SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                        --------------------------------

                                    FORM 10-Q

[Mark One]
[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarterly period ended September 30, 1999

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from ______________ to __________

                        Commission File Number: 0-25509

                          First Federal Bankshares,Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                               Delaware 42-1485449
--------------------------------------------------------------------------------
                (State or other jurisdiction of (I.R.S. Employer
              incorporation or organization) Identification Number)

                    329 Pierce Street, Sioux City, Iowa 51101
                    (Address of principal executive offices)

         Registrant's telephone number, including area code 712-277-0200

        ----------------------------------------------------------------
         Former name, former address and former fiscal year, if changed
                                since last report

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


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

            Class                               Outstanding at November 8, 1999
            -----                               -------------------------------
  (Common Stock, $.01 par value)                     4,826,144
<PAGE>
                         FIRST FEDERAL BANKSHARES, INC.

                                      INDEX



Part I.  Financial Information

   Item I.  Financial Statements of First Federal
            Bankshares, Inc. and Subsidiaries

            Consolidated Condensed Balance Sheets
            at September 30, 1999 and June 30, 1999
            Consolidated Condensed Statements of Operations
            for the three month periods ended
            September 30, 1999 and 1998

            Consolidated Statements of Comprehensive
            Income for the three month periods ended
            September 30, 1999 and 1998

            Consolidated Statements of Cash Flows for the
            three month periods ended
            September 30, 1999 and 1998

            Notes to Consolidated Financial Statements

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

Part II. Other Information

<PAGE>
PART I.  FINANCIAL  INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
FIRST FEDERAL BANKSHARES, INC and SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS

                                                       September 30,        June 30,
                                                           1999                1999
                                                      -------------      -------------
Assets                                                 (Unaudited)
<S>                                                   <C>                <C>
Cash and interest bearing deposits ..............     $  15,877,960      $  15,067,956
Securities available for sale ...................       120,537,326        122,047,213
   (amortized cost $125,403,864 and $125,558,397)

Securities held to maturity .....................        31,379,425         32,006,095
   (fair value of $30,934,509 and $31,756,870)
Loans receivable, net ...........................       462,997,161        457,058,054
Real estate owned and in judgement, net .........           408,220             32,350
Real estate held for development ................           836,966            599,311
Office property and equipment, net ..............        15,649,310         15,411,818
Federal Home Loan Bank stock, at cost ...........         8,094,300          8,094,300
Accrued interest receivable .....................         4,408,656          4,602,258
Deferred tax asset ..............................         1,642,000          1,197,000
Excess of cost over fair value of assets acquired        20,735,458         20,946,396
Other assets ....................................         5,532,605          3,608,987
                                                      -------------      -------------
Total assets ....................................     $ 688,099,387      $ 680,671,738
                                                      =============      =============

Liabilities
Deposits ........................................     $ 469,355,649      $ 464,169,478
Advances from Federal Home Loan Bank ............       141,544,236        138,617,385
Advance payments by borrowers for
    taxes and insurance .........................         1,665,036          2,557,118
Accrued taxes on income .........................           458,563            419,106
Accrued interest payable ........................         4,600,939          4,172,328
Accrued expenses and other liabilities ..........         2,116,763          2,463,316
                                                      -------------      -------------
Total liabilities ...............................       619,741,186        612,398,731
                                                      -------------      -------------

Stockholders' equity
Common stock, $.01 par value ....................            48,248             48,178
Additional paid-in capital ......................        35,978,991         35,957,560
Common stock purchased by ESOP ..................        (1,769,183)        (1,813,758)
Retained earnings, substantially restricted .....        37,119,106         36,283,211
Accumulated other comprehensive income ..........        (3,018,961)        (2,202,184)
                                                      -------------      -------------
Total stockholders' equity ......................        68,358,201         68,273,007
                                                      -------------      -------------
Total liabilities and stockholders' equity ......     $ 688,099,387      $ 680,671,738
                                                      =============      =============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
FIRST FEDERAL BANKSHARES, INC. and SUBSIDIARIES
CONSOLIDATED  CONDENSED  STATEMENTS  OF  OPERATIONS

                                                                    For the three months
                                                                     ended September 30,
                                                                      1999         1998
                                                                   ----------    ----------
                                                                          (Unaudited)
<S>                                                                <C>           <C>
Interest income:
     Loans receivable                                              $8,853,615    $8,079,259
     Mortgage-backed securities                                       637,800       613,640
     Investment securities                                          2,008,707     1,322,356
                                                                   ----------    ----------
     Other interest-earning assets                                     40,447        40,957
          Total interest income                                    11,540,569    10,056,212
                                                                   ----------    ----------

