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 March 31, 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 May 12, 1999

  (Common Stock, $.01 par value)                     4,817,807
<PAGE>

                         FIRST FEDERAL BANKSHARES, INC.


                                      INDEX




                                                             

Part I.  Financial Information

   Item I.  Financial Statements of First Federal Savings Bank
            of Siouxland and Subsidiaries 
      
            Consolidated Condensed Balance Sheets at March 31, 1999 and June 30,
            1998

            Consolidated  Condensed  Statements of Operations  for the three and
            nine month periods ended March 31, 1999 and 1998
        
            Consolidated  Statements of  Comprehensive  Income for the three and
            nine month periods ended March 31, 1999 and 1998
  
            Consolidated  Statements  of Cash Flows for the nine  month  periods
            ended March 31, 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  SAVINGS  BANK  OF  SIOUXLAND  and  SUBSIDIARIES
  CONSOLIDATED  CONDENSED  BALANCE  SHEETS

                                                       March 31,         June 30,
                                                         1999              1998
                                                    -------------    -------------
Assets                                                (Unaudited)
<S>                                                 <C>              <C>          
Cash and interest bearing deposits ..............   $  28,173,490    $  17,225,007
Securities available for sale ...................      81,584,860       65,194,875
   (amortized cost $81,833,086 and $64,821,107)
Securities held to maturity .....................      25,471,429       32,023,240
   (fair value of $25,816,834 and $32,371,990)
Loans receivable, net ...........................     391,179,076      404,800,425
Real estate owned and in judgement, net .........         204,852          489,055
Office property and equipment, net ..............      12,242,270       10,844,964
Federal Home Loan Bank stock, at cost ...........       6,294,300        5,670,600
Accrued interest receivable .....................       2,911,544        3,526,679
Deferred tax asset ..............................         293,000          250,000
Excess of cost over fair value of assets acquired       7,907,955        8,158,212
Other assets ....................................       4,088,557        3,267,043
                                                    -------------    -------------
Total assets ....................................   $ 560,351,333    $ 551,450,100
                                                    =============    =============

Liabilities
Deposits ........................................   $ 400,493,233    $ 392,425,285
Advances from Federal Home Loan Bank ............     106,797,399      107,900,878
Advance payments by borrowers for
    taxes and insurance .........................       1,065,980        2,276,049
Accrued taxes on income .........................         474,221          (84,884)
Accrued interest payable ........................       3,285,275        3,636,142
Accrued expenses and other liabilities ..........       3,908,660        3,276,547
                                                    -------------    -------------
Total liabilities ...............................     516,024,768      509,430,017
                                                    -------------    -------------

Stockholders' equity
Common stock, $1 par value ......................       2,850,113        2,839,943
Additional paid-in capital ......................       8,311,484        8,266,796
Retained earnings, substantially restricted .....      33,320,194       30,678,991
Accumulated other comprehensive income ..........        (155,226)         234,353
                                                    -------------    -------------
Total stockholders' equity ......................      44,326,565       42,020,083
                                                    -------------    -------------
Total liabilities and stockholders' equity ......   $ 560,351,333    $ 551,450,100
                                                    =============    =============

</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
FIRST FEDERAL SAVINGS BANK OF SIOUXLAND AND SUBSIDIARIES
CONSOLIDATED  CONDENSED  STATEMENTS  OF  OPERATIONS

                                                                     (Unaudited)
                                                 For the Three Months             For the Nine Months
                                                    Ended March 31,                Ended March 31,
                                                 1999            1998            1999            1998
                                             -----------     -----------     -----------     -----------
<S>                                          <C>             <C>             <C>             <C>        
Interest income:
     Loans receivable ..................     $ 7,819,221     $ 6,790,785     $24,044,530     $20,626,453
     Mortgage-backed securities ........         505,977         654,663       1,687,373       2,053,101
     Investment securities .............       1,173,437         970,957       3,839,780       2,641,349
     Other interest-earning assets .....          96,057          69,932         152,805          77,714
                                             -----------     -----------     -----------     -----------
          Total interest income ........       9,594,692       8,486,337      29,724,488      25,398,617
                                             -----------     -----------     -----------     -----------

Interest expense:
     Deposits ..........................       4,071,435       3,782,180      13,037,947      11,414,145
     Borrowings ........................       1,601,726       1,284,210       5,030,350       3,913,457
                                             -----------     -----------     -----------     -----------
          Total interest expense .......       5,673,161       5,066,390      18,068,297      15,327,602
                                             -----------     -----------     -----------     -----------
     Net interest income ...............       3,921,531       3,419,947      11,656,191      10,071,015
     Provision for loan losses .........         105,000          95,000         255,000         240,000
                                             -----------     -----------     -----------     -----------
     Net interest income after provision       3,816,531       3,324,947      11,401,191       9,831,015
                                             -----------     -----------     -----------     -----------

Noninterest income:
     Service charges and other fees ....         555,823         286,931       1,515,135         871,888
     Gain on sale of loans held for sale          59,258          52,300         233,669         141,998
     Gain on sale of branch deposits ...            --              --         1,087,884            --
     Abstracting income ................         193,242         189,895         548,908         507,672
     Other income, net .................         208,027         161,506         655,523         516,972
                                             -----------     -----------     -----------     -----------
          Total noninterest income .....       1,016,350         690,632       4,041,119       2,038,530
                                             -----------     -----------     -----------     -----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST FEDERAL SAVINGS BANK OF SIOUXLAND AND SUBSIDIARIES
CONSOLIDATED  CONDENSED  STATEMENTS  OF  OPERATIONS (continued)

