UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                         ------------------------------

                                   FORM 10-QSB
(Mark One)
[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

     FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

     FOR THE TRANSITION PERIOD FROM _________ TO _________

                         Commission File Number 0-50666

                          OSAGE FEDERAL FINANCIAL, INC.
--------------------------------------------------------------------------------
        (Exact name of Small Business Issuer as specified in its Charter)

         UNITED STATES                                        27-0080039
-------------------------------------                  ------------------------
(State or other jurisdiction of                              (IRS Employer
 incorporation or organization)                            Identification No.)

                 239 EAST MAIN STREET, PAWHUSKA, OKLAHOMA 74056
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (918) 287-2919
--------------------------------------------------------------------------------
                           (Issuer's telephone number)

                                 NOT APPLICABLE
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.
 X Yes     No
---    ---

     As of September 30, 2004,  there were 2,281,313  shares of the Registrant's
common stock, par value $.10 per share, outstanding.

     Transitional Small Business Issuer Disclosure Format (check one):
         Yes   X  No
     ---      ---

<PAGE>

                          OSAGE FEDERAL FINANCIAL, INC.

                               PAWHUSKA, OKLAHOMA

                                      INDEX

                                                                            PAGE
                                                                            ----

PART I.  FINANCIAL INFORMATION
------

Item 1.  Financial Statements

Consolidated Balance Sheets as of September 30, 2004 (Unaudited)
  and June 30, 2004                                                           3
Consolidated Statements of Income - (Unaudited) for the three months
  ended September 30, 2004 and 2003                                           4
Consolidated Statements of Cash Flows - (Unaudited) for the three
  months ended September 30, 2004 and 2003                                    5
Notes to Consolidated Financial Statements (Unaudited)                        7

Item 2.  Management's Discussion and Analysis or Plan of Operation            9

Item 3.  Controls and Procedures                                             13

PART II. OTHER INFORMATION
-------

Item 6.  Exhibits                                                            14

Signatures                                                                   15

                                       2
<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

                          OSAGE FEDERAL FINANCIAL, INC.
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS

                                                                                  SEPTEMBER 30,        JUNE 30,
                                                                                      2004               2004
                                                                                ------------------ ------------------
                                                                                   (unaudited)
<S>                                                                               <C>                <C>
    Cash and due from banks                                                       $      561,605     $      573,913
    Interest bearing deposits with banks                                                 896,374          1,019,078
                                                                                   -------------      -------------

        Cash and cash equivalents                                                      1,457,979          1,592,991

    Available-for-sale securities                                                     11,559,429         11,490,050
    Held-to-maturity securities                                                       14,311,275         15,711,809
    Mortgage loans held for sale                                                         579,025                 --
    Loans, net                                                                        58,409,860         55,495,751
    Premises and equipment                                                             1,295,710          1,318,857
    Foreclosed assets held for sale, net                                                   2,103                 --
    Interest receivable                                                                  340,655            319,708
    Federal Home Loan Bank stock, at cost                                                756,800            685,000
    Income taxes refundable                                                                   --             70,403
    Bank owned life insurance                                                          1,954,472          1,934,045
    Other                                                                                259,476            272,465
                                                                                   -------------      -------------

               Total assets                                                       $   90,926,784     $   88,891,079
                                                                                   =============      =============


LIABILITIES AND STOCKHOLDERS' EQUITY

    LIABILITIES
        Deposits                                                                  $   61,078,905     $   61,666,634
        Federal Home Loan Bank advances                                               15,000,000         12,600,000
        Advances from borrowers held in escrow                                           919,285            689,065
        Accrued interest and other liabilities                                           104,232            220,504
        Deferred income taxes                                                             99,539            112,982
                                                                                   -------------      -------------

               Total liabilities                                                      77,201,961         75,289,185
                                                                                   -------------      -------------

    COMMITMENTS AND CONTINGENCIES                                                             --                 --

    STOCKHOLDERS' EQUITY
        Preferred stock, $.10 par value (5,000,000 shares authorized;
          none outstanding)                                                                   --                 --
        Common stock, $.10 par value (20,000,000 shares authorized;
             2,281,313 shares issued and outstanding at September 30,
          2004 and June 30, 2004)                                                        228,131            228,131
        Additional paid-in capital                                                     6,188,947          6,188,947
        Retained earnings                                                              7,933,631          7,810,673
        Unallocated ESOP shares                                                         (547,510)          (547,510)
        Accumulated other comprehensive loss                                             (78,376)           (78,347)
                                                                                   --------------     --------------

               Total stockholders' equity                                             13,724,823         13,601,894
                                                                                   -------------      -------------

