed payments being made with the first permissible
payment.
  (g)        Temporary Suspension or Prohibition .  If the
Employee is suspended and/or temporarily prohibited from participating in the
conduct of the Savings Bank's affairs by a notice served under Section 8(e)(3)
or (g)(1) of the FDIA, 12 U.S.C. Section 1818(e)(3) and (g)(1), the Savings
Bank's obligations under this Agreement shall be suspended as of the date of
service, unless stayed by appropriate proceedings.  If the charges in the
notice are dismissed, the Savings Bank may in its discretion (i) pay the
Employee all or part of the compensation withheld while its obligations under
this Agreement were suspended and (ii) reinstate in whole or in part any of its
obligations which were suspended.
  (h)        Permanent Suspension or Prohibition .  If the
Employee is removed and/or permanently prohibited from participating in the
conduct of the Savings Bank's affairs by an order issued under Section 8(e)(4)
or (g)(1) of the FDIA, 12 U.S.C. Section 1818(e)(4) and
      
   (g)(1), all
obligations of the Savings Bank under this Agreement shall terminate as of the
effective date of the order, but vested rights of the contracting parties shall
not be affected.
  (i)         Default of the Savings Bank .  If the
Savings Bank is in default (as defined in Section 3(x)(1) of the FDIA), all
obligations under this Agreement shall terminate as of the date of default, but
this provision shall not affect any vested rights of the contracting
parties.
  (j)         Termination by Regulators .  All obligations
under this Agreement shall be terminated, except to the extent determined that
continuation of this Agreement is necessary for the continued operation of the
Savings Bank:  (1) by the Director of the OTS (the “Director”) or his or
her designee, at the time the FDIC enters into an agreement to provide
assistance to or on behalf of the Savings Bank under the authority contained in
Section 13(c) of the FDIA; or (2) by the Director or his or her designee, at the
time the Director or his or her designee approves a supervisory merger to
resolve problems related to operation of the Savings Bank or when the Savings
Bank is determined by the Director to be in an unsafe or unsound
condition.  Any rights of the parties that have already vested, however,
shall not be affected by any such action.
  (k)        Reductions of Benefits . Notwithstanding any other
provision of this Agreement, if payments and the value of benefits received or
to be received under this Agreement, together with any other amounts and the
value of benefits received or to be received by the Employee, would cause any
amount to be nondeductible by the Savings Bank or any of the Consolidated
Subsidiaries for federal income tax purposes pursuant to or by reason of Section
280G of the Code, then payments and benefits under this Agreement shall be
reduced (not less than zero) to the extent necessary so as to maximize amounts
and the value of benefits to be received by the Employee without causing any
amount to become nondeductible pursuant to or by reason of Section 280G of the
Code.  The Employee shall determine the allocation of such reduction among
payments and benefits to the Employee.
 
 (l)         Further Reductions .  Any payments made to
the Executive pursuant to this Agreement, or otherwise, are subject to and
conditioned upon their compliance with 12 U.S.C. Section 1828(k) and FDIC
regulation 12 C.F.R. Part 359, Golden Parachute and Indemnification
Payments.
  8.  Notice of Termination .  In the event that the
Savings Bank desires to terminate the employment of the Employee during the term
of this Agreement, the Savings Bank shall deliver to the Employee a written
notice of termination, stating whether such termination constitutes Termination
for Cause or Involuntary Termination, setting forth in reasonable detail the
facts and circumstances that are the basis for the termination, and specifying
the date upon which employment shall terminate, which date shall be at least 30
days after the date upon which the notice is delivered, except in the case of
Termination for Cause.  In the event that the Employee determines in good
faith that he has experienced an Involuntary Termination of his employment, he
shall send a written notice to the Savings Bank stating the circumstances that
constitute such Involuntary Termination and the date upon which his employment
shall have ceased due to such Involuntary Termination.  In the event that
the Employee desires to effect a Voluntary Termination, he shall deliver a
written notice to the Savings Bank, stating the date upon which employment shall
terminate, which date shall be at least 90 days after the date upon which the
notice is delivered, unless the parties agree to a date
sooner.
  9.  Attorneys'
Fees .  The Savings
Bank shall pay all legal fees and related expenses (including the costs of
experts, evidence and counsel) incurred by the Employee as a result of (i)
      
   the Employee's contesting or disputing any termination of
employment, or (ii) the Employee's seeking to obtain or enforce any right or
benefit provided by this Agreement or by any other plan or arrangement
maintained by the Savings Bank (or a successor) or the Consolidated Subsidiaries
under which the Employee is or may be entitled to receive benefits; provided
that the Savings Bank's obligation to pay such fees and
expenses is subject to the Employee's prevailing with respect to the matters in
dispute in any action initiated by the Employee or the Employee's having been
determined to have acted reasonably and in good faith with respect to any action
initiated by the Savings Bank.
  10.  No Assignments .
  (a)        This Agreement is personal to each
of the parties hereto, and no party may assign or delegate any of its rights or
obligations hereunder without first obtaining the written consent of the other
party; provided, however, that the Savings Bank shall require
any successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) by an assumption agreement in form and substance
satisfactory to the Employee, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Savings Bank would
be required to perform it, if no such succession or assignment had taken
place.  Failure to obtain such an assumption agreement prior to the
effectiveness of any such succession or assignment shall be a breach of this
Agreement and shall entitle the Employee to compensation and benefits from the
Savings Bank in the same amount and on the same terms as the compensation
pursuant to Section 7(d) of this Agreement.  For purposes of implementing
the provisions of this Section 10(a), the date on which any such succession
becomes effective shall be deemed the Date of Termination.
  (b)         This Agreement and all rights of
the Employee hereunder shall inure to the benefit of and be enforceable by the
Employee's personal and legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
  11.  Notice .  For the purposes of this Agreement,
notices and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered or
sent by certified mail, return receipt requested, postage prepaid, to the 
Savings Bank at its home office, to the attention of the Board of Directors with
a copy to the Secretary of the Savings Bank, or, if to the Employee, to such
home or other address as the Employee has most recently provided in writing to
the Savings Bank.
  12.  Amendments .  No amendments or additions to
this Agreement shall be binding unless in writing and signed by both parties,
except as herein otherwise provided.
  13.   Headings .  The headings used in this
Agreement are included solely for convenience and shall not affect, or be used
in connection with, the interpretation of this Agreement.
  14.  Severability . The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions
hereof.
  15.  Governing Law . This Agreement shall be governed by the
laws of the State of Idaho.
  16.  Arbitration .  Any dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration in accordance with the rules of the
   17.  Deferral of Non-Deductible Compensation . In the event
that the Employee's aggregate compensation (including compensatory benefits
which are deemed remuneration for purposes of Section 162(m) of the Code) from
the Savings Bank and the Consolidated Subsidiaries for any calendar year exceeds
the maximum amount of compensation deductible by the Savings Bank or any of the
Consolidated Subsidiaries in any calendar year under Section 162(m) of the Code
(the “maximum allowable amount”), then any such amount in excess of the maximum
allowable amount shall be mandatorily deferred with interest thereon at 8% per
annum to a calendar year such that the amount to be paid to the Employee in such
calendar year, including deferred amounts and interest thereon, does not exceed
the maximum allowable amount.  Subject to the foregoing, deferred amounts
including interest thereon shall be payable at the earliest time
permissible.
  18.  Knowing and Voluntary Agreement.   Employee
represents and agrees that he has read this Agreement, understands its terms,
and that he has the right to consult counsel of choice and has either done so or
knowingly waives the right to do so.  Employee also represents that he has
had ample time to read and understand the Agreement before executing it and that
he enters into this Agreement without duress or coercion from any
source.
  * * * *
      *
  IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
  THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE
PARTIES.
      Attest:
                HOME
      FEDERAL BANCORP, INC._____________________________
                __________________________________________________________
                By:
      __________________________Its:
      __________________________EMPLOYEE_____________________________Len
      E. Williams
  
     
 EXHIBIT
10.2
 Employment Agreement entered into by Home Federal Bancorp, Inc. with Len E. Williams  
 EMPLOYMENT
AGREEMENT
  THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of this
30th  day of
January, 2008 by and between Home Federal Bancorp, Inc., a Maryland corporation
(the "Company"), and Len E. Williams (the "Employee"). References to the
"Savings Bank" mean Home Federal Bank.
 WHEREAS, the Employee is currently serving as the President and Chief Executive
Officer of the Company;
 WHEREAS, the Employee has made and will continue to make a major contribution to
the success of the Company in the position of President and Chief Executive
Officer;
 WHEREAS, the Board of Directors of the Company (the "Board of Directors")
recognizes that the possibility of a change in control of the Savings Bank or
the Company may occur and that such possibility, and the uncertainty and
questions which may arise among management, may result in the departure or
distraction of key management to the detriment of the
Company;
 WHEREAS, the Board of Directors believes that it is in the best interests of the
Company and its stockholders to enter into this Agreement with the Employee in
order to assure continuity of management of the Company and its subsidiaries;
and
 WHEREAS, the Board of Directors has approved and authorized the execution of
this Agreement with the Employee; and
 NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as
follows:
 1.         Definitions .
 (a)        "Change in Control" means (i) any
"person," as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (other than the Company,
any Consolidated Subsidiaries (as hereinafter defined), any person (as
hereinabove defined) acting on behalf of the Company as underwriter pursuant to
an offering who is temporarily holding securities in connection with such
offering, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company), is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company's then outstanding securities; (ii) individuals who are members
of the Board on the Effective Date (the "Incumbent Board") cease for any reason
to constitute at least a majority thereof, provided that any person becoming a
director subsequent to the Effective Date whose election was approved by a vote
of at least three-quarters of the directors comprising the Incumbent Board or
whose nomination for election by the Company's stockholders was approved by the
nominating committee serving under an Incumbent Board or who was appointed as a
result of a change at the direction of the Office of Thrift Supervision ("OTS")
or the Federal Deposit Insurance Corporation ("FDIC"), shall be considered a
member of the Incumbent Board; (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other
  