                                                                     (Unaudited)
                                                 For the Three Months             For the Nine Months
                                                    Ended March 31,                Ended March 31,
                                                 1999            1998            1999            1998
                                             -----------     -----------     -----------     -----------
<S>                                          <C>             <C>             <C>             <C>        
Noninterest expense:
     Compensation and employee benefits        1,872,776       1,761,404       5,532,888       4,734,514
     Office property and equipment .....         463,009         380,397       1,341,543       1,070,909
     Deposit insurance premiums ........          60,367          51,305         178,512         155,575
     Data processing expense ...........         100,285          69,732         296,357         220,713
     Advertising .......................         143,483         107,777         430,587         274,632
     Amortization of intangibles .......          85,989           6,561         257,967          19,683
     Other general and administrative ..         554,743         448,294       1,963,664       1,614,836
                                             -----------     -----------     -----------     -----------
          Total noninterest expense ....       3,280,652       2,825,470      10,001,518       8,090,862
                                             -----------     -----------     -----------     -----------

     Earnings before taxes on income ...       1,552,229       1,190,109       5,440,792       3,778,683
     Taxes on income ...................         563,079         417,208       1,982,079       1,347,690
                                             -----------     -----------     -----------     -----------
     Net earnings ......................     $   989,150     $   772,901     $ 3,458,713     $ 2,430,993
                                             ===========     ===========     ===========     ===========

Per share data: (1)
     Basic earnings per share ..........     $      0.35     $      0.27     $      1.22     $      0.86
                                             ===========     ===========     ===========     ===========
     Diluted earnings per share ........     $      0.34     $      0.27     $      1.20     $      0.84
                                             ===========     ===========     ===========     ===========

     Dividends declared per share ......     $      0.24     $      0.12     $      0.48     $      0.36
                                             ===========     ===========     ===========     ===========

</TABLE>
     ----------------- 
     (1)  Restated  for adoption of SFAS 128,  "Earnings  Per Share,"  effective
December 31, 1997.


     See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
FIRST FEDERAL SAVINGS BANK OF SIOUXLAND AND SUBSIDIARIES
Consolidated  Statements  of  Comprehensive Income
                                                                                             (Unaudited)
                                                                       Three Months Ended                Nine Months Ended
                                                                              March 31,                        March 31,
                                                                   ----------------------------      ---------------------------- 
                                                                       1999             1998            1999              1998
                                                                   -----------      -----------      -----------      -----------
<S>                                                                <C>              <C>              <C>              <C>        
Net earnings ..................................................    $   989,150      $   772,901      $ 3,458,713      $ 2,430,993
Other comprehensive income:
    Unrealized gains (losses) on securities available for sale:
        Unrealized holding gains (losses) arising
              during the period, net of tax ...................       (240,236)         (94,284)        (389,579)         305,059
                                                                   -----------      -----------      -----------      -----------
Other comprehensive income, net of tax ........................       (240,236)         (94,284)        (389,579)         305,059
                                                                   -----------      -----------      -----------      -----------

                                                                   ===========      ===========      ===========      ===========
Comprehensive income ..........................................    $   748,914      $   678,617      $ 3,069,134      $ 2,736,052
                                                                   ===========      ===========      ===========      ===========
</TABLE>

                 See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
  FIRST FEDERAL SAVINGS BANK OF SIOUXLAND AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                              (Unaudited)
                                                                       Nine months ended March 31,
                                                                         1999              1998
                                                                     ------------      ------------
<S>                                                                  <C>               <C>         
Cash flows from operating activities:
Net earnings ...................................................     $  3,458,713      $  2,430,993
Adjustments to reconcile net earnings to net cash
     provided by operating activities:
   Loans originated for sale to investors ......................      (27,189,689)      (10,993,253)
   Proceeds from sale of loans originated for sale .............       27,386,792        10,528,869
   Provision for losses on loans and other assets ..............          255,000           240,000
   Depreciation and amortization ...............................          926,431           497,884
   Provision for deferred taxes ................................          190,000              --
   Net gain on sale of loans ...................................         (233,669)         (141,998)
   Net (gain) loss on sale of real estate owned ................          (41,247)              464
   Net gain on sale of branch deposits .........................       (1,087,837)             --
   Net loan fees deferred ......................................           36,236            (6,302)
   Amortization of premiums and discounts on loans,
     mortgage-backed securities, and investment securities .....          (16,555)          (65,861)
   Decrease in accrued interest receivable .....................          615,135           400,850
   Increase in other assets ....................................         (843,140)         (396,541)
   (Decrease) increase in accrued interest payable .............         (350,867)          865,141
   Increase (decrease) in accrued expenses and other liabilities          290,100          (208,492)
   Increase in taxes payable ...................................          559,105           125,264
                                                                     ------------      ------------
Net cash provided by operating activities ......................        3,954,508         3,277,018
                                                                     ------------      ------------

Cash flows from investing activities:
   Cash and cash equivalents of acquisition ....................             --           9,913,195
   Purchase of securities held to maturity .....................      (10,527,262)      (18,017,045)
   Proceeds from maturities of securities held to maturity .....       16,415,656        17,643,000
   Purchase of securities available for sale ...................      (62,031,575)      (27,986,562)
   Purchase of Federal Home Loan Bank Stock ....................         (623,700)             --
   Proceeds from maturities of securities available for sale ...       45,800,271        33,113,338
   Loans purchased .............................................       (3,672,000)      (12,302,000)
   Decrease in loans receivable ................................       16,606,228        20,662,579
   Proceeds from sale of real estate owned .....................          657,198            29,845
   Purchase of office property and equipment ...................       (2,052,439)       (1,061,205)
                                                                     ------------      ------------
Net cash provided by investing activities ......................          572,377        21,995,145
                                                                     ------------      ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
 FIRST FEDERAL SAVINGS BANK OF SIOUXLAND AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                                                                              (Unaudited)
                                                                       Nine months ended March 31,
                                                                         1999              1998
                                                                     ------------      ------------
<S>                                                                  <C>               <C>         
Cash flows from financing activities:
   Increase in deposits ........................................       27,436,896         4,525,019
   Branch deposits transferred due to sale, net ................      (18,281,111)             --
   Proceeds from advances from FHLB ............................       29,000,000        52,000,000
   Repayment of advances from FHLB .............................      (30,103,479)      (61,500,000)
   Issuance of common stock ....................................           54,858            48,071
   Cash dividends paid .........................................         (475,497)         (471,337)
   Net decrease in advances from
      borrowers for taxes and insurance ........................       (1,210,069)         (847,742)
                                                                     ------------      ------------
Net cash provided by (used in) financing activities ............        6,421,598        (6,245,989)
                                                                     ------------      ------------
Net increase in cash and cash equivalents ......................       10,948,483        19,026,174
Cash and cash equivalents at beginning of period ...............       17,225,007        12,478,167
                                                                     ------------      ------------
Cash and cash equivalents at end of period .....................     $ 28,173,490      $ 31,504,341
                                                                     ============      ============
</TABLE>
  See notes to consolidated financial statements ...............
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            FIRST FEDERAL SAVINGS BANK OF SIOUXLAND AND SUBSIDIARIES

