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

                                    FORM 10-Q

[Mark One]

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

         For the quarterly period ended December 31, 2000

[   ]    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 February 12, 2001
            -----                              ---------------------------------
  (Common Stock, $.01 par value)                          4,587,817


<PAGE>
                         FIRST FEDERAL BANKSHARES, INC.


                                      INDEX

                                                                       Page
                                                                       ----

Part I.  Financial Information
   Item I.  Financial Statements of First Federal
            Bankshares, Inc. and Subsidiaries                           1

            Condensed Consolidated Balance Sheets
            at December 31, 2000 and June 30, 2000                      1

            Condensed Consolidated Statements of Operations
            for the three- and six-month periods ended
            December 31, 2000 and 1999                                  2

            Condensed Consolidated Statements of Changes in
            Stockholders' Equity for the six-month periods
            ended December 31, 2000 and 1999                            3

            Condensed Consolidated Statements of Comprehensive
            Income for the three- and six-month periods ended
            December 31, 2000 and 1999                                  4

            Condensed Consolidated Statements of Cash Flows
            for the six-month periods ended
                  December 31, 2000 and 1999                            5

            Notes to Condensed Consolidated Financial Statements        6

   Item 2.  Management's Discussion and Analysis of
            Financial Condition and Results of Operations               8

Part II. Other Information                                              15

<PAGE>

PART I.  FINANCIAL  INFORMATION
  ITEM 1.  FINANCIAL  STATEMENTS

  FIRST  FEDERAL  BANKSHARES, INC  and  SUBSIDIARIES
  CONDENSED CONSOLIDATED  BALANCE  SHEETS

<TABLE>
<CAPTION>
                                                                         December 31,          June 30,
                                                                            2000                2000
                                                                    -------------------------------------
                                                                         (Unaudited)
<S>                                                                    <C>                  <C>
Assets
------
Cash and cash equivalents                                              $ 16,181,067         $ 20,166,706
Securities available for sale                                           113,417,176          117,326,062
   (amortized cost $114,962,866 and $124,252,112)
Securities held to maturity                                              22,563,935           23,737,311
   (fair value of $22,606,347 and $23,067,005)
Loans receivable, net                                                   519,114,052          505,089,564
Office property and equipment, net                                       15,059,296           15,314,905
Federal Home Loan Bank stock, at cost                                     9,468,700            8,928,900
Accrued interest receivable                                               5,112,514            4,800,415
Deferred tax asset                                                          506,000            2,362,000
Excess of cost over fair value of assets acquired                        19,412,457           19,900,409
Other assets                                                              3,878,382            5,755,245
                                                                    -------------------------------------
Total assets                                                           $724,713,579         $723,381,517
                                                                    =====================================

Liabilities

Deposits                                                               $477,952,630         $471,625,531
Advances from Federal Home Loan Bank                                    164,912,415          174,020,499
Advance payments by borrowers for
    taxes and insurance                                                   2,145,202            2,828,275
Accrued taxes on income                                                      73,590              292,740
Accrued interest payable                                                  5,201,254            4,297,514
Accrued expenses and other liabilities                                    2,048,486            2,204,039
                                                                    -------------------------------------
Total liabilities                                                       652,333,577          655,268,598
                                                                    -------------------------------------
Stockholders' equity

Common stock, $.01 par value, 12,000,000 shares authorized;
    4,837,692 and 4,833,608 shares issued
    at December 31, 2000 and June 30, 2000, respectively                     48,377               48,336
Additional paid-in capital                                               36,003,702           36,002,723
Retained earnings, substantially restricted                              41,346,725           39,782,321
Treasury stock, at cost, 244,875 and 144,050 shares
     at December 31, 2000 and June 30, 2000, respectively                (2,161,182)          (1,273,138)
Accumulated other comprehensive income (loss)                              (968,690)          (4,343,049)
Unearned ESOP                                                            (1,550,930)          (1,634,600)
Unearned RRP                                                               (338,000)            (469,674)
                                                                    -------------------------------------
Total stockholders' equity                                               72,380,002           68,112,919
                                                                    -------------------------------------
Total liabilities and stockholders' equity                             $724,713,579         $723,381,517
                                                                    =====================================
</TABLE>



See notes to condensed consolidated financial statements.

                                       -1-

<PAGE>

FIRST FEDERAL BANKSHARES, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED  STATEMENTS  OF  OPERATIONS

<TABLE>
<CAPTION>
                                                                         Three months                  Six months
                                                                       ended December 31,            ended December 31,
                                                                     2000            1999           2000            1999
                                                                 ---------------------------------------------------------------
                                                                                                (Unaudited)
<S>                                                              <C>             <C>             <C>            <C>
Interest income:
     Loans receivable                                            $ 10,642,805    $  9,022,732    $ 20,966,330   $ 17,876,347
     Mortgage-backed securities                                       365,726         579,830         849,153      1,217,630
     Investment securities                                          2,133,894       2,120,430       4,269,987      4,129,137
     Other interest-earning assets                                     36,244          41,504          73,707         81,951
                                                                ------------------------------------------------------------
          Total interest income                                    13,178,669      11,764,496      26,159,177     23,305,065
                                                                ------------------------------------------------------------

