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, 2006

[ ]  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. Yes[X] No[ ]

     Indicate  by check mark  whether  the  Registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

     As of March 31,  2006,  there  were  2,287,017  shares of the  Registrant's
common stock, par value $.10 per share, outstanding.

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

                                       1
<PAGE>


                          OSAGE FEDERAL FINANCIAL, INC.

                               PAWHUSKA, OKLAHOMA

                                      INDEX
<TABLE>
<CAPTION>

                                                                                                          PAGE
                                                                                                          ----

<S>                                                                                                        <C>
PART I.  FINANCIAL INFORMATION
------

Item 1.  Financial Statements

Consolidated Balance Sheets as of March 31, 2006 (Unaudited) and June 30, 2005                             3
Consolidated  Statements of Income -  (Unaudited)  for the three and nine months
         ended March 31, 2006 and 2005                                                                     4
Consolidated Statements of Cash Flows - (Unaudited) for the nine months ended
         March 31, 2006 and 2005                                                                           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 6.  Exhibits                                                                                         16

Signatures                                                                                                17
</TABLE>

                                       2
<PAGE>

PART 1.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

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

ASSETS
                                                                             MARCH 31,        JUNE 30,
                                                                               2006            2005
                                                                          -------------    -------------
                                                                           (unaudited)
<S>                                                                       <C>              <C>
    Cash and due from banks                                               $     559,571    $     600,208
    Interest bearing deposits with banks                                      1,134,960        1,623,837
                                                                          -------------    -------------
        Cash and cash equivalents                                             1,694,531        2,224,045

    Available-for-sale securities                                            18,666,281       14,812,020
    Held-to-maturity securities                                               8,768,653       11,378,513
    Loans, net of allowance for loan losses of $384,600 and $393,475
       at March 31, 2006 and June 30, 2005, respectively                     73,190,157       65,356,288
    Premises and equipment                                                    1,167,145        1,234,408
    Foreclosed assets held for sale, net                                        111,316           31,592
    Interest receivable                                                         433,159          354,516
    Federal Home Loan Bank stock, at cost                                     1,586,300        1,082,500
    Bank owned life insurance                                                 2,067,259        2,011,772
    Deferred income taxes                                                         3,531               --
    Other                                                                       194,254          207,540
                                                                          -------------    -------------

               Total assets                                               $ 107,882,586    $  98,693,194
                                                                          =============    =============


LIABILITIES AND STOCKHOLDERS' EQUITY

    LIABILITIES
        Deposits                                                          $  62,858,013    $  62,083,797
        Federal Home Loan Bank advances                                      30,800,000       21,650,000
        Advances from borrowers held in escrow                                  640,261          754,927
        Accrued interest and other liabilities                                  385,873          459,420
        Deferred income taxes                                                        --           91,795
                                                                          -------------    -------------

               Total liabilities                                             94,684,147       85,039,939
                                                                          -------------    -------------

    COMMITMENTS AND CONTINGENCIES                                                    --               --
    EQUITY RECEIVED FROM CONTRIBUTIONS TO THE ESOP (13,417 SHARES AT
       MARCH 31, 2006, AND 6,077 SHARES AT JUNE 30, 2005)                       163,470           69,397
    STOCKHOLDERS' EQUITY
        Preferred stock, $.10 par value (5,000,000 shares authorized;
          none outstanding)                                                          --               --
        Common stock, $.10 par value (20,000,000 shares authorized;
          2,287,017 and 2,281,313 shares issued and outstanding at
          March 31, 2006 and June 30, 2005, respectively, net of 54,751
          allocated and unallocated ESOP shares for both periods)               223,226          222,656
        Additional paid-in capital                                            5,252,217        5,275,189
        Retained earnings                                                     7,800,359        8,229,727
        Accumulated other comprehensive loss                                   (240,833)        (143,714)
                                                                          -------------    -------------