1. BASIS OF PRESENTATION

The financial  statements  presented 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 the
conversion and acquisition which took place on April 13, 1999, subsequent to the
period  reported on by this  quarterly  report on Form 10-Q.  The conversion and
acquisition are described at Note 2.

The  consolidated  condensed  balance  sheet  information  for June 30, 1998 was
derived from the Bank's audited  Consolidated Balance Sheets for the fiscal year
ended June 30, 1998. The consolidated  condensed financial statements at and for
the three months and nine months ended March 31, 1999 and 1998 are unaudited. In
the opinion of management  of the Bank 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 Bank is set forth
in Note 1 of the Bank's 1998 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  Bank  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  Bank,  are
generally  identifiable  by use  of the  words  "believe,"  "expect,"  "intend,"
"anticipate,"  "estimate," "project" or similar expressions.  The Bank'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
Bank'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

Throughout  the period  reported on by this report,  the Bank was organized as a
federally chartered stock savings bank engaging in retail and commercial banking
and related financial services.  At March 31, 1999,  approximately 53.49 percent
of the Bank's capital stock was owned by First Federal  Bankshares,  M.H.C. (the
"Holding  Company")  a  mutual  holding  company  formed  as  part  of the  1992
reorganization.  The  remaining  46.51  percent of the shares  were owned by the
Bank's Employee Stock Ownership Plan,  stock-based  compensation  plans, and the
general public.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On August 17, 1998 the Bank announced the execution of a definitive agreement to
acquire  Mid-Iowa  Financial  Corp. and its  wholly-owned  subsidiary,  Mid-Iowa
Savings Bank, FSB in a cash transaction. The total purchase consideration of the
acquisition was $28.3 million.  At March 31, 1999,  Mid-Iowa Financial had total
assets of $151.5 million and total deposits of $101.2
million.  The acquisition of Mid-Iowa Financial Corp. will be accounted for as a
purchase.  In  order  to  accomplish  this  acquisition,  the  Bank  formed  the
Registrant  for the purpose of holding all of its capital  stock  following  the
conversion and  acquisition.  The Bank changed its name to First Federal Bank in
conjunction with the conversion and acquisition.  The 53.5% interest in the Bank
owned by the  Holding  Company  was  offered  in a  subscription  and  community
offering as part of the conversion  and 2,635,000  shares of common stock of the
Registrant  were  sold  at $10 per  share.  In  addition,  the  minority  public
stockholders of the Bank exchanged each existing share of Bank stock for 1.64696
shares  of  the   Registrant's   stock.  The  conversion  and  acquisition  were
interdependent transactions.  These transactions became effective after close of
business on April 13, 1999.

3. EARNINGS PER SHARE

The Bank  adopted  Statement  of  Financial  Accounting  Standards  (SFAS)  128,
"Earnings Per Share," effective  December 31, 1997. Prior period information was
restated to conform to current period  reporting under SFAS 128. The computation
of earnings per share is presented below:
<TABLE>
<CAPTION>
                                        Three months ended            Nine months ended
                                             March 31,                     March 31,
                                        1999           1998           1999           1998
                                     ----------     ----------     ----------     ----------
<S>                                  <C>            <C>            <C>            <C>       
Basic earnings per share:
   Net earnings ................     $  989,150     $  772,901     $3,458,713     $2,430,993
   Weighted average shares
         outstanding ...........      2,847,897      2,835,603      2,845,119      2,833,448
   Basic earnings per share ....     $      .35     $      .27     $     1.22     $      .86
                                     ==========     ==========     ==========     ==========
Diluted earnings per share:
   Net earnings ................     $  989,150     $  772,901     $3,458,713     $2,430,993
   Weighted average shares
     outstanding ...............      2,847,897      2,835,603      2,845,119      2,833,448
   Incremental option shares
     using treasury stock method         28,603         35,118         27,003         45,346
                                     ----------     ----------     ----------     ----------
   Diluted shares outstanding ..      2,876,500      2,870,721      2,872,122      2,878,794
   Diluted earnings per share ..     $      .34     $      .27     $     1.20     $      .84
                                     ==========     ==========     ==========     ==========
</TABLE>
4. DIVIDENDS

On January  21,  1999 the Bank  declared a cash  dividend  on its common  stock,
payable on February 26, 1999 to  stockholders of record as of February 12, 1999,
equal to $.12  per  share.  Dividends  totaling  $158,864  were  paid to  public
stockholders.  The  Holding  Company  sought and was granted  approval  from the
Office of Thrift  Supervision  (OTS) to waive its portion of the dividend  which
totaled $182,952.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On March 18, 1999 the Bank declared a cash dividend on its common stock, payable
on April 9, 1999 to  stockholders  of record as of March 29,  1999 equal to $.12
per  share.  Dividends  totaling  $159,062  were  paid to  public  stockholders.
Dividends  totaling $182,952 were paid to the Holding Company.  This represented
the final dividend paid to  stockholders of the Bank prior to the conversion and
acquisition addressed in Note 2 above.