               Total liabilities and stockholders' equity                         $   90,926,784     $   88,891,079
                                                                                   =============      =============
</TABLE>

See Notes to Consolidated Financial Statements

                                       3
<PAGE>



                          OSAGE FEDERAL FINANCIAL, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                                                         THREE MONTHS ENDED
                                                                                           SEPTEMBER 30,
                                                                                --------------------------------
                                                                                    2004               2003
                                                                                ------------       -------------
<S>                                                                             <C>                <C>
 INTEREST INCOME                                                                           (unaudited)
     Loans                                                                     $     942,180      $      848,017
     Available-for-sale securities                                                    69,426              51,114
     Held-to-maturity securities                                                     148,141              84,690
     Deposits with other financial institutions                                        1,277              17,121
     Other                                                                             6,888               5,888
                                                                                ------------       -------------
        Total interest income                                                      1,167,912           1,006,830
                                                                                ------------       -------------

 INTEREST EXPENSE
     Deposits                                                                        333,689             354,342
     Advances from Federal Home Loan Bank                                            164,533             150,421
                                                                                ------------       -------------
        Total interest expense                                                       498,222             504,763
                                                                                ------------       -------------

 NET INTEREST INCOME                                                                 669,690             502,067
 Provision for loan losses                                                                --                  --
                                                                                ------------       -------------
 Net interest income after provision for loan losses                                 669,690             502,067
                                                                                ------------       -------------

 NONINTEREST INCOME
     Service charges on deposit accounts                                             100,824              88,411
     Other service charges and fees                                                   14,936              16,270
     Gain on sale of mortgage loans                                                   17,013             125,743
     Net loan servicing fees                                                           7,571                 835
     Other income                                                                     30,224               6,114
                                                                                ------------       -------------
        Total noninterest income                                                     170,568             237,373
                                                                                ------------       -------------

 NONINTEREST EXPENSE
     Salaries and employee benefits                                                  346,649             317,479
     Net occupancy expense                                                            73,850              72,426
     Deposit insurance premium                                                         2,548               2,403
     Other operating expenses                                                        176,205             169,762
                                                                                ------------       -------------
        Total noninterest expense                                                    599,252             562,070
                                                                                ------------       -------------

 INCOME BEFORE INCOME TAXES                                                          241,006             177,370

 PROVISION FOR INCOME TAXES                                                           83,828              67,497
                                                                                ------------       -------------

 NET INCOME                                                                    $     157,178      $      109,873
                                                                                ============       =============

 BASIC AND DILUTED EARNINGS PER SHARE                                          $        0.07                  NA
                                                                                ============       =============

 CASH DIVIDENDS PAID PER SHARE                                                 $        0.05                  NA
                                                                                ============       =============

</TABLE>

See Notes to Consolidated Financial Statements

                                       4
<PAGE>
                          OSAGE FEDERAL FINANCIAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                         THREE MONTHS ENDED
                                                                                           SEPTEMBER 30,
                                                                                -------------------------------------
                                                                                      2004               2003
                                                                                ------------------ ------------------
    OPERATING ACTIVITIES                                                                    (unaudited)
<S>                                                                             <C>                <C>
        Net income                                                              $       157,178    $        109,873
        Items not requiring (providing) cash
           Depreciation                                                                  31,284              34,705
           Amortization                                                                  30,711              35,380
           Deferred income taxes                                                        (13,425)             (5,986)
           Gain on sale of mortgage loans                                               (17,013)           (125,743)
           Gain on sale of foreclosed assets held for sale                                 (391)               (178)
           Dividends on available-for-sale mutual funds                                 (69,426)            (51,114)
           Stock dividends on Federal Home Loan Bank stock                               (6,800)                 --
           Increase in cash surrender value of bank owned life insurance                (20,427)                 --
        Originations of loans held for delivery against commitments                  (2,210,867)         (7,688,242)
        Proceeds from nonrecourse sale of loans held for delivery against
          commitments                                                                 1,642,066           9,025,841
        Changes in
           Interest receivable                                                          (20,947)              7,941
           Other assets                                                                    (268)            (18,003)
           Accrued interest and other liabilities                                       (45,869)             88,404
                                                                                  --------------     --------------

               Net cash provided by (used in) operating activities                     (544,194)          1,412,878
                                                                                  --------------     --------------

    INVESTING ACTIVITIES
        Net change in loans                                                          (2,932,520)           (893,880)
        Purchases of premises and equipment                                              (8,137)             (2,361)
        Purchase of Federal Home Loan Bank stock                                        (65,000)                 --
        Proceeds from sale of foreclosed assets                                          16,699               2,100
        Purchases of available-for-sale securities                                           --          (2,000,000)
        Proceeds from maturities and paydowns of held-to-maturity
          securities                                                                  1,389,869           3,569,863
        Purchases of held-to-maturity securities                                             --          (3,948,798)
                                                                                  -------------      --------------

