As filed with the Securities and Exchange Commission on November 5 , 2007

Registration No. 333-146289


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 2 TO
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

HOME FEDERAL BANCORP, INC.
HOME FEDERAL BANK 401(K) SAVINGS PLAN

(Exact name of registrant as specified in its charter)

Maryland   6035   26-0886727

 
 
(State or other jurisdiction of   (Primary Standard Industrial   (I.R.S. Employer
incorporation or organization)   Classification Code Number)   Identification Number)

500 12th Avenue South
Nampa, Idaho 83651
(208) 466-4634

(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)

John F. Breyer, Jr., Esquire
Breyer & Associates PC
8180 Greensboro Drive, Suite 785
McLean, Virginia 22102
(703) 883-1100

(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Approximate date of commencement of proposed sale to the public:
As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

Calculation of Registration Fee


Title of Each Class of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered (1) Offering Price Per Unit Aggregate Offering Price (1) Registration Fee

Common Stock, $0.01 par value 15,870,000 $10.00 $158,700,000 (2) $4,873.00 (2)
Participation Interests 365,300 (3)


(1)  
Estimated solely for purposes of calculating the registration fee. As described in the prospectus, the actual number of shares to be issued and sold are subject to adjustment based upon the estimated pro forma market value of the registrant and market and financial conditions.
(2)  
Previously paid.
(3)  
The securities of Home Federal Bancorp, Inc. to be purchased by the Home Federal Bank 401(k) Savings Plan are included in the amount shown for Common Stock. Accordingly, pursuant to Rule 457(h) of the Securities Act, no separate fee is required for the participation interests. Pursuant to such rule, the amount being registered has been calculated on the basis of the number of shares of Common Stock that may be purchased with the current assets of such Plan.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.


PART I – INFORMATION REQUIRED IN PROSPECTUS

Cross Reference Sheet showing the location in the Prospectus of the Items of Form S-1

Item 1.
Forepart of the Registration Statement and Outside Front Cover of Prospectus
 
Forepart of the Registration Statement; Outside Front Cover Page
       
Item 2.
Inside Front and Outside Back Cover Pages of Prospectus
 
Inside Front Cover Page; Outside Back Cover Page
       
Item 3.
Summary Information, Risk Factors and Ratio of Earnings to Fixed Charges
 
Summary; Risk Factors
       
Item 4.
Use of Proceeds
 
How We Intend to Use the Proceeds From this Offering; Capitalization
       
Item 5.
Determination of Offering Price
 
The Conversion and Stock Offering – How We Determined Our Price and the Number of Shares to be Issued in the Stock Offering
       
Item 6.
Dilution
  *
       
Item 7.
Selling Security Holders
  *
       
Item 8.
Plan of Distribution
 
The Conversion and Stock Offering
       
Item 9.
Description of Securities to be Registered
 
Description of Capital Stock of New Home Federal Bancorp
       
Item 10.
Interests of Named Experts and Counsel
 
Legal and Tax Opinions; Experts
       
Item 11.
Information with Respect to the Registrant
   
       
 
(a) Description of Business
 
Business of Home Federal Bancorp, Inc. and Home Federal Bank
       
 
(b) Description of Property
 
Business of Home Federal Bancorp, Inc. and Home Federal Bank – Properties
       
 
(c) Legal Proceedings
 
Business of Home Federal Bancorp, Inc. and Home Federal Bank – Legal Proceedings
       
 
(d) Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
 
Outside Front Cover Page; Market for Our Common Stock; We Intend to Continue to Pay Quarterly Dividends
       
 
(e) Financial Statements
 
Consolidated Financial Statements; Pro Forma Data
       
 
(f) Selected Financial Data
 
Selected Financial and Other Data
       
 
(g) Supplementary Financial Information
 
*

I - 1


 
(h) Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations
       
 
(i) Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  *
       
 
(j) Quantitative and Qualitative Disclosures About Market Risk
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Asset and Liability Management and Market Risk
       
 
(k) Directors, Executive Officers, Promoters and Control Persons
  Management
       
 
(l) Executive Compensation
 
Management – Summary Compensation Table, Management – Employment Agreements and Other Compensatory Arrangements, Management – Benefits to be Considered Following Completion of the Conversion; Management – Benefit Plans
       
 
(m) Security Ownership of Certain Beneficial Owners and Management
  *
       
 
(n) Certain Relationships and Related Transactions
 
Management – Transactions with Management
       
Item 12.
Disclosure of Commission Position on Indemnification for Securities Act Liabilities
 
Part II, Item 17


*Item is omitted because answer is negative or item inapplicable.

I - 2


PROSPECTUS SUPPLEMENT


HOME FEDERAL BANCORP, INC.
HOME FEDERAL BANK’S 401(K) PLAN TRUST

This prospectus supplement relates to the election by participants in the Home Federal Bank’s 401(k) Plan to direct the plan trustee to invest all or a portion of their funds in the plan in the common stock of new Home Federal Bancorp, Inc. (“new Home Federal Bancorp”). The Home Federal Bank’s 401(k) Plan is referred to in this prospectus supplement as the 401(k) Plan.

The common stock may be purchased through the Employer Stock Fund under the 401(k) Plan. The interests offered under this prospectus supplement are conditioned on the conversion of Home Federal MHC (“Home Federal MHC”) from the mutual to stock form of organization. Your investment in the Employer Stock Fund in connection with Home Federal MHC’s conversion is also governed by the purchase priorities contained in the plan of conversion and reorganization adopted by Home Federal MHC, Home Federal Bancorp, Inc., Home Federal Bank and new Home Federal Bancorp (the “plan of conversion and reorganization”). The 401(k) Plan permits you, as a participant, to direct the trustee of the Employer Stock Fund to purchase new Home Federal Bancorp common stock with amounts in the 401(k) Plan attributable to your accounts. This prospectus supplement relates solely to the election of a participant to direct the purchase of new Home Federal Bancorp common stock in the conversion and stock offering and not to any future purchases under the 401(k) Plan or otherwise.

The prospectus dated                         of new Home Federal Bancorp, which is being delivered with this prospectus supplement, includes detailed information with respect to new Home Federal Bancorp, the conversion and stock offering, new Home Federal Bancorp common stock and the financial condition, results of operations and business of Home Federal Bancorp. This prospectus supplement, which provides detailed information with respect to the 401(k) Plan, should be read only in conjunction with the prospectus.


For a discussion of certain factors that you should consider before investing,
see “Restrictions on Resale” at page 12 in this prospectus supplement
and “Risk Factors” beginning on page          in the prospectus.

The securities offered hereby are not deposits or accounts and are not federally insured or guaranteed.

The securities offered hereby have not been approved or disapproved by the Securities and Exchange Commission, the Office of Thrift Supervision, or any state securities commission or agency, nor have these agencies passed upon the accuracy or adequacy of this prospectus supplement. Any representation to the contrary is a criminal offense.

The date of this prospectus supplement is                            .

This prospectus supplement contains information you should consider when making your investment decision. You should rely only on the information provided in this prospectus supplement and the related prospectus. New Home Federal Bancorp has not authorized anyone else to provide you with different information. Home Federal Bancorp is not making an offer of its common stock in any state where an offer is not permitted. The information in this prospectus supplement is accurate only as of the date of this prospectus supplement, regardless of the time of delivery of this prospectus supplement or any sale of new Home Federal Bancorp common stock.


TABLE OF CONTENTS
     
THE OFFERING   1

Election to Purchase New Home Federal Bancorp Common Stock in the Conversion

  1

Securities Offered

  1

Method of Directing Transfer

  2

Time for Directing Transfer

  2

Irrevocability of Transfer Direction

  2

Subsequent Elections

  2

Purchase of New Home Federal Bancorp Common Stock – The Employer Stock Fund

  2

Nature of a Participant’s Interest in New Home Federal Bancorp Common Stock

  2

Voting and Tender Rights of New Home Federal Bancorp Common Stock

  2
     
DESCRIPTION OF THE 401(k) PLAN   3

Introduction

  3

Eligibility and Participation

  3

Contributions Under the 401(k) Plan

  3

Limitations on Contributions

  4

Investment of Contributions

  5

Financial Data

  8

Administration of the 401(k) Plan

  9

Benefits Under the 401(k) Plan

  9

Withdrawals and Distributions from the 401(k) Plan

  10

Reports to 401(k) Plan Participants

  10

Amendment and Termination

  10

Federal Income Tax Consequences

  10

ERISA and Other Qualification

  12

Restrictions on Resale

  12

Securities and Exchange Commission Reporting and Short-Swing Profit Liability

  12
     
LEGAL OPINIONS   13
     
INVESTMENT ELECTION FORM   A-1


THE OFFERING

Election to Purchase New Home Federal Bancorp Common Stock in the Conversion

In connection with the conversion of Home Federal MHC from the mutual to stock form of organization, the 401(k) Plan will permit each participant to direct that all or part of the funds in his or her accounts under the 401(k) Plan be transferred to the Employer Stock Fund and used to purchase new Home Federal Bancorp common stock in the stock offering. The trustee of the Employer Stock Fund will follow the participants’ directions and exercise subscription rights to purchase the common stock in the stock offering to the extent provided in our plan of conversion and reorganization. Funds in the 401(k) Plan that you do not want to be used to purchase new Home Federal Bancorp common stock will remain invested in accordance with your investment instructions in effect at the time.

Respective purchases by the 401(k) Plan in the stock offering will be counted as purchases by the individual participants at whose election they are made, and will be subject to the purchase limitations applicable to the individual, rather than being counted in determining the maximum amount that the Home Federal Bancorp tax-qualified employee plans (as defined in the prospectus) may purchase in the aggregate. See “Home Federal MHC’s Conversion and Stock Offering - Subscription Offering and Subscription Rights” in the prospectus.

All participants are eligible to direct a transfer of funds to the Employer Stock Fund. However, these directions are subject to the purchase priorities in the plan of conversion and reorganization. Your order will be filled based on your status as an eligible account holder, supplemental eligible account holder or other member in the stock offering. An eligible account holder is a depositor whose deposit account(s) totaled $50.00 or more on March 31, 2006. A supplemental eligible account holder is a depositor whose deposit account(s) totaled $50.00 or more on September 30, 2007. An other member is a depositor of Home Federal Bank as of                      2007, or a borrower as of March 16, 2004, respectively. If you fall into one of the above subscription offering categories, you have subscription rights to purchase shares of new Home Federal Bancorp common stock in the subscription offering and you may use funds in your 401(k) Plan account to pay for the shares of new Home Federal Bancorp common stock that you are eligible to purchase.

If we receive subscriptions for more shares than are to be sold in the offering, shares will be allocated to subscribers in the order of the priorities established in the plan of conversion and reorganization under a formula outlined within the plan of conversion and reorganization. In that case, as a result of the allocation, the trustee for the 401(k) Plan may not be able to purchase all of the common stock you requested in the stock offering. The trustee will purchase in the stock offering as many shares as it is able and will pro-rate those shares to each participant’s account based on the purchase priorities contained in the Home Federal MHC plan of conversion and reorganization outlined above.

Securities Offered

The securities offered in connection with this prospectus supplement are participation interests in the Employer Stock Fund. In connection with the conversion from the mutual to stock form of organization of Home Federal MHC, and subject to any limits set out in the plan of conversion and reorganization, up to 100% of the assets of the 401(k) Plan may be used by the 401(k) Plan trustee to acquire our common stock for the accounts of employees participating in the 401(k) Plan. Based on the asset value of the 401(k) Plan as of December 31, 2006, and the offering price, up to 587,592 shares of our common stock could be acquired by the 401(k) Plan. New Home Federal Bancorp is the issuer of the common stock and only the employees of Home Federal Bank and Home Federal Bancorp (and after the conversion, employees of new Home Federal Bancorp) may participate in the 401(k) Plan. Information relating to the 401(k) Plan is contained in this prospectus supplement and information relating to Home Federal Bancorp, the conversion and stock offering, and the financial condition, results of operations and business of Home Federal Bancorp is contained in the prospectus delivered with this prospectus supplement. The address of our principal executive office is 500 12th Avenue South, Nampa, Idaho 83651, and our telephone number is (208) 466-4634. As of December 31, 2006, the market value of the assets of the 401(k) Plan equaled approximately $5,875,972. The plan administrator has informed each participant of the value of his or her beneficial interest in the 401(k) Plan. The value of 401(k) Plan assets represents past contributions to the 401(k) Plan on your behalf, plus or minus earnings or losses on the contributions, less previous withdrawals.

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Method of Directing Transfer

Included with this prospectus supplement is an Investment Election Form. If you wish to direct some or all of your beneficial interest in the assets of the 401(k) Plan into the Employer Stock Fund to purchase new Home Federal Bancorp common stock in the stock offering, you should indicate that decision by completing and submitting the election form. If you do not wish to make an election at this time, you do not need to take any action.

Time for Directing Transfer

The deadline for submitting a direction to transfer amounts to the Employer Stock Fund in order to purchase new Home Federal Bancorp common stock in the stock offering is                      , unless extended. Your completed election form must be returned to the stock information center, 500 12th Avenue South, Nampa, Idaho 83651, by 12:00 Noon, Mountain time on that date.

Irrevocability of Transfer Direction

Once received in proper form, your executed Investment Election Form may not be modified, amended or revoked without our consent unless the stock offering has not been completed by                     . See also “Investment of Contributions - New Home Federal Bancorp Common Stock Investment Election Procedures” below.

Subsequent Elections

After the offering, you will continue to be able to direct the investment of past balances and current contributions among the investment options available under the 401(k) Plan, including the Employer Stock Fund (the percentage invested in any option must be a whole percent). The allocation of your interest in the various investment options offered under the 401(k) Plan may be changed daily. Special restrictions may apply to transfers directed to or from the Employer Stock Fund by those participants who are our executive officers and principal stockholders and are subject to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended.

Purchase of New Home Federal Bancorp Common Stock – The Employer Stock Fund

Shares of new Home Federal Bancorp common stock purchased through the 401(k) Plan will be held as part of the Employer Stock Fund. The trustee requires that Employer Stock Fund units consist of both shares of new Home Federal Bancorp common stock and cash. Accordingly, funds transferred to the Employer Stock Fund for the purchase of new Home Federal Bancorp common stock in the stock offering will be used by the trustee to purchase both shares of the common stock and cash. Units of the Employer Stock Fund will be valued in the offering at $10.00 per unit. Of this amount, $9.70 will be used to acquire 0.97 of one share of new Home Federal Bancorp common stock, and $.30 will be used to acquire cash, through an interest in a money market account. All other persons who purchase our common stock in the stock offering outside of the 401(k) Plan may acquire the common stock without having to acquire the related cash interest and will pay $10.00 per share for new Home Federal Bancorp common stock.

Nature of a Participant’s Interest in New Home Federal Bancorp Common Stock

New Home Federal Bancorp common stock will be held in the name of the trustee as part of the Employer Stock Fund, in its capacity as trustee. Because the 401(k) Plan actually purchases the Employer Stock Fund units, you will acquire a “participation interest” in the Employer Stock Fund units (and the underlying shares of new Home Federal Bancorp common stock and cash) and not own the units (and shares and cash) directly. The trustee will maintain individual accounts reflecting each participant’s individual interest in the Employer Stock Fund.

Voting and Tender Rights of New Home Federal Bancorp Common Stock

The plan administrator generally will exercise voting rights attributable to all of the common stock held by the Employer Stock Fund. With respect to matters involving tender offers for new Home Federal Bancorp, the plan administrator will vote shares allocated to participants in the 401(k) Plan as directed by participants with interests in the Employer Stock Fund. The trustee will provide to you voting instruction rights reflecting your proportional interest in the Employer Stock Fund. The number of shares of common stock held in the Employer Stock Fund that

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the trustee votes in the affirmative and negative on each matter will be proportionate to the voting instructions given by the participants. Where no voting or tender offer instructions are given by the participant, the shares shall be voted or tendered in the manner directed by the plan administrator.

DESCRIPTION OF THE 401(k) PLAN

Introduction

The 401(k) Plan was adopted by Home Federal and is now formally named the “Home Federal Bank’s 401(k) Plan.” This profit sharing plan contains a cash-or-deferred feature described at Section 401(k) of the Internal Revenue Code of 1986, as amended, to encourage employee savings and to allow eligible employees to supplement their income upon retirement. In connection with the conversion, new Home Federal Bancorp will formally adopt the 401(k) Plan. References to Home Federal Bancorp in this description of the 401(k) Plan should be considered to refer to new Home Federal Bancorp after the conversion.

Reference to Full Text of 401(k) Plan. The following statements are summaries of certain provisions of the 401(k) Plan. They are not meant to be a complete description of these provisions and are qualified in their entirety by the full text of the 401(k) Plan. Copies of the 401(k) Plan are available to all employees. You should submit your request to the plan administrator, Home Federal Bank, 500 12th Avenue South, Nampa, Idaho 83651. We encourage you to read carefully the full text of the 401(k) Plan to understand your rights and obligations under the 401(k) Plan.

Tax and Securities Laws. Participants should consult with legal counsel regarding the tax and securities laws implications of participation in the 401(k) Plan. Any officers or beneficial owners of more than 10% of the outstanding shares of common stock should consider the applicability of Sections 16(a) and 16(b) of the Securities Exchange Act of 1934, as amended, to his or her participation in the 401(k) Plan. See “Securities and Exchange Commission Reporting and Short Swing Profit Liability” on page 12 of this prospectus supplement.

Eligibility and Participation

All employees of Home Federal Bancorp (or, after the conversion, new Home Federal Bancorp) or a subsidiary are eligible to participate in the cash or deferred portion (i.e., that portion of the 401(k) Plan under which 401(k) deferrals are made) as of the first day of the calendar quarter following the commencement of employment. All employees of Home Federal Bancorp (or, after the conversion, new Home Federal Bancorp) or a subsidiary who have completed one year of service are eligible to participate in the matching contribution portion of the 401(k) Plan as of the first day of the next following calendar quarter, and the profit sharing portion of the 401(k) Plan on the next following January 1 or July 1. As of December 31, 2006, there were approximately 383 employees eligible to participate in the cash or deferred portion of the 401(k) Plan, and 294 employees had elected to participate.

Contributions Under the 401(k) Plan

401(k) Contributions. The 401(k) Plan permits each participant to defer receipt of up to 100% of their annual compensation, not to exceed $15,500 (for 2007), and to have that compensation contributed to the 401(k) Plan. A 401(k) contribution of 3% of compensation will automatically be made unless the participant elects a different percentage, or to have no 401(k) contributions made on his or her behalf. Generally, the 401(k) Plan describes a participant’s annual compensation as total compensation while the employee is a participant, taking into account pre-tax deferrals and excluding fringe benefits. However, no more than $225,000 of compensation may be taken into account for purposes of determining 401(k) contributions (and matching and profit sharing contributions) for 2007. You may modify the rate of your future 401(k) contributions by filing a new deferral agreement with the plan administrator. Modifications to your rate of 401(k) contributions may take effect as soon as practicable following when you make your revised deferral election. Suspension of your 401(k) contributions will be effective 30 days after that election.

Catch-Up 401(k) Contributions. The 401(k) Plan permits each participant who has attained age 50 to defer up to an additional $5,000 (for 2007) into the 401(k) Plan. Catch-up 401(k) contributions are not subject to any limitations other than the $5,000 dollar limitation.

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Matching Contributions. The 401(k) Plan currently provides for matching contributions to the 401(k) Plan. The annual matching contribution amount is determined by Home Federal Bancorp (and may be zero).

Profit Sharing Contributions. The 401(k) Plan currently permits Home Federal Bancorp to make discretionary profit sharing contributions to the 401(k) Plan. To be eligible for a profit sharing contribution in any year, you must be actively employed with Home Federal Bancorp or Home Federal Bank on the last day of the plan year, and have completed at least 1,000 hours of service during the plan year. In any Plan Year in which a profit sharing contribution is made and in which you are eligible to receive an allocation, an allocation will be made to your profit sharing account using a grouping method. Under this method, you will be assigned to a group which will share in the contribution (if any) that we make for that group. The amount contributed for each group is usually allocated in the ratio that the compensation of each eligible participant who is a member of that group bears to the total compensation of all eligible participants who are members of that group. This means that the amount allocated to the profit sharing account of each eligible participant who is a member of that group will, as a percentage of compensation, be the same.

Rollover Contributions. You may also rollover or directly transfer accounts from another qualified plan or an individual retirement account (“IRA”), provided the rollover or direct transfer complies with applicable law. If you want to make a rollover contribution or direct transfer, you should contact the plan administrator.

Limitations on Contributions

Limitations on 401(k) Contributions. Although the 401(k) Plan allows you to defer receipt of up to 100% of your compensation each year as a 401(k) contribution, federal law limits your total 401(k) contributions under the 401(k) Plan, and any similar plans, to $15,500 for 2007. This annual limitation will increase in future years to reflect increases in the cost of living. 401(k) contributions in excess of this limitation are considered excess deferrals, and will be included in an affected participant’s gross income for federal income tax purposes in the year the 401(k) contribution is made. In addition, any excess deferral will again be subject to federal income tax when distributed by the 401(k) Plan to the participant, unless the excess deferral, together with any income earned on the excess deferral, is distributed to the participant not later than the first April 15th following the close of the taxable year in which the excess deferral is made. Any income on the excess deferral that is distributed not later than such date shall be treated, for federal income tax purposes, as earned and received by the participant in the taxable year in which the distribution is made.

Limitations on Annual Additions and Benefits. Pursuant to the requirements of the Internal Revenue Code, the 401(k) Plan provides that the total amount of all contributions and forfeitures (annual additions) allocated to participants during any plan year may not exceed the lesser of 100% of the participant’s compensation for the plan year, or $45,000. The $45,000 limit will be increased from time to time to reflect increases in the cost of living. Annual additions for this purpose generally include 401(k) deferrals, matching contributions and employer contributions to this or any other qualified plan sponsored by Home Federal Bancorp or an affiliated entity. Annual additions do not include rollover contributions.

Limitation on 401(k) and Matching Contributions for Highly Compensated Employees. Sections 401(k) and 401(m) of the Internal Revenue Code limit the amount of 401(k) contributions and matching contributions that may be made to the 401(k) Plan in any plan year on behalf of highly compensated employees (defined below) in relation to the amount of 401(k) contributions and matching contributions made by or on behalf of all other employees eligible to participate in the 401(k) Plan. Specifically, the percentage of 401(k) contributions made on behalf of a participant who is a highly compensated employee shall be limited so that the average actual deferral percentage for the group of highly compensated employees for the current plan year does not exceed the greater of (i) the average actual deferral percentage for the group of eligible employees who are non-highly compensated employees for the current plan year multiplied by 1.25 or (ii) the average actual deferral percentage for the group of eligible employees who are non-highly compensated employees for the current plan year, multiplied by two (2); provided that the difference in the average actual deferral percentage for eligible non-highly compensated employees does not exceed 2%. Similar discrimination rules apply to matching contributions. The discrimination rules do not apply to 401(k) catch-up contributions.

