SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                         ______________________________
                                   FORM 10-QSB

(Mark One)

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


    For the quarterly period ended                 December 31, 2007
                                         ---------------------------------------

                                       OR

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

   For the transition period from                         to
                                       ------------------     ------------------

                        Commission File Number: 001-33246

                               MSB FINANCIAL CORP.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         UNITED STATES                                        34-1981437
-------------------------------------- -----------------------------------------
(State or other jurisdiction of                            (I.R.S. Employer
 Incorporation or organization)                         Identification Number)

      1902 Long Hill Road, Millington, New Jersey             07946-0417
--------------------------------------------------------------------------------
        (Address of principal executive offices)              (Zip Code)

Registrant's telephone number,
including area code:                                 (908) 647-4000
                                       -----------------------------------------

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

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

      The number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date, February 11, 2008:

           $0.10 par value common stock - 5,620,625 shares outstanding

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



                       MSB FINANCIAL CORP AND SUBSIDARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                   (Unaudited)



                                                                  December 31,   June 30,
                                                                     2007          2007
                                                                 -------------  ---------
                                                                   (Dollars in thousands,
                                                                  except per share amount)
                                                                       
Assets
    Cash and due from banks                                       $   1,965    $   1,460
    Interest-bearing demand deposits with banks                       2,296        2,809
                                                                  ---------    ---------

             Total Cash and Cash Equivalents                          4,261        4,269

    Trading securities                                                  135          114
    Securities held to maturity (fair value $29,201 and
        $28,684, respectively)                                       29,110       29,336
    Loans receivable, net of allowance for loan losses
        of $983 and $926, respectively                              241,250      233,498
    Premises and equipment                                            9,300        8,907
    Federal Home Loan Bank of New York stock, at cost                 1,989        1,669
    Bank owned life insurance                                         4,007        3,929
    Accrued interest receivable                                       1,474        1,513
    Deferred income taxes                                             1,055          954
    Other assets                                                        319          389
                                                                  ---------    ---------

        Total Assets                                              $ 292,900    $ 284,578
                                                                  =========    =========

Liabilities and Stockholders' Equity

Liabilities

    Deposits:
           Non-interest bearing                                   $   8,477    $   8,217
           Interest bearing                                         203,377      202,901
                                                                  ---------    ---------

           Total Deposits                                           211,854      211,118

    Advances from Federal Home Loan Bank of NY                       34,982       27,889
    Advance payments by borrowers for taxes and insurance               463          505
    Accrued interest payable and other liabilities                    1,884        1,720
                                                                  ---------    ---------

        Total liabilities                                           249,183      241,232
                                                                  ---------    ---------

Commitments and Contingencies                                             -            -

Stockholders' Equity
    Common Stock, par value $.10; 10,000,000 shares authorized:
          5,620,625 issued and outstanding                              562          562
    Paid-in capital                                                  24,154       24,153
    Unearned ESOP shares                                             (1,855)      (1,939)
    Accumulated other comprehensive loss                                (51)         (53)
    Retained Earnings                                                20,907       20,623
                                                                  ---------    ---------

Total Stockholders' Equity                                           43,717       43,346
                                                                  ---------    ---------

Total Liabilities and Stockholders' Equity                        $ 292,900    $ 284,578
                                                                  =========    =========


See notes to consolidated financial statements.

                                       2



                                  MSB FINANCIAL CORP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                              (Unaudited)




                                                                              Six Months Ended          Three Months Ended
                                                                           December 31, December 31, December 31, December 31,
                                                                               2007         2006         2007         2006
                                                                           ----------   ----------   ----------   ----------
                                                                                       (In Thousands, except share and
                                                                                             per share amounts)
                                                                                                    
Interest Income:
    Loans receivable, including fees                                       $    7,505   $    7,119   $    3,802   $    3,594
    Securities held to maturity                                                   691          587          345          293
    Other                                                                         106          209           52          154
                                                                           ----------   ----------   ----------   ----------

        Total Interest Income                                                   8,302        7,915        4,199        4,041
                                                                           ----------   ----------   ----------   ----------
Interest Expense
    Deposits                                                                    3,953        3,120        1,974        1,671
    Borrowings                                                                    655        1,385          354          639
                                                                           ----------   ----------   ----------   ----------

        Total Interest Expense                                                  4,608        4,505        2,328        2,310
                                                                           ----------   ----------   ----------   ----------

Net Interest Income                                                             3,694        3,410        1,871        1,731

Provision for Loan Losses                                                          55            0           40            0
                                                                           ----------   ----------   ----------   ----------

Net Interest Income after Provision for Loan Losses                             3,639        3,410        1,831        1,731
                                                                           ----------   ----------   ----------   ----------
Non-Interest Income
    Fees and service charges                                                      176          168           91           82
    Income from bank owned life insurance                                          78           70           39           36
    Unrealized gain (loss) on trading securities                                   21            6           11            8
    Income from investment in real estate                                           0           32            0           17
    Other                                                                          49           40           24           20
                                                                           ----------   ----------   ----------   ----------

        Total Non-Interest Income                                                 324          316          165          163
                                                                           ----------   ----------   ----------   ----------
Non-Interest Expenses
    Salaries and employee benefits                                              1,660        1,546          759          769
    Directors Compensation                                                        127          144           64           73
    Occupancy and equipment                                                       627          599          308          299
    Service bureau fees                                                           260          276          121          135
    Advertising                                                                    96          158           56           66
    Other                                                                         648          513          327          283
                                                                           ----------   ----------   ----------   ----------

        Total Non-Interest Expenses                                             3,418        3,236        1,635        1,625
                                                                           ----------   ----------   ----------   ----------

Income before Income Taxes                                                        545          490          361          269

Income Taxes                                                                      185          175          127           97
                                                                           ----------   ----------   ----------   ----------

Net Income                                                                        360          315          234          172

Amortization component of net periodic pension cost, net of tax of $1               2            -            1            -
                                                                           ----------   ----------   ----------   ----------

Total Comprehensive Income                                                 $      362   $      315   $      235   $      172
                                                                           ==========   ==========   ==========   ==========
Weighted average number of shares of common stock outstanding, basic and
    diluted                                                                 5,430,219    3,091,344    5,432,335    3,091,344
                                                                           ==========   ==========   ==========   ==========

Earnings per share - basic and diluted                                     $     0.07   $     0.10   $     0.04   $     0.06
                                                                           ==========   ==========   ==========   ==========

Dividends Declared per share                                               $     0.03   $        -   $     0.03   $        -
                                                                           ==========   ==========   ==========   ==========


See notes to consolidated financial statements.