Interest expense:
     Deposits                                                       4,945,158     4,574,293
     Borrowings                                                     2,077,674     1,708,410
                                                                   ----------    ----------
          Total interest expense                                    7,022,832     6,282,703
     Net interest income                                            4,517,737     3,773,509
     Provision for loan losses                                        105,000        75,000
                                                                   ----------    ----------
     Net interest income after provision                            4,412,737     3,698,509
                                                                   ----------    ----------

Noninterest income:
     Service charges and other fees                                   693,693       448,747
     Gain on sale of loans held for sale                               85,464        87,408
     Gain on sale of real estate owned and held for investment        173,186             -
     Real estate-related activities                                   428,740       180,820
     Other income, net                                                363,247       184,682
                                                                   ----------    ----------
          Total noninterest income                                  1,744,330       901,657
                                                                   ----------    ----------

Noninterest expense:
     Compensation and employee benefits                             2,181,554     1,920,509
     Adjusted compensation - stock appreciation rights                      -      (468,436)
     Office property and equipment                                    584,215       447,122
     Deposit insurance premiums                                        70,892        60,697
     Data processing expense                                          115,972        96,000
     Advertising                                                      118,487       118,579
     Amortization of intangibles                                      248,636        85,989
     Other general and administrative                                 899,190       701,780
                                                                   ----------    ----------
          Total noninterest expense                                 4,218,946     2,962,240
                                                                   ----------    ----------
     Earnings before taxes on income                                1,938,121     1,637,926
     Taxes on income                                                  740,000       619,924
                                                                   ----------    ----------
     Net earnings                                                  $1,198,121    $1,018,002
                                                                   ==========    ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                <C>           <C>
Per share data: (1)
     Basic earnings per share                                           $0.25         $0.22
                                                                   ==========    ==========
     Diluted earnings per share                                         $0.25         $0.21
                                                                   ==========    ==========
     Dividends declared per share                                      $0.075        $0.070
                                                                   ==========    ==========

</TABLE>

    (1) Adjusted for April 1999 second step offering and exchange.





                 See notes to consolidated financial statements.

<PAGE>
<TABLE>
<CAPTION>
FIRST FEDERAL BANKSHARES, INC.  and SUBSIDIARIES
Consolidated  Statements  of  Comprehensive Income

                                                                        Three months ended
                                                                            September 30,
                                                                    ----------------------------
                                                                       1999              1998
                                                                    -----------      -----------
                                                                             (Unaudited)
<S>                                                                 <C>              <C>
Net earnings ..................................................     $ 1,198,121      $ 1,018,002
Other comprehensive income:
    Unrealized (losses) gains on securities available for sale:
        Unrealized holding (losses) gains arising
              during the period, net of tax ...................        (816,777)         492,198
                                                                    -----------      -----------
Other comprehensive income, net of tax ........................        (816,777)         492,198
                                                                    -----------      -----------
Comprehensive income ..........................................     $   381,344      $ 1,510,200
                                                                    ===========      ===========

</TABLE>


                 See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
FIRST FEDERAL BANKSHARES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                       Three months ended September 30,
                                                                            1999               1998
                                                                        ------------      ------------
                                                                                  (Unaudited)

<S>                                                                     <C>               <C>
Cash flows from operating activities:
Net earnings ......................................................     $  1,198,121      $  1,018,002
Adjustments to reconcile net earnings to net cash
     provided by operating activities:

   Loans originated for sale to investors .........................       (6,635,103)       (7,432,410)
   Proceeds from sale of loans originated for sale ................        7,407,277         8,012,032
   Provision for losses on loans and other assets .................          105,000            75,000
   Depreciation and amortization ..................................          552,833           302,257
   Provision for deferred taxes ...................................           42,000           190,194
   Net gain on sale of loans ......................................          (85,464)          (87,408)
   Net gain on sales of real estate owned and held for development          (173,186)             --
   Net loan fees deferred .........................................           33,862            89,456
   Amortization of premiums and discounts on loans,
     mortgage-backed securities, and investment securities ........          198,495           (33,367)
   Decrease (increase) in accrued interest receivable .............          193,602          (301,982)
   (Increase) decrease in other assets ............................       (1,979,070)          458,352
   Increase in accrued interest payable ...........................          428,611           792,114
   Decrease in accrued expenses and other liabilities .............         (346,553)         (439,307)
                                                                        ------------      ------------
   Increase in taxes payable ......................................           39,457           205,315
Net cash provided by operating activities .........................          979,882         2,848,248
                                                                        ------------      ------------
Cash flows from investing activities:
   Purchase of securities held to maturity ........................         (519,205)       (5,983,751)
   Proceeds from maturities of securities held to maturity ........        1,140,961         5,199,611
   Purchase of securities available for sale ......................       (2,000,000)      (32,461,356)
   Purchase of Federal Home Loan Bank Stock .......................             --            (599,000)
   Proceeds from maturities of securities available for sale ......        2,230,391        11,372,940
   Loans purchased ................................................       (1,570,000)       (1,518,000)
   Increase in loans receivable ...................................       (7,091,040)       (2,051,618)
   Proceeds from sale of real estate owned and held for development        1,541,255              --
   Net expenditures on real estate owned and held for development .         (258,520)             --
   Proceeds from sale of office property and equipment ............           49,005              --
   Purchase of office property and equipment ......................         (572,474)         (440,602)
                                                                        ------------      ------------
Net cash used in investing activities .............................       (7,049,627)      (26,481,776)
                                                                        ------------      ------------

