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 MARCH 31, 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 March 31,  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 March 31, 2004 (Unaudited) and
June 30, 2003                                                                 3

Consolidated  Statements of Income -  (Unaudited)  for the three
and nine months ended March 31, 2004 and 2003                                 4

Consolidated Statements of Cash Flows - (Unaudited) for the nine
months ended March 31, 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                                             15

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

Item 2.  Changes in Securities and Small Business Issuer Purchases of
         Equity Securities                                                   16

Item 6.  Exhibits and Reports on Form 8-K                                    16

Signatures                                                                   17

                                       2
<PAGE>
ITEM 1.  FINANCIAL STATEMENTS

                          OSAGE FEDERAL FINANCIAL, INC.
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                            MARCH 31, 2004          JUNE 30, 2003
                                                                            ---------------         -------------
                                                                             (Unaudited)
<S>                                                                        <C>                     <C>
ASSETS
    Cash and due from banks                                                $        600,155        $      450,313
    Interest bearing deposits with banks                                          7,937,356             9,663,687
                                                                            ---------------         -------------

        Cash and cash equivalents                                                 8,537,511            10,114,000

    Available-for-sale securities                                                11,496,019             9,375,361
    Held-to-maturity securities                                                  16,602,961             8,598,852
    Mortgage loans held for sale                                                         --             1,280,600
    Loans, net                                                                   50,962,002            46,342,323
    Premises and equipment                                                        1,339,778             1,386,294
    Foreclosed assets held for sale, net                                            100,433               117,938
    Interest receivable                                                             299,136               292,190
    Federal Home Loan Bank stock, at cost                                           679,100               667,500
    Income taxes refundable                                                          58,637                 9,629
    Other                                                                         2,195,586               338,211
                                                                            ---------------         -------------

               Total assets                                                $     92,271,163        $   78,522,898
                                                                            ===============         =============

 LIABILITIES AND STOCKHOLDERS' EQUITY
    LIABILITIES
        Deposits                                                           $     67,160,419        $   58,833,435
        Federal Home Loan Bank advances                                          10,000,000            11,000,000
        Advances from borrowers held in escrow                                      692,242               795,604
        Accrued interest and other liabilities                                      746,672               154,818
        Deferred income taxes                                                       146,162               198,380
                                                                            ---------------         -------------

               Total liabilities                                                 78,745,495            70,982,237
                                                                            ---------------         -------------

    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 outstanding at March 31,
          2004; none outstanding at June 30, 2003)                                  228,131                    --
        Additional paid-in capital                                                6,188,947                    --
        Retained earnings                                                         7,691,152             7,541,946
        Accumulated other comprehensive loss                                        (35,052)               (1,285)
        Less:
          Unallocated ESOP shares                                                  (547,510)                   --
                                                                            ---------------         -------------
               Total stockholders' equity                                        13,525,668             7,540,661
                                                                            ---------------         -------------

               Total liabilities and stockholders' equity                  $     92,271,163        $   78,522,898
                                                                            ===============         =============
</TABLE>