                                       3



                           MSB FINANCIAL CORP AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (UNAUDITED)



                                                                        Six Months Ended December 31,
                                                                        -----------------------------
                                                                              2007        2006
                                                                            --------    --------

                                                                              (In Thousands)
                                                                                
Cash Flows from operating activities:
    Net Income                                                              $    360    $    315
    Adjustments to reconcile net income to net
       cash provided by operating activities:
      Net amortization of loan fees and loan costs                              (109)        (55)
      Depreciation and amortization expense                                      274         263
      Amortization component of net periodic pension cost, net of tax              2           -
      ESOP Compensation                                                           85           -
      Provision for Loan Losses                                                   55           -
      Earnings on bank owned life insurance                                      (78)        (70)
      Unrealized (gain) on trading securities                                    (21)         (6)
      Decrease (increase) in accrued interest receivable                          39         (64)
      Deferred Income taxes                                                     (101)        (25)
      Decrease (Increase) in other assets                                         70        (326)
      Increase in other liabilities                                               28         134
      Increase in accrued interest payable                                        60          49
                                                                            --------    --------

             Net Cash Provided by Operating Activities                           664         215
                                                                            --------    --------
Cash Flows from Investing Activities:
      Activity in held to maturity securities:
          Proceeds from maturities, calls and principal repayments               226         216
      Net increase in Loans receivable                                        (7,698)     (9,276)
      Purchase of bank premises and equipment                                   (667)       (333)
      Purchase Federal Home Loan Bank of New York stock                       (2,359)     (1,505)
      Redemptions of Federal Home Loan Bank of New York stock                  2,039       3,390
                                                                            --------    --------

             Net Cash Used in Investing Activities                            (8,459)     (7,508)
                                                                            --------    --------
Cash Flows from Financing Activities:
      Net Increase in deposits                                                   736      91,859
      (Decrease) in short-term borrowings                                     (8,500)    (41,500)
      Long-term debt issuance                                                 16,000           -
      Repayments of long-term debt                                              (407)       (392)
      (Decrease) in advance payments by borrowers for taxes and insurance        (42)        (47)
                                                                            --------    --------

             Net Cash Provided by Financing Activities                         7,787      49,920
                                                                            --------    --------

             Net Increase (Decrease) in Cash and Cash Equivalents                 (8)     42,627

Cash and Cash Equivalents - Beginning                                          4,269       5,881
                                                                            --------    --------

Cash and Cash Equivalents - Ending                                          $  4,261    $ 48,508
                                                                            ========    ========
Supplementary Cash Flows Information

      Interest paid                                                         $  4,548    $  4,457
                                                                            ========    ========

      Income taxes paid                                                     $    376    $    258
                                                                            ========    ========
Supplemental Disclosure of Non-Cash Transactions

      Dividends Declared, not yet paid                                      $     76    $      -
                                                                            ========    ========


See notes to consolidated financial statements.

                                       4



                      MSB FINANCIAL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Note 1 - Organization and Business

         MSB  Financial   Corp.   (the   "Company")  is  a   federally-chartered
corporation  organized in 2004 for the purpose of  acquiring  all of the capital
stock that  Millington  Savings Bank (the "Bank")  issued in its mutual  holding
company reorganization. The Company's principal executive offices are located at
1902 Long Hill Road, Millington,  New Jersey 07946-0417 and its telephone number
at that address is (908) 647-4000.

         MSB Financial, MHC (the "MHC") is a federally-chartered  mutual holding
company that was formed in 2004 in connection  with the mutual  holding  company
reorganization.  MSB Financial,  MHC has not engaged in any significant business
since its formation.  So long as MSB Financial,  MHC is in existence, it will at
all times own a majority of the outstanding stock of the Company.

         The Bank is a New Jersey-chartered  stock savings bank and its deposits
are insured by the Federal Deposit Insurance Corporation.  The Bank is regulated
by the New Jersey  Department of Banking and  Insurance and the Federal  Deposit
Insurance Corporation. The Office of Thrift Supervision regulates MSB Financial,
MHC and the Company as savings and loan holding companies.

         A Registration Statement on Form S-1 (File No. 333-137294), as amended,
was filed by the Company with the Securities and Exchange Commission pursuant to
the Securities Act of 1933, as amended,  relating to the offer for sale of up to
2,199,375  shares (subject to increase to 2,529,281  shares) of its common stock
at $10.00 per share. The offering closed on January 4, 2007 and 2,529,281 shares
were sold for gross proceeds of  $25,292,810,  including  202,342 shares sold to
the Bank's  newly  established  Employee  Stock  Ownership  Plan  ("ESOP").  Net
proceeds of the offering totaled  approximately  $24.5 million.  Concurrent with
closing of the offering,  the MHC received  3,091,344 shares of company stock in
exchange  for the  10,000  shares  previously  owned.  The  MHC is the  majority
stockholder of the Company owning 55% of the outstanding common stock.