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                     <C>               <C>
Cash flows from financing activities:
   Increase in deposits ...........................................        5,186,171           251,909
   Proceeds from advances from FHLB ...............................       10,000,000        24,000,000
   Repayment of advances from FHLB ................................       (7,073,615)       (7,015,815)
   Issuance of common stock .......................................           21,501            29,341
   Cash dividends paid ............................................         (362,226)         (158,161)
                                                                        ------------      ------------
   Net decrease in advances from borrowers for taxes and insurance          (892,082)         (779,353)
                                                                        ------------      ------------
Net cash provided by financing activities .........................        6,879,749        16,327,921
Net increase (decrease) in cash and cash equivalents ..............          810,004        (7,305,607)
                                                                        ------------      ------------
Cash and cash equivalents at beginning of period ..................       15,067,956        17,225,007
Cash and cash equivalents at end of period ........................     $ 15,877,960      $  9,919,400
                                                                        ============      ============

</TABLE>
                 See notes to consolidated financial statements.


<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FIRST FEDERAL BANKSHARES, INC. and SUBSIDIARIES

1. BASIS OF PRESENTATION
   ---------------------

The  consolidated  condensed  balance  sheet  information  for June 30, 1999 was
derived from the Company's  audited  Consolidated  Balance Sheets for the fiscal
year ended June 30, 1999. The consolidated condensed financial statements at and
for the three  months  ended  September  30,  1999 and 1998 are  unaudited.  The
financial  statements  at and for the three months ended  September 30, 1998 are
those of First Federal Savings Bank of Siouxland (the "Bank" or "First Federal")
rather than those of First Federal  Bankshares,  Inc. (the  "Registrant"  or the
"Company").  The  Registrant  was formed as a holding  company to own all of the
capital stock of the Bank following its "second-step" offering in April 1999, in
which each share of the Bank's common stock was exchanged for 1.64696  shares of
Company common stock.

In the opinion of management of the Company these financial  statements  reflect
all  adjustments,  consisting  only of normal  recurring  accruals  necessary to
present  fairly  these  consolidated   financial  statements.   The  results  of
operations  for the interim  periods are not  necessarily  indicative of results
that may be  expected  for an entire  year.  Certain  information  and  footnote
disclosure normally included in financial statements prepared in accordance with
generally accepted accounting principles have been omitted.

A summary of  significant  accounting  policies  followed  by the Company is set
forth in Note 1 of the  Company's  1999  Annual  Report to  Stockholders  and is
incorporated herein by reference.

This report contains certain  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange  Act  of  1934,  as  amended.   The  Company  intends  such
forward-looking  statements  to be covered  by the safe  harbor  provisions  for
forward-looking  statements  contained in the Private  Securities  Reform Act of
1995,  and is  including  this  statement  for the purposes of these safe harbor
provisions.  Forward-looking statements,  which are based on certain assumptions
and describe  future plans,  strategies  and  expectations  of the Company,  are
generally  identifiable  by use  of the  words  "believe,"  "expect,"  "intend,"
"anticipate,"  "estimate,"  "project"  or  similar  expressions.  The  Company's
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain.  Factors which could have a material adverse effect on the
Company's future activities and operating  results include,  but are not limited
to,    changes   in:    interest    rates,    general    economic    conditions,
legislative/regulatory  changes,  U.S. monetary and fiscal policies,  demand for
products and services,  deposit  flows,  competition  and  accounting  policies,
principles and guidelines. These risks and uncertainties should be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements.