5. BRANCH DEPOSIT SALES

The Bank sold $19.4  million of deposits at branch  offices in Hartley,  Sanborn
and Hawarden, Iowa to other local financial institutions.  In addition, the Bank
sold  $699,000 of the loans  associated  with the  Hawarden,  Iowa  office.  The
transactions  were completed in the fourth  calendar  quarter of 1998 and a gain
totaling $1.1 million was recorded in connection with the branch deposit sales.
<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

FINANCIAL CONDITION

Total assets increased by $8.9 million,  or 1.6%, to $560.4 million at March 31,
1999 from $551.5 million at June 30, 1998.  Cash and  interest-bearing  deposits
increased  by  $10.9  million,  or  63.6%,  and  securities  available  for sale
increased by $16.4  million,  or 25.1%,  to $81.6 million at March 31, 1999 from
$65.2 million at June 30, 1998, as proceeds from amortization and prepayments of
loans  receivable  were invested in short-term  investments.  Securities held to
maturity  decreased by $6.6 million,  or 20.5%,  from June 30, 1998 to March 31,
1999.  Additionally,  loans receivable  decreased by $13.6 million,  or 3.4%, to
$391.2  million at March 31,  1999 from  $404.8  million at June 30, 1998 due to
amortization  and  prepayments.  The balance of real estate  owned  decreased by
$284,000, or 58.1%, to $205,000 at March 31, 1999 from $489,000 at June 30, 1998
primarily  due  to  the  sale  of  three  multi-family  properties  in  Madison,
Wisconsin,  with a carrying value totaling $457,000.  No losses were realized on
this sale.  A  foreclosure  on a  commercial  real  estate  property  located in
Grinnell,  Iowa with a  carrying  value  totaling  $136,000  at March 31,  1999,
partially  offset  the  decrease  in real  estate  owned  due to the sale of the
Madison properties.

Deposits increased by $8.1 million, or 2.1%, to $400.5 million at March 31, 1999
from $392.4 million at June 30, 1998. The increase in deposits was primarily due
to stock  subscription  funds received for common stock offered by First Federal
Bankshares,  Inc.  in the  conversion  of the Holding  Company  from a federally
chartered mutual holding company to a Delaware stock corporation  formed to hold
all the stock of the Bank. Stock subscription funds totaling approximately $17.5
million  are  included  in  deposit  balances  at  March  31,  1999.  The  stock
subscription  funds  partially  offset the sale of $19.4  million of deposits in
three branch offices to local financial institutions in November and December of
1998.  Deposit  balances,  excluding  the  stock  subscription  amounts,  in the
remaining  offices  increased by $10.0  million.  Advances from the Federal Home
Loan Bank  decreased by $1.1 million,  or 1.0%,  to $106.8  million at March 31,
1999 from $107.9  million at June 30, 1998.  Advance  payments by borrowers  for
taxes and insurance decreased by $1.2 million, or 53.2%, due to payment in March
1999 of the second half of real estate taxes escrowed.

Total stockholders'  equity increased by $2.3 million, or 5.5%, to $44.3 million
at March 31,  1999  from  $42.0  million  at June 30,  1998.  The  increase  was
primarily due to earnings totaling $3.5 million for the first half of the fiscal
year, less dividends declared totaling $817,000 and a decrease totaling $390,000
in accumulated other comprehensive income.

CAPITAL
The Bank's total equity  increased by $2.3 million to $44.3 million at March 31,
1999 from $42.0  million at June 30, 1998.  The OTS requires  that the Bank meet
minimum tangible,  leverage (core) and risk-based  capital  requirements.  As of
March  31,  1999  the  Bank  was  in  compliance  with  all  regulatory  capital
requirements.  The Bank's required, actual and excess capital levels as of March
31, 1999 are as follows:
<PAGE>
<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     $ 8,289   1.5%     $36,601     6.62%     $28,312
 Core Capital          16,578   3.0%      36,601     6.62%      20,023
 Risk-based Capital    23,264   8.0%      39,316    13.52%      16,052
</TABLE>

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 March 31, 1999
the  Bank's  average  liquidity  position  was  $96.4  million,  or 23.5% of its
liquidity base for the preceding quarter.

COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
March 31, 1999 and 1998

General. Net earnings increased by $216,000, or 28.0%, to $989,000 for the three
months  ended March 31, 1999 from  $773,000 for the three months ended March 31,
1998.  Diluted earnings per share totaled $.34 and $.27,  respectively,  for the
three  months  ended March 31, 1999 and 1998.  The  acquisition  of GFS Bancorp,
Inc.(GFS), effective March 31, 1998, was accounted for using the purchase method
of accounting;  therefore,  the results of operations for the three months ended
March 31, 1998 do not include GFS activity.

Interest Income.  Interest income  increased by $1.1 million,  or 13.1%, to $9.6
million for the three  months  ended  March 31,  1999 from $8.5  million for the
three  months  ended March 31,  1998,  largely due to an increase in the average
balance of  interest-earning  assets.  The average  balance of  interest-earning
assets  increased by $72.9  million,  or 16.6%,  to $511.5 million for the three
months ended March 31, 1999 from $438.6 million for the three months ended March
31,  1998.  The  increase  in average  balances of  interest-earning  assets was
primarily due to the acquisition of GFS Bancorp,  Inc. effective March 31, 1998.
The average yield on  interest-earning  assets  decreased to 7.50% for the three
months  ended  March 31,  1999 from 7.74% for the three  months  ended March 31,
1998,  primarily due to the generally  lower  interest-rate  environment  in the
current year period.

