UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549





FORM
      10-QSB





(Mark
      One)


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





For
      the
      quarterly period ended September 30, 2007





OR





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





For
      the
      transition period
      from                                                                                         
to          Commission file
      number 000-50820





FIRST
      CLOVER LEAF FINANCIAL CORP.


(Exact
      name of small business issuer as specified in its charter)





Maryland
            20-4797391(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer Identification No.)6814
                Goshen Road, Edwardsville, IL
            62025(Address
                of principal executive office)
            (Zip
                Code)





Registrant's
      telephone number, including area code (618) 656-6122





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.  Yes  x  No o





Transitional
      Small Business Disclosure Format (Check one): Yes o  No  x





State
      by
      checkmark whether the Registrant is a shell company (as defined in Rule 12b-2
      of
      the Exchange Act).  Yes o  No  x





Indicate
      the number of shares outstanding of the issuer's classes of common stock, as
      of
      the latest practicable date.





Class
            
            Outstanding
                November 14, 2007Common Stock, par value $.10 per share
            
            8,620,331













FIRST
      CLOVER LEAF FINANCIAL CORP.





FORM
      10-QSB





FOR
      THE
      QUARTER ENDED SEPTEMBER 30, 2007





INDEX





PAGE
                  NO.PART
                  I - Financial InformationItem
                  1.  Financial StatementsConsolidated
                  Balance Sheets
              
              3Consolidated
                  Statements of Income
              
              4Consolidated
                  Statements of Comprehensive
                  Income
              
              5Consolidated
                  Statements of Cash Flows
              
              6Notes
                  to Consolidated Financial
                  Statements
              
              8Item
                  2.  Management's Discussion and Analysis or
                  Plan of Operation
              
              14Item
                  3.  Controls and
                  Procedures
              
              25PART
                  II - Other Information
              
              26Item
                  1.  Legal Proceedings
              
              26Item
                  2.  Unregistered Sales of Equity Securities
                  and Use of Proceeds
              
              26Item
                  3.  Defaults Upon Senior
                  Securities
              
              26Item
                  4. Submission of Matters to a Vote of Security
                  Holders
              
              26Item
                  5.  Other Information
              
              26Item
                  6.  Exhibits
              
              26Signatures
              
              27Certifications
              
              28





***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Consolidated
      Balance Sheets**


(Unaudited)


**September 30,**
            
            
            **December 31,****Assets**
            
            **2007**
            
            
            **2006**Cash
                and due from banks
            
            **$**
            **11,963,724**
            
            
            $
            72,142,452Federal
                funds sold
            
            ****
            **10,249,757**
            
            
            
            20,522,501**Total
                cash and cash equivalents**
            
            ****
            **22,213,481**
            
            
            
            92,664,953Interest-bearing
                time deposits
            
            ****
            **335,662**
            
            
            
            285,668Securities
                available for sale
            
            ****
            **55,632,662**
            
            
            
            45,831,623Federal
                Home Loan Bank stock
            
            ****
            **5,603,773**
            
            
            
            5,603,773Loans,
                net of allowance for loan losses of $1,969,471 and $1,710,247,
                respectively
            
            ****
            **270,820,698**
            
            
            
            244,022,905Loans
                held for sale
            
            ****
            **1,996,192**
            
            
            
            1,002,318Property
                and equipment, net
            
            ****
            **7,410,584**
            
            
            
            6,892,679Accrued
                interest receivable
            
            ****
            **1,934,507**
            
            
            
            1,555,823Mortgage
                servicing rights
            
            ****
            **408,467**
            
            
            
            412,013Goodwill
            
            ****
            **9,402,608**
            
            
            
            9,402,608Core
                deposit intangible
            
            ****
            **1,643,001**
            
            
            
            2,074,000Other
                assets
            
            ****
            **980,720**
            
            
            
            543,423**Total
                assets**
            
            **$**
            **378,382,355**
            
            
            $
            410,291,786**Liabilities
                and Stockholders' Equity**Liabilities:Deposits:Non-interest
                bearing deposits
            
            **$**
            **16,581,147**
            
            
            $
            22,037,287Interest
                bearing deposits
            
            ****
            **239,873,275**
            
            
            
            248,792,359**Total
                deposits**
            
            ****
            **256,454,422**
            
            
            
            270,829,646Federal
                Home Loan Bank advances
            
            ****
            **10,419,919**
            
            
            
            10,325,920Securities
                sold under agreement to repurchase
            
            ****
            **15,715,246**
            
            
            
            29,437,580Subordinated
                debentures
            
            ****
            **3,831,064**
            
            
            
            3,798,016Accrued
                interest payable
            
            ****
            **978,504**
            
            
            
            685,617Other
                liabilities
            
            ****
            **1,753,776**
            
            
            
            1,886,482**Total
                liabilities**
            
            ****
            **289,152,931**
            
            
            
            316,963,261Commitments,
                Contingencies and Credit RiskStockholders'
                Equity:Preferred
                stock, $.10 par value; 10,000,000 shares authorized; no shares
                issued
            
            ****
            **-**
            
            
            
            -Common
                stock, $.10 par value; 20,000,000 shares authorized; 9,074,031 shares
                issued; 8,654,996 and 9,074,031 shares outstanding at September 30,
                2007
                and December 31, 2006, respectively
            
            ****
            **907,403**
            
            
            
            907,403Additional
                paid-in capital
            
            ****
            **71,038,672**
            
            
            
            71,031,467Retained
                earnings
            
            ****
            **22,517,395**
            
            
            
            22,212,827Accumulated
                other comprehensive income (loss)
            
            ****
            **42,492**
            
            
            
            (92,817
            )Unearned
                Employee Stock Ownership Plan shares
            
            ****
            **(666,577**
            **)**
            
            
            (730,355
            )Treasury
                Stock, at cost; 419,035 shares
            
            ****
            **(4,609,961**
            **)**
            
            
            -**Total
                stockholders' equity**
            
            ****
            **93,839,385**
            
            
            
            93,328,525**Total
                liabilities and stockholders' equity**
            
            **$**
            **382,992,316**
            
            
            $
            410,291,786





See
      Accompanying Notes to Consolidated Financial Statements.





3
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Consolidated
      Statements of Income**


(Unaudited)


**Three Months Ended**
            
            
            **Nine Months Ended****September 30,**
            
            
            **September 30,****2007**
            
            
            **2006**
            
            
            **2007**
            
            
            **2006**Interest
                and dividend income:Interest
                and fees on loans
            
            **$**
            **4,550,662**
            
            
            $
            3,788,407
            
            
            **$**
            **13,094,127**
            
            
            $
            7,234,393Interest
                on taxable securities
            
            ****
            **677,516**
            
            
            
            321,517
            
            
            ****
            **1,928,903**
            
            
            
            624,540Interest
                on non-taxable securities
            
            ****
            **38,800**
            
            
            
            59,722
            
            
            ****
            **115,244**
            
            
            
            59,722Federal
                Home Loan Bank dividends
            
            ****
            **39,119**
            
            
            
            72,988
            
            
            ****
            **129,158**
            
            
            
            167,260Interest-bearing
                deposits and federal funds sold
            
            ****
            **342,313**
            
            
            
            589,677
            
            
            ****
            **1,424,102**
            
            
            
            679,463**Total
                interest and dividend income**
            
            ****
            **5,648,410**
            
            
            
            4,832,311
            
            
            ****
            **16,691,534**
            
            
            
            8,765,378Interest
                on deposits
            
            ****
            **2,682,261**
            
            
            
            2,039,267
            
            
            ****
            **7,589,713**
            
            
            
            3,900,126Interest
                on Federal Home Loan Bank advances
            
            ****
            **151,544**
            
            
            
            138,409
            
            
            ****
            **432,668**
            
            
            
            138,409Interest
                on securities sold under agreement to repurchase
            
            ****
            **177,088**
            
            
            
            53,327
            
            
            ****
            **601,541**
            
            
            
            53,327Interest
                on subordinated debentures
            
            ****
            **75,094**
            
            
            
            72,151
            
            
            ****
            **222,935**
            
            
            
            72,151**Total
                interest expense**
            
            ****
            **3,085,987**
            
            
            
            2,303,154
            
            
            ****
            **8,846,857**
            
            
            
            4,164,013**Net
                interest income**
            
            ****
            **2,562,423**
            
            
            
            2,529,157
            
            
            ****
            **7,844,677**
            
            
            
            4,601,365Provision
                for loan losses
            
            ****
            **134,000**
            
            
            
            66,667
            
            
            ****
            **255,000**
            
            
            
            66,667**Net
                interest income after provision for loan losses**
            
            ****
            **2,428,423**
            
            
            
            2,462,490
            
            
            ****
            **7,589,677**
            
            
            