In general, a highly compensated employee includes any employee who was a 5% owner of the employer at any time during the year or preceding year, or had compensation for the preceding year in excess of $100,000. The

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dollar amount in the foregoing sentence is for the plan year ending December 31, 2006. This dollar amount may be adjusted to reflect increases in the cost of living.

Contributions allocated to highly compensated employees that exceed the average deferral limitation in any plan year are referred to as excess contributions. In order to prevent the disqualification of the 401(k) Plan, any excess 401(k) contributions, together with any income earned on these excess contributions, must be distributed to the highly compensated employees before the close of the following plan year. Matching contributions that relate to the returned deferral contributions will be forfeited (if not vested) or distributed (if vested) at the same time as the excess deferral contributions are returned. Regarding matching contributions that do not satisfy the limitation tests described above, in order to prevent the disqualification of the 401(k) Plan, any excess matching contributions, together with any income earned on these excess contributions, must be distributed to the highly compensated employees before the close of the following plan year. Excess matching contributions, plus income allocable thereto, will be forfeited (if not vested) or distributed (if vested). There are specific rules for determining which highly compensated employees will be affected by the excess contribution return rules, and the amount of excess 401(k) contributions and matching contributions that must be returned to the affected employees. The employer will be subject to a 10% excise tax on any excess contributions unless the excess contributions, together with any income earned on these excess contributions, are distributed before the close of the first 21/2 months following the plan year to which the excess contributions relate.

Deduction Limits. Matching and profit sharing contributions are subject to and limited by Internal Revenue Code deduction rules. Contributions will not be made to the extent they would be considered nondeductible. 401(k) contributions are neither subject to nor limited by the Internal Revenue Code deduction rules.

Top-Heavy Plan Requirements. If for any plan year the 401(k) Plan is a top-heavy plan, then minimum contributions may be required to be made to the 401(k) Plan on behalf of non-key employees. Contributions otherwise being made under the Plan may apply to satisfy these requirements.

In general, the 401(k) Plan will be regarded as a “top-heavy plan” for any plan year if, as of the last day of the preceding plan year, the aggregate balance of the accounts of participants who are key employees exceeds 60% of the aggregate balance of the accounts of all participants. Key employees generally include any employee who, at any time during the plan year, is (1) an officer of Home Federal Bancorp (or, after the conversion, new Home Federal Bancorp) or its subsidiaries having annual compensation in excess of $145,000 who is in an officer in an administrative or policy-making capacity, (2) a 5% owner of Home Federal Bancorp (i.e., owns directly or indirectly more than 5% of the stock of Home Federal Bancorp (or, after the conversion, new Home Federal Bancorp), or stock possessing more than 5% of the total combined voting power of all stock of Home Federal Bancorp) or (3) a 1% owner of Home Federal Bancorp having annual compensation in excess of $150,000. The $145,000 amount (but not the $150,000 amount) in the foregoing sentence is for 2007, and may be adjusted in the future for cost of living increases.

Investment of Contributions

Investment Options. All amounts credited to participants’ accounts under the 401(k) Plan are held in trust. The trust is administered by trustees appointed by Home Federal Bank’s Board of Directors.

You must instruct the trustee as to how funds held in your account are to be invested. In addition to the Employer Stock Fund, which will consist of shares of new Home Federal Bancorp common stock and cash, participants may elect to instruct the trustee to invest such funds in any or all of the following investment options:

 
ING VP Money Market Portfolio, Class I - seeks to provide high current return, consistent with preservation of capital and liquidity by investing in high-quality money market instruments.
     
 
ING VP Intermediate Bond Portfolio, Class I Fund - seeks to provide as high a level of total return as is consistent with reasonable risk, primarily through investment in a diversified portfolio of investment-grade corporate bonds and debt securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities.

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ING GNMA Income Fund, Class A - seeks to provide income consistent with the preservation of capital through investment in securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
     
 
ING Fixed Account - seeks to provide stability; guarantees a minimum rate of interest for the life of the contract, and may credit a higher interest rate from time to time.
     
 
Templeton Global Bond Fund, Class A - seeks to provide capital appreciation and growth of income.
     
 
ING VP Index Plus LargeCap Portfolio - seeks to outperform the total return performance of the Standard & Poor’s 500 Composite Index (S&P 500), while maintaining a market level of risk.
     
 
Oppenheimer Main Street Fund, Class A - seeks a high total return.
     
 
Pioneer Fund, Class A - seeks reasonable income and capital growth.
     
 
Fidelity VIP Contrafund Portfolio, Initial Class - seeks long-term capital appreciation.
     
 
Fidelity Advisor Mid Cap Fund, Class T - seeks long-term capital growth.
     
 
ING VP Index Plus SmallCap Portfolio - seeks to outperform the total return performance of the Standard and Poor’s Small-Cap 600 Index (S&P 600), while maintaining a market level of risk.
     
 
Lord Abbett Series Fund, Mid-Cap Value Portfolio, Class VC - seeks capital appreciation through investments, primarily in equity securities, which are believed to be undervalued in the marketplace.
     
 
ING VP International Value Portfolio, Class I - seeks long-term capital appreciation.
     
 
ING American Century Small Cap Value Portfolio, Initial Class - seeks long-term growth of capital; income is a secondary objective.
     
 
ING Baron Small Cap Growth Portfolio, Initial Class - seeks capital appreciation.
     
 
ING VP Index Plus MidCap Portfolio, Class I - seeks to outperform the total return performance of the Standard & Poor’s MidCap 400 Index (S&P 400), while maintaining a market level of risk.
     
 
Washington Mutual Investors Fund, Class R3 - seeks to produce income and to provide an opportunity through growth of principal consistent with sound common stock investing.
     
 
American Balanced Fund, Class R3 - seeks conservation of capital, current income and long-term growth of capital and income.
     
 
ING Solution 2015 Portfolio, Service Class - seeks to provide total return consistent with an asset allocation targeted at retirement in approximately 2015, and thereafter to provide a combination of total return and stability of principal consistent with an asset allocation targeted to retirement.
     
 
ING Solution 2025 Portfolio, Service Class - seeks to provide total return consistent with an asset allocation targeted at retirement in approximately 2025, and thereafter to provide a combination of total return and stability of principal consistent with an asset allocation targeted to retirement.
     
 
ING Solution 2035 Portfolio, Service Class - seeks to provide total return consistent with an asset allocation targeted at retirement in approximately 2035, and thereafter to provide a combination of total return and stability of principal consistent with an asset allocation targeted to retirement.

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ING Solution 2045 Portfolio, Service Class - seeks to provide total return consistent with an asset allocation targeted at retirement in approximately 2045, and thereafter to provide a combination of total return and stability of principal consistent with an asset allocation targeted to retirement.
     
 
ING Solution Income Portfolio, Service Class - seeks to provide a combination of total return and stability of principal consistent with an asset allocation targeted to retirement.
     
 
ING T. Rose Price Growth Equity/ Alger Amer Growth - seeks long-term capital growth, and secondarily, increasing dividend income.
     
 
ING Oppenheimer Global Portfolio, Initial Class - seeks capital appreciation.

For further descriptions of these investment options, you may request a prospectus for each of the investment options from the plan administrator. If no investment direction is given, all contributions to a participant’s account will be invested in the Money Market Fund.

The investment in new Home Federal Bancorp common stock involves certain risks. No assurance can be given that units in the Employer Stock Fund (that are comprised primarily of new Home Federal Bancorp common stock) purchased pursuant to the 401(k) Plan will thereafter be able to be sold at a price equal to or in excess of the purchase price. See also “Risk Factors” in the prospectus.

New Home Federal Bancorp Common Stock Investment Election Procedures. You may instruct the trustee to purchase new Home Federal Bancorp common stock by redirecting funds from your existing accounts into the Employer Stock Fund by filing a completed Investment Election Form with the plan administrator on or prior to the election deadline. The amount of funds redirected into the Employer Stock Fund must be allocated in whole dollar increments from investment options containing your 401(k) Plan funds. When you instruct the trustee to redirect the funds in your existing accounts into the Employer Stock Fund in order to purchase units in the Employer Stock Fund, the trustee will liquidate funds from the appropriate investment option(s) and apply such redirected funds as requested, in order to effect the new allocation. Approximately 97% of the elected funds used to acquire units in the Employer Stock Fund will be invested in new Home Federal Bancorp common stock and the remaining 3% will be invested in a money market account.

For example, you may fund an election to purchase $1,000 worth of the Employee Stock Fund by redirecting the aggregate purchase price of $1,000 for the shares from the following investment options (provided the necessary funds are available in such Investment Options): (i) $100 from the ING VP Money Market Fund; (ii) $300 from the ING VP Intermediate Bond Fund; and (iii) $600 from the Lord Abbett Mid-Cap Value Portfolio Fund. In such case, the trustee would liquidate the amount instructed from each of the selected accounts and the $1,000 will be used to acquire 100 Employer Stock Fund units (that is 97 shares of new Home Federal Bancorp stock and $30 in cash through a money market account investment). If your instructions cannot be fulfilled because you do not have the required funds in one or more of the investment options to purchase the units in the Employer Stock Fund subscribed for, you will be required to file a revised Investment Election Form with the plan administrator by the election deadline. Once received in proper form, an executed election form may not be modified, amended or rescinded without our consent unless the stock offering has not been completed by                                .

Adjusting Your Investment Strategy. Until changed in accordance with the terms of the 401(k) Plan, future allocations of your contributions would remain unaffected by the election to purchase units in the Employer Stock Fund through the 401(k) Plan in the stock offering. You may modify a prior investment allocation election or request the transfer of funds to another investment vehicle by telephone at 1-800-584-6001 or on the Internet at www.ingretirementplans.com. Modifications and fund transfers relating to the Employer Stock Fund will be permitted on a daily basis, except as limited for certain 401(k) Plan participants as previously indicated.

Valuation of Accounts. The 401(k) Plan uses a unit system for valuing each investment fund. Under this system, your share in any investment fund is represented by units. The unit value is determined as of the close of business each regular business day. The total dollar value of your share in any investment fund as of any valuation date is determined by multiplying the number of units held by you by the unit value of the fund on that date. The sum of the values of the funds you select represents the total value of your 401(k) Plan account.

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Financial Data

Employer Contributions. For the plan year ended December 31, 2006, we made matching contributions totaling approximately $212,323.46 into the 401(k) Plan. No profit sharing contribution was made to the 401(k) Plan for the plan year ended December 31, 2006.

If we adopt other stock-based benefit plans, such as a stock option plan or a restricted stock plan, or if contributions are made to the employee stock ownership plan, formed as part of the conversion and stock offering, to repay a loan used by it to acquire new Home Federal Bancorp stock, then we may decide to reduce our matching contribution and/or our discretionary contribution under the 401(k) Plan in order to reduce overall expenses. If we adopt a restricted stock plan, the plan would not be submitted for stockholder approval for at least six months following completion of the reorganization.

Performance of new Home Federal Bancorp Common Stock. It is expected that the new Home Federal Bancorp common stock will be listed on the NASDAQ Global Select Market under the existing symbol “HOME”. As of the date of this prospectus supplement, no shares of new Home Federal Bancorp common stock have been issued or are outstanding and there is no established market for our common stock. Accordingly, there is no record of the historical performance of new Home Federal Bancorp common stock.

Performance of Investment Options. The following table provides performance data with respect to the investment options available under the 401(k) Plan, based on information provided to Home Federal Bancorp by ING.

The information set forth below with respect to the investment options has been reproduced from materials supplied by ING, which administers the 401(k) Plan and is responsible for providing investment alternatives under the 401(k) Plan other than the Employer Stock Fund. Home Federal Bancorp and Home Federal Bank take no responsibility for the accuracy of such information.

Additional information regarding the investment options may be available from ING or Home Federal Bancorp. Participants should review any available additional information regarding these investments before making an investment decision under the 401(k) Plan.

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The total percentage return for the prior three years is provided for each of the following funds.

NET INVESTMENT PERFORMANCE
                               
    For the Year Ended December 31,  
   
 
    2006     2005     2004  
   
   
   
 
ING VP Money Market Portfolio, Class I     4.05 %       2.18 %       0.26 %  
ING VP Intermediate Bond Portfolio, Class I Fund     3.65         2.73         4.46    
ING GNMA Income Fund, Class A     4.20         2.40         2.91    
ING Fixed Account     3.80         3.80         4.10    
Templeton Global Bond Fund, Class A     12.89         (3.60 )       13.99    
ING VP Index Plus LargeCap Portfolio     14.12         4.96         10.14    
Oppenheimer Main Street Fund, Class A     14.28         5.16         8.79    
Pioneer Fund, Class A     15.75         5.81         11.02    
Fidelity VIP Contrafund Portfolio, Initial Class     10.94         16.12         14.67    
Fidelity Advisor Mid Cap Fund, Class T     12.56         7.77         15.42    
ING VP Index Plus SmallCap Portfolio     13.37         7.19         21.59    
Lord Abbett Series Fund, Mid-Cap Value Portfolio, Class VC     11.45         7.47         23.18    
ING VP International Value Portfolio, Class I     28.93         9.00         16.95    
ING American Century Small Cap Value Portfolio, Initial Class     15.05         7.52         20.88    
ING Baron Small Cap Growth Portfolio, Initial Class     14.85         6.99         27.51    
ING VP Index Plus MidCap Portfolio, Class I     9.00         10.69         16.12    
Washington Mutual Investors Fund, Class R3     17.37         2.98         9.27    
American Balanced Fund, Class R3     11.21         2.62         8.30    
ING Solution 2015 Portfolio, Service Class     10.34         NA         NA    
ING Solution 2025 Portfolio, Service Class     12.14         NA         NA    
ING Solution 2035 Portfolio, Service Class     13.67         NA         NA    
ING Solution 2045 Portfolio, Service Class     14.60         NA         NA    
ING Solution Income Portfolio, Service Class     6.94         NA         NA    
ING T. Rowe Price Growth Equity/ Alger Amer Growth     12.51         5.44         9.25    
ING Oppenheimer Global Portfolio, Initial Class     17.27         12.89         14.59    
                               
Each participant should note that past performance is not necessarily an indicator of future results.

Administration of the 401(k) Plan

Trustees. The trustee is appointed by the Board of Directors of Home Federal to serve at its pleasure. Currently, the 401(k) Plan Trustees are Len E. Williams, Robert A. Schoelkoph and Denis J. Trom. These trustees also serve as the trustees of the Employer Stock Fund.

The trustee receives and holds the contributions to the 401(k) Plan in trust and distributes them to participants and beneficiaries in accordance with the provisions of the 401(k) Plan. The trustee is responsible for following participant direction, effectuating the investment of the assets of the trust in the Employer Stock Fund and the other investment options.

Benefits Under the 401(k) Plan

Plan Benefits. Your 401(k) Plan benefit is based on the value of the vested portion of your 401(k) Plan accounts as of the valuation date next preceding the date of distribution to you.

Vesting. You will always have a fully vested (nonforfeitable) interest in your 401(k) contribution account and rollover account. Your matching contribution account and profit sharing contribution account will vest at a rate of 20% for each year of service after you complete two years of service (that is, 100% vested after six years of

9


service). Generally, a year of service is a plan year (January 1 to December 31) during which you perform at least 1,000 hours of service for Home Federal Bancorp (or, after the conversion, new Home Federal Bancorp), Home Federal Bank or an affiliated employer. You also will become 100% vested in your matching contribution account and profit sharing contribution account if you are actively employed on your retirement date, death or disability.

Withdrawals and Distributions from the 401(k) Plan

Withdrawals Prior to Termination of Employment. You may elect to receive an in-service distribution from your rollover account at any time. You may also receive an in-service distribution if you have a hardship. Whether a hardship has occurred in determined in accordance with Internal Revenue Service rules.

Distribution Upon Retirement or Disability. Upon your retirement or disability, you will receive a lump sum payment from the 401(k) Plan.

Distribution Upon Death. If you die prior to your benefits being paid from the 401(k) Plan, your benefits will be paid to your surviving spouse or beneficiary in a lump sum payment.

Distribution Upon Termination for any Other Reason. If you terminate your employment for any reason other than retirement, disability or death and your vested 401(k) Plan account balances exceed $5,000, the trustee will make your distribution on your normal retirement date, unless you request an earlier or later distribution date. Your vested 401(k) Plan accounts will be distributed in a lump sum payment. If your vested account balances do not exceed $5,000, the trustee will generally distribute your benefits to you as soon as administratively practicable in a lump sum following your termination of employment.

Form of Distribution. Distributions from the 401(k) Plan will generally be in the form of cash. However, you have the right to request that your distribution from the Employer Stock Fund be in the form of new Home Federal Bancorp common stock.

Nonalienation of Benefits. Except with respect to federal income tax withholding and as provided with respect to a qualified domestic relations order, benefits payable under the 401(k) Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any rights to benefits payable under the 401(k) Plan shall be void.

Reports to 401(k) Plan Participants

As soon as practicable after the end of each calendar quarter, the plan administrator will furnish to each participant a statement showing (i) balances in the participant’s accounts as of the end of that period, (ii) the amount of contributions allocated to his or her accounts for that period, and (iii) the number of units in each of the funds. Participants may also access information regarding their 401(k) Plan Accounts by using internet access made available by ING, the plan investment manager.

Amendment and Termination

We intend to continue to participate in the 401(k) Plan. Nevertheless, we may amend or terminate the 401(k) Plan at any time. If the 401(k) Plan is terminated in whole or in part, then, regardless of other provisions in the 401(k) Plan, each participant affected by the termination shall become fully vested in all of his or her accounts.

Federal Income Tax Consequences

The following is a brief summary of the material federal income tax aspects of the 401(k) Plan. You should not rely on this summary as a complete or definitive description of the material federal income tax consequences relating to the 401(k) Plan. Statutory provisions change, as do their interpretations, and their application may vary in individual circumstances. Finally, the consequences under applicable state and local income tax laws may not be the same as under the federal income tax laws. Please consult your tax advisor with respect to any distribution from the 401(k) Plan and transactions involving the 401(k) Plan.

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As a “tax-qualified retirement plan,” the Internal Revenue Code affords the 401(k) Plan special tax treatment, including:

 
the sponsoring employer is allowed an immediate tax deduction for the amount contributed to the 401(k) Plan each year;
     
 
participants pay no current income tax on amounts contributed by the employer on their behalf; and
     
 
earnings of the 401(k) Plan are tax-deferred, thereby permitting the tax-free accumulation of income and gains on investments.

We will administer the 401(k) Plan to comply with the requirements of the Internal Revenue Code as of the applicable effective date of any change in the law.

Taxation of Distributions. Generally, 401(k) Plan distributions are taxable as ordinary income for federal income tax purposes.

Common Stock Included in a Lump Sum Distribution. If a lump sum distribution includes common stock, and the lump sum distribution is not rolled over or directly transferred to an IRA, as discussed below, the distribution generally will be taxed in the manner described above, except that the total taxable amount will be reduced by the amount of any net unrealized appreciation with respect to the common stock. Net unrealized appreciation is the excess of the value of the common stock at the time of the distribution over its cost or other basis to the trust. The tax basis of the common stock for purposes of computing gain or loss on its subsequent sale equals the value of the common stock at the time of distribution less the amount of net unrealized appreciation. Any gain on a subsequent sale or other taxable disposition of the common stock up to the amount of net unrealized appreciation at the time of distribution will be considered long-term capital gain regardless of the holding period of the common stock. Any gain on a subsequent sale or other taxable disposition of the common stock in excess of the amount of net unrealized appreciation at the time of distribution will be considered either short-term or long-term capital gain depending upon the length of the holding period of the common stock. The recipient of a distribution may elect to include the amount of any net unrealized appreciation in the total taxable amount of the distribution to the extent allowed by the regulations issued by the Internal Revenue Service.

Rollovers and Direct Transfers to Another Qualified Plan or to an IRA; Mandatory Tax Withholding. Except as discussed below, you may roll over virtually all distributions from the 401(k) Plan to another tax-favored plan or to a standard IRA without regard to whether the distribution is a lump sum distribution or a partial distribution. You have the right to elect to have the trustee transfer all or any portion of an “eligible rollover distribution” directly to another qualified retirement plan (subject to the provisions of the recipient qualified plan) or to an IRA. If you do not elect to have an “eligible rollover distribution” transferred directly to another qualified plan or to an IRA, the distribution will be subject to a mandatory federal withholding tax equal to 20% of the taxable distribution. Your state may also impose tax withholding on your taxable distribution. An “eligible rollover distribution” means any amount distributed from the 401(k) Plan except: (1) a distribution that is (a) one of a series of substantially equal periodic payments (not less frequently than annually) made for your life (or life expectancy) or the joint lives of you and your designated beneficiary or (b) for a specified period of ten years or more; (2) any amount required to be distributed under the minimum distribution rules; and (3) any other distributions excepted under applicable federal law. If you elect to rollover or directly transfer common stock, you may not take advantage of the favorable net unrealized appreciation that applies to common stock, discussed above.

Ten-Year Averaging Rules. Under a special grandfather rule, if you have completed at least five years of participation in the 401(k) Plan before the taxable year in which the distribution is made, and you turned age 50 by 1986, you may elect to have your lump sum distribution taxed using a “ten-year averaging” rule. The election of the special averaging rule applies only to one lump sum distribution you or your beneficiary receive, provided such amount is received on or after you attain age 59½ and you elect to have any other lump sum distribution from a qualified plan received in the same taxable year taxed under the ten-year averaging rule or receive a lump sum distribution on account of your death.

11


Additional Tax on Early Distributions. A participant who receives a distribution from the 401(k) Plan prior to attaining age 59½ will be subject to an additional income tax equal to 10% of the amount of the distribution. The 10% additional income tax will not apply, however, in certain cases, including (but not limited) to distributions rolled over or directly transferred into an IRA or another qualified plan, or the distribution is (i) made to a beneficiary (or to the estate of a participant) on or after the death of the participant, (ii) attributable to the participant’s being disabled within the meaning of Section 72(m)(7) of the Internal Revenue Code, (iii) part of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the participant or the joint lives (or joint life expectancies) of the participant and his beneficiary, (iv) made to the participant after separation from service under the 401(k) Plan after attainment of age 55, (v) made to pay medical expenses to the extent deductible for federal income tax purposes, (vi) pursuant to a qualified domestic relations order or (vii) made to effect the distribution of excess contributions or excess deferrals.

This is a brief description of federal income tax aspects of the 401(k) Plan which are of general application under the Internal Revenue Code. It is not intended to be a complete or definitive description of the federal income tax consequences of participating in or receiving distributions from the 401(k) Plan. Accordingly, you are urged to consult a tax advisor concerning the federal, state and local tax consequences that may be particular to you of participating in and receiving distributions from the 401(k) Plan.

ERISA and Other Qualification

The 401(k) Plan is subject to certain provisions of the Employee Retirement Income Security Act of 1974, the primary federal law governing retirement plans, and is intended to be a qualified retirement plan under the Internal Revenue Code.