               Total stockholders' equity                                    13,034,969       13,583,858
                                                                          -------------    -------------
               Total liabilities and stockholders' equity                 $ 107,882,586    $  98,693,194
                                                                          =============    =============
</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,
                                                           -----------------------------       --------------------------------
                                                                2006              2005               2006              2005
                                                           ------------     ------------       --------------     ------------
                                                                     (unaudited)                         (unaudited)
<S>                                                        <C>              <C>                <C>                <C>
    INTEREST INCOME
        Loans                                              $  1,131,220     $    985,578       $    3,340,988     $  2,891,300
        Available-for-sale securities                           188,887           84,613              518,563          229,292
        Held-to-maturity securities                              95,869          123,440              310,813          407,459
        Deposits with other financial institutions               10,695            4,808               24,094            8,772
        Other                                                    20,827            8,093               52,914           22,772
                                                           ------------     ------------       --------------     ------------
           Total interest income                              1,447,498        1,206,532            4,247,372        3,559,595
                                                           ------------     ------------       --------------     ------------

    INTEREST EXPENSE
        Deposits                                                375,338          344,840            1,095,859        1,016,451
        Advances from Federal Home Loan Bank                    336,370          155,137              906,285          481,649
                                                           ------------     ------------       --------------     ------------
           Total interest expense                               711,708          499,977            2,002,144        1,498,100
                                                           ------------     ------------       --------------     ------------


    NET INTEREST INCOME                                         735,790          706,555            2,245,228        2,061,495
    Provision for loan losses                                        --               --               12,000               --
                                                           ------------     ------------       --------------     ------------
    Net interest income after provision for loan losses         735,790          706,555            2,233,228        2,061,495
                                                           ------------     ------------       --------------     ------------

    NONINTEREST INCOME
        Service charges on deposit accounts                      95,062           78,644              300,961          265,589
        Other service charges and fees                           16,573           17,700               46,666           46,995
        Gain on sale of mortgage loans                            1,196            9,213               35,419           41,310
        Net loan servicing fees                                   8,648            8,620               23,485           24,714
        Other income                                             34,052           29,046               91,035           88,738
                                                           ------------     ------------       --------------     ------------
           Total noninterest income                             155,531          143,223              497,566          467,346
                                                           ------------     ------------       --------------     ------------

    NONINTEREST EXPENSE
        Salaries and employee benefits                          425,798          366,692            1,213,279        1,073,259
        Net occupancy expense                                    63,924           70,209              204,048          209,146
        Deposit insurance premium                                 2,119            2,278                6,469            7,156
        Other operating expenses                                200,367          202,717              598,494          578,799
                                                           ------------     ------------       --------------     ------------
           Total noninterest expense                            692,208          641,896            2,022,290        1,868,360
                                                           ------------     ------------       --------------     ------------

    INCOME BEFORE INCOME TAXES                                  199,113          207,882              708,504          660,481

    PROVISION FOR INCOME TAXES                                   70,299           70,413              251,703          221,407
                                                           ------------     ------------       --------------     ------------
    NET INCOME                                             $    128,814     $    137,469       $      456,801     $    439,074
                                                           ============     ============       ==============     ============
    BASIC EARNINGS PER SHARE                               $       0.06     $       0.06       $         0.21     $       0.20
                                                           ============     ============       ==============     ============

    DILUTED EARNINGS PER SHARE                             $       0.06     $       0.06       $         0.21     $       0.20
                                                           ============     ============       ==============     ============

    CASH DIVIDENDS PAID PER PUBLIC SHARE                   $       1.13     $      0.075       $         1.36     $      0.185
                                                           ============     ============       ==============     ============