Interest  income on loans for the three months ended March 31, 1999 increased by
$1.0 million, or 15.1%,  compared to the three months ended March 31, 1998. This
increase in interest income on loans was primarily due to an increase in average
loans of $62.3 million,  or 18.5%,  to $399.5 million for the three months ended
March 31, 1999 from $337.2  million for the three  months  ended March 31, 1998.
The average  yield on loans  decreased to 7.83% for the three months ended March
31, 1999 from 8.06% for the three months ended March 31, 1998.
<PAGE>
Interest income on  mortgage-backed  securities for the three months ended March
31, 1999  decreased by  $149,000,  or 22.7%,  when  compared to the three months
ended March 31, 1998.  This decrease was due to a decrease of $8.2  million,  or
21.1%, in the average balance of mortgage-backed securities to $30.7 million for
the three  months  ended March 31, 1999 from $38.9  million for the three months
ended  March  31,  1998.  In  addition,  the  average  yield on  mortgage-backed
securities  decreased  to 6.60% for the three  months  ended March 31, 1999 from
6.73% for the three months ended March 31, 1998.

Interest income on investment securities increased by $202,000, or 20.9%, as the
average balance of investment  securities  increased by $15.7 million, or 27.3%,
to $73.0  million at March 31, 1999 from $57.4  million at March 31,  1998.  The
average yield on investment securities decreased by 34 basis points to 6.43% for
the three  months  ended  March 31, 1999 from 6.77% for the three  months  ended
March 31, 1998. The increase in the average balance of investment securities was
due to the Bank's strategy of leveraging  investment purchases with FHLB advance
borrowings.  Interest  income  on other  interest-earning  assets  increased  by
$26,000 due to higher  average  balances in these  investments  during the three
months ended March 31, 1999 as compared to the same quarter of the prior year.

Interest  Expense.  Interest  expense  increased by $607,000,  or 12.0%, to $5.7
million for the three  months  ended  March 31,  1999 from $5.1  million for the
three months ended March 31, 1998.  Interest on deposits  increased by $289,000,
or 7.6%,  to $4.1  million for the three  months  ended March 31, 1999 from $3.8
million for the three months  ended March 31, 1998.  The increase in interest on
deposits was primarily due to an increase in the average  balance of deposits as
a result of the GFS acquisition, partially offset by the sale of the deposits of
three branches in November and December of 1998. The average balance of deposits
increased by $52.4 million,  or 16.4%,  to $371.2 million at March 31, 1999 from
$318.8  million at March 31, 1998. The increase in interest paid on deposits due
to increased  average  balances  was partly  offset by a decrease in the average
cost of deposits to 4.39% for the three  months  ended March 31, 1999 from 4.75%
for the three months ended March 31, 1998.  Rates paid on deposit  accounts were
lowered in response to  generally  lower market rates during 1999 as compared to
1998.

Interest on borrowings increased by $318,000,  or 24.7%, to $1.6 million for the
three  months  ended March 31, 1999 from $1.3 million for the three months ended
March 31, 1998.  The increase in interest on borrowings  was primarily due to an
increase in the average balance of advances.  Average advance balances increased
by $23.6  million,  or 27.4%,  to $109.8  million  at March 31,  1999 from $86.2
million at March 31, 1998.  The  increases in interest  expense due to increased
balances were partly offset by a decrease of 13 basis points in the average cost
of  borrowings to 5.83% for the three months ended March 31, 1999 from 5.96% for
the three months ended March 31, 1998.

Net Interest  Income.  Net interest income  increased by $502,000,  or 14.7%, to
$3.9 million for the three months ended March 31, 1999 from $3.4 million for the
three months ended March 31, 1998. The Bank's interest rate spread for the three
months ended March 31, 1999  increased to 2.79% from 2.73% for the quarter ended
March 31, 1998.
<PAGE>
Provision for Loan Loss.  Provision for loan loss expense  totaled  $105,000 and
$95,000,  respectively,  for the three months ended March 31, 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 $326,000, or 47.2%, to $1.0
million for the three  months  ended March 31, 1999 from  $691,000 for the three
months ended March 31, 1998. The increase in noninterest  income was largely due
to an increase of $269,000,  or 93.7%, in service charges and other fees for the
three  months  ended March 31, 1999 as compared to the three  months ended March
31,  1998.  The  increase  in service  charges and other fees was largely due to
prepayment  penalties  associated with  commercial  real estate lending,  growth
related to the GFS acquisition and the  introduction of a new checking  product.
Other income  increased by $46,000,  or 28.8%,  to $208,000 for the three months
ended March 31, 1999 from  $162,000  for the three  months  ended March 31, 1998
largely due to increased  abstracting  and other activity in the Bank's non-bank
subsidiaries.

Noninterest  expense.  Noninterest  expense increased by $455,000,  or 16.1%, to
$3.3 million for the three months ended March 31, 1999 from $2.8 million for the
three months ended March 31, 1998.  Compensation and benefits expense  increased
by $111,000,  or 6.3%, to $1.9 million for the three months ended March 31, 1999
from $1.8 million for the three  months  ended March 31, 1998.  During the three
months  ended  March  31,  1998  the  Bank   recognized  a  liability   totaling
approximately $214,000 for an early retirement incentive program.  Excluding the
early  retirement  program in the prior year quarter,  compensation and benefits
expense  increased by $325,000,  or 21.0%,  to $1.9 million for the three months
ended March 31, 1999 from $1.5 million, as adjusted,  for the three months ended
March 31,  1998.  The  Bank's  staff  increased  by  approximately  twenty-three
full-time-equivalent  employees  due  to  the  GFS  acquisition  and  due to the
addition of a new branch office.