See Notes to Consolidated Financial Statements

                                       3
<PAGE>
                          OSAGE FEDERAL FINANCIAL, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED                   NINE MONTHS ENDED
                                                            MARCH 31,                           MARCH 31,
                                                ----------------------------------    -------------------------------
                                                      2004             2003                2004            2003
                                                ----------------- ----------------    ---------------- --------------
                                                           (Unaudited)                         (Unaudited)
<S>                                                <C>              <C>                 <C>              <C>
    INTEREST INCOME
        Loans                                      $   842,973      $    861,712        $  2,521,223     $ 2,849,530
        Available-for-sale securities                   62,541            53,076             175,122         170,990
        Held-to-maturity securities                    117,522            88,985             292,514         323,355
        Deposits with other financial
          institutions                                   8,272            32,247              35,121          85,074
        Other                                            5,859             5,760              17,636          20,061
                                                   -----------       -----------         -----------      ----------
                Total interest income                1,037,167         1,041,780           3,041,616       3,449,010
                                                   -----------       -----------         -----------      ----------
    INTEREST EXPENSE
        Deposits                                       346,669           416,484           1,034,630       1,342,767
        Advances from Federal Home Loan
          Bank                                         130,716           150,750             425,590         495,841
                                                   -----------       -----------         -----------      ----------
                Total interest expense                 477,385           567,234           1,460,220       1,838,608
                                                   -----------       -----------         -----------      ----------
    NET INTEREST INCOME                                559,782           474,546           1,581,396       1,610,402
    Provision for loan losses                               --                --                  --              --
                                                   -----------       -----------         -----------      ----------
    Net interest income after provision
       for loan losses                                 559,782           474,546           1,581,396       1,610,402
                                                   -----------       -----------         -----------      ----------
    NONINTEREST INCOME
        Service charges on deposit
          accounts                                      94,548            85,418             275,539         270,380
        Other service charges and fees                  17,873            16,191              52,126          47,793
        Gain on sale of mortgage loans                      --            88,423             143,605         374,109
        Net loan servicing fees                          8,112            (8,603)             15,912         (11,346)
        Other income                                    23,412             6,178              35,004          25,149
                                                   -----------       -----------         -----------      ----------
                Total noninterest income               143,945           187,607             522,186         706,085
                                                   -----------       -----------         -----------      ----------
    NONINTEREST EXPENSE
        Salaries and employee benefits                 328,875           303,561             958,614         905,447
        Net occupancy expense                           75,239            73,647             221,763         243,710
        Deposit insurance premium                        2,206             2,478               6,835           7,477
        Other operating expenses                       174,653           167,796             521,634         476,109
                                                   -----------       -----------         -----------      ----------
                Total noninterest expense              580,973           547,482           1,708,846       1,632,743
                                                   -----------       -----------         -----------      ----------
    INCOME BEFORE INCOME TAXES                         122,754           114,671             394,736         683,744
    PROVISION FOR INCOME TAXES                          41,699            43,977             145,530         260,122
                                                   -----------       -----------         -----------      ----------
    NET INCOME                                    $     81,055      $     70,694        $    249,206     $   423,622
                                                   ===========       ============        ===========      ==========
</TABLE>

See Notes to Consolidated Financial Statements

                                       4
<PAGE>
                          OSAGE FEDERAL FINANCIAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                         NINE MONTHS ENDED
                                                                                             MARCH 31,
                                                                                  -------------------------------
                                                                                       2004              2003
                                                                                  -------------    --------------
                                                                                             (Unaudited)
<S>                                                                                 <C>              <C>
    OPERATING ACTIVITIES
        Net income                                                                  $   249,206      $    423,622
        Items not requiring (providing) cash
           Depreciation                                                                  99,150           130,442
           Amortization                                                                 100,791           100,749
           Deferred income taxes                                                        (30,163)           17,867
           Gain on sale of mortgage loans                                              (143,605)         (374,109)
           Gain (loss) on sale of foreclosed assets held for sale                           552            (6,013)
           Gain on disposal of premises and equipment                                    (4,200)               --
           Dividends on available-for-sale mutual funds                                (175,122)         (170,990)
              Stock dividends from Federal Home Loan Bank                               (11,600)               --
        Originations of loans held for delivery against commitments                  (8,583,042)      (20,777,867)
        Proceeds from nonrecourse sale of loans held for delivery against
          commitments                                                                 9,992,359        20,325,180
        Changes in
           Interest receivable                                                           (6,946)           75,939
           Other assets                                                                 (64,104)           (4,558)
           Accrued interest and other liabilities                                       600,125           285,218
                                                                                  -------------    --------------
               Net cash provided by operating activities                              2,023,401            25,480
                                                                                  -------------    --------------