</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,
                                                                                    ------------------------------
                                                                                      2006               2005
                                                                                    -----------        -----------
                                                                                             (unaudited)
<S>                                                                                 <C>                <C>
    OPERATING ACTIVITIES
        Net income                                                                   $  456,801        $   439,074
        Items not requiring (providing) cash
           Depreciation                                                                  78,875             92,214
           Provision for loan losses                                                     12,000                 --
           Amortization                                                                  92,341             83,625
           Restricted stock plan and options expense                                    103,013             45,783
           Deferred income taxes                                                        (20,445)           (43,920)
           Gain on sale of mortgage loans                                               (35,419)           (41,310)
           (Gain) loss on sale of foreclosed assets held for sale                        (4,210)               260
           Dividends on available-for-sale mutual funds                                (349,243)          (229,292)
           Stock dividends on Federal Home Loan Bank stock                              (52,600)           (22,500)
           Loss on disposal of premises and equipment                                        --                 24
           Increase in cash surrender value of bank owned life insurance                (55,487)           (59,275)
        Originations of loans held for delivery against commitments                  (4,298,620)        (4,048,567)
        Proceeds from nonrecourse sale of loans held for delivery against
          commitments                                                                 4,316,549          3,902,543
        Allocation of Employee Stock Ownership Plan Shares                               94,073             69,397
        Changes in
           Interest receivable                                                          (78,643)           (10,968)
           Other assets                                                                 (26,614)             1,631
           Accrued interest and other liabilities                                       (66,744)           320,084
                                                                                    -----------        -----------

               Net cash provided by operating activities                                165,627            498,803
                                                                                    -----------        -----------


    INVESTING ACTIVITIES
        Net change in loans                                                          (7,947,030)        (6,720,248)
        Purchases of premises and equipment                                             (11,612)           (25,418)
        Purchase of Federal Home Loan Bank stock                                       (451,200)           (65,000)
        Proceeds from sale of foreclosed assets                                          25,647             18,151
        Purchases of available-for-sale securities                                   (5,937,220)                --
        Proceeds from maturities and paydowns of held-to-maturity
          securities                                                                  2,606,509          3,746,463
        Proceeds from maturities and paydowns of available-for-sale
          securities                                                                  2,243,958                 --
                                                                                    -----------        -----------

               Net cash used in investing activities                                 (9,470,948)        (3,046,052)
                                                                                    -----------        -----------


                                                                                      (continued on next page)
</TABLE>

                                       5
<PAGE>

                          OSAGE FEDERAL FINANCIAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (CONTINUED)
<TABLE>
<CAPTION>
                                                                                         NINE MONTHS ENDED
                                                                                             MARCH 31,
                                                                                    ------------------------------
                                                                                      2006               2005
                                                                                    -----------        -----------
                                                                                            (Unaudited)
<S>                                                                                 <C>                <C>
    FINANCING ACTIVITIES
        Net increase (decrease)  in demand, money market, NOW and savings
          deposits                                                                  $(1,409,366)       $   184,001
        Net increase in certificates of deposit                                       2,183,582          1,779,007
        Net increase  (decrease) in Federal Home Loan Bank short-term
          borrowings                                                                  9,150,000         (1,600,000)
        Proceeds from Federal Home Loan Bank advances                                 3,000,000          5,000,000
        Repayments of Federal Home Loan Bank advances                                (3,000,000)        (3,000,000)
        Net increase (decrease) in advances from borrowers held in escrow              (114,666)            95,544
        Payment of dividends (net of restricted stock dividends)                       (886,169)          (126,613)
        Shares purchased and withheld  for restricted stock plans                      (223,356)          (134,426)
        Proceeds from exercise of stock options (net of tax benefit)                     75,782                 --
                                                                                    -----------        -----------

               Net cash provided by financing activities                              8,775,807          2,197,513
                                                                                    -----------        -----------

    DECREASE IN CASH AND CASH EQUIVALENTS                                              (529,514)          (349,736)

    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                    2,224,045          1,592,991
                                                                                    -----------        -----------
    CASH AND CASH EQUIVALENTS, END OF PERIOD                                        $ 1,694,531        $ 1,243,255
                                                                                    ===========        ===========
    SUPPLEMENTAL CASH FLOWS INFORMATION

        Real estate and other assets acquired in settlement of loans                $   111,161        $    47,012

        Interest paid                                                               $ 2,000,029        $ 1,495,846

        Income taxes paid                                                           $   319,344        $   101,500

        Mutual fund dividends reinvested                                            $   349,243        $   229,292
</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. 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 March
         31, 2006, 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.