               Net cash  used in investing activities                                (1,599,089)         (3,273,076)
                                                                                  --------------     --------------
</TABLE>

See Notes to Consolidated Financial Statements

                                       5
<PAGE>
                          OSAGE FEDERAL FINANCIAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (CONTINUED)
<TABLE>
<CAPTION>
                                                                                         THREE MONTHS ENDED
                                                                                           SEPTEMBER 30,
                                                                                -------------------------------------
                                                                                      2004               2003
                                                                                ------------------ ------------------
                                                                                            (Unaudited)
<S>                                                                             <C>                <C>
    FINANCING ACTIVITIES
        Net increase (decrease)  in demand, money market, NOW and savings
          deposits                                                              $      (497,394)   $        688,989
        Net decrease in certificates of deposit                                         (90,335)         (2,142,697)
        Net increase in Federal Home Loan Bank line of credit                           400,000                  --
        Proceeds from Federal Home Loan Bank advances                                 4,000,000                  --
        Repayments of Federal Home Loan Bank advances                                (2,000,000)                 --
        Net increase  in advances from borrowers held in escrow                         230,220              82,049
        Payment of dividends                                                            (34,220)                 --
                                                                                  -------------      --------------

               Net cash provided by (used in) financing activities                    2,008,271          (1,371,659)
                                                                                  -------------      ---------------

    DECREASE IN CASH AND CASH EQUIVALENTS                                              (135,012)         (3,231,857)

    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                    1,592,991          10,114,000
                                                                                  -------------      --------------

    CASH AND CASH EQUIVALENTS, END OF PERIOD                                    $     1,457,979    $      6,882,143
                                                                                  =============      ==============

    SUPPLEMENTAL CASH FLOWS INFORMATION

        Real estate and other assets acquired in settlement of loans            $        18,844    $          1,922

        Interest paid                                                           $       498,111    $        501,309

        Income taxes paid                                                       $            --    $         12,509

        Mutual fund dividends reinvested                                        $        69,426    $         51,114
</TABLE>

                                       6
<PAGE>

                          OSAGE FEDERAL FINANCIAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   OSAGE FEDERAL FINANCIAL, INC.

     Osage  Federal  Financial,  Inc.  (the  "Company")  was  incorporated  as a
     federally  chartered  corporation  for the purpose of becoming  the holding
     company of Osage  Federal Bank (the "Bank") in  connection  with the Bank's
     mutual  holding  company  reorganization.  On  March  31,  2004,  the  Bank
     completed the  reorganization  and became a wholly-owned  subsidiary of the
     Company.  The Company sold 684,394 shares to the public at $10.00 per share
     and issued  1,596,919  shares to Osage  Federal MHC. At September 30, 2004,
     the consolidated  financial statements of the Company included those of the
     Bank. All intercompany items have been eliminated. Prior to consummation of
     the reorganization, the Company had no assets or liabilities.  Accordingly,
     the Company's financial statements consist of those of the Bank for periods
     prior to September 30, 2004.

2.   BASIS OF PRESENTATION

     The accompanying  unaudited consolidated financial statements were prepared
     in  accordance  with  instructions  for Form 10-QSB and  therefore,  do not
     include  all  disclosures  necessary  for a  complete  presentation  of the
     statement of financial condition, statement of income and statement of cash
     flows in conformity with accounting  principles  generally  accepted in the
     United States of America.  However,  all adjustments (all of which are of a
     normal recurring nature) which are, in the opinion of management, necessary
     for the fair  presentation  of the interim  financial  statements have been
     included.  The  balance  sheet of the  Company as of June 30, 2004 has been
     derived  from the audited  balance  sheet of the Bank as of that date.  The
     statements of income for periods presented is not necessarily indicative of
     the results which may be expected for the entire year.

     Certain information and note disclosures normally included in the Company's
     annual  financial   statements   prepared  in  accordance  with  accounting
     principles  generally  accepted in the United  States of America  have been
     condensed or omitted.  These condensed financial  statements should be read
     in conjunction with the financial  statements and notes thereto included in
     the Company's Annual Report on Form 10-KSB for the year ended June 30, 2004
     filed with the Securities and Exchange Commission.

