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Filed Pursuant to Rule 424(b)(3)

Registration No. 333-169410

Prospectus Supplement

Interests in

OCONEE SAVINGS AND LOAN ASSOCIATION

401(k) PROFIT SHARING PLAN

Offering of Participation Interests in up to 471,974 Shares of

OCONEE FEDERAL FINANCIAL CORP.

COMMON STOCK

In connection with the reorganization of Oconee Federal Savings and Loan Association (the “Association”) into the mutual holding company form of organization and the related stock offering of Oconee Federal Financial Corp., Oconee Federal Financial Corp. and the Association are allowing participants in the Oconee Savings and Loan Association 401(k) Profit Sharing Plan (the “Plan”) a one-time opportunity to invest all or a portion of their accounts in shares of common stock of Oconee Federal Financial Corp. Following the stock offering, Plan participants may not purchase additional shares of common stock of Oconee Federal Financial Corp.; however, Plan participants will be able to direct the Plan trustee to sell their shares of common stock.

The Association has registered on behalf of the Plan up to 471,974 participation interests so that the trustee of the Plan could purchase up to 471,974 shares of Oconee Federal Financial Corp. common stock in the offering, at the purchase price of $10.00 per share. This prospectus supplement relates to the initial election of Plan participants to direct the trustee of the Plan to invest all or a portion of their Plan accounts in the Oconee Federal Financial Corp. Stock Fund at the time of the stock offering.

The prospectus of Oconee Federal Financial Corp., dated November 12, 2010, accompanies this prospectus supplement. It contains detailed information regarding the reorganization of the Association and the stock offering of Oconee Federal Financial Corp. common stock and the financial condition, results of operations and business of Oconee Federal Financial Corp. and the Association. This prospectus supplement provides information regarding the Plan. You should read this prospectus supplement together with the prospectus and keep both for future reference.

For a discussion of risks that you should consider, see the “Risk Factors” section of the prospectus.

The interests in the Plan and the offering of Oconee Federal Financial Corp. common stock have not been approved or disapproved by the Office of Thrift Supervision, the Securities and Exchange Commission or any other federal or state agency. Any representation to the contrary is a criminal offense.

The securities offered in this prospectus supplement and in the prospectus are not deposits or accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

This prospectus supplement may be used only in connection with offers and sales by Oconee Federal Financial Corp. of interests or shares of common stock pursuant to the Plan. No one may use this prospectus supplement to re-offer or resell interests or shares of common stock acquired through the Plan.

You should rely only on the information contained in this prospectus supplement and the accompanying prospectus. Oconee Federal Financial Corp., the Association and the Plan have not authorized anyone to provide you with information that is different.

This prospectus supplement does not constitute an offer to sell or solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make an offer or solicitation in that jurisdiction. Neither the delivery of this prospectus supplement and the prospectus nor any sale of common stock shall under any circumstances imply that there has been no change in the affairs of Oconee Federal Financial Corp. or any of its subsidiaries or the Plan since the date of this prospectus supplement, or that the information contained in this prospectus supplement or incorporated by reference is correct as of any time after the date of this prospectus supplement.

The date of this prospectus supplement is November 12, 2010.

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THE OFFERING

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DESCRIPTION OF THE PLAN

Introduction

In connection with the reorganization of the Association into the mutual holding company form of organization and the related stock offering of Oconee Federal Financial Corp., the Association desires to give employees who participate in the Plan a one-time opportunity to purchase common stock of Oconee Federal Financial Corp. Following the stock offering, Plan participants may not purchase additional shares of common stock of Oconee Federal Financial Corp.; however, Plan participants will be able to direct the Plan trustee to sell their shares of common stock.

The Plan is a single employer tax-qualified plan with a cash or deferred compensation feature established in accordance with the requirements under Section 401(a) and Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”).

The Association intends that the Plan, in operation, will comply with the requirements under Section 401(a) and Section 401(k) of the Code. The Association will adopt any amendments to the Plan that may be necessary to ensure the continuing qualified status of the Plan under the Code and applicable Treasury Regulations.

Employee Retirement Income Security Act of 1974 (“ERISA”). The Plan is an “individual account plan” other than a “money purchase pension plan” within the meaning of ERISA. As such, the Plan is subject to all of the provisions of Title I (Protection of Employee Benefit Rights) and Title II (Amendments to the Code Relating to Retirement Plans) of ERISA, except to the funding requirements contained in Part 3 of Title I of ERISA, which by their terms do not apply to an individual account plan (other than a money purchase plan). The Plan is not subject to Title IV (Plan Termination Insurance) of ERISA. The funding requirements contained in Title IV of ERISA are not applicable to participants or beneficiaries under the Plan.

Reference to Full Text of Plan. The following portions of this prospectus supplement summarize certain provisions of the Plan. They are not complete and are qualified in their

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entirety by the full text of the Plan. Copies of the Plan are available to all employees by filing a request with Curtis T. Evatt, Executive Vice President and Chief Financial Officer, Oconee Federal Savings and Loan Association; telephone number: (864) 882-2765; fax: (864) 882-2765; email: curt.evatt@oconeefederal.com. You are urged to read carefully the full text of the Plan.

Eligibility and Participation

All employees of the Association are eligible to participate in the Plan except for the following ineligible classes of employees: (a) employees whose employment is governed by a collective bargaining agreement, (b) non-resident aliens who do not receive earned income which constitutes income from sources within the United States, (c) any individual who becomes an employee as the result of a merger or other acquisition, (d) leased employees, and (e) employees who are employed by an affiliated employer which does not adopt this Plan. If you are an eligible employee on October 1, 2010 and you are at least 21 years of age, you will become a participant in the Plan on October 1, 2010. In all other cases, you will need to be at least age 21 and have 90 consecutive days of employment. Your entry date into the Plan will be the first day of the first, fourth, seventh or tenth month of the plan year coinciding with or next following the date you satisfy the age and service requirements.

Contributions under the Plan

Elective Deferrals. You are permitted to defer on a pre-tax basis up to 100% of your compensation, subject to certain restrictions imposed by the Code, and to have that amount contributed to the Plan on your behalf. For purposes of the Plan, “compensation” means the amount reported on your Form W-2. In 2010, the compensation of each participant taken into account under the Plan is limited to $245,000. (Limits established by the Internal Revenue Service are subject to increase pursuant to an annual cost-of-living adjustment, as permitted by the Code).

In connection with the stock offering, you may, as described above, direct the trustee to invest up to 100% of your Plan account in the Oconee Federal Financial Corp. Stock Fund as a one-time special election. Following the stock offering, you may not purchase any additional shares of Oconee Federal Financial Corp.

Employer Matching Contributions. The Association may, in its discretion, make matching contributions.

Profit Sharing Contributions. The Association may, in its discretion, make profit sharing contributions.

Limitations on Contributions

Limitations on Employee Salary Deferrals. For the Plan year beginning January 1, 2010, the amount of your before-tax contributions may not exceed $16,500 per calendar year.

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Catch-up Contributions. If you have made the maximum amount of regular before-tax contributions allowed by the Plan or other legal limits and you have attained at least age 50 (or will reach age 50 prior to the end of the Plan year), you are also eligible to make an additional catch-up contribution. You may authorize your employer to withhold a specified dollar amount of your compensation for this purpose. For 2010, the maximum catch-up contribution is $5,500.

Investment of Contributions and Account Balances

All amounts credited to your accounts under the Plan are held in the Plan’s trust.

Prior to the effective date of the offering, you were provided the opportunity to direct the investment of your account into one of the following funds:

American Funds Euro Pacific Growth Fund (RERFX)

Vanguard 500 Index (VFINX)

Fidelity Contrafund (FCNTX)

Columbia Dividend Income Z (GSFTX)

Vanguard Mid-Cap Index (VIMSX)

Perkins Mid-Cap Value J (JMCVX)

T. Rowe Price Small-Cap Value (PRSVX)

Vanguard Small Cap Index (NAESX)

Vanguard GNMA (VFIIX)

Metropolitan West Total Return Bond M (MWTRX)

Vanguard Total Bond Market Index (VBMFX)

Federated Capital Preservation Fund (FCPFQ)

T. Rowe Price Capital Appreciation (PRWCX)

Vanguard Target Retirement 2005 (VTOVX)

Vanguard Target Retirement 2015 (VTXVX)

Vanguard Target Retirement 2025 (VTTVX)

Vanguard Target Retirement 2035 (VTTHX)

Vanguard Target Retirement 2045 (VTIVX)

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Performance History

The following table provides performance data with respect to the above investment funds as of June 30, 2010:

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Description of the Investment Funds

American Funds Euro Pacific Growth Fund (RERFX): The investment seeks to provide you with long-term growth of capital. The fund invests primarily in common stocks of issuers in Europe and the Pacific Basin that the investment adviser believes have the potential for growth. It normally invests at least 80% of net assets in securities of issuers in Europe and the Pacific Basin. The fund may invest a portion of its assets in common stocks and other securities of companies in countries with developing and/or markets and may also hold cash, money market instruments and fixed-income securities.

Vanguard 500 Index (VFINX): The investment seeks to track the performance of a benchmark index that measures the investment return of large-capitalization stocks. The fund employs a passive management investment approach designed to track the performance of the Standard & Poor’s 500 index, a widely recognized benchmark of U.S. stock market performance that is dominated by the stocks of large U.S. companies. It invests all, or substantially all, of assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.

Fidelity Contrafund (FCNTX): The investment seeks capital appreciation. The fund normally invests primarily in common stocks. It may invest in securities of companies whose value is not fully recognized by the public. The fund invests in both domestic and foreign issuers. It may invest in “growth” stocks or “value” stocks or both. The advisor uses fundamental analysis of each issuer’s financial condition and industry position and market and economic conditions to select investments.

Columbia Dividend Income Z (GSFTX): The investment seeks total return, consisting of current income and capital appreciation. The fund normally invests at least 80% of net assets in a diversified portfolio of income-producing equity securities. It may invest up to 20% of net assets in debt securities; including securities that are rated low and below investment grade or are unrated. The fund may also invest up to 20% of net assets in foreign securities.

Vanguard Mid-Cap Index (VIMSX): The investment seeks to track the performance of a benchmark index that measures the investment return of mid-capitalization stocks. The fund employs a passive management investment approach designed to track the performance of the MSCI US Mid Cap 450 index, a broadly diversified index of the stocks of medium-size U.S. companies. It attempts to replicate the target index by investing all, or substantially all, of assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.

Perkins Mid-Cap Value J (JMCVX): The investment seeks capital appreciation. The fund primarily invests in the common stocks of mid-sized companies whose stock prices the portfolio managers believe to be undervalued. It normally invests at least 80% of assets in equity securities of companies whose market capitalization falls, at the time of purchase, within the 12-month average of the capitalization range of the Russell Midcap Value index. The fund may invest in foreign equity and debt securities, which may include investments in emerging markets. It can also invest assets in derivatives.

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T. Rowe Price Small-Cap Value (PRSVX): The investment seeks long-term capital growth. The fund will invest at least 80% of assets in companies with a market capitalization that is within or below the range of companies in the Russell 2000 index. While it invests most assets in U.S. common stocks, the fund may also purchase other securities including bonds, foreign stocks, futures, and options.

Vanguard Small Cap Index (NAESX): The investment seeks to track the performance of a benchmark index that measures the investment return of small capitalization stocks. The fund employs a passive management investment approach designed to track the performance of the MSCI US Small Cap 1750 index, a broadly diversified index of the stocks of smaller U.S. companies. It attempts to replicate the target index by investing all, or substantially all, of assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.

Vanguard GNMA (VFIIX): The investment seeks to provide a moderate level of current income. The fund normally invests at least 80% of assets in government National Mortgage Association certificates. It may invest the balance of assets in other U.S. government obligations, as well as in repurchase agreements secured by U.S. government securities. The fund’s dollar-weighted average maturity will normally fall within an intermediate-term range (3 to 10 years).

Metropolitan West Total Return Bond M (MWTRX): The investment seeks to maximize long-term total return. The fund pursues its objective by investing, under normal circumstances, at least 80% of net assets in investment grade fixed income securities or unrated securities that are determined by the Adviser to be of similar quality. Up to 20% of the fund’s net assets may be invested in securities rated below investment grade. Under normal conditions, the portfolio duration is two to eight years and the dollar-weighted average maturity ranges from two to fifteen years.

Vanguard Total Bond Market Index (VBMFX): The investment seeks to track the performance of a broad, market-weighted bond index. The fund employs a “passive management”, or indexing investment approach designed to track the performance of the Barclays Capital U.S. Aggregate Float Adjusted index. It invests by sampling the index. It invests at least 80% of assets in bonds held in the index. The fund maintains a dollar-weighted average maturity consistent with that of the index, ranging between 5 and 10 years.

Federated Capital Preservation Fund (FCPFQ): The fund seeks to offer investors stable principal and high current income. To pursue its objective, the fund invests in stable value products, including GIC’s (Guaranteed Investment Contract), synthetic GIC’s and money market instruments.

T. Rowe Price Capital Appreciation (PRWCX): The investment seeks long-term capital appreciation. The fund normally invests primarily in the common stocks of established U.S. companies believed to have above-average potential for capital growth. It invest at least 50% of assess in common stocks and the remaining assets in other securities, including convertible securities, corporate and government debt, foreign securities, futures, and options.

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Vanguard Target Retirement 2005 (VTOVX): The investment seeks to provide growth of capital and current income. The fund primarily invests in other Vanguard mutual funds according to an asset allocation designed for investors planning to retire within a few years of 2005. It allocates approximately 62% of assets to bonds and money market instruments, and 38% to stocks.

Vanguard Target Retirement 2015 (VTXVX): The investment seeks to provide growth of capital and current income. The fund primarily invests in other Vanguard mutual funds according to an asset allocation designed for investors planning to retire within a few years of 2015. It typically allocates approximately 61% of assets to stocks, and 39% to bonds.

Vanguard Target Retirement 2025 (VTTVX): The investment seeks to provide growth of capital and current income. The fund primarily invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire within a few years of 2025. It allocates approximately 76% of assets to stocks and 24% to bonds.