Interest expense:
     Deposits                                                       5,905,349       5,009,054      11,514,702      9,954,212
     Borrowings                                                     2,762,621       2,204,816       5,621,697      4,282,490
                                                                ------------------------------------------------------------
          Total interest expense                                    8,667,970       7,213,870      17,136,399     14,236,702
                                                                ------------------------------------------------------------
     Net interest income                                            4,510,699       4,550,626       9,022,778      9,068,363
     Provision for loan losses                                        150,000         135,000         295,000        240,000
                                                                ------------------------------------------------------------
     Net interest income after provision for loan losses            4,360,699       4,415,626       8,727,778      8,828,363
                                                                ------------------------------------------------------------

Noninterest income:
     Service charges and other fees                                   843,412         767,396       1,673,296      1,461,089
     Gain on sale of loans held for sale                               80,635          40,246         144,716        125,710
     Gain on sale of real estate owned and held for investment        148,714         187,988         178,214        361,174
     Net gain (loss) on sale of securities                             (1,565)        (50,535)          6,072        (50,535)
     Real estate-related activities                                   279,691         302,843         581,392        731,583
     Other income                                                     269,365         370,345         647,547        733,592
                                                                ------------------------------------------------------------
          Total noninterest income                                  1,620,252       1,618,283       3,231,237      3,362,613
                                                                ------------------------------------------------------------

Noninterest expense:
     Compensation and employee benefits                             2,165,643       2,307,856       4,364,123      4,489,410
     Office property and equipment                                    594,931         569,445       1,199,882      1,153,660
     Deposit insurance premiums                                        23,987          69,213          49,031        140,105
     Data processing expense                                          119,707         106,378         241,951        222,350
     Advertising                                                      128,667         141,351         214,062        259,838
     Amortization of intangibles                                      241,702         245,949         483,515        494,585
     Other general and administrative                                 931,541         749,911       1,898,086      1,649,101
                                                                ------------------------------------------------------------
          Total noninterest expense                                 4,206,178       4,190,103       8,450,650      8,409,049
                                                                ------------------------------------------------------------

     Earnings before taxes on income                                1,774,773       1,843,806       3,508,365      3,781,927
     Taxes on income                                                  698,000         578,000       1,221,000      1,318,000
                                                                ------------------------------------------------------------
     Net earnings                                                $  1,076,773    $  1,265,806    $  2,287,365   $  2,463,927
                                                                ============================================================
Per share data:
     Basic earnings per share                                    $       0.24    $       0.27    $       0.51   $       0.53
                                                                ============================================================
     Diluted earnings per share                                  $       0.24    $       0.27    $       0.51   $       0.53
                                                                ============================================================

     Dividends declared per share                                $      0.080    $      0.075    $      0.160   $      0.150
                                                                ============================================================
</TABLE>


     See notes to condensed consolidated financial statements.

                                        2

<PAGE>

FIRST FEDERAL BANKSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                           Six months ended December 31,
                                                                            2000                 1999
                                                                         -------------------------------
                                                                                   (Unaudited)
<S>                                                                      <C>               <C>
Capital Stock
   Beginning of year balance                                             $     48,336      $     48,178
   Stock options exercised                                                         41                99
                                                                         -------------------------------
End of period balance                                                          48,377            48,277
                                                                         -------------------------------

Additional paid-in capital

   Beginning of year balance                                               36,002,723        35,957,560
   Stock options exercised                                                     12,480            30,429
   Stock depreciation of allocated ESOP shares                                (11,501)           (5,420)
   Grant of RRP shares at market                                                   --            18,250
                                                                         -------------------------------
End of period balance                                                      36,003,702        36,000,819
                                                                         -------------------------------

Retained earnings, substantially restricted
   Beginning of year balance                                               39,782,321        36,283,211
   Net earnings                                                             2,287,365         2,463,927
   Dividends paid on common stock                                            (722,961)         (696,522)
                                                                         -------------------------------
End of period balance                                                      41,346,725        38,050,616
                                                                         -------------------------------

Treasury stock, at cost
   Beginning of year balance                                               (1,273,138)               --
   Treasury stock purchased                                                  (888,044)       (1,054,763)
   RRP shares granted                                                              --           657,000
                                                                         -------------------------------
End of period balance                                                      (2,161,182)         (397,763)
                                                                         -------------------------------

Accumulated other comprehensive income (loss)
   Beginning of year balance                                               (4,343,049)       (2,202,184)
   Net change in unrealized losses on securities available-for-sale         3,378,640        (2,070,718)
   Less: reclassification adjustment for net realized gains included
         in net income (net of tax expense)                                    (4,281)          (26,054)
                                                                         -------------------------------
End of period balance                                                        (968,690)       (4,298,956)
                                                                         -------------------------------

Unearned ESOP shares

   Beginning of year balance                                               (1,634,600)       (1,813,758)
   ESOP shares allocated                                                       83,670            98,408
                                                                         -------------------------------
End of period balance                                                      (1,550,930)       (1,715,350)
                                                                         -------------------------------

Unearned recognition and retention plan shares
   Beginning of year balance                                                 (469,674)               --
   RRP shares granted                                                              --          (675,250)
   Amortization of RRP expense                                                131,674            54,000
                                                                         -------------------------------
End of period balance                                                        (338,000)         (621,250)
                                                                         -------------------------------

                                                                         -------------------------------
Total stockholders' equity                                               $ 72,380,002      $ 67,066,393
                                                                         ===============================
</TABLE>



See notes to condensed consolidated financial statements.