3.   EARNINGS PER SHARE

     Earnings  per share (EPS) were  computed  as follows for the quarter  ended
     September 30, 2004.  Since the Company did not have  stockholders  prior to
     April  1,  2004,  earlier  earnings  per  share  disclosures  would  not be
     meaningful:

         Net income                                            $ 157,178
                                                               ---------

         Average common shares outstanding                     2,226,562
                                                               ---------

         Basic and diluted earnings per share                  $    0.07
                                                               =========

                                       7
<PAGE>

4.   PLAN OF MUTUAL HOLDING COMPANY REORGANIZATION AND STOCK ISSUANCE

     On  November  24,  2003,  the Board of  Directors  of the Bank,  subject to
     regulatory  approval,  adopted a proposed  Plan of Mutual  Holding  Company
     Reorganization  and Stock Issuance (the "Plan") to convert from a federally
     chartered  mutual savings  association  into a federally  chartered  mutual
     holding  company  structure under the name "Osage Federal MHC" (the "Mutual
     Holding Company")  pursuant to the laws of the United States of America and
     the Rules and Regulations of the Office of Thrift  Supervision  ("OTS").  A
     principal part of the  reorganization  into the Mutual Holding  Company was
     the incorporation of a federally chartered stock holding company.  The Bank
     became a wholly owned subsidiary of a concurrently  formed holding company.
     The Plan  provided  that the holding  company  would offer  nontransferable
     subscription  rights to purchase common stock of the holding  company.  The
     rights  were  to  be  offered  first  to  eligible  account  holders,   the
     tax-qualified  employee stock benefit plans,  supplemental eligible account
     holders and other members.  Any shares remaining were then to be offered to
     the general  public.  All stock was issued to eligible  account holders and
     the tax-qualified employee stock benefit plan.

     Upon completion of the reorganization, the Mutual Holding Company owned 70%
     of the outstanding stock of the Company, with the remaining 30% held by the
     public.  The Company owned 100% of the Bank. The Bank may not pay dividends
     to the  Company  if the  dividends  would  cause the Bank to fall below the
     "well capitalized" capital threshold.

     The Company  contributed  approximately 50% of the proceeds of the offering
     to the Bank. The Company also lent its employee  stock  ownership plan cash
     to  enable  the plan to buy 8% of the  shares  issued  in the  offering  to
     persons  other than the MHC. The balance will be retained as the  Company's
     initial  capitalization  and may be used  for  general  business  purposes,
     including the purchase of investment securities, repurchasing shares of its
     common stock and paying  dividends.  The funds received by the Bank will be
     used  for  general  business  purposes,  including  originating  loans  and
     purchasing securities.

     Offering  costs were  deferred and deducted from the proceeds of the shares
     sold in the stock  offering.  If the offering had not been  completed,  all
     costs would have been charged to expense.  At September 30, 2004,  $426,900
     in such costs had been incurred.

5.   OTHER COMPREHENSIVE INCOME

     Other comprehensive income is comprised of the following:
<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED
                                                                           SEPTEMBER 30,
                                                                    ---------------------------
                                                                      2004               2003
                                                                    --------           --------
                                                                           (Unaudited)
<S>                                                                  <C>               <C>
    NET INCOME                                                       $157,178          $109,873
                                                                     --------          --------
    OTHER COMPREHENSIVE INCOME (LOSS)
        Unrealized gain (loss) on available-for-sale
          securities, net of income taxes                                 (29)          (33,806)
                                                                     --------          --------
    COMPREHENSIVE INCOME                                             $157,149          $ 76,067
                                                                     ========          ========
</TABLE>

                                       8
<PAGE>

6.   RECENT ACCOUNTING PRONOUNCEMENT

     The Emerging Issues Task Force (EITF) of the Financial Accounting Standards
     Board  (FASB)   previously   issued  EITF  Issue  03-1,   "The  Meaning  of
     Other-Than-Temporary    Impairment   and   Its   Application   to   Certain
     Investments."  EITF  Issue 03-1  provides  guidance  on the  meaning of the
     phrase other-than-temporary impairment and its application to several types
     of investments,  including debt securities  classified as  held-to-maturity
     and  available-for-sale  under FASB  Statement  No.  115,  "Accounting  for
     Certain  Investments  in Debt  and  Equity  Securities."  EITF  Issue  03-1
     attempts to better define whether impairment losses should be recognized on
     available-for-sale  securities prior to sale of the securities. It provides
     guidance for evaluating whether and when unrealized losses should be deemed
     "other-than-temporary,"  requiring immediate  recognition of losses through
     earnings.  In addition,  EITF 03-1 requires financial statement  disclosure
     for  impaired   securities  on  which  an  impairment  loss  has  not  been
     recognized,  including the amount of  unrealized  loss and the term of that
     impairment.  Certain  portions of EITF 03-1 have been  delayed in order for
     the FASB Staff to  provide  implementation  guidance  and  clarify  several
     issues that were raised by  interested  parties  during the public  comment
     period. The Company is monitoring developments related to this EITF Issue.