    INVESTING ACTIVITIES
        Net change in loans                                                          (4,662,259)        6,699,920
        Purchases of premises and equipment                                             (52,634)         (118,758)
        Proceeds from sale of premises and equipment                                      4,200                --
        Proceeds from sale of foreclosed assets                                          59,533           117,363
        Purchases of available-for-sale securities                                   (2,000,000)       (2,000,000)
        Proceeds from maturities and paydowns of held-to-maturity securities          4,933,268         6,424,630
        Purchases of held-to-maturity securities                                    (12,961,570)       (6,040,103)
        Change in cash surrender value of bank-owned life insurance                     (13,618)               --
        Purchase of bank-owned life insurance                                        (1,900,000)               --
                                                                                  -------------    --------------
               Net cash provided by (used in) investing activities                  (16,593,080)        5,083,052
                                                                                  -------------    --------------
</TABLE>

See Notes to Consolidated Financial Statements

                                       5
<PAGE>
                          OSAGE FEDERAL FINANCIAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (CONTINUED)
<TABLE>
<CAPTION>
                                                                                          NINE MONTHS ENDED
                                                                                              MARCH 31,
                                                                                  ----------------------------------
                                                                                       2004              2003
                                                                                  ---------------- -----------------
                                                                                             (Unaudited)
<S>                                                                               <C>              <C>
    FINANCING ACTIVITIES
       Net increase in demand, money market, NOW and savings deposits             $   10,664,893   $      960,473
       Net increase (decrease) in certificates of deposit                             (2,337,909)         114,337
       Net decrease in Federal Home Loan Bank advances                                (1,000,000)              --
       Net increase (decrease) in advances from borrowers held in escrow                (103,362)         129,142
       Net proceeds from sale of common stock                                          5,769,568               --
                                                                                  --------------   --------------
               Net cash provided by financing activities                              12,993,190        1,203,952
                                                                                  --------------   --------------

    INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                  (1,576,489)       6,312,484

    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                    10,114,000        7,318,030
                                                                                  --------------   --------------

    CASH AND CASH EQUIVALENTS, END OF PERIOD                                      $    8,537,511   $   13,630,514
                                                                                   =============    =============

    SUPPLEMENTAL CASH FLOWS INFORMATION

       Real estate and other assets acquired in settlement of loans               $       42,580   $      139,617

       Interest paid                                                              $    1,451,369   $    1,840,239

       Income taxes paid                                                          $      226,059   $      289,391

       Mutual fund dividends reinvested                                           $      175,122   $      170,990
</TABLE>

    See Notes to Consolidated Financial Statements

                                       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  and sold  684,394  shares to the  public at $10.00 per
         share and issued  1,596,919  shares to Osage  Federal MHC. At March 31,
         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 March 31, 2004.

2.       BASIS OF PRESENTATION

         The  accompanying  unaudited  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, 2003 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  registration  statement
         filed with the Securities and Exchange Commission.

3.       EARNINGS PER SHARE

         The  Company  first  issued  stock to the  public  on March  31,  2004.
         Earnings  per  share  for the  quarter  ended  March  31,  2004 are not
         meaningful and are therefore not presented.

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

                                       7
<PAGE>

          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 up to 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 March 31,
          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                   NINE MONTHS ENDED
                                                              MARCH 31,                           MARCH 31,
                                                     ---------------------------          ------------------------
                                                      2004                2003               2004           2003
                                                     -------            --------          --------        --------
                                                           (Unaudited)                       (Unaudited)
<S>                                                    <C>               <C>              <C>             <C>
    NET INCOME                                         $81,055           $70,694          $249,206        $423,622
                                                       -------          --------          --------        --------
    OTHER COMPREHENSIVE INCOME (LOSS)
        Unrealized gain (loss) on
          available-for-sale securities,
             net of income taxes                            14            (5,155)          (33,767)           (663)
                                                      --------          ---------         ---------       ---------
    COMPREHENSIVE INCOME                               $81,069           $65,539          $215,439        $422,959
                                                       =======           ========         ========        ========
</TABLE>