2. REORGANIZATION, CONVERSION AND ACQUISITION
   ------------------------------------------

Prior to April  13,  1999,  the Bank was  owned  approximately  53.49%  by First
Federal  Bankshares,  M.H.C. (the "Mutual Holding Company") and 46.51% by public
shareholders.  On  April  13,  1999,  pursuant  to  a  plan  of  conversion  and
reorganization,  and after a series of transactions:  (1) the Company was formed
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

to own all of the capital stock of the Bank,  (2) the Company sold the ownership
interest in the Bank previously held by the Mutual Holding Company to the public
in a subscription  offering (the Offering),  (3) previous public shareholders of
the Bank had their shares  exchanged  (the  Exchange)  into common shares of the
Company  (exchange  ratio of 1.64696 to 1) and (4) the  Mutual  Holding  Company
ceased to exist. As a result of the reorganization,  the consolidated  financial
statements  for prior  periods have been  restated to reflect the changes in the
par  value of common  stock  from  $1.00 to $.01 per share and in the  number of
authorized shares of common stock from 20,000,000 to 12,000,000.

The primary  purpose of the  Offering  was to fund the  acquisition  of Mid-Iowa
Financial Corp.  (Mid-Iowa) and its  wholly-owned  subsidiary,  Mid-Iowa Savings
Bank,  FSB. The  shareholders  of Mid-Iowa  received  $28.3 million cash for all
outstanding  shares on April 13, 1999, the effective  date. The  acquisition was
accounted for as a purchase;  accordingly,  Mid-Iowa's results of operations are
included in the financial  statements  from the  acquisition  date forward.  The
excess of purchase price over the fair value of the net  identifiable  assets of
$12.6 million was recorded as goodwill and is being amortized on a straight-line
basis over 25 years.

3. EARNINGS PER SHARE
   ------------------

The following information was used in the computation of net earnings per common
share on both a basic and diluted basis for the periods presented.  Prior period
information was restated for the Offering and Exchange.
<TABLE>
<CAPTION>
                                                         Three months ended
                                                            September 30,
                                                       1999              1998
                                                   ----------         ----------
<S>                                                <C>                <C>
Basic earnings per share:
   Net earnings ..........................         $1,198,121         $1,018,002
   Weighted average shares
         outstanding .....................          4,821,309          4,681,237
   Basic earnings per share ..............         $      .25         $      .22
                                                   ==========         ==========

Diluted earnings per share:
   Net earnings ..........................         $1,198,121         $1,018,002
   Weighted average shares
     outstanding .........................          4,821,309          4,681,237
   Incremental option shares
     using treasury stock method .........             18,877             51,456
                                                   ----------         ----------
   Diluted shares outstanding ............          4,840,186          4,732,693
   Diluted earnings per share ............         $      .25         $      .21
                                                   ==========         ==========
</TABLE>

4. DIVIDENDS
   ---------

On July 22,  1999 the  Company  declared a cash  dividend  on its common  stock,
payable  on August 31,  1999 to  stockholders  of record as of August 16,  1999,
equal to $.075 per share. Dividends totaling $361,862 were paid to stockholders.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On October 21, 1999 the Company  declared a cash  dividend on its common  stock,
payable on November 30, 1999 to  stockholders  of record as of November 15, 1999
equal to $.075 per share. Approximately $361,961 will be paid to stockholders on
November 30, 1999.
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

FINANCIAL CONDITION

Total assets increased by $7.4 million,  or 1.1%, to $688.1 million at September
30, 1999 from $680.7  million at June 30, 1999. The increase in total assets was
largely due to an increase in loans  receivable.  Loans receivable  increased by
$5.9  million,  or 1.3%,  to $463.0  million at  September  30, 1999 from $457.1
million  at June 30,  1999.  In  addition,  cash and  interest-bearing  deposits
increased  by $810,000,  or 5.4%,  to $15.9  million at September  30, 1999 from
$15.1 million at June 30, 1999.  Partially offsetting the increase in loans were
decreases in investment  securities.  Securities available for sale decreased by
$1.5  million,  or 1.2%,  to $120.5  million at  September  30, 1999 from $122.0
million at June 30, 1999.  Securities held to maturity decreased by $627,000, or
2.0%,  to $31.4  million at  September  30, 1999 from $32.0  million at June 30,
1999.  The balance of real  estate  owned  increased  by $376,000 to $408,000 at
September  30, 1999 from  $32,000 at June 30,  1999.  During the  quarter  ended
September 30, 1999 the Company took possession of one 12-unit apartment building
and four 4-unit condominium  properties in Madison,  Wisconsin by voluntary deed
in lieu of foreclosure.  The related loan balances of the two separate borrowing
entities  involved  was  approximately  $1.6  million.  The sale of the  12-unit
apartment  and  four  of  the  condominium  units  generated  proceeds  totaling
approximately  $1.3 million that  reduced the balance in real estate  owned.  In
addition,  the Company  foreclosed  on a  non-residential  property  with a loan
balance  totaling  $111,000.  Real  estate  held for  development  increased  by
$238,000, or 39.7%, to $837,000 at September 30, 1999, from $599,000 at June 30,
1999 due to  investment  in a new 50-lot  residential  development  in northwest
Iowa. The developed lots are expected to be ready for sale in the quarter ending
December 31, 1999.