Restrictions on Resale

Any person receiving shares of new Home Federal Bancorp common stock under the 401(k) Plan who is an “affiliate” of new Home Federal Bancorp or Home Federal Bank as the term “affiliate” is used in Rules 144 and 405 under the Securities Act of 1933 (e.g., directors, officers and significant stockholders of new Home Federal Bancorp and Home Federal Bank) may re-offer or resell such shares only pursuant to a registration statement or, assuming the availability thereof, pursuant to Rule 144 or some other exemption from the registration requirements of the Securities Act of 1933. Any person who may be an “affiliate” of new Home Federal Bancorp may wish to consult with counsel before transferring any new Home Federal Bancorp common stock owned by him or her. In addition, participants are advised to consult with counsel as to the applicability of Section 16 of the Securities Exchange Act of 1934 which may restrict the sale of new Home Federal Bancorp common stock acquired under the 401(k) Plan, or other sales of new Home Federal Bancorp common stock.

Securities and Exchange Commission Reporting and Short-Swing Profit Liability

Section 16 of the Securities Exchange Act of 1934 imposes reporting and liability requirements on officers, directors and persons beneficially owning more than 10% of public companies such as new Home Federal Bancorp. Section 16(a) of the Securities Exchange Act of 1934 requires the filing of reports of beneficial ownership. Within ten days of becoming a person subject to the reporting requirements of Section 16(a), a Form 3 reporting initial beneficial ownership must be filed with the Securities and Exchange Commission. Certain changes in beneficial ownership, such as purchases, sales and participation in savings and retirement plans must be reported on a Form 4 within two business days of when a change occurs. Certain other changes in beneficial ownership, such as gifts and inheritances, may be reported on a Form 4 or annually on a Form 5 within 45 days after the close of our fiscal year. Participation in the Employer Stock Fund of the 401(k) Plan by our officers, directors and persons beneficially owning more than 10% of the outstanding new Home Federal Bancorp common stock must be reported to the Securities and Exchange Commission at least annually on a Form 4 or Form 5 by such individuals.

Section 16(b) of the Securities Exchange Act of 1934 provides for the recovery by us of any profits realized by an officer, director or any person beneficially owning more than 10% of the new Home Federal Bancorp common stock resulting from the purchase and sale or sale and purchase of new Home Federal Bancorp common stock within any six-month period. The Securities and Exchange Commission rules provide an exemption from the profit recovery provisions of Section 16(b) for certain transactions within an employee benefit plan, such as the 401(k)

12


Plan, provided certain requirements are met. If you are subject to Section 16, you should consult with counsel regarding the applicability of Section 16 to specific transactions involving the 401(k) Plan.

LEGAL OPINIONS

The validity of the issuance of new Home Federal Bancorp common stock will be passed upon by Breyer & Associates PC, McLean, Virginia, which firm acted as special counsel for Home Federal MHC, Home Federal Bancorp, new Home Federal Bancorp and Home Federal Bank in connection with the conversion and stock offering.

13


INVESTMENT ELECTION FORM

PARTICIPANT ELECTION TO INVEST IN
NEW HOME FEDERAL BANCORP, INC. COMMON STOCK
(“EMPLOYER STOCK FUND”)

Home Federal Bank’s 401(k) Plan

If you would like to participate in the stock offering using amounts currently in your account in the Home Federal Bank’s 401(k) Plan, please complete this form and return it to Denis Trom, 500 12th Avenue South, Nampa, Idaho 83651, by no later than 12:00 Noon, Mountain time, on                   .

Participant’s Name (Please Print):


Address:

    Street     City     State     Zip Code
                       
Social Security Number:                                                            

1.   Background Information

New Home Federal Bancorp, Inc. (“New Home Federal Bancorp”) will be issuing shares of common stock, par value $0.01 per share, to certain eligible depositors and borrowers of Home Federal Bank and the public in connection with the conversion of Home Federal MHC from the mutual to stock form of organization.

Participants in the Home Federal Bank’s 401(k) Plan (the “401(k) Plan”) are being given an opportunity to direct the trustee of the 401(k) Plan to purchase new Home Federal Bancorp common stock in the offering with amounts currently in their 401(k) Plan account by acquiring units of the Employer Stock Fund, an investment fund under the 401(k) Plan comprised of new Home Federal Bancorp common stock and cash. (Employees who would like to directly purchase shares of new Home Federal Bancorp common stock in the offering with funds other than amounts currently in their 401(k) Plan account may do so by completing the order form that accompanies the prospectus.) Units of the Employer Stock Fund will be valued in the stock offering at $10.00 per unit. Of this amount, $9.70 will be used to acquire 0.97 of one share of new Home Federal Bancorp common stock, and $.30 will be used to acquire cash, through an interest in a money market account. Participants are also being given the opportunity, after the stock offering, to direct future contributions under the 401(k) Plan to the Employer Stock Fund. Approximately 97% of the amounts used to acquire units in the Employer Stock Fund will be invested in new Home Federal Bancorp common stock and the remaining 3% will be invested in cash.

Because it is actually the 401(k) Plan that purchases the new Home Federal Bancorp common stock, participants would acquire a “participation interest” (expressed as units of the Employer Stock Fund) in the shares and cash and would not own the shares and cash directly.

Prior to making a decision to direct the trustee to purchase units in the Employer Stock Fund, we strongly urge you to carefully review the prospectus and the prospectus supplement that accompany this Investment Election Form. Your decision to direct the transfer of amounts credited to your account balances to the Employer Stock Fund in order to purchase shares of new Home Federal Bancorp common stock in connection with the stock offering is irrevocable. Notwithstanding this irrevocability, participants may transfer out some or all of their units in the Employer Stock Fund, if any, and into one or more of the 401(k) Plan’s other investment funds at such times as are provided for under the 401(k) Plan’s rules for such transfers.

Investing in any stock entails some risks and we encourage you to discuss your investment decision with your investment advisor before completing this form. Neither the trustee, the plan administrator, nor any employee of Home Federal MHC, Home Federal Bancorp or Home Federal Bank is authorized to make any representations about this investment. You should not rely on any information other than information contained in the prospectus and the prospectus supplement in making your investment decision.

Any shares purchased by the 401(k) Plan based on your election will be subject to the conditions and restrictions otherwise applicable to new Home Federal Bancorp common stock purchased directly by you in the stock offering. These restrictions are described in the prospectus and the prospectus supplement.

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2.   Investment Elections

If you would like to participate in the stock offering with amounts currently in your 401(k) Plan account, please complete the table below, indicating what amount of each of your current funds you would like to transfer into the Employer Stock Fund. If the trustee is unable to use the total amount that you elect in the box below to have transferred into the Employer Stock Fund to purchase new Home Federal Bancorp common stock and cash due to an oversubscription in the stock offering, the amount that is not invested in the Employer Stock Fund will be reallocated on a pro-rata basis among your other 401(k) Plan fund investments. If you elect in the box below to have 100% of your current 401(k) Plan funds transferred into the Employer Stock Fund and the offering is oversubscribed, the amount that is not invested in the Employer Stock Fund will be invested in the money market account.

Indicate the amount to be transferred from one or more of the following funds into the Employer Stock Fund:

Amount     From Fund
$__________.00     ING VP Money Market Portfolio, Class I
$__________.00     ING VP Intermediate Bond Portfolio, Class I Fund
$__________.00     ING GNMA Income Fund, Class A
$__________.00     ING Fixed Account
$__________.00     Templeton Global Bond Fund, Class A
$__________.00     ING VP Index Plus LargeCap Portfolio
$__________.00     Oppenheimer Main Street Fund, Class A
$__________.00     Pioneer Fund, Class A
$__________.00     Fidelity VIP Contrafund Portfolio, Initial Class
$__________.00     Fidelity Advisor Mid Cap Fund, Class T
$__________.00     ING VP Index Plus SmallCap Portfolio
$__________.00     Lord Abbett Series Fund, Mid-Cap Value Portfolio, Class VC
$__________.00     ING VP International Value Portfolio, Class I
$__________.00     ING American Century Small Cap Value Portfolio, Initial Class
$__________.00     ING Baron Small Cap Growth Portfolio, Initial Class
$__________.00     ING VP Index Plus MidCap Portfolio, Class I
$__________.00     Washington Mutual Investors Fund, Class R3
$__________.00     American Balanced Fund, Class R3
$__________.00     ING Solution 2015 Portfolio, Service Class
$__________.00     ING Solution 2025 Portfolio, Service Class
$__________.00     ING Solution 2035 Portfolio, Service Class
$__________.00     ING Solution 2045 Portfolio, Service Class
$__________.00     ING Solution Income Portfolio, Service Class
$__________.00     ING T. Rose Price Growth Equity/Alger Amer Growth
$__________.00     ING Oppenheimer Global Portfolio, Initial Class
       
Note: If you do not complete this election, you will not participate in the offering by using your 401(k) Plan funds.

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3.          Purchaser Information.    The ability of participants in the Plan to purchase common stock in the stock offering and to direct their current account balances into the Employer Stock Fund is based upon the participant’s status as an eligible account holder, supplemental eligible account holder or other member. Please indicate your status.

A.   [_]  
Eligible Account Holder - Check here if you were a depositor with $50.00 or more on deposit with Home Federal Bank as of March 31, 2006.
         
B.   [_]  
Supplemental Eligible Account Holder - Check here if you were a depositor with $50.00 or more on deposit with Home Federal Bank as of September 30, 2007, but are not an eligible account holder.
         
C.   [_]  
Other Member - Check here if you were a depositor of Home Federal Bank as of              , 2007 or a borrower as of March 16, 2004, respectively, but are not an eligible account holder or supplemental eligible account holder.

Account Title (Names on Accounts)   Account Number

 
     

 
     

 
     

 

4.   Participant Signature and Acknowledgment - Required

By signing this investment election form, I authorize and direct the plan administrator and trustee to carry out my instructions. I acknowledge that I have been provided with and have received a copy of the prospectus and prospectus supplement relating to the issuance of new Home Federal Bancorp common stock that accompany this investment election form. I am aware of the risks involved in investing in new Home Federal Bancorp common stock and understand that the trustee, plan administrator and any employee of Home Federal Bancorp or Home Federal are not responsible for my choice of investment. I understand that my failure to sign this acknowledgment will make this investment election form null and void.

I ACKNOWLEDGE THAT THE SHARES OF COMMON STOCK, $.01 PAR VALUE PER SHARE, OF NEW HOME FEDERAL BANCORP, INC. ARE NOT DEPOSITS OR AN ACCOUNT AND ARE NOT FEDERALLY INSURED OR GUARANTEED BY HOME FEDERAL BANK, HOME FEDERAL BANCORP, INC., NEW HOME FEDERAL BANCORP, INC., OR BY THE FEDERAL GOVERNMENT.

If anyone asserts that the shares of New Home Federal Bancorp common stock are federally insured or guarantee, or are as safe as an insured deposit, I should call the Office of Thrift Supervision Regional Director,                         , at                           .

Participant’s Signature:                                                                                                     Date Signed:                                          

This form must be completed and returned to Denis Trom,
500 12th Avenue South, Nampa, Idaho 83651,
by no later than
12:00 Noon, Mountain time, on                                         .

A-3


PROSPECTUS    
Up to 13,800,000 Shares of Common Stock    
(Subject to increase to up to 15,870,000 shares)    
    HOME FEDERAL BANCORP, INC.
    (Proposed Holding Company for Home Federal Bank)

         New Home Federal Bancorp, Inc., is a newly formed Maryland corporation, that is offering up to 13,800,000 shares of its common stock to the public in connection with the conversion of Home Federal MHC from the mutual to the stock form of organization. As part of the conversion, Home Federal Bank will become our wholly-owned subsidiary. We may increase the maximum number of shares that we sell in the offering by up to 15%, to 15,870,000 shares, as a result of the demand for shares or changes in market and financial conditions. The shares being offered represent the 58.9% ownership interest in Home Federal Bancorp, Inc. now owned by Home Federal MHC, its mutual holding company parent. Home Federal Bancorp, a Federal corporation, currently is the “mid-tier” holding company of Home Federal Bank and will cease to exist upon completion of the conversion. The remaining 41.1% ownership interest in Home Federal Bancorp is owned by the public and will be exchanged for shares of new Home Federal Bancorp common stock upon the completion of the conversion . If you are now a stockholder of Home Federal Bancorp, your shares will be canceled and exchanged for shares of new Home Federal Bancorp. The number of shares you will receive will be based on an exchange ratio that will depend upon the number of new shares we sell in this offering. All shares of common stock being offered for sale will be sold at a price of $10.00 per share.

   
If you are a current or former depositor of Home Federal Bank as of the eligibility record dates, you may have priority rights to purchase shares in the subscription offering. if (1) you had at least $50.00 on deposit at Home Federal Bank at the close of business on March 31, 2006; (2) you had at least $50.00 on deposit at Home Federal Bank at the closed of business on September 30, 2007; or (3) you were a depositor or borrower of Home Federal Bank on ___________, 2007 and March 15, 2004, respectively.
       
   
If you are a current stockholder of Home Federal Bancorp, your shares will be exchanged automatically for between 7,103,110 and 9,610,090 new shares of new Home Federal Bancorp, or up to 11,051,604 shares in the event the maximum of the offering range is increased by 15%.
       
   
If you are not a depositor, but are interested in purchasing shares of our common stock, you may be able to purchase shares of our common stock in the community offering and/or a syndicated community offering (collectively referred to as the “offering”) to the extent shares remain available after priority orders are filled.

         In order to complete the offering, we must sell, in the aggregate, at least 10,200,000 shares. The minimum purchase is 25 shares. The subscription offering is scheduled to end at 12:00 Noon, Mountain time, on __________ __, 2007. However, we may extend this expiration date without notice to you, until ________ __, 2008, unless the Office of Thrift Supervision approves a later date, which may not be extended beyond _________ __, 2009. Once submitted, orders are irrevocable unless the offering is terminated or extended beyond _________ __, 2008. If the offering is extended beyond _________ __, 2008, subscribers will have the right to modify or rescind their purchase orders. In the event this occurs, or there is a change in the offering range, we will resolicit purchasers and you will have the opportunity to maintain, change or cancel your order. If you do not provide us with a written indication of your intent after you receive the resolicitation materials, your order will be cancelled and your funds will be returned to you, with interest. New Home Federal Bancorp will hold all subscribers’ funds received before the completion of the conversion in a segregated account at Home Federal Bank or, at our discretion, at an independent insured depository institution until the conversion is completed or terminated. We will pay interest on all funds received at a rate equal to Home Federal Bank’s passbook/statement savings rate, which is currently 0.20% per annum. Funds will be returned promptly with interest if the conversion is terminated.

         Home Federal Bancorp’s common stock is currently listed on the Nasdaq Global Market under the symbol “HOME”. We have applied to have the common stock of new Home Federal Bancorp listed for trading on the Nasdaq Global Select Market. For the first 20 trading days after the conversion and offering is completed, we expect new Home Federal Bancorp common stock to trade under the symbol “HOMED,” thereafter it will revert to the “HOME” trading symbol. We cannot assure you that our common stock will be approved for listing on the Nasdaq Global Select Market.

Investing in our common stock involves risks. See “Risk Factors” beginning on page 1.




OFFERING SUMMARY
Price Per Share: $10.00; Minimum Subscription: 25 shares or $250

                      Maximum,
      Minimum   Maximum   as adjusted (1)
     
 
 
Number of Shares       10,200,000       13,800,000       15,870,000  
Gross Offering Proceeds       $102,000,000       $138,000,000       $158,700,000  
Underwriting Commission       3,228,000       4,370,000       5,026,000  
Other Expenses       1,243,000       1,243,000       1,243,000  
Net Proceeds to Home Federal Bancorp, Inc.       97,529,000       132,387,000       152,431,000  
Net Proceeds Per Share       9.56       9.59       9.61  



(1)  
For information regarding underwriting compensation to be paid to Keefe, Bruyette & Woods, including the assumptions regarding the number of shares sold in the offering that we used to determine the estimated offering expenses, see “Pro Forma Data” and “The Conversion and Stock Offering – Marketing Arrangements.”

          Keefe, Bruyette & Woods will use its best efforts to assist us in our selling efforts, but is not required to purchase any of the common stock that is being offered for sale. Subscribers will not pay any commissions to purchase shares of common stock in the offering.

         These securities are not deposits or accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. Neither the Securities and Exchange Commission, the Office of Thrift Supervision, nor any other federal agency or state securities regulator has approved or disapproved these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

         For information on how to subscribe, call the stock information center at (208) ___-___.


 
KEEFE, BRUYETTE & WOODS
 

 
__________ ___, 2007



TABLE OF CONTENTS

        Page
       
         
  Summary     i
  Risk Factors     1
  Selected Financial and Other Data     10
  A Warning About Forward-Looking Statements     12
  How We Intend to Use the Proceeds From this Offering     13
  We Intend to Continue to Pay Quarterly Cash Dividends     14
  Market for Our Common Stock     15
  Capitalization     16
  Home Federal Bank Exceeds All Regulatory Capital Requirements     17
  Pro Forma Data     19
  Recent Developments     27
  Management’s Discussion and Analysis of Financial Condition and Results of Operations     39
  Business of Home Federal Bancorp, Inc. and Home Federal Bank     69
  Management     104
  Proposed Purchases by Management     129
  Security Ownership of Certain Beneficial Owners and Management     130
  How We Are Regulated     132
  Taxation     141
  The Conversion and Stock Offering     144
  Comparison of Rights of New Home Federal Bancorp and Home Federal Bancorp’s Stockholders     166
  Restrictions on Acquisitions of New Home Federal Bancorp and Home Federal Bank     173
  Description of Capital Stock     177
  Transfer Agent and Registrar     178
  Experts     178
  Legal and Tax Opinions     178
  Where You Can Find More Information     179
  Index to Consolidated Financial Statements     F-1



SUMMARY

This summary provides an overview of the key aspects of the stock offering as described in more detail elsewhere in this prospectus and may not contain all the information that is important to you. To completely understand the stock offering, you should read the entire prospectus carefully, including the sections entitled “Risk Factors” and “The Conversion and Stock Offering” and the consolidated financial statements and the notes to the consolidated financial statements beginning on page F-1, before making a decision to invest in our common stock.

Overview

New Home Federal Bancorp, is a newly formed Maryland corporation. New Home Federal Bancorp is conducting this offering of between 10,200,000 and 13,800,000 shares of common stock in connection with the conversion of Home Federal MHC from the mutual to the stock form of organization. The shares of new Home Federal Bancorp to be sold represent the 58.9% ownership interest in the mid-tier holding company, Home Federal Bancorp now owned by Home Federal MHC. This ownership interest is being sold to raise additional capital to support the operational growth of Home Federal Bank. The remaining 41.1% ownership interest in Home Federal Bancorp is owned by the public and will be exchanged for shares of new Home Federal Bancorp common stock upon the completion of the conversion . In this exchange, each publicly held share of Home Federal Bancorp common stock will, on the date of completion of the conversion, be automatically converted into and become the right to receive a number of shares of common stock of new Home Federal Bancorp determined pursuant to an exchange ratio. The current public stockholders of Home Federal Bancorp common stock will own the same percentage of common stock in new Home Federal Bancorp after the conversion as they hold in Home Federal Bancorp subject to additional purchases, or the receipt of cash in lieu of fractional shares. The actual number of shares a current stockholder of Home Federal Bancorp receives pursuant to the exchange ratio will therefore depend on the number of shares we sell in our offering, which in turn will depend on the final appraised value of new Home Federal Bancorp. We may increase the maximum number of shares that we sell in the offering by up to 15% to 15,870,000 shares, as a result of the demand for shares or changes in market and financial conditions. The offering includes a subscription offering in which certain persons, including depositors of Home Federal Bank, have prioritized subscription rights. There are limitations on how many shares of common stock a person may purchase in the offering. The amount of capital being raised is based on an appraisal of Home Federal Bancorp. Most of the terms and requirements of this offering are required by regulations of the Office of Thrift Supervision. The same directors and certain officers who manage Home Federal Bancorp will manage new Home Federal Bancorp.

The following tables show how many shares of common stock that may be issued in the offering, and subsequently issued if our new proposed stock benefit plans are adopted.

    Shares to be sold             Shares proposed             Total shares of
    to the   Shares to be sold   to be sold             common stock to be
    public in   to the employee stock   to directors   Exchange   outstanding after the
    this offering   ownership plan (2)   and officers   shares   conversion
   
 
 
 
 
    Amount   %(1)   Amount   %(1)   Amount   %(1)   Amount   %(1)   Amount   %(1)
   
 
 
 
 
 
 
 
 
 
 
Minimum   9,321,500   53.9 %   816,000   4.7 %   62,500   0.3 %   7,103,110   41.1 %   17,303,110   100.0 %
Midpoint   10,977,500   53.9     960,000   4.7     62,500   0.3     8,356,600   41.1     20,356,600   100.0  
Maximum   12,633,500   53.9     1,104,000   4.7     62,500   0.3     9,610,090   41.1     23,410,090   100.0  
Maximum, as adjusted 14,537,900   54.0     1,269,600   4.7     62,500   0.2     11,051,604   41.1     26,921,604   100.0  


    Shares that   Shares that
    may be   may be
    awarded under a   issued under a
    restricted stock plan   stock option plan
   
 
    Amount   %(1)   Amount   %(1)
   
 
 
 
 
Minimum   353,510   2.0 %   883,776   5.1 %
Midpoint   415,894   2.0     1,039,736   5.1  
Maximum   478,278   2.0     1,195,696   5.1  
Maximum, as adjusted   550,020   2.0     1,375,051   5.1  

(1) As a percentage of total shares outstanding after the offering.
 
(2) Assumes 8% of the shares sold in the conversion are sold to the employee stock ownership plan in the offering.

Dollar amounts in this prospectus are consolidated and refer to Home Federal Bancorp and subsidiary unless otherwise indicated.


i



The Companies:

Home Federal Bancorp, Inc. (new)
500 12th Avenue South
Nampa, Idaho 83651
(208) 466-4634

New Home Federal Bancorp is a newly formed Maryland corporation that will hold all of the outstanding shares of Home Federal Bank following the conversion to stock ownership. New Home Federal Bancorp is conducting the stock offering in connection with the conversion of Home Federal MHC from the mutual to the stock form of organization. Following the completion of the offering, new Home Federal Bancorp will be the savings and loan holding company of Home Federal Bank and its primary regulator will be the Office of Thrift Supervision.

Home Federal MHC
500 12th Avenue South
Nampa, Idaho 83651
(208) 466-4634

Home Federal MHC is a federally chartered mutual holding company that owns 58.9% of the outstanding common stock of Home Federal Bancorp. Home Federal MHC was formed in 2004 in connection with the reorganization of Home Federal Bank into the mutual holding company form of organization. Home Federal MHC is a savings and loan holding company and its business is to own at least a majority of Home Federal Bancorp’s outstanding shares of common stock. Following the conversion, Home Federal MHC will cease to exist as a separate entity; it will be replaced by new Home Federal Bancorp.