Note 2 - Basis of Consolidated Financial Statement Presentation

         The  consolidated  financial  statements  include  the  accounts of the
Company,  its  wholly-owned  subsidiary,  the Bank, and the Bank's  wholly-owned
subsidiary,  Millington  Savings  Service Corp.  All  significant  inter-company
accounts  and  transactions  have  been  eliminated  in   consolidation.   These
statements  were prepared in accordance with  instructions  for Form 10-QSB and,
therefore,  do not include  information  or footnotes  necessary  for a complete
presentation of financial  condition,  results of operations,  and cash flows in
conformity with generally accepted accounting principles in the United States of
America ("GAAP").

         In the  opinion of  management,  all  adjustments,  consisting  of only
normal  recurring  adjustments  or  accruals,  which  are  necessary  for a fair
presentation of the consolidated  financial statements have been made at and for
the three and six month periods ended December 31, 2007 and 2006. The results of
operations  for the three and six month periods ended December 31, 2007

                                       5



and 2006 are not necessarily indicative of the results which may be expected for
an entire fiscal year or other interim periods.

         The data in the consolidated  statements of financial position for June
30,  2007  was  derived  from  the  Company's  audited  consolidated   financial
statements  for  that  date.  That  data,  along  with  the  interim   financial
information  presented in the  consolidated  statements  of financial  position,
income and  comprehensive  income,  and cash flows should be read in conjunction
with the 2007 audited consolidated  financial statements for the year ended June
30, 2007, including the notes thereto included in the Company's Annual Report on
Form 10-KSB.

         The consolidated  financial statements have been prepared in conformity
with accounting  principles  generally accepted in the United States of America.
In preparing the consolidated  financial  statements,  management is required to
make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities as of the date of the consolidated  statements of financial position
and  revenues and expenses  for the periods  then ended.  Actual  results  could
differ significantly from those estimates.

         A material  estimate that is  particularly  susceptible  to significant
change  relates to the  determination  of the  allowance  for loan  losses.  The
allowance for loan losses represents  management's best estimate of losses known
and inherent in the portfolio that are both probable and reasonable to estimate.
While management uses the most current information  available to estimate losses
on loans,  actual losses are dependent on future events and, as such,  increases
in the allowance for loan losses may be necessary.

         In addition,  various regulatory agencies, as an integral part of their
examination  process,  periodically review the Bank's allowance for loan losses.
Such agencies may require the Bank to recognize additions to the allowance based
on their  judgments  about  information  available  to them at the time of their
examinations.

Note 3 - Earnings Per Share

         Basic  earnings  per share is computed  by  dividing  net income by the
weighted average number of common shares outstanding,  exclusive of the Employee
Stock  Ownership  Plan  ("ESOP")  shares not yet  committed to be released.  The
10,000 shares issued to MSB Financial,  MHC in connection  with the formation of
the mutual  holding  company  structure in 2004 were  "replaced"  with 3,091,344
shares,  or 55% of the shares issued in the Company's  initial public  offering,
upon  completion  of the  offering  on  January  4, 2007.  This  transaction  is
analogous to a stock split or significant  stock dividend,  therefore,  earnings
per share has been  retroactively  restated  for all  prior  periods  presented.
Diluted  earnings  per share has not differed  from basic  earnings per share as
there have not been any  contracts or securities  exercisable  or which could be
converted into common stock.

Note 4 - Stock Based Compensation

         The  Company  had no  stock-based  compensation  as of,  or  prior  to,
December 31, 2007.

                                       6



Note 5 - Recent Accounting Pronouncements

         In September  2006, the Financial  Accounting  Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value
Measurements",  which defines fair value,  establishes a framework for measuring
fair value under GAAP, and expands  disclosures  about fair value  measurements.
SFAS No. 157 applies to other accounting  pronouncements  that require or permit
fair value measurements.  The new guidance is effective for financial statements
issued for fiscal years  beginning  after  November  15,  2007,  and for interim
periods  within those fiscal years.  The Company does not expect the adoption of
SFAS No. 157 to have a material  impact on its financial  condition,  results of
operations or cash flows.

         In February  2007, the FASB issued SFAS No. 159, "The Fair Value Option
for Financial  Assets and Financial  Liabilities-Including  an amendment of FASB
Statement  No.  115." SFAS No. 159 permits  entities  to choose to measure  many
financial  instruments and certain other items at fair value.  Unrealized  gains
and losses on items for which the fair value  option  has been  elected  will be
recognized  in  earnings  at each  subsequent  reporting  date.  SFAS No. 159 is
effective  for  financial  statements  issued for fiscal years  beginning  after
November 15, 2007,  and for interim  periods  within  those  fiscal  years.  The
Company does not expect the  adoption of SFAS No. 159 to have a material  impact
on its financial condition, results of operations or cash flows.

         In  September  2006,  the FASB's  Emerging  Issues Task Force  ("EITF")
issued  EITF  Issue  No.  06-4,   "Accounting  for  Deferred   Compensation  and
Postretirement  Benefit  Aspects of  Endorsement  Split  Dollar  Life  Insurance
Arrangements"  ("EITF 06-4").  EITF 06-4 requires the recognition of a liability
related to the  postretirement  benefits covered by an endorsement  split-dollar
life insurance  arrangement.  The consensus highlights that the employer (who is
also the  policyholder)  has a liability  for the benefit it is providing to its
employee.  As such,  if the  policyholder  has agreed to maintain the  insurance
policy in force for the employee's  benefit during his or her  retirement,  then
the liability  recognized  during the employee's active service period should be
based on the future  cost of  insurance  to be  incurred  during the  employee's
retirement.  Alternatively,  if the policy  holder  has  agreed to  provide  the
employee with a death  benefit,  then the liability for the future death benefit
should be  recognized  by following  the guidance in SFAS No. 106 or  Accounting
Principals Board (APB) Opinion No. 12, as appropriate. For transition, an entity
can choose to apply the guidance using either of the following approaches: (a) a
change in accounting principle through retrospective  application to all periods
presented or (b) a change in accounting  principle  through a  cumulative-effect
adjustment  to the balance in retained  earnings at the beginning of the year of
adoption.  The adoption is required in fiscal years beginning after December 15,
2007,  with early  adoption  permitted.  The Company is currently  assessing the
impact  of EITF 06-4 on its  consolidated  financial  position  and  results  of
operations.