            4,534,698Noninterest
                income:Service
                fees on deposit accounts
            
            ****
            **48,805**
            
            
            
            44,219
            
            
            ****
            **137,176**
            
            
            
            44,219Other
                service charges and fees
            
            ****
            **35,108**
            
            
            
            28,205
            
            
            ****
            **104,578**
            
            
            
            28,205Loan
                servicing fees
            
            ****
            **18,943**
            
            
            
            23,989
            
            
            ****
            **76,889**
            
            
            
            23,989Gain
                on sale of loans
            
            ****
            **25,019**
            
            
            
            5,691
            
            
            ****
            **68,570**
            
            
            
            5,691Gain
                on sale of assets
            
            ****
            **64,126**
            
            
            
            -
            
            
            ****
            **64,126**
            
            
            
            -Other
            
            ****
            **3,496**
            
            
            
            (4,126
            )
            
            ****
            **6,645**
            
            
            
            (1,186
            )Total
                noninterest income
            
            ****
            **195,497**
            
            
            
            97,978
            
            
            ****
            **457,984**
            
            
            
            100,918Noninterest
                expense:Compensation
                and employee benefits
            
            ****
            **700,980**
            
            
            
            611,477
            
            
            ****
            **2,115,082**
            
            
            
            1,072,666Occupancy
                expense
            
            ****
            **239,316**
            
            
            
            182,609
            
            
            ****
            **651,252**
            
            
            
            239,742Data
                processing services
            
            ****
            **100,628**
            
            
            
            102,953
            
            
            ****
            **310,438**
            
            
            
            204,207Director
                fees
            
            ****
            **59,550**
            
            
            
            132,000
            
            
            ****
            **178,150**
            
            
            
            230,750Professional
                fees
            
            ****
            **122,649**
            
            
            
            76,215
            
            
            ****
            **370,190**
            
            
            
            161,770Amortization
                of core deposit intangible
            
            ****
            **117,000**
            
            
            
            161,500
            
            
            ****
            **430,999**
            
            
            
            161,500Amortization
                of mortgage servicing rights
            
            ****
            **20,543**
            
            
            
            26,000
            
            
            ****
            **61,628**
            
            
            
            26,000Other
            
            ****
            **334,252**
            
            
            
            398,690
            
            
            ****
            **943,166**
            
            
            
            661,373Total
                noninterest expense
            
            ****
            **1,694,918**
            
            
            
            1,691,444
            
            
            ****
            **5,060,905**
            
            
            
            2,758,008**Income
                before income taxes**
            
            ****
            **929,002**
            
            
            
            869,024
            
            
            ****
            **2,986,756**
            
            
            
            1,877,608Income
                taxes
            
            ****
            **339,400**
            
            
            
            344,900
            
            
            ****
            **1,093,950**
            
            
            
            727,900**Net
                income**
            
            **$**
            **589,602**
            
            
            $
            524,124
            
            
            **$**
            **1,892,806**
            
            
            $
            1,149,708Basic
                and diluted income per share (see Note 5)
            
            **$**
            **0.07**
            
            
            $
            0.06
            
            
            **$**
            **0.21**
            
            
            $
            0.15Dividends
                per share
            
            **$**
            **0.06**
            
            
            $
            0.06
            
            
            **$**
            **0.18**
            
            
            $
            0.18





See
      Accompanying Notes to Consolidated Financial Statements.





4
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Consolidated
      Statements of Comprehensive Income**


(Unaudited)


**Three Months Ended**
            
            
            **Nine Months Ended****September 30,**
            
            
            **September 30,****2007**
            
            
            **2006**
            
            
            **2007**
            
            
            **2006**Net
                income
            
            $
            589,602
            
            
            $
            524,124
            
            
            $
            1,892,806
            
            
            $
            1,149,708Other
                comprehensive income:Unrealized
                gains on securities arising during the period, net of tax
            
            
            271,007
            
            
            
            199,900
            
            
            
            135,309
            
            
            
            116,576Comprehensive
                income
            
            **$**
            **860,609**
            
            
            **$**
            **724,024**
            
            
            **$**
            **2,028,115**
            
            
            **$**
            **1,266,284**





See
      Accompanying Notes to Consolidated Financial Statements.





5
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Consolidated
      Statements of Cash Flows**


(Unaudited)


**Nine Months Ended****September 30,****2007**
            
            
            **2006**Cash
                flows from operating activities:Net
                income
            
            **$**
            **1,892,806**
            
            
            $
            1,149,708Adjustments
                to reconcile net income to net cash provided by operating
                activities:Amortization
                of:Deferred
                loan origination (fees) costs, net
            
            ****
            **(53,496**
            **)**
            
            
            (63,240
            )Premiums
                and discounts on securities
            
            ****
            **(21,749**
            **)**
            
            
            (50,511
            )Premiums
                and discounts on loans
            
            ****
            **(397,000**
            **)**
            
            
            (204,000
            )Core
                deposit intangible
            
            ****
            **430,999**
            
            
            
            161,500Mortgage
                servicing rights
            
            ****
            **61,628**
            
            
            
            26,000Premiums
                and discounts on deposits
            
            ****
            **2,500**
            
            
            
            (12,000
            )Premiums
                and discounts on FHLB advances
            
            ****
            **93,999**
            
            
            
            34,500Premiums
                and discounts on subordinated debt
            
            ****
            **33,048**
            
            
            
            10,000Provision
                for loan losses
            
            ****
            **255,000**
            
            
            
            66,667Depreciation
                expense
            
            ****
            **326,101**
            
            
            
            111,632ESOP
                expense
            
            ****
            **70,983**
            
            
            
            58,338Gain
                on sale of loans
            
            ****
            **(68,570**
            **)**
            
            
            (5,691
            )Gain
                on sale of property and equipment
            
            ****
            **(64,126**
            **)**
            
            
            -Proceeds
                from sales of loans held for sale
            
            ****
            **3,389,952**
            
            
            
            904,301Originations
                of loans held for sale
            
            ****
            **(4,315,256**
            **)**
            
            
            (898,610
            )Change
                in assets and liabilities:Decrease
                (increase) in accrued interest receivable
            
            ****
            **(378,684**
            **)**
            
            
            (223,019
            )Decrease
                (increase) in other assets
            
            ****
            **(495,379**
            **)**
            
            
            254,153Increase
                (decrease) in accrued interest payable
            
            ****
            **292,887**
            
            
            
            176,898Increase
                (decrease) in other liabilities
            
            ****
            **(214,390**
            **)**
            
            
            (552,594
            )**Net
                cash flows from operating activities**
            
            ****
            **841,253**
            
            
            
            944,032Cash
                flows from investing activities:Purchase
                of interest-bearing time deposits
            
            ****
            **(49,994**
            **)**
            
            
            -Available
                for sale securities:Purchases
            
            ****
            **(15,811,337**
            **)**
            
            
            (2,769,463
            )Proceeds
                from calls and maturities
            
            ****
            **5,100,000**
            
            
            
            1,250,000Proceeds
                from pay-downs
            
            ****
            **1,149,040**
            
            
            
            172,962Held
                to maturity securities:Proceeds
                from pay-downs
            
            ****
            **-**
            
            
            
            34,520Redemption
                of Federal Home Loan Bank stock
            
            ****
            **-**
            
            
            
            2,111,461Loan
                originations, net of principal collected
            
            ****
            **(26,602,297**
            **)**
            
            
            (12,567,180
            )Purchase
                of property and equipment
            
            ****
            **(1,380,013**
            **)**
            
            
            (113,792
            )Proceeds
                from the sale of property and equipment
            
            ****
            **600,133**
            
            
            
            -Cash
                received in acquisition of Clover Leaf Financial Corp.,
                net
            
            ****
            **-**
            
            
            
            19,857,563**Net
                cash flows from investing activities**
            
            **$**
            **(36,994,468**
            **)**
            
            $
            7,976,071




(Continued)





6
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Consolidated
      Statements of Cash Flows**


(Unaudited)


(Continued)**Nine Months Ended****September 30,****2007**
            
            
            **2006**Cash
                flows from financing activities:Net
                increase (decrease) in deposits
            
            **$**
            **(14,377,724**
            **)**
            
            $
            (10,359,818
            )Net
                increase (decrease) in other borrowings
            
            ****
            **(13,722,334**
            **)**
            
            
            5,065,989Repayment
                of FHLB advances
            
            ****
            **-**
            
            
            
            (3,000,000
            )Issuance
                of common stock, net
            
            ****
            **-**
            
            
            
            40,144,878Purchase
                of Treasury Stock
            
            ****
            **(4,609,961**
            **)**
            
            
            -Cash
                dividends
            
            ****
            **(1,588,238**
            **)**
            
            
            (939,300
            )**Net
                cash flows from financing activities**
            
            ****
            **(34,298,257**
            **)**
            
            
            30,911,749**Net
                increase (decrease) in cash and cash equivalents**
            
            ****
            **(70,451,472**
            **)**
            
            
            39,831,852Cash
                and cash equivalents at beginning of period
            
            ****
            **92,664,953**
            
            
            
            3,427,901Cash
                and cash equivalents at end of period
            
            **$**
            **22,213,481**
            
            
            $
            43,259,753Supplemental
                disclosures of cash flow information:Cash
                paid (received) during the period for:Interest
            
            **$**
            **8,472,799**
            
            
            $
            3,954,615Income
                taxes, net of refunds
            
            ****
            **1,593,542**
            
            
            
            713,000Supplemental
                schedule of noncash investing and financing activities:Transfer
                of securities from held to maturity to available for sale
            
            $
            -
            
            
            $
            317,505Common
                stock issued in acquisition of Clover Leaf Financial Corp.
            
