SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q
(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, 2006
                                    --------------------------------------------

                                       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 large  accelerated
filer,  an accelerated  filer,  or a  non-accelerated  filer.  See definition of
"accelerated  filer" and "large accelerated filer" in Rule 12b-2 of the Exchange
Act (Check one):
Large accelerated filer [ ]   Accelerated filer [ ]   Non-accelerated filer [X]

         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 8, 2007:

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



                      MSB FINANCIAL CORP. AND SUBSIDIARIES

                                      INDEX


                                                                                            Page
                                                                                           Number
                                                                                           ------
                                                                                     
PART I - FINANCIAL INFORMATION

      Item 1:  Financial Statements

               Consolidated Statements of Financial Position
               at December 31, 2006  and June 30, 2006 (Unaudited)                              2

               Consolidated Statements of Income for the Three and Six Months Ended
               December 31, 2006 and 2005 (Unaudited)                                           3

               Consolidated Statements of Cash Flows for the Six Months
               Ended December 31, 2006 and 2005 (Unaudited)                                     4

               Notes to Consolidated Financial Statements                                       5

      Item 2:  Management's Discussion and Analysis of
               Financial Condition and Results of Operations                                    9

      Item 3:  Quantitative and Qualitative Disclosures About Market Risk                      15

      Item 4:  Controls and Procedures                                                         15


PART II - OTHER INFORMATION                                                                    16


SIGNATURES                                                                                     18





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



                                                           December 31,        June 30,
                                                              2006              2006
                                                           ------------       ---------
                                                                   (In Thousands
                                                         Except share and per share amount)
                                                                       
Assets
    Cash and due from banks                                  $  1,870          $  1,779
    Interest-bearing demand deposits with banks                46,638             4,102
                                                             --------          --------

              Total Cash and Cash Equivalents                  48,508             5,881

    Trading securities                                            115               109
    Securities held to maturity (fair value $26,949 and        27,491            27,707
      $26,821, respectively)
    Loans Receivable, net of allowance for loan losses        227,652           218,321
      Of $920 and $921, respectively
    Investment in real estate                                      89                97
    Premises and equipment, net                                 8,977             8,899
    Federal Home Loan Bank of New York stock, at cost             936             2,821
    Bank owned life insurance                                   4,074             4,004
    Accrued interest receivable                                 1,414             1,350
    Deferred income taxes                                         777               752
    Other assets                                                  569               243
                                                             --------          --------

        Total Assets                                         $320,602          $270,184
                                                             ========          ========

Liabilities and Shareholder's Equity

Liabilities

    Deposits                                                 $286,614          $194,755
    Advances from Federal Home Loan Bank of NY                 12,289            54,181
    Advance payments by borrowers for taxes and                   482               529
      Insurance
    Accrued interest payable and other liabilities              1,411             1,228
                                                             --------          --------

        Total liabilities                                     300,796           250,693
                                                             --------          --------

Commitments and Contingencies                                       -                 -

Shareholder's Equity
    Common Stock, par value $.10; 10,000,000 shares
      Authorized; 10,000 shares issued and outstanding              1                 1
    Paid-In Capital                                               199               199
    Retained Earnings                                          19,606            19,291
                                                             --------          --------

Total Shareholder's Equity                                     19,806            19,491
                                                             --------          --------


Total Liabilities and Shareholder's Equity                   $320,602          $270,184
                                                             ========          ========


See notes to consolidated financial statements.

                                       2



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



                                                          Six Months Ended          Three Months Ended
                                                       December 31,  December 31, December 31, December 31,
                                                           2006         2005         2006         2005
                                                        ----------   ----------   ----------   ----------
                                                               (In Thousands, except share and
                                                                     per share amounts)
                                                                                  
Interest Income:
    Loans receivable, including fees                    $    7,119   $    6,002   $    3,594   $    3,113
    Securities held to maturity                                587          589          293          294
    Other                                                      209           79          154           40
                                                        ----------   ----------   ----------   ----------

        Total Interest Income                                7,915        6,670        4,041        3,447
                                                        ----------   ----------   ----------   ----------
Interest Expense
    Deposits                                                 3,120        2,350        1,671        1,226
    Borrowings                                               1,385          607          639          364
                                                        ----------   ----------   ----------   ----------