         In March 2007, the EITF ratified EITF Issue No. 06-10  "Accounting  for
Collateral Assignment Split-Dollar Life Insurance Agreements" (EITF 06-10). EITF
06-10  provides  guidance for  determining  a liability  for the  postretirement
benefit  obligation as well as  recognition  and  measurement  of the associated
asset on the basis of the terms of the  collateral  assignment  agreement.  EITF
06-10 is  effective  for fiscal years  beginning  after  December 15, 2007.  The
Company is  currently  assessing  the  impact of EITF 06-10 on its  consolidated
financial position and results of operations.

                                       7



         In December  2007,  the FASB issued  proposed FASB Staff Position (FSP)
157-b,  "Effective Date of FASB Statement No. 157," that would permit a one-year
deferral in applying the measurement provisions of SFAS No. 157 to non-financial
assets  and  non-financial  liabilities   (non-financial  items)  that  are  not
recognized or disclosed at fair value in an entity's  financial  statements on a
recurring basis (at least annually). Therefore, if the change in fair value of a
non-financial  item  is  not  required  to be  recognized  or  disclosed  in the
financial  statements on an annual basis or more frequently,  the effective date
of  application  of FASB  No.157 to that item is  deferred  until  fiscal  years
beginning after November 15, 2008 and interim periods within those fiscal years.
This deferral does not apply,  however, to an entity that applies SFAS No.157 in
interim or annual financial  statements  before proposed FSP 157-b is finalized.
The  Company  does not  expect  the  adoption  of FSP 157-b will have a material
impact on the Company's operating income or net earnings.


Note 6 - Retirement Plans

            Periodic expenses for the Company's  retirement plans, which include
  the Directors'  Retirement Plan and the Executive  Incentive  Retirement Plan,
  were as follows:

                                        Six Months Ended     Three Months Ended
                                           December 31,         December 31,
                                         ---------------      ---------------
                                         2007       2006      2007       2006
                                         ----       ----      ----       ----

(In Thousands) (In Thousands)

Service Cost                             $ 56       $ 51      $ 28       $ 26
Interest Cost                              30         26        15         13
Amortization of Unrecognized (Gain)        (2)         0        (1)         0
Amortization of Past Service Liability      6          7         3          3
                                         ----       ----      ----       ----
                                         $ 90       $ 84      $ 45       $ 42
                                         ====       ====      ====       ====


Note 7 - Subsequent Events

         On  January  29,  2008,  the  Board  of  Directors  authorized  a stock
repurchase  program pursuant to which the Company intends to repurchase up to 5%
of its  outstanding  shares  (excluding  shares held by MSB Financial,  MHC, the
Company's mutual holding company), representing up to 126,464 shares. The timing
of the repurchases will depend on certain factors, including but not limited to,
market  conditions  and  prices,  the  Company's   liquidity   requirements  and
alternative  uses of capital.  Any  repurchased  shares will be held as treasury
stock and will be available for general corporate purposes.

                                       8



ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         This Form  10-QSB  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:

     o    Statements of our goals, intentions and expectations;
     o    Statements  regarding  our  business  plans,  prospects,   growth  and
          operating strategies;
     o    Statements   regarding   the  quality  of  our  loan  and   investment
          portfolios; and
     o    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:

     o    General economic conditions,  either nationally or in our market area,
          that are worse than expected;
     o    Changes in the  interest  rate  environment  that reduce our  interest
          margins or reduce the fair value of financial instruments;
     o    Our ability to enter into new markets and/or expand product  offerings
          successfully and take advantage of growth opportunities;
     o    Increased competitive pressures among financial services companies;
     o    Changes in consumer spending, borrowing and savings habits;
     o    Legislative or regulatory changes that adversely affect our business;
     o    Adverse changes in the securities markets;
     o    Our ability to successfully manage our growth; and
     o    Changes in accounting policies and practices, as may be adopted by the
          bank regulatory agencies,  the Financial Accounting Standards Board or
          the Public Company Accounting Oversight Board.

         No  forward-looking  statement  can be guaranteed  and we  specifically
disclaim any obligation to update any forward-looking statement.

Critical Accounting Policies

         In preparing  the  consolidated  financial  statements,  management  is
required to make estimates and assumptions  that affect the reported  amounts of
assets  and  liabilities  as of the  dates  of the  consolidated  statements  of
financial position and revenues and expenses for the periods then ended.  Actual
results could differ  significantly  from those estimates.  A material  estimate
that  is  particularly   susceptible  to  significant   change  relates  to  the
determination of the allowance for loan losses.

         The  allowance for loan losses  represents  our best estimate of losses
known and inherent in our loan  portfolio  that are both probable and reasonable
to estimate.  In  determining  the amount of the allowance  for loan losses,  we
consider the losses inherent in our loan portfolio and changes in the nature and
volume of our loan  activities,  along with  general  economic  and real  estate
market  conditions.  We  utilize  a two tier  approach:  (1)  identification  of
impaired  loans  for  which   specific   reserves  are   established;   and  (2)
establishment  of general  valuation  allowances  on the  remainder  of the loan
portfolio.  We maintain a loan review  system  which  provides  for a

                                       9



systematic  review  of the  loan  portfolio  and  the  early  identification  of
potential  impaired  loans.  Such system takes into  consideration,  among other
things,  delinquency  status, size of loan, type of collateral and the financial
condition of the borrower.  Specific loan loss  allowances are  established  for
identified loans based on a review of such information  and/or appraisals of the
underlying collateral. General loan loss allowances are based upon a combination
of  factors  including,  but  not  limited  to,  actual  loan  loss  experience,
composition of the loan portfolio,  current economic conditions and management's
judgment.