         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 balance  sheet,  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,
         2005 has been derived from the audited  balance sheet of the Company 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, 2005 filed with the  Securities  and
         Exchange Commission.

2.       EARNINGS PER SHARE

         Earnings per share (EPS) were  computed as follows for the three months
         and nine months ended March 31:
<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED        NINE MONTHS ENDED
                                                                      MARCH 31,                MARCH 31,
                                                             -----------------------------------------------
                                                                   2006        2005        2006         2005
                                                             -----------------------------------------------
<S>                                                            <C>          <C>         <C>         <C>
         Net income                                            $128,814     $137,469    $456,801    $439,074
                                                             -----------------------------------------------
         Average common shares outstanding                    2,208,269    2,232,639   2,203,417   2,228,580
                                                             -----------------------------------------------
         Average common diluted shares outstanding            2,212,614    2,243,912   2,208,853   2,231,662
                                                             -----------------------------------------------
         Basic earnings per share                                 $0.06        $0.06       $0.21       $0.20
                                                             ===============================================
         Fully diluted earnings per share                         $0.06        $0.06       $0.21       $0.20
                                                             ===============================================
</TABLE>

                                       7
<PAGE>

3.       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 March 31,
         2006, $426,900 in such costs had been incurred.

4.       OTHER COMPREHENSIVE INCOME

         Other comprehensive income is comprised of the following:
<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED               NINE MONTHS ENDED
                                                                     MARCH 31,                       MARCH 31,
                                                          ---------------------------      ----------------------------
                                                              2006           2005              2006            2005
                                                          -----------    ------------      ------------    ------------
                                                                                    (Unaudited)
<S>                                                       <C>            <C>               <C>             <C>
    NET INCOME                                            $   128,814    $    137,469      $    56,801     $    439,074
                                                          -----------    ------------      ------------    ------------
    OTHER COMPREHENSIVE INCOME (LOSS)
        Unrealized loss on available-for-sale
          securities, net of income taxes                     (44,275)        (22,072)          (97,119)        (28,168)
                                                          -----------    ------------      ------------    ------------
    COMPREHENSIVE INCOME                                  $    84,539    $    115,397      $    359,682    $    410,906
                                                          ===========    ============      ============    ============
</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, 2006 AND JUNE 30, 2005

         Our total assets  increased by $9.2 million to $107.9  million at March
31, 2006 from $98.7 million at June 30, 2005 primarily due to a $7.8 million, or
12.0%, increase in loans receivable,  net and a $3.9 million, or 26.0%, increase
in  available-for-sale  securities.  These increases were partially  offset by a
$2.6  million,  or  22.9%,  decrease  in  held-to-maturity   securities.   Loans
receivable,  net increased to $73.2 million at March 31, 2006 from $65.4 million
at June 30, 2005. This increase in loans receivable, net primarily resulted from
a $3.2 million, or 6.6%, increase in one- to four-family  mortgages,  and a $2.9
million  increase in construction  loans. We are retaining almost all of our 1-4
family mortgages.  Our commercial loans increased  $993,000 due to lending to an
area municipality, a church and participation in a local real estate development
loan.  There were increases in almost all other  categories of loans,  including
automobile loans (an $836,000  increase),  and mortgages secured by junior liens
(a  $568,000  increase).  There were no loans held for sale at March 31, 2006 or
June 30, 2005. Cash and cash equivalents  decreased to $1.7 million  (consisting
primarily of our Federal Home Loan Bank  ("FHLB")  demand  account) at March 31,
2006 from $2.2 million at June 30, 2005.  This balance  fluctuates  with lending
and deposit activity.  Total securities  increased to $27.4 million at March 31,
2006 from $26.2  million at June 30, 2005.  Beginning  in the fourth  quarter of
fiscal 2005, the Company  undertook a wholesale  strategy using  short-term FHLB
advances  to  acquire  a  diversified   portfolio  of  high-quality  fixed-  and
variable-rate  mortgage-related securities. This program will likely extend over
the next few years. Our objective is to build an  interest-sensitive  investment
portfolio that will enhance earnings in all rate  environments.  As of March 31,
2006,  we had  acquired  $9.0 million of these  securities.  Because of the flat
yield curve,  we have had minimal  purchases of these  securities in the current
quarter.