Vanguard Target Retirement 2035 (VTTHX): The investment seeks to provide growth of capital and current income. The fund primarily invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire within a few years of 2035. It allocates approximately 90% of assets to stocks and 10% to bonds.

Vanguard Target Retirement 2045 (VTIVX): The investment seeks to provide growth of capital and current income. The fund primarily invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire within a few years of 2045. It allocates approximately 90% of assets to stocks and 10% to bonds.

For a discussion of material risks you should consider, see the “Risk Factors” section of the attached prospectus and the section of the Prospectus Supplement called “Notice of Your Rights Concerning Employer Securities” (see below).

Withdrawals and Distributions from the Plan

Applicable federal law requires the Plan to impose substantial restrictions on the right of a Plan participant to withdraw amounts held for his or her benefit under the Plan prior to the participant’s termination of employment with the Association. A substantial federal tax penalty may also be imposed on withdrawals made prior to the participant’s attainment of age 59  ¹/2.

Rollover Account. You may make a withdrawal from your rollover account without any restrictions and pursuant to the procedures established in the Plan.

Distribution upon Termination of Employment. You may make withdrawals from your account at any time after you terminate employment. In the event your vested account balance as of the date of your termination is $5,000 or less, your interest in the Plan will be cashed out and payment sent to you or, at your election, rolled over to another qualified retirement plan or to an individual retirement account. If your vested interest is more than $1,000 but not more

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than $5,000 and you fail to elect a lump sum distribution or a rollover, your vested interest will be rolled over to an individual retirement account selected by the Association. If your total vested account exceeds $5,000 and you terminate employment upon retirement on or after normal retirement age or because you suffer a disability, your vested interest will be distributed as soon as administratively feasible. If you terminate employment for reasons other than retirement or disability, your vested interest will be distributed as soon as administratively feasible after the next regularly scheduled Plan valuation date following your termination of employment. The normal form of distribution of benefits is a joint and survivor annuity. Optional forms of payments are installment payments, period payments as requested by the participant or any other form of annuity which can be purchased by an insurance company.

Disability. In the event you become disabled, your benefits will become 100% vested and immediately distributable.

Death. In the event of your death, your benefits will become 100% vested. Any death benefit payable to a non-spouse beneficiary will be distributed in a lump sum. Death benefits payable to your spouse will be distributed as monthly payments until his or her death unless, with your spouse’s written consent, you waive the monthly payments, in which case your spouse will receive a lump sum.

Administration of the Plan

The Trustee and Custodian. The trustee of the Plan is First Federal Savings and Loan Association of Charleston.

Plan Administrator. Pursuant to the terms of the Plan, the Plan is administered by the Plan administrator. The address of the Plan administrator is Oconee Federal Savings and Loan Association, Attention: Curtis T. Evatt, Executive Vice President and Chief Financial Officer, 201 North Second Street, Seneca, South Carolina 29678, telephone number: (864) 882-2765. The Plan administrator is responsible for the administration of the Plan, interpretation of the provisions of the Plan, prescribing procedures for filing applications for benefits, preparation and distribution of information explaining the Plan, maintenance of Plan records, books of account and all other data necessary for the proper administration of the Plan, preparation and filing of all returns and reports relating to the Plan which are required to be filed with the U.S. Department of Labor and the Internal Revenue Service, and for all disclosures required to be made to participants, beneficiaries and others under Sections 104 and 105 of ERISA.

Reports to Plan Participants. The Plan administrator will furnish you a statement at least quarterly showing the balance in your account as of the end of that period, the amount of contributions allocated to your account for that period, and any adjustments to your account to reflect earnings or losses (if any).

Amendment and Termination

It is the intention of the Association to continue the Plan indefinitely. Nevertheless, the Association may terminate the Plan at any time. If the Plan is terminated in whole or in part,

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then regardless of other provisions in the Plan, you will have a fully vested interest in your accounts. The Association reserves the right to make any amendment or amendments to the Plan which do not cause any part of the trust to be used for, or diverted to, any purpose other than the exclusive benefit of participants or their beneficiaries; provided, however, that the Association may make any amendment it determines necessary or desirable, with or without retroactive effect, to comply with ERISA.

Merger, Consolidation or Transfer

In the event of the merger or consolidation of the Plan with another plan, or the transfer of the Plan assets to another plan, the Plan requires that you would, if either the Plan or the other plan terminates, receive a benefit immediately after the merger, consolidation or transfer which is equal to or greater than the benefit you would have been entitled to receive immediately before the merger, consolidation or transfer, if the Plan had then terminated.

Federal Income Tax Consequences

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

As a “tax-qualified retirement plan,” the Code affords the Plan special tax treatment, including:

(1) the sponsoring employer is allowed an immediate tax deduction for the amount contributed to the Plan each year;

(2) participants pay no current income tax on amounts contributed by the employer on their behalf; and

(3) earnings of the Plan are tax-deferred, thereby permitting the tax-free accumulation of income and gains on investments.

The Association will administer the Plan to comply with the requirements of the Code as of the applicable effective date of any change in the law.

Lump-Sum Distribution. A distribution from the Plan to a participant or the beneficiary of a participant will qualify as a lump-sum distribution if it is made within one taxable year, on account of the participant’s death, disability or separation from service, or after the participant attains age 59  ¹/2, and consists of the balance credited to participants under the Plan and all other profit sharing plans (and in some cases all other stock bonus plans), if any, maintained by the Association. The portion of any lump-sum distribution required to be included in your taxable

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income for federal income tax purposes consists of the entire amount of the lump-sum distribution, less the amount of after-tax contributions, if any, you have made to this Plan and any other profit sharing plans maintained by the Association, which is included in the distribution.

Oconee Federal Financial Corp. Common Stock Included in Lump-Sum Distribution. If a lump-sum distribution includes Oconee Federal Financial Corp. common stock, the distribution generally will be taxed in the manner described above, except that the total taxable amount may be reduced by the amount of any net unrealized appreciation with respect to Oconee Federal Financial Corp. common stock, that is, the excess of the value of Oconee Federal Financial Corp. common stock at the time of the distribution over its cost or other basis of the securities to the trust. The tax basis of Oconee Federal Financial Corp. common stock, for purposes of computing gain or loss on its subsequent sale, equals the value of Oconee Federal Financial Corp. common stock at the time of distribution, less the amount of net unrealized appreciation. Any gain on a subsequent sale or other taxable disposition of Oconee Federal Financial Corp. common stock, to the extent of the amount of net unrealized appreciation at the time of distribution, will constitute long-term capital gain, regardless of the holding period of Oconee Federal Financial Corp. common stock. Any gain on a subsequent sale or other taxable disposition of Oconee Federal Financial Corp. common stock, in excess of the amount of net unrealized appreciation at the time of distribution, will be considered long-term capital gain. The recipient of a distribution may elect to include the amount of any net unrealized appreciation in the total taxable amount of the distribution, to the extent allowed by regulations to be issued by the Internal Revenue Service.

Distributions: Rollovers and Direct Transfers to Another Qualified Plan or to an IRA. You may roll over virtually all distributions from the Plan to another qualified plan or to an individual retirement account (IRA) in accordance with the terms of the other plan or account.

Notice of Your Rights Concerning Employer Securities

There has been an important change in Federal law that provides specific rights concerning investments in employer securities, such as Oconee Federal Financial Corp. common stock. Because you may in the future have investments in Oconee Federal Financial Corp. Stock Fund under the Plan, you should take the time to read the following information carefully.

Your Rights Concerning Employer Securities. The Plan must allow you to elect to move any portion of your account that is invested in the Oconee Federal Financial Corp. Stock Fund from that investment into other investment alternatives under the Plan. You may contact the Plan Administrator shown above for specific information regarding this new right, including how to make this election. In deciding whether to exercise this right, you will want to give careful consideration to the information below that describes the importance of diversification. All of the investment options under the Plan are available to you if you decide to diversify out of the Oconee Federal Financial Corp. Stock Fund.

The Importance of Diversifying Your Retirement Savings. To help achieve long-term retirement security, you should give careful consideration to the benefits of a well-balanced and

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diversified investment portfolio. Spreading your assets among different types of investments can help you achieve a favorable rate of return, while minimizing your overall risk of losing money. This is because market or other economic conditions that cause one category of assets, or one particular security, to perform very well often cause another asset category, or another particular security, to perform poorly. If you invest more than 20% of your retirement savings in any one company or industry, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it is an effective strategy to help you manage investment risk.

In deciding how to invest your retirement savings, you should take into account all of your assets, including any retirement savings outside of the Plan. No single approach is right for everyone because, among other factors, individuals have different financial goals, different time horizons for meeting their goals, and different tolerance for risk. Therefore, you should carefully consider the rights described here and how these rights affect the amount of money that you invest in Oconee Federal Financial Corp. common stock through the Plan.

It is also important to periodically review your investment portfolio, your investment objectives, and the investment options under the Plan to help ensure that your retirement savings will meet your retirement goals.

Additional ERISA Considerations

As noted above, the Plan is subject to certain provisions of ERISA, including special provisions relating to control over the Plan’s assets by participants and beneficiaries. The Plan’s feature that allows you to direct the investment of your account balances is intended to satisfy the requirements of Section 404(c) of ERISA relating to control over plan assets by a participant or beneficiary. The effect of this is two-fold. First, you will not be deemed a “fiduciary” because of your exercise of investment discretion. Second, no person who otherwise is a fiduciary, such as the Association, the Plan Administrator, or the Plan’s trustee is liable under the fiduciary responsibility provision of ERISA for any loss which results from your exercise of control over the assets in your Plan account.

Because you will be entitled to invest all or a portion of your account balance in the Plan in Oconee Federal Financial Corp. common stock, the regulations under Section 404(c) of ERISA require that the Plan establish procedures that ensure the confidentiality of your decision to purchase, hold, or sell employer securities, except to the extent that disclosure of such information is necessary to comply with federal or state laws not preempted by ERISA. These regulations also require that your exercise of voting and similar rights with respect to the common stock be conducted in a way that ensures the confidentiality of your exercise of these rights.

Securities and Exchange Commission Reporting and Short-Swing Profit Liability

Section 16 of the Securities Exchange Act of 1934, as amended, imposes reporting and liability requirements on officers, directors, and persons beneficially owning more than 10% of public companies such as Oconee Federal Financial Corp. Section 16(a) of the Securities Exchange Act of 1934 requires the filing of reports of beneficial ownership. Within 10 days of

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becoming an officer, director or person beneficially owning more than 10% of the shares of Oconee Federal Financial Corp., a Form 3 reporting initial beneficial ownership must be filed with the Securities and Exchange Commission. Changes in beneficial ownership, such as purchases, sales and gifts generally must be reported periodically, either on a Form 4 within two business days after the change occurs, or annually on a Form 5 within 45 days after the close of Oconee Federal Financial Corp.’s fiscal year. Discretionary transactions in and beneficial ownership of the common stock through the Oconee Federal Financial Corp. Stock Fund of the Plan by officers, directors and persons beneficially owning more than 10% of the common stock of Oconee Federal Financial Corp. generally must be reported to the Securities and Exchange Commission by such individuals.

In addition to the reporting requirements described above, Section 16(b) of the Securities Exchange Act of 1934, as amended, provides for the recovery by Oconee Federal Financial Corp. of profits realized by an officer, director or any person beneficially owning more than 10% of Oconee Federal Financial Corp.’s common stock resulting from non-exempt purchases and sales of Oconee Federal Financial Corp. common stock within any six-month period.

The Securities and Exchange Commission has adopted rules that provide exemptions from the profit recovery provisions of Section 16(b) for all transactions in employer securities within an employee benefit plan, provided certain requirements are met. These requirements generally involve restrictions upon the timing of elections to acquire or dispose of employer securities for the accounts of Section 16(b) persons.

Except for distributions of common stock due to death, disability, retirement, termination of employment or under a qualified domestic relations order, persons affected by Section 16(b) are required to hold shares of common stock distributed from the Plan for six months following such distribution and are prohibited from directing additional purchases within the Oconee Federal Financial Corp. Stock Fund for six months after receiving such a distribution.

Financial Information Regarding Plan Assets

Financial information representing the assets available for plan benefits at December 31, 2009, is available upon written request to the Plan Administrator at the address shown above.

LEGAL OPINION

The validity of the issuance of the common stock has been passed upon by Luse Gorman Pomerenk & Schick, P.C., Washington, D.C., which acted as special counsel to Oconee Federal Financial Corp. in connection with Oconee Federal Financial Corp.’s stock offering.

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Proposed Holding Company for Oconee Federal Savings and Loan Association

Up to 1,821,600 Shares of Common Stock

Oconee Federal Financial Corp. is offering on a best efforts basis up to 1,821,600 shares of its common stock for sale at $10.00 per share in connection with the reorganization of Oconee Federal Savings and Loan Association into the mutual holding company form of ownership. The shares being offered represent 33% of the shares of common stock of Oconee Federal Financial Corp. that will be outstanding following the offering. After the offering, 65.02% of our outstanding common stock will be owned by Oconee Federal, MHC, our federally chartered mutual holding company. In addition, Oconee Federal Savings and Loan Association intends to contribute cash in an amount equal to 2% of the value of the shares of common stock sold in the offering to a charitable foundation that it will establish and to cause Oconee Federal Financial Corp. to issue, on behalf of Oconee Federal Savings and Loan Association, a number of shares equal to 6% of the shares of common stock sold in the offering (which is equal to 1.98% of the shares that will be outstanding following the offering) to the charitable foundation. The percentage of our outstanding shares to be owned by public stockholders, by Oconee Federal, MHC and by the charitable foundation will not be affected by the number of shares we sell in the offering. We must sell a minimum of 1,346,400 shares in order to complete the offering and we will terminate the offering if we do not sell the minimum number of shares. We may sell up to 2,094,840 shares because of regulatory considerations or changes in market or economic conditions without resoliciting subscribers.

Following the completion of the reorganization, we expect that the common stock of Oconee Federal Financial Corp. will be listed on The Nasdaq Capital Market under the trading symbol “OFED.” An active market, however, may not develop in our common stock.