Home Federal Bancorp, Inc.
500 12th Avenue South
Nampa, Idaho 83651
(208) 466-4634

Home Federal Bancorp, Inc. is a federal corporation and a mid-tier holding company that owns 100% of Home Federal Bank. It was formed in 2004 in connection with the reorganization of Home Federal Bank into the mutual holding company form of organization. Effective with the reorganization, it became a stock holding company and the 58.9% owned subsidiary of Home Federal MHC, a federally chartered mutual holding company.

Home Federal Bancorp conducts its business as a savings and loan holding company and has no significant liabilities. Its primary business consists of directing, planning and coordinating the business activities of Home Federal Bank.

Home Federal Bank
500 12th Avenue South
Nampa, Idaho 83651
(208) 466-4634

             Home Federal Bank was founded in 1920 as a building and loan association and reorganized as a federal mutual savings and loan association in 1936. We are a community-based financial institution primarily serving the Boise, Idaho and surrounding metropolitan area known as the Treasure Valley region of southwestern Idaho, including Ada, Canyon, Elmore and Gem counties. We conduct our operations through our 15 full-service banking offices, and two loan centers. Included in our 15 full-service banking offices are six Wal-Mart in-store branch locations. We are in the business of attracting deposits from the public and utilizing those deposits to originate loans. We offer a wide range of loan products to meet the demands of our customers. Historically, lending activities have been primarily directed toward the origination of residential and commercial real estate loans. Real estate lending activities have been primarily focused on first mortgages on owner occupied, one- to four-family residential properties. To an increasing extent in recent years, lending activities have also included the origination of residential


ii



and commercial construction and land development loans and home equity loans. While continuing our commitment to residential lending, management expects commercial lending, including commercial real estate, builder finance and commercial business lending, to become increasingly important activities for us. Consistent with this strategy, we appointed Mr. Len E. Williams as President of Home Federal Bank in September 2006 and to Home Federal Bancorp’s board of directors in April 2007. Mr. Williams has extensive experience in business related lending. Before starting his tenure with us, Mr. Williams served as Senior Vice President and Head of Business Banking of Fifth Third Bank and held several management positions with Key Bank, including President of Business Banking from 2003 to 2005. We expect him to succeed Mr. Daniel L. Stevens, Home Federal Bancorp’s Chairman, President and Chief Executive Officer, as President and Chief Executive Officer of new Home Federal Bancorp, and to become Chief Executive Officer of Home Federal Bank in October 2008. See “Business of Home Federal Bancorp, Inc. and Home Federal Bank – Lending Activities.”

             At June 30, 2007, we had total assets of $728.3 million, deposit accounts of $418.7 million and equity of $110.0 million. Home Federal Bank maintains a website at www.myhomefed.com.

Operating Lines

             The following reflects our management structure and responsibilities of each of our operating lines before and after the conversion:



iii



Operating Strategy

Our strategies center on our continued development into a full service, community-oriented bank. Our goal is to continue to enhance our franchise value and earnings through controlled growth in our banking operations, especially small business lending, while maintaining the community-oriented customer service and sales focus that has characterized our success to date. In order to be successful in this objective and increase stockholder value, we are committed to the following strategies:

Continue Growing in Our Existing Markets. We believe there is a large customer base in our market that is dissatisfied with the service received from larger regional banks. By offering quicker decision making in the delivery of banking products and services, offering customized products where appropriate, and providing customer access to our senior managers, we hope to distinguish ourselves from larger, regional banks operating in our market areas. Our larger capital base resulting from this offering and our plans to diversify our product mix should allow us to compete effectively against smaller banks.

Continue Our Disciplined Execution. We believe our success as a banking organization depends on a disciplined approach to originating loans and monitoring the performance of our loan portfolio. Despite our growth, we have consistently maintained strong asset quality. We believe our strong asset quality is the result of our underwriting standards, experienced loan officers and the strength of the local economy. We do not originate “subprime” mortgage loans and currently hold no such loans in our portfolio or service any of these loans. In addition, many of the commercial loans we originate are to borrowers well known by our loan officers from existing and prior banking relationships. At June 30, 2007, our nonperforming assets as a percentage of total assets were 0.07% and for the nine months ended June 30, 2007 our ratio of net charge-offs to average loans was 0.02%. Our year-end (September 30) nonperforming assets as a percentage of total assets and ratio of net charge-offs to average loans have not exceeded 0.17% and 0.10%, respectively, in any of the past five years.

Expanding Our Product Offerings. We intend to continue our emphasis on originating commercial lending products that diversify our loan portfolio by increasing the percentage of our assets consisting of higher-yielding construction and land development, commercial real estate and commercial business loans with higher risk-adjusted returns, shorter maturities and more sensitivity to interest rate fluctuations, while still providing high quality loan products for single-family residential borrowers. We also intend to selectively add products to provide diversification of revenue sources and to capture our customer’s full relationship. We intend to continue to expand our business by cross selling our loan and deposit products and services to our customers in order to increase our fee income.

Focus on Our Branch Expansion. Branch expansion has played a significant role in our ability to grow loans, deposits and customer relationships. Since August 2000 we have opened eight branches in our existing markets. We are planning four to six new branches that we intend to open within the next 24 months. There is currently one new branch under construction in Nampa, Idaho and plans are being finalized for the construction of a new branch office in the Meridian, Idaho market in 2008. Our long-term strategy is to build two or three branches per year if appropriate sites can be identified and obtained. We will also actively search for appropriate acquisitions to enhance our ability to deliver products and services in our existing markets and to expand into surrounding markets. However, there are currently no specific acquisitions under consideration.

Increasing Our Core Transaction Deposits. A fundamental part of our overall strategy is to improve both the level and the mix of deposits that serve as a funding base for asset growth. By growing demand deposit accounts and other transaction accounts, we intend to reduce our reliance on higher-cost certificates of deposit and borrowings such as advances from the Federal Home Loan Bank of Seattle. In order to expand our core deposit franchise, we are focusing on introducing additional products and services to obtain money market and time deposits by bundling them with other consumer services. Business deposits are being pursued by the introduction of cash management products and by specific targeting of small business customers.

Hire Experienced Employees With a Customer Service Focus. Our ability to continue to attract and retain banking professionals with strong business banking and service skills, community relationships and significant


iv



knowledge of our markets is key to our success. We believe that by focusing on experienced bankers who are established in their communities, we enhance our market position and add profitable growth opportunities. We emphasize to our employees the importance of delivering exemplary customer service and seeking opportunities to build further relationships with our customers. Our goal is to compete by relying on the strength of our customer service and relationship banking approach.

Continuing an internal management culture which is driven by a focus on profitability, productivity and accountability for results and which responds proactively to the challenge of change. The primary method for reinforcing our culture is the comprehensive application of our “Pay for Performance” total compensation program. Every employee has clearly defined accountabilities and performance standards that tie directly or indirectly to our profitability. All incentive compensation is based on specific profitability measures, sales volume goals or a combination of specific profitability measures and individual performance goals. This approach encourages all employees to focus on our profitability and has created an environment that embraces new products, services and delivery systems.

The Conversion and Stock Offering

Home Federal MHC is currently in the mutual form of ownership. Our depositors and certain borrowers as members have the right to vote on certain matters, such as the conversion. The conversion is a series of transactions by which we are reorganizing from a mutual holding company structure, where the mid-tier holding company, Home Federal Bancorp, is 58.9% owned by a mutual holding company, Home Federal MHC, and 41.1% owned by other stockholders (who are sometimes referred to as the “public stockholders”), to a stock holding company which will be 100% owned by public stockholders. As part of the conversion, Home Federal Bancorp and Home Federal MHC will cease to exist as separate entities, and Home Federal Bank will be owned directly by new Home Federal Bancorp. Voting rights in new Home Federal Bancorp will be vested solely in the public stockholders following the conversion.

As a result of the conversion of Home Federal MHC into new Home Federal Bancorp, the shares of common stock of the mid-tier holding company, Home Federal Bancorp, owned by Home Federal MHC will be cancelled. New shares of common stock, representing the 58.9% ownership interest of Home Federal MHC in the mid-tier holding company, Home Federal Bancorp, are being offered for sale by new Home Federal Bancorp in this offering. The remaining 41.1% ownership interest in Home Federal Bancorp is currently owned by public stockholders and will be exchanged for shares of new Home Federal Bancorp’s common stock based on an exchange ratio of 1.1360 to 1.5369. The exchange ratio may be increased to as much as 1.7674 in the event the maximum of the offering range is increased by 15%. The actual exchange ratio will be determined at the closing of the offering and will depend on the number of shares of new Home Federal Bancorp’s common stock that are sold in the offering.


v



     
Terms of the Offering
     

We are offering between 10,200,000 and 13,800,000 shares of common stock, to those with subscription rights in the following order of priority:

     
(1)   Depositors who held at least $50 with us on March 31, 2006.  
     
(2)   The Home Federal Bancorp employee stock ownership plan.  
     
(3)   Depositors who held at least $50 with us on September 30, 2007.  

vi



     
(4)   Depositors and borrowers with us as of                                  , 2007 and March 16, 2004, respectively, to the extent not already included in a prior category.  
     

We may increase the maximum number of shares that we sell in the offering by up to 15% to 15,870,000 shares as a result of market demand, regulatory considerations or changes in financial conditions with the approval of the Office of Thrift Supervision and without any notice to you. If we increase the number of shares in the offering, you will not have the opportunity to change or cancel your stock order. The offering price is $10.00 per share. All purchasers will pay the same purchase price per share. No commission will be charged to purchasers in the offering.

     

If we receive subscriptions for more shares than are to be sold in the subscription offering, shares will be allocated in order of the priorities described above under a formula outlined in the plan of conversion and reorganization. If we increase the number of shares to be sold above 13,800,000, the employee stock ownership plan will have the first priority right to purchase any shares exceeding that amount to the extent that its subscription has not previously been filled. Any shares remaining will be allocated in the order of priorities described above. Shares of common stock not subscribed for in the subscription offering will be offered to the general public in a direct community offering with a preference to natural persons residing in Ada, Canyon, Elmore and Gem counties, Idaho and, if necessary, a syndicated community offering. The direct community offering, if any, shall begin at the same time as, during or promptly after the subscription offering. See “The Conversion and Stock Offering – Subscription Offering and Subscription Rights,” “– Direct Community Offering” and “– Syndicated Community Offering.”

     

Keefe, Bruyette & Woods, our financial advisor and selling agent in connection with the offering, will use its best efforts to assist us in selling our common stock in the offering. Keefe, Bruyette & Woods is not obligated to purchase any shares of common stock in the offering. For further information about the role of Keefe, Bruyette & Woods in the offering, see “The Conversion and Stock Offering – Marketing Arrangements.”

     

Reasons for the Conversion and Offering

We believe that this is the right time for Home Federal MHC to convert to the stock form. Generally, the conversion and stock offering will give us the financial strength to continue to grow our bank, better enable us to serve our customers in our market area, help us retain and attract qualified management through stock-based compensation plans, and provide us with easier access to the capital markets through possible future equity and debt offerings.

We believe that the conversion also will help us grow our loan portfolio, particularly in the commercial lending area. The increased capital from the offering proceeds will enable us to make larger loans than we have been able to in the past and make us a more effective competitor in our market areas. In order to capitalize on these opportunities we have hired and plan to hire several additional commercial lending officers who will focus on increasing our commercial loan portfolio. We believe that, as a stock-form institution, we may be in a better position to attract and retain quality loan officers. In addition, we plan to expand our banking franchise by opening additional branch offices. We are planning four to six new branches that we intend to open within the next 24 months. There is currently one new branch under construction in Nampa, Idaho and plans are being finalized for the construction of a new branch office in the Meridian, Idaho market in 2008. We hope to be able to use these new branches to enhance our commercial lending efforts in which we open new offices. In addition, we believe that there may be opportunities to make acquisitions of other financial institutions in the future, although we do not currently have any plans, agreements or understandings regarding any acquisition transactions. The proceeds from the offering as well as the stock form of ownership will facilitate our ability to consider acquisitions in the future.

The Exchange of Home Federal Bancorp Common Stock

If you are now a stockholder of Home Federal Bancorp, the existing publicly traded mid-tier holding company, your shares will be cancelled and exchanged for new shares of new Home Federal Bancorp common stock. The exchange of shares is subject to the completion of the conversion inculding the approval of the


vii



members of Home Federal MHC, the stockholders of Home Federal Bancorp, Inc. and the approval of the appraisal update by the Office of Thrift Supervision. The number of shares you receive will be based on an exchange ratio determined as of the closing of the conversion. The actual number of shares you receive will depend upon the number of shares we sell in our offering, which in turn will depend upon the final appraised value of new Home Federal Bancorp. The following table shows how the exchange ratio will adjust, based on the number of shares sold in our offering. The table also shows how many shares a hypothetical owner of Home Federal Bancorp common stock would receive in the exchange, based on the number of shares sold in the offering.

                                     
                                100    
                                shares of    
                                Home   Value of
                                Federal   new Home
                                Bancorp   Federal
                                common   Bancorp shares
                                stock   to be received
                        Total shares       would be   in exchange
                        of new       exchanged   for 100 shares
              Shares of new Home   Home       for the   of Home
              Federal Bancorp stock   Federal       following   Federal
              to be exchanged for   Bancorp       number of   Bancorp
              current Home Federal   common       shares of   common stock
    Shares to be sold in   Bancorp common   stock to be       new   assuming
    the offering   stock   outstanding       Home   value at
   

 

  after the   Exchange   Federal   $10.00 per
    Amount   Percent   Amount   Percent   conversion   ratio   Bancorp   share
   
 
 
 
 
 
 
 
Minimum   10,200,000   58.9 %     7,103,110   41.1 %   17,303,110   1.1360   113   $1,130
Midpoint   12,000,000   58.9       8,356,600   41.1     20,356,600   1.3364   133   1,330
Maximum   13,800,000   58.9       9,610,090   41.1     23,410,090   1.5369   153   1,530
15% above the maximum   15,870,000   58.9     11,051,604   41.1     26,921,604   1.7674   176   1,760

If you currently own shares of Home Federal Bancorp which are held in “street name,” they will be exchanged without any action on your part. If you currently are the record owner of shares of Home Federal Bancorp and hold certificates for these shares you will receive, after the conversion and offering is completed, a transmittal form with instructions to surrender your stock certificates. New certificates of our common stock will be mailed within five business days after the exchange agent receives properly executed transmittal forms and stock certificates. You should not submit a stock certificate for exchange until you receive a transmittal form.

No fractional shares of our common stock will be issued to any public stockholder of Home Federal Bancorp upon consummation of the conversion. For each fractional share that would otherwise be issued, we will pay an amount equal to the product obtained by multiplying the fractional share interest to which the holder would otherwise be entitled by the $10.00 per share subscription price.

Under federal law and regulations, current public stockholders of Home Federal Bancorp do not have dissenters’ rights or appraisal rights.

Outstanding options to purchase shares of Home Federal Bancorp common stock also will convert into and become options to purchase new shares of new Home Federal Bancorp, Inc. common stock. The number of shares of common stock to be received upon exercise of these options will be determined pursuant to the exchange ratio. The aggregate exercise price, duration and vesting schedule of these options will not be affected by the conversion. At June 30, 2007, there were 559,228 outstanding options to purchase shares of Home Federal Bancorp common stock, 49,233 of which have vested. Such options will be converted into options to purchase 635,283 shares of common stock at the minimum of the offering range and 859,478 shares of common stock at the maximum of the offering range. Because Office of Thrift Supervision regulations prohibit us from repurchasing our common stock during the first year following the conversion unless compelling business reasons exist for such repurchases, we may use authorized but unissued shares to fund option exercises that occur during the first year following the conversion. If


viii



all existing options were exercised for authorized, but unissued shares of common stock following the conversion, stockholders would experience dilution of approximately 3.5%.

How We Determined the Offering Range and the $10.00 Price Per Share

The offering range is based on an independent appraisal of the market value of the common stock to be issued in the offering. RP Financial, LC., an appraisal firm experienced in appraisals of financial institutions, has advised us that, as of September 14, 2007, the estimated pro forma market value of our common stock, including exchange shares, ranges from a minimum of $173.0 million to a maximum of $234.1 million, with a midpoint of $203.6 million. Based on this valuation range, the percentage of Home Federal Bancorp’s common stock owned by Home Federal MHC, and the $10.00 price per share, the respective boards of directors of Home Federal Bank, Home Federal MHC and Home Federal Bancorp determined to offer shares of new Home Federal Bancorp’s common stock ranging from a minimum of 10,200,000 shares to a maximum of 13,800,000 shares, with a midpoint of 12,000,000 shares. The pro forma market value can be adjusted upward by us subsequent to the expiration date of the offering and prior to closing to reflect the demand for shares in the offering or changes in market and financial conditions without the resolicitation of subscribers if supported by an appropriate change in our independent appraisal and the approval of the Office of Thrift Supervision. At the adjusted maximum, the estimated pro forma market value of new Home Federal Bancorp’s common stock would be $269.2 million and the number of shares offered would equal 15,870,000 shares.

             The independent appraisal was based in part on our financial condition and results of operations, the pro forma impact of the additional capital raised by the sale of common stock in the offering, and an analysis of a peer group of companies that RP Financial considered comparable to us. The peer group, which consists of 10 publicly traded thrift institutions, includes companies that range in asset size from $531 million to $1.2 billion, have market capitalizations that range from $53.2 million to $174.6 million, and have been in fully converted form for more than one year. A majority of the peer group companies are located in the Western states.

             The independent valuation was prepared by RP Financial in reliance upon the information contained in this prospectus, including the consolidated financial statements of Home Federal Bancorp. RP Financial also considered the following factors, among others:

  the present results and financial condition of Home Federal Bank, and the projected results and financial condition of new Home Federal Bancorp, a Maryland corporation;
     
  the economic and demographic conditions in Home Federal Bank’s existing market area;
     
  certain historical, financial and other information relating to Home Federal Bank;
     
  a comparative evaluation of the operating and financial characteristics of Home Federal Bank with those of other similarly situated publicly traded savings institutions located in the United States;
     
  the impact of the conversion and the offering on Home Federal Bancorp’s stockholders’ equity and earnings potential;
     
  the proposed dividend policy of new Home Federal Bancorp; and
     
  the trading market for securities of comparable institutions and general conditions in the market for such securities.

             The following table presents a summary of selected pricing ratios for the companies comprising the peer group used by RP Financial in its independent appraisal report dated September 14, 2007 and the pro forma pricing ratios for us, as calculated in the table on page 20 in the section of this prospectus entitled “Pro Forma Data.” Compared to the median pricing of the peer group, our pro forma pricing ratios at the midpoint of the offering range indicated a premium of 86.9% on a price-to-earnings basis and discounts of 25.0% on a price-to-book value basis and 27.9% on a price-to-tangible book value basis. The estimated appraised value and the resulting premiums and


ix



discounts took into consideration the potential financial impact of the conversion and offering and RP Financial’s analysis of the results of operations and financial condition of Home Federal Bancorp compared to the peer group.

        Price-to-earnings   Price-to-book   Price-to-tangible  
        multiple(1)   value ratio   book value ratio  
       
 
 
 
  New Home Federal Bancorp                        
 

Minimum of offering range

    24.34x     88.26 %     88.26 %  
 

Midpoint of offering range

    27.66     96.34       96.34    
 

Maximum of offering range

    33.77     103.20       103.20    
 

Maximum of offering range, as adjusted

    34.10     110.13       110.13    
 
  Valuation of peer group companies as of September 14, 2007(2)                        
 

Average

    18.90x     129.19 %     145.75 %  
 

Median

    14.80     128.49       133.67    


(1)   Reflects our pro forma price-to-earnings multiples based on pro forma net income for the 12 months ended June 30, 2007.
(2)   Reflects earnings for the most recent twelve month period for which data was publicly available.

The independent appraisal is not necessarily indicative of post-offering trading value. You should not assume or expect that the valuation of new Home Federal Bancorp as indicated above means that the common stock will trade at or above the $10.00 purchase price after the offering is completed.

The independent appraisal will be updated before we complete the conversion. Any changes in the appraisal would be subject to the approval of the Office of Thrift Supervision The estimated pro forma market value of new Home Federal Bancorp may be increased by up to 15%, or up to $269.2 million. See “Pro Forma Data.”

After-Market Performance Information Provided by the Independent Appraiser

The following table, prepared by our independent appraiser, presents for all second step conversions that began trading from January 1, 2006 to September 14, 2007, the percentage change in the trading price from the initial trading date of the offering to the dates shown in the table. The table also presents the average and median trading prices and percentage change in trading prices for the same dates. This information relates to stock performance experienced by other companies that may have no similarities to us with regard to market capitalization, offering size, earnings quality and growth potential, among other factors.

The table is not intended to indicate how our common stock may perform. Data represented in the table reflects a small number of transactions and is not indicative of general stock market performance trends or of price performance trends of companies that undergo conversions. Furthermore, this table presents only short-term price performance and may not be indicative of the longer-term stock price performance of these companies. There can be no assurance that our stock price will appreciate or that our stock price will not trade below $10.00 per share. The movement of any particular company’s stock price is subject to various factors, including, but not limited to, the amount of proceeds a company raises, the company’s historical and anticipated operating results, the nature and quality of the company’s assets, the company’s market area and the quality of management and management’s ability to deploy proceeds (such as through loans and investments, the acquisition of other financial institutions or other businesses, the payment of dividends and common stock repurchases). In addition, stock prices may be affected by general market and economic conditions, the interest rate environment, the market for financial institutions and merger or takeover transactions and the presence of professional and other investors who purchase stock on speculation, as well as other unforeseeable events not in the control of management. Before you make an investment decision, please carefully read this prospectus, including “Risk Factors.”


x



After Market Trading Activity
Second Step Offerings
Completed Closing Dates between January 1, 2006 and September 14, 2007

            Appreciation from Initial Trading Date(1)    
           
   
Transaction Conversion
Date
  1 Day     1 Week     1 Month     Through
September 14, 2007
   

 
 
 
 
 
 
Abington Bancorp, Inc.                                                  

(NASDAQ: ABBC)

    6/28/07       (4.0 )%       (1.6 )%       (7.5 )%       (4.2 )%    
Peoples United Financial, Inc.                                                  

(NASDAQ: PBCT)

    4/16/07       3.8         2.0         (0.3 )       (14.9 )    
Osage Bancshares, Inc.                                                  

(NASDAQ: OSBK)

    1/18/07       (0.5 )       (0.5 )       (6.8 )       (9.1 )    
Westfield Financial, Inc.                                                  

(AMEX: WFD)

    1/4/07       7.0         7.5         9.0         (0.1 )    
Citizens Community Bancorp, Inc.                                                  

(NASDAQ: CZ WI)

    11/1/06       (2.5 )       (1.0 )       (3.3 )       (7.7 )    
Liberty Bancorp, Inc.                                                  

(NASDAQ: LBCP)

    7/24/06       2.5         1.0         1.5         7.2      
First Clover Leaf Fin. Corp.                                                  

(NASDAQ: FCLF)

    7/11/06       3.9         6.0         11.2         15.0      
Monadnock Bancorp, Inc.                                                  

(OTCBB : MN KB )

    6/29/06               (5.0 )       (13.8 )       (17.5 )    
Average             1.3         1.1         (1.2 )       (3.9 )    
Median             1.3         0.3         (1.8 )       (6.0 )    

                                                 
(1)          The offering price for each transaction was $10.00 per share.