            
            -
            
            
            
            14,848,004Net
                cash received (paid) in acquisition of Clover Leaf Financial
                Corp.:Cash
                paid to Clover Leaf Financial Corp. shareholders
            
            $
            -
            
            
            $
            (6,363,430
            )Acquisition
                costs paid
            
            
            -
            
            
            
            (275,786
            )Total
                cash payments
            
            
            -
            
            
            
            (6,639,216
            )Cash
                and cash equivalents acquired
            
            
            -
            
            
            
            26,496,779Net
                cash received in acquisition
            
            $
            -
            
            
            $
            19,857,563





See
      Accompanying Notes to Consolidated Financial Statements.





7
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Notes
      to Consolidated Financial Statements**








(1)
            The
                information contained in the accompanying consolidated financial
                statements is unaudited.  In the opinion of management, the
                consolidated financial statements contain all adjustments (none of
                which
                were other than normal recurring entries) necessary for a fair statement
                of the results of operations for the interim periods.  The
                results of operations for the interim periods are not necessarily
                indicative of the results which may be expected for the entire fiscal
                year.  These consolidated financial statements should be read in
                conjunction with the consolidated financial statements of First Clover
                Leaf Financial Corp. (Company) for the year ended December 31, 2006
                contained in the 2006 Annual Report to Stockholders that was filed
                as an
                exhibit to the Company’s Annual Report on Form
                10-KSB.





On
      January 2, 2001, First Federal Savings & Loan Association of Edwardsville
      (Association) reorganized into the two-tier mutual holding company
      structure.  As part of the reorganization, the Association became a
      capital stock savings and loan association and a wholly-owned subsidiary of
      First Federal Financial Services, Inc., which became the majority-owned
      subsidiary of First Federal Financial Services, MHC (MHC).  On
      November 20, 2003, the Board of Directors adopted a plan to complete an initial
      public offering of the common stock of the Company.  In connection
      with the offering, the Company offered its common stock to the depositors of
      the
      Association as of specified dates and to an employee stock ownership
      plan.  The initial public offering was consummated on June 28, 2004
      through the sale and issuance by the Company of 1,764,027 shares of common
      stock
      at $10 per share.  In addition, the Company issued 2,156,033 shares to
      the MHC, resulting in the MHC retaining a 55% ownership percentage in the
      Company.  Net proceeds from the sale of common stock were $16,011,975
      after deduction of offering expenses of $746,285, and unearned compensation
      related to shares issued to the ESOP.





On
      February 3, 2006, the Company announced that the Board of Directors of the
      MHC
      adopted a Plan of Conversion and Reorganization to convert the MHC to a capital
      stock corporation and conduct a simultaneous stock offering
      (Conversion).  In addition, on February 3, 2006, the Company entered
      into a definitive merger agreement to acquire Clover Leaf Financial Corp.,
      the
      holding company of Clover Leaf Bank, an Illinois state bank headquartered in
      Edwardsville, Illinois (collectively Clover Leaf), pursuant to which, upon
      completion of the Conversion, First Clover Leaf Financial Corp., a new Maryland
      corporation (First Clover Leaf or Company) would acquire all of the common
      stock
      of Clover Leaf (Acquisition).





The
      Conversion and Acquisition were consummated on July 10, 2006 through the sale
      and issuance by First Clover Leaf of 4,174,125 shares of common stock at $10
      per
      share.  Net proceeds from the sale of common stock were $40.14 million
      after deduction of conversion and offering costs of $1.60 million.  In
      addition, each outstanding share of stock was converted into the right to
      receive 1.936 shares of First Clover Leaf’s common stock, or 3,415,193 total
      shares.  Shareholders of Clover Leaf Financial Corp. received total
      merger consideration of $21.2 million, consisting of 1,484,800 shares of First
      Clover Leaf common stock and approximately $6.4 million of cash, or $41.56
      of
      merger consideration per share of Clover Leaf Financial Corp.  In
      addition, fractional shares in the aggregate, or 87 shares, were redeemed for
      cash.  Clover Leaf Bank merged its operations into First Federal
      Savings and Loan Association of Edwardsville as of July 10, 2006 and was renamed
      First Clover Leaf Bank (Bank).  First Clover Leaf’s common stock is
      traded on the NASDAQ Capital Market under the symbol “FCLF.”  As
      required by current regulations, a liquidation account in the amount of $20.7
      million was established in conjunction with the Conversion.





8
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Notes
      to Consolidated Financial Statements**








As
      a
      result, each eligible account holder or supplemental account holder will be
      entitled to a proportionate share of this account in the event of a complete
      liquidation of the Bank, and only in such event.  This share will be
      reduced if the eligible account holder’s or supplemental account holder’s
      deposit balance falls below the amounts on the date of record and will cease
      to
      exist if the account is closed.  The liquidation account will never be
      increased despite any increase after Conversion in the related deposit
      balance.  The Bank may not declare, pay a dividend on, or repurchase
      any of its capital stock of the Bank, if the effect thereof would cause retained
      earnings to be reduced below the liquidation account amount or regulatory
      capital requirements.  Any purchase of First Clover Leaf common stock
      will be conducted in accordance with applicable laws and
      regulations.  First Clover Leaf expects that, subject to regulatory
      capital requirements of the Bank, financial condition and results of operations
      for First Clover Leaf and the Bank, quarterly dividends will continue to be
      paid
      in the future, although no assurances can be given that dividends will be paid
      in the future.





On
      July
      10, 2007, the Board of Directors of the Company announced the authorization
      of a
      stock repurchase program pursuant to which the Company was authorized to
      repurchase up to 5% of its issued and outstanding shares, or up to
      approximately, 453,700 shares.  As of October 11, 2007, the Company
      had repurchased all 453,700 shares of common stock authorized by the Board
      of
      Directors at an average price of $11.01 per share.  On October 23,
      2007, the Board of Directors of the Company announced the authorization of
      a
      second stock repurchase program pursuant to which the Company intends to
      repurchase up to 5% of its outstanding common stock, or up to approximately
      443,600 shares.





On
      October 23, 2007, the Board of Directors of the Company declared a cash dividend
      on the Company’s common stock of $.06 per share for the quarter ended September
      30, 2007.  The dividend will be payable to stockholders of record as
      of November 16, 2007 and is expected to be paid on November 26,
      2007.





(2)
            On
                July 10, 2006, the Company acquired Clover Leaf Financial Corp.,
                the
                parent company of Clover Leaf Bank.  Shareholders of Clover Leaf
                Financial Corp. received total merger consideration of $21.2 million,
                consisting of 1,484,800 shares of First Clover Leaf common stock
                and
                approximately $6.4 million of cash, or $41.56 of merger consideration
                per
                share of Clover Leaf Financial Corp.  The Company incurred
                acquisition costs of $343,504.  The Acquisition was accounted
                for using the purchase method under Statement of Financial Accounting
                Standards (SFAS) No. 141, “Business Combinations.”  Fair value
                adjustments on the assets acquired and liabilities assumed are amortized
                over the estimated useful lives of the related assets and
                liabilities.  The core deposit intangible of $2.39 million is
                amortized over 7.6 years using the sum-of-the-years digits
                method.  First Clover Leaf recorded fair value accounting
                adjustments of $329,000, net of income taxes of $202,000 and core
                deposit
                intangibles of $1.48 million, net of income taxes of
                $909,000.  Based upon Clover Leaf Financial Corp. stockholders’
                equity of $10.33 million, goodwill amounted to $9.4 million at July
                10,
                2006.  As a result of the Acquisition, the Bank now operates
                three full-service offices and increased its market share and scale
                of
                operations.