Depositors who had accounts at Oconee Federal Savings and Loan Association with aggregate balances of at least $50 on June 30, 2009 will have first priority to purchase shares of common stock of Oconee Federal Financial Corp. The offering is scheduled to terminate at 1:00 p.m., Eastern Time on December 23, 2010. We may extend the termination date without notice to you, until February 7, 2011, or such later date as the Office of Thrift Supervision may approve, which may not be beyond January 6, 2013.

The minimum purchase is 25 shares of common stock. The maximum purchase that an individual may make through a single deposit account is 25,000 shares, and no person by himself, or with an associate or group of persons acting in concert may purchase more than 62,500 shares. Once submitted, orders are irrevocable unless the offering is terminated or extended beyond February 7, 2011. If the offering is extended beyond February 7, 2011, subscribers will have the right to modify or rescind their purchase orders. Funds received prior to the completion of the offering will be held in a segregated account at Oconee Federal Savings and Loan Association. Whether the offering is completed or terminated, subscription funds will bear interest at our passbook savings rate, which is currently 0.50% per annum. If the offering is terminated, subscribers will have their funds returned promptly, with interest.

Mutual Securities, Inc. will use its best efforts to assist us in selling our common stock, but is not obligated to purchase any of the common stock that is being offered for sale. In addition, officers and directors may participate in the solicitation of offers to purchase common stock in reliance upon Rule 3a4-1 under the Securities Exchange Act of 1934, as amended. Subscribers will not pay any commissions to purchase shares of common stock in the offering.

This investment involves a degree of risk, including the possible loss of principal.

Please read the “Risk Factors” beginning on page 25.

OFFERING SUMMARY

Price: $10.00 per share

These securities are not deposits or savings accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

Neither the Securities and Exchange Commission, the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, nor any state securities regulator has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is November 12, 2010

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SUMMARY

The following summary explains material information regarding the reorganization, the offering of common stock by Oconee Federal Financial Corp. and the business of Oconee Federal Savings and Loan Association. The summary may not contain all the information that is important to you. For additional information, you should read this entire prospectus carefully, including the financial statements and the notes to the financial statements of Oconee Federal Savings and Loan Association. In certain circumstances, where appropriate, the terms “we, “us” and “our” refer collectively to Oconee Federal, MHC, Oconee Federal Financial Corp. and Oconee Federal Savings and Loan Association or to any of those entities, depending on the context.

The Companies

Oconee Federal, MHC

Upon completion of the reorganization and the offering, Oconee Federal, MHC will become the federally chartered mutual holding company of Oconee Federal Financial Corp. Oconee Federal, MHC is not currently an operating company and has not engaged in any business to date. Oconee Federal, MHC will be formed upon completion of the reorganization. As a mutual holding company, Oconee Federal, MHC will be a non-stock company that will have as its members all holders of the deposit accounts at Oconee Federal Savings and Loan Association, and certain borrowers of Oconee Federal Savings and Loan Association as of October 21, 1991 for so long as such borrowings remain in existence. As a mutual holding company, Oconee Federal, MHC is required by law to own a majority of the voting stock of Oconee Federal Financial Corp. The initial directors of Oconee Federal, MHC will consist of the current directors of Oconee Federal Savings and Loan Association.

Oconee Federal Financial Corp.

Oconee Federal Financial Corp. will be the federal mid-tier stock holding company for Oconee Federal Savings and Loan Association following the reorganization and offering. This offering is made by Oconee Federal Financial Corp. Oconee Federal Financial Corp. is not currently an operating company. Oconee Federal Financial Corp. will be formed upon completion of the reorganization. Oconee Federal Financial Corp. will be chartered under federal law and will own 100% of the common stock of Oconee Federal Savings and Loan Association. Our executive office will be located at 201 E. North Second Street, Seneca, South Carolina 29678, and our telephone number will be (864) 882-2765.

Oconee Federal Savings and Loan Association

Oconee Federal Savings and Loan Association is a federally chartered savings and loan association headquartered in Seneca, South Carolina. Oconee Federal Savings and Loan Association was originally chartered by the State of South Carolina in 1924 as Seneca Building and Loan Association. In 1958, we changed our name to “Oconee Savings and Loan Association” and in 1991 we converted to our federal charter under the name “Oconee Federal Savings and Loan Association.”

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We conduct our business from our main office, our executive office annex and three branch offices. All of our offices are located in Oconee County, South Carolina. Our primary market area consists of Oconee County and the nearby communities and townships in adjacent counties in South Carolina. The telephone number at our main office is (864) 882-2765. Our website address is www.oconeefederal.com. Information on our website should not be considered a part of this prospectus.

At June 30, 2010, we had total assets of $333.5 million, total deposits of $272.6 million and total equity of $59.7 million. We recorded net income of $2.6 million for the year ended June 30, 2010.

Our principal business activity is the origination of one- to four-family residential mortgage loans and, to a much lesser extent, non-residential mortgage loans, construction and land loans, and other loans. We offer a variety of deposit accounts, including checking, money market, savings and certificates of deposit, and emphasize personal and efficient service for our customers.

Our Reorganization into a Mutual Holding Company and the Offering

We do not have stockholders in our current mutual form of ownership. Our depositors and certain borrowers as of October 21, 1991 currently have the right to vote on certain matters such as the election of directors and the proposed mutual holding company reorganization. The reorganization is a series of transactions by which we will convert our corporate structure from our current status as a mutual savings and loan association to the mutual holding company form of ownership. The reorganization will be conducted pursuant to an amended and restated plan of reorganization and stock issuance plan, which we refer to as the plan of reorganization. Following the reorganization, Oconee Federal Savings and Loan Association will become a federal stock savings and loan association subsidiary of Oconee Federal Financial Corp. Oconee Federal Financial Corp. will be a majority-owned subsidiary of Oconee Federal, MHC. After the reorganization, our depositors will become members of Oconee Federal, MHC, and will continue to have the same voting rights in Oconee Federal, MHC as they had in Oconee Federal Savings and Loan Association prior to the reorganization.

We are offering between 1,346,400 and 1,821,600 shares of Oconee Federal Financial Corp. common stock based on our independent appraisal. The purchase price will be $10.00 per share. All investors will pay the same price per share in the offering. The $10.00 per share price was selected primarily because it is the price most commonly used in mutual holding company reorganizations and offerings. We may increase the amount of stock to be sold to up to 2,094,840 shares without any further notice to you. In addition, Oconee Federal Savings and Loan Association intends to (a) cause Oconee Federal Financial Corp. to issue, on behalf of Oconee Federal Savings and Loan Association, a number of shares of common stock equal to 6% of the shares sold in the offering (which is equal to 1.98% of the shares that will be outstanding following the offering), which would be up to 109,296 shares at the maximum of the offering range, to Oconee Federal Charitable Foundation, a charitable foundation that Oconee Federal Savings and Loan Association will establish in connection with the reorganization, and (b) contribute to the charitable foundation an amount of cash equal to 2% of the value of the shares sold in the offering, which would be $269,280 at the minimum of the offering range and $364,320 at the maximum of the offering range.

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The primary reasons for our decision to reorganize into a mutual holding company and conduct the offering are to establish an organizational structure that will enable us to:

The reorganization and the capital raised in the offering are expected to provide us with additional capital to support new loans and higher lending limits, support the growth of our banking franchise, provide an additional cushion against unforeseen risks and expand our asset and deposit base. The reorganization and offering also will allow us to establish and fund with stock and cash our charitable foundation as well as stock benefit plans for management and employees that will permit us to attract and retain qualified personnel.

Unlike a standard conversion transaction in which all of the common stock of the holding company of the converting savings and loan association is sold to the public, only a minority of the stock is sold to the public in a mutual holding company reorganization. A majority of the outstanding common stock must be held by the mutual holding company. Consequently, the shares that we are permitted to sell in the offering and issue to the charitable foundation represent a minority of our outstanding shares. As a result, a mutual holding company offering raises less than half the capital that would be raised in a standard conversion offering. Based on these restrictions and an evaluation of our capital needs, our board of directors has decided that 33% of our outstanding shares of common stock will be offered for sale in the offering; 65.02% of our shares will be retained by Oconee Federal, MHC; and 1.98% of our shares will be issued to Oconee Federal Charitable Foundation on behalf of Oconee Federal Savings and Loan Association. Our board of directors has determined that offering 33% of our outstanding shares of common stock for sale in the offering will enable management to effectively invest the capital raised in the offering. See “—Possible Conversion of Oconee Federal, MHC to Stock Form.”

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The following chart shows our corporate structure following the reorganization and offering:

Business Strategy

Our current community-oriented business strategy consists of the following:

A full description of our business strategy can be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Oconee Federal Savings and Loan Association —Business Strategy” and a description of our products and services can be found under “Business of Oconee Federal Savings and Loan Association.”

Terms of the Offering

We are offering between 1,346,400 and 1,821,600 shares of common stock of Oconee Federal Financial Corp. to qualified depositors and other members, our tax-qualified employee benefit plans and to the public to the extent shares remain available. The amount of capital we are raising in the offering is based on an appraisal of the pro forma market value of Oconee Federal Financial Corp. We may increase the maximum number of shares that we sell in the offering by up to 15%, to up to 2,094,840 shares, as a result of regulatory considerations, strong demand for the shares of common stock in the offering, or positive changes in financial markets,

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including financial institution stocks. Subscription priorities have been established for the allocation of common stock to the extent the subscription offering is oversubscribed. See “The Reorganization and Offering – Offering of Common Stock – Subscription Rights” for a description of allocation procedures in the event of an oversubscription.

Unless the pro forma market value of Oconee Federal Financial Corp. decreases below $40,800,000 or increases above $63,480,000, or the offering is extended beyond February 7, 2011, you will not have the opportunity to change or cancel your stock order. The offering price of the shares of common stock is $10.00 per share. All investors will pay the same $10.00 purchase price per share. Investors will not be charged a commission to purchase shares of common stock. Mutual Securities, Inc., our financial advisor in connection with the reorganization and offering, will use its best efforts to assist us in selling our shares of common stock, but Mutual Securities, Inc. is not obligated to purchase any shares in the offering.

Persons Who May Order Stock in the Offering

We are offering the shares of common stock of Oconee Federal Financial Corp. in a “subscription offering” in the following descending order of priority:

Any shares of our common stock that remain unsold in the subscription offering will be offered for sale in a community offering that may commence concurrently with, during or promptly after, the subscription offering. The community offering must be completed within 45 days of the end of the subscription offering, unless extended with Office of Thrift Supervision approval. Natural persons residing in Oconee and Pickens Counties, South Carolina will have a purchase preference in any community offering. Shares also may be offered to the general public. We also may offer shares of common stock not purchased in the subscription offering or the community offering through a syndicate of brokers in what is referred to as a syndicated community offering managed by Mutual Securities, Inc. We have the right to accept or reject, in our sole discretion, any orders received in the community offering or the syndicated community offering.

To ensure proper allocation of stock, each eligible account holder must list on his or her stock order form all deposit accounts in which he or she had an ownership interest at June 30, 2009, September 30, 2010 or November 10, 2010 as applicable. Failure to list an account or

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providing incorrect information could result in the loss of all or part of a subscriber’s stock allocation. We will attempt to identify your ownership in all accounts but cannot guarantee we will identify all accounts in which you had an ownership interest. Our interpretations of the terms and conditions of the stock issuance plan and of the acceptability of the order forms will be final.

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

Our decision to offer between 1,346,400 shares and 1,821,600 shares, which is our offering range, is based on an independent appraisal of our pro forma market value prepared by McAuliffe Financial, LLC, a firm experienced in appraisals of financial institutions. McAuliffe Financial, LLC is of the opinion that as of September 3, 2010, the estimated pro forma market value of the common stock of Oconee Federal Financial Corp. on a fully converted equivalent basis (i.e., the pro forma market value of Oconee Federal Savings and Loan Association assuming that 100% of the common stock of Oconee Federal Financial Corp. was sold in a public offering, rather than the 33% that will be sold in the offering) was between $40.8 million and $55.2 million, with a midpoint of $48.0 million.

In preparing its independent appraisal, McAuliffe Financial, LLC considered the information contained in this prospectus, including Oconee Federal Savings and Loan Association’s financial statements. McAuliffe Financial, LLC also considered the following factors, among others, in determining and making adjustments to our pro forma valuation:

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Set forth below are the names and locations of the peer group companies used by McAuliffe Financial, LLC in its independent appraisal. The peer group is comprised of savings institutions that met the following criteria: (i) high capital ratios and low non-performing assets; (ii) up to $1.0 billion in assets; (iii) conducted an initial public offering of its common stock prior to June 30, 2009; (iv) had positive core earnings for the most recent four quarters; (v) trade on NASDAQ; (vi) have had no public announcement of a second-step mutual holding company conversion; and (vii) operate in rural markets.

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McAuliffe Financial, LLC also considered the contribution of cash and shares of common stock to Oconee Federal Charitable Foundation. The contribution of cash and shares of common stock to the charitable foundation will reduce our estimated pro forma value. See “Comparison of Valuation and Pro Forma Information With and Without the Charitable Foundation.”

In reviewing the appraisal prepared by McAuliffe Financial, LLC, our board of directors considered the methodologies and the appropriateness of the assumptions used by McAuliffe Financial, LLC in addition to the factors listed above, and our board of directors believes that these assumptions were reasonable.

Our board of directors determined that the common stock should be sold at $10.00 per share and that 33% of the shares of Oconee Federal Financial Corp. common stock should be offered for sale in the offering and 65.02% should be held by Oconee Federal, MHC (after giving effect to the issuance of shares of common stock to Oconee Federal Charitable Foundation). Our board of directors determined that offering 33% of our outstanding shares of common stock for sale in the offering allowed for an efficient use of net proceeds for Oconee Federal Financial Corp. and Oconee Federal Savings and Loan Association in the near-term. See “—Possible Conversion of Oconee Federal, MHC to Stock Form.” Based on the estimated valuation range and the purchase price, the number of shares of Oconee Federal Financial Corp. common stock that will be outstanding upon completion of the offering will range from 4,080,000 to 5,520,000 shares (subject to adjustment to up to 6,348,000 shares), and the number of shares of Oconee Federal Financial Corp. common stock that will be sold in the offering will range from 1,346,400 shares to 1,821,600 shares (subject to adjustment to up to 2,094,840 shares). The number of shares that Oconee Federal, MHC will own after the offering will range from 2,652,840 shares to 3,589,104 shares (subject to adjustment to up to 4,127,470 shares). The number of shares of common stock that Oconee Federal Charitable Foundation will own after the reorganization will range from 80,760 shares at the minimum of the offering range to 109,296 share at the maximum of the offering range, subject to adjustment to as much as 125,690 shares at the adjusted maximum of the offering range. The estimated valuation range may be amended with the approval of the Office of Thrift Supervision, if required, or if necessitated by subsequent developments in the financial condition of Oconee Federal Savings and Loan Association or market conditions generally.