                                       9
<PAGE>

ITEM 2.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                              OR PLAN OF OPERATION

GENERAL

     The   following   discussion   and   analysis  is  intended  to  assist  in
understanding the financial condition and results of operations of the Company.

FORWARD-LOOKING STATEMENTS

     When used in this discussion and elsewhere in this Quarterly Report on Form
10-QSB,  the words or phrases  "will likely  result,"  "are  expected to," "will
continue," "is anticipated,"  "estimate,"  "project," or similar expressions are
intended  to  identify  "forward-looking  statements"  within the meaning of the
Private  Securities  Litigation Reform Act of 1995. The Company cautions readers
not to place undue reliance on any such forward-looking statements,  which speak
only as of the date made, and advises  readers that various  factors,  including
regional  and  national  economic  conditions,  substantial  changes in level of
market  interest  rates,  credit  and  other  risks of  lending  and  investment
activities and  competitive  and  regulatory  factors could affect the Company's
financial  performance  and could cause the Company's  actual results for future
periods to differ  materially from those  anticipated or projected.  The Company
does not  undertake  and  specifically  disclaims  any  obligation to update any
forward-looking statements to reflect occurrence of anticipated or unanticipated
events or circumstances after the date of such statements.

COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2004 AND JUNE 30, 2004

     Our total assets  increased  by $2.0 million to $90.9  million at September
30, 2004 from $88.9 million at June 30, 2004 primarily due to a $2.9 million, or
5.3% increase in loans receivable, net. Loans receivable, net increased to $58.4
million at September 30, 2004 from $55.5 million at June 30, 2004. This increase
in loans  receivable,  net  primarily  resulted  from a $1.1  million,  or 2.5%,
increase in one- to four-family mortgages. Other loans, including nonresidential
and land loans,  increased $1.1 million,  or 21.1%, to $6.1 million at September
30, 2004 from $5.0 million at June 30, 2004. A significant part of this increase
was a $550,000 loan made to a local church. Loans held for sale were $579,000 at
September  30, 2004.  There were no loans held for sale at June 30, 2004. We are
selling some of our one- to four-family  loans in the secondary  market where we
anticipate the borrower will be in the home for a long period of time.  Cash and
cash equivalents  decreased to $1.5 million (consisting primarily of our Federal
Home Loan Bank ("FHLB")  demand account) at September 30, 2004 from $1.6 million
at June 30, 2004. Total  securities  decreased to $25.9 million at September 30,
2004 from $27.2 million at June 30, 2004, reflecting primarily a $1.4 million or
8.9%  decrease  in  collateralized   mortgage  obligations  and  mortgage-backed
securities from normal paydowns.

     Our total  liabilities  increased  $1.9  million,  or 2.5% mostly due to an
increase in FHLB  advances to $15.0  million at September  30, 2004,  from $12.6
million at June 30, 2004, a $2.4 million, or 19.0% increase.  Deposits decreased
$590,000 to $61.1 million at September 30, 2004. A $1.4 million decline in money
market savings  accounts was partially  offset by a $1.0 million increase in NOW
and  non-interest-bearing  accounts.  The money market savings  decline had been
anticipated,  and is a result of disbursement of public funds on local projects.
There  have also been  transfers  of  balances  to our new  high-yield  checking
account.  There were small  declines in  certificates  of deposit  and  passbook
savings accounts.

                                       10
<PAGE>

     Stockholders'  equity increased  $123,000 to $13.7 million at September 30,
2004 from $13.6  million at June 30, 2004,  primarily  due to income of $157,000
for the three months ended  September 30, 2004. The Company paid a cash dividend
of $0.05 per share to stockholders other than Osage Federal MHC, or $34,000,  in
the quarter ending September 30, 2004.

COMPARISON  OF OPERATING  RESULTS FOR THE THREE MONTHS ENDED  SEPTEMBER 30, 2004
AND 2003

     GENERAL.  Net income for the three  months  ended  September  30,  2004 was
$157,000,  a $47,000, or 43.1%,  increase compared to net income of $110,000 for
the three months ended  September 30, 2003. The increase in net income  resulted
mainly from an increase in net interest  income,  partly offset by a decrease in
noninterest income and an increase in noninterest expense.

     INTEREST INCOME. Total interest income increased by $161,000,  or 16.0%, to
$1.2 million for the three months ended September 30, 2004 from $1.0 million for
the same period in 2003  primarily  due to a 15 basis point  increase in average
yield on interest-earning assets, The yield on earning assets for the period was
5.39%  compared  to a yield of 5.24% in the same  period  in 2003.  The  average
balance of total interest-earning  assets increased $10.0 million from the three
months ended September 30, 2003.