9
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Notes
      to Consolidated Financial Statements**








The
      following pro forma information, including the effects of the purchase
      accounting adjustments, summarizes the results of operations for the nine months
      ended September 30, 2006 as though the Acquisition had been completed as of
      the
      beginning of the period.





**Nine****Months****Ended****September 30,****2006**Total
                interest income
            
            ****
            **13,357,096**Total
                interest expense
            
            ****
            **6,432,358**Net
                interest income
            
            ****
            **6,924,738**Provision
                for loan losses
            
            ****
            **116,500**Total
                noninterest income
            
            ****
            **291,549**Total
                noninterest expense
            
            ****
            **5,277,733**Income
                before income taxes
            
            ****
            **1,822,054**Income
                taxes
            
            ****
            **761,461**Net
                income
            
            ****
            **1,060,593**Pro
                forma basic and diluted income per share
            
            ****
            **0.12**Pro
                forma weighted-average shares outstanding
            
            ****
            **8,924,997**








The
      pro
      forma results of operations do not purport to be indicative of the results
      that
      would actually have been obtained had the Acquisition occurred on the date
      indicated or that may be obtained in the future.





(3)
            The
                gross carrying value and accumulated amortization of the core deposit
                intangible is presented below:








**September 30,**
            
            
            **December 31,****2007**
            
            
            **2006**Core
                deposit intangible
            
            **$**
            **2,391,000**
            
            
            $
            2,391,000Accumulated
                amortization
            
            ****
            **(747,999**
            **)**
            
            
            (317,000
            )Total
            
            **$**
            **1,643,001**
            
            
            $
            2,074,000








Amortization
      expense on core deposit intangible for the three and nine months ended September
      30, 2007 was $117,000 and $430,999, respectively, and $161,500 for each of
      the
      comparable periods for 2006.





10
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Notes
      to Consolidated Financial Statements**








Estimated
      amortization expense on core deposit intangible for the three months ended
      December 31, 2007 and each of the five succeeding fiscal years is as
      follows:





**Core****Deposit****Intangible**Three
                months ended December 31, 2007
            
            $
            115,001Year
                ended December 31, 2008
            
            
            403,000Year
                ended December 31, 2009
            
            
            297,000Year
                ended December 31, 2010
            
            
            224,000Year
                ended December 31, 2011
            
            
            196,000Year
                ended December 31, 2012
            
            
            196,000








(4)
            Unrealized
                losses and fair value, aggregated by investment category and length
                of
                time that individual securities have been in a continuous unrealized
                loss
                position, as of September 30, 2007 are summarized as
                follows:





**Less than 12 Months**
            
            
            **12 Months or More**
            
            
            **Total****Fair**
            
            
            **Unrealized**
            
            
            **Fair**
            
            
            **Unrealized**
            
            
            **Fair**
            
            
            **Unrealized****Value**
            
            
            **loss**
            
            
            **Value**
            
            
            **loss**
            
            
            **Value**
            
            
            **loss**Securities
                available for sale:U.S.
                government agency obligations
            
            $
            1,996,100
            
            
            $
            3,900
            
            
            $
            4,666,140
            
            
            $
            32,955
            
            
            $
            6,662,240
            
            
            $
            36,855Corporate
                bonds
            
            
            496,150
            
            
            
            2,630
            
            
            
            3,471,219
            
            
            
            124,247
            
            
            
            3,967,369
            
            
            
            126,877Mortgage-backed
                securities
            
            
            2,445,815
            
            
            
            17,442
            
            
            
            221,183
            
            
            
            3,740
            
            
            
            2,666,998
            
            
            
            21,182$
            4,938,065
            
            
            $
            23,972
            
            
            $
            8,358,542
            
            
            $
            160,942
            
            
            $
            13,296,607
            
            
            $
            184,914





For
      all
      of the above securities, the unrealized losses are primarily due to changes
      in
      interest rates and, as such, are considered to be temporary by the
      Company.





(5)
            Basic
                and diluted income per share (EPS) represents income available to
                common
                stockholders divided by the weighted average number of common shares
                outstanding.  ESOP shares which are committed to be released are
                considered outstanding for basic and diluted income per
                share.  The weighted-average share number for the three and nine
                months ended September 30, 2006 has been restated to reflect the
                additional shares issued to First Federal shareholders through the
                Conversion described in Note 1.





11
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Notes
      to Consolidated Financial Statements**








**Three Months Ended**
            
            
            **Nine Months Ended****September 30,**
            
            
            **September 30,****2007**
            
            
            **2006**
            
            
            **2007**
            
            
            **2006**Net
                income available to common stockholders
            
            **$**
            **589,602**
            
            
            $
            524,124
            
            
            **$**
            **1,892,806**
            
            
            $
            1,149,708Basic
                potential common shares:Weighted
                average shares outstanding
            
            ****
            **8,832,363**
            
            
            
            8,912,649
            
            
            ****
            **8,992,590**
            
            
            
            8,035,276Weighted
                average unallocated Employee StockOwnership
                Plan shares
            
            ****
            **(140,288**
            **)**
            
            
            (148,026
            )
            
            ****
            **(142,398**
            **)**
            
            
            (149,034
            )Basic
                weighted average shares outstanding
            
            ****
            **8,692,075**
            
            
            
            8,764,623
            
            
            ****
            **8,850,192**
            
            
            
            7,886,242Dilutive
                potential common shares
            
            ****
            **-**
            
            
            
            -
            
            
            ****
            **-**
            
            
            
            -Dilutive
                weighted average shares outstanding
            
            **$**
            **8,692,075**
            
            
            $
            8,764,623
            
            
            **$**
            **8,850,192**
            
            
            $
            7,886,242Basic
                and diluted income per share
            
            **$**
            **0.07**
            
            
            $
            0.06
            
            
            **$**
            **0.21**
            
            
            $
            0.15








(6)
            The
                Company adopted the provisions of Financial Accounting Standards
                Board
                Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an
                Interpretation of FASB Statement No. 109” (“FIN 48”), effective January 1,
                2007.  No adjustment was recognized for uncertain tax
                positions.  The Company is subject to U.S. Federal income taxes,
                as well as State of Illinois income taxes.  Tax years ending
                December 31, 2004 through December 31, 2006 remain open to examination
                by
                these jurisdictions.  The Company recognizes interest and
                penalties related to tax positions in income tax expense.  At
                September 30, 2007, there was no accrual for uncertain tax positions
                or
                related interest.





(7)
            The
                Company has an employee stock ownership plan (ESOP) that covers
                substantially all employees who have attained the age of 21 and completed
                one year of service.  The Clover Leaf Financial Corp. employees
                became eligible to participate in the plan on January 1,
                2007.  In connection with the stock offering in 2004, the
                Company loaned funds to the ESOP for the purchase of the Company’s common
                stock at the initial public offering at $10.00 per share.  The
                Company loan is being repaid with level annual payments of $70,318
                over 20
                years beginning December 31, 2004.  All shares are held in a
                suspense account for allocation among the participants as the loan
                is
                repaid.  Shares are released for allocation to participants
                based upon the ratio of the current year’s debt service to the sum of
                total principal and interest payments over the life of the
                note.  Shares released from the suspense account are allocated
                among the participants based upon their pro rata annual
                compensation.  The purchase of shares by the ESOP was recorded
                by the Company as unearned ESOP shares in a contra equity
                account.  As ESOP shares are committed to be released to
                compensate employees, the contra equity account is reduced and the
                Company
                recognizes compensation expense equal to the average fair market
                value of
                the shares committed to be released.  Compensation expense of
                $23,003 and $70,983 was incurred for the three and nine months ended
                September 30, 2007, respectively and $21,000 and $58,338 for comparable
                periods in 2006.





12
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Notes
      to Consolidated Financial Statements**








Dividends
      on unallocated ESOP shares,
      together with Company contributions, are used by the ESOP to repay principal
      and
      interest on the outstanding note.





ESOP
      shares issued prior to the conversion date have been adjusted by the exchange
      ratio of 1.936.





The
      following table reflects the shares held by the plan at September 30, 2007
      and
      December 31, 2006:








September
                30,
            
            
            December
                31,2007
            
            
            2006Unallocated
                shares (fair value at September 30, 2007 and December 31, 2006 of
                $1,521,417 and $1,662,477, respectively)
            
            
            138,185
            
            
            
            144,563Allocated
                Shares
            
            
            32,574
            
            
            
            26,196Total
                ESOP Shares
            
            
            170,759
            
            
            
            170,759




13
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.