Termination of the Offering

The subscription offering will end at 12:00 Noon, Mountain time, on                             , 2007, unless extended. The direct community offering and syndicated community offering, if any, will also end at 12:00 Noon, Mountain time, on                             , 2007. If fewer than the minimum number of shares are subscribed for in the subscription offering and we do not get orders for at least the minimum number of shares by                             , 2008, we will either:

(1)   promptly return any payment you made to us, with interest, or cancel any withdrawal authorization you gave us; or
       
(2)  

extend the offering, if allowed, and give you notice of the extension and of your rights to cancel, change or confirm your order. If we extend the offering and you do not respond to the notice, then we will cancel your order and return your payment, with interest, or cancel any withdrawal authorization you gave us. We must complete or terminate the offering by                             , 2009.


xi



How We Will Use the Proceeds Raised From the Sale of Common Stock

We intend to use the net proceeds received from the stock offering as follows:

                        Maximum,  
    Minimum       Maximum       as adjusted  
   
 
 
            (In Thousands)          
Gross proceeds     $102,000         $138,000       $158,700  
Less: estimated underwriting commission and other offering commissions     4,471         5,613       6,269  
Net proceeds     97,529         132,387       152,431  
Less:                          

Net proceeds to Home Federal Bank

    48,765         66,194       76,216  

Loan to our employee stock ownership plan

    8,160         11,040       12,696  
Net cash proceeds retained by new Home Federal Bancorp     40,604         55,153       63,519  

We expect to expand our branch network and are planning four to six new branches that we intend to open within the next 24 months. There is currently one new branch under construction in Nampa, Idaho and plans are being finalized for the construction of a new branch office in the Meridian, Idaho market in 2008. Our long-term strategy is to build two or three branches per year if appropriate sites can be identified and obtained. We expect that each new branch office will cost between $1.3 million to $2.2 million, depending upon the location, cost of land, and the size and design of the building and permitting costs, which may vary from one jurisdiction to another. Initially, the net proceeds from the offering will be utilized to fund new loan originations, particularly in the commercial lending area.

Except as described above, neither new Home Bancorp, Inc. and Home Federal has any specific plans for the investment of the proceeds of this offering and has not allocated a specific portion of the proceeds to any particular use. The net proceeds retained by new Home Federal Bancorp will initially be deposited with Home Federal Bank and may ultimately be used to support lending and investment activities, future expansion of operations through the establishment or acquisition of banking offices or other financial service providers, to pay dividends or for other general corporate purposes, including repurchasing shares of its common stock. No such acquisitions are specifically being considered at this time. Initially, a substantial portion of the net proceeds will be invested in short-term investments, investment-grade debt obligations and mortgage-backed securities.

See “Risk Factors” and “How We Intend to Use the Proceeds From This Offering.”

Our Dividend Policy

Home Federal Bancorp has paid quarterly cash dividends since the quarter ended June 30, 2005. During the quarter ended June 30, 2007, the cash dividend was $0.055 per share. We intend to continue to pay cash dividends on a quarterly basis after we complete the conversion and the offering. We currently expect that the level of cash dividends per share after the conversion and offering will be substantially consistent with the current amount of dividends per share paid by Home Federal Bancorp on its common stock as adjusted for the additional shares issued pursuant to the exchange ratio. For example, based on the current cash dividend of $0.055 per share and an assumed exchange ratio of 1.5369 at the maximum of the offering range, the cash dividend, if paid, would be approximately $.035 per share. However, the dividend rate and the continued payment of dividends will depend on a number of factors, including our capital requirements, our financial condition and results of operations, tax considerations, statutory and regulatory limitations and general economic conditions. No assurance can be given that we will continue to pay dividends or that they will not be reduced in the future. Additionally, we can not guarantee that the amount of dividends that we pay after the conversion will be equal to the per share dividend amount that Home Bancorp’s stockholders currently receive, as adjusted to reflect the exchange ratio.


xii



Market for Common Stock

Home Federal Bancorp’s common stock is currently listed on the Nasdaq Global Market under the symbol “HOME”. We have applied to have the common stock of new Home Federal Bancorp listed for trading on the Nasdaq Global Select Market. For the first 20 trading days after the conversion and offering is completed, we expect new Home Federal Bancorp common stock to trade under the symbol “HOMED,” thereafter it will revert to the “HOME" trading symbol.

Limitations on the Purchase of Common Stock in the Conversion

The minimum purchase is 25 shares.

The maximum purchase in the subscription offering and community offering by any person or group of persons through a single deposit account is 5% of the common stock sold in the offering. For example, if 12,000,000 shares are sold at the midpoint of the offering range, any person or group persons through a single deposit account may purchase up to 600,000 shares. If 13,800,000 shares are sold at the maximum of the offering range, any person or group persons through a single deposit account may purchase up to 690,000 shares. Finally, if 10,200,000 shares are sold at the minimum of the offering range, any person or group persons through a single deposit account may purchase up to 510,000 shares.

The maximum purchase in the subscription offering and community offering combined by any person, related persons or persons acting together is 5% of the common stock sold in the offering. This means that the same limitations that are described in the preceding paragraph are applicable to purchases combined by any person, related persons or persons acting together.

If any of the following persons purchase common stock, their purchases when combined with your purchases cannot exceed 5% of the common stock sold in the offering:

(1)  
your spouse, or your relatives or your spouse’s relatives living in your house;
       
(2)  
companies or other entities in which you have a 10% or greater equity or substantial beneficial interest or in which you serve as a senior officer or partner;
       
(3)  
a trust or other estate if you have a substantial beneficial interest in the trust or estate or you are a trustee or fiduciary for the trust or other estate; or
       
(4)  
other persons who may be acting together with you (including, but not limited to, persons who file jointly a Schedule 13G or Schedule 13D Beneficial Ownership Report with the Securities and Exchange Commission, persons living at the same address or persons exercising subscription rights through qualifying deposits registered at the same address, whether or not related).

In addition to the above purchase limitations, there is an ownership limitation for stockholders other than our employee stock ownership plan. Shares of common stock that you purchase in the offering individually and together with persons described above, plus any shares you and they receive in exchange for existing shares of Home Federal Bancorp common stock, may not exceed 5% of the total shares of common stock to be issued and outstanding after the completion of the conversion.

Subject to Office of Thrift Supervision approval, we may increase or decrease the purchase limitations in the offering at any time. Our tax-qualified benefit plans, including our employee stock ownership plan, are authorized to purchase up to 10% of the shares sold in the offering without regard to these purchase limitations. See “The Conversion and Stock Offering – Limitations on Stock Purchases.”


xiii



Steps We May Take if We Do Not Receive Orders for the Minimum Number of Shares

If we do not receive orders for at least 10,200,000 shares of common stock in the subscription, community and/or syndicated community offering, we may take several steps in order to issue the minimum number of shares of common stock in the offering range. Specifically, we may:

  increase the purchase and ownership limitations; and/or
     
 

seek regulatory approval to extend the offering beyond the                             , 2007 expiration date, provided that any such extension will require us to resolicit subscriptions received in the offering.

Alternatively, we may terminate the offering, return funds with interest and cancel deposit account withdrawal authorizations.

How to Purchase Common Stock

Note: Once we receive your order, you cannot cancel or change it without our consent. If new Home Federal Bancorp intends to sell fewer than 10,200,000 shares or more than 15,870,000 shares, all subscribers will be notified and given the opportunity to change or cancel their orders. If you do not respond to this notice, we will return your funds promptly with interest or cancel your withdrawal authorization.

If you want to subscribe for shares, you must complete an original stock order form and drop it off at any Home Federal Bank branch or send it, together with full payment or withdrawal authorization, to Home Federal Bank in the postage-paid envelope provided. You must sign the certification that is part of the stock order form. We must receive your stock order form before the end of the offering period.

You may pay for shares in any of the following ways:

 
By check or money order made payable to Home Federal Bancorp, Inc.
     
 
By authorizing a withdrawal from an account at Home Federal Bank, including certificates of deposit, designated o n the stock order form. To use funds in an individual retirement account (“IRA ”) at Home Federal, you must transfer your account to an unaffiliated institution or broker. Please contact the stock information center as soon as possible for assistance.
     
  In cash, if delivered in person to any Home Federal Bank branch office.

We will pay interest on your subscription funds at the rate Home Federal Bank pays on passbook savings accounts from the date it receives your funds until the conversion is completed or terminated. All funds received before the completion of the conversion will be held in a segregated account at Home Federal Bank or, at our discretion, at an independent insured depository institution. All funds authorized for withdrawal from deposit accounts with Home Federal Bank will earn interest at the applicable account rate until the conversion is completed. There will be no early withdrawal penalty for withdrawals from certificates of deposit at Home Federal Bank used to pay for stock.

You may subscribe for shares of common stock using funds in your IRA at Home Federal Bank or elsewhere. However, common stock must be held in a self-directed retirement account. Home Federal Bank’s IRAs are not self-directed, so they cannot be invested in common stock. If you wish to use some or all of the funds in your Home Federal Bank IRA, the applicable funds must be transferred to a self-directed account reinvested by an independent trustee, such as a brokerage firm. If you do not have such an account, you will need to establish one before placing your stock order. An annual administrative fee may be payable to the independent trustee. Because individual circumstances differ and processing of retirement fund orders takes additional time, we recommend that you contact the stock information center promptly, preferably at least two weeks before the


xiv



end of the offering period, for assistance with purchases using your IRA or other retirement account that you may have. Whether you may use such funds for the purchase of shares in the stock offering may depend on timing constraints and possible limitations imposed by the institution where the funds are held.

Purchases of Common Stock by Our Officers and Directors

Our directors and executive officers, as a group, beneficially owned approximately 4.42% of Home Federal Bancorp’s outstanding common stock as of June 30, 2007 which shall be exchanged for new Home Federal Bancorp common stock. Collectively, our directors and executive officers intend to subscribe for 62,500 shares regardless of the number of shares sold in the offering. This number equals 0.2% of the 23,410,090 shares that would be issued at the maximum of the offering range. If fewer shares are issued in the conversion, then officers and directors will own a greater percentage of new Home Federal Bancorp. These shares do not include any shares that may be awarded or issued in the future under any stock option plan or recognition and retention plan we intend to adopt. Directors and executive officers will pay the same $10.00 per share price for these shares as everyone else who purchases shares in the conversion.

These proposed purchases of common stock by our directors and executive officers, together with shares exchanged, the purchase by the employee stock ownership plan of 8% of the aggregate shares sold in the offering, as well as the potential acquisition of common stock through the proposed stock option plan and recognition and retention plan will result in ownership by insiders of new Home Federal Bancorp in excess of 13.9% of the total shares outstanding after the offering at the maximum of the offering range. As a result, it could be more difficult to obtain majority support for stockholder proposals opposed by the Board and management. See “Risk Factors – Risks Related to This Offering – The amount of common stock we will control, our articles of incorporation and bylaws, and state and federal law could discourage hostile acquisitions of control of new Home Federal Bancorp.”

Tax Consequences of the Conversion

We have received the opinion of Silver Freedman & Taff, L.L.P. and Munther Goodrum Sperry, Chartered, Boise, Idaho, respectively, that, under federal and Idaho income tax law and regulation, there will be no taxable gain or loss and no change in tax basis upon the receipt of exchange shares and that the conversion will not be a taxable event for us. This opinion, however, is not binding on the Internal Revenue Service. See “The Conversion and Stock Offering – Effects of the Conversion – Tax Effects of the Conversion.”

Benefits to Management from the Offering

Our employees, officers and directors will benefit from the offering as a result of various stock-based benefit plans. Full-time employees, including officers, are participants in our existing employee stock ownership plan, which will purchase additional shares of common stock in the offering. The employee stock ownership plan intends to purchase in the offering 8% of the aggregate shares sold in the offering, or if shares are not available, in the open market after the conversion. Our employee stock ownership plan expects to purchase up to 8.0% of the shares of common stock we sell in the offering, or 1,104,000 shares of common stock, assuming we sell the maximum number of the shares proposed to be sold which when combined with the existing shares held by the employee stock ownership plan will be less than 8.0% of the shares outstanding following the conversion as required by Office of Thrift Supervision regulations. A loan from new Home Federal Bancorp to the employee stock ownership plan, funded by a portion of the proceeds from this offering, will be used to purchase these shares. The loan will accrue interest at an appropriate interest rate in effect at the time the employee stock ownership loan is entered into. The employee stock ownership plan provides a retirement benefit to all employees eligible to participate in the plan.

Subsequent to completion of the offering, we intend to implement new stock option and stock recognition and retention plans which will benefit our employees and directors no earlier than six months after the conversion. Under these plans, we may award stock options and shares of restricted stock to employees and directors. Stock options will be granted at an exercise price equal to 100% of the fair market value of our common stock on the option grant date. Under the new stock option plan, we may grant stock options in an amount up to 10% of new


xv



Home Federal Bancorp’s common stock sold in the offering. Under the stock recognition and retention plan, we may award restricted stock in an amount equal to 3.5% of new Home Federal Bancorp’s common stock sold in the offering. Shares of restricted stock will be awarded at no cost to the recipient. All the stock benefit plans will comply with all applicable Office of Thrift Supervision regulations. The new stock option and stock recognition and retention plans will supplement our existing 2005 Stock Option and Incentive Plan and 2005 Recognition and Retention Plan, which will continue as plans of new Home Federal Bancorp. Both the employee stock ownership plan and the recognition and retention plan will increase the voting control of management without a cash outlay by the recipient.

The number of options granted or shares awarded under the proposed and existing stock option plans and stock recognition and retention plans may not in the aggregate, pursuant to Federal regulations, exceed 10% and 4%, respectively, of our total outstanding shares (including shares sold to our employee stock ownership plan).

The additional shares purchased by the employee stock ownership plan and our new stock-based incentive plans will increase our future compensation costs, thereby reducing our earnings. We cannot determine the actual amount of these new stock-related compensation and benefit expenses at this time because applicable accounting

practices generally require that they be based on the fair market value of the options or shares of common stock at the date of the grant; however, we expect them to be significant. We will recognize expenses for our employee stock ownership plan when shares are committed to be released to participants’ accounts and will recognize expenses for restricted stock awards and stock options generally over the vesting period of awards made to recipients. We estimate, once these plans are adopted, the increase in compensation expense will be approximately $1.6 million on an after-tax basis, based on the maximum of the valuation range. Additionally, stockholders will experience a reduction in their ownership interest if newly issued shares of common stock are used to fund stock options and restricted stock awards. In the event newly issued shares of our common stock are used to fund stock options and restricted stock option awards in an amount equal to 8.7% and 3.5% , respectively, of the shares sold in the offering, stockholders would experience dilution in their ownership interest of 4.9% and 2.0%, respectively, or 6.7% in the aggregate. See “Risk Factors – Risks Related to this Offering – After this offering, our compensation expenses will increase and our return on equity will be low compared to other companies. These factors could negatively impact the price of our stock.” and “ – Management Benefits to Be Considered Following Completion of the Conversion and Reorganization.”

The following table summarizes the new stock benefits that our officers, directors and employees may receive following the offering at the maximum of the offering range. It assumes that the proposed new stock option plan is approved by stockholders within one year after completion of the offering to permit the granting of options to purchase a number of shares equal to 8.7% of the shares sold in the offering and the proposed new stock recognition and retention plan is approved by stockholders within one year after completion of the offering to permit the awarding of a number of shares of common stock equal to 3.5% of the shares sold in the offering. It further assumes that, at the maximum of the offering range, a total of 13,800,000 shares will be sold to the public and that our tangible regulatory capital is 10% or more following the proposed stock issuance.

  Number
of Shares
Based on
Minimum of
Offering
      Number
of Shares
Based on
Maximum of
Offering
      Plan     As a % of
Shares Issued
in the
Conversion
    Individuals
Eligible to
Receive
Awards
  As a % of
Total
Shares
Sold in
the
Offering
    Value of
Benefits
Based on
Minimum of
Offering
Range (1)
  Value of
Benefits
Based on
Maximum of
Offering
Range (1 )

 
   
 
 
 
   
 
                                                      (In Thousands)
                  Employee stock                                              
  816,000       1,104,000         ownership plan       4.7 %       Employees       8.0 %     $ 8,160     $ 11,040  
                                                                 
                  Restricted                 Directors/                            
  353,510       478,278         stock plan       2.0         Employees       3.5         3,535       4,783  
                                                                 
                  Stock option                 Directors/                            
  883,776       1,195,696         plan       5.1         Employees       8.7         2,395       3,240  
                       
                                 
                          11.9                                      
                       
                                 

xvi




(1)  
The actual value of the restricted stock awards will be determined based on their fair value as of the date the grants are made. For purposes of this table, fair value is assumed to be the offering price of $10.00 per share. The fair value of stock options has been estimated at $2.71 per option using the Black-Scholes option pricing model with the following assumptions: a grant-date share price and option exercise price of $10.00; dividend yield of 1.6%; expected option life of 10 years; risk free interest rate of 5.03% (based on the ten-year Treasury Note rate); and a volatility rate of 11.31% based on an index of publicly traded mutual holding company institutions. The actual expense of the stock options will be determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions used in the option pricing model ultimately adopted.

The value of the restricted stock awards will be based on the price of Home Federal Bancorp’s common stock at the time those shares are granted, which, subject to stockholder approval, cannot occur until at least six months after the offering is completed. The following table presents the total value of all restricted shares to be available for award and issuance under the new stock recognition and retention plan, assuming the shares for the plan are issued in a range of market prices from $8.00 per share to $14.00 per share.

Share Price     353,510
Shares
Awarded at
Minimum of Range
  415,894
Shares
Awarded at
Midpoint of Range
  478,278
Shares
Awarded at
Maximum of Range
  550,020
Shares
Awarded at
Maximum of Range,
as adjusted

   
 
 
 
(In Thousands, Except Per Share Amounts)
  $  8.00       $ 2,828     $ 3,327       $3,826     $ 4,400  
  $10.00         3,535       4,159       4,783       5,500  
  $12.00         4,242       4,991       5,739       6,600  
  $14.00         4,949       5,823       6,696       7,700  

The grant-date fair value of the options granted under the stock-based incentive plan will be based in part on the price of new Home Federal Bancorp’s common stock at the time the options are granted, which, subject to stockholder approval, cannot occur until at least six months after the offering is completed. The value also will depend on the various assumptions utilized in estimating the value using the Black-Scholes option pricing model. The following table presents the total estimated value of the options to be available for grant under the new stock option plan, assuming the market price and exercise price for the stock options are equal, with a range of market prices for the shares from $8.00 per share to $14.00 per share.

Market/Exercise Price     Grant-Date
Fair Value
Per Option
  883,776
Options
at Minimum
of Range
  1,039,736
Options
at Midpoint
of Range
  1,195,696
Options
at Maximum
of Range
  1,375,051
Options
at Maximum
of Range,
as adjusted

   
 
 
 
 
(In Thousands, Except Per Share Amounts)
  $  8.00       $2.17     $1,918     $2,256     $2,595     $2,984  
  $10.00       2.71     2,395     2,818     3,240     3,726  
  $12.00       3.26     2,881     3,390     3,898     4,483  
  $14.00       3.80     3,358     3,951     4,544     5,225  

The following table presents information regarding our existing employee stock ownership plan, options and restricted stock previously awarded under our 2005 Stock Option and Incentive Plan and our 2005 Recognition and Retention Plan, our employee stock ownership plan, and our proposed new stock option plan and new recognition and retention plan. The table below assumes that 23,410,090 shares are outstanding after the offering, which includes the sale of 13,800,000 shares in the offering at the maximum of the offering range and the issuance of 9,610,090 shares in exchange for shares of Home Federal Bancorp common stock using an exchange ratio of 1.5369. It is also assumed that the value of the stock is $10.00 per share and that the exchange of existing shares is in accordance with the exchange ratio at the maximum of the offering range.


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                            Percentage of Shares
                    Estimated   Outstanding After the
Existing and New Stock Benefit Plans   Participants   Shares (1)     Value   Conversion

   
 
                    (In Thousands)    
Employee Stock Ownership Plan:     All Employees                            
                                   

Shares purchased in 2004 mutual holding

                                 

company reorganization

          765,929 (2)     $ 7,659       3.3 %  
                                   

Shares to be purchased in this offering

          1,104,000         11,040       4.7    
           
     
 

Total Employee Stock Ownership Plan

          1,869,929       $ 18,699       8.0 %  
                                   
                                   
Recognition and Retention Plans:     Directors and Officers                            
                                   

2005 Recognition and Retention Plan

          458,138 (3)     $ 4,581       2.0 %  
                                   
Proposed New Recognition and Retention Plan           478,278 (4)       4,783       2.0    
           
     
 

Total recognition and Retention Plan

          936,416       $ 9,364       4.0 %  
                             
Stock Option Plans:     Directors and Officers                          
                                 

2005 Stock Option and Incentive Plan

            1,145,342 (5)           4.9 %  
                                 

Proposed New Stock Option Plan

            1,195,696       3,240     5.1 %  
             
   
 

Total Stock Option Plans

            2,341,038             10.0 %  
                                 

Total stock benefits plans

                               


(1)  
Shares purchased or awarded and options granted prior to the conversion have been adjusted for the 1.5369 exchange ratio at the maximum of the offering range.
(2)  
Approximately 153,186 (99,672 shares prior to adjustment for the exchange ratio) of these shares have been allocated to the accounts of participants.
(3)  
A total of 74,836 shares (48,693 shares prior to adjustment for the exchange ratio) of the indicated 2005 Recognition and Retention Plan awards have vested, and the shares of Home Federal Bancorp common stock subject to these awards have been distributed.
(4)  
The actual value of new recognition and retention plan awards will be determined based on their fair value as of the date grants are made. For purposes of this table, fair value is assumed to be the same as the offering price of $10.00 per share.
(5)  
A total of 107,664 options (70,053 options prior to adjustment for the exchange ratio) of the indicated 2005 Stock Option Plan options have been exercised.
(6)  
The weighted-average fair value of stock options granted under the 2005 Stock Option and Incentive Plan is $2.60 using the Black-Scholes option pricing model. Prior to the adjustments for exchange ratio, the 2005 Stock Option Plan covered 745,229 shares (i.e., the total number of options that could be granted), before exercises of options. The assumptions used for the options were the following: exercise price, $12.20 to $17.43; dividend yield, 2.0%; expected life, five to eight years; expected volatility, 14.96% to 17.43% and risk-free interest rate, 3.98% to 4.72%. The fair value of stock options to be granted under the new stock option plan has been estimated at $2.71 per option using the Black-Scholes option pricing model with the following assumptions: exercise price, $10.00; trading price on date of grant, $10.00; dividend yield, 1.6%; expected life, ten years: expected volatility, 11.31%; and risk-free interest rate, 5.03%.