        Total Interest Expense                               4,505        2,957        2,310        1,590
                                                        ----------   ----------   ----------   ----------

Net Interest Income                                          3,410        3,713        1,731        1,857

Provision for Loan Losses                                        0           30            0           15
                                                        ----------   ----------   ----------   ----------

Net Interest Income after Provision for Loan Losses          3,410        3,683        1,731        1,842
                                                        ----------   ----------   ----------   ----------
Non-Interest Income
    Fees and service charges                                   168          173           82           89
    Income from bank owned life insurance                       70           64           36           30
    Unrealized gain on trading securities                        6           11            8            0
    Income from investment in real estate                       32           21           17           10
    Other                                                       40           37           20           18
                                                        ----------   ----------   ----------   ----------

        Total Non-Interest Income                              316          306          163          147
                                                        ----------   ----------   ----------   ----------
Non-Interest Expenses
    Salaries and employee benefits                           1,546        1,372          769          678
    Directors Compensation                                     144          144           73           72
    Occupancy and equipment                                    599          467          299          240
    Service bureau fees                                        276          247          135          118
    Advertising                                                158          116           66           66
    Other                                                      513          461          283          229
                                                        ----------   ----------   ----------   ----------

        Total Non-Interest Expense                           3,236        2,807        1,625        1,403
                                                        ----------   ----------   ----------   ----------

Income before Income Taxes                                     490        1,182          269          586

Income Taxes                                                   175          449           97          225
                                                        ----------   ----------   ----------   ----------

Net Income                                              $      315   $      733   $      172   $      361
                                                        ==========   ==========   ==========   ==========

Net Income per common share-basic and diluted
            basic                                       $     0.10   $     0.24   $     0.06   $     0.12

            diluted                                     $     0.10   $     0.24   $     0.06   $     0.12

Weighted average number of common shares outstanding-
            basic                                        3,091,344    3,091,344    3,091,344    3,091,344

            diluted                                      3,091,344    3,091,344    3,091,344    3,091,344



See notes to consolidated financial statements.

                                       3




                            MSB Financial Corp and Subsidiaries
                          Consolidated Statements of Cash Flows
                                       (Unaudited)



                                                                        Six Months Ended December 31,
                                                                              2006        2005
                                                                            --------    --------
                                                                               (In Thousands)
                                                                                 
Cash Flows from operating activities:
    Net Income                                                              $    315    $    733
    Adjustments to reconcile net income to net
       cash provided by operating activities:
      Net amortization of loan fees and loan costs                               (55)        (57)
      Depreciation                                                               263         214
      Provision for Loan Losses                                                    -          30
      Earnings on bank owned life insurance                                      (70)        (65)
      Unrealized (gain) on trading securities                                     (6)        (11)
      Deferred Income taxes                                                      (25)          -
      (Increase) in interest receivable                                          (64)       (141)
      (Increase) decrease in other assets                                       (326)         32
      Increase (decrease) in accrued interest payable                             49         (38)
      Increase in other liabilities                                              134          95
                                                                            --------    --------

              Net Cash Provided by Operating Activities                          215         792
                                                                            --------    --------

Cash Flows from Investing Activities:
      Activity in held to maturity securities:
          Maturities, calls and principal repayments                             216         357
      Net increase in Loans receivable                                        (9,276)    (22,515)
      Purchase of bank premises and equipment                                   (333)       (207)
      Federal Home Loan Bank of New York stock:
          Purchases                                                           (1,505)     (1,196)
          Redemptions                                                          3,390         579
                                                                            --------    --------

              Net Cash Used in Investing Activities                           (7,508)    (22,982)
                                                                            --------    --------

Cash Flows from Financing Activities:
      Increase in deposits                                                    91,859       3,084
      (Decrease) increase in short-term borrowings                           (41,500)     18,750
      Repayments of long-term debt                                              (392)       (379)
      (Decrease) in advance payments by borrowers for taxes and insurance        (47)        (26)
                                                                            --------    --------

              Net Cash Provided by Financing Activities                       49,920      21,429

              Net Increase (Decrease) in Cash and Cash Equivalents            42,627        (761)

Cash and Cash Equivalents - Beginning                                          5,881       5,666
                                                                            --------    --------

Cash and Cash Equivalents - Ending                                          $ 48,508    $  4,905
                                                                            --------    --------

Supplementary Cash Flows Information

      Interest paid                                                         $  4,457    $  2,995
                                                                            ========    ========

      Income taxes paid                                                     $    258    $    489
                                                                            ========    ========


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  $24.6 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-Q 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.