**Item
      2.   Management’s Discussion and Analysis or Plan of
      Operation**





**Forward-Looking
      Statements**





When
      used
      in this 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 Act of 1995.  Such
      statements are subject to certain risks and uncertainties including changes
      in
      economic conditions in our market area, changes in policies by regulatory
      agencies, fluctuations in interest rates, demand for loans in our market area,
      and competition that could cause actual results to differ materially from
      historical earnings and those presently anticipated or projected.  The
      Company wishes to caution you not to place undue reliance on any such
      forward-looking statements, which only speak as of the date made.  The
      Company wishes to advise you that the factors listed above could affect the
      Company’s financial performance and could cause the Company’s actual results for
      future periods to differ materially from any opinions or statements expressed
      with respect to future periods in any current statements.





The
      Company does not undertake, and specifically disclaims any obligation, to
      publicly release the result of any revisions which may be made to any
      forward-looking statements to reflect events or circumstances after the date
      of
      such statements or to reflect the occurrence of anticipated or unanticipated
      events.





**Overview**





Net
      income increased to $590,000 for the three months ended September 30, 2007
      from
      $524,000 for the same period last year.  Net income increased to $1.9
      million for the nine months ended September 30, 2007 from $1.1 million for
      the
      same period last year.  The increase in net income was due to higher
      net interest income and noninterest income, which more than offset higher
      noninterest expense and higher income taxes.  Basic and diluted income
      per share was $.07 and $.06 for the three months ended September 30, 2007 and
      2006, respectively, and $.21 and $.15 for the nine months ended September 30,
      2007 and 2006, respectively.





**Critical
      Accounting Policies**





We
      consider accounting policies involving significant judgments and assumptions
      by
      management that have, or could have, a material impact on the carrying value
      of
      certain assets or on income to be critical accounting
      policies.  Management makes significant estimates and has identified
      the allowance for loan losses as the most critical.





***Allowance
      for Loan Losses.*****The allowance for loan losses is
      established as losses are estimated to have occurred through a provision for
      loan losses charged to earnings. Loan losses are charged against the allowance
      when management believes the uncollectibility of a loan balance is confirmed.
      Subsequent recoveries, if any, are credited to the allowance.





The
      allowance for loan losses is evaluated on a regular basis by management and
      is
      based upon management’s periodic review of the collectibility of the loans in
      light of historical experience, the nature and volume of the loan portfolio,
      adverse situations that may affect the borrower’s ability to repay, estimated
      value of any underlying collateral and prevailing economic conditions. This
      evaluation is inherently subjective as it requires estimates that are
      susceptible to significant revision as more information becomes
      available.





14
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Management’s
      Discussion and Analysis or Plan of Operation**








The
      allowance consists of specific, general and unallocated components. The specific
      component relates to loans that are classified as doubtful, substandard or
      special mention. For such loans that are also classified as impaired, an
      allowance is established when the discounted cash flows (or collateral value
      or
      observable market price) of the impaired loan is lower than the carrying value
      of that loan. The general component covers non-classified loans and is based
      on
      historical loss experience adjusted for qualitative factors. An unallocated
      component is maintained to cover uncertainties that could affect management’s
      estimate of probable losses. The unallocated component of the allowance reflects
      the margin of imprecision inherent in the underlying assumptions used in the
      methodologies for estimating specific and general losses in the
      portfolio.





A
      loan is
      considered impaired when, based on current information and events, it is
      probable that the Company will be unable to collect the scheduled payments
      of
      principal or interest when due according to the contractual terms of the loan
      agreement. Factors considered by management in determining impairment include
      payment status, collateral value, and the probability of collecting scheduled
      principal and interest payments when due. Loans that experience insignificant
      payment delays and payment shortfalls generally are not classified as impaired.
      Management determines the significance of payment delays and payment shortfalls
      on a case-by-case basis, taking into consideration all of the circumstances
      surrounding the loan and the borrower, including the length of the delay, the
      reasons for the delay, the borrower’s prior payment record, and the amount of
      the shortfall in relation to the principal and interest owed. Impairment is
      measured on a loan by loan basis for commercial and construction loans by either
      the present value of expected future cash flows discounted at the loan’s
      effective interest rate, the loan’s obtainable market price, or the fair value
      of the collateral if the loan is collateral dependent.





Large
      groups of smaller balance homogeneous loans are collectively evaluated for
      impairment. Accordingly, the Company does not separately identify individual
      consumer and residential loans for impairment disclosures, unless such loans
      are
      the subject of a restructuring agreement.





**Qualitative
      Disclosures of Market Risk**





During
      the relatively low interest rate environment that has existed in recent years,
      we have implemented the following strategies to manage interest rate risk:
      (i)
      maintaining a high equity-to-assets ratio; and (ii) offering a variety of
      adjustable rate loan products, including adjustable rate one- to four-family,
      multifamily and non-residential mortgage loans, and short-term consumer loans,
      and through the Clover Leaf acquisition, a variety of adjustable-rate commercial
      loans.  By maintaining a high equity-to-assets ratio and by investing
      in adjustable-rate and short-term assets, we are better positioned to react
      to
      increases in market interest rates.  However, maintaining high equity
      balances reduces the return-on-equity ratio, and investments in shorter-term
      assets generally bear lower yields than longer-term investments.





**Quantitative
      Disclosures of Market Risk**





The
      majority of First Clover Leaf Bank’s assets and liabilities are monetary in
      nature.  Consequently, the most significant form of market risk is
      interest rate risk.  First Clover Leaf’s assets, consisting primarily
      of loans, have longer maturities than its liabilities, consisting primarily
      of
      deposits.  As a result, the principal part of First Clover Leaf’s
      business strategy is to manage interest rate risk and reduce the exposure of
      our
      net interest income to changes in market interest rates.  Accordingly,
      the Board of Directors has established an Asset/Liability Management Committee
      which is responsible for evaluating the interest rate risk inherent
      in





15
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Management’s
      Discussion and Analysis or Plan of Operation**








assets
      and liabilities, for determining the level of risk that is appropriate given
      First Clover Leaf’s business strategy, operating environment, capital, liquidity
      and performance objectives, and for managing this risk consistent with the
      guidelines approved by the Board of Directors.  Senior management
      monitors the level of interest rate risk on a regular basis and the
      Asset/Liability Management Committee meets as needed to review the
      asset/liability policies and interest rate risk position.





The
      Office of Thrift Supervision requires the computation of amounts by which the
      net present value of an institution’s cash flow from assets, liabilities and
      off-balance sheet items (the institution’s net portfolio value or “NPV”) would
      change in the event of a range of assumed changes in market interest
      rates.  The Office of Thrift Supervision provides all institutions
      that file a Consolidated Maturity/Rate Schedule as a part of their quarterly
      Thrift Financial Report with an interest rate sensitivity report of net
      portfolio value.  The Office of Thrift Supervision simulation model
      uses a discounted cash flow analysis and an option-based pricing approach to
      measure the interest rate sensitivity of net portfolio value.  The
      Office of Thrift Supervision model estimates the economic value of each type
      of
      asset, liability and off-balance-sheet contract under the assumption that the
      United States Treasury yield curve increases or decreases instantaneously by
      100
      basis points.  At September 30, 2007, the Company’s NPV percentage
      change for a 100 and 200 basis point rate reduction was a positive 2% for
      each.  Under the increasing rate scenarios, the Company would
      experience a NPV decline of 5% at a 100 basis point rate change and a decline
      of
      10% at a 200 basis point rate change.  These ratios are within the
      Office of Thrift Supervision guidelines.





**Liquidity
      and Capital Resources**


We
      maintain liquid assets at levels considered adequate to meet liquidity
      needs.  We adjust our liquidity levels to fund deposit outflows, pay
      real estate taxes on mortgage loans, repay our borrowings and fund loan
      commitments.  We also adjust liquidity as appropriate to meet asset
      and liability management objectives.




Our
      primary sources of liquidity are deposits, amortization and prepayment of loans,
      maturities of investment securities and other short-term investments, and
      earnings and funds provided from operations.  While scheduled
      principal repayments on loans are a relatively predictable source of funds,
      deposit flows and loan prepayments are greatly influenced by market interest
      rates, economic conditions, and rates offered by our competition.  We
      set the interest rates on our deposits to maintain a desired level of total
      deposits.  In addition, we invest excess funds in short-term
      interest-earning assets, which provide liquidity to meet lending
      requirements.




A
      portion
      of our liquidity consists of cash and cash equivalents, which are a product
      of
      our operating, investing and financing activities.  At September 30,
      2007 and December 31, 2006, $22.2 million and $92.7 million, respectively,
      were
      invested in cash and cash equivalents.  The primary sources of cash
      are principal repayments on loans, proceeds from the calls and maturities of
      investment securities, increases in deposit accounts and advances from the
      Federal Home Loan Bank of Chicago.







16
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Management’s
      Discussion and Analysis or Plan of Operation**








Cash
      flows are derived from operating activities, investing activities and financing
      activities as reported in the Consolidated Statements of Cash Flows included
      with the Consolidated Financial Statements.