  corporation, other
than (1) a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
person (as herein above defined) acquires more than 25% of the combined voting
power of the Company's then outstanding securities; or (iv) the stockholders of
the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets (or any transaction having a similar effect); provided
that the term "Change in Control" shall not include an acquisition of securities
by an employee benefit plan of the Savings Bank or the Company or a change in
the composition of the Board at the direction of the OTS or the
FDIC.
 (b)        The term "Consolidated
Subsidiaries" means any subsidiary or subsidiaries of the Company (or its
successors) that are part of the affiliated group (as defined in Section 1504 of
the Internal Revenue Code of 1986, as amended (the "Code"), without regard to
subsection (b) thereof) that includes the Company, including but not limited to
the Savings Bank.
 (c)        The term "Date of Termination"
means the date upon which the Employee's employment with the Company ceases, as
specified in a notice of termination pursuant to Section 8 of this Agreement or
the date a succession becomes effective under Section 10.
 (d)        The term "Effective Date" means
January 30, 2008.
 (e)        The term "Involuntary Termination"
means the termination of the employment of Employee (i) by the Company without
the Employee's express written consent; or (ii) by the Employee by reason of a
material diminution of or interference with his duties, responsibilities or
benefits, including (without limitation), if the termination of employment
occurs within 30 days of any of the following actions unless consented to in
writing by the Employee: (1) a requirement that the Employee be based at any
place other than Nampa, Idaho, or within a radius of 35 miles from the location
of the Company's administrative offices as of the Effective Date, except for
reasonable travel on Company business; (2) a material demotion of the Employee;
(3) a material reduction in the number or seniority of personnel reporting to
the Employee or a material reduction in the frequency with which, or in the
nature of the matters with respect to which such personnel are to report to the
Employee, other than as part of a Company-wide reduction in staff; (4) a
reduction in the Employee's salary or a material adverse change in the
Employee's perquisites, benefits, contingent benefits or vacation, other than as
part of an overall program applied uniformly and with equitable effect to all
members of the senior management of the Company; (5) a material permanent
increase in the required hours of work or the workload of the Employee; or (6)
the failure of the Board of Directors (or a board of directors of a successor of
the Company) to elect the Employee as President and Chief Executive Officer of
the Company (or a successor of the Company) or any action by the Board of
Directors (or a board of directors of a successor of the Company) removing the
Employee from such office. The term "Involuntary Termination" does not include
Termination for Cause, termination of employment due to death or permanent
disability pursuant to Section 7(f) of this Agreement, retirement or suspension
or temporary or permanent prohibition from participation in the conduct of the
Savings Bank's affairs under Section 8 of the Federal Deposit Insurance Act
("FDIA").
   
  (f)          The term “Section
409A” shall mean Section 409A of the Code and the regulations and guidance of
general applicability issued thereunder.
 (g)          The term “Separation from
Service” shall have the same meaning as in Section 409A.
  (h)          The terms “Termination
for Cause” and “Terminated for Cause” mean the Employee’s Separation from
Service with  the Savings Bank because of the Employee's personal
dishonesty, incompetence, willful misconduct, breach of a fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule, or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order, or material breach of any
provision of this Agreement. The Employee shall not be deemed to have been
Terminated for Cause unless and until there shall have been delivered to the
Employee a copy of a resolution, duly adopted by the Board of Directors at a
meeting of the Board duly called and held for such purpose (after reasonable
notice to the Employee and an opportunity for the Employee, together with the
Employee's counsel, to be heard before the Board), stating that in the good
faith opinion of the Board of Directors the Employee has engaged in conduct
described in the preceding sentence and specifying the particulars thereof in
detail.
  2.       Term . 
The initial term of this Agreement shall be a period of two year, commencing on
the Effective Date, subject to earlier termination as provided herein. Beginning
on the second anniversary of the Effective Date, the term of this Agreement
shall be extended for a period of three years, provided
that(i) neither the Employee nor the Company has given notice
to the other in writing at least 90 days prior to the end of such two-year term
that this Agreement shall not be extended further; and (ii) prior to the end of
such two-year term, the Board of Directors, or a committee of the Board of
Directors which has been delegated authority to act on such matters by the Board
of Directors (“Committee”), explicitly reviews and approves the extension. 
Assuming the Employee’s employment has not been previously terminated pursuant
to the preceding sentence, or otherwise under this Agreement, on the fifth
anniversary of the Effective Date, and on each anniversary thereafter, the term
of this Agreement shall be extended for a period of one year, provided
that(i)
neither the Employee nor the Company has given notice to the other in writing at
least 90 days prior to such anniversary that the term of this Agreement shall
not be extended further; and (ii) prior to such anniversary, the Board of
Directors, or the Committee, explicitly reviews and approves the
extension.  Reference herein to the term of this Agreement shall refer to
both such initial term and such extended terms.
  3.         Employment . The Employee shall be employed as the
President and Chief Executive Officer of the Company. As such, the Employee
shall render all services and possess the powers as are customarily performed by
persons situated in similar executive capacities, and shall have such other
powers and duties as the Board of Directors may prescribe from time to time. The
Employee shall also render services to the Company or any subsidiary or
subsidiaries of the Company or Savings Bank as requested by the Company from
time to time consistent with his executive position. The Employee shall devote
his best efforts and reasonable time and attention to the business and affairs
of the Company to the extent necessary to discharge his responsibilities
hereunder. The Employee may (i) serve on charitable or civic boards or
committees and, in addition, on such corporate boards as are approved in a
resolution adopted by a majority of the Board of Directors or the Committee,
which approval shall not be withheld unreasonably and (ii) manage personal
investments, so long as such activities do not interfere materially with
performance of his responsibilities hereunder.
   
 4.         Cash
Compensation .
 (a)        Salary . The Company agrees to pay the Employee during
the term of this Agreement a base salary (the "Salary") in the annualized amount
of $235,000. The Salary shall be paid no less frequently than monthly and shall
be subject to customary tax withholding. The amount of the Employee's Salary
shall be increased (but shall not be decreased) from time to time in accordance
with the amounts of salary approved by the Board of Directors or the Committee
or the board of directors or the appropriate committee of the Company after the
Effective Date. The amount of the Salary shall be reviewed by the Board of
Directors or the Committee at least annually during the term of this
Agreement.
 (b)        Bonuses . The Employee shall be entitled to participate
in an equitable manner with all other executive officers of the Company in such
performance-based and discretionary bonuses, if any, as are authorized and
declared by the Board of Directors or the Committee for executive
officers.
 (c)        Expenses . The Employee shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the Employee in
performing services under this Agreement in accordance with the policies and
procedures applicable to the executive officers of the Company, provided that
the Employee accounts for such expenses as required under such policies and
procedures.
 5.         Benefits .
 (a)        Participation in Benefit Plans . The Employee shall be
entitled to participate, to the same extent as executive officers of the Company
generally, in all plans of the Company relating to pension, retirement, thrift,
profit-sharing, savings, group or other life insurance, hospitalization, medical
and dental coverage, travel and accident insurance, education, cash bonuses, and
other retirement or employee benefits or combinations thereof. In addition, the
Employee shall be entitled to be considered for benefits under all of the stock
and stock option related plans in which the Company's executive officers are
eligible or become eligible to participate.
 (b)        Fringe
Benefits . The Employee shall be eligible to participate in, and
receive benefits under, any other fringe benefit plans or perquisites which are
or may become generally available to the Company's executive officers, including
but not limited to supplemental retirement, deferred compensation program,
supplemental medical or life insurance plans, company cars, club dues, physical
examinations, financial planning and tax preparation
services.
 6.        Vacations;
Leave .  The Employee shall be entitled to (i) annual paid
vacation in accordance with the policies established by the Board of Directors
or the Committee for executive officers (but not less than four weeks), with
such vacation accruing annually and available beginning after the end of a
90-day orientation period; (ii) voluntary leaves of absence, with or without
pay, from time to time at such times and upon such conditions as the Board of
Directors or the Committee may determine in its discretion; and (iii) six days
of sick leave annually, without carryover, accruing annually beginning with the
Effective Date.
      
 7.         Termination
of Employment .
 (a)        Involuntary
Termination . The Board of Directors may terminate the Employee's
employment at any time, but, except in the case of Termination for Cause,
termination of employment shall not prejudice the Employee's right to
compensation or other benefits under this Agreement. In the event of Involuntary
Termination other than after a Change in Control which occurs during the term of
this Agreement, the Company shall (i) if the Involuntary Termination occurs
prior to the first anniversary of the Effective Date, pay to the Employee a
lump-sum severance amount equal to one year’s Salary as in effect immediately
prior to the Date of Termination, or (ii) if the Involuntary Termination occurs
after the first anniversary of the Effective Date, pay to the Employee during
the remaining term of this Agreement the Salary at the rate in effect
immediately prior to the Date of Termination and (iii) provide to the Employee
during the remaining term of this Agreement substantially the same group life
insurance, hospitalization, medical, dental, prescription drug and other health
benefits, and long-term disability insurance (if any) for the benefit of the
Employee and his dependents and beneficiaries who would have been eligible for
such benefits if the Employee had not suffered Involuntary Termination, on terms
substantially as favorable to the Employee, including amounts of coverage and
deductibles and other costs to him, as if he had not suffered Involuntary
Termination. Notwithstanding the foregoing, if the taxable payments under this
Section 7(a) would extend over a period of time sufficient for such payments not
to be considered severance payments under Section 409A (and as such considered
deferred compensation), then the final payment that could be made without
causing the payments to be considered deferred compensation under Section 409A
shall include the present value of the remaining payments, with such present
value determined using the applicable discount rate used for purposes of
determining present value under Section 280G of the Code.
  (b)        Termination
for Cause . In the event of Termination for Cause, the Company shall
pay to the Employee the Salary and provide benefits under this Agreement only
through the Date of Termination, and shall have no further obligation to the
Employee under this Agreement.
 (c)        Voluntary
Termination . The Employee's employment may be voluntarily terminated
by the Employee at any time upon at least 90 days' written notice to the Company
or such shorter period as may be agreed upon between the Employee and the Board
of Directors. In the event of such voluntary termination, the Company shall be
obligated to continue to pay to the Employee the Salary and provide benefits
under this Agreement only through the Date of Termination, at the time such
payments are due, and shall have no further obligation to the Employee under
this Agreement.
 (d)        Change in
Control . In the event of the Employee’s Involuntary Termination
within 12 months after a Change in Control, and which occurs at any time
following the first anniversary of the Effective Date while the Employee is
employed under this Agreement, the Company shall (i) pay to the Employee in a
lump sum in cash within 25 business days after the Date of Termination an amount
equal to 299% of the Employee's "base amount" as defined in Section 280G of the
Code; and (ii) provide to the Employee during the remaining term of this
Agreement substantially the same group life insurance, hospitalization, medical,
dental,
    
