Equitable Financial Corp. Announces Loan Sale and Sale of Freddie Mac Stock.

GRAND ISLAND, Neb. -- Equitable Financial Corp. (OTCBB:EQFC), the holding company for Equitable Bank, announced today that it has entered into an agreement with FTN Financial for the sale of a $6.6 million portfolio of one- to four-family mortgage loans. The loans subject to the sale, all of which are conventional long-term fixed-rate loans, will be sold with servicing released. The loans will be sold at a discount to the unpaid loan balances as of the closing date of the agreement, which is expected to be December 30, 2005. Equitable Financial expects to incur a pre-tax loss of $150,000, or an after-tax loss of $99,000, in connection with the loan sale.

The pool of 86 loans has a weighted average maturity of 179 months and a gross weighted average interest rate of 5.52%. In separate transactions, Equitable Financial will replace these loans with the origination of a like amount of adjustable-rate nonresidential real estate and commercial business loans with rates that adjust based on the prime rate.

Richard L. Harbaugh, President and Chief Executive Officer of Equitable Financial, said "The sale of these longer term, lower coupon loans and the corresponding funding of higher coupon adjustable-rate loans will improve our interest rate risk position. We believe that this restructuring is the right decision for the long-term profitability of Equitable Financial and our effort to create value for our stockholders."

Equitable Financial also announced today that during the quarter ending December 31, 2005, Equitable Financial sold Freddie Mac common stock for a pre-tax net gain of $340,000. The sale represented approximately 51% of Equitable Financial's Freddie Mac common stock.

Equitable Financial Corp. is the holding company for Equitable Bank and is headquartered in Grand Island, Nebraska. Equitable Bank operates five offices in Grand Island, Omaha and North Platte, Nebraska.