Deposits increased by $5.2 million,  or 1.1%, to $469.4 million at September 30,
1999 from $464.2  million at June 30, 1999.  Advances from the Federal Home Loan
Bank increased by $2.9 million, or 2.1%, to $141.5 million at September 30, 1999
from $138.6  million at June 30, 1999.  Advance  payments by borrowers for taxes
and insurance decreased by $892,000,  or 34.9%, due to payment in September 1999
of the first half of real estate taxes escrowed.

Total  stockholders'  equity  increased by $85,000 to $68.4 million at September
30, 1999 from $68.3 million at June 30, 1999.  Earnings totaled $1.2 million for
the first  quarter of the fiscal year.  Largely  offsetting  the  earnings  were
dividends  declared  totaling $362,000 and an increase of $817,000 in unrealized
losses on available for sale securities due to lower valuations in the generally
higher interest rate environment.

LIQUIDITY
---------

OTS regulations  require that thrift  institutions  such as the Bank maintain an
average daily balance of liquid assets (cash,  certain time  deposits,  banker's
acceptances  and specified  United States  government,  state or federal  agency
obligations)  in each calendar  quarter of not less than 4% of the average daily
balance  of its  liquidity  base (net  withdrawable  deposits  plus  short  term
borrowings)  during the preceding  quarter.  For the quarter ended September 30,
1999 the Company's  average liquidity  position was $163.3 million,  or 33.3% of
its liquidity base for the preceding quarter.
<PAGE>
CAPITAL
-------

The  Company's  total equity  increased by $85,000 to $68.4 million at September
30, 1999 from $68.3 million at June 30, 1999.  The OTS requires that the Company
meet minimum tangible,  leverage (core) and risk-based capital requirements.  As
of September 30, 1999 the Company was in compliance with all regulatory  capital
requirements.  The Company's  required,  actual and excess  capital levels as of
September 30, 1999 are as follows:
<TABLE>
<CAPTION>
                                                                Excess of
                                                                Actual Over
                       Required  % of       Actual     % of     Regulatory
                       Amount   Assets      Amount    Assets    Requirement
                       ------   ------      ------    ------    -----------
                                       (Amounts in thousands)
<S>                   <C>         <C>      <C>         <C>       <C>
 Tangible Capital     $ 9,992     1.5%     $43,879     6.59%     $33,887
 Core Capital          19,985     3.0%      43,879     6.59%      23,894
 Risk-based Capital    28,675     8.0%      47,037    13.12%      18,362
</TABLE>

COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
------------------------------------------------------------------
September 30, 1999 and 1998
---------------------------

General.  Net earnings increased by $180,000,  or 17.7%, to $1.2 million for the
three  months  ended  September  30, 1999 from $1.0 million for the three months
ended  September  30, 1998.  Diluted  earnings per share  totaled $.25 and $.21,
respectively,  for the three  months  ended  September  30,  1999 and 1998.  The
acquisition of Mid-Iowa  Financial Corp.  (Mid-Iowa),  effective April 13, 1999,
was  accounted  for using the  purchase  method of  accounting;  therefore,  the
results of  operations  for the three  months  ended  September  30, 1998 do not
include Mid-Iowa results.

Interest Income.  Interest income increased by $1.5 million,  or 14.8%, to $11.5
million for the three months ended September 30, 1999 from $10.0 million for the
three months ended September 30, 1998, largely due to an increase in the average
balance of  interest-earning  assets.  The average  balance of  interest-earning
assets  increased by $104.5  million,  or 19.8%, to $631.3 million for the three
months ended  September 30, 1999 from $526.8  million for the three months ended
September 30, 1998. The increase in average balances of interest-earning  assets
was  primarily  due to  the  acquisition  of  Mid-Iowa.  The  average  yield  on
interest-earning  assets decreased to 7.31% for the three months ended September
30, 1999 from 7.64% for the three months ended September 30, 1998, primarily due
to lower  yields  on loans  receivable  and  mortgage-backed  securities  and to
changes  in the mix of  interest-earning  assets.  Investment  securities,  with
generally  lower  yields  than  yields  on  loans  receivable,  made up 19.8% of
interest-earning  assets  for the  three  months  ended  September  30,  1999 as
compared  to  15.1%  of  interest-earning  assets  for the  three  months  ended
September  30,  1998.  The  change  in the mix of  interest-earning  assets  was
primarily due to the acquisition of Mid-Iowa.  Mid-Iowa's  investment  portfolio
totaled $46.1 million,  or 29.7%, of Mid-Iowa's  interest-earning  assets on the
effective date of the acquisition.
<PAGE>
Interest income on loans for the three months ended September 30, 1999 increased
by $774,000,  or 9.6%, to $8.9 million for the three months ended  September 30,
1999 from $8.1  million for the three  months  ended  September  30,  1998.  The
increase in interest  income on loans was  primarily due to an increase of $55.4
million, or 13.6%, in the average balance of loans receivable, to $463.1 million
for the three months ended  September 30, 1999 from $407.7 million for the three
months ended  September 30, 1998. The average yield on loans  decreased to 7.65%
for the three  months ended  September  30, 1999 from 7.93% for the three months
ended September 30, 1998.