  prescription drug
and other health benefits, and long-term disability insurance (if any) for the
benefit of the Employee and his dependents and beneficiaries who would have been
eligible for such benefits if the Employee had not suffered Involuntary
Termination, on terms substantially as favorable to the Employee, including
amounts of coverage and deductibles and other costs to him, as if he had not
suffered Involuntary Termination.
 (e)        Death . In the event of the death of the Employee while
employed under this Agreement and prior to any termination of employment, the
Company shall pay to the Employee's estate, or such person as the Employee may
have previously designated in writing, the Salary which was not previously paid
to the Employee and which he would have earned if he had continued to be
employed under this Agreement through the last day of the calendar month in
which the Employee died, together with the benefits provided hereunder through
such date.
 (f)         Disability . If the Employee becomes entitled to
benefits under the terms of the then-current disability plan, if any, of the
Company (the "Disability Plan") or becomes otherwise unable to fulfill his
duties under this Agreement, he shall be entitled to receive such group and
other disability benefits, if any, as are then provided by the Company for
executive employees. In the event of such disability, this Agreement shall not
be suspended, except that (i) the obligation to pay the Salary to the Employee
shall be reduced in accordance with the amount of disability income benefits
received by the Employee, if any, pursuant to this paragraph such that, on an
after-tax basis, the Employee shall realize from the sum of disability income
benefits and the Salary the same amount as he would realize on an after-tax
basis from the Salary if the obligation to pay the Salary were not reduced
pursuant to this Section 7(f); and (ii) upon a resolution adopted by a majority
of the disinterested members of the Board of Directors or the Committee, the
Company may discontinue payment of the Salary beginning six months following a
determination that the Employee has become entitled to benefits under the
Disability Plan or otherwise unable to fulfill his duties under this
Agreement.  If the Employee’s disability does not constitute a disability
within the meaning of Section 409A, then payments under this Section 7(f) shall
not commence until the earlier of the Employee’s death or the sixth month
anniversary of the Employee’s Separation from Service, with any delayed payments
being made with the first permissible payment.
  (g)        Temporary
Suspension or Prohibition . If the Employee is suspended and/or
temporarily prohibited from participating in the conduct of the Savings Bank's
affairs by a notice served under Section 8(e)(3) or (g)(l) of the FDIA, 12
U.S.C. Section 1818(e)(3) and (g)(1), the Company's obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the Company
may in its discretion (i) pay the Employee all or part of the compensation
withheld while its obligations under this Agreement were suspended and (ii)
reinstate in whole or in part any of its obligations which were
suspended.
 (h)        Permanent
Suspension or Prohibition . If the Employee is removed and/or
permanently prohibited from participating in the conduct of the Savings Bank's
affairs by an order issued under Section 8(e)(4) or (g)(1) of the FDIA, 12
U.S.C. Section 1818(e)(4) and (g)(1), all obligations of the Company under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
 (i)         Default of
the Savings Bank . If the Savings Bank is in default (as defined in
Section 3(x)(1) of the FD]A), all obligations under this Agreement shall
terminate as of the date of default, but this provision shall not affect any
vested rights of the contracting parties.
   
  (j)         Termination
by Regulators . All obligations under this Agreement shall be
terminated, except to the extent determined that continuation of this Agreement
is necessary for the continued operation of the Savings Bank: (1) by the
Director of the OTS (the "Director") or his or her designee, at the time the
FDIC enters into an agreement to provide assistance to or on behalf of the
Savings Bank under the authority contained in Section 13(c) of the FDIA; or (2)
by the Director or his or her designee, at the time the Director or his or her
designee approves a supervisory merger to resolve problems related to operation
of the Savings Bank or when the Savings Bank is determined by the Director to be
in an unsafe or unsound condition. Any rights of the parties that have already
vested, however, shall not be affected by any such action.
 (k)        Reductions
of Benefits . Notwithstanding any other provision of this Agreement,
if payments and the value of benefits received or to be received under this
Agreement, together with any other amounts and the value of benefits received or
to be received by the Employee, would cause any amount to be nondeductible by
the Company or any of the Consolidated Subsidiaries for federal income tax
purposes pursuant to or by reason of Section 280G of the Code, then payments and
benefits under this Agreement shall be reduced (not less than zero) to the
extent necessary so as to maximize amounts and the value of benefits to be
received by the Employee without causing any amount to become nondeductible
pursuant to or by reason of Section 280G of the Code. The Employee shall
determine the allocation of such reduction among payments and benefits to the
Employee.
 (l)         Further
Reductions . Any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with 12 U.S.C. Section 1828(k) and FDIC regulation 12 C.F.R. Part 359, Golden
Parachute and Indemnification Payments.
 8.         Notice of
Termination . In the event that the Company desires to terminate the
employment of the Employee during the term of this Agreement, the Company shall
deliver to the Employee a written notice of termination, stating whether such
termination constitutes Termination for Cause or Involuntary Termination,
setting forth in reasonable detail the facts and circumstances that are the
basis for the termination, and specifying the date upon which employment shall
terminate, which date shall be at least 30 days after the date upon which the
notice is delivered, except in the case of Termination for Cause. In the event
that the Employee determines in good faith that he has experienced an
Involuntary Termination of his employment, he shall send a written notice to the
Company stating the circumstances that constitute such Involuntary Termination
and the date upon which his employment shall have ceased due to such Involuntary
Termination. In the event that the Employee desires to effect a Voluntary
Termination, he shall deliver a written notice to the Company, stating the date
upon which employment shall terminate, which date shall be at least 90 days
after the date upon which the notice is delivered, unless the parties agree to a
date sooner.
 9.         Attorneys'
Fees . The Company shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by the Employee
as a result of (i) the Employee's contesting or disputing any termination of
employment, or (ii) the Employee's seeking to obtain or enforce any right or
benefit provided by this Agreement or by any other plan or arrangement
maintained by the Company (or a successor) or the Consolidated Subsidiaries
under which the Employee is or may be entitled to receive benefits; provided
that the Company's obligation to pay such fees and expenses is subject to the
Employee's prevailing with respect to the matters in dispute in any action
initiated by the Employee or the Employee's having been
    
 determined to have
acted reasonably and in good faith with respect to any action initiated by the
Company.
 10.       No
Assignments .
 (a)        This Agreement is personal to each
of the parties hereto, and no party may assign or delegate any of its rights or
obligations hereunder without first obtaining the written consent of the other
party; provided, however, that the Company shall require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) by
an assumption agreement in form and substance satisfactory to the Employee, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it, if no such
succession or assignment had taken place. Failure to obtain such an assumption
agreement prior to the effectiveness of any such succession or assignment shall
be a breach of this Agreement and shall entitle the Employee to compensation and
benefits from the Company in the same amount and on the same terms as the
compensation pursuant to Section 7(d) of this Agreement. For purposes of
implementing the provisions of this Section 10(a), the date on which any such
succession becomes effective shall be deemed the Date of
Termination.
 (b)        This Agreement and all rights of
the Employee hereunder shall inure to the benefit of and be enforceable by the
Employee's personal and legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
 11.       Notice . For the purposes of this Agreement, notices and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered or sent by
certified mail, return receipt requested, postage prepaid, to the Company at its
home office, to the attention of the Board of Directors with a copy to the
Secretary of the Company, or, if to the Employee, to such home or other address
as the Employee has most recently provided in writing to the
Company.
 12.       Amendments . No amendments or additions to this
Agreement shall be binding unless in writing and signed by both parties, except
as herein otherwise provided.
 13.       Headings . The headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.
 14.       Severability . The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions
hereof.
 15.       Governing
Law . This Agreement shall be governed by the laws of the State of
Idaho.
 16.       Arbitration . Any dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by arbitration
in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. The OTS may appear at any arbitration hearing but the decision is
not binding on the OTS.
    