The independent appraisal will be updated before we complete the reorganization and offering. If the pro forma market value of the common stock at that time is either below $40.8 million or above $63.5 million, then Oconee Federal Financial Corp., after consulting with the Office of Thrift Supervision, may terminate the plan of reorganization and return all funds promptly with interest; extend or hold a new subscription or community offering, or both; establish a new offering range and commence a resolicitation of subscribers; or take such other actions as may be permitted by the Office of Thrift Supervision. Under such circumstances, we will notify you, and you will have the opportunity to change or cancel your order.

Two measures investors use to analyze an issuer’s stock are the ratio of the offering price to the issuer’s book value and the ratio of the offering price to the issuer’s annual net income. McAuliffe Financial, LLC considered these ratios, among other factors, in preparing its independent appraisal. Book value is the same as total equity, and represents the difference between the issuer’s assets and liabilities.

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The following table presents a summary of selected pricing ratios for the peer group companies and for us on a non-fully converted basis. These figures are from the McAuliffe Financial, LLC appraisal report.

Compared to the average pricing ratios of the peer group, our pro forma pricing ratios at the maximum of the offering range indicated a discount of 14.42% on a price-to-core earnings basis and a discount of 31.65% on a price-to-book basis. At the minimum and maximum of the valuation range, a share of common stock is priced at 16.67 times and 22.73 times our core earnings, respectively. The peer group companies, as of September 3, 2010, traded on average at 26.56 times core earnings. The median trading price of the peer group common stock was at 16.91 times core earnings. At the minimum and maximum of the valuation range, the common stock is valued at 58.45% and 74.91%, respectively, of our pro forma book value. This represents a discount of 46.67% at the minimum and 31.65% at the maximum of the valuation range to the average trading price-to-book value of our peer group companies, which as of September 3, 2010 was 109.60%. As of September 3, 2010, the median trading price of our peer group companies was 102.73% of the book value of these companies.

Our board of directors, in reviewing and accepting the valuation, considered the range of price-to-earnings multiples and the range of the price-to-book value ratios at the different amounts of shares to be sold in the offering. Our board of directors also considered the discount to our peer group with respect to the price-to-core earnings and price-to-book value, compared our pro forma book value and core earnings ratios to those of our peer group and noted the relative discount. In this regard, our board of directors noted the discounts applied by McAuliffe Financial, LLC with respect to our market area, the liquidity of our stock, the subscription interest in other recent mutual holding company offerings and the difficulty of marketing financial institutions’ stocks in today’s volatile economic climate. After extensive review, our board of directors concluded that such discounts were appropriate.

The independent appraisal did not consider one valuation approach to be more important than the other. Instead, the independent appraisal concluded that these ranges represented the appropriate balance of the two approaches to valuing Oconee Federal Financial Corp. and the number of shares to be sold, in comparison to the identified peer group institutions. The estimated appraised value and the resulting discounts took into consideration the potential financial impact of the reorganization and offering and the appraiser’s conclusions regarding Oconee Federal Financial Corp.’s financial condition and operations after the offering in comparison to the peer group companies.

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The following table presents a summary of selected pricing ratios for the peer group companies, with such ratios adjusted to their fully converted equivalent basis, and the resulting pricing ratios for Oconee Federal Financial Corp. on a fully converted equivalent basis. Compared to the average fully-converted pricing ratios of the peer group, Oconee Federal Financial Corp.’s pro forma fully-converted pricing ratios at the maximum of the offering range indicated a discount of 1.77% on a price-to-core earnings basis and a discount of 18.19% on a price-to-book basis.

In preparing both the fully converted pricing ratio analysis and the non-fully converted pricing ratio analysis, McAuliffe Financial, LLC assumed offering expenses equal to $856,000 plus 1.5% of the gross proceeds of the offering not related to the sale of stock to our benefit plans and our officers and directors or issued to the charitable foundation, a pre-tax reinvestment rate of 0.39% of the net proceeds of the offering, a tax rate of 38%, purchases by the employee stock ownership plan equal to 3.92% of our outstanding shares (including shares issued to Oconee Federal, MHC and Oconee Federal Charitable Foundation) funded with a loan from Oconee Federal Financial Corp. with a 25-year term, purchases by the stock-based incentive plan equal to 1.96% of the shares issued in connection with the reorganization (including shares issued to Oconee Federal, MHC and Oconee Federal Charitable Foundation) with a five-year vesting schedule and option grants under the stock-based incentive plan equal to 4.90% of the shares issued in connection with the reorganization (including shares issued to Oconee Federal, MHC and the Oconee Federal Charitable Foundation). Shares of common stock purchased by the stock-based incentive plan were assumed at $10.00 per share. The stock options were assumed to be granted with an exercise price of $10.00 per share, vest over a five-year period and have a term of 10 years.

The pro forma fully converted calculations use the same assumptions as applied to the peer group companies, and also assume the effect of the establishment and funding of our charitable foundation. See “Comparison of Valuation and Pro Forma Information With and Without the Charitable Foundation” for a discussion of the impact of our charitable foundation on our appraised value.

The independent appraisal does not indicate market value. Do not assume or expect that Oconee Federal Financial Corp.’s valuation as indicated above means that the common stock will trade at or above the $10.00 purchase price after the reorganization and offering.

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After-Market Performance Information Provided by Independent Appraiser

The following table presents stock price performance information for all mutual holding company initial public offerings completed between January 9, 2008 and September 3, 2010.

This table is not intended to be indicative of how our stock price may perform. Furthermore, this table presents only short-term price performance with respect to companies that only recently completed their initial public offerings and may not be indicative of the longer-term stock price performance of these companies.

Stock price performance is affected by many factors, including, but not limited to: general market and economic conditions; the interest rate environment; the amount of proceeds a company raises in its offering; and numerous factors relating to the specific company, including the experience and ability of management, historical and anticipated operating results, the nature and quality of the company’s assets, and the company’s market area. The companies listed in the table above may not be similar to Oconee Federal Financial Corp., the pricing ratios for their stock offerings may be different from the pricing ratios for Oconee Federal Financial Corp. common stock and the market conditions in which these offerings were completed may be different from current market conditions. Any or all of these differences may cause our stock to perform differently from these other companies.

Before you make an investment decision, we urge you to carefully read this entire prospectus, including, but not limited to, the section entitled “Risk Factors,” beginning on page 25.

You should be aware that, in certain market conditions, stock prices of initial public offerings by thrift institutions have decreased below their initial offering prices. For example, as the above table illustrates, the stocks of six companies were trading below their initial offering price at September 3, 2010. Our stock may trade below the $10.00 purchase price and our stock may not perform similarly to other recent first-step mutual holding company offerings. See “Risk Factors—Risks Related to this Offering—The Future Price of the Shares of Common Stock May Be Less Than the Purchase Price in the Offering.”

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Limits on the Amount of Common Stock You May Purchase

The minimum purchase is 25 shares of common stock. Generally, no individual, or individuals through a single account, may purchase more than $250,000 of common stock. If any of the following persons purchase shares of common stock, their purchases when combined with your purchases cannot exceed $625,000 of common stock:

We may, in our sole discretion and without further notice to or solicitation of subscribers or other prospective purchasers, increase the maximum purchase limitation to 9.9% of the number of shares sold in the offering and issued to our charitable foundation, provided that the total number of shares purchased by persons, their associates and those persons with whom they are acting in concert, to the extent such purchases exceed 5% of the shares sold in the offering and issued to our charitable foundation, shall not exceed, in the aggregate, 10% of the total number of the shares sold in the offering and issued to our charitable foundation.

Subject to Office of Thrift Supervision approval, we may increase or decrease the purchase limitations in the offering at any time. A detailed discussion of the limitations on purchases of common stock by an individual and persons acting together is set forth under the caption “The Reorganization and the Offering—Offering of Common Stock—Limitations on Purchase of Shares.”

It is expected that the employee stock ownership plan will purchase 3.92% of our outstanding shares (including shares issued to Oconee Federal, MHC and Oconee Federal Charitable Foundation). Subject to the approval of the Office of Thrift Supervision, the employee stock ownership plan may purchase some or all of these shares in the open market following the completion of the offering. Our employee stock ownership plan purchases will range from 159,936 to 216,384 shares of common stock, respectively, at the minimum and maximum of the offering range.

Our Issuance of Shares of Common Stock to the Charitable Foundation

To further our commitment to supporting charitable organizations that operate in the communities we serve and may serve in the future, we intend, subject to our members’ approval, to establish and fund a new charitable foundation as part of the offering. We believe that the creation and funding of the charitable foundation will result in a significant increase in our charitable contributions to organizations in our community. Oconee Federal Savings and Loan Association intends to (a) cause Oconee Federal Financial Corp. to issue to the charitable foundation, on behalf of Oconee Federal Savings and Loan Association, a number of shares of common stock equal to 6% of the shares sold in the offering (which is equal to 1.98% of the shares that will be outstanding following the offering), ranging from 80,760 shares at the minimum of the valuation range to 109,296 shares at the maximum of the valuation range, subject to adjustment to up to 125,690 shares at the adjusted maximum of the valuation range, and (b) contribute to the charitable foundation an amount of cash equal to 2% of the value of the shares sold in the offering.

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The shares will have a value of $807,600 at the minimum of the valuation range and $1,092,960 at the maximum of the valuation range, subject to adjustment to up to $1,256,900 at the adjusted maximum of the valuation range. The cash contribution will be $269,280 at the minimum of the valuation range and $364,320 at the maximum of the valuation range, subject to adjustment to up to $418,968 at the adjusted maximum of the valuation range. As a result of the issuance of shares to the charitable foundation and the cash contribution, we expect to record an after-tax expense of approximately $668,000 at the minimum of the valuation range and up to $1,039,000 at the adjusted maximum of the valuation range during the quarter in which the offering is completed.

Under the Internal Revenue Code, an entity is permitted to deduct up to 10% of its taxable income (income before income taxes) in any one year for charitable contributions. Any contribution in excess of the 10% limit may be deducted for federal income tax purposes over the five years following the year in which the charitable contribution was made. Accordingly, a charitable contribution by an entity to a charitable foundation could, if necessary, be deducted for federal income tax purposes over a six-year period. We could be limited if our pretax income falls below historical levels, and after-tax expense would be more in that case. While federal tax law allows the filing of consolidated income tax returns, South Carolina tax law does not. Since Oconee Federal Financial Corp. will have limited operations and limited unconsolidated income following the reorganization, we structured the contribution to the charitable foundation in an attempt to take advantage of the tax deductibility of the charitable contribution for both federal and South Carolina income tax purposes. Specifically, under the “deemed purchase” method of Section 1032 of the Internal Revenue Code, Oconee Federal Savings and Loan Association will cause Oconee Federal Financial Corp. to issue shares to the charitable foundation on Oconee Federal Savings and Loan Association’s behalf, in satisfaction of Oconee Federal Savings and Loan Association’s promised contribution to the charitable foundation. Oconee Federal Savings and Loan Association will make the cash portion of the contribution using a portion of the proceeds of the offering.

The new charitable foundation will be governed by a board of directors, initially consisting of Curtis T. Evatt, our Executive Vice President and Chief Financial Officer, Robert N. McLellan, Jr., one of our current non-employee directors and Douglas W. Brune, a civic leader with charitable experience in our community. None of these individuals will receive compensation for their service as a director of the charitable foundation. In addition, some of our employees will serve as executive officers of the charitable foundation. None of these individuals will receive compensation for their service as an executive officer of the charitable foundation.

The new charitable foundation will be dedicated to supporting charitable causes and community development activities in the communities in which we operate or may operate. In addition to traditional community contributions and community reinvestment initiatives, the charitable foundation is expected to emphasize grants or donations to support housing assistance, local education and other types of organizations or civic-minded projects.

Issuing shares of common stock to the charitable foundation will:

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The establishment and funding of the charitable foundation has been approved by our board of directors, and must be approved by the members of Oconee Federal Savings and Loan Association at the special meeting of members. If members of Oconee Federal Savings and Loan Association do not approve the establishment and funding of the charitable foundation, we will proceed with the reorganization and offering and subscribers for common stock will not be resolicited (unless required by the Office of Thrift Supervision). Without the charitable foundation, the percentage of the outstanding shares to be owned by public stockholders would increase from 33% to 34.98%. In addition, without the charitable foundation, McAuliffe Financial, LLC estimates that our pro forma valuation would be greater. As a result, a greater number of shares or common stock would be issued in the offering. Specifically, the number of shares of common stock issued in the offering would increase to 1,456,917 shares from 1,346,000 shares at the minimum of the offering range, to 1,714,020 shares from 1,584,000 shares at the midpoint of the offering range, to 1,971,123 shares from 1,821,600 shares at the maximum of the offering range and to 2,266,808 shares from 2,094,840 shares at the adjusted maximum of the offering range. The percentage of the outstanding shares to be owned by Oconee Federal, MHC would be unchanged at 65.02%.

McAuliffe Financial, LLC will update its appraisal of our pro forma market value at the conclusion of the offering. The pro forma market value reflected in that updated appraisal will be based on the facts and circumstances existing at that time, including, among other things, market and economic conditions, as well as whether the charitable foundation is formed and funded with shares of our common stock.

See “Risk Factors—Risks Related to this Offering—The Contribution of Shares to the Charitable Foundation Will Dilute Your Ownership Interests and Adversely Affect Net Income,” “Comparison of Valuation and Pro Forma Information With and Without the Charitable Foundation” and “Oconee Federal Charitable Foundation.”