                                        3

<PAGE>

FIRST FEDERAL BANKSHARES, INC.  and SUBSIDIARIES
Condensed Consolidated  Statements  of  Comprehensive Income

<TABLE>
<CAPTION>
                                                              Three Months Ended                 Six months ended
                                                                  December 31,                      December 31,
                                                          ----------------------------      ----------------------------
                                                           2000              1999             2000             1999
                                                           ----              ----             ----             ----
                                                                                  (Unaudited)
<S>                                                       <C>             <C>              <C>              <C>
Net earnings                                              $ 1,076,773     $ 1,265,806      $ 2,287,365      $ 2,463,927
Other comprehensive income:
    Unrealized holding gains (losses)
      arising during the period, net of tax                 2,516,795      (1,253,941)       3,378,640       (2,070,718)
    Less: reclassification adjustment for
      net realized gains (losses)
         included in net income, net of tax expense             1,163         (26,054)          (4,281)         (26,054)
                                                          -----------     -----------      -----------      -----------
Other comprehensive income (loss), net of tax               2,517,958      (1,279,995)       3,374,359       (2,096,772)
                                                          -----------     -----------      -----------      -----------

                                                          -----------     -----------      -----------      -----------
Comprehensive income (loss)                               $ 3,594,731     ($   14,189)     $ 5,661,724      $   367,155
                                                          ===========      ===========     ===========      ===========
</TABLE>

See notes to condensed consolidated financial statements.

                                        4

<PAGE>
FIRST FEDERAL BANKSHARES, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                         Six months ended December 31,
                                                                          2000                  1999
                                                                     -----------------------------------
                                                                                  (Unaudited)
<S>                                                                      <C>               <C>
Cash flows from operating activities:

Net earnings                                                            $  2,287,365      $  2,463,927
Adjustments to reconcile net earnings to net cash
     provided by operating activities:
   Loans originated for sale to investors                                (14,751,680)       (9,753,019)
   Proceeds from sale of loans originated for sale                        15,144,009        10,564,990
   Provision for loan losses                                                 295,000           240,000
   Depreciation and amortization                                           1,113,590         1,249,918
   Net gain on sale of loans                                                (144,716)         (125,710)
   Net (gain) loss on sale of securities available-for-sale                   (6,072)           50,535
   Net gain on sale of real estate owned and held for development           (178,214)         (361,174)
   Net loan fees deferred                                                    (59,406)            7,300
   Amortization of premiums and discounts on loans,
     mortgage-backed securities, and investment securities                   283,532           355,663
   Decrease (increase) in other assets                                     2,003,658        (1,222,839)
   Increase (decrease) in accrued expenses and other liabilities             529,037          (998,916)
                                                                        -------------------------------
Net cash provided by operating activities                                  6,516,103         2,470,675
                                                                        -------------------------------

Cash flows from investing activities:

   Purchase of securities held-to-maturity                                        --          (519,205)
   Proceeds from maturities of securities held-to-maturity                 1,176,372         2,199,586
   Proceeds from sale of securities available-for-sale                     7,846,709         3,131,067
   Purchase of securities available-for-sale                                      --        (7,875,000)
   Purchase of Federal Home Loan Bank Stock                                 (539,800)         (359,600)
   Proceeds from maturities of securities available-for-sale               1,466,703         4,450,070
   Loans purchased                                                        (4,911,000)       (4,547,000)
   Increase in loans receivable                                          (10,330,942)      (16,839,277)
   Proceeds from sale of real estate owned and held for development          787,419         2,355,736
   Net expenditures on real estate owned and held for development           (523,601)         (756,039)
   Proceeds from sale of office property and equipment                            --            49,295
   Purchase of office property and equipment                                (362,269)         (868,117)
                                                                        -------------------------------
Net cash used in investing activities                                     (5,390,409)      (19,578,484)
                                                                        -------------------------------

Cash flows from financing activities:

   Increase (decrease) in deposits                                         6,327,099        (7,065,897)
   Proceeds from advances from FHLB                                       31,500,000        45,500,000
   Repayment of advances from FHLB                                       (40,656,875)      (15,148,276)
   Net decrease in advances from borrowers for taxes and insurance          (683,073)         (220,656)
   Issuance of common stock, net                                              12,521            30,527
   Purchase of treasury stock                                               (888,044)       (1,054,763)
   Cash dividends paid                                                      (722,961)         (696,522)
                                                                        -------------------------------
Net cash (used in) provided by financing activities                       (5,111,333)       21,344,413
                                                                        -------------------------------
Net (decrease) increase in cash and cash equivalents                      (3,985,639)        4,236,604
Cash and cash equivalents at beginning of period                          20,166,706        15,067,956
                                                                        -------------------------------
Cash and cash equivalents at end of period                              $ 16,181,067      $ 19,304,560
                                                                        ===============================
</TABLE>


See notes to condensed consolidated financial statements.

                                        5

<PAGE>

FIRST FEDERAL BANKSHARES, INC. and SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The  condensed  consolidated  balance  sheet  information  for June 30, 2000 was
derived from the Company's  audited  Consolidated  Balance Sheets for the fiscal
year ended June 30, 2000. The condensed consolidated financial statements at and
for the  three  months  and six  months  ended  December  31,  2000 and 1999 are
unaudited.

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 condensed 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  2000  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 and
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 AND CONVERSION

First Federal Bankshares,  Inc. (the "Company") is the holding company for First
Federal Bank (the  "Bank").  The Company owns 100% of the Bank's  common  stock.
Currently,  the Company engages in no other  significant  activities  beyond its
ownership of the Bank's  common  stock.  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 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.