Interest  income  on  mortgage-backed  securities  for the  three  months  ended
September  30, 1999  increased by $24,000,  or 3.9%,  when compared to the three
months ended  September  30,  1998.  The increase was due to an increase of $3.5
million, or 9.6%, in the average balance of mortgage-backed  securities to $40.0
million for the three months ended September 30, 1999 from $36.4 million for the
three months ended  September  30, 1998.  The average  yield on  mortgage-backed
securities decreased to 6.39% for the three months ended September 30, 1999 from
6.74% for the three months ended September 30, 1998.

Interest income on investment securities increased by $686,000, or 51.9%, as the
average balance of investment  securities  increased by $45.4 million, or 57.0%,
to $125.1  million at September  30, 1999 from $79.7  million at  September  30,
1998. The increase in the average balance of investment securities was primarily
due to the acquisition of Mid-Iowa. The average balance of investment securities
acquired  from Mid-Iowa  totaled  approximately  $40.2 million  during the three
months ended  September 30, 1999.  The average  yield on  investment  securities
decreased by 21 basis points to 6.43% for the three months ended  September  30,
1999 from 6.64% for the three months ended  September 30, 1998.  Interest income
on other interest-earning assets declined by only $1,000 to $40,000 at September
30, 1999 from $41,000 at September 30, 1998.

Interest  Expense.  Interest  expense  increased by $740,000,  or 11.8%, to $7.0
million for the three months ended  September 30, 1999 from $6.3 million for the
three  months  ended  September  30,  1998.  Interest on deposits  increased  by
$371,000, or 8.1%, to $4.9 million for the three months ended September 30, 1999
from $4.6 million for the three months ended September 30, 1998. The increase in
interest on deposits was primarily due to an increase in the average  balance of
deposits  as a result  of the  Mid-Iowa  acquisition.  The  average  balance  of
deposits  increased by $65.1 million,  or 17.0%,  to $448.7 million at September
30, 1999 from $383.6  million at September  30,  1998.  The increase in interest
paid on deposits due to  increased  average  balances was partly  offset by a 36
basis  point  decrease  in the  average  cost of deposits to 4.41% for the three
months ended  September 30, 1999 from 4.77% for the three months ended September
30, 1998.  The decrease in the average cost of deposits was  primarily  due to a
generally  higher  concentration  of  transaction  accounts for the three months
ended September 30, 1999.  Transaction  accounts made up 38.2% of total deposits
during the  quarter  ended  September  30,  1999 as  compared  to 35.2% of total
deposits during the quarter ended September 30, 1998.

Interest on borrowings increased by $369,000,  or 21.6%, to $2.1 million for the
three  months  ended  September  30, 1999 from $1.7 million for the three months
ended  September 30, 1998.  The increase in interest on borrowings was primarily
due to an increase in the average balance of advances.  Average advance balances
increased by $28.9  million,  or 25.6%,  to $141.9 million at September 30, 1999
from $113.0 million at September 30, 1998. The increase in interest  expense due
to increased advance balances was partly offset by a decrease of 18 basis points
in the average cost of borrowings to 5.86% for the three months ended  September
30, 1999 from 6.04% for the three months ended September 30, 1998.
<PAGE>
Net Interest  Income.  Net interest income  increased by $744,000,  or 19.7%, to
$4.5 million for the three months ended September 30, 1999 from $3.8 million for
the three months ended  September 30, 1998.  The Company's  interest rate spread
for the three months ended  September 30, 1999 decreased  slightly to 2.56% from
2.58% for the quarter ended September 30, 1998.

Provision for Loan Loss.  Provision for loan loss expense  totaled  $105,000 and
$75,000,  respectively,  for the three months ended September 30, 1999 and 1998.
The allowance for losses on loans is based on management's  periodic  evaluation
of the loan portfolio and reflects an amount that, in management's  opinion,  is
adequate  to  absorb  losses  in  the  existing  portfolio.  In  evaluating  the
portfolio,  management  takes into  consideration  numerous  factors,  including
current economic conditions,  prior loan loss experience, the composition of the
loan portfolio, and management's estimate of anticipated credit losses.