         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, 2006 and 2005. The results of
operations  for the three and six month periods ended December 31,

                                       5



2006  and  2005 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 condition for June
30, 2006 were  derived  from the  Company's  Registration  Statement on Form S-1
(File No. 333-137294).  That data, along with the interim financial  information
presented in the consolidated statements of financial condition, income and cash
flows,  should  be read in  conjunction  with  the 2006  consolidated  financial
statements as presented in the Form S-1.

         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 condition
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

         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,  net
income per common  share for those shares have been  retroactively  restated for
all periods presented. Earnings per share for periods subsequent to December 31,
2006  will  reflect  the  issuance  of the  2,529,281  shares  sold in the stock
offering in addition to the shares held by MSB Financial, MHC. Basic and diluted
earnings  per share are  equivalent  as there were no  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, 2006.

Note 5 - Recent Accounting Pronouncements

         On December 16, 2004, the Financial Accounting Standards Board ("FASB")
issued  Statement  of  Financial   Accounting   Standards   ("SFAS")  No.  123R,
"Share-Based  Payment," which replaces SFAS No. 123, "Accounting for Stock-Based
Compensation" and supersedes APB Opinion No. 25, "Accounting for Stock Issued to
Employees."  This  statement  will  require  that all  share-based  payments  to
employees,  including  grants  of  employee  stock  options,  be

                                       6



recognized as compensation costs in the consolidated  financial statements based
on their fair values.  The  effective  date of this  statement was delayed until
fiscal years  beginning  after June 15, 2005. The impact of the adoption of this
standard will be dependent on the nature and extent of stock-based  compensation
granted in future periods.

         In May 2005,  the FASB  issued SFAS No.  154,  "Accounting  Changes and
Error  Corrections,"  which  establishes,  unless  impracticable,  retrospective
application  as the  required  method  for  reporting  a  change  in  accounting
principle  in the absence of explicit  transition  requirements  specific to the
newly  adopted  accounting  principle.   The  statement  provides  guidance  for
determining  whether  retrospective   application  of  a  change  in  accounting
principle is  impracticable.  The  statement  also  addresses the reporting of a
correction of error by restating  previously issued financial  statements.  SFAS
No. 154 is effective for  accounting  changes and  corrections of errors made in
fiscal years  beginning  after December 15, 2005. We have adopted this statement
as required,  and such adoption did not have a material effect on our results of
operations or financial position.

         In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain
Hybrid  Financial  Instruments."  SFAS No. 155 amends SFAS No. 133 and 140,  and
improves the financial  reporting of certain  hybrid  financial  instruments  by
requiring more consistent  accounting that eliminates  exemptions and provides a
means to simplify the accounting for these instruments.  Specifically,  SFAS No.
155 allows financial  instruments that have embedded derivatives to be accounted
for as a whole  (eliminating the need to bifurcate the derivative from its host)
if the holder elects to account for the whole  instrument on a fair value basis.
SFAS No. 155 is effective for all financial instruments acquired or issued after
the beginning of an entity's  first fiscal year that begins after  September 15,
2006. We are required to adopt the  provisions  of SFAS No. 155, as  applicable,
beginning  on July 1, 2007.  We do not believe the adoption of SFAS No. 155 will
have any impact on our financial position or results of operations.