 17.       Deferral of
Non-Deductible Compensation . In the event that the Employee's
aggregate compensation (including compensatory benefits which are deemed
remuneration for purposes of Section 162(m) of the Code) from the Company and
the Consolidated Subsidiaries for any calendar year exceeds the maximum amount
of compensation deductible by the Company or any of the Consolidated
Subsidiaries in any calendar year under Section 162(m) of the Code (the "maximum
allowable amount"), then any such amount in excess of the maximum allowable
amount shall be mandatorily deferred with interest thereon at 8% per annum to a
calendar year such that the amount to be paid to the Employee in such calendar
year, including deferred amounts and interest thereon, does not exceed the
maximum allowable amount. Subject to the foregoing, deferred amounts including
interest thereon shall be payable at the earliest time
permissible.
 18.       Knowing and
Voluntary Agreement . Employee represents and agrees that he has read
this Agreement, understands its terms, and that he has the right to consult
counsel of choice and has either done so or knowingly waives the right to do so.
Employee also represents that he has had ample time to read and understand the
Agreement before executing it and that he enters into this Agreement without
duress or coercion from any source.
  * * * *
*
  IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
  THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.
  Attest:
              HOME
      FEDERAL BANCORP, INC._____________________________
              __________________________________________________________
              By:
      __________________________Its:
      __________________________EMPLOYEE_____________________________Len
      E. Williams


EXHIBIT
10.3


Amended Employment Agreement entered into by Home Federal Bank with Daniel L. Stevens
 AMENDED EMPLOYMENT
      AGREEMENT
  THIS AMENDED EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of this 30th 
day of January, 2008 by and  includes the amendments made on December 21,
2007, between Home Federal Bank (the "Savings Bank"), and Daniel L. Stevens (the
"Employee"). References to the "Company" mean Home Federal Bancorp, Inc., a
Maryland corporation.
  WHEREAS, the Employee is currently serving as the Chairman of the Savings
Bank;
  WHEREAS, the Employee has made and will continue to make a major contribution to
the success of the Savings Bank in the position of Chairman;
  WHEREAS, the Board of Directors of the Savings Bank (the "Board of Directors")
recognizes that the possibility of a change in control of the Savings Bank or
the Company may occur and that such possibility, and the uncertainty and
questions which may arise among management, may result in the departure or
distraction of key management to the detriment of the Savings
Bank;
  WHEREAS, the Board of Directors believes that it is in the best interests of the
Savings Bank to enter into this Agreement with the Employee in order to assure
continuity of management of the Savings Bank and its subsidiaries;
and
  WHEREAS, the Board of Directors has approved and authorized the execution of
this Agreement with the Employee; and
 NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as
follows:
  1.         Definitions.
  (a)        "Change in Control" means (i) any
"person," as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (other than the Company,
any Consolidated Subsidiaries (as hereinafter defined), any person (as
hereinabove defined) acting on behalf of the Company as underwriter pursuant to
an offering who is temporarily holding securities in connection with such
offering, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company), is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company's then outstanding securities; (ii) individuals who are members
of the Board on the Effective Date (the "Incumbent Board") cease for any reason
to constitute at least a majority thereof, provided that any person becoming a
director subsequent to the Effective Date whose election was approved by a vote
of at least three-quarters of the directors comprising the Incumbent Board or
whose nomination for election by the Company's stockholders was approved by the
nominating committee serving under an Incumbent Board or who was appointed as a
result of a change at the direction of the Office of Thrift Supervision ("OTS")
or the Federal Deposit Insurance Corporation ("FDIC"), shall be considered a
member of the Incumbent Board; (iii) the stockholders of the Company approve a
merger or consolidation of the
      
 
  Company with any
other corporation, other than (1) a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or (2) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person (as hereinabove defined) acquires more
than 25% of the combined voting power of the Company's then outstanding
securities; or (iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets (or any transaction
having a similar effect); provided that the term "Change in Control" shall not
include an acquisition of securities by an employee benefit plan of the Savings
Bank or the Company or a change in the composition of the Board at the direction
of the OTS or the FDIC.
  (b)        The term "Consolidated
Subsidiaries" means any subsidiary or subsidiaries of the Company (or its
successors) that are part of the affiliated group (as defined in Section 1504 of
the Internal Revenue Code of 1986, as amended (the "Code"), without regard to
subsection (b) thereof) that includes the Savings Bank, including but not
limited to the Company.
  (c)        The term "Date of Termination"
means the date upon which the Employee experiences a Separation from Service
with the Savings Bank, as specified in a notice of termination pursuant to
Section 8 of this Agreement or the date a succession becomes effective under
Section 10.
  (d)        The term "Effective Date" means
December 6, 2004, the original effective date of this
Agreement.
  (e)        The term "Involuntary Termination"
means the Employee’s Separation From Service (i) by the Savings Bank without the
Employee's express written consent; or (ii) by the Employee by reason of a
material diminution of or interference with his duties, responsibilities or
benefits, including (without limitation), if the termination of employment
occurs within 30 days of any of the following actions unless consented to in
writing by the Employee: (1) a requirement that the Employee be based at any
place other than Nampa, Idaho, or within a radius of 35 miles from the location
of the Savings Bank's administrative offices as of the Effective Date, except
for reasonable travel on Savings Bank business; (2) a material demotion of the
Employee; (3) a material reduction in the number or seniority of personnel
reporting to the Employee or a material reduction in the frequency with which,
or in the nature of the matters with respect to which such personnel are to
report to the Employee, other than as part of a Savings Bank-wide reduction in
staff; (4) a reduction in the Employee's salary or a material adverse change in
the Employee's perquisites, benefits, contingent benefits or vacation, other
than as part of an overall program applied uniformly and with equitable effect
to all members of the senior management of the Savings Bank; (5) a material
permanent increase in the required hours of work or the workload of the
Employee; or (6) the failure of the Board of Directors (or a board of directors
of a successor of the Savings Bank) to elect the Employee as President and Chief
Executive Officer of the Savings Bank (or a successor of the Savings Bank) or
any action by the Board of Directors (or a board of directors of a successor of
the Savings Bank) removing the Employee from such office. The term "Involuntary
Termination" does not include Termination for Cause, Separation from Service due
to death or permanent disability pursuant to Section 7(f) of this Agreement,
retirement or suspension
      
 
  or temporary or
permanent prohibition from participation in the conduct of the Savings Bank's
affairs under Section 8 of the Federal Deposit Insurance Act
("FDIA").
  (f)         The term “Section 409A”
shall mean Section 409A of the Code and the regulations and guidance of general
applicability issued thereunder.
  (g)        The term “Separation from Service”
shall have the same meaning as in Section 409A.
  (h)        The terms "Termination for Cause"
and "Terminated for Cause" mean the Employee’s Separation from Service with the
Savings Bank because of the Employee's personal dishonesty, incompetence,
willful misconduct, breach of a fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any law,
rule, or regulation (other than traffic violations or similar offenses) or final
cease-and-desist order, or material breach of any provision of this Agreement.
The Employee shall not be deemed to have been Terminated for Cause unless and
until there shall have been delivered to the Employee a copy of a resolution,
duly adopted by the Board of Directors at a meeting of the Board duly called and
held for such purpose (after reasonable notice to the Employee and an
opportunity for the Employee, together with the Employee's counsel, to be heard
before the Board), stating that in the good faith opinion of the Board of
Directors the Employee has engaged in conduct described in the preceding
sentence and specifying the particulars thereof in detail.
  2.         Term . The term of this Agreement shall be a period of
three years commencing on the Effective Date, subject to earlier termination as
provided herein. Beginning on the first anniversary of the Effective Date, and
on each anniversary thereafter, the term of this Agreement shall be extended for
a period of one year in addition to the then-remaining term, provided that (i)
neither the Employee nor the Company has given notice to the other in writing at
least 90 days prior to such anniversary that the term of this Agreement shall
not be extended further; and (ii) prior to such anniversary, the Board of
Directors, or a committee of the Board of Directors which has been delegated
authority to act on such matters by the Board of Directors ("Committee"),
explicitly reviews and approves the extension. Reference herein to the term of
this Agreement shall refer to both such initial term and such extended
terms.
  3.         Employment . The Employee shall be employed as the
Chairman of the Savings Bank. As such, the Employee shall render all services
and possess the powers as are customarily performed by persons situated in
similar executive capacities, and shall have such other powers and duties as the
Board of Directors may prescribe from time to time. The Employee shall also
render services to the Company or any subsidiary or subsidiaries of the Company
or Savings Bank as requested by the Savings Bank from time to time consistent
with his executive position. The Employee shall devote his best efforts and
reasonable time and attention to the business and affairs of the Savings Bank to
the extent necessary to discharge his responsibilities hereunder. The Employee
may (i) serve on charitable or civic boards or committees and, in addition, on
such corporate boards as are approved in a resolution adopted by a majority of
the Board of Directors or the Committee, which approval shall not be withheld
unreasonably and (ii) manage personal investments, so long as such activities do
not interfere materially with performance of his responsibilities
hereunder.
      
 4.         Cash
Compensation .
  (a)        Salary . The Savings Bank agrees to pay the Employee
during the term of this Agreement a base salary (the "Salary") in the annualized
amount of $203,400. The Salary shall be paid no less frequently than monthly and
shall be subject to customary tax withholding. The amount of the Employee's
Salary shall be increased but shall not be decreased) from time to time in
accordance with the amounts of salary approved by the Board of Directors or the
Committee or the board of directors or the appropriate committee of the Savings
Bank after the Effective Date. The amount of the Salary shall be reviewed by the
Board of Directors or the Committee at least annually during the term of this
Agreement.
  (b)        Bonuses . The Employee shall be entitled to participate
in an equitable manner with all other executive officers of the Savings Bank in
such performance-based and discretionary bonuses, if any, as are authorized and
declared by the Board of Directors or the Committee for executive
officers.
  (c)        Expenses . The Employee shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the Employee in
performing services under this Agreement in accordance with the policies and
procedures applicable to the executive officers of the Savings Bank, provided
that the Employee accounts for such expenses as required under such policies and
procedures.
  5.         Benefits .
  (a)        Participation in Benefit Plans . The Employee shall be
entitled to participate, to the same extent as executive officers of the Savings
Bank generally, in all plans of the Savings Bank relating to pension,
retirement, thrift, profit-sharing, savings, group or other life insurance,
hospitalization, medical and dental coverage, travel and accident insurance,
education, cash bonuses, and other retirement or employee benefits or
combinations thereof. In addition, the Employee shall be entitled to be
considered for benefits under all of the stock and stock option related plans in
which the Savings Bank's executive officers are eligible or become eligible to
participate.
  (b)        Fringe
Benefits . The Employee shall be eligible to participate in, and
receive benefits under, any other fringe benefit plans or perquisites which are
or may become generally available to the Savings Bank's executive officers,
including but not limited to supplemental retirement, deferred compensation
program, supplemental medical or life insurance plans, company cars, club dues,
physical examinations, financial planning and tax preparation
services.
  6.         Vacations;
Leave . The Employee shall be entitled (i) to annual paid vacation in
accordance with the policies established by the Board of Directors or the
Committee for executive officers, and (ii) to voluntary leaves of absence, with
or without pay, from time to time at such times and upon such conditions as the
Board of Directors or the Committee may determine in its
discretion.
      