                                       8
<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 MARCH 31, 2004 AND JUNE 30, 2003

     Our total assets  increased by $13.7  million to $92.3 million at March 31,
2004 from $78.5 million at June 30, 2003  primarily  due to an $8.0 million,  or
93.1% increase in  held-to-maturity  securities,  and a $4.6 million,  or 10.0 %
increase in loans  receivable,  net.  Loans  receivable,  net increased to $51.0
million at March 31, 2004 from $46.3 million at June 30, 2003.  This increase in
loans receivable, net primarily resulted from a $4.0 million, or 11.8%, increase
in one- to  four-family  mortgages.  Partially  offsetting the increase in loans
receivable,  net was a 100%  decrease  in loans held for sale to $0 at March 31,
2004 from $1.3  million at June 30,  2003.  The  decline in loans  held-for-sale
reflects  a  strategic  change.  We  are  now  retaining  most  of our  one-  to
four-family loans in order to strengthen our net interest margin.  Cash and cash
equivalents  decreased to $8.5 million (consisting primarily of our Federal Home
Loan Bank  ("FHLB")  overnight  account) at March 31, 2004 from $10.1 million at
June 30, 2003.  Total  securities  increased to $28.1  million at March 31, 2004
from $18.0 million at June 30, 2003,  reflecting  primarily a 93.1%  increase in
collateralized mortgage obligations and mortgage-backed  securities,  and a $2.0
million purchase of available-for-sale  securities.  Other assets increased $1.9
million due to the purchase of a bank-owned  life insurance  policy.  The policy
took effect January 1, 2004.

     Our total  liabilities  increased  $7.8 million,  or 10.9% mostly due to an
increase in deposits to $67.2  million at March 31, 2004,  from $58.8 million at
June 30, 2003,  an $8.3  million,  or 14.2%  increase.  At March 31,  2004,  our
noninterest-bearing  deposits were $8.3 million,  which included $5.9 million of
funds to be refunded to  subscribers in our stock offering whose orders were not
filled.  Substantially  all of these  funds are  expected  to be paid out in the
fourth  quarter.  Money  market  savings  accounts  were $12.5  million,  a $4.6
million, or 58.3% increase from June 30, 2003 balances. A public fund entity has
placed about $3 million in additional  funds,  which will gradually be disbursed
on local projects. Certificates of deposit decreased $2.3 million, or 6.2%. FHLB
advances  were $10.0  million,  a $1.0 million  decline from June 30, 2003.  The
decline in  certificates  of deposit  resulted  from  decreases  in public  unit
deposits,  as well as  customers  opting for money  market  accounts  in lieu of
locking in longer-term rates.

                                       9
<PAGE>

     Stockholders'  equity  increased $6.0 million to $13.5 million at March 31,
2004 from $7.5  million at June 30, 2003,  primarily  due to the sale of 684,394
shares  at $10 per share to the  public in  connection  with the  Bank's  mutual
holding company reorganization. The increase in stockholder equity also reflects
income of $249,000 for the nine months ended March 31, 2004.

COMPARISON  OF  OPERATING  RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND
2003

     GENERAL.  Net income for the three months ended March 31, 2004 was $81,000,
a $10,000,  or 14.7%,  increase  compared to net income of $71,000 for the three
months ended March 31, 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  decreased by $5,000,  or 0.4%, to
$1,037,000  for the three  months ended March 31, 2004 from  $1,042,000  for the
same period in 2003  primarily  due to an 8 basis point decline in average yield
on interest-earning assets, The yield on earning assets for the period was 5.36%
compared to a yield of 5.44% in the same period in 2003. The average  balance of
total interest-earning  assets was flat, increasing only $164,000 from the three
months ended March 31, 2003.