Our
      primary investing activities are the origination of loans and the purchase
      of
      investment securities.  During the nine months ended September 30,
      2007 and 2006, our loan originations, net of collected principal, totaled $26.6
      million and $12.6 million, respectively.  We sold $3.4 million of
      loans during the nine months ended September 30, 2007, and $904,000 during
      the
      comparable period in 2006.  Cash received from calls and maturities of
      available-for-sale investment securities totaled $5.1 million and $1.3 million
      for the nine months ended September 30, 2007 and 2006,
      respectively.  We purchased $15.8 million and $2.8 million in
      available-for-sale investment securities during the nine months ended September
      30, 2007 and 2006, respectively.  We received proceeds of $1.1 million
      and $173,000 from the pay-down of available-for-sale securities during the
      nine
      months ended September 30, 2007 and 2006, respectively.





Purchases
      of premises and equipment, primarily related to the renovation of one of the
      Bank’s branch offices, were $1.4 million during the nine months ended September
      30, 2007.  Sales of premises and equipment totaled $600,000, including
      a gain on the sale of assets of $64,000, during the nine months ended September
      30, 2007.  This included the sale of our Park Street facility that had
      been closed in the fourth quarter of 2006.  Purchases of premises and
      equipment were $114,000 for the comparable period in 2006.  There were
      no redemptions of FHLB stock for the nine months ended September 30,
      2007.  During the comparable period in 2006 FHLB stock redemptions
      were $2.1 million.




Deposit
      flows are generally affected by the level of interest rates, the interest rates
      and products offered by local competitors, and other factors.  Due to
      the reduction in the level of deposits with one significant customer of $33.7
      million offset by increases in deposits of $19.3 million, net deposits decreased
      by $14.4 million for the nine months ended September 30, 2007.  Large
      fluctuations in the level of deposits are a normal occurrence for this customer
      based on the nature of this customer’s business.  During the
      comparable period in 2006 the net decrease in deposits was $10.4
      million.  Other borrowings had a net decrease of $13.7 million and a
      net increase of $5.1 million for the nine months ended September 30, 2007 and
      2006, respectively. Repurchases of the Company’s common stock were $4.6 million
      for the nine months ended September 30, 2007.  There were no
      repurchases of the Company’s common stock for the comparable period in
      2006.





Liquidity
      management is both a daily and long-term function of business
      management.  If we require funds beyond our ability to generate them
      internally, borrowing agreements exist with the Federal Home Loan Bank of
      Chicago, which provides an additional source of funds.  At September
      30, 2007, we had $10.4 million of advances from the Federal Home Loan Bank
      of
      Chicago and an additional available credit of approximately $57.1
      million.





17
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Management’s
      Discussion and Analysis or Plan of Operation**







The
      Bank
      is required to maintain certain minimum capital requirements under Office of
      Thrift Supervision regulations.  Failure by a savings institution to
      meet minimum capital requirements can result in certain mandatory and possible
      discretionary actions by regulators, which, if undertaken, could have a direct
      material effect on the Bank’s financial statements.  The Bank was
      considered “well-capitalized” at September 30, 2007.  Under the
      capital adequacy guidelines and regulatory framework for prompt corrective
      action, the Bank must meet specific capital guidelines that involve quantitative
      measures of the Bank’s assets, liabilities, and certain off-balance sheet items
      as calculated under regulatory accounting practices.




The
      Bank’s actual and required capital amounts and ratios at September 30, 2007 were
      as follows:




**Minimum
                  Required****for
                  Capital**
              
              
              **to
                  be "Well****Actual**
              
              
              **Adequacy**
              
              
              **Capitalized"****Amount**
              
              
              **Ratio**
              
              
              **Amount**
              
              
              **Ratio**
              
              
              **Amount**
              
              
              **Ratio****(Dollars in Thousands)**Stockholders'
                  equity
              
              $
              77,306Goodwill
                  and core deposit intangible
              
              
              (11,045
              )Disallowed
                  servicing assets
              
              
              (408
              )Unrealized
                  loss (gain) on securities AFS, net
              
              
              (41
              )Tangible
                  capital
              
              $
              65,812
              
              
              
              18.0
              %
              
              $
              5,478
              
              
              
              1.5
              %
              
              N/A
              
              
              
              -General
                  valuation allowance
              
              
              1,969Deduction
                  for low-level recourse
              
              
              (814
              )Total
                  capital to risk-weighted assets
              
              $
              66,967
              
              
              
              24.7
              %
              
              $
              21,725
              
              
              
              8.0
              %
              
              $
              27,156
              
              
              
              10.0
              %Tier
                  1 capital to risk-weighted assets
              
              $
              65,812
              
              
              
              24.2
              %
              
              $
              N/A
              
              
              
              -
              
              
              $
              16,293
              
              
              
              6.0
              %Tier
                  1 capital to total assets
              
              $
              65,812
              
              
              
              18.0
              %
              
              $
              14,607
              
              
              
              4.0
              %
              
              $
              18,259
              
              
              
              5.0
              %




**Off-Balance
      Sheet Arrangements**




In
      the
      ordinary course of business, the Company is a party to credit-related financial
      instruments with off-balance sheet risk to meet the financing needs of our
      customers.  These financial instruments include commitments to extend
      credit.  The Company follows the same credit policies in making
      commitments as it does for on-balance sheet instruments.




Commitments
      to extend credit are agreements to lend to a customer as long as there is no
      violation of any condition established in the contract.  Commitments
      generally have fixed expiration dates or other termination clauses and may
      require payment of a fee. The commitments for equity lines of credit may expire
      without being drawn upon. Therefore, the total commitment amounts do not
      necessarily represent future cash requirements. The amount of collateral
      obtained, if it is deemed necessary by the Company, is based on management’s
      credit evaluation of the customer.  Unfunded commitments under
      construction lines of credit for residential and multi-family properties are
      commitments for possible future extensions of credit to existing customers.
      These lines of credit are uncollateralized and usually do not contain a
      specified maturity date and may not be drawn upon to the total extent to which
      the Company is committed.





18
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Management’s
      Discussion and Analysis or Plan of Operation**








Standby
      letters of credit are conditional commitments issued by the Company to guarantee
      the performance of a customer to a third party.





A
      summary
      of the notional or contractual amounts of financial instruments, with
      off-balance-sheet risk at September 30, 2007 follows:





**Range
                of****Variable**
            
            
            **Fixed**
            
            
            
            
            
            **Rates
                on****Rate**
            
            
            **Rate**
            
            
            **Total**
            
            
            **Fixed
                Rate****Commitments**
            
            
            **Commitments**
            
            
            **Commitments**
            
            
            **Commitments**($
                in thousands)Commitments
                to extend credit
            
            $
            18,313
            
            
            $
            13,867
            
            
            $
            32,180
            
            
            
            4.99%-18.00
            %Standby
                letters of credit
            
            $
            3,174
            
            
            $
            2,479
            
            
            $
            5,653
            
            
            
            6.00%-9.75
            %




Loans
      sold to the Federal Home Loan Bank (FHLB) of Chicago under the Mortgage
      Partnership Finance program are sold with recourse.  The Bank has an
      agreement to sell residential loans up to $60.0 million to the FHLB of
      Chicago.  Approximately $46.7 million had been sold through September
      30, 2007.  Under the agreement, the Bank had a maximum credit
      enhancement of $814,000 at September 30, 2007.  Based upon a favorable
      payment history, the Bank does not anticipate recognizing any losses on these
      residential loans.





**Recent
      Accounting Pronouncements**





The
      following accounting standards were recently issued relating to the financial
      services industry:





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” to
      define fair value, establish a framework for measuring fair value and expand
      disclosures about fair values.  The Statement is effective for
      financial statements issued for fiscal years beginning after November 15, 2007,
      and interim periods within those fiscal years.  The Company does not
      expect SFAS No. 157 to have a material impact on the Company’s financial
      position or results of operation.





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities.”  SFAS No. 159 permits
      entities to choose to measure many financial instruments and certain other
      items
      at fair value.  Entities shall report unrealized gains and losses on
      those items which the fair value option has been elected in
      earnings.  SFAS No. 159 is effective as of the beginning of an
      entity’s first fiscal year that begins after November 15, 2007.  The
      Company is currently evaluating the requirements of the Statement and impact
      on
      the Company’s financial position and results of operations.