                                       6
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. EARNINGS PER SHARE

The following information was used in the computation of net earnings per common
share ("EPS") on both a basic and diluted basis for the periods presented.

<TABLE>
<CAPTION>


                                           Three months ended          Six months ended
                                              December 31,                December 31,
                                           2000          1999         2000            1999
                                       -------------------------     -------------------------
<S>                                    <C>            <C>            <C>            <C>
Basic EPS computation:
   Net earnings                        $1,076,773     $1,265,806     $2,287,365     $2,463,927
   Weighted-average common shares
           outstanding                  4,434,239      4,637,649      4,444,883      4,639,430
                                       ----------     ----------     ----------     ----------

      Basic earnings per share         $     0.24     $     0.27     $     0.51     $     0.53
                                       ==========     ==========     ==========     ==========

Diluted EPS computation:
                                                                                    ----------
   Net earnings                        $1,076,773     $1,265,806     $2,287,365     $2,463,927
   Weighted average common
      shares outstanding - basic        4,434,239      4,637,649      4,444,883      4,639,430
   Incremental option shares using
      treasury stock method                31,770         16,413         34,186         17,646
                                       ----------     ----------     ----------     ----------

   Weighted average diluted

      shares outstanding                4,466,009      4,654,062      4,479,069      4,657,076
                                       ----------     ----------     ----------     ----------

      Diluted earnings per share       $     0.24     $     0.27     $     0.51     $     0.53
                                       ==========     ==========     ==========     ==========
</TABLE>


4. DIVIDENDS

On October 26, 2000 the Company  declared a cash  dividend on its common  stock,
payable on November 30, 2000 to  stockholders of record as of November 16, 2000,
equal to $.08 per share. Dividends totaling $361,467 were paid to stockholders.

On January 18, 2001 the Company  declared a cash  dividend on its common  stock,
payable on February 28, 2001 to  stockholders  of record as of February 14, 2001
equal to $.08 per share.  Approximately $355,018 will be paid to stockholders on
February 28, 2001.

5. EFFECT OF NEW ACCOUNTING STANDARDS

Statement  of  Financial  Accounting  Standards  ("SFAS")  140,  Accounting  for
Transfers and Servicing of Financial Assets and  Extinguishments of Liabilities,
is effective for transfers and servicing of financial assets and extinguishments
of liabilities after March 31, 2001.  Management does not expect the adoption of
this standard to have a material effect on the Company's  consolidated financial
statements.

6. RECENT DEVELOPMENTS

In December 2000 the Company entered into an agreement (the  "Agreement") with a
mortgage finance company (the "Mortgage  Finance Company") to assist the Company
with a review of the Company's  fixed rate  residential  mortgage loan portfolio
("the Mortgage Loans"),  which totaled  approximately $116.0 million at December


                                       7
<PAGE>

31, 2000.  Pursuant to the  Agreement,  the Company  also  retained the Mortgage
Finance  Company to act as the Company's  exclusive agent in connection with the
Company's  securitization  or sale and related delivery of the Mortgage Loans to
one or more institutional investors.

The Company expects to have the Mortgage Loans  securitized by March 1, 2001. As
of the date  hereof,  the  Company  has  executed a forward  commitment  to sell
approximately  $48.8  million of the  mortgage-backed  securities  ("MBS") to be
created by this securitization for settlement in March 2001. The Company expects
to sell the  remainder of the MBS by September 30, 2001.  However,  whether such
sales are completed or not, is within  management's  discretion and is dependent
on market conditions and other factors.

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

FINANCIAL CONDITION

Total assets  increased by $1.3 million,  or 0.2%, to $724.7 million at December
31, 2000 from $723.4  million at June 30, 2000. The increase in total assets was
primarily due to an increase in loans receivable.  Loans receivable increased by
$14.0  million,  or 2.8%,  to $519.1  million at  December  31, 2000 from $505.1
million at June 30, 2000. The increase in loans  receivable was primarily due to
an increase in the origination of commercial real estate and commercial business
loans,  which  generally  have interest  rates higher than those of  residential
single-family  mortgages.  Partially offsetting the increase in loans receivable
was a  decrease  in the  balance  of  total  investment  securities.  Securities
available-for-sale ("AFS") decreased by $3.9 million, or 3.3%, to $113.4 million
at December 31, 2000 from $117.3 million at June 30, 2000. During the six months
ended  December 31, 2000 the Company sold AFS  mortgage-backed  securities  with
principal  balances  totaling  $7.8  million  in order to fund loan  growth.  In
addition,  securities  held-to-maturity  decreased by $1.2 million,  or 4.9%, to
$22.5  million at December  31, 2000 from $23.7  million at June 30, 2000 due to
principal repayment and amortization.

Deposits  increased by $6.4 million,  or 1.3%, to $478.0 million at December 31,
2000 from $471.6 million at June 30, 2000. Partly due to the increase in deposit
balances,  advances  from the Federal Home Loan Bank (the  "FHLB")  decreased by
$9.1  million,  or 5.2%,  to $164.9  million at  December  31,  2000 from $174.0
million at June 30, 2000.  Accrued  interest payable  increased by $904,000,  or
21.0%,  to $5.2  million at December  31, 2000 from $4.3 million at December 31,
1999 largely due to increased balances in deposit accounts.