     The primary  factor for the decrease in interest  income was a $19,000,  or
2.2%,  decrease in interest  from loans,  due to a 57 basis point decline in the
average  yield  on loans to 6.88%  for the 2004  period  from  7.45% in the 2003
period,  reflecting  decreased market rates of interest and repayments of higher
yielding  mortgages.  Average loans increased $2.4 million,  or 5.0%, from $46.9
million in 2003 to $49.2 million in 2004.

     Our investment portfolio and cash investments totaled $36.6 million for the
three months ended March 31, 2004,  an $8.5 million or 30.4%  increase  from the
same  period in 2003.  The yield on these  investments  improved,  and was 2.72%
compared to 2.35% in 2003. This yield increase is attributable to investing most
excess cash in mortgage-backed  securities,  which earn a higher yield than cash
investments.

     INTEREST EXPENSE.  Total interest expense decreased  $90,000,  or 15.8%, to
$477,000 for the three  months ended March 31, 2004 from  $567,000 for the three
months ended March 31, 2003. The decrease in interest expense resulted from a 58
basis  point  decrease  in the  average  cost  of  interest-bearing  liabilities
partially offset by a $700,000,  or 0.9%,  increase in the average  balance,  to
$69.3 million for the 2004 period compared to $68.6 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 2003 and 2004 and was
also  attributable  in part to a $4.3 million,  or 10.9% decrease in the average
balance of  certificates  of deposit,  to $34.9 million for the 2004 period from
$39.2  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,  with the primary  increase in money market accounts,
for which the average balance increased $3.2 million, or 39.7%, to $11.4 million
for the 2004 period from $8.2 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.

     Average passbook savings accounts increased $2.5 million,  or 65.5%, during
the same period.  This large increase is due to funds received from  subscribers
in our stock  offering.  Pending  completion of the offering,  all  subscribers'
funds were placed in a segregated  account at the Bank which earned  interest at

                                       10
<PAGE>

the  passbook  rate.  At the  close  of  the  transaction  on  March  31,  2004,
subscribers'  funds were either applied to the purchase of stock or moved into a
noninterest-bearing  account on which refund checks were written.  We anticipate
that both passbook and noninterest-bearing  deposit averages will return to more
normal levels in the fourth quarter of 2004.

     Interest  expense on Federal Home Loan Bank  advances  fell $20,000 for the
three months ended March 31, 2004, or 13.3%,  compared to the three months ended
March 31,  2003,  reflecting  a decrease in the  average  balance of advances to
$10.6 million for the 2004 period from $11.3 million for the 2003 period,  and a
49 basis point decrease in the average cost.

     NET INTEREST INCOME. Net interest income increased by $85,000, or 18.0%, to
$560,000 for the three  months ended March 31, 2004 from  $475,000 for the three
months ended March 31, 2003.  The net interest  rate spread  increased to 2.70 %
for the 2004  period  from  2.09% for the 2003  period,  while the net  interest
margin increased to 2.89% from 2.48%. The increases in spread and margin reflect
our retention of one- to four-family  mortgages,  instead of selling them in the
secondary  market.  Near the end of the quarter,  we used the proceeds  from the
stock conversion to purchase mortgage-backed securities, in order to improve our
yield on our securities.

     PROVISION  FOR LOAN LOSSES.  There were no  provisions  for loan losses for
either the three months ended March 31, 2004 or 2003.  There were no charge-offs
and $5,000 of  recoveries  in the three  months  ended  March 31,  2004,  and no
charge-offs or recoveries in the three months ended March 31, 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 $409,000 at March 31, 2004 and at
March 31, 2003, and as a percentage of total loans  outstanding  was 0.77%.  and
0.85% at March 31, 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 March 31, 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 $144,000 for the three
months  ended March 31, 2004 from  $188,000 for the three months ended March 31,
2003.  Net loan servicing  fees  increased  $17,000 for the two periods,  due to
lower amortization of mortgage servicing rights. There were no gains on the sale
of mortgages  for the three  months ended March 31, 2004,  as we chose to retain
our originated  one-to-four family loans during the quarter.  There were $88,000
of gains  recorded for the three  months  ended March 31,  2003.  We have made a
strategic decision to retain most of our originated mortgages, but we may modify
this decision based on interest rate  fluctuation and other market  factors.  By
retaining  mortgages,  we intend to increase  our net  interest  margins,  which
should benefit future periods' net interest  income.  Other  noninterest  income
increased  to $23,000 for the three  months  ended