 7.         Termination
of Employment .
  (a)        Involuntary
Termination . The Board of Directors may terminate the Employee's
employment at any time, but, except in the case of Termination for Cause,
termination of employment shall not prejudice the Employee's right to
compensation or other benefits under this Agreement. In the event of Involuntary
Termination other than after a Change in Control which occurs during the term of
this Agreement, the Savings Bank shall (i) if the Involuntary Termination occurs
prior to the first anniversary of the Effective Date, pay to the Employee a
lump-sum severance amount equal to one year’s Salary as in effect immediately
prior to the Date of Termination, or (ii) if the Involuntary Termination occurs
after the first anniversary of the Effective Date, pay to the Employee during
the remaining term of this Agreement the Salary at the rate in effect
immediately prior to the Date of Termination and (iii) provide to the Employee
during the remaining term of this Agreement substantially the same group life
insurance, hospitalization, medical, dental, prescription drug and other health
benefits, and long-term disability insurance (if any) for the benefit of the
Employee and his dependents and beneficiaries who would have been eligible for
such benefits if the Employee had not suffered Involuntary Termination, on terms
substantially as favorable to the Employee, including amounts of coverage and
deductibles and other costs to him, as if he had not suffered Involuntary
Termination.  Notwithstanding the foregoing, if the taxable payments under
this Section 7(a) would extend over a period of time sufficient for such
payments not to be considered severance payments under Section 409A (and as such
considered deferred compensation), then the final payment that could be made
without causing the payments to be considered deferred compensation under
Section 409A shall include the present value of the remaining payments, with
such present value determined using the applicable discount rate used for
purposes of determining present value under Section 280G of the Code.
  (b)        Termination
for Cause . In the event of Termination for Cause, the Savings Bank
shall pay to the Employee the Salary and provide benefits under this Agreement
only through the Date of Termination, and shall have no further obligation to
the Employee under this Agreement.
  (c)        Voluntary
Termination . The Employee's employment may be voluntarily terminated
by the Employee at any time upon at least 90 days' written notice to the Savings
Bank or such shorter period as may be agreed upon between the Employee and the
Board of Directors. In the event of such voluntary termination, the Savings Bank
shall be obligated to continue to pay to the Employee the Salary and provide
benefits under this Agreement only through the Date of Termination, at the time
such payments are due, and shall have no further obligation to the Employee
under this Agreement.
  (d)        Change in
Control . In the event of the Employee’s Involuntary Termination
within 12 months after a Change in Control which occurs at any time following
the first anniversary of the Effective Date while the Employee is employed under
this Agreement, the Savings Bank shall (i) pay to the Employee in a lump sum in
cash within 25 business days after the Date of Termination an amount equal to
299% of the Employee's "base amount" as defined in Section 280G of the Code; and
(ii) provide to the Employee during the remaining term of this Agreement
substantially the same group life insurance, hospitalization, medical, dental,
prescription drug and other health benefits, and long-term disability insurance
(if any) for the benefit of the Employee and his dependents and beneficiaries
who would have been eligible for such benefits if the Employee had not suffered
Involuntary Termination, on terms substantially as favorable to the Employee,
including amounts of coverage and deductibles and other costs to him, as if he
had not suffered Involuntary Termination; provided, however, that no payment
shall be made under this Section 7(d) that would cause the Savings Bank to be
"undercapitalized" for purposes of 12 C.F.R. 565.4 or any
      
 successor
provision.
  (e)        Death . In the event of the death of the Employee while
employed under this Agreement and prior to any termination of employment, the
Savings Bank shall pay to the Employee's estate, or such person as the Employee
may have previously designated in writing, the Salary which was not previously
paid to the Employee and which he would have earned if he had continued to be
employed under this Agreement through the last day of the calendar month in
which the Employee died, together with the benefits provided hereunder through
such date.
  (f)         Disability . If the Employee becomes entitled to
benefits under the terms of the then-current disability plan, if any, of the
Savings Bank (the "Disability Plan") or becomes otherwise unable to fulfill his
duties under this Agreement, he shall be entitled to receive such group and
other disability benefits, if any, as are then provided by the Savings Bank for
executive employees. In the event of such disability, this Agreement shall not
be suspended, except that (i) the obligation to pay the Salary to the Employee
shall be reduced in accordance with the amount of disability income benefits
received by the Employee, if any, pursuant to this paragraph such that, on an
after-tax basis, the Employee shall realize from the sum of disability income
benefits and the Salary the same amount as he would realize on an after-tax
basis from the Salary if the obligation to pay the Salary were not reduced
pursuant to this Section 7(f); and (ii) upon a resolution adopted by a majority
of the disinterested members of the Board of Directors or the Committee, the
Savings Bank may discontinue payment of the Salary beginning six months
following a determination that the Employee has become entitled to benefits
under the Disability Plan or otherwise unable to fulfill his duties under this
Agreement. If the Employee’s disability does not constitute a disability within
the meaning of Section 409A, then payments under this Section 7(f) shall not
commence until the earlier of the Employee’s death or the sixth month
anniversary of the Employee’s Separation from Service, with any delayed payments
being made with the first permissible payment.
  (g)        Temporary
Suspension or Prohibition . If the Employee is suspended and/or
temporarily prohibited from participating in the conduct of the Savings Bank's
affairs by a notice served under Section 8(e)(3) or (g)(1) of the FDIA, 12
U.S.C. Section 1818(e)(3) and (g)(1), the Savings Bank's obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the Savings
Bank may in its discretion (i) pay the Employee all or part of the compensation
withheld while its obligations under this Agreement were suspended and (ii)
reinstate in whole or in part any of its obligations which were
suspended.
  (h)        Permanent
Suspension or Prohibition . If the Employee is removed and/or
permanently prohibited from participating in the conduct of the Savings Bank's
affairs by an order issued under Section 8(e)(4) or (g)(1) of the FDIA, 12
U.S.C. Section 1818(e)(4) and (g)(1), all obligations of the Savings Bank under
this Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
  (i)         Default of
the Savings Bank . If the Savings Bank is in default (as defined in
Section 3(x)(1) of the FDIA), all obligations under this Agreement shall
terminate as of the date of default, but this provision shall not affect any
vested rights of the contracting parties.
  (j)         Termination
by Regulators . All obligations under this Agreement shall be
terminated, except to the extent determined that continuation of this Agreement
is necessary for the continued operation of the Savings Bank: (1) by the
Director of the OTS (the "Director") or his or her designee, at the time the
FDIC enters into an agreement to provide assistance to or on behalf
of
      
 the Savings Bank
under the authority contained in Section 13(c) of the FDIA; or (2) by the
Director or his or her designee, at the time the Director or his or her designee
approves a supervisory merger to resolve problems related to operation of the
Savings Bank or when the Savings Bank is determined by the Director to be in an
unsafe or unsound condition. Any rights of the parties that have already vested,
however, shall not be affected by any such action.
  (k)        Reductions
of Benefits . Notwithstanding any other provision of this Agreement,
if payments and the value of benefits received or to be received under this
Agreement, together with any other amounts and the value of benefits received or
to be received by the Employee, would cause any amount to be nondeductible by
the Savings Bank or any of the Consolidated Subsidiaries for federal income tax
purposes pursuant to or by reason of Section 280G of the Code, then payments and
benefits under this Agreement shall be reduced (not less than zero) to the
extent necessary so as to maximize amounts and the value of benefits to be
received by the Employee without causing any amount to become nondeductible
pursuant to or by reason of Section 280G of the Code. The Employee shall
determine the allocation of such reduction among payments and benefits to the
Employee.
  (l)         Further
Reductions . Any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with 12 U.S.C. Section 1828(k) and FDIC regulation 12 C.F.R. Part 359, Golden
Parachute and Indemnification Payments.
  8.         Notice of
Termination . In the event that the Savings Bank desires to terminate
the employment of the Employee during the term of this Agreement, the Savings
Bank shall deliver to the Employee a written notice of termination, stating
whether such termination constitutes Termination for Cause or Involuntary
Termination, setting forth in reasonable detail the facts and circumstances that
are the basis for the termination, and specifying the date upon which employment
shall terminate, which date shall be at least 30 days after the date upon which
the notice is delivered, except in the case of Termination for Cause. In the
event that the Employee determines in good faith that he has experienced an
Involuntary Termination of his employment, he shall send a written notice to the
Savings Bank stating the circumstances that constitute such Involuntary
Termination and the date upon which his employment shall have ceased due to such
Involuntary Termination. In the event that the Employee desires to effect a
Voluntary Termination, he shall deliver a written notice to the Savings Bank,
stating the date upon which employment shall terminate, which date shall be at
least 90 days after the date upon which the notice is delivered, unless the
parties agree to a date sooner.
  9.         Attorneys'
Fees . The Savings Bank shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by the Employee
as a result of (i) the Employee's contesting or disputing any termination of
employment, or (ii) the Employee's seeking to obtain or enforce any right or
benefit provided by this Agreement or by any other plan or arrangement
maintained by the Savings Bank (or a successor) or the Consolidated Subsidiaries
under which the Employee is or may be entitled to receive benefits; provided
that the Savings Bank's obligation to pay such fees and expenses is subject to
the Employee's prevailing with respect to the matters in dispute in any action
initiated by the Employee or the Employee's having been determined to have acted
reasonably and in good faith with respect to any action initiated by the Savings
Bank.
      