Office property and equipment expense  increased by $83,000,  or 21.7%, over the
prior  year,  partially  due to the  implementation  of a new  platform  banking
system,  equipment and software  upgrades and replacements  related to Year 2000
issues and to the addition of two offices.  Deposit  insurance  premium expense,
data processing expense and advertising expense increased by $9,000, $31,000 and
$36,000,  respectively, for the three months ended March 31, 1999 as compared to
the three months ended March 31, 1998.  Amortization of intangibles increased by
$79,000 to $86,000 for the three months ended March 31, 1999 from $7,000 for the
three months ended March 31, 1998 due to amortization of the goodwill related to
the  GFS   acquisition   that  commenced  in  April  1998.   Other  general  and
administrative  expenses  increased by $106,000,  or 23.8%, for the three months
ended March 31, 1999 as compared to the three months ended March 31, 1998.
<PAGE>
Net earnings and income tax expense.  Net earnings  before  income taxes totaled
$1.6 million for the three months ended March 31, 1999, compared to $1.2 million
for the three  months  ended March 31,  1998.  Income tax expense  increased  by
$146,000,  or 35.0%,  to $563,000 for the three months ended March 31, 1999 from
$417,000 for the three months ended March 31,  1998.  The Bank's  effective  tax
rate increased to 36.3% for the three months ended March 31, 1999 from 35.1% for
the three months ended March 31, 1998.


COMPARISON OF THE RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED
March 31, 1999 and 1998.

General.  Net earnings increased by $1.0 million,  or 42.3%, to $3.4 million for
the nine months ended March 31, 1999 from $2.4 million for the nine months ended
March 31, 1998. Diluted earnings per share totaled $1.20 and $.84, respectively,
for the nine  months  ended  March 31,  1999 and 1998.  The  acquisition  of GFS
Bancorp,  Inc.,  effective  March 31, 1998, was accounted for using the purchase
method of accounting;  therefore,  the results of operations for the nine months
ended March 31, 1998 do not include GFS activity.

Interest income.  Interest income increased by $4.3 million,  or 17.0%, to $29.7
million for the nine months ended March 31, 1999 from $25.4 million for the nine
months ended March 31, 1998,  largely due to an increase in the average  balance
of  interest-earning  assets.  The average  balance of  interest-earning  assets
increased by $84.3 million,  or 19.3%,  to $520.3 million at March 31, 1999 from
$436.0  million at March 31,  1998  primarily  due to growth  related to the GFS
acquisition. The average yield on interest-earning assets decreased to 7.62% for
the nine months  ended March 31, 1999 from 7.77% for the nine months ended March
31, 1998, primarily due to the generally lower interest-rate  environment in the
current year period.  This decrease in yield  partially  offset the increases in
interest income related to larger average balances.

Interest income on loans  increased by $3.4 million,  or 16.6%, to $24.0 million
for the nine months ended March 31, 1999 from $20.6  million for the nine months
ended March 31,  1998  primarily  due to an  increase in the average  balance of
loans.  The average balance of loans receivable  increased by $62.0 million,  or
18.1%,  to $404.2  million for the nine months  ended March 31, 1999 from $342.2
million  at  March  31,  1998  primarily  due  to  growth  related  to  the  GFS
acquisition.  The yield on loans  receivable was 7.93% and 8.04%,  respectively,
for the nine months ended March 31, 1999 and 1998.

Interest income on mortgage-backed  securities decreased by $366,000,  or 17.8%,
to $1.7  million for the nine months  ended March 31, 1999 from $2.1 million for
the nine  months  ended March 31,  1998.  The  decrease  in  interest  income on
mortgage-backed  securities  was  primarily due to a decrease of $7.3 million in
the average balance of mortgage-backed  securities to $33.6 million for the nine
months  ended March 31, 1999 from $40.9  million for the nine months ended March
31, 1998. The decrease in the balance of  mortgage-backed  securities was due to
amortization  and  prepayment  as  borrowers  refinanced  in the  generally  low
interest-rate  environment for fixed-rate  mortgage loans.  The average yield on
mortgage-backed securities was 6.69% for both the nine month periods ended March
31, 1999 and 1998.

Interest income on investment securities increased by $1.2 million, or 45.4%, to
$3.8  million for the nine months ended March 31, 1999 from $2.6 million for the
nine months ended March 31, 1998. The average  balance of investment  securities
<PAGE>
increased by $27.3 million, or 53.5%, to $78.3 million for the nine months ended
March 31, 1999 from $51.0  million  for the nine months  ended March 31, 1998 as
the Bank leveraged investment purchases with FHLB advances. The average yield on
investment  securities  decreased  to 6.54% for the nine months  ended March 31,
1999 from 6.91% for the nine months ended March 31, 1998 in the generally  lower
interest-rate environment.

Interest expense. Interest expense increased by $2.7 million, or 17.9%, to $18.1
million for the nine months ended March 31, 1999 from $15.3 million for the nine
months ended March 31, 1998. The increase in interest  expense was primarily due
to  an  increase  of  $87.3  million,  or  21.7%,  in  the  average  balance  of
interest-bearing  liabilities  to $490.0 million for the nine months ended March
31, 1999 from $402.7 million at March 31, 1998.

Interest on deposits  increased by $1.6 million,  or 14.2%, to $13.0 million for
the nine  months  ended  March 31,  1999 from $11.4  million for the nine months
ended March 31,  1998,  primarily  due to an increase in the average  balance of
deposits.  The average balance of deposits increased by $60.2 million, or 19.0%,
to $377.3  million for the nine months ended March 31, 1999 from $317.1  million
for the nine months ended March 31, 1998,  primarily due to the  acquisition  of
GFS deposit accounts.  The average interest cost of deposits  decreased to 4.61%
for the nine months  ended  March 31, 1999 from 4.80% for the nine months  ended
March 31,  1998 as rates paid on deposit  accounts  were  lowered in response to
generally lower market rates.

