Mail-Stop 4561
September 9, 2005
Via facsimile and U.S. Mail
Mr. Richard L. Harbaugh
President and Chief Operating Officer
Equitable Financial Corp.
113-115 North Locust Street
Grand Island, Nebraska 68801
Re: Equitable Financial Corp.
Amendment No. 1 to Form SB-2
File No. 333-126617
Filed August 31, 2005
Dear Mr. Harbaugh:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filing. We look forward to working
with you in these respects. We welcome any questions you may have
about our comments or on any other aspect of our review. Feel
free
to call us at the telephone numbers listed at the end of this
letter.
Mike, please revise this letter so that it is formatted in
accordance
with Memo 4-05
Prospectus Supplement - Interests
Once you have submitted..., page 7
1. Revise the penultimate paragraph on page 7 to clarify when
under
the terms of the plan, investment directions can be changed, e.g.,
once a quarter, etc.
Change in Investment Allocation, page i
2. Revise the sentence before the list of investment options to
clarify that, "... now direct that the percentage of the market
value
of the units ...".
Prospectus Summary, page 1
3. Revise your description of Equitable Financial MHC to clarify
that
the voting rights of this company will be controlled by the Board
of
Equitable Financial MHC which will be substantially similar to the
management of Equitable Federal Savings Bank of Grand Island.
MD&A
General
4. Noting the gain on the sale of the data processors stock in the
fourth quarter, it appears that the fourth quarter otherwise had a
net loss. Please revise to add disclosure as to why the fourth
quarter results were a net loss without the stock sale gain.
Allowance for Loan Losses, page 66
5. Please revise your discussion of the allowance for loan
losses to explain the significant increase in the ratio of
the allowance for loan losses to nonperforming loans as of June
30,
2005, and the reasons supporting this increase.
Liquidity Management, page 69
6. Noting your response to our previous comment numbered 12,
revise
the third paragraph on page 69 to add disclosure of the of the
total
available for sale portfolios well as the pledged securities,
including to whom pledged and for what public funds.
General
7. Please file updated consents for all audited financial
statements included in your next filing.
Financial Statements for the years ended June 30, 2005 and 2004
Note 1 - Summary of Significant Accounting Policies, page F-7
8. Please revise your accounting policies for mortgage
origination
fees and brokerage fee income to include the timing of income
recognition.
Note 2 - Securities, page F-12
9. We note that you have disclosed the redemption of your
investment in the stock of your data processor during the fourth
quarter of 2005 resulting in a gain of $328,880. Please provide
additional detail regarding this transaction in your response
letter,
including but not limited to:
* a description of the securities;
* the date of purchase, number of shares, and cost per share;
* your proportionate interest in the data processing company prior
to
its acquisition;
* the balance sheet classification of the investment;
* your analysis leading to classification of the proceeds from
sale
of the securities as held-to-maturity in the statement of cash
flows;
and
* the amounts paid to the data processor for services in 2005 and
2004.
Note 10 - Employee Benefit Plans, page F-23
10. Please explain your recording of only the one-third portion
of
the cash surrender value of life insurance. Refer to the guidance
provided by paragraph 2 of FTB 85-4.
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert this action as defense in any
proceeding
initiated by the Commission or any person under the federal
securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
Any questions regarding the accounting comments may be
directed
to Amanda Roberts (202) 551- 3417 or John Nolan at (202) 551-3492.
All other questions may be directed to Michael Clampitt at (202)
551-
3434 or to me at (202) 551-3419
Sincerely,
Christian Windsor
Special Counsel
Financial Services Group
CC: Via U.S. Mail and Fax: (202)
Paul M. Aguggia, Esq.
Aaron M. Kalsow, Esq.
Muldoon Murphy & Aguggia, LLP
5101 Wisconsin Ave, NW
Washington, DC 20016
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Equitable Financial Corp.
Richard L. Harbaugh, President and CEO
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