                                       11
<PAGE>

March 31, 2004  compared to $6,000 for the three months ended March 31, 2003. We
began  recognizing  income related to the net change in the cash surrender value
of bank-owned  life  insurance in the third quarter of fiscal 2004.  This income
was $14,000.

     NONINTEREST EXPENSE.  Noninterest expense was $581,000 for the three months
ended March 31,  2004,  increasing  $33,000  from  $548,000 for the three months
ended March 31, 2003.  Salaries and benefits increased $25,000,  or 8.3%. Normal
year-end salary increases accounted for approximately $8,000 of this change, and
deferred benefit expense  associated with bank-owned life insurance was $10,000.
This  expense was  recognized  for the first time in the third  quarter of 2004.
Other operating  expenses  increased  $7,000  primarily as a result of a $16,000
increase in audit and other SEC filing expenses.

     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  decreased
$2,000, or 5.2%,  reflecting a decrease in pretax income. The effective tax rate
was 34% for the three months ended March 31, 2004,  and 38% for the three months
ended March 31, 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.

COMPARISON  OF  OPERATING  RESULTS FOR THE NINE MONTHS  ENDED MARCH 31, 2004 AND
2003

     GENERAL.  Net income for the nine months ended March 31, 2004 was $249,000,
a $174,000 or 41.2%,  decrease  compared to net income of $423,000  for the nine
months ended March 31, 2003. The decrease in net income  resulted  mainly from a
decrease in noninterest income.

     INTEREST INCOME. Total interest income decreased by $407,000,  or 11.8%, to
$3.0  million for the nine months ended March 31, 2004 from $3.4 million for the
same period in 2003  primarily  due to a 63 basis point decline in average yield
on  interest-earning  assets  reflecting  the  decline in overall  market  rates
between the periods and a shift in the  composition of  interest-earning  assets
towards  lower-yielding  investment  securities.  The  average  balance of total
interest-earning assets decreased by $1.0 million, or 1.3%, to $76.7 million for
the 2004 period from $77.7 million for the 2003 period.

     The primary  factor for the  decrease in interest  income was a $328,000 or
11.5%,  decrease in interest from loans,  due to a 68 basis point decline in the
average  yield  on loans to 6.92%  for the 2004  period  from  7.60% in the 2003
period,  reflecting  decreased market rates of interest and repayments of higher
yielding mortgages. Also contributing to the decrease in interest on loans was a
$1.4 million, or 2.9%,  decrease in the average balance of loans receivable,  to
$48.5  million for the nine months  ended March 31, 2004 from $49.9  million for
the nine months ended March 31, 2003.

     Interest income on securities and cash investments  decreased as the result
of the 42 basis point decrease in the average yield on securities,  to 2.43% for
the 2004 period from 2.85% for the 2003 period. This decline was also reflective
of  decreased   market   rates  of  interest   resulting   in   prepayments   of
mortgage-backed securities and collateralized mortgage obligations.  The decline
in yield more than offset a $428,000, or 1.6% increase in the average balance of
securities and cash investments to $27.5 million for the nine months ended March
31, 2004 from $27.1 million for the nine months ended March 31, 2003.