19
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Management’s
      Discussion and Analysis or Plan of Operation**








**Financial
      Condition**





***Total
      Assets.***  Total assets decreased to $378.4 million at
      September 30, 2007 from $410.3 million at December 31, 2006.  The
      decrease was due to the change in cash levels as we experienced a decline in
      deposits with one significant customer.  Federal funds sold decreased
      to $10.2 million at September 30, 2007 from $20.5 million at December 31,
      2006.  Cash and due from banks declined to $12.0 million at September
      30, 2007 from $72.1 million at December 31, 2006.  Securities
      available for sale increased to $55.6 million at September 30, 2007 from $45.8
      million at December 31, 2006.  The increase was due primarily to
      purchases of $15.8 million, partially offset by maturities and pay-downs of
      $5.1
      million and $1.1 million, respectively.  Loans, net amounted to $270.8
      million at September 30, 2007, compared to $244.0 million at December 31,
      2006.  The increase was due primarily to new loan originations in
      excess of loan collections of $26.6 million.  The majority of this
      increase was in the commercial loan portfolio which has experienced a steady
      demand over the nine month period.  Property and equipment increased
      to $7.4 million at September 30, 2007 from $6.9 million at December 31, 2006
      primarily due to the renovation of one of the Bank’s branch
      offices.  The Company has entered into a Real Estate Contract with a
      local contractor to purchase for the sum of $625,000, three lots and a newly
      constructed building, prior to the final build out, in accordance with agreed
      upon plans and specifications as outlined by both parties.  The
      closing of this sale is expected to occur on or before February 1,
      2008.





***Total
      Liabilities.***  Deposits decreased to $256.5 million at
      September 30, 2007 from $270.8 million at December 31, 2006 as a result of
      net
      withdrawals, primarily with one significant customer.  Due to the
      nature of this customer’s business, large fluctuations in its deposit accounts
      are a normal occurrence.  Securities sold under agreement to
      repurchase dropped to $15.7 million at September 30, 2007 from $29.4 million
      at
      December 31, 2006 due to the repayment of such borrowings.





***Stockholders’
      Equity.***  Stockholders’ equity decreased to $89.2 million
      at September 30, 2007 from $93.3 million at December 31, 2006, principally
      as a
      result of the repurchase of $4.6 million of the Company’s common stock, and the
      payment of cash dividends of $1.6 million.  These decreases in equity
      were partially offset by $1.9 million in net income.





20
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Management’s
      Discussion and Analysis or Plan of Operation**





**Asset
      Quality**





The
      following table sets forth information with respect to the Company’s
      nonperforming and impaired loans at the dates indicated.


**September 30,**
            
            
            **December 31,****2007**
            
            
            **2006**Loans
                90 days or more past due and still accruing
            
            **$**
            **128,762**
            
            
            $
            16,267Nonaccrual
                loans
            
            ****
            **2,207,454**
            
            
            
            1,371,289Other
                impaired loans
            
            ****
            **967,117**
            
            
            
            2,533,898Total
                nonperforming and impaired loans
            
            **$**
            **3,303,333**
            
            
            $
            3,921,454Allowance
                for losses on nonperforming and impaired loans
            
            **$**
            **409,149**
            
            
            $
            396,137Nonperforming
                and impaired loans with no allowance for losses
            
            **$**
            **128,762**
            
            
            $
            16,267





At
      September 30, 2007, the Company had no loans which were not currently classified
      as nonaccrual, 90 days past due or restructured but where known information
      about possible credit problems of borrowers caused management to have serious
      concerns as to the ability of the borrowers to comply with present loan
      repayment terms and which may result in disclosure as nonaccrual, 90 days past
      due or restructured.





At
      September 30, 2007, the Company’s nonaccrual loans increased $836,000 from
      December 31, 2006, while other impaired loans declined $1.6 million from
      December 31, 2006.  This shift in balances was primarily due to one
      loan relationship whose financial condition caused the Company to reclassify
      their loans to a nonaccrual status from an impaired status.





Under
      the
      Company’s internal review policy, loans classified as substandard totaled $3.4
      million at September 30, 2007 and $3.3 million at December 31,
      2006.





Following
      is a summary of activity in the allowance for loan losses:


**Nine Months Ended****September 30,**
            
            
            **September 30,****2007**
            
            
            **2006**Balance
                at beginning of period
            
            **$**
            **1,710,247**
            
            
            $
            428,419Allowance
                acquired by acquisition
            
            ****
            **-**
            
            
            
            911,021Charge-offs
            
            ****
            **-**
            
            
            
            -Recoveries
            
            ****
            **4,224**
            
            
            
            1,358Provision
                charged to expense
            
            ****
            **255,000**
            
            
            
            66,667Balance
                at end of period
            
            **$**
            **1,969,471**
            
            
            $
            1,407,465




**Results
      of Operations**





***General.***  Net
      income increased to $590,000 for the three months ended September 30, 2007
      from
      $524,000 for the same period last year.  This increase was primarily
      due to an increase in noninterest income, with relatively no change in net
      interest income or noninterest expense.  Net income increased to $1.9
      million for the nine months ended September 30, 2007 from $1.1 million for
      the
      same period last year.  The increase in net income was due to higher
      net interest income and noninterest income, which more than offset higher
      noninterest expense and higher income taxes.





21
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Management’s
      Discussion and Analysis or Plan of Operation**








***Net
      interest income.***  Net interest income increased to $2.6
      million for the three months ended September 30, 2007 from $2.5 million for
      the
      comparable period in 2006.  Net interest income increased to $7.8
      million for the nine months ended September 30, 2007 from $4.6 million for
      the
      comparable period in 2006. The increase for the nine months ended September
      30,
      2007 was due principally to the Clover Leaf acquisition.  Average net
      interest-earning assets were $81.5 million for the nine months ended September
      30, 2007, compared to $43.1 million for the same period in 2006. The ratio
      of
      interest-earning assets to interest-bearing liabilities increased to 130.5%
      for
      the nine months ended September 30, 2007 from 128.9% for the same period in
      2006.  The average interest rate spread dropped to 1.97% for the nine
      months ended September 30, 2007 from 2.36% for the same period in
      2006.  The average rate on interest-earning assets increased by 30
      basis points, while the average rate on interest-bearing liabilities increased
      by 69 basis points.  The decrease in the interest rate spread was
      attributable to the cost of funds rising faster than the yield on
      interest-earning assets.





***Interest
      income.***  Interest income on loans increased to $4.6
      million for the three months ended September 30, 2007 from $3.8 million for
      the
      comparable period in 2006.  Interest income on loans increased to
      $13.1 million for the nine months ended September 30, 2007 from $7.2 million
      for
      the comparable period in 2006. Interest income on loans increased primarily
      as a
      result of a higher average balance and yield due principally to the Clover
      Leaf
      acquisition.  The average balance of loans was $254.0 million and
      $149.9 million for the nine months ended September 30, 2007 and 2006,
      respectively. The average yield on loans increased to 6.87% for the nine months
      ended September 30, 2007 from 6.43% for comparable period in 2006.





Interest
      income on securities increased to $755,000 for the three months ended September
      30, 2007 from $454,000 for the comparable period in 2006.  Interest
      income on securities increased to $2.2 million for the nine months ended
      September 30, 2007 from $852,000 for the comparable period in
      2006.  Interest income on securities increased due primarily to a
      higher average balance as a result of the Clover Leaf
      acquisition.  The average balance of securities was $58.2 million and
      $25.5 million for the nine months ended September 30, 2007 and 2006,
      respectively.  Interest on other interest-bearing deposits, which
      includes federal funds sold, increased significantly due to a higher average
      balance.  The average balance of these deposits was $36.8 million and
      $16.8 million for the nine months ended September 30, 2007 and 2006,
      respectively.  The higher average balance of other interest-bearing
      deposits resulted primarily from an increase in federal funds sold, which is
      related to the overall increase in deposit accounts.  The average
      yield on other interest-bearing assets decreased to 5.16% for the nine months
      ended September 30, 2007 from 5.39% for the same period last
      year.  The lower yield on other interest-bearing deposits was due to a
      decline in the rate paid on these deposits, specifically the federal fund
      rate.  Components of interest income vary from time to time based on
      the availability and interest rates of loans, securities and other
      interest-earning assets.





***Interest
      expense.***  Interest expense on deposits increased to $2.7
      million for the three months ended September 30, 2007 from $2.0 million for
      the
      comparable period in 2006.  Interest expense on deposits increased to
      $7.6 million for the nine months ended September 30, 2007 from $3.9 million
      for
      the comparable period in 2006.  Higher cost of funds resulted from the
      increase in balances from the Clover Leaf acquisition and higher market interest
      rates paid on certificates.  The average balance of interest-bearing
      deposits was $232.7 million and $142.5 million for the nine months ended
      September 30, 2007 and 2006, respectively.  The average rate on
      deposits increased to 4.35% for the nine months ended September 30, 2007 from
      3.65% from the same period last year.