         In March 2006, the FASB issued SFAS No. 156,  "Accounting for Servicing
of  Financial  Assets - An Amendment  of FASB  Statement  No. 140." SFAS No. 156
requires  that  all  separately   recognized   servicing  assets  and  servicing
liabilities be initially  measured at fair value, if  practicable,  and permits,
but does not  require,  the  subsequent  measurement  of  servicing  assets  and
servicing  liabilities  at fair  value.  SFAS  No.  156 is  effective  as of the
beginning of an entity's first fiscal year that begins after September 15, 2006,
which for us will be July 1, 2007.  We do not believe  that the adoption of SFAS
No. 156 will have any effect on our financial position or results of operations.

         In July 2006, the FASB issued FASB  Interpretation  No. 48, "Accounting
for Uncertainty in Income Taxes - an  Interpretation  of FASB Statement No. 109"
(FIN 48), which clarifies the accounting for uncertainty in tax positions.  This
Interpretation  requires that companies recognize in their financial  statements
the impact of a tax position  only, if the company has  determined  based on the
technical  merits of the tax position,  that the tax position  would more likely
than not be sustained upon an examination by the appropriate  taxing  authority.
The provisions of FIN 48 are effective for fiscal years beginning after December
15,  2006,  with the  cumulative  effect of the change in  accounting  principle
recorded as an adjustment to opening retained  earnings.  We do not believe that
the adoption of FIN 48 will have a material effect on our financial  position or
results of operations.

         In  September   2006,   the  FASB  issued  SFAS  No.  157,  Fair  Value
Measurements,  which  defines fair value,  establishes a framework for measuring
fair  value  under  generally  accepted  accounting   principles,   and  expands
disclosures  about  fair  value  measurements.  SFAS No.  157

                                       7



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. We are currently evaluating the potential impact, if any, of
the adoption of SFAS No. 157 on our consolidated financial position,  results of
operations and cash flows.

         In September 2006, the FASB issued SFAS No. 158, Employers'  Accounting
for Defined Benefit Pension and Other  Postretirement  Plans ("SFAS 158"), which
amends  SFAS  87 and  SFAS  106 to  require  recognition  of the  overfunded  or
underfunded  status of pension  and other  postretirement  benefit  plans on the
balance  sheet.  Under  SFAS 158,  gains and  losses,  prior  service  costs and
credits,  and any remaining  transition  amounts under SFAS 87 and SFAS 106 that
have  not  yet  been  recognized  through  net  periodic  benefit  cost  will be
recognized in accumulated other comprehensive income, net of tax effects,  until
they are amortized as a component of net periodic cost. The measurement  date --
the date at which the  benefit  obligation  and plan  assets are  measured -- is
required  to be the  company's  fiscal  year  end.  SFAS  158 is  effective  for
publicly-held  companies for fiscal years ending after December 15, 2006, except
for the measurement date provisions, which are effective for fiscal years ending
after December 15, 2008. We are currently  analyzing the effects of SFAS 158 but
expect  that  its  implementation  will  not  have  a  material  impact  on  our
consolidated financial condition or results of operations.

         On September 13, 2006, the Securities  and Exchange  Commission  issued
Staff Accounting  Bulleting No. 108 ("SAB 108").  SAB 108 provides  interpretive
guidance  on how  the  effects  of the  carryover  or  reversal  of  prior  year
misstatements  should be  considered  in  quantifying  a potential  current year
misstatement.  Prior to SAB 108,  Companies  might  evaluate the  materiality of
financial-statement  misstatements  using either the income statement or balance
sheet approach, with the income statement approach focusing on new misstatements
added in the  current  year,  and the  balance  sheet  approach  focusing on the
cumulative  amount  of  misstatement  present  in  a  company's  balance  sheet.
Misstatements  that  would be  material  under one  approach  could be viewed as
immaterial under another  approach,  and not be corrected.  SAB 108 now requires
that companies view financial  statement  misstatements  as material if they are
material according to either the income statement or balance sheet approach.  We
have  analyzed  SAB 108 and  determined  that it will not  impact  our  reported
results of operations or financial condition.

         In  September  2006,  the FASB  issued FASB Staff  Position  AUG AIR-1,
"Accounting  for Planned Major  Maintenance  Activities"  which is effective for
fiscal  years  beginning  after  December  15,  2006.  This  position  statement
eliminates  the  accrue-in-advance   method  of  accounting  for  planned  major
maintenance  activities.   We  do  not  expect  this  pronouncement  to  have  a
significant impact on the determination or reporting of our financial results.