   10.       No
Assignments .
  (a)        This Agreement is personal to each
of the parties hereto, and no party may assign or delegate any of its rights or
obligations hereunder without first obtaining the written consent of the other
party; provided however, that the Savings Bank shall require any successor or
assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) by an assumption agreement in form and substance satisfactory to the
Employee, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Savings Bank would be required to perform
it, if no such succession or assignment had taken place. Failure to obtain such
an assumption agreement prior to the effectiveness of any such succession or
assignment shall be a breach of this Agreement and shall entitle the Employee to
compensation and benefits from the Savings Bank in the same amount and on the
same terms as the compensation pursuant to Section 7(d) of this Agreement. For
purposes of implementing the provisions of this Section 10(a), the date on which
any such succession becomes effective shall be deemed the Date of
Termination.
  (b)        This Agreement and all rights of
the Employee hereunder shall inure to the benefit of and be enforceable by the
Employee's personal and legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
  11.       Notice . For the purposes of this Agreement, notices and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered or sent by
certified mail, return receipt requested, postage prepaid, to the Savings Bank
at its home office, to the attention of the Board of Directors with a copy to
the Secretary of the Savings Bank, or, if to the Employee, to such home or other
address as the Employee has most recently provided in writing to the Savings
Bank.
  12.       Amendments . No amendments or additions to this
Agreement shall be binding unless in writing and signed by both parties, except
as herein otherwise provided.
  13.       Headings . The headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.
  14.       Severability . The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions
hereof.
  15.       Governing
Law . This Agreement shall be governed by the laws of the State of
Idaho.
  16.       Arbitration . Any dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by arbitration
in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. The OTS may appear at any arbitration hearing but the decision is
not binding on the OTS.
  17.       Deferral of
Non-Deductible Compensation . In the event that the Employee's
aggregate compensation (including compensatory benefits which are deemed
remuneration for purposes of Section 162(m) of the Code) from the Savings Bank
and the Consolidated Subsidiaries
      
 
  for any calendar
year exceeds the maximum amount of compensation deductible by the Savings Bank
or any of the Consolidated Subsidiaries in any calendar year under Section
162(m) of the Code (the "maximum allowable amount"), then any such amount in
excess of the maximum allowable amount shall be mandatorily deferred with
interest thereon at 8% per annum to a calendar year such that the amount to be
paid to the Employee in such calendar year, including deferred amounts and
interest thereon, does not exceed the maximum allowable amount. Subject to the
foregoing, deferred amounts including interest thereon shall be payable at the
earliest time permissible.
  18.       Knowing and
Voluntary Agreement . Employee represents and agrees that he has read
this Agreement, understands its terms, and that he has the right to consult
counsel of choice and has either done so or knowingly waives the right to do so.
Employee also represents that he has had ample time to read and understand the
Agreement before executing it and that he enters into this Agreement without
duress or coercion from any source.
    * * * *
*
      
 
  IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
  THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.
   Attest:
                HOME
      FEDERAL BANCORP, INC._____________________________
                __________________________________________________________
                By:
      __________________________Its:
      __________________________EMPLOYEE_____________________________Daniel
      L. Stevens
  
  
  
 
 EXHIBIT
10.4
 
 Amended
Employment Agreement entered
 into
by Home Federal Bancorp, Inc. with Daniel L. Stevens
 AMENDED EMPLOYMENT
AGREEMENT
  THIS AMENDED EMPLOYMENT AGREEMENT (the
"Agreement") is made and entered into as of this 30th day of
January, 2008 by and includes the amendments made on December 21, 2007 between
Home Federal Bancorp, Inc., a Maryland corporation (the "Company"), and Daniel
L. Stevens (the "Employee"). References to the "Savings Bank" mean Home Federal
Bank.
  WHEREAS, the Employee is currently
serving as the Chairman of the Company;
  WHEREAS, the Employee has made and will
continue to make a major contribution to the success of the Company in the
position of Chairman;
  WHEREAS, the Board of Directors of the
Company (the "Board of Directors") recognizes that the possibility of a change
in control of the Savings Bank or the Company may occur and that such
possibility, and the uncertainty and questions which may arise among management,
may result in the departure or distraction of key management to the detriment of
the Company;
  WHEREAS, the Board of Directors
believes that it is in the best interests of the Company and its stockholders to
enter into this Agreement with the Employee in order to assure continuity of
management of the Company and its subsidiaries; and
  WHEREAS, the Board of Directors has
approved and authorized the execution of this Agreement with the Employee;
and
  NOW, THEREFORE, in consideration of the
foregoing and of the respective covenants and agreements of the parties herein,
it is AGREED as follows:
  1.           Definitions.
  (a)           "Change
in Control" means (i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Company, any Consolidated Subsidiaries (as hereinafter defined),
any person (as hereinabove defined) acting on behalf of the Company as
underwriter pursuant to an offering who is temporarily holding securities in
connection with such offering, any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or any corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities; (ii)
individuals who are members of the Board on the Effective Date (the "Incumbent
Board") cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the Effective Date whose
election was approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board or whose nomination for election by the Company's
stockholders was approved by the nominating committee serving under an Incumbent
Board or who was appointed as a result of a change at the direction of the
Office of Thrift Supervision ("OTS") or the Federal Deposit Insurance
Corporation ("FDIC"), shall be considered a member of the Incumbent Board; (iii)
the stockholders of the Company approve a merger or consolidation of the Company
with any other
   
  corporation,
other than (1) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (2) a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no person (as herein above defined) acquires more than 25% of the
combined voting power of the Company's then outstanding securities; or (iv) the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets (or any transaction having a similar
effect); provided that the term "Change in Control" shall not include an
acquisition of securities by an employee benefit plan of the Savings Bank or the
Company or a change in the composition of the Board at the direction of the OTS
or the FDIC.
  (b)           The
term "Consolidated Subsidiaries" means any subsidiary or subsidiaries of the
Company (or its successors) that are part of the affiliated group (as defined in
Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code"),
without regard to subsection (b) thereof) that includes the Company, including
but not limited to the Savings Bank.
  (c)           The
term "Date of Termination" means the date upon which the Employee experiences a
Separation from Service from the Company, as specified in a notice of
termination pursuant to Section 8 of this Agreement or the date a succession
becomes effective under Section 10.
  (d)           The
term "Effective Date" means December 6, 2004, the original effective date of
this Agreement.
  (e)           The
term "Involuntary Termination" means the Employee’s Separation from Service (i)
by the Company without the Employee's express written consent; or (ii) by the
Employee by reason of a material diminution of or interference with his duties,
responsibilities or benefits, including (without limitation), if the termination
of employment occurs within 30 days of any of the following actions unless
consented to in writing by the Employee: (1) a requirement that the Employee be
based at any place other than Nampa, Idaho, or within a radius of 35 miles from
the location of the Company's administrative offices as of the Effective Date,
except for reasonable travel on Company business; (2) a material demotion of the
Employee; (3) a material reduction in the number or seniority of personnel
reporting to the Employee or a material reduction in the frequency with which,
or in the nature of the matters with respect to which such personnel are to
report to the Employee, other than as part of a Company-wide reduction in staff;
(4) a reduction in the Employee's salary or a material adverse change in the
Employee's perquisites, benefits, contingent benefits or vacation, other than as
part of an overall program applied uniformly and with equitable effect to all
members of the senior management of the Company; (5) a material permanent
increase in the required hours of work or the workload of the Employee; or (6)
any action by the Board of Directors (or a board of directors of a successor of
the Company) removing the Employee from office. The term "Involuntary
Termination" does not include Termination for Cause, termination of employment
due to death or permanent disability pursuant to Section 7(f) of this Agreement,
retirement or suspension or temporary or permanent prohibition from
participation in the conduct of the Savings Bank's affairs under Section 8 of
the Federal Deposit Insurance Act ("FDIA").
   
  (f)           The term
“Section 409A” shall mean Section 409A of the Code and the regulations and
guidance of general applicability issued thereunder.
  (g)           The
term “Separation from Service” shall have the same meaning as in Section
409A.
  (h) The
terms “Termination for Cause” and “Terminated for Cause” mean the Employee’s
Separation from Service with  the Savings Bank because of the
Employee's personal dishonesty, incompetence, willful misconduct, breach of a
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, or material
breach of any provision of this Agreement. The Employee shall not be deemed to
have been Terminated for Cause unless and until there shall have been delivered
to the Employee a copy of a resolution, duly adopted by the Board of Directors
at a meeting of the Board duly called and held for such purpose (after
reasonable notice to the Employee and an opportunity for the Employee, together
with the Employee's counsel, to be heard before the Board), stating that in the
good faith opinion of the Board of Directors the Employee has engaged in conduct
described in the preceding sentence and specifying the particulars thereof in
detail.
  2.           Term.
The term of this Agreement shall be a period of three years commencing on the
Effective Date, subject to earlier termination as provided herein. Beginning on
the first anniversary of the Effective Date, and on each anniversary thereafter,
the term of this Agreement shall be extended for a period of one year in
addition to the then-remaining term, provided that (i) neither the Employee nor
the Company has given notice to the other in writing at least 90 days prior to
such anniversary that the term of this Agreement shall not be extended further;
and (ii) prior to such anniversary, the Board of Directors, or a committee of
the Board of Directors which has been delegated authority to act on such matters
by the Board of Directors ("Committee"), explicitly reviews and approves the
extension. Reference herein to the term of this Agreement shall refer to both
such initial term and such extended terms.
  3.           Employment.
The Employee shall be employed as the Chairman of the Company. As such, the
Employee shall render all services and possess the powers as are customarily
performed by persons situated in similar executive capacities, and shall have
such other powers and duties as the Board of Directors may prescribe from time
to time. The Employee shall also render services to the Company or any
subsidiary or subsidiaries of the Company or Savings Bank as requested by the
Company from time to time consistent with his executive position. The Employee
shall devote his best efforts and reasonable time and attention to the business
and affairs of the Company to the extent necessary to discharge his
responsibilities hereunder. The Employee may (i) serve on charitable or civic
boards or committees and, in addition, on such corporate boards as are approved
in a resolution adopted by a majority of the Board of Directors or the
Committee, which approval shall not be withheld unreasonably and (ii) manage
personal investments, so long as such activities do not interfere materially
with performance of his responsibilities hereunder.
  4.           Cash
Compensation.
  (a)           Salary.
The Company agrees to pay the Employee during the term of this Agreement a base
salary (the "Salary") in the annualized amount of $22,600. The Salary shall be
paid no less frequently than monthly and shall be subject to customary tax
withholding. The
   