         Although  specific and general loan loss  allowances are established in
accordance  with  management's  best estimate,  actual losses are dependent upon
future events and, as such,  further provisions for loan losses may be necessary
in order to increase the level of the  allowance  for loan losses.  For example,
our  evaluation  of the allowance  includes  consideration  of current  economic
conditions,  and a change in economic conditions could reduce the ability of our
borrowers  to make  timely  repayments  of their  loans.  This  could  result in
increased  delinquencies and increased  non-performing loans, and thus a need to
make  increased  provisions to the  allowance for loan losses,  which would be a
charge to income  during  the  period  the  provision  is made,  resulting  in a
reduction to our earnings.  A change in economic conditions could also adversely
affect  the  value of the  properties  collateralizing  our real  estate  loans,
resulting in increased charge-offs against the allowance and reduced recoveries,
and thus a need to make  increased  provisions to the allowance for loan losses.
Furthermore,  a change in the composition of our loan portfolio or growth of our
loan portfolio could result in the need for additional provisions.

Comparison of Financial Condition at December 31, 2007 and June 30, 2007

         General. Total assets increased to $292.9 million at December 31, 2007,
compared to $284.6  million at June 30,  2007 due  primarily  to a $7.8  million
increase in loans  receivable.  Cash and cash  equivalents  were $4.3 million at
December 31, 2007 and at June 30, 2007. FHLB advances increased to $35.0 million
at December 31, 2007 compared to $27.9 million at fiscal year end primarily as a
result of increased loan demand.

         Loans.  Loans  receivable,  net, rose to $241.3 million at December 31,
2007 from $233.5 million at June 30, 2007, an increase of $7.8 million.  The one
to four family loan  portfolio  grew by $10.4  million or 8.4%  between June 30,
2007 and December 31, 2007.  The  commercial  real estate loan portfolio grew by
$2.3 million or 7.9%, whereas the construction loan portfolio  decreased by $2.5
million or 16.0%,  as did the  deposit  account  loan  portfolio  by $572,000 or
50.2%,  the home equity loan  portfolio by $485,000 or 0.9%,  and the commercial
loan portfolio by $1.4 million or 16.3%.

         Securities.  Our  portfolio of  securities  held to maturity  decreased
slightly to $29.1  million at December 31, 2007 as compared to $29.3  million at
June 30, 2007 due to principal  repayments.  There were no purchases  during the
six month period ended  December 31, 2007.  FHLB of New York stock  increased by
$320,000  from $1.7  million at June 30, 2007 to $2.0  million at  December  31,
2007,  due to an increase in  borrowing  with the Federal  Home Loan Bank of New
York.

         Deposits.  Total  deposits  at December  31, 2007 were $211.9  million,
compared  to  $211.1  million  at  June  30,  2007,  an  increase  of  $736,000.
Certificates of deposit,  savings  deposits,  and non-interest  bearing checking
deposits  increased  by $1.8  million,  $402,000,  and  $260,000,  respectively,
whereas interest bearing checking balances decreased by $1.7 million.

                                       10



         Borrowings.  Total  borrowings  at December 31, 2007  amounted to $35.0
million,  compared to $27.9 million at June 30, 2007. The increase in borrowings
primarily  resulted  from the need to fund an  increase  in loan  demand  in the
absence of deposit growth.

         Equity.  Stockholders' equity was $43.7 million at December 31, 2007 as
compared to $43.3 million at June 30, 2007,  reflecting  net income of $360,000,
$84,000 in earned ESOP  shares,  and $76,000 in  dividends  declared  during the
six-months ended December 31, 2007.

Comparison of Operating  Results for the Three and Six Months Ended December 31,
2007 and 2006

         General.  Our net income for the three months  ended  December 31, 2007
was  $234,000,  compared to net income of  $172,000,  for the three months ended
December  31,  2006,  an increase of $62,000 or 36.0%.  This was  primarily  the
result of an increase in net interest  income,  partially offset by increases in
the  provision  for loan losses and income  taxes.  Net interest  income for the
three months ended  December  31, 2007  increased  $140,000 to $1.9 million from
$1.7 million for the  comparable  prior year  quarter.  The  provision  for loan
losses  reflected  an  increase  of $40,000  for the three  month  period  ended
December 31, 2007,  compared to the three month period ended  December 31, 2006.
Non-interest income and non-interest expense remained relatively the same with a
slight  increase  of $2,000 or 1.2% and $10,000 or 0.6%,  respectively,  for the
three months ended  December 31, 2007,  compared to the three month period ended
December 31, 2006.

         Our net income for the six months ended December 31, 2007 was $360,000,
compared to net income of $315,000 for the six months  ended  December 31, 2006,
an increase of $45,000 or 14.3%. This was primarily the result of an increase in
net interest  income,  partially  offset by increases in the  provision for loan
losses and non-interest  expenses.  Net interest income for the six months ended
December 31, 2007,  increased $284,000 to $3.7 million from $3.4 million for the
six months ended  December 31, 2006.  The  provision  for loan losses  increased
$55,000 for the six months ended  December  31, 2007  compared to the six months
ended  December 31, 2006.  There was no provision for the six month period ended
December 31,  2006.  Non-interest  income  remained  relatively  the same with a
slight  increase  of  $8,000  for  the  six  months  ended  December  31,  2007.
Non-interest  expense  increased  by  $182,000,  compared  to the same six month
period ended December 31, 2006.

         Net Interest Income.  Net interest income increased $140,000 or 8.1% to
$1.9  million for the three month period  ended  December 31, 2007,  compared to
$1.7  million for the three months ended  December  31,  2006.  Interest  income
increased  by $158,000  or 3.9%,  and  interest  expense  increased  slightly by
$18,000 or 0.8%, for the same three month comparative periods.