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,
                                   ----------------     ------------------
                                    2006       2005       2006       2005
                                    ----       ----       ----       ----
                                              (In Thousands)

Service Cost                        $ 51       $ 59       $ 26       $ 29
Interest Cost                         26         21         13         11
Amortization of Past Service Cost      7         24          3         12
                                    ----       ----       ----       ----
                                    $ 84       $104       $ 42       $ 52
                                    ====       ====       ====       ====

                                       8



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

This Form 10-Q 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.

     Any of the  forward-looking  statements  that we make in this report 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.  Consequently,  no  forward-looking
statement can be guaranteed.

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 condition 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.

                                       9



         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 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, 2006 and June 30, 2006

         General.  Total  assets  reached  $320.6  million at December 31, 2006,
compared to $270.2 million at June 30, 2006.  Subscription funds received in the
Company's  stock  offering,  which  commenced  in  November  and  was  completed
subsequent to the quarter end, on January 4, 2007,  had a significant  impact on
quarter end data. At December 31, 2006,  the Company had received  $82.2 million
in stock  subscription  funds, a substantial  portion of which  represented over
subscriptions  subsequently  returned.  Cash and cash equivalents stood at $48.5
million  at  December  31,  2006  compared  to $5.9  million  at June 30,  2006.
Liquidity  provided by the  offering  was also  responsible  for the decrease in
borrowed  funds;  FHLB  advances fell to $12.3 million at December 31, 2006 from
$54.2 million at fiscal year end.

         Loans.  Loans  receivable,  net, rose to $227.7 million at December 31,
2006  from  $218.3  million  at June 30,  2006,  an  increase  of $9.4  million.
One-to-four family real estate loans grew by $ 3.8 million or 3.18% between June
30, 2006 and December 31, 2006. Home equity lending continued to be strong,  and
this  portfolio  grew  during the six months  ended  December  31,  2006 by $7.2
million or 14.71%.

         Securities.  Our  portfolio of  securities  held to maturity  decreased
slightly to $27.5  million at December 31, 2006 as compared to $27.7  million at
June  30,  2006  due to  principal

                                       10



repayments.  We did not purchase any new securities  during the six months ended
December 31, 2006.

         Deposits.  Total  deposits  at December  31, 2006 were $286.6  million,
compared to $194.8  million at June 30,  2006.  Savings  deposits,  inclusive of
subscription  funds,  increased $83.9 million, as did certificates of deposit by
$9.3 million,  whereas interest bearing checking balances decreased by $857,000.
The  increase  in savings  deposits  was due  primarily  to  subscription  funds
deposited at the Bank in connection with the Company's stock offering, completed
in  January  4,  2007.  As  previously  noted,  a  substantial  portion  of  the
subscription   funds  represented  over  subscriptions  that  were  returned  to
prospective buyers in January 2007.

         Borrowings.  Total  borrowings  at December 31, 2006  amounted to $12.3
million,  compared to $54.2 million at June 30, 2006. The decrease resulted from
the use of  subscription  funds  received  during the stock  offering  to reduce
outstanding Federal Home Loan Bank borrowings.  The Bank's short-term borrowings
increased  however  subsequent  to the  quarter  end  following  the  refund  of
approximately $61.9 million of oversubscriptions received in the offering.

         Equity.  Stockholder's equity was $19.8 million at December 31, 2006 as
compared  to $19.5  million  at June 30,  2006,  reflecting  net  income for the
six-month period of $315,000.

Comparison of Operating  Results for the Three and Six Months Ended December 31,
2006 and 2005

         General.  Our net income for the three months  ended  December 31, 2006
was  $172,000,  compared to net income of $361,000  for the three  months  ended
December 31, 2005.  This was primarily the result of a $126,000 or 6.8% decrease
in net interest income and a $222,000 or 15.8% increase in non-interest  expense
for the three months  ended  December 31, 2006 as compared to the same period in
2005. A $91,000 or 13.4% increase in salaries and employee  benefits expense was
the largest  increase in the  non-interest  expense  category.  The increases in
salaries  and  employee  benefits  expense,  as well as increases of $59,000 and
$54,000  (24.6% and 23.6%) in occupancy and  equipment  and other  miscellaneous
expenses are largely attributable to the opening of the Martinsville branch.