Total  stockholders'  equity  increased  by $4.3  million  to $72.4  million  at
December  31, 2000 from $68.1  million at June 30, 2000.  Earnings  totaled $2.3
million for the first six months of the fiscal year.  In  addition,  accumulated
other comprehensive  income(loss) increased by $3.4 million as unrealized losses
on available-for-sale  securities decreased due to higher market valuations. The
higher valuations occurred as market interest rates stabilized after a series of
six interest rate  increases by the Federal  Reserve Board between June 1999 and
May 2000.  Dividends  declared  during the six months  ended  December  31, 2000
totaled  $723,000  excluding  dividends on unallocated  Employee Stock Ownership
Plan ("ESOP") shares.


                                       8
<PAGE>


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  December 31,
2000 the Company's  average liquidity  position was $134.3 million,  or 23.8% of
its liquidity base for the preceding quarter.

CAPITAL

The  Company's  total  stockholders'  equity  increased by $4.3 million to $72.4
million at  December  31,  2000 from $68.1  million  at June 30,  2000.  The OTS
requires that the Bank meet minimum  tangible,  leverage  (core) and  risk-based
capital  requirements.  As of December 31, 2000 the Bank was in compliance  with
all regulatory  capital  requirements.  The Bank's  required,  actual and excess
capital levels as of December 31, 2000 are as follows:

                                                             Excess of
                                                             Actual Over
                      Required  % of      Actual    % of     Regulatory
                       Amount  Assets     Amount   Assets    Requirement
                       ------  ------     ------   ------    -----------
                                  (Amounts in thousands)

 Tangible Capital     $10,798   1.5%     $48,715     6.95%     $37,917
 Core Capital          21,597   3.0%      48,715     6.95%      27,118
 Risk-based Capital    33,791   8.0%      52,310    12.38%      18,519






COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED

December 31, 2000 and 1999

General.  Net earnings for the three months ended December 31, 2000 totaled $1.1
million, or $.24 per diluted share compared to $1.3 million, or $.27 per diluted
share for the three months ended December 31, 1999.

Interest Income.  Interest income increased by $1.4 million,  or 12.0%, to $13.2
million for the three months ended  December 31, 2000 from $11.8 million for the
three months ended December 31, 1999,  largely due to an increase in the average
balance of  interest-earning  assets.  The average  balance of  interest-earning
assets  increased by $37.2  million,  or 5.8%,  to $675.0  million for the three
months ended  December  31, 2000 from $637.8  million for the three months ended
December 31, 1999.  The average yield on  interest-earning  assets  increased to
7.81% for the three  months  ended  December  31,  2000 from 7.38% for the three
months ended  December 31, 1999,  due to higher yields on loans  receivable  and
investment and mortgage-backed  securities in the generally higher interest rate
environment and to changes in the mix of interest-earning assets.

Interest  income on loans for the three months ended December 31, 2000 increased
by $1.6 million,  or 18.0%, to $10.6 million for the three months ended December
31, 2000 from $9.0  million for the three months  ended  December 31, 1999.  The
increase in interest  income on loans was  primarily due to an increase of $54.6
million, or 11.7%, in the average balance of loans receivable, to $523.4 million


                                       9
<PAGE>

for the three months ended  December 31, 2000 from $468.8  million for the three
months ended  December 31, 1999.  The average yield on loans  increased to 8.13%
for the three  months  ended  December  31, 2000 from 7.70% for the three months
ended  December 31, 1999.  The increase in the average yield on loans was due to
the Company's  strategy of increasing  its portfolio of commercial  real estate,
commercial business and consumer loans that generally have higher interest rates
than residential single-family mortgages.

Interest income on mortgage-backed securities ("MBS") for the three months ended
December 31, 2000  decreased by $214,000,  or 36.9%,  when compared to the three
months  ended  December 31,  1999.  The  decrease in interest  income on MBS was
primarily due to a decrease in the average  balance of MBS. The average  balance
of MBS decreased by $14.4  million,  or 39.9%,  to $21.6 million at December 31,
2000 from  $36.0  million  at  December  31,  1999.  Cash  flows  from sales and
principal  reductions  of MBS  were  used to fund  part of the  increase  in the
balance of loans receivable. The average yield on MBS increased to 6.77% for the
three  months  ended  December  31, 2000 from 6.45% for the three  months  ended
December 31, 1999, as variable rate securities  repriced upward in the generally
higher market interest rate environment.

Interest income on investment  securities increased by $13,000, or 0.6%, for the
three  months  ended  December  31, 2000 as compared to the three  months  ended
December  31, 1999  primarily  due to an increase in the average  yield on those
securities.  The average  yield on investment  securities  increased by 15 basis
points to 6.68% for the three months ended  December 31, 2000 from 6.53% for the
three  months  ended  December  31,  1999.  The  average  balance of  investment
securities  decreased by $2.1 million,  or 1.6%, to $127.8 million for the three
months ended  December  31, 2000 from $129.9  million for the three months ended
December 31, 1999.