Interest on FHLB advances  increased by $1.1 million,  or 28.5%, to $5.0 million
for the nine months  ended March 31, 1999 from $3.9  million for the nine months
ended March 31, 1998.  The average  balance of FHLB advances  increased by $27.1
million,  or 31.6%,  to $112.7  million for the nine months ended March 31, 1999
from $85.6  million for the nine months  ended March 31, 1998 largely due to GFS
fixed-term  advances  acquired in March 1998. The average  interest rate paid on
FHLB  advances  decreased to 5.95% for the nine months ended March 31, 1999 from
6.09% for the nine months ended March 31, 1998 as generally  lower-rate advances
were added in the current nine-month period.

Net interest income. Net interest income increased by $1.6 million, or 15.7%, to
$11.7  million for the nine months  ended March 31, 1999 from $10.1  million for
the nine months ended March 31, 1998.

Provision   for  Loan  Losses.   The  Bank   provided   $255,000  and  $240,000,
respectively, for loan losses for the nine months ended March 31, 1999 and 1998.
The general loan loss allowance  acquired from GFS Bancorp totaling $801,000 was
combined  with the  Bank's  loan loss  allowance  on the  effective  date of the
acquisition and problem assets acquired from GFS were recorded at fair value.

Noninterest income. Noninterest income increased by $2.0 million to $4.0 million
for the nine months  ended March 31, 1999 from $2.0  million for the nine months
ended March 31, 1998. The increase in noninterest  income was largely due to the
recognition  of a $1.1  million gain on the sale of the deposits of three branch
offices.   Deposits   totaling  $19.4  million  were  sold  to  local  financial
institutions.  Over 80% of the  deposits  sold were  fixed-rate,  fixed-maturity
certificates of deposits with average interest rates higher than First Federal's
weighted  average  interest  rate  paid on  total  deposits.  The  sale of these
deposits  reduced the average interest rate paid on the Bank's total deposits by
approximately 10 basis points.  The increase in noninterest  income was also due
<PAGE>
to growth related to the acquisition of GFS in March,  1998. Income from service
charges  and other  fees and gain on sale of loans  held for sale  increased  by
$643,000,  or 73.8%, and $92,000,  or 64.6%,  respectively,  for the nine months
ended March 31, 1999 when  compared  to the nine  months  ended March 31,  1998.
Service  charge  income  increased  due to an  increase in  transaction  account
balances in 1999 and also due to the addition of a new checking product. Gain on
sale of loans held for sale  increased  due to  increased  mortgage  activity as
borrowers took advantage of generally low fixed-rate financing opportunities for
both refinancing and purchases.

Noninterest expense. Noninterest expense increased by $1.9 million, or 23.6%, to
$10.0 million for the nine months ended March 31, 1999 from $8.1 million for the
nine months ended March 31, 1998.  Compensation and benefit expense increased by
$798,000,  or 16.9%,  to $5.5  million for the nine months  ended March 31, 1999
from $4.7 million for the nine months ended March 31,  1998.  This  increase was
largely  due  to  the  addition  of  GFS  Bancorp  staff  and  staff  for  a new
full-service  office opened in May 1998. The increase in noninterest expense was
also due to an increase of $271,000,  or 25.3%, in office property and equipment
expense  and to an increase  of  $156,000,  or 56.8%,  in  advertising  expense,
partially due to the promotion of a new checking product.  Other  administrative
expenses  increased  by  $349,000  over the  prior  year  period.  In  addition,
amortization  of  intangibles  increased  to $258,000  for the nine months ended
March 31,  1999 from  $20,000  for the nine  months  ended March 31, 1998 due to
amortization of the goodwill recorded in conjunction with the GFS acquisition.

Net earnings and income tax expense.  Net earnings before income taxes increased
by $1.7 million,  or 44.0%,  to $5.4 million for the nine months ended March 31,
1999 from $3.8  million for the nine months  ended  March 31,  1998.  Income tax
expense  increased  by $634,000,  or 47.1%,  to $2.0 million for the nine months
ended March 31, 1999 from $1.3 million for the nine months ended March 31, 1998.
The federal and state tax rate on  earnings  was 36.4% and 35.7%,  respectively,
for the nine months ended March 31, 1999 and 1998.


YEAR 2000

The Bank has  identified  the  systems  that will be  affected  by the Year 2000
problem.  The Bank's Year 2000  Action  Team has  completed  the  awareness  and
inventory  phases of Year  2000 in which  potential  Year  2000  risk  areas and
systems have been identified;  and, assessment of the Bank's Year 2000 exposures
is complete.  Programming  changes,  system upgrades and  replacements and other
actions  necessary  to  prepare  for Year 2000 were  completed  during the first
calendar  quarter of 1999.  In addition,  testing and  assessing the validity of
Year 2000 changes  were  completed  during the quarter  ended March 31, 1999 and
Year 2000-ready systems have been implemented.