         Our net income for the six months ended December 31, 2006 was $315,000,
compared to net income of $733,000 for the six months  ended  December 31, 2005.
This was  primarily  the result of a $303,000 or 8.2%  decrease in net  interest
income and a $429,000  or 15.3%  increase  in  non-interest  expense for the six
months  ended  December  31,  2006 as  compared  to the same  period in 2005.  A
$174,000 or 12.7%  increase in salaries  and employee  benefits  expense was the
largest increase in the non-interest expense category. The increases in salaries
and employee benefits expense* as well as occupancy and equipment expense, which
rose by  $132,000  or 28.3%,  were  largely  the  result of the  opening  of the
Martinsville branch.

         Net Interest  Income.  Net  interest  income for the three months ended
December  31, 2006  amounted to $1.7  million  compared to $1.9  million for the
three months ended  December 31, 2005. A 17.2%  increase in interest  income for
the three months ended  December  31, 2006 was  substantially  offset by a 45.3%
increase in interest expense.

         The increase in interest income for the three months ended December 31,
2006 resulted from a 12.7% increase in the average  balance of  interest-earning
assets and a 24 basis point increase in the average yield  thereon.  Our average
yield on loans  receivable  for the three  months  ended  December  31, 2006 was
6.38%,  28 basis points  greater  than for the three  months ended

                                       11



December 31, 2005.  The increase in yield on loans combined with a $21.3 million
or 10.4%  increase  in the  average  balance of loans  receivable  for the three
months  ended  December  31, 2006 was  responsible  for the increase in interest
income.  The  increase of $154,000  in other  interest  income was the result of
increased  balances  held at the Federal Home Loan Bank as a result of the funds
received in conjunction with the initial public stock offering.

         The increase in interest  expense for the three  months ended  December
31, 2006 was  attributable  to higher  interest rates and borrowings  during the
period.  The average cost of deposits rose by 70 basis  points,  and the average
balance of deposits  increased  by $14.2  million or 7.5% between  periods.  The
average  balance of Federal  Home Loan Bank  advances for the three months ended
December  31, 2006 was 43.3% higher than the same period in 2005 and the average
cost was 95 basis points higher.  The increase in borrowings was necessitated by
strong loan demand.  The 22.6% increase in the rate paid on borrowings  resulted
from the higher interest rate environment for the 2006 period relative to 2005.

         Net interest income for the six months ended December 31, 2006 amounted
to $3.4 million  versus $3.7 million for the six months ended December 31, 2005.
A $1.2  million or 18.7%  increase in interest  income for the six months  ended
December 31, 2006 was  substantially  offset by a $1.5 million or 52.4% increase
in interest expense.

         The increase in interest  income for the six months ended  December 31,
2006 resulted from a 13.1% increase in the average  balance of  interest-earning
assets and a 29 basis point increase in the average yield  thereon.  Our average
yield on loans  receivable for the six months ended December 31, 2006 was 6.37%,
30 basis points  greater than for the six months  ended  December 31, 2005.  The
increase in yield on loans combined with a $25.6 million increase in the average
balance  of loans  receivable  for the six months  ended  December  31,  2006 is
responsible  for the 18.6%  increase  in  interest  income on loans over the six
months  ended  December 31,  2005.  The  increase of $209,000 in other  interest
income was the result of increased  balances  held at the Federal Home Loan Bank
as a result of the funds received in  conjunction  with the initial public stock
offering.

         The increase in interest  expense for the six months ended December 31,
2006 is attributable to higher interest rates and borrowings  during the period.
The average cost of deposits rose by 73 basis points,  while the average balance
of deposits was slightly  higher,  $188.4 million for the 2005 period and $193.6
million  for the 2006  period.  The  average  balance of Federal  Home Loan Bank
advances  for the six months ended  December 31, 2006 was $53.6  million and the
average  cost  thereof  was  5.17%.  This  represents  a $23.8  million or 80.2%
increase  over the average  balance of $29.7  million  for the six months  ended
December  31,  2005 and a 109 basis  point  increase  over the  average  cost of
advances for the 2005 period.  Management's  challenge  continues to be building
deposits in order to reduce reliance on borrowings.