         Our total liabilities increased $9.6 million, or 11.3% mostly due to an
increase in FHLB advances to $30.8 million at March 31, 2006, from $21.7 million
at June 30, 2005, a $9.1 million,  or 42.3% increase.  Advances used to fund our
investment program comprised $7.2 million of the total advances, increasing $4.0
million from program advances at June 30, 2005.  Deposits  increased $774,000 to
$62.9

                                       9
<PAGE>
million at March 31,  2006 from $62.1  million at June 30,  2005.  Money  market
accounts  decreased  $1.4  million  during the period,  while  passbook  savings
decreased $315,000. Our deposits have been affected by the payout of estates, as
well as rate  competition.  NOW accounts and non-interest  bearing deposits have
been stable during the period,  while  certificates  of deposit  increased  $2.2
million.  We have been promoting our 9-, 13-, 25-, and 61-month  certificates to
counter strong rate competition from area financial institutions.  Although some
of the  certificate  growth has been from our other deposit  categories,  we are
attracting new depositors.

         Stockholders'  equity decreased  $549,000 to $13.0 million at March 31,
2006 from $13.6  million at June 30, 2005,  primarily due to a special $1.00 per
share dividend,  or $652,000 (net of restricted stock dividends of $38,000),  to
stockholders  other than Osage  Federal MHC.  This was  partially  offset by net
income of $457,000 for the nine months  ended March 31,  2006.  The Company paid
regular  cash  dividends  of $0.36 per share to  stockholders  other  than Osage
Federal MHC, or $234,000 (net of restricted stock dividends of $13,000),  in the
period ending March 31, 2006. On February 24, 2006, we announced  that our Board
of Directors had approved an open market stock  repurchase  program for up to 5%
of our outstanding shares  (approximately  34,505 shares). As of March 31, 2006,
no shares had been repurchased.

COMPARISON  OF  OPERATING  RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND
2005

         GENERAL.  Net  income for the three  months  ended  March 31,  2006 was
$129,000 ($0.06 per diluted share), an $8,000, or 6.3%, decrease compared to net
income of $137,000  ($0.06 per diluted  share) for the three  months ended March
31,  2005.  The  decrease  in net income  resulted  mainly  from an  increase in
noninterest  expense,  partly  offset by increases  in net  interest  income and
noninterest income.

         INTEREST INCOME. Total interest income increased by $241,000, or 20.0%,
to $1.4  million for the three months ended March 31, 2006 from $1.2 million for
the same period in 2005  primarily  due to a 21 basis point  increase in average
yield on interest-earning assets. The yield on earning assets for the period was
5.73%  compared  to a yield of 5.52% in the same  period  in 2005.  The  average
balance of total interest-earning  assets increased $13.9 million from the three
months ended March 31, 2005.

         The primary factor for the increase in interest  income was a $146,000,
or 14.8% increase in interest from loans.  Average loans increased $8.8 million,
or 14.4%, from $61.7 million in 2005 to $70.5 million in 2006. The average yield
on loans  increased  slightly,  to 6.50%  from  6.48% for the two  periods.  Our
portfolio yield reflects continuing low long-term interest rates.

         Our average  investment  portfolio and cash  investments  totaled $30.4
million for the three  months  ended  March 31,  2006,  a $4.2  million or 16.1%
increase from the same period in 2005. The yield on these  investments  improved
to 3.95%  compared  to 3.30% in 2005.  This yield  increase is  attributable  to
general  short-term  interest  rate  increases  as well as higher  yields on new
securities purchases.