For a further discussion of benefits to management, see “Management.”

Conditions to Completing the Conversion and Offering

We are conducting the conversion and offering and the exchange of shares under the terms of our plan of conversion and reorganization. We cannot complete the conversion , offering and exchange of shares unless:


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  our plan of conversion and reorganization is approved by at least a majority of votes eligible to be cast by depositors and borrowers of Home Federal Bank;
         
  our plan of conversion and reorganization is approved by at least two-thirds of the outstanding shares of our common stock entitled to vote at a meeting of stockholders of Home Federal Bancorp including the shares held by Home Federal MHC (because Home Federal MHC owns more than 50% of the outstanding shares of Home Federal Bancorp common stock, we expect that Home Federal MHC will control the outcome of this vote);
         
  our plan of conversion and reorganization is approved by a majority of the outstanding shares of Home Federal Bancorp, excluding shares held by the Home Federal MHC;
         
  we sell at least the minimum number of shares of common stock offered; and
         
  we receive approval from the Office of Thrift Supervision to complete the conversion and offering.

Home Federal MHC intends to vote its ownership interest in favor of the plan of conversion and reorganization. At June 30, 2007, Home Federal MHC owned 58.9% of the outstanding shares of common stock of Home Federal Bancorp. The directors and executive officers of Home Federal Bancorp and their affiliates beneficially owned 673,945 shares of Home Federal Bancorp, or 4.42% of the outstanding shares of common stock as of June 30, 2007. They have indicated their intention to vote those shares in favor of the plan of conversion and reorganization.

Delivery of Stock Certificates

Certificates representing shares of common stock issued in the offering and the exchange shares will be mailed to the persons entitled to receive these certificates at the certificate registration address noted on the order form, as soon as practicable following completion of the offering and receipt of all necessary regulatory approvals. Until certificates for the shares of common stock are available and delivered to purchasers, purchasers may not be able to sell the shares of common stock which they ordered or received in the exchange, even though the common stock will have begun trading.

Subscription Rights

Subscription rights are not allowed to be transferred, and we will act to ensure that you do not do so. We will not accept any stock orders that we believe involve the transfer of subscription rights.

Restrictions on the Acquisition of New Home Federal Bancorp

Federal regulations, as well as provisions contained in our articles of incorporation and bylaws, restrict the ability of any person, firm or entity to acquire new Home Federal Bancorp or its capital stock. These restrictions include the requirement that a potential acquirer of common stock obtain the prior approval of the Office of Thrift Supervision before acquiring in excess of 10% of the voting stock of new Home Federal Bancorp. Additionally, Office of Thrift Supervision regulations prohibit anyone from acquiring new Home Federal Bancorp for a period of three years following the offering, unless this prohibition is waived by the Office of Thrift Supervision. See “Risk Factors – Risks Related to the Offering – The amount of common stock we will control, our articles of incorporation and bylaws, and state and federal law could discourage hostile acquisitions of control of new Home Federal Bancorp.”

Important Risks in Owning New Home Federal Bancorp’s Common Stock

Before you decide to purchase stock, you should read the “Risk Factors” section on pages 1 to 9 of this prospectus.


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Stock Information Center

If you have any questions regarding the offering or our conversion to stock form, please call the stock information center at (208)        -            from 9:00 a.m. to 5:00 p.m., Mountain time, Monday through Friday. The Stock Information Center is closed on weekends and bank holidays. The Stock Information Center is located at our main office, 500 12th Avenue South, Nampa, Idaho. The banking operations portion of our main office is separate and apart from the Stock Information Center and will not have offering materials and cannot accept completed order forms or proxy cards.

To ensure that you receive a prospectus at least 48 hours before the offering deadline, we may not mail a prospectus any later than five days prior to such date or hand-deliver any prospectus later than two days prior to this date. Stock order forms may only be distributed with or preceded by a prospectus.

By signing the stock order form, you are acknowledging your receipt of a prospectus and your understanding that the shares are not a deposit account and are not insured or guaranteed by Home Federal MHC, Home Federal Bancorp, Home Federal Bank, new Home Federal Bancorp, the Federal Deposit Insurance Corporation or any other federal or state governmental agency.

We will make reasonable attempts to provide a prospectus and offering materials to holders of subscription rights. The subscription offering and all subscription rights will expire at 12:00 Noon, Mountain time, on                             , 2007, whether or not we have been able to locate each person entitled to subscription rights.


xx


RISK FACTORS

You should consider these risk factors, in addition to the other information in this prospectus, in deciding how to vote on the conversion and before deciding whether to make an investment in new Home Federal Bancorp’s stock.

Risks Related to Our Business

Our increased emphasis on commercial lending may expose us to increased lending risks.

Our business strategy is focused on the expansion of commercial real estate, construction and land development and commercial business lending. These types of lending activities, while potentially more profitable than single-family residential lending, are generally more sensitive to regional and local economic conditions, making loss levels more difficult to predict. Collateral evaluation and financial statement analysis in these types of loans requires a more detailed analysis at the time of loan underwriting and on an ongoing basis. While economic trends in the Treasure Valley Region of Southwest Idaho have been relatively positive, a decline in real estate values, would reduce the value of the real estate collateral securing our loans and increase the risk that we would incur losses if borrowers defaulted on their loans. In addition, these loans generally expose a lender to greater risk of non-payment and loss than one- to four-family residential mortgage loans because repayment of the loans often depends on the successful operation of the property and the income stream of the borrowers. Further, such loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to one- to four-family residential mortgage loans. Also, many of our commercial borrowers have more than one loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a one- to four-family residential mortgage loan. Accordingly, when there are defaults and losses on these types of loans, they are often larger on a per loan basis than those for permanent single-family or consumer loans. A secondary market for most types of commercial real estate and construction loans is not readily liquid, so we have less opportunity to mitigate credit risk by selling part or all of our interest in these loans.

Our business strategy includes significant growth plans, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.

We intend to continue pursuing a significant growth strategy for our business. Our growth initiatives are based upon recruiting experienced personnel to lead such initiatives, and, accordingly, the failure to identify and retain such personnel would place significant limitations on our ability to execute our growth strategy. In addition, achieving our growth targets requires us to attract customers that currently have banking relationships with other financial institutions in our market, thereby increasing our share of the market. To the extent we expand our lending beyond our current market area, we could incur additional risk related to those new market areas. We cannot assure that we will be able to expand our market presence in our existing markets or successfully enter new markets or that any such expansion will not adversely affect our profitability. If we do not manage our growth effectively, we may not be able to achieve our business plan, and our business, profitability and prospects could be harmed. Also, if our growth occurs more slowly than anticipated or declines, our profitability could be materially adversely affected.

Our ability to successfully grow will depend on a variety of factors, including our ability to attract and retain experienced bankers, the continued availability of desirable business opportunities, the competitive responses from other financial institutions in our market area and our ability to manage our growth. While we believe we have the executive management resources and internal systems in place to successfully manage our future growth, there can be no assurance growth opportunities will be available or that we will successfully manage our growth.

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We are highly dependent on key individuals and a number of the members of the original senior management team that were in place at the time of our mutual holding company reorganization have either left Home Federal Bank or will be retiring in the next year and as a result there will be a new management team leading us going forward.

Consistent with our policy of focusing on select growth initiatives we are highly dependent on the continued services of a limited number of our executive officers and key management personnel. The loss of services of any of these individuals could have a material adverse impact on our operations because other officers may not have the experience and expertise to readily replace these individuals.

The senior management team of Home Federal Bancorp in place at the time of the mutual holding company reorganization had worked together for a number of years and, until recently, virtually all of them had worked for us for five years or more. Daniel L. Stevens who has been our President and Chief Executive Officer since 1995 has announced that he will retire on September 30, 2008 and has begun the transition to his retirement, including working with his replacement, Len E. Williams. Roger D. Eisenbarth who has been our Senior Vice President and Chief Lending Officer since 1993 retired on October 15, 2007. Karen Wardwell who had been a Senior Vice President in Operations and Technology left in June 2007 and T. Blake Burgess our Corporate Secretary and Director of Accounting left in August 2007. In addition, we are currently interviewing potential candidates for the chief financial officer position. Once this individual is hired, Robert A. Schoelkoph, our current Chief Financial Officer, will continue to serve as Treasurer and Secretary of Home Federal Bancorp and Home Federal Bank.

While we believe we have in place qualified individuals to replace these individuals and have provided for an orderly transition, the new individuals will need to develop a cohesive and unified management team. Changes in key personnel and their responsibilities may be disruptive to our business and could have a material adverse effect on our business, financial condition and profitability. Moreover, our anticipated growth is expected to place increased demands on our human resources and will require the recruitment of additional middle management personnel. The competition to hire experienced banking professionals is also intense. If we are unable to attract qualified banking professionals, our expansion plans could be delayed or curtailed and our business, financial condition, and profitability may be adversely affected.

Fluctuations in interest rates could reduce our profitability and affect the value of our assets.

Like other financial institutions, we are subject to interest rate risk. Our primary source of income is net interest income, which is the difference between interest earned on loans and investments and the interest paid on deposits and borrowings. We expect that we will periodically experience imbalances in the interest rate sensitivities of our assets and liabilities and the relationships of various interest rates to each other. Over any defined period of time, our interest-earning assets may be more sensitive to changes in market interest rates than our interest-bearing liabilities, or vice versa. In addition, the individual market interest rates underlying our loan and deposit products (e.g., prime) may not change to the same degree over a given time period. In any event, if market interest rates should move contrary to our position, our earnings may be negatively affected. In addition, loan volume and quality and deposit volume and mix can be affected by market interest rates. Changes in levels of market interest rates could materially affect our net interest spread, asset quality, origination volume, and overall profitability.

Interest rates have recently been at historically low levels. However, since June 30, 2004, the U.S. Federal Reserve Board has increased its target for the federal funds rate 17 times, from 1.00% to 5.25%. While these short-term market interest rates (which we use as a guide to price our deposits) have increased, longer-term market interest rates (which we use as a guide to price our longer-term loans such as one- to four-family residential mortgages) have not. This “flattening” of the market yield curve has had a negative impact on our interest rate spread and net interest margin to date. If short-term interest rates continue to rise, and if rates on our deposits and borrowings continue to reprice upwards faster than the rates on our long-term loans and investments, we would experience further compression of our interest rate spread and net interest margin, which would have a negative effect on our profitability.

We principally manage interest rate risk by managing our volume and mix of our earning assets and funding liabilities. In a changing interest rate environment, we may not be able to manage this risk effectively. If we

2


are unable to manage interest rate risk effectively, our business, financial condition and results of operations could be materially harmed.

Changes in the level of interest rates also may negatively affect our ability to originate real estate loans, the value of our assets and our ability to realize gains from the sale of our assets, all of which ultimately affect our earnings. At June 30, 2007, we had $215.2 million in loans due after one year with fixed rates of interest, representing 43.4% of our total loan portfolio and 29.5% of our total assets. Our most recent “rate shock” analysis indicates that our net portfolio value would be more adversely affected by an increase in interest rates than by a decrease. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Asset and Liability Management and Market Risk.”

Our business is subject to various lending risks which could adversely impact our results of operations and financial condition.

Our business strategy centers on the continued transition to commercial banking activities in order to expand our net interest margin. Consistent with this strategy, we are working to further reduce the percentage of our assets that are lower-yielding residential loans and mortgage-backed securities and to increase the percentage of our assets consisting of construction and land development, commercial and multi-family real estate and commercial business loans that have higher risk-adjusted returns. Our increasing focus on these types of lending will continue to increase our risk profile relative to traditional thrift institutions as we continue to implement our business strategy for the following reasons:

Our commercial and multi-family real estate loans involve higher principal amounts than other loans and repayment of these loans may be dependent on factors outside our control or the control of our borrowers. We originate commercial and multi-family real estate loans for individuals and businesses for various purposes which are secured by commercial properties. As of June 30, 2007, $134.7 million, or 27.2% and $6.9 million, or 1.4% (excluding commercial real estate construction loans of $15.2 million), of our total loan portfolio was secured by commercial and multi-family real estate property, respectively.

The credit risk related to commercial and multi-family real estate loans is considered to be greater than the risk related to one- to four-family residential or consumer loans because the repayment of commercial and multifamily real estate loans typically is dependent on the income stream of the real estate securing the loan as collateral and the successful operation of the borrower’s business, which can be significantly affected by conditions in the real estate markets or in the economy. For example, if the cash flow from the borrower’s project is reduced as a result of leases not being obtained or renewed, the borrower’s ability to repay the loan may be impaired. In addition, many of our commercial and multi-family real estate loans are not fully amortizing and contain large balloon payments upon maturity. These balloon payments may require the borrower to either sell or refinance the underlying property in order to make the balloon payment.

If we foreclose on a commercial and multi-family real estate loan, our holding period for the collateral typically is longer than for one- to four-family residential mortgage loans because there are fewer potential purchasers of the collateral. Additionally, commercial and multi-family real estate loans generally have relatively large balances to single borrowers or related groups of borrowers. Accordingly, if we make any errors in judgment in the collectibility of our commercial and multi-family real estate loans, any resulting charge-offs may be larger on a per loan basis than those incurred with our residential or consumer loan portfolios. See “Business of Home Federal Bancorp and Home Federal Bank – Lending Activities – Commercial and Multi-Family Real Estate Lending.”

Our construction and land development loans are based upon estimates of costs and value associated with the complete project. We make land purchase, lot development and real estate construction loans to individuals and builders, primarily for the construction of residential properties and, to a lesser extent, commercial and multi-family real estate projects. We will originate these loans whether or not the collateral property underlying the loan is under contract for sale. Residential real estate construction loans include single-family tract construction loans for the construction of entry level residential homes. Over the last two years, we have significantly increased the amount of construction and land development loans in our loan portfolio, both in dollar amounts and as a percentage of our

3


total loans. At June 30, 2007, $46.2 million or 9.32% of our total loan portfolio consisted of construction and land development loans.

Our construction and land development loans are based upon estimates of costs and values associated with the completed project, which may be inaccurate. Construction and land development lending involves additional risks when compared with permanent residential lending because funds are advanced upon the security of the project, which is of uncertain value prior to its completion. Because of the uncertainties inherent in estimating construction costs, as well as the market value of the completed project and the effects of governmental regulation of real property, it is relatively difficult to evaluate accurately the total funds required to complete a project and the related loan-to-value ratio. This type of lending also typically involves higher loan principal amounts and is often concentrated with a small number of builders. These loans often involve the disbursement of substantial funds with repayment primarily dependent on the success of the ultimate project and the ability of the borrower to sell or lease the property or obtain permanent take-out financing, rather than the ability of the borrower or guarantor to repay principal and interest. If our appraisal of the value of a completed project proves to be overstated, we may have inadequate security for the repayment of the loan upon completion of construction of the project and may incur a loss. Our ability to continue to originate a significant amount of construction loans is dependent on the continued strength of the housing market in the Treasure Valley Region of Southwest, Idaho. Further, if we lost our relationship with one or more of our larger borrowers building in these counties or there is a decline in the demand for new housing in these counties, it is expected that the demand for construction loans would decline, our liquidity would substantially increase and our net income would be adversely affected.

Repayment of our commercial business loans is often dependent on the cash flows of the borrower, which may be unpredictable, and the collateral securing these loans may fluctuate in value. At June 30, 2007, commercial business loans totaled $4.1 million of our total loan portfolio, however, we intend to significantly expand these types of loans as a percentage of our total loan portfolio. Our commercial business loans are primarily made based on the identified cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. Most often, this collateral consists of accounts receivable, inventory or equipment. Credit support provided by the borrower for most of these loans and the probability of repayment is based on the liquidation of the pledged collateral and enforcement of a personal guarantee, if any exists. As a result, in the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from it customers. The collateral securing other loans may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business.

If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings could be reduced.

We make various assumptions and judgments about the collectibility of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. In determining the amount of the allowance for loan losses, we review our loans and our loss and delinquency experience, and evaluate economic conditions. Management recognizes that significant new growth in loan portfolios, new loan products and the refinancing of existing loans can result in portfolios comprised of unseasoned loans that may not perform in a historical or projected manner. If our assumptions are incorrect, our allowance for loan losses may not be sufficient to cover actual losses, resulting in additions to our allowance. Material additions to our allowance could materially decrease our net income. In addition, bank regulators periodically review our allowance for loan losses and may require us to increase our provision for loan losses or recognize additional loan charge-offs. Any increase in our allowance for loan losses or loan charge-offs as required by these regulatory authorities could have a material adverse effect on our financial condition and profitability.

If the value of real estate in the Boise metropolitan area were to decline materially, a significant portion of our loan portfolio could become under-collateralized, which could have a material adverse effect on us.

With substantially all of our loans secured by real property and concentrated in the State of Idaho, and specifically 43.9%, 30.0%, 4.4% and 3.2%, respectively, of our total loan portfolio concentrated in Ada, Canyon, Elmore and Gem counties, Idaho, respectively, a decline in local economic conditions could adversely affect the values of our real estate collateral. As a result, we have a greater risk of loan defaults and losses in the event of an economic downturn in our market area as adverse economic changes may have a negative effect on the ability of our

4


borrowers to make timely repayment of their loans. Consequently, a decline in local economic conditions may have a greater effect on our earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are geographically diverse. If we are required to liquidate a significant amount of collateral during a period of reduced real estate values to satisfy the debt, our financial condition and profitability could be adversely affected.

Because our loans are concentrated to borrowers in our market area, a downturn in the local economy or a decline in local real estate values could cause increases in nonperforming loans, which could hurt our profits.

Because the majority of our borrowers and depositors are individuals and businesses located and doing business in the Boise and surrounding metropolitan area, our success depends to a significant extent upon economic conditions in the Boise and surrounding metropolitan area. Adverse economic conditions in our market area could reduce our growth rate, affect the ability of our customers to repay their loans and generally affect our financial condition and results of operations. Conditions such as inflation, recession, unemployment, high interest rates, short money supply, scarce natural resources, international disorders, terrorism and other factors beyond our control may adversely affect our profitability. We do not have the ability of a larger institution to spread the risks of unfavorable local economic conditions across a large number of diversified economies. Any sustained period of increased payment delinquencies, foreclosures or losses caused by adverse market or economic conditions in the State of Idaho could adversely affect the value of our assets, revenues, profitability and financial condition. Moreover, we cannot give any assurance we will benefit from any market growth or favorable economic conditions in our primary market areas if they do occur.

The building of market share through our branching strategy could cause our expenses to increase faster than revenues.

We intend to continue to build market share through our branching strategy. We are planning four to six new branches that we intend to open within the next 24 months. There are costs involved in opening branches and new branches generally require a period of time to generate sufficient revenues to offset their costs, especially in areas in which we do not have an established presence. Accordingly, any new branch may negatively impact our earnings for some period of time until the branch reaches certain economies of scale. Our expenses could be further increased if we encounter delays in the opening of any of our new branches. Finally, there is a risk that our new branches will not be successful even after they have been established.

If external funds are not available, this could adversely impact our growth and future prospects.

We rely on deposits, brokered deposits, Federal Home Loan Bank advances and other borrowings to fund our operations. Although we have historically been able to replace maturing deposits if desired, no assurance can be given that we will be able to replace such funds in the future if our financial condition or market conditions were to change. Although we consider the sources of existing funds adequate for our current liquidity needs, we may seek additional brokered deposits or debt in the future to achieve our long-term business objectives. There can be no assurance additional funds, if sought, would be available to us or, if available, would be on favorable terms. If additional financing sources are unavailable or are not available on reasonable terms, our growth and future prospects could be adversely affected.

We face strong competition from other financial institutions, financial service companies and other organizations offering services similar to those offered by us, which could limit our growth and profitability.

We face direct competition from a significant number of financial institutions, many with a state-wide or regional presence, and in some cases a national presence, in both originating loans and attracting deposits. Competition in originating loans comes primarily from other banks, mortgage companies and consumer finance institutions that make loans in our primary market areas. We also face substantial competition in attracting deposits from other banking institutions, money market and mutual funds, credit unions and other investment vehicles.

In addition, banks with larger capitalization and non-bank financial institutions that are not governed by bank regulatory restrictions have large lending limits and are better able to serve the needs of larger customers.

5


Many of these financial institutions are also significantly larger and have greater financial resources than us, have been in business for a long period of time and have established customer bases and name recognition.

We compete for loans principally on the basis of interest rates and loan fees, the types of loans we originate and the quality of service we provide to borrowers. Our ability to attract and retain deposits requires that we provide customers with competitive investment opportunities with respect to rate of return, liquidity, risk and other factors. To effectively compete, we may have to pay higher rates of interest to attract deposits, resulting in reduced profitability. If we are not able to effectively compete in our market area, our profitability may be negatively affected, potentially limiting our ability to pay dividends. The greater resources and deposit and loan products offered by some of our competitors may also limit our ability to increase our interest-earning assets. See “Business of Home Federal Bancorp and Home Federal Bank – Competition.”

We continually encounter technological change, and we may have fewer resources than many of our competitors to continue to invest in technological improvements.

The financial services industry is undergoing rapid technological changes, with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial institutions to better serve customers and to reduce costs. Our future success will depend, in part, upon our ability to address the needs of our clients by using technology to provide products and services that will satisfy client demands for convenience, as well as to create additional efficiencies in our operations. Many of our competitors have substantially greater resources to invest in technological improvements. We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers.

We are subject to extensive regulation which could adversely affect our business.

Our operations are subject to extensive regulation by federal, state and local governmental authorities and are subject to various laws and judicial and administrative decisions imposing requirements and restrictions on part or all of our operations. Because our business is highly regulated, the laws, rules and regulations applicable to it are subject to regular modification and change. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets and determination of the level of our allowance for loan losses. Any change in this regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material impact on our operations or otherwise materially and adversely affect our business, financial condition, prospects or profitability. See “How We Are Regulated – Regulation and Supervision of Home Federal Bank.”

Risks Related to this Offering

After this offering, our compensation expenses will increase and our return on equity will be low compared to other companies. These factors could negatively impact the price of our stock.

The proceeds we will receive from the sale of our common stock will significantly increase our capital and it will take us time to fully deploy those proceeds in our business operations. Our compensation expense will increase because of the costs associated with the employee stock ownership and new stock-based incentive plans. These additional expenses will adversely affect our net income. We cannot determine the actual amount of these new stock-related compensation and benefit expenses at this time because applicable accounting practices generally require that they be based on the fair market value of the options or shares of common stock at the date of the grant; however, we expect them to be significant. We will recognize expenses for our employee stock ownership plan when shares are committed to be released to participants’ accounts and will recognize expenses for restricted stock awards and stock options generally over the vesting period of awards made to recipients. We estimate, once these plans are adopted, the increase in compensation expense will be approximately $1.6 million on an after-tax basis, based on the maximum of the valuation range. As a result we expect our return on equity to be below our historical level and less than many of our regional and national peers. Following the first step conversion, which occurred in December 2004, return on equity decreased from 10.47% for the year ended September 30, 2004 to 5.69% for the year ended September 30, 2005. In addition, return on assets also decreased from 0.93% for the year ended September 30, 2004 to 0.82% for the year ended September 30, 2005. For the nine months ended June 30, 2007 and

6


for the year ended September 30, 2006, our return on equity was 4.92% and 5.90%, respectively. Although we expect that our net income will increase following the offering, we expect that our return on equity will also be reduced as a result of the additional capital that we will raise in the offering. For example, our pro forma return on equity for the twelve months ended June 30, 2007 was 3.36%, assuming the sale of shares at the maximum of the offering range. In comparison, the peer group used by RP Financial in its appraisal had an average return on equity of 7.18% for the twelve months ended June 30, 2007. If our return on equity remains below the industry average following the stock offering, this could hurt our stock price. We cannot guarantee when or if we will achieve returns on equity that are comparable to industry peers. For further information regarding pro forma income and expenses, see “Pro Forma Data.”