  amount of
the Employee's Salary shall be increased (but shall not be decreased) from time
to time in accordance with the amounts of salary approved by the Board of
Directors or the Committee or the board of directors or the appropriate
committee of the Company after the Effective Date. The amount of the Salary
shall be reviewed by the Board of Directors or the Committee at least annually
during the term of this Agreement.
  (b)           Bonuses.
The Employee shall be entitled to participate in an equitable manner with all
other executive officers of the Company in such performance-based and
discretionary bonuses, if any, as are authorized and declared by the Board of
Directors or the Committee for executive officers.
  (c)           Expenses.
The Employee shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Employee in performing services under this
Agreement in accordance with the policies and procedures applicable to the
executive officers of the Company, provided that the Employee accounts for such
expenses as required under such policies and procedures.
  5.           Benefits.
  (a)           Participation
in Benefit Plans. The Employee shall be entitled to participate, to the
same extent as executive officers of the Company generally, in all plans of the
Company relating to pension, retirement, thrift, profit-sharing, savings, group
or other life insurance, hospitalization, medical and dental coverage, travel
and accident insurance, education, cash bonuses, and other retirement or
employee benefits or combinations thereof. In addition, the Employee shall be
entitled to be considered for benefits under all of the stock and stock option
related plans in which the Company's executive officers are eligible or become
eligible to participate.
  (b)           Fringe
Benefits. The Employee shall be eligible to participate in, and receive
benefits under, any other fringe benefit plans or perquisites which are or may
become generally available to the Company's executive officers, including but
not limited to supplemental retirement, deferred compensation program,
supplemental medical or life insurance plans, company cars, club dues, physical
examinations, financial planning and tax preparation
services.
  (c)           Vacations;
Leave. The Employee shall be entitled (i) to annual paid vacation in
accordance with the policies established by the Board of Directors or the
Committee for executive officers, and (ii) to voluntary leaves of absence, with
or without pay, from time to time at such times and upon such conditions as the
Board of Directors or the Committee may determine in its
discretion.
  6.           Termination
of Employment.
  (a)           Involuntary
Termination. The Board of Directors may terminate the Employee's
employment at any time, but, except in the case of Termination for Cause,
termination of employment shall not prejudice the Employee's right to
compensation or other benefits under this Agreement. ]n the event of Involuntary
Termination other than after a Change in Control which occurs during the term of
this Agreement, the Company shall (i) if the Involuntary Termination occurs
prior to the first anniversary of the Effective Date, pay to the
  
  Employee
a lump-sum severance amount equal to one year’s Salary as in effect immediately
prior to the Date of Termination, or (ii) if the Involuntary Termination occurs
after the first anniversary of the Effective Date, pay to the Employee during
the remaining term of this Agreement the Salary at the rate in effect
immediately prior to the Date of Termination and (iii) provide to the Employee
during the remaining term of this Agreement substantially the same group life
insurance, hospitalization, medical, dental, prescription drug and other health
benefits, and long-term disability insurance (if any) for the benefit of the
Employee and his dependents and beneficiaries who would have been eligible for
such benefits if the Employee had not suffered Involuntary Termination, on terms
substantially as favorable to the Employee, including amounts of coverage and
deductibles and other costs to him, as if he had not suffered Involuntary
Termination. Notwithstanding the foregoing, if the taxable payments under this
Section 7(a) would extend over a period of time sufficient for such payments not
to be considered severance payments under Section 409A (and as such considered
deferred compensation), then the final payment that could be made without
causing the payments to be considered deferred compensation under Section 409A
shall include the present value of the remaining payments, with such present
value determined using the applicable discount rate used for purposes of
determining present value under Section 280G of the Code.
 
  (b)           Termination
for Cause. In the event of Termination for Cause, the Company shall pay
to the Employee the Salary and provide benefits under this Agreement only
through the Date of Termination, and shall have no further obligation to the
Employee under this Agreement.
  (c)           Voluntary
Termination. The Employee's employment may be voluntarily terminated by
the Employee at any time upon at least 90 days' written notice to the Company or
such shorter period as may be agreed upon between the Employee and the Board of
Directors. In the event of such voluntary termination, the Company shall be
obligated to continue to pay to the Employee the Salary and provide benefits
under this Agreement only through the Date of Termination, at the time such
payments are due, and shall have no further obligation to the Employee under
this Agreement.
  (d)           Change
in Control. In the event of the Employee’s Involuntary Termination within
12 months after a Change in Control and which occurs at any time following the
first anniversary of the Effective Date while the Employee is employed under
this Agreement, the Company shall (i) pay to the Employee in a lump sum in cash
within 25 business days after the Date of Termination an amount equal to 299% of
the Employee's "base amount" as defined in Section 280G of the Code; and (ii)
provide to the Employee during the remaining term of this Agreement
substantially the same group life insurance, hospitalization, medical, dental,
prescription drug and other health benefits, and long-term disability insurance
(if any) for the benefit of the Employee and his dependents and beneficiaries
who would have been eligible for such benefits if the Employee had not suffered
Involuntary Termination, on terms substantially as favorable to the Employee,
including amounts of coverage and deductibles and other costs to him, as if he
had not suffered Involuntary Termination.
  (e)           Death.
In the event of the death of the Employee while employed under this Agreement
and prior to any termination of employment, the Company shall pay to the
Employee's estate, or such person as the Employee may have previously designated
in writing, the Salary which was not previously paid to the Employee and which
he would have earned if he
   
  had
continued to be employed under this Agreement through the last day of the
calendar month in which the Employee died, together with the benefits provided
hereunder through such date.
  (f)           Disability.
If the Employee becomes entitled to benefits under the terms of the then-current
disability plan, if any, of the Company (the "Disability Plan") or becomes
otherwise unable to fulfill his duties under this Agreement, he shall be
entitled to receive such group and other disability benefits, if any, as are
then provided by the Company for executive employees. In the event of such
disability, this Agreement shall not be suspended, except that (i) the
obligation to pay the Salary to the Employee shall be reduced in accordance with
the amount of disability income benefits received by the Employee, if any,
pursuant to this paragraph such that, on an after-tax basis, the Employee shall
realize from the sum of disability income benefits and the Salary the same
amount as he would realize on an after-tax basis from the Salary if the
obligation to pay the Salary were not reduced pursuant to this Section 7(f); and
(ii) upon a resolution adopted by a majority of the disinterested members of the
Board of Directors or the Committee, the Company may discontinue payment of the
Salary beginning six months following a determination that the Employee has
become entitled to benefits under the Disability Plan or otherwise unable to
fulfill his duties under this Agreement. If the Employee’s disability does not
constitute a disability within the meaning of Section 409A, then payments under
this Section 7(f) shall not commence until the earlier of the Employee’s death
or the sixth month anniversary of the Employee’s Separation from Service, with
any delayed payments being made with the first permissible
payment.
 (g)           Temporary
Suspension or Prohibition. If the Employee is suspended and/or
temporarily prohibited from participating in the conduct of the Savings Bank's
affairs by a notice served under Section 8(e)(3) or (g)(l) of the FDIA, 12
U.S.C. Section 1818(e)(3) and (g)(1), the Company's obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the Company
may in its discretion (i) pay the Employee all or part of the compensation
withheld while its obligations under this Agreement were suspended and (ii)
reinstate in whole or in part any of its obligations which were
suspended.
  (h)           Permanent
Suspension or Prohibition. If the Employee is removed and/or permanently
prohibited from participating in the conduct of the Savings Bank's affairs by an
order issued under Section 8(e)(4) or (g)(1) of the FDIA, 12 U.S.C. Section
1818(e)(4) and (g)(1), all obligations of the Company under this Agreement shall
terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.
  (i)           Default
of the Savings Bank. If the Savings Bank is in default (as defined in
Section 3(x)(1) of the FD]A), all obligations under this Agreement shall
terminate as of the date of default, but this provision shall not affect any
vested rights of the contracting parties.
  (j)           Termination
by Regulators. All obligations under this Agreement shall be terminated,
except to the extent determined that continuation of this Agreement is necessary
for the continued operation of the Savings Bank: (1) by the Director of the OTS
(the "Director") or his or her designee, at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Savings Bank under the
authority contained in Section 13(c) of the FDIA; or (2) by the Director or his
or her designee, at the time the Director or his or her designee approves a
supervisory merger to resolve problems related to operation of the Savings Bank
or when the
   
  Savings
Bank is determined by the Director to be in an unsafe or unsound condition. Any
rights of the parties that have already vested, however, shall not be affected
by any such action.
  (k)           Reductions
of Benefits. Notwithstanding any other provision of this Agreement, if
payments and the value of benefits received or to be received under this
Agreement, together with any other amounts and the value of benefits received or
to be received by the Employee, would cause any amount to be nondeductible by
the Company or any of the Consolidated Subsidiaries for federal income tax
purposes pursuant to or by reason of Section 280G of the Code, then payments and
benefits under this Agreement shall be reduced (not less than zero) to the
extent necessary so as to maximize amounts and the value of benefits to be
received by the Employee without causing any amount to become nondeductible
pursuant to or by reason of Section 280G of the Code. The Employee shall
determine the allocation of such reduction among payments and benefits to the
Employee.
  (l)           Further
Reductions. Any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with 12 U.S.C. Section 1828(k) and FDIC regulation 12 C.F.R. Part 359, Golden
Parachute and Indemnification Payments.
  8.           Notice
of Termination. In the event that the Company desires to terminate the
employment of the Employee during the term of this Agreement, the Company shall
deliver to the Employee a written notice of termination, stating whether such
termination constitutes Termination for Cause or Involuntary Termination,
setting forth in reasonable detail the facts and circumstances that are the
basis for the termination, and specifying the date upon which employment shall
terminate, which date shall be at least 30 days after the date upon which the
notice is delivered, except in the case of Termination for Cause. In the event
that the Employee determines in good faith that he has experienced an
Involuntary Termination of his employment, he shall send a written notice to the
Company stating the circumstances that constitute such Involuntary Termination
and the date upon which his employment shall have ceased due to such Involuntary
Termination. In the event that the Employee desires to effect a Voluntary
Termination, he shall deliver a written notice to the Company, stating the date
upon which employment shall terminate, which date shall be at least 90 days
after the date upon which the notice is delivered, unless the parties agree to a
date sooner.
  9.           Attorneys'
Fees. The Company shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by the Employee
as a result of (i) the Employee's contesting or disputing any termination of
employment, or (ii) the Employee's seeking to obtain or enforce any right or
benefit provided by this Agreement or by any other plan or arrangement
maintained by the Company (or a successor) or the Consolidated Subsidiaries
under which the Employee is or may be entitled to receive benefits; provided
that the Company's obligation to pay such fees and expenses is subject to the
Employee's prevailing with respect to the matters in dispute in any action
initiated by the Employee or the Employee's having been determined to have acted
reasonably and in good faith with respect to any action initiated by the
Company.
  10.           No
Assignments.
  (a)           This
Agreement is personal to each of the parties hereto, and no party may assign or
delegate any of its rights or obligations hereunder without first obtaining the
written
   