         INTEREST EXPENSE.  Total interest expense increased $212,000, or 42.3%,
to $712,000  for the three  months  ended March 31, 2006 from  $500,000  for the
three  months ended March 31, 2005.  The increase in interest  expense  resulted
from  a 57  basis  point  increase  in  the  average  cost  of  interest-bearing
liabilities  combined with a $13.0  million,  or 17.4%,  increase in the average
balance,  to $87.4 million for the 2006 period compared to $74.4 million for the
2005 period.  The increase in the average cost of  interest-bearing  liabilities
was most notably due to short-term  market rate increases.  We had $17.8 million
of  short-term  advances at March 31,  2006 which are subject to rate  increases
every 30 days or more frequently.  Average  interest-bearing  deposits were down
$3.7 million between the two quarters,  with certificates of deposit  accounting
for a $637,000 increase. For the same time periods, money market savings account
balances  dropped  $3.0  million.  Most of this  year-over-year  decline was the
result of public fund
                                       10
<PAGE>

disbursements,  which had been anticipated.  We are also experiencing a shift of
these lower-cost deposits to certificates of deposit.  Interest-bearing checking
balances  decreased $1.0 million,  due to a decline in our  high-yield  checking
account  balances.  Average rates on certificates are up 43 basis points between
the two  periods.  In the current  rate  environment,  our  strategy has been to
attract shorter-term deposits, paying less than like-term FHLB advances.

         Interest  expense on FHLB  advances  increased  $181,000  for the three
months ended March 31, 2006, or 116.8%, compared to the three months ended March
31,  2005,  reflecting  an increase in the average  balance of advances to $30.1
million for the 2006 period from $13.5 million for the 2005 period.  The average
cost of these advances  decreased by 14 basis points in the same time period. As
older advances have matured,  we have been able to replace them with  lower-rate
advances.  However,  because much of our  borrowing is currently  short-term  in
nature,  and  because  the  yield  curve is  almost  flat,  our  cost to  borrow
short-term funds has increased.

         NET INTEREST INCOME. Net interest income increased by $29,000, or 4.1%,
to $736,000  for the three  months  ended March 31, 2006 from  $707,000  for the
three  months ended March 31, 2005.  The net interest  rate spread  decreased to
2.42% for the 2006 period from 2.80% for the 2005 period, while the net interest
margin decreased to 2.91% from 3.24%. The decreases in spread and margin reflect
our wholesale  strategy  using  available-for-sale  investments  and  short-term
advances.  This program,  which is structured to increase net interest income in
the event the yield curve  steepens,  will have the effect of  lowering  our net
interest spread and net interest margin percentages over time.

         PROVISION FOR LOAN LOSSES. There were no provisions for loan losses for
either the three months ended March 31, 2006 or 2005.  There were no charge-offs
in the three months ended March 31, 2006, and less than $1,000 of net recoveries
in the same period in 2005. 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  $385,000 at March 31, 2006 and
$409,000 at March 31, 2005, and as a percentage of total loans  outstanding  was
0.52% and 0.64% at March 31, 2006 and 2005,  respectively.  The decrease in this
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, 2006 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
allowances will be sufficient to offset any future loan losses.

         NONINTEREST  INCOME.  Noninterest  income increased to $156,000 for the
three months ended March 31, 2006 from $143,000 for the three months ended March
31, 2005. Service charges were up $16,000,  or 20.9%. The Company  implemented a
new fee schedule in April 2005.

         NONINTEREST  EXPENSE.  Noninterest  expense was  $692,000 for the three
months ended March 31,  2006,  increasing  $50,000  from  $642,000 for the three
months ended March 31, 2005.  Salaries and

                                       11
<PAGE>

benefits increased  $59,000,  or 16.1%.  Dividends on unvested  restricted stock
plan  shares,  including  the  $1.00  special  dividend  paid in  January  2006,
accounted for $37,000 of this  increase.  This plan, as well as the stock option
plan,  was approved by the  shareholders  November 17,  2004.  Regular  salaries
increased  $18,000,  reflecting  normal salary  increases.  Occupancy  decreased
$6,000 due to reduced equipment depreciation.