     The primary  factor for the increase in interest  income was a $94,000,  or
11.1%, increase in interest from loans. Average loans increased $9.4 million, or
19.6%, from $48.0 million in 2003 to $57.4 million in 2004. Partially offsetting
this balance  change was a 46 basis point  decline in the average yield on loans
to 6.54% for the 2004 period from 7.00% in the 2003 period, reflecting decreased
market rates of interest and repayments of higher yielding mortgages.

     Our average investment portfolio and cash investments totaled $28.2 million
for the three months ended  September 30, 2004, a $622,000 or 2.3% increase from
the same  period  in 2003.  The  yield on these  investments  improved  to 3.09%
compared to 2.20% in 2003. This yield increase is attributable to investing most
excess cash in mortgage-backed  securities,  which typically earn a higher yield
than cash investments.

     INTEREST  EXPENSE.  Total interest expense  decreased  $7,000,  or 1.3%, to
$498,000  for the three months ended  September  30, 2004 from  $505,000 for the
three months ended September 30, 2003. The decrease in interest expense resulted
from  a 30  basis  point  decrease  in  the  average  cost  of  interest-bearing
liabilities partially offset by a $6.4 million, or 9.7%, increase in the average
balance,  to $72.6 million for the 2004 period compared to $66.2 million for the
2003 period.  The decrease in the average cost of  interest-bearing  liabilities
was a result of the  continued  decline in market rates of interest  during 2004
and 2003 and was also  attributable in part to a $1.4 million,  or 3.8% decrease
in the average balance of certificates of deposit, to $34.9 million for the 2004
period  from $36.3  million  for the 2003  period.  The  decrease in the average
balance of  certificates  of  deposit  was offset by  increases  in the  average
balances of all other deposit  categories  except savings.  The primary increase
was in money  market  accounts,  for which the average  balance  increased  $4.1
million,  or 49.4%,  to $12.4  million for the 2004 period from $8.3 million for
the 2003 period.  The concentration of the increase in average  interest-bearing
liabilities in the money market accounts,  which are lower cost liabilities than
certificates of deposit,  resulted in a change in the mix of the deposit base to
favor a lower cost of funds.  Consumers have generally been reluctant to lock in
current  rates on  certificates  of  deposit,  and in many cases have chosen the
liquidity of money market savings accounts instead.

     Interest  expense on FHLB advances  increased  $14,000 for the three months
ended September 30, 2004, or 9.4%,  compared to the three months ended September
30,  2003,  reflecting  an increase in the average  balance of advances to $13.8
million for the 2004 period from $11.0  million for the 2003  period,  partially
offset by a 67 basis point decrease in the average cost.

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<PAGE>

     NET INTEREST INCOME.  Net interest income increased by $168,000,  or 33.4%,
to $670,000 for the three months ended  September 30, 2004 from $502,000 for the
three months ended September 30, 2003. The net interest rate spread increased to
2.66% for the 2004 period from 2.21% for the 2003 period, while the net interest
margin increased to 3.09% from 2.61%. The increases in spread and margin reflect
our  retention  of  some  one-  to  four-family  mortgages,   and  reducing  our
lower-yielding balances at depository institutions.

     PROVISION  FOR LOAN LOSSES.  There were no  provisions  for loan losses for
either the three months ended  September 30, 2004 or 2003.  There were less than
$1,000 of charge-offs  and no recoveries in the three months ended September 30,
2004, and no  charge-offs or recoveries in the three months ended  September 30,
2003. Based on our  stratification  of the loan portfolios using historical loss
factors and other data,  management  believes that the recorded  allowance would
cover both known and inherent  losses in the  portfolio  that were both probable
and estimable.

     The evaluation of the level of loan loss allowance is inherently subjective
as it requires  estimates that are  susceptible to significant  revision as more
information  becomes  available  or as future  events  change.  The level of the
allowance  is based on  estimates  and the  ultimate  losses may vary from these
estimates.  The allowance for loan losses was $408,000 at September 30, 2004 and
$409,000 at September 30, 2003,  and as a percentage of total loans  outstanding
was 0.68%. and 0.83% at September 30, 2004 and 2003, respectively.  The ratio is
mainly reflective of the increase in total loans outstanding.