Your subscription funds could be held for an extended time period and will be unavailable to you for other investments if completion of the conversion is delayed.

Your subscription funds could be held for an extended time period if the conversion is not completed by _____ ____ _ _, 2007 and the regulators give new Home Federal Bancorp more time to complete the conversion. If this occurs, your funds would not be available to use for other purposes. If the regulators give new Home Federal Bancorp more time to complete the conversion, new Home Federal Bancorp will contact everyone who subscribed for shares to see if they still want to purchase stock. A material change in the independent appraisal of new Home Federal Bancorp would be the most likely, but not necessarily the only, reason for a delay in completing the conversion. The conversion requirements permit the Office of Thrift Supervision to grant one or more time extensions, none of which may exceed 90 days. Extensions may not go beyond ___________ __, 2009.

Management and the board of directors have significant discretion over the investment of the offering proceeds and may not be able to achieve acceptable returns on the proceeds from the offering.

We expect that a significant amount of capital will be raised in this offering. The board of directors and management of new Home Federal Bancorp will have discretion in the investment of this additional capital. We will use a portion of the net proceeds retained to finance the purchase of common stock in the offering by the employee stock ownership plan and may use the remaining net proceeds to pay dividends to stockholders, repurchase shares of common stock, purchase securities, deposit funds in Home Federal Bank or other financial institutions, acquire other financial services companies or for other general corporate purposes. Home Federal Bank may use the proceeds it receives to fund new loans, establish or acquire new branches or loan production offices, acquire other financial service providers, purchase securities, or for general corporate purposes. We have not, however, identified specific amounts of proceeds for any of these purposes and we will have significant flexibility in determining the amount of net proceeds we apply to different uses and the timing of these applications. Our failure to utilize these funds effectively could reduce our profitability. We have not established a timetable for the effective deployment of the proceeds, and we cannot predict how long we will require to effectively deploy the proceeds. Initially, a substantial portion of the net proceeds will be invested in short-term investments, investment-grade debt obligations and mortgage-backed securities. Investing the offering proceeds in securities until we are able to deploy the proceeds will provide lower margins than we generally earn on loans, potentially adversely affecting stockholder returns, including earnings per share, return on assets and return on equity.

Holders of New Home Federal Bancorp common stock may not be able to sell their shares when desired if a liquid trading market does not develop.

Currently shares of Home Federal Bancorp’s common stock are listed on the Nasdaq Global Market under the symbol “HOME” and there is an established market for the common stock. In connection with the offering, we have applied to have our common stock listed for trading on the Nasdaq Global Select Market under the symbol “HOME.” We cannot predict whether a liquid trading market in shares of new Home Federal Bancorp’s common stock will develop or how liquid that market might become. The development of a liquid public market depends upon the existence of willing buyers and sellers, the presence of which is not within our control or the control of any market maker. See “Market for Our Common Stock.”

7


The shares of most recent second step conversions have traded below their initial offering price and as a result, our stock price may decline when trading commences.

If you purchase shares in the offering, you may not be able to sell them at above the $10.00 per share purchase price even if a liquid trading market develops. The shares of several recent offerings in connection with second step conversions have traded below the initial offering price after completion of the offering. After our shares begin trading, the trading price of our common stock will be determined by the marketplace and may be influenced by many factors, including prevailing interest rates, investor perceptions, securities analysts reports and general industry, geopolitical and economic conditions. See “The Conversion and Stock Offering – How We Determined Our Price and the Number of Shares to Be Issued in the Stock Offering.”

The amount of common stock we will control, our articles of incorporation and bylaws, and state and federal law could discourage hostile acquisitions of control of Home Federal Bancorp.

Our directors and executive officers, as a group, beneficially owned approximately 4.42% of Home Federal Bancorp’s outstanding common stock as of June 30, 2007 which will be exchanged for new Home Federal Bancorp common stock. Our board of directors and executive officers intend to purchase approximately 0.5% and 0.4% of additional common stock at the minimum and maximum of the offering range, respectively. These purchases, together with their prior ownership, as well as their potential acquisition of common stock through the employee stock ownership plan and proposed new stock option and stock recognition and retention plans will result in ownership by insiders of new Home Federal Bancorp in excess of 13.9% of the total shares issued in the offering at the maximum of the offering range. This inside ownership and provisions in our articles of incorporation and bylaws may discourage attempts to acquire new Home Federal Bancorp, pursue a proxy contest for control of new Home Federal Bancorp, assume control of new Home Federal Bancorp by a holder of a large block of common stock, and remove new Home Federal Bancorp’s management, all of which stockholders might think are in their best interests. These provisions include a prohibition on any holder of common stock voting more than 10% of the outstanding common stock. See “Restrictions on Acquisition of Home Federal Bancorp and Home Federal – Anti-takeover Provisions in Home Federal Bancorp’s Articles of Incorporation and Bylaws.”

In addition, the business corporation law of Maryland, the state where new Home Federal Bancorp is incorporated, provides for certain restrictions on acquisition of new Home Federal Bancorp. Furthermore, federal law restricts acquisitions of control of savings and loan holding companies such as new Home Federal Bancorp.

We intend to remain independent which may mean you will not receive a premium for your common stock.

We intend to remain independent for the foreseeable future. Because we do not plan on seeking possible acquirors, it is unlikely that we will be acquired in the foreseeable future. Accordingly, you should not purchase our common stock with any expectation that a takeover premium will be paid to you in the near term.

We intend to grant stock options and restricted stock to the board of directors and certain employees following the conversion which will likely reduce your ownership interest.

New Home Federal Bancorp’s articles of incorporation would not restrict new Home Federal Bancorp from adopting other stock-related compensation plans, however, the rules of the NASDAQ Stock Market, on which the common stock of Home Federal Bancorp is currently listed and on which the common stock of new Home Federal Bancorp will be listed, generally require stockholder approval of most compensation plans for directors, officers and key employees of the corporation. Moreover, although generally not required, stockholder approval of stock-related compensation plans may be sought in certain instances to qualify such plans for favorable treatment under current federal income tax laws and regulations. In addition, we plan to submit the stock compensation plans discussed in this prospectus to the stockholders for their approval. For a further discussion, see “Comparison of Rights of New Home Federal Bancorp and Home Federal Bancorp’s Stockholders - Issuance of Capital Stock.”

If approved by a vote of the stockholders following the conversion, we intend to establish a new stock option plan with a number of shares equal to 8.7% of the shares sold in the offering and a new stock recognition and retention plan with a number of shares equal to 3.5% of the shares sold in the offering. These new stock benefit plans are being established for the benefit of selected directors, officers and employees of new Home Federal

8


Bancorp and Home Federal Bank and are worth a total of $8.0 million at the purchase price, based on the maximum of the estimated offering range. Awards under these plans will likely reduce the ownership interest of all stockholders by increasing the number of shares outstanding. The issuance of authorized but unissued shares of common stock pursuant to the exercise of options under the new stock option plan and the new stock recognition and retention plan would dilute the voting interests of existing stockholders, by up to 4.9% and 2.0%, respectively. For further discussion regarding these plans, see “Pro Forma Data” and “Management – Benefits to Be Considered Following Completion of the Conversion and Reorganization.”

9


SELECTED FINANCIAL AND OTHER DATA

The Financial Condition Data as of September 30, 2006 and 2005 and the Operating Data for the years ended September 30, 2006, 2005 and 2004 are derived from the audited consolidated financial statements and related notes included elsewhere in the prospectus. The Financial Condition Data as of September 30, 2004, 2003 and 2002 and the Operating Data for the years ended September 30, 2003 and 2002 are derived from audited consolidated financial statements, not included in this prospectus. The Financial Condition Data as of June 30, 2007 and the Operating Data for the nine months ended June 30, 2007 and 2006 are derived from unaudited consolidated financial statements included elsewhere in this prospectus which, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) necessary to present fairly the data for the unaudited periods. Historical results are not necessarily indicative of results to be expected in any future period, and results for the nine months ended June 30, 2007 are not necessarily indicative of the results to be expected for the year ended September 30, 2007. The following information is only a summary and you should read it in conjunction with our consolidated financial statements and related notes beginning on page F-1 and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

            At September 30,
    At June 30,  
    2007   2006   2005   2004   2003   2002
   
 
 
 
 
 

FINANCIAL CONDITION DATA:

  (Unaudited)                   (In Thousands)                
                                                             
Total assets     $ 728,315       $ 761,292       $ 689,577       $ 743,867       $ 450,196       $ 416,543  
Investment securities available for sale, at fair value
                                      5,440         2,507  
Mortgage-backed securities, available for sale
      166,755         12,182         14,830         871                  

Mortgage-backed securities, held to maturity

              183,279         180,974         96,595         24,425         44,325  

Loans receivable, net (1)

      491,768         503,065         430,944         392,634         372,629         318,297  

Loans held for sale

      4,363         4,119         5,549         3,577         5,066         12,722  

Total deposit accounts

      418,698         430,281         396,325         343,087         301,273         279,772  

Federal Home Loan Bank advances

      189,264         210,759         175,932         122,797         96,527         91,008  

Stockholders’ equity

      109,998         107,869         101,367         45,097         40,399         34,961  

      Nine Months Ended                                                    
      June 30,       Year Ended September 30,  
     
     
 

OPERATING DATA:

    2007       2006       2006       2005       2004       2003       2002  
     
     
     
     
     
     
     
 
    (Unaudited)   (In Thousands)
                                                                       

Interest income

    $ 32,260       $ 29,293       $ 39,913       $ 33,910       $ 27,512       $ 26,896       $ 26,904  

Interest expense

      16,088         11,883         16,917         12,231         9,650         9,705         11,465  
     
     
     
     
     
     
     
 

Net interest income

      16,172         17,410         22,996         21,679         17,862         17,191         15,439  

Provision for loan losses

      71         320         138         456         900         615         277  
     
     
     
     
     
     
     
 

Net interest income after provision for loan losses

      16,101         17,090         22,858         21,223         16,962         16,576         15,162  
                                                                       

Noninterest income

      8,626         8,343         11,109         10,128         8,982         11,188         5,767  

Noninterest expense

      18,134         18,062         23,945         23,158         18,576         18,885         17,178  
     
     
     
     
     
     
     
 

Income before income taxes

      6,593         7,371         10,022         8,193         7,368         8,879         3,751  

Federal income tax expense

      2,517         2,817         3,810         2,910         2,684         3,423         1,644  
     
     
     
     
     
     
     
 

Net income

    $ 4,076       $ 4,544       $ 6,212       $ 5,283       $ 4,684       $ 5,456       $ 2,107  
     
     
     
     
     
     
     
 

Earnings per common share:

                                                                     

Basic

    $ 0.28       $ 0.31       $ 0.43       $ 0.36         nm (2)       nm (2)       nm (2)

Diluted

      0.28         0.31         0.43         0.36         nm (2)       nm (2)       nm (2)
                                                                       

Dividends declared per share:

    $ 0.165       $ 0.160       $ 0.215       $ 0.100         nm (2)       nm (2)       nm (2)


(1)    
Net of allowances for loan losses, loans in process and deferred loan fees.
(2)    
Per share information is not meaningful. Home Federal Bancorp did not complete its minority stock offering until December 6, 2004 and did not have any outstanding shares prior to that date.

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        At September 30,
    At June 30,  

OTHER DATA:

  2007   2006     2005     2004     2003     2002
   
 
   
   
   
   

Number of:

                                                           

Real estate loans outstanding

      3,047         3,389         3,236         3,081         3,053         2,565  

Deposit accounts

      70,546         70,373         73,013         75,565         72,327         70,183  

Full-service offices

      15         14         15         14         14         14  
    At or For the                                                
    Nine Months Ended   At or For the
    June 30, (1)   Year Ended September 30,
   
 

KEY FINANCIAL RATIOS:

  2007   2006   2006   2005   2004   2003   2002
   
 
 
 
 
 
 

Performance Ratios:

                                                                     

Return on average assets (2)

      0.72 %       0.85 %       0.85 %       0.82 %       0.93 %       1.23 %       0.53 %

Return on average equity (3)

      4.92         5.81         5.90         5.69         10.47         13.39         6.03  

Dividend payout ratio

      21.96         21.76         19.72         10.68                          

Equity to asset ratio (4)

      14.70         14.56         14.47         14.38         8.86         9.17         8.74  

Interest rate spread (5)

      2.41         2.87         2.79         3.15         3.55         3.93         3.98  

Net interest margin (6)

      3.02         3.41         3.33         3.57         3.84         4.19         4.23  

Efficiency ratio (8)

      73.13         70.14         70.21         72.81         69.20         66.55         81.01  
Noninterest income/operating revenue (9)
      34.8         32.4         32.6         31.8         33.5         39.4         27.2  
Average interest-earning assets to average interest-bearing liabilities
      120.44         122.86         122.32         121.07         113.62         110.96         107.83  
Noninterest expense as a percent of average total assets
      2.41         2.52         3.29         3.59         3.68         4.25         4.29  
                                                                       

Capital Ratios:

                                                                     
Tier I (core) capital (to tangible assets)
      12.97         11.59         11.77         12.00         6.01         8.89         8.50  
Total risk-based capital (to risk-weighted assets)
      20.58         19.34         19.46         20.46         12.76         14.18         13.79  
Tier I risk-based capital (to risk-weighted assets)
      19.95         18.65         18.82         19.75         12.05         13.56         13.27  
                                                                       

Asset Quality Ratios:

                                                                     
Non-accrual and 90 days or more past due loans as a percent of total loans
      0.07         0.01         0.08         0.11         0.16         0.04         0.14  
Non-performing assets as a percent of total assets
      0.07                 0.05         0.15         0.10         0.03         0.17  
Allowance for losses as a percent of gross loans receivable
      0.56         0.64         0.59         0.67         0.67         0.49         0.41  
Allowance for losses as a percent of nonperforming loans
      748.77         10,533.33         766.49         602.97         432.30         1,393.23         295.94  
Net charge-offs to average loans
      0.02         0.01         0.01         0.05         0.03         0.04         0.10  
                                                                       

(1)   Ratios have been annualized.
(2)   Net income divide d by average total assets.

(footnotes continued on following page)

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(3)  
Net income divided by average equity.
(4)  
Average equity divided by average total assets.
(5)  
Difference between weighted average yield on interest-earning assets and weighted average rate on interest-bearing liabilities.
(6)  
Net interest margin, otherwise known as net yield on interest-earning assets, is calculated as net interest income divided by average interest-earning assets.
(7)  
Tangible equity is equity less goodwill and other intangible assets.
(8)
 
The efficiency ratio represents the ratio of noninterest expense divided by the sum of net interest income and noninterest income (expense).
(9)  
Operating revenue is defined as the sum of net interest and non-interest income.

A WARNING ABOUT FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, which can be identified by the use of words such as “believes,” “expects,” “anticipates,” “estimates” or similar expressions. Forward-looking statements include:

    statements of our goals, intentions and expectations;
       
    statements regarding our business plans, prospects, growth and operating strategies;
       
    statements regarding the quality of our loan and investment portfolios; and
       
    estimates of our risks and future costs and benefits.

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

    general economic conditions, either nationally or in our market area, that are worse than expected;
       
    changes in the interest rate environment that reduce our interest margins or reduce the fair value of financial instruments;
       
    increased competitive pressures among financial services companies;
       
    changes in consumer spending, borrowing and savings habits;
       
    our ability to successfully manage our growth;
       
    legislative or regulatory change s that adversely affect our business;
       
    adverse changes in the securities markets; and
       
   
changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Public Company Accounting Oversight Board or the Financial Accounting Standards Board.

Any of the forward-looking statements that we make in this prospectus and in other public statements we make may turn out to be wrong because of inaccurate assumptions we might make, because of the factors illustrated above or because of other factors that we cannot foresee. Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements and you should not rely on such statements.

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HOW WE INTEND TO USE THE PROCEEDS FROM THIS OFFERING

Although the actual net proceeds from the sale of the shares of common stock cannot be determined until the conversion is completed, we presently anticipate that the net proceeds will be between $97.5 million at the minimum of the offering range and $132.4 million at the maximum of the offering range and may be up to $152.4 million assuming an increase in the estimated offering range by 15%. See “Pro Forma Data” and “The Conversion and Stock Offering – How We Determined Our Price and the Number of Shares to Be Issued in the Stock Offering” as to the assumptions used to arrive at these amounts.

We intend to use the net proceed s received from the stock offering as follows:

    Minimum   Maximum   Maximum,
as adjusted
   
 
 
              (In Thousands)          
Gross proceeds
    $ 102,000       $ 138,000       $ 158,700  

Less: estimated underwriting commission and other offering expenses

      4,471         5,613         6,269  

Estimated net proceeds

      97,529         132,387         152,431  
                               

Less:

                             

Net proceeds to Home Federal Bank

      48,765         66,194         76,216  

Loan to our employee stock ownership plan

      8,160         11,040         12,696  

Net cash proceeds retained by new Home Federal Bancorp

      40,604         55,153         63,519  

New Home Federal Bancorp will retain 50% of the net conversion proceeds and will purchase all of the capital stock of Home Federal Bank to be issued in the conversion in exchange for the remaining 50% of the net conversion proceeds. The net proceeds retained by new Home Federal Bancorp will initially be deposited with Home Federal Bank and may ultimately be used to support lending and investment activities, future expansion of operations through the establishment or acquisition of banking offices or other financial service providers, to pay dividends or for other general corporate purposes, including repurchasing shares of its common stock. No such acquisitions are specifically being considered at this time. Home Federal Bank intends to use the proceeds received from new Home Federal Bancorp for future lending and investment activities, in addition to general and other corporate purposes. Initially, a substantial portion of the net proceeds will be invested in short-term investments, investment-grade debt obligations and mortgage-backed securities.

In particular, the net conversion proceeds will be used to expand our branch network and are planning four to six new branches that we intend to open within the next 24 months. There is currently one new branch under construction in Nampa, Idaho and plans are being finalized for the construction of a new branch office in the Meridian, Idaho market in 2008. Our long-term strategy is to build two or three branches per year if appropriate sites can be identified and obtained. We expect that each new branch office will cost between $1.3 million to $2.2 million, depending upon the location, cost of land, and the size and design of the building and permitting costs, which may vary from one jurisdiction to another. Initially, the net proceeds from the offering will be utilized to fund new loan originations, particularly in the commercial lending area.

As our strategic plan for growth and enhanced business model implementation is realized, new services and products will continue to be offered. We expect that these new services and products will reflect our plans to expand our commercial business related banking and therefore the new product and services will be directed towards attracting and retaining commercial business customers.

New Home Federal Bancorp intends to use a portion of the net proceeds to make a loan directly to the employee stock ownership plan to enable it to purchase up to 8% of the aggregate shares of common stock sold in the offering; or if shares are not available, in the open market after the conversion. Based upon the sale of 10,200,000 shares of common stock in the offering and the sale of 13,800,000 shares of common stock in the offering and at the minimum and maximum of the estimated offering range, respectively, the loan to the Home Federal Bancorp employee stock ownership plan would be $8.2 million and $11.0 million, respectively. See

13


“Management – Benefits to Be Considered Following Completion of the Conversion and Reorganization – Employee Stock Ownership Plan.”

New Home Federal Bancorp intends to adopt a new stock recognition and retention plan, subject to stockholder approval, and will use a portion of its proceeds to fund the purchase of shares in the open market for the plan. The stock recognition and retention plan intends to purchase in the open market 3.5% of the aggregate shares sold in the offering or $3.5 million and $4.8 million at the minimum and maximum of the estimated offering range, respectively.

The net proceeds may vary because total expenses of the conversion may be more or less than those estimated. The net proceeds will also vary if the number of shares to be issued in the conversion is adjusted to reflect a change in the estimated pro forma market value of new Home Federal Bancorp. Payments for shares made through withdrawals from existing deposit accounts at Home Federal Bank will not result in the receipt of new funds

for investment by Home Federal Bank but will result in a reduction of Home Federal Bank’s interest expense and liabilities as funds are transferred from interest-bearing certificates or other deposit accounts.

WE INTEND TO CONTINUE TO PAY QUARTERLY CASH DIVIDENDS

Home Federal Bancorp has paid quarterly cash dividends since the quarter ended June 30, 2005. Home Federal Bancorp’s current quarterly dividend is $0.055 per share. After we complete the conversion, dividends will be paid by new Home Federal Bancorp on its outstanding shares of common stock. We currently expect that the level of cash dividends per share after the conversion, and offering will be substantially consistent with the current amount of dividends per share paid by Home Federal Bancorp on its common stock as adjusted for the additional shares issued pursuant to the exchange ratio. For example, based on the current cash dividend of $0.055 per share and an assumed exchange ratio of 1.5369 at the maximum of the offering range, the cash dividend, if paid, would be approximately $0.035 per share. However, the rate of such dividends and the initial or continued payment thereof will be in the discretion of the board of directors of new Home Federal Bancorp and will depend upon a number of factors, including the amount of net proceeds retained by us in the offering, investment opportunities available to us, capital requirements, our financial condition and result of operations, tax considerations, statutory and regulatory limitations, and general economic conditions. No assurance can be given that we will continue to pay dividends or that they will not be reduced in the future. We cannot guarantee that the amount of dividends that we pay after the conversion will be equal to the per share dividend amount that Home Federal Bancorp’s stockholders currently receive, as adjusted to reflect the exchange ratio. In addition, during the first three years after the conversion, no dividend will be declared or paid if it would be classified as a return of capital.

Dividends from new Home Federal Bancorp may eventually depend, in part, upon receipt of dividends from Home Federal Bank, because new Home Federal Bancorp initially will have no source of income other than dividends from Home Federal Bank, earnings from the investment of proceeds from the sale of common stock retained by us, and interest payments with respect to our loan to our employee stock ownership plan.

Home Federal Bank’s ability to pay dividends to new Home Federal Bancorp will be governed by the Home Owners’ Loan Act, as amended, and the regulations of the Office of Thrift Supervision. In addition, the prior approval of the Office of Thrift Supervision will be required for the payment of a dividend if the total of all dividends declared by Home Federal Bank in any calendar year would exceed the total of its net profits for the year combined with its nets profits for the two preceding years, less any required transfers to surplus or a fund for the retirement of any preferred stock. In addition, Home Federal Bank will be prohibited from paying cash dividends to new Home Federal Bancorp to the extent that any such payment would reduce Home Federal Bank’s regulatory capital below required capital levels or would impair the liquidation account to be established for the benefit of Home Federal Bank’s eligible account holders and supplemental eligible account holders. See “The Conversion and Offering – Liquidation Rights.”