         PROVISION  FOR INCOME TAXES.  The  provision for income taxes  remained
flat for the three months ended March 31, 2006 and 2005.  The effective tax rate
was 35% for the three months ended March 31, 2006,  and 34% for the three months
ended March 31, 2005. The increase in our effective tax rate primarily  reflects
timing of recognition of certain nondeductible expenses.

COMPARISON  OF  OPERATING  RESULTS FOR THE NINE MONTHS  ENDED MARCH 31, 2006 AND
2005

         GENERAL.  Net  income  for the nine  months  ended  March 31,  2006 was
$457,000 ($0.20 per diluted share),  an $18,000,  or 4.0%,  increase compared to
net income of $439,000 ($0.20 per diluted share) for the nine months ended March
31,  2005.  The  increase in net income  resulted  mainly from  increases in net
interest  income  and  noninterest  income,  partly  offset  by an  increase  in
noninterest expense.

         INTEREST INCOME. Total interest income increased by $688,000, or 19.3%,
to $4.2  million for the nine months  ended March 31, 2006 from $3.6 million for
the same period in 2005  primarily  due to a $12.7  million  increase in earning
assets and a 23 basis point  increase in average  yield earned on those  assets.
The yield on earning  assets for the  period  was 5.65%  compared  to a yield of
5.42% in the same period in 2005.

         The primary  factor for the increase in interest  income was a $450,000
or 15.6% increase in interest from loans.  Average loans increased $9.4 million,
or 15.9%, from $59.6 million in 2005 to $69.0 million in 2005. The average yield
on loans  decreased  slightly,  to 6.45%  from  6.46% for the two  periods.  Our
portfolio yield reflects continuing low long-term interest rates.

         Our average  investment  portfolio and cash  investments  totaled $29.7
million  for the nine  months  ended  March 31,  2006,  a $2.6  million  or 9.5%
increase from the same period in 2005. The yield on these  investments  improved
to 3.83%  compared  to 3.17% in 2005.  This yield  increase is  attributable  to
general short-term interest rate increases, which favorably affected some of our
adjustable-rate   securities,  as  well  as  higher  yields  on  new  securities
purchases.

         INTEREST EXPENSE.  Total interest expense increased $504,000, or 33.6%,
to $2.0  million for the nine months  ended March 31, 2006 from $1.5 million for
the nine months ended March 31, 2005. The increase in interest  expense resulted
from  a 44  basis  point  increase  in  the  average  cost  of  interest-bearing
liabilities  combined with an $11.1 million,  or 15.1%,  increase in the average
balance,  to $84.7 million for the 2005 period compared to $73.6 million for the
2005 period.  The increase in the average cost of  interest-bearing  liabilities
was most  notably  due to  short-term  market rate  increases.  Interest-bearing
deposits were down $2.1 million  between the two periods,  with  certificates of
deposit  accounting for an $862,000 increase.  For the same time periods,  money
market savings account balances  dropped $3.8 million.  Most of this decline was
the result of public fund  disbursements,  which had been  anticipated.  Average
interest-bearing  checking  balances  decreased  $1.5  million  between  the two
periods.  As short-term  interest rates have risen we've had customers  transfer
funds  to  our   certificates  of  deposit,   as  well  as  to  other  financial
institutions.  Average rates on certificates  are up 29 basis points between the
two periods.

                                       12
<PAGE>

         Interest  expense  on FHLB  advances  increased  $425,000  for the nine
months ended March 31, 2006,  or 88.2%,  compared to the nine months ended March
31,  2005,  reflecting  an increase in the average  balance of advances to $27.2
million for the 2006 period from $13.9 million for the 2005 period.  The average
cost of these advances  decreased by 16 basis points in the same time period. As
older advances have matured,  we have been able to replace them with  lower-rate
advances. However, we are borrowing a significant amount of short-term advances,
which have increased our borrowing costs.