Noninterest Income.  Noninterest income increased by $843,000, or 93.5%, to $1.7
million for the three  months  ended  September  30, 1999 from  $902,000 for the
three months ended  September 30, 1998. The increase in  noninterest  income was
partially due to an increase of $245,000, or 54.6%, in service charges and other
fees for the three  months  ended  September  30,  1999 as compared to the three
months ended  September 30, 1998. The increase in service charges and other fees
was largely due to growth related to the Mid-Iowa acquisition. Additionally, fee
schedule changes, which included several service fee increases, went into effect
in June 1999.  Gains on the sale of real  estate  owned and real estate held for
development  totaled  $118,000 and $55,000,  respectively,  for the three months
ended  September 30, 1999.  No comparable  gains on real estate were recorded in
the prior  year  quarter.  Income  from  other  real  estate-related  activities
increased  by  $248,000,  or 137.11%,  to $429,000  for the three  months  ended
September 30, 1999 from $181,000 for the three months ended  September 30, 1998.
The increase in real  estate-related  income was  primarily due to earnings from
the real estate brokerage  company  acquired in the merger with Mid-Iowa.  Other
income  increased by $178,000,  or 96.7%, to $363,000 for the three months ended
September 30, 1999 from  $185,000 for the three months ended  September 30, 1998
largely due to  noninterest  income from the Company's  subsidiaries  that offer
escrow services and uninsured investment products to the public.

Noninterest expense. Noninterest expense increased by $1.2 million, or 42.4%, to
$4.2 million for the three months ended September 30, 1999 from $3.0 million for
the three months ended  September 30, 1998.  Compensation  and benefits  expense
increased  by  $261,000,  or 13.6%,  to $2.2  million for the three months ended
September  30, 1999 from $1.9 million for the three months ended  September  30,
1998. Staff increased by 21 full-time-equivalent  employees, or 10.4%, to 222 at
September 30, 1999 from 201 at September 30, 1998. During the three months ended
September 30, 1998 the Company recorded a credit to noninterest expense totaling
$468,000.  The credit  related to stock  appreciation  rights  (SAR)  which were
required to be  periodically  re-valued  due to  fluctuations  in the  Company's
common stock price  during the period.  The Company  eliminated  the SAR and the
potential  distortion resulting from stock price changes through cash payouts to
SAR holders in December 1998 and January 1999.

Office property and equipment expense increased by $137,000,  or 30.7%, over the
prior  year,  partially  due to  the  completion  of a new  office  building  in
Grinnell,  Iowa and to the  addition  of the  seven  Mid-Iowa  offices.  Deposit
insurance  premium expense and data processing  expense increased by $10,000 and
$20,000, respectively, for the three months ended September 30, 1999 as compared
to the three  months  ended  September  30, 1998.  Amortization  of  intangibles
<PAGE>
increased by $163,000 to $249,000 for the three months ended  September 30, 1999
from $86,000 for the three months ended  September 30, 1998 due to  amortization
of the goodwill  related to the  Mid-Iowa  acquisition  that  commenced in April
1999. Other general and administrative expenses increased by $197,000, or 28.2%,
for the three  months ended  September  30, 1999 as compared to the three months
ended  September  30, 1998.  This  increase  was  primarily  due to  noninterest
expenses of the Mid-Iowa real estate  brokerage firm acquired in April 1999 that
partially offset the increase in noninterest income mentioned above.

Net earnings and income tax expense.  Net earnings  before  income taxes totaled
$1.9  million for the three months ended  September  30, 1999,  compared to $1.6
million  for the three  months  ended  September  30,  1998.  Income tax expense
increased  by  $120,000,  or  19.4%,  to  $740,000  for the three  months  ended
September 30, 1999 from $620,000 for the three months ended  September 30, 1998.
The Company's  effective tax rate  increased to 38.2% for the three months ended
September  30, 1999 from 37.8% for the three  months  ended  September  30, 1998
partially due to the increase in  non-deductible  amortization of intangibles in
the current fiscal year quarter.

YEAR 2000 (Y2K)

The Company has completed  the  awareness  and inventory  phases of Year 2000 in
which  potential  Year 2000 risk areas and  systems  have been  identified.  The
assessment  of the  Company's  Year  2000  exposures  is  complete.  Programming
changes, system upgrades and replacements and other actions necessary to prepare
for Year 2000 are  complete.  Testing and  assessing  the  validity of Year 2000
changes were completed during fiscal 1999 and Year 2000-ready  systems have been
implemented.

The Company has  identified  and  assessed its  computer  operating  systems and
networking software;  applications software;  data processing hardware platforms
such  as  personal   computers  and  automated  teller  machines;   third  party
interfaces;  and environmental systems,  including,  but not limited to, climate
control systems,  sprinklers,  elevators and security  systems.  The Company has
identified its  mission-critical  systems  including its "core" data  processing
system for loans, deposits and the general ledger.