         Provision for Loan Losses. We did not make a loan loss provision during
the three or six months  ended  December  31,  2006.  Provisions  of $15,000 and
$30,000 were made during the same periods in 2005. The allowance for loan losses
totaled $920,000 and $921,000,  respectively,  at December 31, 2006 and June 30,
2006, representing 0.40% and 0.41%,  respectively,  of total loans. The ratio of
non-performing  loans to total loans was 0.66%, at December 31, 2006. During the
three and six  months  ended  December  31,  2006,  there was a  charge-off  and
recovery  of $1,000 and  $1,000,  respectively.  During the three and six months
ended December 31, 2005, loans totaling $ 1,000 and $10,000  respectively,  were
charged off and there were no recoveries of  previously  charged off loans.  The
allowance for loan losses  reflects

                                       12



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 our bank owned life insurance.
Overall, non-interest income rose by $16,000 or 10.9% for the three months ended
December  31, 2006 as compared to the three  months  ended  December  31,  2005.
Non-interest  income was $10,000  higher for the six months  ended  December 31,
2006 as compared to the six months ended December 31, 2005. Income from fees and
service charges was lower during the 2006 periods but increased income from both
the bank's  investment in real estate and bank owned life  insurance  offset the
lower fees and service charges.

         Non-Interest Expenses.  Total non-interest expenses grew by $222,000 or
15.8% during the three months ended  December 31, 2006 to $1.6 million  compared
to $1.4 million for the same period in 2005.

         Salaries and employee  benefits  expense totaled $769,000 for the three
months ended  December 31, 2006, a $91,000 or 13.4%  increase  over $678,000 for
the three months ended December 31, 2005. Salaries and employee benefits are our
main  non-interest  expense  and  represented  47.3% and  48.3% of  non-interest
expenses for the three months ended December 31, 2006 and 2005, respectively.

         Total  non-interest  expenses  grew by $429,000 or 15.3% during the six
months ended December 31, 2006 to $3.2 million  compared to $2.8 million for the
same period in 2005.

         Salaries and employee benefits expense totaled $1.5 million for the six
months ended  December 31, 2006, a $174,000 or 12.7%  increase over $1.4 million
for the six months ended December 31, 2005.

         Non-interest  expense for the 2006 periods,  particularly  salaries and
employee benefits,  occupancy,  equipment and advertising expenses, was impacted
by the operation of the Martinsville branch office, which opened in July 2006.

         Income  Taxes.  Income tax expense for the three months ended  December
31,  2006 was  $97,000 or 36.1% of income  before  income  taxes as  compared to
$225,000  or 38.4% of income  before  income  taxes for the three  months  ended
December 31, 2005.

         Income tax  expense  for the six months  ended  December  31,  2006 was
$175,000 or 35.7% of income before income taxes as compared to $449,000 or 38.0%
of income before income taxes for the six months ended December 31, 2005.

         The reduction  for the 2006 periods  primarily  reflects  lower pre-tax
income.

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 minimum losses.

                                       13



         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.

         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, 2006, the Bank had outstanding commitments to originate
loans of $3.1 million,  construction  loans in process of $3.1  million,  unused
lines of credit of $24.7  million  and  standby  letters of credit of  $108,000.
Certificates of deposit  scheduled to mature in one year or less at December 31,
2006, totaled $95.8 million.

         The Bank generates cash through  borrowings  from the Federal Home Loan
Bank to meet its day-to-day funding obligations. At December 31, 2006, its total
loans  to  deposits   ratio  was  79.4%.   At  December  31,  2006,  the  Bank's
collateralized  borrowing  limit  with the  Federal  Home  Loan  Bank was  $91.7
million,  of which $12.3 million was  outstanding.  As of December 31, 2006, 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 sound and profitable  financial
organization,   the  Bank   actively   seeks  to   maintain   its  status  as  a
well-capitalized  institution in accordance  with  regulatory  standards.  As of
December  31,  2006,  the  Bank  exceeded  all  applicable   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  Millington  Savings Bank's
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, 2006, our significant  off-balance sheet  commitments  consisted of
commitments to originate loans of $3.1 million, construction loans in process of
$3.1  million,  unused lines of credit of $ 24.7 million and standby  letters of
credit of $108,000.