How You May Pay for Your Shares

In the subscription offering and the community offering you may pay for your shares only by:

If you wish to use your Oconee Federal Savings and Loan Association individual retirement account to pay for your shares, please be aware that federal law requires that such funds first be transferred to a self-directed retirement account with a trustee other than Oconee Federal Savings and Loan Association. The transfer of such funds to a new trustee requires considerable additional time, so please contact the Stock Information Center immediately or your order may not be processed in time to purchase common stock in the offering. The Stock Information Center may be reached by calling (864) 885-2261, Monday through Friday between 9:00 a.m. and 4:00 p.m., Eastern Time. Also, please be aware that Oconee Federal Savings and Loan Association is not permitted to lend funds to anyone for the purpose of purchasing shares of common stock in the offering.

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You can subscribe for shares of common stock in the offering by delivering a signed and completed original stock order form, together with full payment, before the expiration date of the subscription offering. You may submit your order form in one of three ways: by mail, using the reply envelope provided; by overnight courier to the address indicated on the order form; or by bringing your stock order form and payment to one of our offices or our stock information center. Once submitted, your order is irrevocable. We are not required to accept copies or facsimiles of order forms. Funds received prior to the completion of the offering will be held in a segregated account at Oconee Federal Savings and Loan Association. Subscription funds will bear interest at our passbook savings rate, which is currently 0.50% per annum. If the offering is terminated, we will promptly return your subscription funds with interest.

Withdrawals from certificates of deposit at Oconee Federal Savings and Loan Association for the purpose of purchasing common stock in the offering may be made without incurring an early withdrawal penalty. All funds authorized for withdrawal from deposit accounts with Oconee Federal Savings and Loan Association must be in the deposit accounts at the time the stock order form is received. However, funds will not be withdrawn from the accounts until the offering is completed and will continue to earn interest at the applicable deposit account rate until the completion of the offering. A hold will be placed on those funds when your stock order is received, making the designated funds unavailable to you. After we receive an order, the order cannot be revoked or changed, except with our consent. In addition, we are not required to accept copies or facsimiles of order forms.

You May Not Sell or Transfer Your Subscription Rights

Office of Thrift Supervision regulations prohibit you from transferring your subscription rights. If you order shares of common stock in the subscription offering, you will be required to state that you are purchasing the shares of common stock for yourself and that you have no agreement or understanding to sell or transfer your subscription rights. We intend to take legal action, including reporting persons to federal or state regulatory agencies, against anyone who we believe has sold or given away his or her subscription rights. We will not accept your order if we have reason to believe that you have sold or transferred your subscription rights. When completing your stock order and certification form, you should not add the name(s) of persons who do not have subscription rights or who qualify in a lower subscription priority than you do. In addition, the stock order and certification form requires that you list all deposit or loan accounts, giving all names on each account and the account number at the applicable eligibility record date. Your failure to provide this information, or providing incomplete or incorrect information, may result in a loss of part or all of your share allocation, if there is an oversubscription. Eligible depositors or borrowers who enter into agreements to allow ineligible investors to participate in the subscription offering may be violating federal and state law and may be subject to civil enforcement actions or criminal prosecution.

Deadline for Orders of Common Stock

If you wish to purchase shares of common stock, we must receive your properly completed stock order form, together with payment for the shares, no later than 1:00 p.m., Eastern Time, on December 23, 2010 unless we extend this deadline. We may extend the December 23, 2010 expiration date, without notice to you, until February 7, 2011. If the offering is extended beyond February 7, 2011, we will be required to resolicit subscriptions before proceeding with the offering. In such case, you will have the right to confirm, modify or rescind your stock order. If we do not receive a response to any resolicitation

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from you, your stock order will be rescinded and all funds received will be returned promptly with interest, or withdrawal authorizations will be cancelled. You may submit your stock order form by mail using the return envelope provided, by overnight courier to the indicated address on the stock order form, or by bringing your stock order form and payment to one of our offices or our stock information center. Once submitted, your stock order is irrevocable unless the offering is terminated or extended beyond February 7, 2011.

Once Submitted, Your Purchase Order May Not Be Revoked Unless the Offering is Terminated or Extended Beyond February 7, 2011.

Funds that you use to purchase shares of our common stock in the offering will be held in an interest bearing account until the termination or completion of the offering, including any extension of the expiration date. The Office of Thrift Supervision approved the reorganization on November 12, 2010; however, because completion of the reorganization and offering will be subject to an update of the independent appraisal, among other factors, there may be one or more delays in the completion of the reorganization. Any orders that you submit to purchase shares of our common stock in the offering are irrevocable, and you will not have access to subscription funds unless the offering is terminated, or extended beyond February 7, 2011.

Termination of the Offering

The subscription offering will terminate at 1:00 p.m., Eastern Time, on December 23, 2010. We expect that the community offering, if one is conducted, would terminate at the same time. We may extend this expiration date without notice to you until February 7, 2011, or such later date as the Office of Thrift Supervision may approve. If the subscription offering and/or community offerings extend beyond February 7, 2011, we will be required to resolicit subscriptions before proceeding with the offering. In such event, all subscribers will be afforded the opportunity to increase, decrease or cancel their subscription. If you choose not to subscribe for the common stock or do not respond to the resolicitation notice, your funds will be promptly returned to you with interest. All further extensions, in the aggregate, may not last beyond January 6, 2013, which is two years after the special meeting of members of Oconee Federal Savings and Loan Association to be held on January 6, 2011 to vote on the plan of reorganization.

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

If we do not receive orders for at least 1,346,400 shares of common stock, we may take several steps in order to sell the minimum number of shares of common stock in the offering range. Specifically, we may (a) increase the purchase limitations, (b) seek regulatory approval to extend the offering beyond the February 7, 2011 expiration date, and/or (c) reduce the valuation and offering range, provided that any such extension or reduction will require us to resolicit subscriptions received in the offering and provide subscribers with the opportunity to increase, decrease or cancel their subscriptions. If a subscriber determines to cancel his or her subscription or does not respond to the resolicitation notice, his or her subscription funds will be refunded with interest.

Market for the Common Stock

We anticipate that the common stock sold in the offering will be listed and traded on The Nasdaq Capital Market. An active market may not develop in our common stock.

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Cash Dividends

We currently intend to declare and pay a quarterly cash dividend on the common stock equal to $0.10 per share following our board of directors’ review of our financial condition and results of operations for the first full or partial quarter following the completion of the offering. This dividend represents a 4.0% annual yield assuming a share price of $10.00. The dividend rate and the continued payment of dividends will depend upon our board of directors’ consideration of a number of factors, including the amount of net proceeds retained by us in the offering, investment opportunities available to us, capital requirements, our financial condition and results of operations, the Office of Thrift Supervision’s and Federal Reserve Board’s policies regarding dividend waivers by mutual holding companies, and, to a lesser extent, statutory and regulatory limitations affecting dividends and dividend waivers by mutual holding companies, tax considerations, and general economic conditions. There can be no assurance that our quarterly cash dividend will not be reduced or eliminated in future periods. See “Our Policy Regarding Dividends” for more information regarding our dividend policy.

How We Intend to Use the Proceeds from the Offering

Assuming we sell 1,821,600 shares of common stock in the offering, and we have net proceeds of $17.15 million, we intend to distribute the net proceeds as follows:

We intend to use a portion of the net proceeds to pay quarterly dividends equal to $0.10 per share. We expect to initially invest the net proceeds of the offering in securities issued by the United States government and its agencies or government sponsored enterprises and as otherwise permitted under our investment policy. We may use a portion of the net proceeds to repurchase shares of our common stock in the future, although we are generally not permitted to do so during the first year following our reorganization. We may use a portion of the net proceeds to finance the possible acquisition of other financial institutions, branch offices or other financial service businesses or to expand through de novo branching, although we are not considering any specific transactions or any expansion outside Oconee County at this time. We may also use the net proceeds for other general corporate purposes. Oconee Federal Savings and Loan Association intends to partially fund Oconee Federal Charitable Foundation with a cash contribution of $269,280, $316,800 or $364,320, respectively, at the minimum, midpoint and maximum of the offering range. Oconee Federal Savings and Loan Association generally intends to use the proceeds it receives to make loans. It may also purchase securities as permitted under our investment policy, expand its banking franchise internally or through acquisitions, although it has no specific plans or agreements for specific transactions at this time. Oconee Federal Savings and Loan Association may also use the proceeds it receives to support new loan, deposit or other financial products and services, and for

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general corporate purposes. See “How We Intend to Use the Proceeds from the Offering.” Neither Oconee Federal Savings and Loan Association nor Oconee Federal Financial Corp. has any plans or agreements for any specific acquisition transactions at this time.

Our Officers, Directors and Employees Will Receive Additional Benefits and Compensation After the Reorganization and Offering

We intend to establish an employee stock ownership plan and implement a stock-based incentive plan that will provide for grants of stock options and restricted stock.

Employee Stock Ownership Plan. The board of directors of Oconee Federal Savings and Loan Association has adopted an employee stock ownership plan, which will award shares of our common stock to eligible employees primarily based on their compensation. Our board of directors will, at the completion of the offering, ratify the loan to the employee stock ownership plan and the issuance of the common stock to the employee stock ownership plan. It is expected that our employee stock ownership plan will purchase an amount of shares equal to 3.92% of our outstanding shares (including shares issued to Oconee Federal, MHC and Oconee Federal Charitable Foundation). In recognition of the possible expenses of the employee stock ownership plan, we adopted the Oconee Savings and Loan Association 401(k) Profit Sharing Plan, which supersedes and is expected to have a lower overall cost than the Oconee Savings and Loan Association Profit Sharing Plan would have had if it remained in force.

Stock-Based Incentive Plan. In addition to shares purchased by the employee stock ownership plan, we intend to adopt a stock-based incentive plan designed to attract and retain qualified personnel in key positions, provide directors, officers and key employees with a proprietary interest in Oconee Federal Financial Corp. as an incentive to contribute to our success and reward key employees for outstanding performance. The number of options granted and restricted shares awarded under the stock-based incentive plan may not exceed 4.90% and 1.96%, respectively, of our total outstanding shares, including shares issued to Oconee Federal, MHC and Oconee Federal Charitable Foundation, provided that if Oconee Federal Savings and Loan Association’s tangible capital at the time of adoption of the stock-based incentive plan is less than 10% of its assets, then the amount of restricted shares may not exceed 1.47% of our outstanding shares. The number of options granted or restricted shares awarded under the stock-based incentive plan, when aggregated with any subsequently adopted stock-based benefit plans (exclusive of any shares held by any employee stock ownership plan), may not exceed 25% of the number of shares of common stock held by persons other than Oconee Federal, MHC. Under applicable regulations, the exercise price of options granted within one year of the completion of the offering must be equal to the then fair market value of the common stock on the date the options are granted.

The stock-based incentive plan will not be established sooner than six months after the offering and would require the approval of a majority of the outstanding shares of Oconee Federal Financial Corp. eligible to be cast, as well as by a majority of the votes cast by stockholders other than Oconee Federal, MHC.

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Under applicable regulations, unless we obtain a waiver from the Office of Thrift Supervision (or we adopt our stock-based incentive plan more than one year following the completion of the offering) the following additional restrictions would apply to our stock-based incentive plan:

These restrictions do not apply to plans adopted after one year following the completion of the offering.

We have not yet determined whether we will present the stock-based incentive plan for stockholder approval within one year following the completion of the offering or whether we will present this plan for stockholder approval more than one year after the completion of the offering. In the event the Office of Thrift Supervision changes its regulations or policies regarding stock-based incentive plans, including any regulations or policies restricting the size of awards and vesting of benefits as described above, the restrictions described above may not be applicable.

We may obtain the shares needed for our stock-based benefit plans by issuing additional shares of common stock from authorized but unissued shares or through stock repurchases.

Incentive Plan Expenses. The implementation of an employee stock ownership plan and a stock-based incentive plan will increase our future compensation costs, thereby reducing our earnings. For example, we will be required to recognize an expense each year under our employee stock ownership plan equal to the fair market value of the shares committed to be released for that year to the participating employees. Similarly, if we issue restricted stock awards under a stock-based incentive plan, we would be required to recognize an expense based on the fair market value of the shares on the grant date as they vest. Finally, if we issue stock options, we would be required to recognize expense based on the estimated value of such options on the grant date, as they vest. See “Risk Factors—Risks Related to this Offering—Our Stock Benefit Plans Will Increase Our Costs, Which Will Reduce Our Income” and “Management—Future Stock Benefit Plans.”

Benefits to Management. The following table summarizes the stock benefits that our officers, directors and employees may receive following the reorganization and offering, at the maximum of the offering range and assuming that our employee stock ownership plan purchases 3.92% of our outstanding shares (including shares issued to Oconee Federal, MHC and Oconee Federal Charitable Foundation) and that we implement a stock-based incentive plan granting options to purchase 4.90% of the total shares of common stock of Oconee Federal Financial Corp. issued in connection with the reorganization (including shares issued to Oconee Federal, MHC and Oconee Federal Charitable Foundation) and awarding restricted shares of common stock equal to 1.96% of the total shares of common stock of Oconee Federal

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Financial Corp. issued in connection with the reorganization (including shares issued to Oconee Federal, MHC and Oconee Federal Charitable Foundation).

The value of the restricted shares of common stock issued under the stock-based incentive plan will be based on the fair market value of Oconee Federal Financial Corp.’s common stock at the time those restricted shares are awarded, which, subject to stockholder approval, cannot occur until at least six months after the offering. The following table presents the total value of all restricted shares to be available for award and issuance under the stock-based incentive plan, assuming the restricted shares for the plan are purchased or issued in a range of market prices from $8.00 per share to $14.00 per share. The value of restricted shares to be granted under the stock-based incentive plan ranges from $639,744 to $1,741,891, depending on the number of restricted shares awarded and the assumed market price on the date the restricted shares are granted.

The grant-date fair value of the options granted under the stock-based incentive plan will be based in part on the price of Oconee Federal Financial Corp.’s common stock at the time the options are granted, which, subject to stockholder approval, cannot occur until at least six months after the offering. The value will also depend on the various assumptions utilized in estimating the value using the Black-Scholes option pricing model. The following table presents the total estimated value of the options to be available for grant under the stock-based incentive plan, assuming the market price and exercise price for the stock options are equal and the range of market prices for the shares is $8.00 per share to $14.00 per share. The grant-date fair value of the options granted under the stock option plan ranges from $177,929 to $482,131, depending on the number of options granted and the assumed market price on the date the options are granted.