The Bank has identified its  mission-critical  systems including its "core" data
processing system for loans,  deposits and the general ledger.  The enhancements
necessary to prepare the Bank's  mission-critical  systems for the year 2000 are
complete.  Contingency  plans  are  being  developed  for  these  systems  on  a
department-by-department  basis in  anticipation of the possibility of unplanned
system difficulties or failure of third parties to successfully prepare for Year
2000.  Most of these plans provide for some types of manual  record-keeping  and
reporting  procedures,  and will be  completed  by June 30,  1999 as part of the
Bank's overall contingency  planning process.  The Bank anticipates that it will
incur internal  staff costs as well as consulting and other expenses  related to
enhancements  necessary  to  prepare  and  maintain  its  systems  for Year 2000
readiness.  Based on the Bank's  current  estimate,  fiscal 1999 expenses of the
Year 2000 project are not expected to exceed $100,000.
<PAGE>
In addition to expenses related to its own computer  systems,  the Bank is aware
of potential Year 2000 risks to third parties, including vendors, depositors and
borrowers and the possible adverse impact on the Bank resulting from failures by
these  parties  to  adequately  address  the  Year  2000  problem.  The Bank has
contacted all  mission-critical  vendors and service  providers  regarding their
Year 2000  readiness.  The  potential  risks posed by these  entities  have been
analyzed  and  periodic   updates  on  the  Year  2000   progress  of  currently
non-compliant  vendors  are  being  performed.  To  date,  the Bank 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 Bank'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  Bank  regarding  the  repayment  of  loans  from  those
commercial  customers.  The Bank surveyed its existing commercial customers with
aggregate  outstanding  loan balances of $250,000 or more  regarding  their Year
2000 preparedness.  The results of this survey process were not conclusive as to
the overall  level of Year 2000 risk in the Bank's  commercial  loan  portfolio.
However,  repayment  sources for the majority of loans in the Bank's  commercial
loan portfolio are from  multi-family  real estate projects that tend to be less
computer-dependent than, for example, a manufacturing business. Accordingly, the
Bank considers its  commercial  loan portfolio to contain a relatively low level
of Year 2000 risk. Nevertheless,  the Bank has established a $75,000 reserve for
loan  losses  related  to  unforeseen  Year  2000  problems  of  its  commercial
customers. The Bank 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 Bank with
specific information regarding their Year 2000 status.

The Bank is also analyzing the Year 2000 risk posed by its 50 largest commercial
depositors.  To  date,  the  analysis  of the 25  largest  depositors  has  been
completed  and  indicates  a  relatively  low level of Year 2000 risk.  The Bank
considers its commercial  deposit portfolio to contain a relatively low level of
Year  2000  risk  since  the   majority  of  its   commercial   depositors   are
small-business  customers with limited computer  technology  dependence in their
core  business  functions.  The  bank  analyzes  potential  Year  2000  risk  of
prospective commercial deposit customers prior to accepting their deposits.

The Bank has assigned  responsibility to a committee of staff members to provide
information to customers and employees  about The Bank's  progress in addressing
the Year 2000  problem.  The mission of the  committee  is to maintain  customer
confidence  in the  Bank's  ability  to  operate  in Year  2000  and to  educate
employees  about  its Year 2000  efforts  in order to allow  them to  adequately
address customer concerns.

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.

   A special  meeting of  members  of First  Federal  Bankshares,  M.H.C.  and a
special  meeting of the  stockholders of First Federal Savings Bank of Siouxland
were  held on  March  26,  1999.  At the  meetings,  both  the  members  and the
stockholders voted on the following proposal:

Ballot No. 1.
-------------

The approval of a Plan of Conversion and Reorganization (the "Plan") pursuant to
which (i) the Bank will organize First Federal Bankshares,  Inc. as a first-tier
Delaware-chartered subsidiary; (ii) the Company will organize an interim federal
savings association  ("Interim") as a wholly owned subsidiary;  (iii) the Mutual
Holding Company will convert into an interim  federal stock savings  association
and will  simultaneously  merge  with  and  into  the Bank  with the Bank as the
resulting entity and with shares of Bank Common Stock held by the Mutual Holding
Company being canceled and each eligible account holder of the Bank receiving an
interest  in  the  liquidation   account  of  the  Bank  in  exchange  for  such
individual's  interest in the Mutual  Holding  Company;  (iv) Interim will merge
with and  into  the Bank  (the  "Bank  Merger")  with the Bank as the  resulting
entity,  with the  public  stockholders  of the Bank  ("Minority  Stockholders")
receiving common stock of the Company in exchange for the publicly-owned  shares
of the Bank ("Minority  Shares"),  based on the Exchange  Ratio;  (v) all of the
shares of common stock of Interim  held by the Company  will be  converted  into
shares of common stock of the Bank;  and, (vi)  contemporaneously  with the Bank
Merger,  the Company will offer for sale in the offering  shares of common stock
in a subscription and, if necessary, community offering.

The results of the voting on Ballot No. 1 were as follows:

                                              Votes            Votes
                                             In favor          Against
                                             --------          -------
Meeting of members
First Federal Bankshares, M.H.C.             2,176,777         133,192  
Percentage of votes cast                         94.23%           5.77%
Percentage of votes eligible to be cast          63.48%           3.88%

Meeting of stockholders
First Federal Savings Bank of Siouxland,  
including votes and
proxies of the
Mutual Holding Company                       2,249,825          88,886
Percentage of eligible votes                     78.98%           3.12%
<PAGE>
Meeting of stockholders
First Federal Savings Bank of Siouxland,         
excluding votes and
proxies of the
Mutual Holding Company                         725,225          88,886
Percentage of eligible votes                     54.78%           6.71%


The proposal,  having received the favorable votes of at least a majority of the
total  votes  eligible  to be cast at the  Members  meeting  was  declared  duly
approved  by the  Members.  In  addition,  the  proposal,  having  received  the
favorable votes of at least two-thirds of the Bank's stockholders,  including at
least a majority of the shares held by Minority Stockholders,  was declared duly
approved by the stockholders of the Bank.


Exhibits and Reports on Form 8-K.
(a)    Exhibits

      27 - Financial Data Schedule


(b)    Reports of Form 8-K

    On April 29, 1999 the Registrant filed a current report on Form 8-K relating
    to the Bank's  acquisition of Mid-Iowa Financial Corp. and the conversion of
    the former mutual holding company of the Bank to a capital stock corporation
    resulting in the organization of the Registrant,  First Federal  Bankshares,
    Inc.

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



         DATE:  May 12, 1999             BY: /s/Katherine Bousquet
                                             ---------------------
                                             Katherine Bousquet
                                             Chief Financial Officer