Any payment of dividends by Home Federal Bank to new Home Federal Bancorp which would be deemed to be drawn out of Home Federal Bank’s bad debt reserves would require a payment of taxes at the then-current tax rate of Home Federal Bank on the amount of earnings deemed to be removed from the reserves for such distribution.

14


Home Federal Bank does not intend to make any distribution to new Home Federal Bancorp that would create such a federal tax liability. See “Taxation.”

Unlike Home Federal Bank, new Home Federal Bancorp is not subject to the above regulatory restrictions on the payment of dividends to its stockholders.

MARKET FOR OUR COMMON STOCK

Home Federal Bancorp’s common stock is currently listed on the Nasdaq Global Market under the symbol “HOME,” and there is an established market for such common stock. We have applied to have the common stock of new Home Federal Bancorp listed for trading on the Nasdaq Global Select Market and we expect that the common stock will trade under the symbol “HOMED” for a period of 20 trading days after completion of the offering.

Thereafter, new Home Federal Bancorp’s trading symbol will revert to “HOME” We cannot assure you our common stock will be approved for listing on the Nasdaq Global Select Market.

 
Making a market may include the solicitation of potential buyers and sellers in order to match buy and sellorders. The development of a liquid public market depends upon the existence of willing buyers and sellers, the presence of which is not within our control or the control of any market maker. You should view the common stock as a long-term investment. Furthermore, there can be no assurance that you will be able to sell your shares at or above the purchase price.
 
The following table sets forth the high and low closing stock prices for Home Federal Bancorp common stock as reported by The Nasdaq Stock Market LLC and cash dividends per share declared for the periods indicated.
                     
    Stock Price Per Share   Cash
   
  Dividends
    High   Low   Per Share
   
 
 
Fiscal Year Ended September 30, 2007                        

                       
                         
Quarter Ended December 31, 2006   $ 17.91     $ 15.51     $ 0.055  
Quarter Ended March 31, 2007     17.69       14.02       0.055  
Quarter Ended June 30, 2007     17.80       14.53       0.055  
                         
Fiscal Year Ended September 30, 2006                        

                       
                         
Quarter Ended December 31, 2005   $ 13.00     $ 12.10     $ 0.050  
Quarter Ended March 31, 2006     13.67       12.16       0.055  
Quarter Ended June 30, 2006     15.64       13.30       0.055  
Quarter Ended September 30, 2006     15.74       13.63       0.055  
                         
Fiscal Year Ended September 30, 2005                        

                       
                         
Quarter Ended December 31, 2004   $ 12.96     $ 12.49     $  
Quarter Ended March 31, 2005     13.04       11.91        
Quarter Ended June 30, 2005     13.42       11.16       0.050  
Quarter Ended September 30, 2005     13.19       11.97       0.050  
 
At May 10 , 2007, the business day immediately preceding the public announcement of the conversion, and at ______, 2007, the date of this prospectus, the closing prices of Home Federal Bancorp common stock as reported on the Nasdaq Global Market were $15.03 per share and $____ per share, respectively. At June 30, 2007, Home Federal Bancorp had approximately 680 stockholders of record, excluding persons or entities that hold stock in nominee or “street name” accounts with brokers.

15


CAPITALIZATION
 
The following table presents the capitalization of Home Federal Bancorp at June 30, 200 7, and the pro forma consolidated capitalization of new Home Federal Bancorp after giving effect to the conversion, excluding assumed earnings on the net proceeds, based upon the sale of the number of shares shown below and the other assumptions set forth under “Pro Form a Data.”

            New Home Federal Bancorp – Pro Forma
            Based Upon Sale at $10.00 Per Share
           
  Home Federal                                
  Bancorp                           15,870,000
  Capitalization   10,200,000     12,000,000     13,800,000     Shares (1)
  at   Shares     Shares     Shares     (Maximum of
  June 30,   (Minimum     (Midpoint     (Maximum     Range, as
  2007   of Range)     of Range)     of Range)     Adjusted)
   
   
   
   
   
 
    (Dollars in Thousands)
     
Deposits (2)   $ 418,698     $ 418,698     $ 418,698     $ 418,698     $ 418,698  
Borrowings (2)     189,264       189,264       189,264       189,264       189,264  
   
   
   
   
   
 

Total deposits and borrowings

  $ 607,962     $ 607,962     $ 607,962     $ 607,962     $ 607,962  
   
   
   
   
   
 
Stockholders’ equity                                        

Preferred stock, $0.01 par value, 5,000,000 shares authorized; issued and outstanding, none

                             

Common stock, $0.01 par value, 100,000,000 shares authorized;
shares to be issued as reflected (3)

  $ 152     $ 173     $ 204     $ 234     $ 269  

Additional paid-in capital

    59,209       156,717       174,115       191,514       211,523  

Retained earnings (4)

    57,922       57,922       57,922       57,922       57,922  

Equity Received from MHC

          50       50       50       50  

Accumulated other comprehensive loss

    (3,477 )     (3,477 )     (3,477 )     (3,477 )     (3,477 )
Less:                                        

Common stock to be acquired by the employee stock ownership plan (5)

    (3,808 )     (11,968 )     (13,408 )     (14,848 )     (16,504 )

Common stock to be acquired by the stock recognition and retention plan (6)

          (3,535 )     (4,159 )     (4,783 )     (5,500 )
   
   
   
   
   
 
Total stockholders’ equity   $ 109,998     $ 195,882     $ 211,247     $ 226,612     $ 244,283  
   
   
   
   
   
 
Total stockholders’ equity as a percentage of pro forma assets     15.10 %     24.06 %     25.46 %     26.82 %     28.32 %
Pro forma shares outstanding                                        

Shares offered for sale in offering

          10,200,000       12,000,000       13,800,000       15,870,000  

Shares to be exchanged

          7,103,110       8,356,600       9,610,090       11,051,064  
   
   
   
   
   
 

Total shares outstanding

          17,303,110       20,356,600       23,410,090       26,921,604  
   
   
   
   
   
 
 
(footnotes on following page)

16



(1)  
As adjusted to give effect to an increase in the number of shares of common stock which would be offered as a result of a 15% increase in the estimated offering range to reflect demand for shares, changes in market and general financial conditions following the commencement of the subscription and community offerings or regulatory considerations.
(2)  
Does not reflect withdrawals from deposit accounts for the purchase of shares of common stock in the conversion. These withdrawals would reduce pro forma deposits by the amount of the withdrawals.
(3)  
No effect has been given to the issuance of additional shares of common stock pursuant to the proposed stock option plan. If this plan is implemented, an amount up to 10% of the shares of new Home Federal Bancorp common stock sold in the offering will be reserved for issuance upon the exercise of options under the stock option plan. See “Management – Benefits to be Considered Following Completion of the Conversion and Reorganization.”
(4)  
The retained earnings of Home Federal Bank will be substantially restricted after the conversion. Additionally, Home Federal Bank will be prohibited from paying any dividend that would reduce its regulatory capital below the amount required for the liquidation account that will be set up in connection with the conversion. See “The Conversion and Stock Offering – Effects of the Conversion – Depositors’ Rights if We Liquidate.”
(5)  
Assumes that 8% of the shares sold in the offering will be purchased by the employee stock ownership plan financed by a loan from new Home Federal Bancorp. The loan will be repaid principally from Home Federal Bank’s contributions to the employee stock ownership plan. Since new Home Federal Bancorp will finance the employee stock ownership plan debt, this debt will be eliminated through consolidation and no liability will be reflected on new Home Federal Bancorp’s consolidated financial statements. Accordingly, the amount of shares of common stock acquired by the employee stock ownership plan is shown in this table as a reduction of total stockholders’ equity.
(6)  
Assumes a number of shares of common stock equal to 3.5% of the shares of common stock sold in the offering. The dollar amount of common stock to be purchased is based on the $10.00 per share subscription price in the offering and represents unearned compensation. This amount does not reflect possible increases or decreases in the value of common stock relative to the subscription price in the offering. As new Home Federal Bancorp accrues compensation expense to reflect the vesting of shares pursuant to the new stock recognition and retention plan, the credit to equity will be offset by a charge to noninterest expense. Implementation of the new stock recognition and retention plan will require stockholder approval. The funds to be used by the new stock recognition and retention plan to purchase the shares will be provided by new Home Federal Bancorp. See “Management – Benefits to Be Considered Following Completion of the Conversion and Reorganization – Stock Recognition and Retention Plan.”

HOME FEDERAL BANK
EXCEEDS ALL REGULATORY CAPITAL REQUIREMENTS

       At June 30, 2007, Home Federal Bank exceeded all of its applicable regulatory capital requirements. The table on the following page sets forth the regulatory capital of Home Federal Bank at June 30, 2007 and the pro forma regulatory capital of Home Federal Bank after giving effect to the conversion, based upon the sale of the number of shares shown in the table. The pro forma regulatory capital amounts reflect the receipt by Home Federal Bank of 50% of the net stock proceeds, after expenses. The pro forma risk-based capital amounts assume the investment of the net proceeds received by Home Federal Bank in assets that have a risk-weight of 20% under applicable regulations, as if such net proceeds had been received and so applied at June 30, 2007.

17


                  Pro Forma at June 30, 2007
                   
                                                                  15,870,000 Shares
                    10,200,000 Shares     12,000,000 Shares   13,800,000 Shares   Sold at
                    Sold at     Sold at   Sold at   $10.00 per Share
  At     $10.00 per Share     $10.00 per Share   $10.00 per Share   (Maximum of Range,
  June 30, 2007     (Minimum of Range)     (Midpoint of Range)   (Maximum of Range)   as Adjusted)
   
   
   
   
   
 
            Percent of           Percent of         Percent of           Percent of           Percent of
    Amount     Assets (1)   Amount     Assets     Amount   Assets     Amount     Assets     Amount     Assets  
   
   
   
   
   
 
   
   
   
   
 
                                    (Dollars in Thousands)                                

Equity capital under generally accepted accounting principles (“GAAP ”)

  $ 89,306       12.61 %   $ 129,911       17.16 %   $ 137,185     17.91 %   $ 144,460       18.65 %   $ 152,826       19.48 %
   
   
   
   
   
 
   
   
   
   
 
Tangible capital   $ .92,234       12.97 %   $ 132,839       17.48 %   $ 140,113     18.23 %   $ 147,388       18.96 %   $ 155,754       19.78 %
Requirement     10,669       1.50       11,401       1.50       11,532     1.50       11,662       1.50       11,813       1.50  
   
   
   
   
   
 
   
   
   
   
 
Excess   $ 81,565       11.47 %   $ 121,438       15.98 %   $ 128,581     16.73 %   $ 135,726       17.46 %   $ 143,941       18.28 %
   
   
   
   
   
 
   
   
   
   
 
Core capital   $ 92,234       12.97 %   $ 132,839       17.48 %   $ 140,113     18.23 %   $ 147,388       18.96 %   $ 155,754       19.78 %
Requirement     28,452       4.00       30,402       4.00       30,751     4.00       31,099       4.00       31,500       4.00  
   
   
   
   
   
 
   
   
   
   
 
Excess   $ 63,782       8.97 %   $ 102,437       13.48 %   $ 109,362     14.23 %   $ 116,289       14.96 %   $ 124,254       15.78 %
   
   
   
   
   
 
   
   
   
   
 
Total risk based capital   $ 95,063       20.58 %   $ 135,668       28.76 %   $ 142,942     30.19 %   $ 150,217       31.61 %   $ 158,583       33.23 %
Risk based requirement     36,954       8.00       37,734       8.00       37,873     8.00       38,013       8.00       38,173       8.00  
   
   
   
   
   
 
   
   
   
   
 
Excess   $ 58,109       12.58 %   $ 97,934       20.76 %   $ 105,069     22.19 %   $ 112,204       23.61 %   $ 120,410       25.23 %
   
   
   
   
   
 
   
   
   
   
 
Reconciliation of capital infused into Home Federal Bank:                                                                              
Net proceeds infused                   $ 48,765             $ 57,479           $ 66,194             $ 76,216          
Less:                                                                              

Common stock acquired by employee stock ownership plan

                    (8,160 )             (9,600 )           (11,040 )             (12,696 )        
                   
           
         
           
         

Pro forma increase in GAAP and regulatory capital

                  $ 40,605             $ 47,879           $ 55,154             $ 63,520          
                   
           
         
           
         


(1)

Adjusted total or adjusted risk-weighted assets, as appropriate.

18


PRO FORMA DATA

       We cannot determine the actual net proceeds from the sale of our common stock until the conversion is completed. However, we estimate that net proceeds will be between $97.5 million and $132.4 million, or $152.4 million if the estimated offering range is increased by 15%, based upon the following assumptions:

 

all shares of common stock will be sold through non-transferable rights to subscribe for the common stock, in order of priority, to:


     

eligible account holders, who are depositors of Home Federal Bank with account balances of at least $50.00 as of the close of business on March 31, 2006,

 
     

the proposed employee stock ownership plan, which will purchase 8% of the shares of common stock sold in the offering,

 
     

supplemental eligible account holders, who are depositors of Home Federal Bank with account balances of at least $50.00 as of the close of business on September 30, 2007, and

 
     

other members, who are depositors of Home Federal Bank and borrowers of Home Federal Bank as of the close of business on _______ __ , 2007, and March 16, 2004, respectively, other than eligible account holders or supplemental eligible account holders.


 

Keefe, Bruyette & Woods will receive a success fee equal to 1.0% of the gross proceeds from the offering, excluding shares of common stock sold to directors, officers, employees and the employee stock ownership plan; and

 
 

total expenses, excluding the success fee paid to Keefe, Bruyette & Woods, are estimated to be approximately $1.2 million. Actual expenses may vary from those estimated.

       Pro forma consolidated net income and stockholders’ equity of new Home Federal Bancorp have been calculated for the year ended September 30, 2006 and for the nine months ended June 30, 2007 as if the common stock to be issued in the conversion had been sold at the beginning of the period and the net proceeds had been invested at 4.91% and 4.91%, which represent the yields on one-year U.S. Government securities at September 30, 2006 and at June 30, 2007. We believe that this rate more accurately reflects a pro forma reinvestment rate than the arithmetic average method, which assumes reinvestment of the net proceeds at a rate equal to the average of the yield on interest-earning assets and the cost of deposits for these periods. The effect of withdrawals from deposit accounts for the purchase of common stock has not been reflected. A tax rate of 39.0% has been assumed for periods resulting in an after-tax yields of 3.00% and 3.00% for the year ended September 30, 2006 and for the nine months ended June 30, 2007, respectively. We have also assumed that approximately 50% of the shares of common stock being offered will be sold in the subscription and community offerings and the remaining 50% of the shares of common stock will be sold in the syndicated community offering. Historical and pro forma per share amounts have been calculated by dividing historical and pro forma amounts by the indicated number of shares of common stock, as adjusted to give effect to the shares purchased by the employee stock ownership plan. See Note 2 to the following tables. As discussed under “How We Intend to Use the Proceeds From this Offering,” new Home Federal Bancorp intends to make a loan to fund the purchase of 8% of the common stock sold in the offering by the employee stock ownership plan and intends to retain 50% of the net proceeds from the conversion.

       No effect has been given in the tables to the issuance of additional shares of common stock pursuant to the proposed stock option plan. See “Management – Benefits to Be Considered Following Completion of the Conversion and Reorganization – Stock Option Plan.” The table below gives effect to the new stock recognition and retention plan, which is expected to be adopted by new Home Federal Bancorp following the conversion and presented along with the new stock option plan to stockholders for approval at an annual or special meeting of

19


stockholders to be held at least six months following the completion of the conversion. If the new stock recognition and retention plan is approved by stockholders, the stock recognition and retention plan intends to acquire an amount of common stock equal to 3.5% of the shares of common stock sold in the offering, either through open market purchases or from authorized but unissued shares of common stock, if permissible. The following tables assume that stockholder approval has been obtained, as to which there can be no assurance, and that the shares acquired by the stock recognition and retention plan are purchased in the open market at $10.00 per share. No effect has been given to new Home Federal Bancorp’s results of operations after the conversion, the market price of the common stock after the conversion or a less than 3.5% purchase by the new stock recognition and retention plan.

       The following pro forma information may not be representative of the financial effects of the foregoing transactions at the dates on which such transactions actually occur and should not be taken as indicative of future results of operations. Pro forma stockholders’ equity represents the difference between the stated amount of assets and liabilities of Home Federal Bancorp computed in accordance with GAAP. Stockholders’ equity does not give effect to intangible assets in the event of a liquidation, to Home Federal Bank’s bad debt reserve or to the liquidation account to be maintained by Home Federal Bank. The pro forma stockholders’ equity is not intended to represent the fair market value of the common stock and may be different than amounts that would be available for distribution to stockholders in the event of liquidation.

       The tables on the following pages summarize historical consolidated data of Home Federal Bank and new Home Federal Bancorp’s pro forma data at or for the dates and periods indicated based on the assumptions set forth above and in the table and should not be used as a basis for projection of the market value of our common stock following the conversion and the offering.

20


    At or For the Nine Months Ended June 30, 2007  
   
 
    10,200,000   12,000,000   13,800,000   15,870,000
    Shares Sold at   Shares Sold at   Shares Sold at   Shares Sold at
    $10.00 Per   $10.00 Per   $10.00 Per   $10.00 Per Share
    Share   Share   Share   (Maximum of
    (Minimum   (Midpoint   (Maximum   Range, as
    of Range)   of Range)   of Range)   Adjusted) (1)
   
   
   
   
 
            (Dollars in Thousands)        
 
Gross proceeds of offering   $ 102,000     $ 120,000     $ 138,000     $ 158,700  

Less Expenses

    (4,471 )     (5,042 )     (5,613 )     (6,269 )
Plus: MHC assets reinvested     50       50       50       50  
   
   
   
   
 

Estimated net proceeds

    97,579       115,008       132,437       152,481  

Less: Common stock purchased by employee stock ownership plan (2)

    (8,160 )     (9,600 )     (11,040 )     (12,696 )

Less: Common stock purchased by the stock recognition and retention plan (3)

    (3,535 )     (4,159 )     (4,783 )     (5,500 )
   
   
   
   
 
Estimated investable net proceeds   $ 85,884     $ 101,249     $ 116,614     $ 134,285  
   
   
   
   
 
For the Nine Months ended June 30, 2007:                                
Consolidated net income:                                

Historical

  $ 4,076     $ 4,076     $ 4,076     $ 4,076  
Pro forma income on net proceeds     1,928       2,273       2,618       3,015  

Pro forma income on assets from MHC

    1       1       1       1  

Pro forma employee stock ownership plan adjustment (2)

    (249 )     (293 )     (337 )     (387 )

Pro forma restricted stock award adjustment (3)

    (323 )     (380 )     (437 )     (503 )

Pro forma stock option adjustment (4)

    (324 )     (382 )     (439 )     (505 )
   
   
   
   
 

Pro forma net income

  $ 5,109     $ 5,296     $ 5,483     $ 5,697  
   
   
   
   
 
Per share net income:                                

Historical

  $ 0.26     $ 0.22     $ 0.19     $ 0.17  
Pro forma income on net proceeds, as adjusted     0.12       0.12       0.12       0.12  

Pro forma employee stock ownership plan adjustment (2)

    (0.02 )     (0.02 )     (0.02 )     (0.02 )

Pro forma restricted stock award adjustment (3)

    (0.02 )     (0.02 )     (0.02 )     (0.02 )

Pro forma stock option adjustment (4)

    (0.02 )     (0.02 )     (0.02 )     (0.02 )
   
   
   
   
 

Pro forma net income per share (5)

  $ 0.32     $ 0.28     $ 0.25     $ 0.23  
   
   
   
   
 
Offering price as a multiple of pro forma net earnings per share     23.44 x     26.79 x     30.00 x     32.61 x
Number of shares outstanding for pro forma income per share calculations     15,804,647       18,592,672       21,382,157       24,588,970  

(table continued on following page) (Footnotes on page 25)         

21


    At or For the Nine Months Ended June 30, 2007  
   
 
    10,200,000   12,000,000   13,800,000   15,870,000
    Shares Sold at   Shares Sold at   Shares Sold at   Shares Sold at
    $10.00 Per   $10.00 Per   $10.00 Per   $10.00 Per Share
    Share   Share   Share   (Maximum of
    (Minimum   (Midpoint   (Maximum   Range, as
    of Range)   of Range)   of Range)   Adjusted) (1)
   
   
   
   
 
    (Dollars in Thousands)
At June 30, 2007:                                
                                 
Stockholders’ equity:                                

Historical

  $ 109,998     $ 109,998     $ 109,998     $ 109,998  

Estimated net proceeds

    97,529       114,958       132,387       152,431  

Plus: Equity Increase from MHC

    50       50       50       50  

Less: Common stock acquired by

                               

the employee stock ownership plan (2)

    (8,160 )     (9,600 )     (11,040 )     (12,696 )

Less: Common stock acquired by the stock recognition and

                               

retention plan (3)(4)

    (3,535 )     (4,159 )     (4,783 )     (5,500 )
   
   
   
   
 

Pro forma stockholders’ equity

  $ 195,882     $ 211,247     $ 226,612     $ 244,283  

Less:    Intangibles

                       
   
   
   
   
 

Pro forma tangible stockholders’ equity

  $ 195,882     $ 211,247     $ 226,612     $ 244,283  
   
   
   
   
 
Stockholders’ equity per share:                                

Historical

  $ 6.36     $ 5.40     $ 4.70     $ 4.09  

Estimated net proceeds

    5.64       5.65       5.66       5.66  
Less: Common stock acquired by the employee                                

stock ownership plan (2)

    (0.47 )     (0.47 )     (0.47 )     (0.47 )
Less: Common stock acquired by the stock                                

recognition and retention plan (3)(4)

    (0.20 )     (0.20 )     (0.20 )     (0.20 )
   
   
   
   
 
Pro forma stockholders’ equity per share (6)   $ 11.33     $ 10.38     $ 9.69     $ 9.08  
Less: Intangibles per share                        
   
   
   
   
 
Pro forma tangible stockholders equity per share   $ 11.33     $ 10.38     $ 9.69     $ 9.08  
   
   
   
   
 
Offering price as a percentage of pro                                

forma stockholders’ equity (5)

    88.26 %     96.34 %     103.20 %     110.13 %
Offering price as a percentage of pro forma tangible stockholders’ equity per share     88.26 %     96.34 %     103.20 %     110.13 %
   
   
   
   
 
Number of shares outstanding for pro forma                                

book value per share calculations

    17,303,110       20,356,600       23,410,090       26,921,604  
                                 
                      (Footnotes on page 25)

22


    At or For the Year Ended September 30, 2006  
   
 
    10,200,000   12,000,000   13,800,000   15,870,000
    Shares Sold at   Shares Sold at