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Restrictions on the Acquisition of Oconee Federal Financial Corp. and Oconee Federal Savings and Loan Association

Federal regulations, as well as provisions contained in the charter and bylaws of Oconee Federal Savings and Loan Association and Oconee Federal Financial Corp., restrict the ability of any person, firm or entity to acquire Oconee Federal Financial Corp., Oconee Federal Savings and Loan Association, or their respective capital stock. These restrictions include the requirement that a potential acquirer of common stock obtain the prior approval of the Office of Thrift Supervision before acquiring in excess of 10% of the voting stock of Oconee Federal Financial Corp. or Oconee Federal Savings and Loan Association, as well as a provision in each of Oconee Federal Financial Corp.’s and Oconee Federal Savings and Loan Association’s respective charter that provides that for a period of five years from the closing of the offering, no person, other than Oconee Federal, MHC, may directly or indirectly offer to acquire or acquire the beneficial ownership of more than 10% of any class of equity security of Oconee Federal Financial Corp. or Oconee Federal Savings and Loan Association held by persons other than Oconee Federal, MHC, and, with respect to Oconee Federal Savings and Loan Association, other than Oconee Federal Financial Corp., and that any shares acquired in excess of this limit would not be entitled to be voted and would not be counted as voting stock in connection with any matters submitted to the stockholders for a vote.

Because a majority of the shares of outstanding common stock of Oconee Federal Financial Corp. must be owned by Oconee Federal, MHC, any acquisition of Oconee Federal Financial Corp. must be approved by Oconee Federal, MHC. Furthermore, Oconee Federal, MHC would not be required to pursue or approve a sale of Oconee Federal Financial Corp. even if such sale were favored by a majority of Oconee Federal Financial Corp.’s public stockholders. Finally, although a mutual holding company may be acquired by a mutual institution or another mutual holding company in a remutualization transaction, current Office of Thrift Supervision policy makes such transactions unlikely because of the special regulatory scrutiny given to the structure and pricing of such transactions. Specifically, current Office of Thrift Supervision policy views remutualization transactions as raising significant issues concerning disparate treatment of minority stockholders and mutual members of the target entity, and raising issues concerning the effect on the mutual members of the acquiring entity. As a result, a remutualization transaction for Oconee Federal Financial Corp. is unlikely unless the applicant can clearly demonstrate that the Office of Thrift Supervision’s concerns are not warranted in the particular case.

Proposed Stock Purchases by Management

Oconee Federal Financial Corp.’s directors and executive officers and their associates are expected to purchase, for investment purposes, approximately 187,500 shares of common stock in the offering, which represents 13.93%, 11.84%, 10.29% and 8.95% of the shares sold to the public and

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4.60%, 3.91%, 3.40% and 2.95% of the total shares to be outstanding after the offering (including shares owned by Oconee Federal, MHC and shares contributed to the charitable foundation) at the minimum, midpoint, maximum and maximum, as adjusted, of the offering range, respectively. Like all of our eligible depositor and borrower purchasers, our directors and executive officers and their associates have subscription rights based on their deposits or borrowings and, in the event of an oversubscription, their orders will be subject to the allocation provisions set forth in our plan of reorganization. Oconee Federal, MHC and Oconee Federal Financial Corp.’s directors and executive officers and their associates are expected to own an aggregate of 2,840,316, 3,308,460, 3,776,604 and 4,314,970 shares at the minimum, midpoint, maximum and maximum, as adjusted, of the offering range, respectively, or 69.62%, 68.93%, 68.42% and 67.97% of the total shares to be outstanding after the offering.

The plan of reorganization provides that the aggregate amount of shares acquired in the offering by our directors and executive officers (and their associates) may not exceed 29% of the outstanding shares held by persons other than Oconee Federal, MHC, except with the approval of the Office of Thrift Supervision. We may seek approval from the Office of Thrift Supervision to allow purchases by our directors and executive officers (and their associates) to exceed the 29% limit to the extent needed to enable us to sell the minimum number of shares of common stock in the offering range.

Directors and executive officers will pay the same $10.00 per share price paid by all other persons who purchase shares in the offering. These shares will be counted in determining whether the minimum of the offering range is reached.

Conditions to Completing the Reorganization and Offering

We cannot complete the reorganization and offering unless:

Office of Thrift Supervision approval does not constitute a recommendation or endorsement of an investment in our stock by the Office of Thrift Supervision.

Subject to member approval at the special meeting of members, we intend to establish and fund the charitable foundation in connection with the offering. However, member approval of the charitable foundation is not a condition to the completion of the reorganization and offering.

Possible Conversion of Oconee Federal, MHC to Stock Form

In the future, Oconee Federal, MHC may convert from the mutual to capital stock form, in a transaction commonly referred to as a “second-step conversion.” In a second-step conversion, members of Oconee Federal, MHC would have subscription rights to purchase common stock of Oconee Federal Financial Corp. or its successor, and the public stockholders of Oconee Federal Financial Corp. would be entitled to exchange their shares of common stock for an equal percentage of shares of the converted Oconee Federal, MHC. This percentage may be adjusted to reflect any assets owned by Oconee Federal, MHC.

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Our board of directors has no current plans to undertake a second-step conversion transaction. Any second-step conversion transaction would require the approval of holders of a majority of the outstanding shares of Oconee Federal Financial Corp. common stock (excluding shares held by Oconee Federal, MHC) and the approval of the depositor and borrower members of Oconee Federal, MHC.

Delivery of Prospectus

To ensure that each person receives a prospectus at least 48 hours before the deadline for orders for common stock, we may not mail prospectuses any later than five days prior to such date or hand-deliver prospectuses later than two days prior to that date. Stock order forms may only be delivered if accompanied or preceded by a prospectus. We are not obligated to deliver a prospectus or order form by means other than U.S. mail.

We will make reasonable attempts to provide a prospectus and offering materials to holders of subscription rights. The subscription offering and all subscription rights will expire at 1:00 p.m., Eastern time, on December 23, 2010, whether or not we have been able to locate each person entitled to subscription rights.

Delivery of Stock Certificates

Certificates representing shares of common stock issued in the offering will be mailed to purchasers at the address provided on the order form as soon as practicable following completion of the offering and receipt of all necessary regulatory approvals. It is possible that, until certificates for the common stock are delivered to purchasers, purchasers might not be able to sell the shares of common stock that they ordered, even though the common stock has already begun trading.

How You May Obtain Additional Information Regarding the Reorganization and Offering

If you have any questions regarding the reorganization and offering, please call the Stock Information Center at (864) 885-2261, Monday through Friday between 9:00 a.m. and 4:00 p.m., Eastern Time.

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RISK FACTORS

You should consider carefully the following risk factors, in addition to all other information

in this prospectus, in evaluating an investment in our common stock.

Risks Related to Our Business

The United States Economy Remains Weak and Unemployment Levels Are High. A Prolonged Economic Downturn, Especially One Affecting Our Geographic Market Area, Would Likely Materially Affect Our Business and Financial Results.

Loan portfolio quality has deteriorated at many financial institutions reflecting, in part, the weak U.S. economy and high unemployment. In addition, the values of real estate collateral supporting many commercial loans and home mortgages have declined and may continue to decline. The continuing weakness in real estate markets also has resulted in reduced demand for the construction of new housing and increased delinquencies in construction, residential and commercial mortgage loans. This has had an adverse impact on real estate values in our market area and on our activities, and has contributed to an increase in our level of non-performing assets, charge-offs and allowance for loan losses during 2010. If adverse economic conditions persist or become worse, we will likely experience a material adverse impact on our asset quality and operating results. No assurance can be given that these conditions will improve or will not worsen in the near term. If these conditions do not improve or worsen, they could adversely affect our results of operations.

Future Changes in Interest Rates Could Reduce Our Profits.

Our ability to make a profit largely depends on our net interest income, which could be negatively affected by changes in interest rates. Net interest income is the difference between:

The rates we earn on our assets and the rates we pay on our liabilities are generally fixed for a contractual period of time. Like many savings institutions, our liabilities generally have shorter contractual maturities than our assets. This imbalance can create significant earnings volatility, because market interest rates change over time. In a period of rising interest rates, the interest income earned on our assets may not increase as rapidly as the interest paid on our liabilities. In a period of declining interest rates, the interest income earned on our assets may decrease more rapidly than the interest paid on our liabilities as borrowers prepay mortgage loans, and mortgage-backed securities are prepaid, thereby requiring us to reinvest those cash flows at lower interest rates. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Oconee Federal Savings and Loan Association—Management of Market Risk.”

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In addition, changes in interest rates can affect the average life of loans and mortgage-backed and related securities. A reduction in interest rates results in increased prepayments of loans and mortgage-backed securities, as borrowers refinance their debt in order to reduce their borrowing costs. This creates reinvestment risk, which is the risk that we may not be able to reinvest prepayments at rates that are comparable to the rates we earned on the prepaid loans or securities. Additionally, increases in interest rates may decrease loan demand and/or make it more difficult for borrowers to repay adjustable-rate loans.

We evaluate interest rate sensitivity using an Office of Thrift Supervision model that estimates the change in Oconee Federal Savings and Loan Association’s net portfolio value over a range of interest rate scenarios. Net portfolio value is the discounted present value of expected cash flows provided by assets, liabilities and off-balance sheet contracts. At June 30, 2010, in the event of an immediate 200 basis point increase in interest rates, the Office of Thrift Supervision model projects that we would experience a $18.6 million, or 24%, decrease in our net portfolio value. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Oconee Federal Savings and Loan Association—Management of Market Risk.”

We Have a High Concentration of Loans Secured by Real Estate in Our Market Area.

At June 30, 2010, $265.9 million, or 99.6% of our loan portfolio, consisted of loans secured by real estate, virtually all of which is located in Oconee County, South Carolina and communities and townships in adjacent counties in South Carolina. We have relatively few loans outside of our market area, and, as a result, we have a greater risk of loan defaults and losses in the event of a further economic downturn in our market area as adverse economic changes may have a negative effect on the ability of our borrowers to make timely repayment of their loans. As of June 30, 2010, the unemployment rate in Oconee County, South Carolina was 11.5%, compared to the unemployment rate in the State of South Carolina of 10.7% and the national rate of 9.5%. The unemployment rates in Oconee County and the State of South Carolina increased to 12.0% and 11.0%, respectively, as of August 31, 2010, compared to the national rate of 9.6%. Further declines in local property values could also adversely affect the value of property used as collateral on our loans. If we are required to liquidate a significant amount of collateral to satisfy the debt during a period of reduced real estate values, our financial condition and results of operations could be adversely affected.

If Our Allowance for Loan Losses Is Not Sufficient to Cover Actual Loan Losses, Our Earnings Could Decrease.

We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. In determining the amount of the allowance for loan losses, we review our loans (including the underlying cash flow and collateral, if any) and our loss and delinquency experience, and we evaluate economic conditions, which may be difficult to assess. If our assumptions are incorrect, our allowance for loan losses may not be sufficient to cover losses inherent in our loan portfolio, resulting in additions to our allowance. Our allowance for loan losses was 0.33% of total loans and 22.32% of non-performing loans at June 30, 2010. Material additions to our allowance could materially decrease our net income.

In addition, bank regulators periodically review our allowance for loan losses and may require us to increase our provision for loan losses or recognize further loan charge-offs. Any increase in our allowance for loan losses or loan charge-offs as required by these regulatory authorities may have a material adverse effect on our financial condition and results of operations.

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Higher FDIC Insurance Premiums and Special Assessments Will Adversely Affect Our Earnings.

As part of a plan to restore the reserve ratio of the Deposit Insurance Fund, the Federal Deposit Insurance Corporation, or FDIC, imposed a special assessment equal to five basis points of assets less Tier 1 capital as of June 30, 2009, which was payable on September 30, 2009. We recorded an expense of $127,260 during the quarter ended June 30, 2009, to reflect the special assessment. The FDIC has also increased its maximum quarterly assessment rates and changed the method by which rates are calculated. Quarterly assessments paid by Oconee Federal Savings and Loan Association for the year ended June 30, 2010 equaled $329,734, compared to $166,980 for the year ended June 30, 2009. The Dodd-Frank Act broadens the base for FDIC insurance assessments. Assessments will now be based on the average consolidated total assets less tangible equity capital of a financial institution. Any further special assessments or increases to quarterly assessment rates will adversely affect our earnings. Moreover, under the Dodd-Frank Act, the minimum statutory reserve ratio for the FDIC’s Deposit Insurance Fund will increase from 1.15% to 1.35% of insurable deposits by September 30, 2020, although banks with assets under $10 billion are exempt from any FDIC assessments necessary to increase the Deposit Insurance Fund above 1.15%. There can be no assurance that the FDIC will not impose additional special assessments, or increase the deposit premiums applicable to us, in the future.

The Recently Enacted Financial Reform Legislation May Have an Adverse Effect on the Amount of Dividends We Can Pay, Which Could Adversely Affect the Value of Our Common Stock.

The value of our common stock will be significantly affected by our ability to pay dividends to our public shareholders. Our ability to pay dividends and the amount of such dividends are affected by the ability of Oconee Federal, MHC, our mutual holding company, to waive the receipt of dividends declared by Oconee Federal Financial Corp. If Oconee Federal, MHC is permitted to waive its right to receive dividends on its shares of Oconee Federal Financial Corp., then Oconee Federal Financial Corp. would have more cash available to pay dividends to our public stockholders.

The Dodd-Frank Act provides that, after the regulation of savings and loan holding companies is transferred to the Federal Reserve Board, which is expected to occur in approximately eight months, a mutual holding company will be required to give the Federal Reserve Board notice before waiving the receipt of dividends, and sets forth the standards for granting a waiver, including a requirement that waived dividends be considered in determining an appropriate exchange ratio in the event of a conversion of the mutual holding company to stock form. The Federal Reserve Board historically has generally not allowed mutual holding companies to waive the receipt of dividends, and there can be no assurance that the Federal Reserve Board will permit dividend waivers by mutual holding companies such as Oconee Federal, MHC.

Government Responses to Economic Conditions May Adversely Affect Our Operations, Financial Condition and Earnings.