     Management assesses the allowance for loan losses monthly. While management
uses available information to estimate losses on loans, loan loss provisions may
be necessary based on changes in economic  conditions.  In addition,  regulatory
agencies, as an integral part of their examination process,  periodically review
the allowance  for loan losses and may require the bank to recognize  additional
provisions based on their judgment of information  available to them at the time
of their examination. The allowance for loan losses as of September 30, 2004 was
maintained at a level that represented  management's  best estimate of losses in
the loan  portfolio  to the  extent  they  were  both  probable  and  reasonably
estimable. However, there can be no assurance that the level of loan losses will
be sufficient to offset any future loan losses.

     NONINTEREST INCOME.  Noninterest income decreased to $171,000 for the three
months  ended  September  30,  2004 from  $237,000  for the three  months  ended
September 30, 2003. There were $17,000 of gains on the sale of mortgages for the
three months ended September 30, 2004 compared to $126,000 of gains recorded for
the three  months  ended  September  30,  2003.  Due to our  additional  capital
received in the mutual holding company reorganization,  we have made a strategic
decision to retain most of our originated  mortgages,  but we periodically  sell
those  loans that we  anticipate  will have  longer  lives.  By  retaining  most
mortgages,  we have increased our net interest  margin.  Net loan servicing fees
increased  $7,000 for the two  periods,  due to lower  amortization  of mortgage
servicing  rights.  In the  prior  year's  quarter,  we were  amortizing  a more
significant amount of mortgage servicing rights that we had recorded on loans we
sold to Freddie Mac, due to faster  paydowns These gradually  became  completely
amortized,  reducing our current expense. Other non-interest income increased to
$30,000 for the three months ended September 30, 2004 compared to $6,000 for the
three months ended  September 30, 2003. We began  recognizing  income related to
the net change in the cash surrender  value of bank-owned life insurance that we
purchased in the third  quarter of fiscal 2004.  This income was $20,000 for the
current quarter.

     NONINTEREST EXPENSE.  Noninterest expense was $599,000 for the three months
ended September 30, 2004,  increasing $37,000 from $562,000 for the three months
ended  September 30, 2003.  Salaries and benefits  increased  $29,000,  or 9.2%.
Normal  year-end salary  increases  accounted for  approximately  $6,000 of this
change,  and benefit expense  associated with a deferred  compensation  plan was
$15,000.

                                       12
<PAGE>

This  expense was  recognized  for the first time in the third  quarter of 2004.
Additional  expense of $7,000 for the employee stock ownership plan was recorded
this quarter. Other operating expenses increased $6,000 primarily as a result of
a $19,000 increase in audit and other SEC filing expenses, partially offset by a
decrease in loan expense of $8,000 due to lower fees paid to Freddie Mac.

     Management  expects  increased  expenses  in the  future as a result of the
establishment  of the employee  stock  ownership  plan and the  potential  stock
benefit plans, as well as increased costs associated with being a public company
such as periodic  reporting,  annual meeting materials,  retention of a transfer
agent, and professional fees.

     PROVISION  FOR INCOME  TAXES.  The  provision  for income  taxes  increased
$16,000,  or 24.2%,  reflecting an increase in pretax income.  The effective tax
rate was 35% for the three months  ended  September  30,  2004,  and 38% for the
three months ended  September  30, 2003.  The decline in our  effective tax rate
primarily  reflects  income  attributable  to the increase in the cash surrender
value of  bank-owned  life  insurance  which is not  treated  as income  for tax
purposes.

LIQUIDITY AND CAPITAL RESOURCES

     We are required to have enough investments that qualify as liquid assets in
order to  maintain  sufficient  liquidity  to  ensure a safe and  sound  banking
operation. Liquidity may increase or decrease depending upon the availability of
funds and comparative  yields on investments in relation to the return on loans.
Historically,  we have  maintained  liquid  assets above  levels  believed to be
adequate to meet the  requirements  of normal  operations,  including  potential
deposit  outflows.  Cash flow projections are regularly  reviewed and updated to
assure that adequate liquidity is maintained.

     Our liquidity,  represented by cash and cash  equivalents,  is a product of
our operating,  investing and financing activities. Our primary sources of funds
are deposits,  scheduled  payments,  prepayments  and  maturities of outstanding
loans and mortgage-backed  securities,  maturities of investment  securities and
other short-term investments and funds provided from operations. While scheduled
payments  from the  amortization  of loans and  mortgage-backed  securities  and
maturing  investment  securities  and  short-term   investments  are  relatively
predictable  sources of funds,  deposit flows and loan  prepayments  are greatly
influenced by general interest rates,  economic  conditions and competition.  In
addition,  we invest excess funds in short-term  interest-earning  assets, which
provide  liquidity to meet lending  requirements.  We also generate cash through
borrowings.  We utilize FHLB advances to leverage our capital base and provide a
portion of the funding  needed to manage the interest rate risk presented by our
core business of attracting and retaining  retail  deposits to fund mortgage and
consumer loans. On March 31, 2004, we raised additional capital of $5.9 million,
net of a $548,000  loan made to the Osage  Federal  Employees'  Stock  Ownership
Plan,  and  $100,000  paid  to  capitalize  the  Mutual  Holding  Company.  This
additional capital was originally invested in mortgage-backed securities.