         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-

                                       14



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.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Our most  significant form of market risk is interest rate risk because
the majority of our assets and liabilities are monetary instruments. Our assets,
consisting  primarily of mortgage loans,  have generally longer  maturities than
our  liabilities,  consisting  primarily of short-term  deposits.  We derive our
income  mainly from the  difference or "spread"  between the interest  earned on
loans,  securities  and other  interest-earning  assets,  and  interest  paid on
deposits,  borrowings and other  interest-bearing  liabilities.  In general, the
larger the spread,  the more we earn. When market rates of interest change,  the
interest  we receive on our assets and the  interest  we pay on our  liabilities
will fluctuate.  This can cause decreases in our spread and can adversely affect
our income.

         Future  interest  rates or their effect on net interest  income are not
predictable.  Although  certain assets and liabilities may have similar maturity
or periods of  repricing,  they may react at  different  times and in  different
degrees to changes in the market  interest  rates.  The interest rate on certain
types of assets and liabilities,  such as demand deposits and savings  accounts,
may  fluctuate in advance of changes in market  interest  rates,  while rates on
other types of assets and  liabilities may lag behind changes in market interest
rates.  Certain  assets,  such as  adjustable  rate  mortgages,  generally  have
features that restrict  changes in interest rates on a short-term basis and over
the life of the asset.  In the event of an interest rate increase,  an increased
credit risk may result as the ability of many  borrowers  to service  their debt
may decrease.

         Management  of the  Company  does not  believe  that  there  has been a
material  adverse  change in market risk during the three months ended  December
31, 2006.

ITEM 4 - 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, 2006.  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, 2006.

         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.

                                       15



                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

         There were no material  pending legal  proceedings at December 31, 2006
         to which the Company or its subsidiaries is a party other that ordinary
         routine litigation incidental to their respective businesses.

ITEM 1A - RISK FACTORS

         This item is not yet applicable to the Company  because the Company has
not yet filed an annual report on Form 10-K.

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

          On November 13, 2006, the Securities and Exchange  Commission declared
          the registrant's  Registration  Statement on Form S-1 (Commission File
          No. 333-137294) effective. The Registration Statement covered the sale
          by the registrant of up to 2,529,281 shares of its common stock,  $.10
          par value.  The  offering  was  commenced  on  November  27,  2006 and
          terminated on January 4, 2007 with 2,529,281 shares sold to the public
          at  $10.00  per share  for  aggregate  proceeds  of  $25,292,810.  The
          registrant  estimates  that  it  incurred  approximately  $786,000  in
          expenses in the offering  (including  approximately  $ 284,000 in fees
          and reimbursable  expenses paid to Keefe,  Bruyette & Woods,  Inc. for
          its  services  as  marketing  agent) for  estimated  net  proceeds  of
          approximately $24.5 million.  The registrant used approximately 50% of
          the net proceeds to make a capital  contribution  to the Bank and used
          $2,023,420 to fund a loan to its Employee  Stock  Ownership  Plan. The
          Company  retained the remainder of the proceeds for ongoing  expenses.
          All payments of proceeds or expenses  were made to persons  other than
          directors,  officers,  general  partners  of the  registrant  or their
          associates,  persons  owning 10% or more of any class of securities of
          the registrant or affiliates of the registrant.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

         None

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

         None

ITEM 5 - OTHER INFORMATION

         None

                                       16



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

                                       17




                                   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 14, 2007               /s/Gary T. Jolliffe
                                      ------------------------------------------
                                      Gary T. Jolliffe
                                      President and Chief Executive Officer



Date: February 14, 2007               /s/Jeffrey E. Smith
                                      ------------------------------------------
                                      Jeffrey E. Smith
                                      Vice President and Chief Financial Officer

                                       18