                                       12
<PAGE>

     INTEREST EXPENSE.  Total interest expense decreased $378,000,  or 20.6%, to
$1.5  million for the nine months ended March 31, 2004 from $1.8 million for the
nine months ended March 31, 2003. The decrease in interest expense resulted from
a 73 basis point decrease in the average cost of  interest-bearing  liabilities.
Average  balances  for the two periods  were flat,  decreasing  $34,000 to $68.5
million. The decrease in the average cost of interest-bearing  liabilities was a
result of the continued decline in market rates of interest during 2003 and 2004
and was also  attributable  in part to a $3.6  million,  or 9.1% decrease in the
average balance of certificates of deposit, to $35.4 million for the 2004 period
from $39.0 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,  with the primary  increase in money market accounts,
for which the average balance increased $1.7 million,  or 20.9%, to $9.7 million
for the 2004 period  from $8.0  million for the 2003  period.  Passbook  savings
accounts for the same period  increased $1.2 million,  or 32.1%, to $5.0 million
for the 2004 period from $3.8 million for 2003 period.  The concentration of the
increase  in  average  interest-bearing  liabilities  in the  money  market  and
passbook savings 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. Interest-bearing NOW accounts increased slightly for the periods,
increasing  $322,000 to $6.3  million for the 2004 period from $6.0  million for
the 2003 period.  Consumers  have  generally  been reluctant to lock in rates on
certificates  of deposit,  and in many cases have chosen the  liquidity of money
market savings accounts instead.

         Interest  expense on Federal Home Loan Bank  advances  fell $70,000 for
the nine months  ended  March 31,  2004,  or 14.2%,  compared to the nine months
ended March 31, 2003,  reflecting a decrease in the average  balance of advances
to $10.9 million for the 2004 period from $11.7 million for the 2003 period, and
a 43 basis point decrease in the average cost.

         NET INTEREST INCOME. Net interest income decreased by $29,000, or 1.8%,
to $1.6  million for the nine months  ended March 31, 2004 from $1.6 million for
the nine months ended March 31, 2003. The net interest rate spread  increased to
2.39% for the 2004 period from 2.34% for the 2003 period, while the net interest
margin  decreased to 2.74% from 2.76%.  We anticipate  continued  improvement in
both the margin and the spread as we increase loans outstanding,  and shift from
short-term assets to longer-term mortgage-backed securities.

         PROVISION FOR LOAN LOSSES. There were no provisions for loan losses for
either the nine  months  ended  March 31,  2004 or 2003.  There  were  $6,000 of
charge-offs  and $5,000 of recoveries  for the nine months ended March 31, 2004,
and no charge-offs or recoveries in the nine months ended March 31, 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.

         NONINTEREST  INCOME.  Noninterest  income decreased to $522,000 for the
nine months  ended March 31, 2004 from  $706,000 for the nine months ended March
31, 2003.  Service  charges were up slightly,  by $5,000,  due to higher average
overdraft  activity.  Net loan  servicing  fees  increased  $27,000  for the two
periods,  due to lower amortization of mortgage  servicing rights.  Gains on the
sale of  mortgages  decreased  to $144,000  for the nine months  ended March 31,
2004,  from  $374,000  for the nine  months  ended  March 31,  2003,  a $230,000
decrease. We anticipate that these gains from the sale of mortgages will further
decline  because  refinancing  activity  has slowed,  and because we have made a
strategic  decision to retain most of our  originated  mortgages.  By  retaining
mortgages,  we intend to increase our net interest margins, which should benefit
future periods' net interest income.

         NONINTEREST EXPENSE.  Noninterest expense was $1.7 million for the nine
months ended March 31, 2004,  increasing  $76,000 from $1.6 million for the nine
months ended March 31, 2003.  Salaries and benefits increased $53,000,  or 5.9%,
mainly due to raises, increases in health insurance, and recognition

                                       13
<PAGE>

of deferred  benefit expense  associated  with  bank-owned life insurance.  This
expense was $10,000 for the 2004 period.  Furniture and  equipment  depreciation
decreased  $33,000,  or 40.0%,  reflecting  accelerated  writeoffs  of  computer
equipment in the nine months ended March 31, 2003 in connection  with an upgrade
of our data processing equipment.  Other operating expenses increased $46,000 as
a result of a $15,000 increase in audit and SEC filing expenses,  and $20,000 of
losses resulting from fraudulent  activities by customers.  The Bank is pursuing
its legal remedies to recover these losses.