     Liquidity  management  is both a daily and  long-term  function of business
management.  Excess  liquidity is generally  invested in short-term  investments
such  as  overnight   deposits,   mutual  funds,  and  collateralized   mortgage
obligations.  On a longer term basis,  we  maintain a strategy of  investing  in
various loan products. We use our sources of funds primarily to meet our ongoing
commitments, to pay maturing certificates of deposit and savings withdrawals, to
fund  loan  commitments  and  to  maintain  our  portfolio  of   mortgage-backed
securities and investment securities.  At September 30, 2004, the total approved
loan origination  commitments  outstanding amounted to $2.7 million. At the same
date,  construction  loans in process were $1.5 million.  We had  commitments to
sell loans to Freddie Mac of $1.2 million  Certificates of deposit  scheduled to
mature  in one  year or less at  September  30,  2004,  totaled  $18.0  million.
Although  the  average  cost of  deposits  decreased  throughout  2003 and 2004,
management's  policy is to maintain deposit rates at levels that are competitive
with other local financial  institutions.


                                       13
<PAGE>

Based on the competitive rates and on historical experience, management believes
that a significant  portion of maturing deposits will remain with Osage Federal.
In addition, at September 30, 2004, our total collateralized borrowing limit was
$37.6 million of which we had $15.0 million  outstanding,  giving us the ability
at September  30, 2004 to borrow an  additional  $22.6  million from the FHLB of
Topeka as a funding source to meet commitments and for liquidity purposes.

ITEM 3.  CONTROLS AND PROCEDURES

The Company's  management  evaluated,  with the  participation  of the Company's
Chief Executive  Officer and Chief Financial  Officer,  the effectiveness of the
Company's  disclosure  controls  and  procedures,  as of the  end of the  period
covered by this report.  Based on that evaluation,  the Chief Executive  Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective to ensure that information  required to be disclosed by
the  Company  in the  reports  that it files or  submits  under  the  Securities
Exchange Act of 1934 is recorded, processed,  summarized and reported within the
time periods  specified in the  Securities and Exchange  Commission's  rules and
forms.

There were no changes in the Company's internal control over financial reporting
that occurred  during the  Company's  last fiscal  quarter that have  materially
affected,  or are reasonably likely to materially affect, the Company's internal
control over financial reporting.

                                       14
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 6.  EXHIBITS

         The following  exhibits are either being filed with or  incorporated by
reference in this quarterly report on Form 10-QSB:

         NUMBER   DESCRIPTION
         3(i)     Articles of Incorporation * 3(ii) Bylaws *
         4        Form of Common Stock Certificate *
         10.1     Executive Salary Continuation Plan and Split Dollar Agreements
                     with Mark S. White**
         10.2     Executive Salary Continuation Plan and Split Dollar Agreements
                     with Richard Trolinger**
         10.3     Executive Salary Continuation Plan and Split Dollar Agreements
                     with Martha Hayes**
         10.4     Executive Salary Continuation Plan and Split Dollar Agreements
                     with Sue Allen Smith**
         10.5     Director Supplemental Income Plan and Split Dollar Agreements
                     with Mark A. Formby**
         10.6     Director Supplemental Income Plan and Split Dollar Agreements
                     with Harvey Payne**
         10.7     Director Supplemental Income Plan and Split Dollar Agreements
                     with Gary Strahan**
         31.1     Rule 13a-14(a)/15d-14(a) Certification of Chief Executive
                     Officer
         31.2     Rule 13a-14(a)/15d-14(a) Certification of Chief Financial
                     Officer
         32       Section 1350 Certification
         ---------------
         *  Incorporated  by  reference  from  the   Registrant's   Registration
            Statement  on Form  SB-2  (File No.  333-111219).
         ** Incorporated  by reference from the  Quarterly Report on Form 10-QSB
            for the  Quarter Ended March 31, 2004.


                                       15
<PAGE>
                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                            OSAGE FEDERAL FINANCIAL, INC.



Date: November 15, 2004             /s/ Mark S. White
                                    -------------------------------------------
                                    Mark S. White, President
                                    (Duly Authorized Representative)


Date: November 15, 2004             /s/ Sue Allen Smith
                                    --------------------------------------------
                                    Sue Allen Smith, Vice President
                                    (Principal Financial Officer)


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