         The increase of $158,000 or 3.9% in total interest income for the three
months ended  December 31, 2007,  resulted  from a 3.0%  increase in the average
balance of  interest-earning  assets and a 5 basis  point  increase in the yield
thereon.  Average earning assets  increased $7.9 million,  to $274.8 million for
the three months ended  December  31, 2007,  compared to $266.9  million for the
three  months  ended  December  31,  2006.  Interest  income on loans  increased
$208,000 or 5.8% for the three months ended  December 31, 2007,  compared to the
same  period  ended  December  31,  2006  primarily  due to an increase of $15.4
million  or 6.9% in average  loan  balances,  offset in part by a 7 basis  point
reduction in average  yield  thereon.  Interest on  securities  held to maturity
increased  $52,000  or 17.8% for the  three  months  ended  December  31,  2007,
compared to the three  months ended  December  31,  2006,  as a result of a $1.6
million or 5.9% increase in the average balance, in addition to a 47 basis point
increase in yield.  Other interest  income  reflected a reduction of $102,000 or
66.2 % in interest  income  primarily due to a decrease

                                       11



of $9.2 million or 66.0% in average other interest-earning  assets for the three
months ended  December  31, 2007,  compared to the same three month period ended
December 31, 2006.  Balances held at the Federal Home Loan Bank during the three
months ended December 31, 2006 were higher due to the increased  funds generated
by the initial IPO stock offering.

         Total interest  expense  increased  slightly by $18,000 or 0.8% for the
three  months  ended  December  31,  2007,  compared to the three  months  ended
December 31, 2006. Average interest-bearing  liabilities decreased $16.2 million
or 6.4%, from $252.9 for the three months ended December 31, 2006, to $236.7 for
the three months ended December 31, 2007, tempered by a 28 basis points increase
in the average rate from 3.65% to 3.93%,  for the respective  periods.  Interest
expense on deposits  increased  by $303,000 or 18.1% for the three  months ended
December 31, 2007,  compared to the three months ended  December 31, 2006,  as a
result of a slight increase of $1.1 million or 0.6% in average  interest-bearing
deposits and a 57 basis point increase in the average rates on  interest-bearing
deposits.  The Bank experienced a shift in its deposit base for the three months
ended  December 31, 2007,  compared to the three months ended December 31, 2006,
as NOW account average  balances  decreased $2.6 million or 8.9%, as did savings
balances by $9.9 million or 17.1%;  while  average  balances on  higher-yielding
time  deposits  increased by $13.6 million or 11.6%.  NOW account  average rates
increased by 2 basis points, as did savings by 91 basis points and time deposits
by 25 basis points, for the three months ended December 31, 2007, as compared to
the three months ended December 31, 2006. The average 91 basis point increase in
the  savings  rate was the  result  of a new  tiered  savings  product  that was
introduced in 2007. Total interest  expense on borrowings  decreased by $285,000
for the three months ended December 31, 2007, compared to the three months ended
December 31, 2006.  Federal Home Loan Bank advance  average  balances  decreased
$17.4 million or 35.0%,  as did the average rate by 78 basis points,  from 5.15%
to 4.37% for the three  months ended  December  31,  2007,  compared to the same
three month  period  ended  December  31,  2006.  Federal Home Loan Bank average
advances  balances  decreased  during the three month period ended  December 31,
2007 as funds from the IPO were used to pay down short-term borrowings.

         Net interest income increased  $284,000 or 8.3% to $3.7 million for the
six months ended  December 31, 2007,  from $3.4 million for the six months ended
December 31, 2006. A $387,000 or 4.9% increase in interest  income was offset by
an increase of  $103,000  or 2.3% in interest  expense for the six month  period
ended  December  31, 2007,  compared to the six month period ended  December 31,
2006.

         The increase of $387,000 or 4.9% in interest  income for the six months
ended  December  31, 2007,  resulted  from a $10.3  million  increase in average
earning  assets,  along with a 5 basis point increase in yield,  compared to the
six months  ended  December  31,  2006.  Interest  income on loans  increased by
$386,000 or 5.4% for the six months ended December 31, 2007, compared to the six
months ended December 31, 2006. Average loan receivable balances increased $13.9
million or 6.2% to $237.4  million for the six months  ended  December 31, 2007,
compared to $223.5 million for the six months ended December 31, 2006.  Interest
income on securities  held to maturity  increased  $104,000 or 17.7% for the six
months ended  December 31, 2007,  compared to the six months ended  December 31,
2006.  Average  securities held to maturity  balances  increased $1.6 million or
5.9% for the six months  ended  December  31,  2007,  compared to the six months
ended  December 31, 2006,  primarily due to purchases made in early 2007, as the
yield on the investment held to maturity portfolio  increased by 48 basis points
for the six month period ended December 31, 2007, compared to the same six month
period ended December 31, 2006. Interest income on other interest-earning assets
decreased by $103,000 or 49.3% for the six month period ended December 31, 2007,
compared to the same six month  period  ended  December  31, 2006 as the average
other interest  earning-asset  balances decreased $5.2 million or

                                       12



52.7%.  Average  Federal Home Loan Bank balances were lower during the six month
period  ended  December  31,  2007,  as funds from the IPO were used to pay down
short-term borrowings.