The
      increase of interest on FHLB advances, securities sold under agreement to
      repurchase and subordinated debentures for the nine months ended September
      30,
      2007 resulted from these borrowing being acquired in the acquisition of Clover
      Leaf Financial Corp.  Prior to the Acquisition, the Company did not
      have borrowings or subordinated debt.





22
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Management’s
      Discussion and Analysis or Plan of Operation**








***Provision
      for loan losses.***  Provision for loan losses was $134,000
      and $255,000 for the three and nine months ended September 30, 2007,
      respectively, and $67,000 for each of the comparable periods in
      2006.  Provision for loan losses is based upon management’s
      consideration of current economic conditions, the Company’s loan portfolio
      composition and historical loss experience used to estimate probable losses
      as
      well as the level of nonperforming assets and classified
      assets.  Management also reviews individual loans for which full
      collectibility may not be reasonably assured and considers, among other matters,
      the estimated fair value of the underlying collateral.  This
      evaluation is ongoing and results in variations in the Company’s provision for
      loan losses.  The large increase for the three and nine months ended
      September 30, 2007 compared to the same periods in 2006 was primarily due to
      the
      overall increase in the loan portfolio as well as the change in the composition
      of the portfolio that now includes a larger share of commercial and commercial
      real estate loans.  The Company is subject to periodic examination by
      the OTS, which may require the Company to record increases in the allowances
      based on its evaluation of available information.  There can be no
      assurance that the OTS will not require further increases to the
      allowances.





***Noninterest
      income.***  Noninterest income increased to $195,000 for
      the three months ended September 30, 2007 from $98,000 for the comparable period
      in 2006.  Noninterest income increased to $458,000 for the nine months
      ended September 30, 2007 from $101,000 for the comparable period in
      2006.  The increase was due to service charge income on deposit
      accounts and customer debit and credit cardholders acquired as a result of
      the
      Acquisition.  In addition, the Company has recognized noninterest
      income from their loan sale and servicing activity since the
      Acquisition.  The Company also recognized $64,000 in gain on sale of
      assets during 2007 related to the sale of the Park Street facility.





***Noninterest
      expense.***  Noninterest expense totaled $1.7 million for
      the three months ended September 30, 2007 and 2006.  Noninterest
      expense increased to $5.1 million for the nine months ended September 30, 2007
      from $2.8 million for the comparable period in 2006.  Compensation and
      employee benefits, the largest component of noninterest expense, increased
      to
      $701,000 for the three months ended September 30, 2007 from $611,000 for the
      comparable period in 2006 and increased to $2.1 million for the nine months
      ended September 30, 2007 from $1.1 million for the comparable period in
      2006.  Compensation and employee benefits increased as a result of
      primarily a higher number of personnel and salary levels due to the Clover
      Leaf
      acquisition.





Occupancy
      expense rose to $239,000 for the three months ended September 30, 2007 compared
      to $183,000 for the comparable period in 2006.  Occupancy expense rose
      to $651,000 for the nine months ended September 30, 2007 compared to $240,000
      for the comparable period in 2006. Occupancy expense increased due to the Clover
      Leaf acquisition and operation of three offices versus one office in the prior
      period, and depreciation on the renovation of one of the branch offices that
      was
      completed in 2007.





Data
      processing services decreased to $101,000 for the three months ended September
      30, 2007 from $103,000 for the comparable period in 2006.  Data
      processing services increased to $310,000 for the nine months ended September
      30, 2007 from $204,000 for the comparable period in 2006.  Data
      processing services rose as a result of the Clover Leaf acquisition of deposits,
      including retail and commercial demand deposit accounts not previously offered
      by the Company.





Director
      fees decreased to $60,000 for the three months ended September 30, 2007 from
      $132,000 for the comparable period in 2006 and decreased to $178,000 for the
      nine months ended September 30, 2007 from $231,000 for the comparable period
      in
      2006.  During 2006, additional meetings were held due to the
      Conversion and Acquisition.





23
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**Management’s
      Discussion and Analysis or Plan of Operation**








Professional
      services increased to $123,000 for the three months ended September 30, 2007
      from $76,000 for the comparable period in 2006.  Professional services
      increased to $370,000 for the nine months ended September 30, 2007 from $162,000
      for the comparable period in 2006.  Professional services increased as
      a result of higher expenses associated with our status as a larger and more
      complex public company following completion of the Clover Leaf
      acquisition.





Other
      noninterest expenses decreased to $334,000 for the three months ended September
      30, 2007 from $399,000 for the comparable period in 2006.  Other
      noninterest expenses increased to $943,000 for the nine months ended September
      30, 2007 from $661,000 for the comparable period in 2006.  Other
      noninterest expense increased due to the Clover Leaf acquisition, including
      expenses related to demand deposit accounts and internet banking services not
      previously offered by the Company.





***Income
      taxes.***  Income taxes decreased to $339,000 for the three
      months ended September 30, 2007 from $345,000 for the comparable period in
      2006.  Income taxes increased to $1.1 million for the nine months
      ended September 30, 2007 from $728,000 for the comparable period in
      2006.  The primary reason for the change in income taxes was the level
      of pre-tax income.  The effective tax rate was 36.5% for the three
      months ended September 30, 2007 versus 39.7% for the comparable period in
      2006.  The effective tax rate was 36.6% for the nine months ended
      September 30, 2007 versus 38.8% for the comparable period in
      2006.  The decrease in the effective tax rate for the three and nine
      months ended September 30, 2007 from the comparable periods in 2006 was
      primarily due to an increase in tax exempt income.





24
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.








**Item
                3.   Controls and
                Procedures**








As
      of the
      end of the period covered by this report, the Company carried out an evaluation,
      under the supervision and with the participation of the Company’s principal
      executive officer and principal financial officer, of the effectiveness of
      the
      design and operation of the Company’s disclosure controls and procedures. Based
      on this evaluation, the Company’s principal executive officer and principal
      financial officer concluded that the Company’s disclosure controls and
      procedures are effective in timely alerting them to material information
      required to be included in the Company’s periodic SEC reports.





In
      addition, there have been no changes in the Company’s internal control over
      financial reporting    during the most recent fiscal quarter
      that has materially affected, or is reasonably likely to materially affect,
      the
      Company’s internal control over financial reporting.





25
 ***Index***





FIRST
      CLOVER LEAF FINANCIAL CORP.





**PART
      II - Other
      Information**





**Item
      1 - Legal Proceedings.**





There
      are
      no material legal proceedings to which the Company is a party or of which any
      of
      their property is subject.  From time to time, the Company is a party
      to various legal proceedings incident to its business.





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





No
      equity
      securities were sold during the quarter that were not registered under the
      Securities Exchange Act.  The following table presents for the periods
      indicated a summary of the purchases made by or on behalf of the Company of
      shares of its common stock.





Period
            
            Total
              Number
                of
              Shares
              Purchased
            
            
            Average
              Price
              Paid
                per
              Share
            
            
            Total
              Number
                of
              Shares
              Purchased
              as
                Part of
              Publicly
              Announced
              Plans
                or
              Programs
            
            
            Maximum
              Number
                of
              Shares
                That
              May
                Yet Be
              Purchased
              Under
                the
              Plans
                or
              Programs1453,700July
                10 - 31, 2007
            
            
            208,342
            
            
            $
            10.82
            
            
            
            208,342
            
            
            
            245,358August
                1 - 31, 2007
            
            
            123,529
            
            
            $
            10.91
            
            
            
            123,529
            
            
            
            121,829September
                1 - 30, 2007
            
            
            87,164
            
            
            $
            11.57
            
            
            
            87,164
            
            
            
            34,665




1The
      Company’s Board
      of Directors approved a stock repurchase program on July 10, 2007 for the
      repurchase of up to 453,700 shares of common stock.  The Company has
      since purchased all 453,700 shares that were approved.  The Company’s
      Board of Directors approved a second stock repurchase program on October 23,
      2007 for the repurchase of up to 443,600 shares of common stock.





**Item
      3 - Defaults upon Senior Securities.**





Not
      applicable.





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





None





**Item
      5 - Other Information.**





None





**Item
      6 – Exhibits.**





(a)  Exhibits.


31.1:
            Certification
                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.


31.2:
            Certification
                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.


32:
            Certification
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.





26
 ***Index***




FIRST
      CLOVER LEAF FINANCIAL CORP.





**SIGNATURES**








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





FIRST
                CLOVER LEAF FINANCIAL CORP.(Small
                Business Issuer)DATE:
                November 14**,** 2007
            BY:
            Dennis
                M. TerryDennis
                M. Terry, President and Chief Executive OfficerBY:
            Darlene
                F. McDonaldDarlene
                F. McDonald, Senior Vice-President and Chief Financial
                Officer






27