The Dodd-Frank Act, among other things, will change the bank regulatory framework, create an independent consumer protection bureau that will assume the consumer protection responsibilities of the various federal banking agencies, and establish more stringent capital standards for banks and bank

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holding companies. The legislation will also result in new regulations affecting the lending, funding, trading and investment activities of banks and bank holding companies. Bank regulatory agencies also have been responding aggressively to concerns and adverse trends identified in examinations. Ongoing uncertainty and adverse developments in the financial services industry and the domestic and international credit markets, and the effect of new legislation and regulatory actions in response to these conditions, may adversely affect our operations by restricting our business activities, including our ability to originate or sell loans, modify loan terms, or foreclose on property securing loans. These measures are likely to increase our costs of doing business and may have a significant adverse effect on our lending activities, financial performance and operating flexibility. In addition, these risks could affect the performance and value of our loan and investment securities portfolios, which also would negatively affect our financial performance.

Furthermore, the Federal Reserve Board, in an attempt to help the overall economy, has, among other things, kept interest rates low through its targeted federal funds rate and the purchase of mortgage-backed securities. If the Federal Reserve Board increases the federal funds rate, overall interest rates will likely rise, which may negatively affect the housing markets and the U.S. economic recovery. In addition, deflationary pressures, while possibly lowering our operating costs, could have a significant negative effect on our borrowers, especially our business borrowers, and the values of underlying collateral securing loans, which could negatively affect our financial performance.

Financial Reform Legislation Recently Enacted by Congress Will, Among Other Things, Eliminate the Office of Thrift Supervision, Tighten Capital Standards, Create a New Bureau of Consumer Financial Protection and Result in New Laws and Regulations That Are Expected to Increase Our Costs of Operations.

The Dodd-Frank Act will significantly change the current bank regulatory structure and affect the lending, investment, trading and operating activities of financial institutions and their holding companies. The Dodd-Frank Act will eliminate our current primary federal regulator, the Office of Thrift Supervision, and require Oconee Federal Savings and Loan Association to be regulated by the Office of the Comptroller of the Currency (the primary federal regulator for national banks). The Dodd-Frank Act also authorizes the Federal Reserve Board to supervise and regulate all savings and loan holding companies, including mutual holding companies, like Oconee Federal Financial Corp. and Oconee Federal, MHC, in addition to bank holding companies that it currently regulates. As a result, the Federal Reserve Board’s current regulations applicable to bank holding companies, including holding company capital requirements, will apply to savings and loan holding companies like Oconee Federal Financial Corp. and Oconee Federal, MHC. These capital requirements are substantially similar to the capital requirements currently applicable to Oconee Federal Savings and Loan Association, as described in “Supervision and Regulation—Federal Banking Regulation—Capital Requirements.” The Dodd-Frank Act also requires the Federal Reserve Board to set minimum capital levels for bank holding companies that are as stringent as those required for the insured depository subsidiaries, and the components of Tier 1 capital would be restricted to capital instruments that are currently considered to be Tier 1 capital for insured depository institutions. Bank holding companies with assets of less than $500 million are exempt from these capital requirements. The legislation also establishes a floor for capital of insured depository institutions that cannot be lower than the standards in effect today, and directs the federal banking regulators to implement new leverage and capital requirements within 18 months that take into account off-balance sheet activities and other risks, including risks relating to securitized products and derivatives.

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The Dodd-Frank Act also creates a new Bureau of Consumer Financial Protection with broad powers to supervise and enforce consumer protection laws. The Bureau of Consumer Financial Protection has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions such as Oconee Federal Savings and Loan Association, including the authority to prohibit “unfair, deceptive or abusive” acts and practices. The Bureau of Consumer Financial Protection has examination and enforcement authority over all banks and savings institutions with more than $10 billion in assets. Banks and savings institutions with $10 billion or less in assets will be examined by their applicable bank regulators. The new legislation also weakens the federal preemption available for national banks and federal savings associations, and gives state attorneys general the ability to enforce applicable federal consumer protection laws.

Lastly, the Dodd-Frank Act will increase stockholder influence over boards of directors by requiring companies to give stockholders a non-binding vote on executive compensation and so-called “golden parachute” payments, and by authorizing the Securities and Exchange Commission to promulgate rules that would allow stockholders to nominate their own candidates using a company’s proxy materials. The legislation also directs the Federal Reserve Board to promulgate rules prohibiting excessive compensation paid to bank holding company executives, regardless of whether the company is publicly traded or not.

It is difficult to predict at this time what impact the new legislation and implementing regulations will have on community banks, including the lending and credit practices of such banks. Moreover, many of the provisions of the Dodd-Frank Act will not take effect for at least a year, and the legislation requires various federal agencies to promulgate numerous and extensive implementing regulations over the next several years. Although the substance and scope of these regulations cannot be determined at this time, it is expected that the legislation and implementing regulations, particularly those provisions relating to the new Bureau of Consumer Financial Protection and mutual holding company dividend waivers, will increase our operating and compliance costs and restrict our ability to pay dividends.

Strong Competition Within Our Market Area May Limit Our Growth and Profitability.

Competition in the banking and financial services industry, and more specifically in the Seneca area, is intense. In our market area and the Seneca area generally, we compete with commercial banks, savings institutions, mortgage brokerage firms, credit unions, finance companies, mutual funds, insurance companies, and brokerage and investment banking firms operating locally and elsewhere. Many of these competitors have substantially greater resources and lending limits than we have and offer certain services that we do not or cannot provide. Our profitability depends upon our continued ability to successfully compete in our market area. The greater resources and broader range of deposit and loan products offered by our competition may limit our ability to increase our interest-earning assets and profitability. We expect competition to remain intense in the future as a result of legislative, regulatory and technological changes and the continuing trend of consolidation in the financial services industry. Technological advances, for example, have lowered barriers to entry, allowed banks to expand their geographic reach by providing services over the Internet and made it possible for non-depository institutions to offer products and services that traditionally have been provided by banks. Competition for deposits and the origination of loans could limit our ability to successfully implement our business plan, and could adversely affect our results of operations in the future. For additional information see “Business of Oconee Federal Savings and Loan Association—Competition.”

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Future Changes in the Level of Support that the Government Provides Housing Finance Could Adversely Impact Our Financial Condition and Operating Results.

On August 17, 2010, the Department of the Treasury, Department of Housing and Urban Development and the White House opened the Conference on the Future of Housing Finance, with the stated purpose of determining what role the government should play in the housing market. The Conference acknowledged that the government’s involvement in the housing market needs to be reduced from its current position, where the Federal Housing Administration and the government sponsored enterprises collectively guarantee over 90% of all residential mortgages.

Because we focus on residential mortgage lending, we may be adversely affected by any changes that arise, either directly or indirectly, from changes in the government’s role in the housing finance system. Such changes include a decreased governmental role in housing finance that might result in reduced demand for housing, which could lower home values in our market area; changes in tax policy, which might make home ownership less attractive as an investment; and changes to the structure of the housing finance system, which might give a competitive advantage to other types of financial institutions.

While it is impossible to predict changes to the housing finance system at this time, and how any such changes might impact us, any change that adversely affects the competitive position of the operations of a traditional thrift will likely also have a material adverse impact on our financial condition and operating results. Any such change may also reduce the value of your shares of common stock.

We Will Need to Implement Additional Finance and Accounting Systems, Procedures and Controls in Order to Satisfy Our New Public Company Reporting Requirements. This Will Increase Our Operating Expenses.

In connection with the offering, we are becoming a public company. The federal securities laws and regulations of the Securities and Exchange Commission require that we file annual, quarterly and current reports and that we maintain effective disclosure controls and procedures and internal control over financial reporting. We expect that the obligations of being a public company, including substantial public reporting obligations, will require significant expenditures and place additional demands on our management team. These obligations will increase our operating expenses and could divert our management’s attention from our operations. Compliance with the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the Securities and Exchange Commission will require us to certify the adequacy of our internal controls and procedures, which will require us to upgrade our accounting systems, which will increase our operating costs. In addition, such requirements may cause us to hire additional accounting, internal audit and/or compliance personnel.

Our Business Is Continually Subject to Technological Change, and We May Have Fewer Resources Than Our Competitors to Continue to Invest in Technological Improvements.

The banking and financial services industry continually undergoes technological changes, with frequent introductions of new technology-driven products and services. In addition to enhancing customer service, the effective use of technology increases efficiency and enables financial institutions to reduce costs. Our future success will depend, in part, upon our ability to address the needs of our customers by using technology to provide products and services that provide customer convenience, as well as create additional efficiencies in our operations. Many of our competitors have greater resources to invest in technological improvements than we do. We may not effectively implement new technology-driven products and services or do so as quickly, which could reduce our ability to effectively compete, and could adversely affect earnings.

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We Operate in a Highly Regulated Environment and May Be Adversely Affected by Changes in Laws and Regulations.

We are subject to extensive regulation, supervision and examination by the Office of Thrift Supervision, our chartering authority, and by the FDIC, as insurer of deposits. Such regulation and supervision govern the activities in which a financial institution and its holding company may engage and are intended primarily for the protection of the insurance fund and depositors. Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the imposition of restrictions on the operation of an institution, the classification of assets by the institution and the adequacy of an institution’s allowance for loan losses. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, or legislation, may have a material adverse impact on our operations. See “—The Recently Enacted Financial Reform Legislation May Have an Adverse Effect on the Amount of Dividends We Can Pay, Which Could Adversely Affect the Value of Our Common Stock” and “—Financial Reform Legislation Recently Enacted by Congress Will, Among Other Things, Eliminate the Office of Thrift Supervision, Tighten Capital Standards, Create a New Bureau of Consumer Financial Protection and Result in New Laws and Regulations That Are Expected to Increase Our Costs of Operations.”

We Rely on Our Management Team for the Successful Implementation of Our Business Strategy.

The future success of Oconee Federal Financial Corp. and Oconee Federal Savings and Loan Association will be largely due to the efforts of our senior management team consisting of T. Rhett Evatt, President and Chief Executive Officer, and Curtis T. Evatt, Executive Vice President and Chief Financial Officer. Because we are a relatively small community savings and loan association with a relatively small management team, each member of our senior management team has more responsibility than his or her counterpart typically would have at a larger institution with more employees, and we have fewer management-level personnel who are in a position to assume the responsibilities of our senior management team. Accordingly, the loss of services of either of these individuals may have a material adverse effect on our ability to implement our business plan.

Risks Related to this Offering

The Future Price of the Shares of Common Stock May Be Less Than the Purchase Price in the Offering.

If you purchase shares of common stock in the offering, you may not be able to sell them at or above the purchase price in the offering. The purchase price in the offering is determined by an independent, third-party appraisal, pursuant to federal banking regulations and subject to review and approval by the Office of Thrift Supervision. The appraisal is not intended, and should not be construed, as a recommendation of any kind as to the advisability of purchasing shares of common stock. Our aggregate pro forma market value as reflected in the final, approved independent appraisal may exceed the market price of our shares of common stock after the completion of the offering, which may result in our stock trading below the initial offering price of $10.00 per share.

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Publicly traded stocks, including stocks of financial institutions, have recently experienced substantial market price volatility. In recent transactions, shares of common stock issued by newly converted savings institutions or mutual holding companies have traded below the price at which the shares were sold in the offerings conducted by those companies. After our shares begin trading, the trading price of our common stock will be determined by the marketplace, and may be influenced by many factors that are not directly related to our operating performance or asset quality, including prevailing interest rates, the overall performance of the economy, investor perceptions of Oconee Federal Financial Corp., the current market conditions for financial institutions generally, investor perception of the health of the financial services industry and investor assessment of credit quality conditions, including default and foreclosure rates, and general industry, geopolitical and economic conditions.

There Will be a Limited Trading Market in Our Common Stock, Which Will Hinder Your Ability to Sell Our Common Stock and May Lower the Market Price of the Stock.

Oconee Federal Financial Corp. has never issued stock and, therefore, there is no current trading market for the shares of common stock. Moreover, our public “float,” which is the total number of our outstanding shares less the shares held by Oconee Federal, MHC, our employee stock ownership plan and our directors and senior officers and is used as a measurement of shares available for trading, will likely be quite limited. We estimate that our public float, as so defined, will range from 1,068,064 shares at the minimum of the offering range to 1,515,616 shares at the maximum of the offering range. The limited public float will likely result in the spread between the “bid” and “ask” prices for the stock being significantly wider than that of many other public companies. This wide spread could make it more difficult to sell a large number of shares at one time and could mean a sale of a large number of shares at one time could depress the market price.

Although we expect that our common stock will trade on The Nasdaq Capital Market, an active and liquid trading market in shares of our common stock may not develop. Persons purchasing shares may not be able to sell their shares when they desire if a liquid trading market does not develop or sell them at a price equal to or above the initial purchase price of $10.00 per share even if a liquid trading market develops. This limited trading market for our common stock may reduce the market value of the common stock and make it difficult to buy or sell our shares on short notice. For additional information see “Market for the Common Stock.”

The Capital We Raise in the Offering Will Reduce Our Return on Equity, Which Could Negatively Affect the Trading Price of Our Common Stock.

Net income divided by average equity, known as “return on equity,” is a ratio many investors use to compare the performance of a financial institution to its peers. For the year ended June 30, 2010, our return on average equity was 4.40%. Following the offering, we expect our consolidated equity to increase from $59.7 million to between $69.8 million at the minimum of the offering range and $75.9 million at the adjusted maximum of the offering range. Based upon our earnings for the year ended June 30, 2010, and these pro forma equity levels, our pro forma return on equity would be 3.39% and 3.00% at the minimum and adjusted maximum of the offering range, respectively. We expect our return on equity to remain lower until we are able to leverage the additional capital we receive from the offering. Although we expect to be able to increase net interest income using proceeds of the offering, our return on equity will be reduced by the capital raised in the offering, higher expenses from the costs of being a public company, and added expenses associated with our employee stock ownership plan and the stock-based benefit plan we intend to adopt. Until we can increase our net interest income and non-interest income, we expect our return on equity to remain lower, which may reduce the value of your shares of common stock.

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The Contribution of Shares to the Charitable Foundation Will Dilute Your Ownership Interests and Adversely Affect Net Income.