         The  $103,000 or 2.3%  increase in interest  expense for the six months
ended December 31, 2007, compared to the six months ended December 31, 2006, was
primarily due to an average rate increase of 30 basis points on interest-bearing
liabilities,  offset by a reduction of $13.7 million in average interest-bearing
liabilities.  Interest  expense on deposits  increased  by $833,000  for the six
months ended  December 31, 2007,  compared to the six months ended  December 31,
2006. The average rate on deposits increased 64 basis points and average deposit
balances increased $11.0 million or 5.7%, from $193.6 million for the six months
ended December 31, 2006, to $204.6 million for the six months ended December 31,
2007. Certificates of deposit average balances increased $16.0 million or 14.0%,
as did the average rate by 44 basis points for the six months ended December 31,
2007,  compared to the same six month period ended  December 31, 2006.  Whereas,
NOW accounts and savings average balances decreased by $3.1 million or 10.7% and
$1.8 million or 3.6%, respectively,  for the six months ended December 31, 2007,
compared  to the six  months  ended  December  31,  2007.  Interest  expense  on
borrowings  decreased by $730,000  for the six months  ended  December 31, 2007,
compared to the six months ended  December 31, 2006.  Average  Federal Home Loan
Bank advance balances were reduced by $24.8 million or 46.2%, as was the average
rate by 62 basis  points  for the six month  period  ended  December  31,  2007,
compared to the six month period ended December 31, 2006. Federal Home Loan Bank
average  balances  decreased  during the six months  ended  December 31, 2007 as
funds from the IPO were used to pay down short-term borrowings.

         Provision  for Loan Losses.  For the three month period ended  December
31, 2007, a $40,000  provision  was made,  whereas no provision was made for the
same period in 2006.  There were no  charge-offs  nor  recoveries  of previously
charged-off  loans during the three month period ended December 31, 2007.  There
were  charge-offs  and  recoveries of $1,000 and $1,000,  respectively,  for the
three month  period  ended  December  31,  2006.  For the six month period ended
December 31, 2007, a $55,000  provision was made,  whereas no provision was made
for the same period in 2006. There were no charge offs and a $2,000 recovery for
the six month period ended December 31, 2007, and  charge-offs and recoveries of
$1,000 and $1,000, respectively, for the six month period end December 31, 2006.
The allowance for loan losses totaled  $983,000 and $926,000,  respectively,  at
December 31, 2007 and June 30, 2007, representing 0.40% and 0.38%,  respectively
of total loans. The ratio of  non-performing  loans to total loans was 1.11%, at
December 31, 2007, as compared to 0.97% at June 30, 2007. The allowance for loan
losses  reflects our estimation of the losses  inherent in our loan portfolio to
the extent they are both probable and reasonable to estimate.

         Non-Interest  Income. This category includes fees derived from checking
accounts, ATM transactions and debit card use and mortgage related fees. It also
includes increases in the cash-surrender  value of the bank owned life insurance
and unrealized gain on trading securities.

         Non-interest  income  rose by $2,000 to $165,000  for the three  months
ended  December 31, 2007 from  $163,000 for the three months ended  December 31,
2006. Total non-interest income increased from $316,000 for the six months ended
December 31, 2006 to $324,000 for the six months ended  December 31, 2007 due to
increases of $8,000 in both fees and service  charges and income from bank owned
life insurance;  an increase of $15,000 in unrealized gain on trading securities
and a $9,000  increase  in other  income,  offset by a  reduction  of $32,000 in
income  from  investment  in real  estate  as a result  of the sale in 2006 of a
building where a former office was located.

                                       13



         Non-Interest  Expenses.  Total non-interest expenses grew by $10,000 or
0.6% for the three months ended December 31, 2007,  compared to the three months
ended December 31, 2006.

         Salaries and employee  benefits expense  decreased  $10,000 or 1.3% for
the three  months ended  December  31, 2007,  compared to the three months ended
December 31 2006. The decrease reflects a $106,000 reduction in the Bank's 401-K
pension plan expense for the three month  period ended  December 31, 2007,  as a
result of the plan being  amended.  This  reduction was offset in part by normal
salary  increases  and a $41,000  increase in the Bank's ESOP expense  which was
implemented in January 2007. Other expense totaled $327,000 for the three months
ended December 31, 2007, a $44,000 or 15.6% increase over the three month period
ended  December 31, 2006. The increase was due primarily to the costs of being a
public company and Sarbanes-Oxley Section 404 compliance expense.

         Our  non-interest  expense for the six months ended  December 31, 2007,
increased  $182,000 or 5.6% to $3.4 million from $3.2 million for the six months
ended  December 31,  2006.  Salaries and  employee  benefits  expense  increased
$114,000 or 7.4% for the six months ended December 31, 2007, compared to the six
months ended December 31 2006, which included a $106,000 reduction in the Bank's
401-K pension plan  expense,  as a result of the plan being  amended,  more than
offsetting the decrease were normal salary increases and $85,000 in ESOP expense
incurred during the six months ended December 31, 2007. In addition,  the number
of personnel  increased for the six months ended December 31, 2007,  compared to
the same period ended December 31, 2006. Other expense  increased by $135,000 or
26.3% to $648,000 for the six month period ended December 31, 2007,  compared to
$513,000  for the same period ended  December  31,  2006.  The increase in other
expense was attributable to the costs associated with being a public company and
Sarbanes-Oxley Section 404 compliance expense.  Advertising expense decreased by
$62,000 or 39.2% to $96,000, compared to $158,000 for the six month period ended
December 31, 2006.  The reduction in expense was primarily due to the additional
expense  incurred  last year with the opening of the  Martinsville  branch which
opened at the end of July 2006.

         Income  Taxes.  Income tax expense for the three months ended  December
31, 2007 was  $127,000  or 35.2% of income  before  income  taxes as compared to
$97,000  or 36.1% of income  before  income  taxes for the  three  months  ended
December 31, 2006.

         For the six months  ended  December  31,  2007,  income tax expense was
$185,000  or 33.9% of income  before  taxes as  compared to $175,000 or 35.7% of
income before income taxes for the six months ended December 31, 2006.

Liquidity, Commitments and Capital Resources

         The Bank must be capable of meeting  its  customer  obligations  at all
times.  Potential  liquidity  demands  include  funding loan  commitments,  cash
withdrawals  from  deposit  accounts  and other  funding  needs as they  present
themselves. Accordingly, liquidity is measured by our ability to have sufficient
cash reserves on hand, at a reasonable cost and/or with minimal losses.