Interest Expense.  Interest expense increased by $1.5 million, or 20.2%, to $8.7
million for the three months  ended  December 31, 2000 from $7.2 million for the
three  months  ended  December  31,  1999.  Interest  on deposits  increased  by
$896,000, or 17.9%, to $5.9 million for the three months ended December 31, 2000
from $5.0 million for the three months ended  December 31, 1999. The increase in
interest on deposits was largely due to a 66 basis point increase in the average
cost of  deposits to 5.15% for the three  months  ended  December  31, 2000 from
4.49% for the three months ended December 31, 1999. The generally  higher market
interest rate  environment  during the current fiscal year  influenced the rates
paid on deposits.  Strong  competition for deposits in this  environment made it
more difficult for the Company to attract  transaction  accounts,  as opposed to
higher-costing   certificates  of  deposit.  The  average  balance  of  deposits
increased by $12.6 million, or 2.8%, to $458.6 million at December 31, 2000 from
$446.0  million at December  31, 1999 and the  increase  primarily  consisted of
increases in time deposit balances.

An increase in the balance of FHLB advances partially funded the increase in the
balance of loans receivable. Interest on FHLB advances increased by $558,000, or
25.3%,  to $2.8 million for the three  months ended  December 31, 2000 from $2.2
million for the three months ended  December 31, 1999.  The increase in interest
on borrowings was largely due to an increase in the average balance of advances.
The average balance of advances increased by $22.9 million,  or 15.2%, to $173.3
million at December  31, 2000 from $150.4  million at  December  31,  1999.  The
increase in interest  expense was also due to an increase of 52 basis  points in
the average cost of borrowings to 6.38% for the three months ended  December 31,
2000 from 5.86% for the three months ended December 31, 1999.


                                       10
<PAGE>


Net Interest Income. Net interest income decreased by $40,000,  or 0.9%, to $4.5
million for the three months  ended  December 31, 2000 from $4.6 million for the
three months ended December 31, 1999. The Company's interest rate spread for the
three months ended December 31, 2000 decreased to 2.32% from 2.54% for the three
months ended December 31, 1999.

Provision  for Loan Loss.  Provision  for loan losses  increased by $15,000,  or
11.1%,  to $150,000 for the three months ended  December 31, 2000 from  $135,000
for the three months ended December 31, 2000 and 1999. Provision for loan losses
was increased due to increased  loan  balances and the larger  concentration  of
commercial  and consumer  loans  included in those  balances.  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  totaled  $1.6 million for each of the
three-month  periods  ended  December  31, 2000 and 1999.  Income  from  service
charges and other fees increased by $76,000, or 9.9%, for the three months ended
December 31, 2000 as compared to the three months ended  December 31, 1999.  The
increase in service charges and other fees resulted from increased  service fees
from the Company's growing business and personal deposit account  relationships.
Gain on sale of loans held for sale increased by $40,000,  or 100.4%, to $81,000
for the three months  ended  December 31, 2000 from $40,000 for the three months
ended  December  31,  1999  due  to  increased   activity  in  residential  loan
originations. The Company recorded net losses on the sale of securities totaling
$2,000 and $51,000,  respectively,  for the three months ended December 31, 2000
and 1999.  These increases were largely offset by decreases in other  categories
of  noninterest  income.  Gain  on  sale of real  estate  held  for  development
decreased by $38,000,  or 20.4%, to $149,000 for the three months ended December
31, 2000 from $187,000 for the three months ended December 31, 1999. Income from
other real estate-related  activities decreased by $23,000, or 7.6%, to $280,000
for the three months ended  December 31, 2000 from $303,000 for the three months
ended  December  31,  1999,  partly  due to a decrease  in sales  revenue in the
Company's  real estate  brokerage  subsidiary in a generally  slower real estate
market.  Other noninterest  income decreased by $101,000,  or 27.3%, to $269,000
for the three months ended  December 31, 2000 from $370,000 for the three months
ended  December  31,  1999  primarily  due to  lower  revenues  from the sale of
non-insured  alternative  investments.  Investors chose insured  certificates of
deposit with rates  comparable  to those being offered for  non-insured  deposit
products in the generally higher market interest rate environment.

Noninterest  expense.  Noninterest  expense totaled $4.2 million for each of the
three months ended December 31, 2000 and 1999.  The Company has focused  renewed
attention on controlling noninterest expense since the completion of recent bank
acquisitions  in the two  preceding  fiscal  years.  Compensation  and  benefits
expense  decreased  by $142,000,  or 6.2%,  to $2.2 million for the three months
ended  December 31, 2000 from $2.3  million for the three months ended  December
31, 1999 largely due to a reduction in  full-time-equivalent  ("FTE") employees.
This reduction in FTE's more than offset  additional  expense  related to annual
salary increases, which took effect in January 2000.

Office property and equipment  expense and data processing  expense increased by
$25,000,  or 4.5%,  and $13,000,  or 12.5%,  respectively,  for the three months
ended  December  31,  2000 as  compared  to the same  period of the prior  year.


                                       11
<PAGE>

Deposit insurance premium expense and advertising  expense decreased by $45,000,
or  65.3%,  and  $13,000,  or 9.0%,  respectively,  for the three  months  ended
December 31, 2000 as compared to the three months ended December 31, 1999. Other
general and  administrative  expenses  increased by $182,000,  or 24.2%, for the
three  months  ended  December  31, 2000 as compared to the three  months  ended
December 31, 1999,  largely due to increases in legal and professional  fees and
donation expense.