         NET INTEREST  INCOME.  Net interest  income  increased by $184,000,  or
8.9%, to $2.2 million for the nine months ended March 31, 2006 from $2.1 million
for the nine months ended March 31, 2005. The net interest rate spread decreased
to 2.50%  for the 2005  period  from  2.71% for the 2005  period,  while the net
interest  margin  decreased  to 2.99% from 3.15%.  The  decreases  in spread and
margin reflect our wholesale strategy using  available-for-sale  investments and
short-term advances. This strategy, which is structured to increase net interest
income as the yield curve  steepens,  will have the effect of  lowering  our net
interest spread and net interest margin percentages over time.

         PROVISION  FOR LOAN LOSSES.  The provision for loan losses for the nine
months ended March 31, 2006 was $12,000,  with none  recorded in the same period
in 2005.  There were $21,000 of net  charge-offs  in the nine months ended March
31, 2006 and less than $1,000 of net charge-offs in the same period in 2005. The
provision was needed to keep our reserves  adequate,  because of net charge-offs
as well as  significant  loan growth.  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 increased to $498,000 for the
nine months  ended March 31, 2006 from  $467,000 for the nine months ended March
31, 2005.  Service charges were up $35,000 or 13.3%.  The Company  implemented a
new fee schedule in April 2005.

         NONINTEREST EXPENSE.  Noninterest expense was $2.0 million for the nine
months ended March 31, 2006,  increasing $154,000 from $1.9 million for the nine
months ended March 31, 2005. Salaries and benefits increased $140,000, or 13.0%.
The  addition  of the stock  option  plan and  restricted  stock plan  increased
expenses by $104,000. Of this increase,  dividends on unearned restricted stock,
including the special $1.00 paid in January 2006, accounted for $47,000.  Normal
raises  accounted for a $41,000  increase.  Other operating  expenses  increased
$20,000  primarily as a result of a $13,000  increase in advertising  and public
relations. We have been doing targeted advertising for deposit products.  Losses
on charged off checking  accounts were $10,000 higher than the previous  period.
These  losses  represent  mostly  accounts  which have  incurred  large  service
charges.

         PROVISION  FOR INCOME TAXES.  The provision for income taxes  increased
$30,000,  or 13.7%,  reflecting an increase in pretax income.  The effective tax
rate was 36% for the nine  months  ended  March 31,  2006,  and 34% for the nine
months ended March 31, 2005.  The increase in our effective  tax rate  primarily
reflects certain nondeductible  compensation expense, including expense relating
to our stock benefit plans.

         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.

                                       13
<PAGE>

         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.

         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, 2006, the total approved loan
origination  commitments outstanding amounted to $4.1 million. At the same date,
construction  loans in  process  were  $2.0  million.  We also had  $806,000  of
unfunded  commitments  on lines of credit on that date. We had no commitments to
sell loans to Freddie Mac at March 31, 2006.  Certificates of deposit  scheduled
to  mature  in one  year or less at  March  31,  2006,  totaled  $19.4  million.
Management's  policy is to maintain deposit rates at levels that are competitive
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,
2006, our total collateralized borrowing limit was $43.2 million of which we had
$30.8 million outstanding,  giving us the ability at March 31, 2006 to borrow an
additional  $12.4  million  from the FHLB of Topeka as a funding  source to meet
commitments and for liquidity purposes.

                                       14
<PAGE>


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 6.  EXHIBITS

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

         NUMBER   DESCRIPTION
         ------   -----------
         <S>      <C>
         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**
         10.8     Osage Federal Financial, Inc. 2004 Stock Option Plan***
         10.9     Osage Federal Bank 2004 Restricted Stock Plan***
         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
<FN>
         _______________
         *     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, 2005.
         ***   Incorporated by reference to the Registrants Registration Statement on Form S-8 (File No. 333-121866).
</FN>
</TABLE>

                                       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 11, 2006                       /s/ Mark S. White
                                         ---------------------------------------
                                         Mark S. White, President
                                         (Duly Authorized Representative)


Date: May 11, 2006                       /s/ Sue Allen Smith
                                         ---------------------------------------
                                         Sue Allen Smith, Vice President
                                         (Principal Financial Officer)


                                       17