         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  decreased
$115,000,  or 44.1%,  reflecting a decrease in pretax income.  The effective tax
rate was 37% for the  nine  months  ended  March  31,  2004 and 38% for the nine
months ended March 31, 2003.

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
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 Federal Home Loan Bank 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.  At March 31, 2004,  we
raised  additional  capital of $5.8 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.  These  funds  were  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 March 31, 2004, the total approved loan
origination  commitments outstanding amounted to $3.2 million. At the same date,
construction  loans in process were $1.5  million.  We had  commitments  to sell
loans  to  Freddie  Mac of  $148,000,  and  also had  commitments  to sell  loan
participations totaling $400,000. Certificates of deposit scheduled to mature in
one year or less at March 31, 2004, totaled $19.1 million.  Although the average
cost of deposits decreased  throughout 2003,  management's policy is to maintain
deposit  rates at  levels  that  are  competitive

                                       14
<PAGE>

with other local financial  institutions.  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 March 31,
2004, our total collateralized borrowing limit was $31.7 million of which we had
$10.0 million outstanding,  giving us the ability at March 31, 2004 to borrow an
additional  $21.7 million from the Federal Home Loan Bank 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.

                                       15
<PAGE>
                           PART II. OTHER INFORMATION

ITEM 2.  CHANGES IN  SECURITIES  AND  SMALL  BUSINESS ISSUER PURCHASES OF EQUITY
         -----------------------------------------------------------------------
         SECURITIES
         ----------

     (d) On February 11, 2004, the Securities and Exchange  Commission  declared
the  registrant's  Registration  Statement  on Form  SB-2  (Commission  File No.
333-111219)  effective.  The  Registration  Statement  covered  the  sale by the
registrant  of up to 684,394  shares of its  common  stock,  $.10 par value,  in
connection with the mutual holding company reorganization (the "Reorganization")
of Osage Federal Savings and Loan Association,  Pawhuska, Oklahoma (the "Bank").
The offering was  commenced  on February  20, 2004 and  terminated  on March 12,
2004. The Reorganization was approved by the Bank's members at a special meeting
held on March 24, 2004. The  Reorganization was completed on March 31, 2004 with
684,394 shares sold to the public at $10.00 per share for aggregate  proceeds of
$6,843,940.  The registrant estimates that it incurred approximately $427,000 in
expenses  in  the  offering  (including   approximately  $129,000  in  fees  and
reimbursable  expenses paid to Keefe, Bruyette & Woods, Inc. for its services as
marketing agent) for estimated net proceeds of approximately  $6.4 million.  The
registrant  used  approximately  50% of the net  proceeds  to acquire all of the
shares  of  capital  stock  to be  issued  by the  Bank in  connection  with the
Reorganization  and used $542,710 to fund a loan to its Employee Stock Ownership
Plan. The Company  retained the remainder of the proceeds for ongoing  expenses.
All payments of proceeds or expenses were made to persons other than  directors,
officers, general partners of the registrant or their associates, persons owning
10% or more of any class of  securities  of the  registrant or affiliates of the
registrant.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
         --------------------------------

         (a)      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).

         (b)      REPORTS ON FORM 8-K.  During the quarter ended March 31, 2004,
                  the Registrant did not file any current reports on Form 8-K.

                                       16
<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: May 13, 2004                          /s/ Mark S. White
                                            ------------------------------------
                                            Mark S. White, President
                                            (Duly Authorized Representative)


Date: May 13, 2004                          /s/ Sue Allen Smith
                                            ------------------------------------
                                            Sue Allen Smith, Vice President
                                            (Chief Financial Officer)


                                       17