  consent
of the other party; provided, however, that the Company shall require any
successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) by an assumption agreement in form and substance
satisfactory to the Employee, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it, if no such succession or assignment had taken place.
Failure to obtain such an assumption agreement prior to the effectiveness of any
such succession or assignment shall be a breach of this Agreement and shall
entitle the Employee to compensation and benefits from the Company in the same
amount and on the same terms as the compensation pursuant to Section 7(d) of
this Agreement. For purposes of implementing the provisions of this Section
10(a), the date on which any such succession becomes effective shall be deemed
the Date of Termination.
  (b)           This
Agreement and all rights of the Employee hereunder shall inure to the benefit of
and be enforceable by the Employee's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.
  11.           Notice.
For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or sent by certified mail, return
receipt requested, postage prepaid, to the Company at its home office, to the
attention of the Board of Directors with a copy to the Secretary of the Company,
or, if to the Employee, to such home or other address as the Employee has most
recently provided in writing to the Company.
  12.           Amendments.
No amendments or additions to this Agreement shall be binding unless in writing
and signed by both parties, except as herein otherwise
provided.
  13.           Headings.
The headings used in this Agreement are included solely for convenience and
shall not affect, or be used in connection with, the interpretation of this
Agreement.
  14.           Severability.
The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
  15.           Governing
Law. This Agreement shall be governed by the laws of the State of
Idaho.
  16.           Arbitration.
Any dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. The OTS may appear at any
arbitration hearing but the decision is not binding on the
OTS.
  17.           Deferral
of Non-Deductible Compensation. In the event that the Employee's
aggregate compensation (including compensatory benefits which are deemed
remuneration for purposes of Section 162(m) of the Code) from the Company and
the Consolidated Subsidiaries for any calendar year exceeds the maximum amount
of compensation deductible by the Company or any of the Consolidated
Subsidiaries in any calendar year under Section 162(m) of the Code (the "maximum
allowable amount"), then any such amount in excess of the maximum
   
  allowable
amount shall be mandatorily deferred with interest thereon at 8% per annum to a
calendar year such that the amount to be paid to the Employee in such calendar
year, including deferred amounts and interest thereon, does not exceed the
maximum allowable amount. Subject to the foregoing, deferred amounts including
interest thereon shall be payable at the earliest time permissible.
  18.           Knowing
and Voluntary Agreement. Employee represents and agrees that he has read
this Agreement, understands its terms, and that he has the right to consult
counsel of choice and has either done so or knowingly waives the right to do so.
Employee also represents that he has had ample time to read and understand the
Agreement before executing it and that he enters into this Agreement without
duress or coercion from any source.
     
    IN WITNESS
WHEREOF, the parties have executed this Agreement as of the day and year first
above written.
  THIS AGREEMENT
CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE
PARTIES.
  
 Attest:
                  HOME
      FEDERAL BANCORP, INC._____________________________
                  __________________________________________________________
                  By:
      __________________________Its:
      __________________________EMPLOYEE_____________________________Daniel
      L. Stevens


EXHIBIT
31.1











Certification
of Chief Executive Officer Pursuant to


Section
302 of the Sarbanes-Oxley Act of 2002





I, Len E.
Williams, President and Chief Executive Officer of Home Federal Bancorp, Inc.,
certify that:





1.
            I
      have reviewed this Quarterly Report on Form 10-Q of Home Federal Bancorp,
      Inc.;





2.
            Based
      on my knowledge, this report does not contain any untrue statement of a
      material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were made, not misleading with respect to the period covered by this
      report;





3.
            Based
      on my knowledge, the financial statements, and other financial information
      included in this report, fairly present in all material respects the
      financial condition, results of operations and cash flows of the
      registrant as of, and for, the periods presented in this
      report;





4.
            The
      registrant’s other certifying officer(s) and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
      control over financial reporting (as defined in Exchange Act Rules
      13a-15(f) and 15d-15(f)) for the registrant and
  have:





(a)
            Designed
      such disclosure controls and procedures, or caused such disclosure
      controls and procedures to be designed under our supervision, to ensure
      that material information relating to the registrant, including its
      consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this quarterly report is
      being prepared;





(b)
            Designed
      such internal control over financial reporting, or caused such internal
      control over financial reporting to be designed under our supervision, to
      provide reasonable assurance regarding the reliability of financial
      reporting and the preparation of financial statements for external
      purposes in accordance with generally accepted accounting
      principles;





(c)
            Evaluated
      the effectiveness of the registrant’s disclosure controls and procedures
      and presented in this report our conclusions about the effectiveness of
      the disclosure controls and procedures, as of the end of the period
      covered by this report based on such evaluation;
  and





(d)
            Disclosed
      in this report any change in the registrant’s internal control over
      financial reporting that occurred during the registrant’s most recent
      fiscal quarter (the registrant’s fiscal fourth quarter in the case of an
      annual report) that has materially affected, or is reasonably likely to
      materially affect, the registrant’s internal control over financial
      reporting; and





5.
            The
      registrant’s other certifying officer(s) and I have disclosed, based on
      our most recent evaluation of internal control over financial reporting,
      to the registrant’s auditors and the audit committee of registrant’s board
      of directors (or persons performing the equivalent
    functions):





(a)
            All
      significant deficiencies and material weakness in the design or operation
      of internal control over financial reporting which are reasonably likely
      to adversely affect the registrant’s ability to record, process, summarize
      and report financial data information;
and





(b)
            Any
      fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant’s internal control
      over financial reporting.








Date:  May 9,
2008                                                                /s/ Len E.
Williams


Len E.
Williams


President and


Chief Executive
Officer








EXHIBIT
31.2











Certification
of Chief Financial Officer Pursuant to


Section
302 of the Sarbanes-Oxley Act of 2002





I, Robert
A. Schoelkoph, Chief Financial Officer of Home Federal Bancorp, Inc., certify
that:





1.
            I
      have reviewed this Quarterly Report on Form 10-Q of Home Federal Bancorp,
      Inc.;





2.
            Based
      on my knowledge, this report does not contain any untrue statement of a
      material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were made, not misleading with respect to the period covered by this
      report;





3.
            Based
      on my knowledge, the financial statements, and other financial information
      included in this report, fairly present in all material respects the
      financial condition, results of operations and cash flows of the
      registrant as of, and for, the periods presented in this
      report;





4.
            The
      registrant’s other certifying officer(s) and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
      control over financial reporting (as defined in Exchange Act Rules
      13a-15(f) and 15d-15(f)) for the registrant and
  have:





(a)
            Designed
      such disclosure controls and procedures, or caused such disclosure
      controls and procedures to be designed under our supervision, to ensure
      that material information relating to the registrant, including its
      consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this quarterly report is
      being prepared;





(b)
            Designed
      such internal control over financial reporting, or caused such internal
      control over financial reporting to be designed under our supervision, to
      provide reasonable assurance regarding the reliability of financial
      reporting and the preparation of financial statements for external
      purposes in accordance with generally accepted accounting
      principles;





(c)
            Evaluated
      the effectiveness of the registrant’s disclosure controls and procedures
      and presented in this report our conclusions about the effectiveness of
      the disclosure controls and procedures, as of the end of the period
      covered by this report based on such evaluation;
  and





(d)
            Disclosed
      in this report any change in the registrant’s internal control over
      financial reporting that occurred during the registrant’s most recent
      fiscal quarter (the registrant’s fiscal fourth quarter in the case of an
      annual report) that has materially affected, or is reasonably likely to
      materially affect, the registrant’s internal control over financial
      reporting; and





5.
            The
      registrant’s other certifying officer(s) and I have disclosed, based on
      our most recent evaluation of internal control over financial reporting,
      to the registrant’s auditors and the audit committee of registrant’s board
      of directors (or persons performing the equivalent
    functions):





(a)
            All
      significant deficiencies and material weakness in the design or operation
      of internal control over financial reporting which are reasonably likely
      to adversely affect the registrant’s ability to record, process, summarize
      and report financial data information;
and





(b)
            Any
      fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant’s internal control
      over financial reporting.








Date:  May 9,
2008                                                                /s/ Robert A.
Schoelkoph


Robert A.
Schoelkoph


Senior Vice President and


Chief Financial
Officer








EXHIBIT
32





Certification
of Chief Executive Officer and Chief Financial Officer of Home Federal Bancorp,
Inc.


Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002








The
undersigned hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 and in connection with this Quarterly Report on Form 10-Q,
that:





1.
            the
      Report fully complies with the requirements of Section 13(a) or 15(d) of
      the Securities Exchange Act of 1934, as amended;
  and





2.
            the
      information contained in the Report fairly presents, in all material
      respects, the financial condition and results of operations of the
      Company.










/s/Len
      E. Williams
            /s/Robert A.
      SchoelkophLen E.
      Williams
            Robert A.
      SchoelkophPresident
      and
            Senior Vice
      President andChief Executive
      Officer
            Chief Financial
      Officer







Dated:May 9,
2008