It is the intention of the Company to maintain normal business operations during
the Year 2000  transition  and beyond.  The  Company  has  developed a Year 2000
Business  Continuity  and  Contingency  Plan  as an  addition  to the  Company's
Disaster  Recovery  Plan.  Together,  these  plans are  designed  to ensure  the
continuity of daily operations in the event of a loss of essential resources due
to Year 2000 induced failures. These plans describe individual contingency plans
concerning  specific  software  and  hardware  issues,   operational  plans  for
continuing operations, and specific policies and procedures that would be put in
place  upon  the   occurrence  of  a  power  outage,   computer   interruptions,
telecommunications  interruptions,  natural  disaster,  etc. Such plans identify
participants,  processes  and  equipment  that will be  necessary  to permit the
Company to resume and continue operations until the problem is resolved.

In addition  to expenses  related to its own  computer  systems,  the Company is
aware  of  potential  Year  2000  risks  to third  parties,  including  vendors,
depositors  and  borrowers  and  the  possible  adverse  impact  on the  Company
resulting  from failures by these  parties to  adequately  address the Year 2000
problem.  The Company has  contacted  all  mission-critical  vendors and service
providers  regarding  their Year 2000  readiness.  The potential  risks posed by
<PAGE>
these entities have been analyzed and periodic updates on the Year 2000 progress
of currently non-compliant vendors are being performed. To date, the Company has
not been advised by any of these parties that they do not have plans in place to
address and correct the issues  associated with the Year 2000 problem.  However,
no assurance can be given as to the adequacy of such plans or to the  timeliness
of their implementation.

The risk  exists  that some of the  Company's  commercial  borrowers  may not be
prepared for Year 2000 and may suffer financial harm as a result. This, in turn,
represents  risk to the  Company  regarding  the  repayment  of loans from those
commercial  customers.  The Company has surveyed its  commercial  customers with
aggregate  outstanding  loan balances of $250,000 or more  regarding  their Year
2000 preparedness. Based on the results of this survey process the overall level
of Year 2000 risk in the Company's  commercial  loan portfolio is believed to be
relatively low. In addition,  repayment sources for the majority of loans in the
Company's  commercial loan portfolio are from  multi-family real estate projects
that tend to be less  computer-dependent  than,  for  example,  a  manufacturing
business.  The Company  analyzes Year 2000 risk posed by prospective  commercial
loan customers prior to approving their loan requests. Commercial loan customers
are asked to sign an acknowledgement  demonstrating  their commitment to address
Year 2000  problems  inherent in their  operations  and  agreeing to provide the
Company with specific information regarding their Year 2000 status.

The  Company  has also  analyzed  the Year  2000  risk  posed by its 20  largest
commercial  depositors.  The Company currently  considers its commercial deposit
portfolio to contain a relatively low level of Year 2000 risk since the majority
of  these  depositors  are   small-business   customers  with  limited  computer
technology  dependence in their core business  functions.  The Company  analyzes
potential Year 2000 risk of prospective  commercial  deposit  customers prior to
accepting their deposits.

The  preceding  paragraphs  include  forward-looking   statements  that  involve
inherent risks and  uncertainties.  The actual costs of Year 2000 compliance and
the impact of Year 2000 issues  could differ  materially  from what is currently
anticipated.  Factors that might result in such differences  include  incomplete
inventory  and  assessment  results,  higher  than  anticipated  costs to update
software  and  hardware  and  vendors',  customers'  and  other  third  parties'
inability to effectively address the Year 2000 issue.
<PAGE>
PART II. OTHER INFORMATION

Legal Proceedings
-----------------

   There are various claims and lawsuits in which the Registrant is periodically
involved incidental to the Registrant's  business. In the opinion of management,
no   material   loss  is   expected   from  any  of  such   pending   claims  or
lawsuits.

Submission of Matters to a Vote of Security Holders
---------------------------------------------------

   No matters  were  submitted to a vote of security  holders  during the period
covered by this report.

Exhibits and Reports on Form 8-K

(a)      Exhibits

         27 - Financial Data Schedule

(b)      Reports on Form 8-K

         No  reports on Form 8-K were  filed  during the period  covered by this
         report.


<PAGE>

                                   SIGNATURES

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

                                             FIRST FEDERAL BANKSHARES, INC.

         DATE:  November 12, 1999            BY: /s/Barry E. Backhaus
                                                 --------------------
                                                 Barry E. Backhaus
                                                 President and
                                                 Chief Executive Officer

         DATE:  November 12, 1999            BY: /s/Katherine Bousquet
                                                 ---------------------
                                                 Katherine Bousquet

                                                 Chief Financial Officer