Net earnings and income tax expense.  Net earnings  before  income taxes totaled
$1.8 million for each of the  three-month  periods  ended  December 31, 2000 and
1999.  Income tax expense  increased by $120,000,  or 20.8%, to $698,000 for the
three  months ended  December 31, 2000 from  $578,000 for the three months ended
December 31, 1999.  The Company's  effective tax rate increased to 39.3% for the
three  months  ended  December  31, 2000 from 31.3% for the three  months  ended
December 31, 1999  partially due to an adjustment for federal taxes payable on a
state refund received during the prior fiscal quarter. In addition,  the balance
of tax-exempt  investment  securities  decreased to $7.0 million at December 31,
2000 from $9.6 million at December 31, 1999.

COMPARISON OF THE RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED
DECEMBER 31, 2000 AND 1999

General.  Net earnings totaled $2.3 million,  or $.51 per diluted share, for the
six months ended December 31, 2000 compared to $2.5 million, or $.53 per diluted
share, for the six months ended December 31, 1999.

Interest Income.  Interest income increased by $2.9 million,  or 12.2%, to $26.2
million for the six months ended  December  31, 2000 from $23.3  million for the
six months ended  December  31, 1999,  largely due to an increase in the average
balance of  interest-earning  assets.  The average  balance of  interest-earning
assets increased by $39.4 million, or 6.2%, to $674.0 million for the six months
ended  December 31, 2000 from $634.6  million for the six months ended  December
31, 1999. The average yield on  interest-earning  assets  increased to 7.76% for
the six months  ended  December  31,  2000 from  7.34% for the six months  ended
December  31,  1999,  primarily  due to higher  yields on loans  receivable  and
investment  securities in the generally  higher market interest rate environment
and to changes in the mix of interest-earning assets.

Interest income on loans  increased by $3.1 million,  or 17.3%, to $21.0 million
for the six months ended December 31, 2000 from $17.9 million for the six months
ended December 31, 1999. The increase in interest  income on loans was primarily
due to an increase of $53.2 million,  or 11.4%,  in the average balance of loans
receivable,  to $518.9  million for the six months ended  December 31, 2000 from
$465.7  million for the six months ended December 31, 1999. The average yield on
loans  increased to 8.08% for the six months ended  December 31, 2000 from 7.68%
for the six months ended December 31, 1999.

Interest income on MBS decreased by $368,000, or 30.3%, for the six months ended
December  31, 2000 as compared to the six months ended  December  31, 1999.  The
decrease was  primarily  due to a decrease of $12.8  million,  or 33.8%,  in the
average  balance of MBS to $25.1  million for the six months ended  December 31,
2000 from $38.0 million for the six months ended  December 31, 1999. The average
yield on MBS increased to 6.76% for the six months ended  December 31, 2000 from
6.42% for the six months ended December 31, 1999.

Interest income on investment securities increased by $141,000, or 3.4%, to $4.3
million for the six months ended December 31, 2000 from $4.1 million for the six
months ended  December 31, 1999.  The increase in interest  income on investment
securities  was primarily due to a 21 basis point  increase in the average yield

                                       12
<PAGE>

on  investment  securities  to 6.69% for the six months ended  December 31, 2000
from 6.48% for the six months ended  December 31, 1999.  The average  balance of
investment securities was $127.7 million and $127.5 million,  respectively,  for
the six months ended December 31, 2000 and 1999.

Interest Expense. Interest expense increased by $2.9 million, or 20.4%, to $17.1
million for the six months ended  December  31, 2000 from $14.2  million for the
six months  ended  December  31,  1999.  Interest on deposits  increased by $1.5
million,  or 15.7%,  to $11.5 million for the six months ended December 31, 2000
from $10.0  million for the six months ended  December 31, 1999 due to increases
in both the  average  balance of  deposits  and in rates paid on  deposits.  The
average  balance of  deposits  increased  by $7.4  million,  or 1.7%,  to $454.8
million for the six months ended  December 31, 2000 from $447.4  million for the
six months ended December 31, 1999. The average cost of deposits increased by 61
basis points to 5.06% for the six months ended  December 31, 2000 from 4.45% for
the six months ended December 31, 1999.

Interest on borrowings  increased by $1.3 million, or 25.3%, to $5.6 million for
the six months  ended  December  31,  2000 from $4.3  million for the six months
ended  December  31,  1999.  The  increase in interest  paid on  borrowings  was
primarily due to an increase in the average balance of advances. Average advance
balances  increased by $30.5  million,  or 20.9%,  to $176.7 million for the six
months  ended  December  31, 2000 from $146.2  million for the six months  ended
December 31, 1999. The increase in interest  expense was also due to an increase
of 50 basis points,  or 8.5%, in the average cost of borrowings to 6.36% for the
six months ended  December 31, 2000 from 5.86% for the six months ended December
31, 1999.

Net Interest Income. Net interest income decreased by $46,000,  or 0.8%, to $9.0
million for the six months ended December 31, 2000 from $9.1 million for the six
months ended December 31, 1999. The Company's  interest rate spread decreased by
22 basis points,  or 8.6%,  to 2.33% for the six months ended  December 31, 2000
from 2.55% for the six months ended December 31, 1999.

Provision for Loan Loss.  Provision for loan loss expense  increased by $55,000,
or 22.9%,  to $295,000 for the six months ended  December 31, 2000 from $240,000
for the six months ended  December 31, 1999. The provision for loan loss expense
was  increased  due to  increased  balances  in loans  receivable  and to larger
concentrations  of  commercial  and  consumer  loans in the current  fiscal year
period.  Commercial  and consumer  loans are  generally  considered to involve a
higher level of risk than one- to four-family residential loans.