         Senior  management is  responsible  for managing our overall  liquidity
position and risk and is responsible  for ensuring that our liquidity  needs are
being met on both a daily and long term basis. The Financial  Review  Committee,
comprised  of senior  management  and chaired by President  and Chief  Executive
Officer Gary  Jolliffe,  is  responsible  for  establishing  and  reviewing  our
liquidity procedures, guidelines, and strategy on a periodic basis.

                                       14



         Our approach to managing  day-to-day  liquidity is measured through our
daily  calculation of investable funds and/or borrowing needs to ensure adequate
liquidity.  In addition,  senior management  constantly evaluates our short-term
and long-term  liquidity risk and strategy  based on current market  conditions,
outside investment and/or borrowing opportunities,  short and long-term economic
trends, and anticipated short and long-term liquidity  requirements.  The Bank's
loan and deposit  rates may be adjusted as another  means of managing  short and
long-term  liquidity  needs. We do not at present  participate in derivatives or
other  types of hedging  instruments  to meet  liquidity  demands,  as we take a
conservative approach in managing liquidity.

         At December 31, 2007, the Bank had outstanding commitments to originate
loans of $2.0 million,  construction  loans in process of $6.1  million,  unused
lines of credit of $28.2 million and standby  letters of credit of $268,000.  At
December 31, 2007 the Company had commitments  for building  improvements in the
amount of  approximately  $2.1  million.  Certificates  of deposit  scheduled to
mature in one year or less at December 31, 2007, totaled $106.5 million.

         The Bank generates cash through  borrowings  from the Federal Home Loan
Bank to meet its day-to-day funding obligations.  The Bank's borrowings from the
Federal Home Loan Bank  increased  from $27.9  million at June 30, 2007 to $35.0
million at December  31, 2007 as a result of an  increase in loan  balances.  At
December  31,  2007,  the Bank's  total  deposits to loans  ratio was 87.8%.  At
December 31, 2007, the Bank's  collateralized  borrowing  limit with the Federal
Home Loan Bank was $104.4 million, of which $35.0 million was outstanding. As of
December  31,  2007,  the Bank also had a $20.0  million  line of credit  with a
financial  institution  for reverse  repurchase  agreements  (which is a form of
borrowing) that it could access if necessary.

         Consistent with its goals to operate a well-capitalized  and profitable
financial  organization,  the Bank  actively  seeks to  maintain  its  status in
accordance with regulatory standards. At December 31, 2007 the Bank exceeded all
applicable minimum regulatory capital requirements.

Off-Balance Sheet Arrangements

         We are a party to financial instruments with  off-balance-sheet risk in
the normal course of our business of investing in loans and securities,  as well
as in the normal  course of  maintaining  and improving  our  facilities.  These
financial  instruments  include  significant  purchase   commitments,   such  as
commitments  related to capital  expenditure  plans and  commitments to purchase
investment securities or mortgage-backed  securities,  and commitments to extend
credit to meet the financing  needs of our customers.  At December 31, 2007, our
significant  off-balance sheet commitments primarily consisted of commitments to
originate loans of $2.0 million,  construction loans in process of $6.1 million,
unused  lines of  credit  of $28.2  million  and  standby  letters  of credit of
$268,000.

         Commitments  to extend  credit are  agreements to lend to a customer as
long as there is no  violation of any  condition  established  in the  contract.
Commitments  generally have fixed expiration dates or other termination  clauses
and may require  payment of a fee.  Our  exposure to credit loss in the event of
nonperformance by the other party to the financial instrument for commitments to
extend credit is represented by the contractual amount of those instruments.  We
use the same credit policies in making  commitments and conditional  obligations
as we do  for  on-balance-sheet  instruments.  Since  a  number  of  commitments
typically expire without being drawn upon, the total  commitment  amounts do not
necessarily represent future cash requirements.

                                       15



            At  December  31,  2007 the Company  had  commitments  for  building
improvements in the amount of approximately $2.1 million.

                                       16



ITEM 3 - CONTROLS AND PROCEDURES

         An  evaluation  was  performed  under  the  supervision,  and  with the
participation of the Company's management, including the Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
the Company's  disclosure  controls and procedures (as defined in Rule l3a-l5(e)
promulgated  under  the  Securities  Exchange  Act of 1934,  as  amended)  as of
December 31, 2007.  Based on such  evaluation,  the  Company's  Chief  Executive
Officer and Chief Financial Officer have concluded that the Company's disclosure
controls and procedures are effective as of December 31, 2007.

         No change in the Company's  internal controls over financial  reporting
(as defined in Rule l3a-l5(f)  promulgated under the Securities  Exchange Act of
1934,  as amended)  occurred  during the most  recent  fiscal  quarter  that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.

                                       17



                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

         There were no material  pending legal  proceedings at December 31, 2007
         to which the Company or its subsidiaries is a party other than ordinary
         routine litigation incidental to their respective businesses.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

         None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

         None

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None

ITEM 5 - OTHER INFORMATION

         None

ITEM 6 - EXHIBITS

         31    Certifications of the Chief Executive Officer and Chief Financial
               Officer pursuant to Rule 13a-14(a)

         32    Certifications  of  Chief  Executive  Officer and Chief Financial
               Officer  pursuant to 18 U.S.C.  Section 1350, as adopted pursuant
               to Section 906 of the Sarbanes-Oxley Act of 2002

                                       18



                                   SIGNATURES

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



                                      MSB FINANCIAL CORP.
                                      (Registrant)


Date: February 13, 2008               /s/Gary T. Jolliffe
                                      ------------------------------------------
                                      Gary T. Jolliffe
                                      President and Chief Executive Officer


Date: February 13, 2008               /s/Jeffrey E. Smith
                                      ------------------------------------------
                                      Jeffrey E. Smith
                                      Vice President and Chief Financial Officer


                                       19