Subject to member approval at the special meeting of members, Oconee Federal Savings and Loan Association intends to establish a charitable foundation in connection with the offering. Oconee Federal Savings and Loan Association contribute to the charitable foundation a number of shares equal to 6% of the shares of Oconee Federal Financial Corp. common stock sold in the offering (which is equal to 1.98% of the shares that will be outstanding following the offering) and an amount of cash equal to 2% of the value of the shares of common stock sold in the offering. The aggregate contribution will have an adverse effect on our net income for the quarter and year in which we make the contribution to the charitable foundation. The after-tax expense of the contribution will reduce net income in fiscal year 2011 by approximately $668,000 at the minimum of the valuation range and approximately $1.04 million at the adjusted maximum of the valuation range. We had net income of $2.6 million for the year ended June 30, 2010. Because Oconee Federal, MHC will hold 65.02% of our outstanding shares, persons purchasing shares in the offering will have their ownership and voting interests in Oconee Federal Financial Corp. diluted by 17.1% due to the issuance of shares of common stock to the charitable foundation.

The Contribution to the Charitable Foundation May Not Be Tax Deductible, Which Could Reduce Our Profits.

We believe that the contribution to Oconee Federal Charitable Foundation will be deductible for federal and state income tax purposes. However, we cannot assure you that the Internal Revenue Service will grant tax-exempt status to the charitable foundation. If the contribution is not deductible, we would not receive any tax benefit from the contribution. The value of the contribution of cash and shares of common stock will be $1.08 million at the minimum of the offering range, and up to $1.68 million at the adjusted maximum of the offering range, which would result in after-tax expense of approximately $668,000 at the minimum and approximately $1.04 million at the adjusted maximum of the offering range during the year ending June 30, 2011. In the event that the Internal Revenue Service does not grant tax-exempt status to the charitable foundation or the contribution to the charitable foundation is otherwise not tax deductible, we would recognize after-tax expense up to the value of the entire contribution, or $1.08 million at the minimum and $1.68 million at the adjusted maximum of the offering range.

In addition, even if the contribution is tax deductible, we may not have sufficient profits to be able to use the deduction fully. Under the Internal Revenue Code and South Carolina income tax laws, an entity is permitted to deduct up to 10% of its taxable income (income before income taxes) in any one year for charitable contributions. Any contribution in excess of the 10% limit may be deducted for federal and South Carolina income tax purposes over the five years following the year in which the charitable contribution was made. Accordingly, a charitable contribution by an entity to a charitable foundation could, if necessary, be deducted for federal and South Carolina income tax purposes over a six-year period. Our pre-tax income over this period may not be sufficient to fully use this deduction. While federal tax law allows the filing of consolidated income tax returns, South Carolina tax law does not. Since Oconee Federal Financial Corp. will have limited operations and limited unconsolidated income following the reorganization, we structured the contribution to the charitable foundation in an attempt to

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take advantage of the tax deductibility of the charitable contribution for both federal and South Carolina income tax purposes. Specifically, under the “deemed purchase” method of Section 1032 of the Internal Revenue Code, Oconee Federal Savings and Loan Association will cause Oconee Federal Financial Corp. to issue shares to the charitable foundation on Oconee Federal Savings and Loan Association’s behalf, in satisfaction of Oconee Federal Savings and Loan Association’s promised contribution to the charitable foundation. Oconee Federal Savings and Loan Association will make the cash portion of the contribution to the charitable foundation using a portion of the proceeds of the offering.

Our Stock Benefit Plans Will Increase Our Costs, Which Will Reduce Our Income.

We anticipate that our employee stock ownership plan will purchase an amount of shares of our common stock equal to up to 3.92% of our outstanding shares (including the shares held by Oconee Federal, MHC and Oconee Federal Charitable Foundation), provided that, with approval of the OTS, our employee stock ownership plan may purchase some or all of such shares in the open market following the completion of the offering. If all shares are purchased in the open market at a price of $10 per shares, the cost of acquiring the shares of common stock for the employee stock ownership plan will be between $1.60 million at the minimum of the offering range and $2.49 million at the adjusted maximum of the offering range. We will record annual employee stock ownership plan expenses in an amount equal to the fair value of shares of common stock committed to be released to employees. If shares of common stock appreciate in value over time, compensation expense relating to the employee stock ownership plan will increase.

We also intend to adopt a stock-based incentive plan after the offering under which plan participants would be awarded restricted shares of our common stock (at no cost to them) and/or options to purchase shares of our common stock. Under Office of Thrift Supervision regulations, we are authorized to grant awards of stock or options under one or more stock-based incentive plans in an amount up to 25% of the number of shares of common stock held by persons other than Oconee Federal, MHC. The number of shares of common stock or options granted under any initial stock-based incentive plan may not exceed 1.96% and 4.90%, respectively, of our total outstanding shares, including shares issued to Oconee Federal, MHC and Oconee Federal Charitable Foundation.

The shares of restricted common stock granted under the stock-based incentive plan will be expensed by us over their vesting period based on the fair market value of the shares on the date they are awarded. If the shares of restricted common stock to be granted under the stock-based incentive plan are repurchased in the open market (rather than issued directly from authorized but unissued shares by Oconee Federal Financial Corp.) and cost the same as the purchase price in the offering, the reduction to stockholders’ equity due to the plan would be between $800,000 at the minimum of the offering range and $1,244,000 at the adjusted maximum of the offering range. To the extent we repurchase shares of common stock in the open market to fund the grants of restricted shares under the plan, and the price of such shares exceeds the offering price of $10.00 per share, the reduction to stockholders’ equity would exceed the range described above. Conversely, to the extent the price of such shares is below the offering price of $10.00 per share, the reduction to stockholders’ equity would be less than the range described above.

We will recognize as an expense in our income statement the grant-date fair value of stock options as such options vest. When we record an expense related to the grant of options using the fair value method, we will incur significant compensation and benefits expense. As discussed in the Management’s Discussion and Analysis section of this prospectus, and based on certain assumptions discussed there, we estimate this annual expense would be approximately $62,000 on an after-tax basis, assuming the adjusted maximum number of shares is sold in the offering.

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The Implementation of a Stock-Based Incentive Plan May Dilute Your Ownership Interest.

We intend to adopt a stock-based incentive plan following the reorganization and offering. This stock-based incentive plan will be funded through either open market purchases, if permitted, or from the issuance of authorized but unissued shares. Stockholders would experience a reduction in ownership interest totaling 1.8% in the event newly issued shares are used to fund stock options and stock awards in an amount equal to 4.90% and 1.96%, respectively, of the total shares issued in the reorganization and offering (including shares issued to Oconee Federal, MHC and Oconee Federal Charitable Foundation).

We Have Broad Discretion in Allocating the Proceeds of the Offering, and Our Failure to Effectively Utilize Such Proceeds Could Reduce Our Profits.

Oconee Federal Financial Corp. may retain up to 50% of the net proceeds from the offering and contribute the remainder of the net proceeds of the offering to Oconee Federal Savings and Loan Association. Oconee Federal Financial Corp. will use a portion of the net proceeds to fund the employee stock ownership plan and may use the remaining net proceeds to pay dividends to stockholders, repurchase shares of common stock, purchase investment securities or acquire other financial services companies, although we do not have any specific plans or commitments to do so as of this date. Oconee Federal Savings and Loan Association may use the proceeds it receives to fund new loans, establish or acquire new branches, purchase investment securities, or for general corporate purposes. We have not, however, allocated specific amounts of proceeds for any of these purposes and we will have significant flexibility in determining the amount of net proceeds we apply to different uses and the timing of such applications. Our failure to utilize these funds effectively could reduce our profitability.

Persons Who Purchase Stock in the Offering Will Own a Minority of Oconee Federal Financial Corp.’s Common Stock and Will Not Be Able to Exercise Voting Control Over Most Matters Put to a Vote of Stockholders.

Public stockholders will own a minority of the outstanding shares of Oconee Federal Financial Corp.’s common stock. As a result, stockholders other than Oconee Federal, MHC will not be able to exercise voting control over most matters put to a vote of stockholders. Oconee Federal, MHC, will own a majority of Oconee Federal Financial Corp.’s common stock after the offering and, through its board of directors, will be able to exercise voting control over most matters put to a vote of stockholders. The same directors and officers who manage Oconee Federal Savings and Loan Association will also manage Oconee Federal Financial Corp. and Oconee Federal, MHC. No assurances can be given that our board of directors, officers or Oconee Federal, MHC will not take action that the public stockholders believe to be contrary to their interests. The only matters as to which stockholders other than Oconee Federal, MHC will be able to exercise voting control currently include any proposal to implement a stock-based incentive plan within one year of the offering or a “second-step” conversion. In addition, Oconee Federal, MHC may exercise its voting control to prevent a sale or merger transaction in which stockholders could receive a premium for their shares.

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Our Stock Value May be Negatively Affected by Our Mutual Holding Company Structure and Federal Regulations Restricting Takeovers.

The Mutual Holding Company Structure May Impede Takeovers. Oconee Federal, MHC, as the majority stockholder of Oconee Federal Financial Corp., will be able to control the outcome of virtually all matters presented to stockholders for their approval, including a proposal to acquire Oconee Federal Financial Corp. Accordingly, Oconee Federal, MHC may prevent the sale of control or merger of Oconee Federal Financial Corp. or its subsidiaries even if such a transaction were favored by a majority of the public stockholders of Oconee Federal Financial Corp. The board of directors of Oconee Federal Savings and Loan Association has decided to form a mutual holding company rather than undertake a standard conversion to stock form in part because the mutual holding company structure will allow our board of directors to control the future of Oconee Federal Financial Corp and its subsidiaries. Additionally, while current Office of Thrift Supervision regulations permit a mutual holding company to be acquired by a mutual institution in a remutualization transaction, the Office of Thrift Supervision has issued a policy statement indicating that it views remutualization transactions as raising significant issues concerning disparate treatment of minority stockholders and mutual members of the target entity and raising issues concerning the effect on the mutual members of the acquiring entity. Under certain circumstances, the Office of Thrift Supervision intends to give these issues special scrutiny and reject applications providing for the remutualization of a mutual holding company unless the applicant can clearly demonstrate that the Office of Thrift Supervision’s concerns are not warranted in the particular case.

Federal Regulations Restricting Takeovers. For three years following the offering, Office of Thrift Supervision regulations prohibit any person from acquiring or offering to acquire more than 10% of our common stock without the prior written approval of the Office of Thrift Supervision. Moreover, current Office of Thrift Supervision policy prohibits the acquisition of a mutual holding company subsidiary by any person or entity other than a mutual holding company or a mutual institution, and restricts the terms of permissible acquisitions. See “Restrictions on the Acquisition of Oconee Federal Financial Corp. and Oconee Federal Savings and Loan Association” for a discussion of applicable Office of Thrift Supervision Regulations regarding acquisitions.

The Corporate Governance Provisions in Our Charter and Bylaws May Prevent or Impede the Holders of a Minority of Our Common Stock from Obtaining Representation on Our Board of Directors and May Also Prevent or Impede a Change in Control.

Provisions in our charter and bylaws may prevent or impede holders of a minority of our common stock from obtaining representation on our board of directors. For example, our board of directors will be divided into three classes with staggered three-year terms. A classified board makes it more difficult for stockholders to change a majority of the directors because it generally takes at least two annual elections of directors for this to occur. Second, our charter provides that there will not be cumulative voting by stockholders for the election of our directors, which means that Oconee Federal, MHC, as the holder of a majority of the shares eligible to be voted at a meeting of stockholders, may elect all of our directors to be elected at that meeting. Third, our bylaws contain procedures and timetables for a stockholder wishing to make a nomination for the election of directors or a proposal for new business at a meeting of stockholders, the effect of which may be to give our management time to solicit its own proxies in an attempt to defeat any dissident slate of nominations if management thinks it is in the best interests of stockholders generally. Also, we have the ability to issue preferred stock with voting rights to third parties who may be friendly to our board of directors.

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In addition, a section in each of Oconee Federal Financial Corp.’s and Oconee Federal Savings and Loan Association’s respective charters provides that for a period of five years from the closing of the offering, no person, other than Oconee Federal, MHC, and, with respect to Oconee Federal Savings and Loan Association, other than Oconee Federal, MHC and Oconee Federal Financial Corp., may directly or indirectly offer to acquire or acquire the beneficial ownership of more than 10% of any class of equity security of Oconee Federal Financial Corp. or Oconee Federal Savings and Loan Association held by persons other than Oconee Federal, MHC, and, with respect to Oconee Federal Savings and Loan Association, other than Oconee Federal Financial Corp., and that any shares acquired in excess of this limit would not be entitled to be voted and would not be counted as voting stock in connection with any matters submitted to the stockholders for a vote.

Our Management Team Has No Experience Managing a Public Company, and Regulatory Compliance May Divert Its Attention from the Day-to-Day Management of Our Business.

Our management team has no experience managing a publicly-traded company or complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage our transition into a public company, which will be subject to significant regulatory oversight and reporting obligations under federal securities laws. In particular, these new obligations will require substantial attention from our management and may divert their attention away from the day-to-day management of our business, which could materially and adversely impact our business operations.

A WARNING ABOUT FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, which can be identified by the use of such words as estimate, project, believe, intend, anticipate, plan, seek, expect and similar expressions. These forward-looking statements include:

These forward-looking statements are subject to significant risks, assumptions and uncertainties, including, among other things, the following important factors that could affect the actual outcome of future events:

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Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. We discuss these and other uncertainties in “Risk Factors” beginning on page 25.

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SELECTED FINANCIAL AND OTHER DATA

The summary information presented below at each date or for each of the periods presented is derived in part from the financial statements of Oconee Federal Savings and Loan Association. The financial condition data at June 30, 2010 and 2009, and the operating data for the years ended June 30, 2010 and 2009 were derived from the audited financial statements of Oconee Federal Savings and Loan Association included elsewhere in this prospectus. The information at June 30, 2008, 2007 and 2006 and for the years ended June 30, 2008, 2007 and 2006 was derived in part from audited financial statements that are not included in this prospectus. The following information is only a summary, and should be read in conjunction with our financial statements and notes beginning on page F-1 of this prospectus.