Noninterest Income.  Noninterest income decreased by $131,000,  or 3.9%, to $3.2
million for the six months ended December 31, 2000 from $3.4 million for the six
months  ended  December 31, 1999.  Service  charges and other fees  increased by
$212,000,  or 14.5%,  to $1.7 million for the six months ended December 31, 2000
from $1.5  million for the six months ended  December  31, 1999.  During the six
months ended December 31, 2000, gain on sale of loans held for sale increased by
$19,000,  or 15.1%,  when  compared  to the same period in 1999,  reflecting  an
increase in mortgage  origination  activity in the current  fiscal year  period.
Gain on sale of real estate held for development  totaled $178,000 and $241,000,
respectively,  for the six months ended  December 31, 2000 and 1999.  During the
six months  ended  December  31, 2000 no gain on sale of real  estate  owned was
recorded  while gain on sale of real estate owned  totaled  $120,000 for the six

                                       13
<PAGE>

months ended December 31, 1999. Income from other real estate-related activities
decreased by $151,000,  or 20.5%,  to $581,000 for the six months ended December
31, 2000 from $732,000 for the six months ended  December 31, 1999. The decrease
in real  estate-related  income was primarily due to decreased revenues from the
Company's real estate brokerage company.  Other income decreased by $85,000,  or
11.7%,  to $648,000 for the six months ended December 31, 2000 from $733,000 for
the six months ended  December  31, 1999  largely due to weaker  earnings in the
Company's non-bank subsidiaries.

Noninterest expense.  Noninterest expense increased by $42,000, or 0.5%, to $8.5
million for the six months ended December 31, 2000 from $8.4 million for the six
months ended December 31, 1999.  Compensation and benefits expense  decreased by
$125,000,  or 2.8%,  to $4.4 million for the six months ended  December 31, 2000
from $4.5 million for the six months ended  December 31, 1999 primarily due to a
reduction in FTE's during the current fiscal year period.

Deposit insurance premium expense and advertising  expense decreased by $91,000,
or 65.0%, and $46,000, or 17.6%, respectively, for the six months ended December
31, 2000 as compared to the six months  ended  December  31,  1999.  The deposit
insurance  premium rate decreased to $0.0206 per hundred dollars of deposits for
the six months  ended  December  31, 2000 from  $0.0580  per hundred  dollars of
deposits for the six months ended  December 31, 1999.  The  decreases in certain
noninterest  expense  categories were more than offset by increases in equipment
costs and  other  general  and  administrative  expenses.  Office  property  and
equipment expense and data processing  expense increased by $46,000 and $20,000,
respectively,  over the prior year.  Other general and  administrative  expenses
increased by $249,000,  or 15.1%,  for the six months ended December 31, 2000 as
compared to the six months ended December 31, 1999,  largely due to increases in
legal and professional fees and contributions.

Net earnings and income tax expense.  Net earnings  before  income taxes totaled
$3.5  million  for the six months  ended  December  31, 2000 as compared to $3.8
million for the six months ended December 31, 1999. Income tax expense decreased
by $97,000,  or 7.4%, to $1.2 million for the six months ended December 31, 2000
from $1.3 million for the six months ended  December  31,  1999.  The  Company's
effective tax rate was 34.8% for each of the six months ended  December 31, 2000
and 1999.



                                       14
<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

   The Company  convened its 2000 Annual Meeting of  Stockholders on October 26,
2000. At the meeting,  the  stockholders of the Company  considered and voted on
the following proposals:

Ballot No. 1.

The  election of Jon G.  Cleghorn,  Steven L. Opsal and David Van  Engelenhoven,
each to serve as directors  for terms of three years and Nancy A Boysen to serve
as director for a term of one year and until their  respective  successors  have
been elected and qualified - The results of Ballot No. 1 are as follows:

                                               For           Withheld
                                               ---           --------
            Jon G. Cleghorn                 3,692,736          61,984
            Steven L. Opsal                 3,646,054         108,666
            David Van Engelenhoven          3,682,905          71,815
            Nancy A. Boysen                 3,595,035         159,685

Ballot No. 2.

The ratification of the appointment of KPMG LLP as auditors for the Company for
the fiscal year ending June 30, 2001 - The results of
--------------------------------------------------------------------------------
Ballot No. 2 are as follows:           For          Against      Abstain
                                      ----         --------      -------
   Number of Votes                 3,717,543        18,059        18,819
   Percentage of votes present
     in person or by proxy              99.0%          0.5%          0.5%


Exhibits and Reports on Form 8-K
--------------------------------

(a)        Exhibits

          none

(b)        Reports on Form 8-K

       On January 9, 2001 the  Registrant  filed a current report on Form 8-K to
       report the  announcement  by the Company  that it is  commencing  a stock
       repurchase program. The program calls for the repurchase of up to 460,000
       shares, or approximately  10%, of the Company's  outstanding common stock
       in open market transactions within a one-year timeframe.



                                       15
<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:  February 13, 2001            BY: /s/ Barry E. Backhaus
                                                   ---------------------
                                                   Barry E. Backhaus
                                                   President and
                                                   Chief Executive Officer

           DATE:  February 13, 2001            BY: /s/ Katherine Bousquet
                                                   ----------------------
                                                   Katherine Bousquet
                                                   Vice President and Treasurer
                                                  (Principal Financial and
                                                     Accounting Officer