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, 2001

[_]  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 11, 2001
            -----                               ---------------------------
  (Common Stock, $.01 par value)                         4,581,517


<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 March 31, 2001 and June 30, 2000                         1

            Condensed Consolidated Statements of Operations
            for the three- and nine-month periods ended
            March 31, 2001 and 2000                                     2

            Condensed Consolidated Statements of Changes in
            Stockholders' Equity for the nine-month periods
            ended March 31, 2001 and 2000                               3

            Condensed Consolidated Statements of Comprehensive
            Income for the three- and nine-month periods ended
            March 31, 2001 and 2000                                     4

            Condensed Consolidated Statements of Cash Flows
            for the nine-month periods ended March 31, 2001
            and 2000                                                    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>
                                                                                      March 31,               June 30,
                                                                                        2001                    2000
                                                                                ------------------------------------------
Assets                                                                               (Unaudited)
------
<S>                                                                                   <C>                     <C>
Cash and cash equivalents                                                             $19,105,301             $20,166,706
Securities available for sale                                                         162,186,106             117,326,062
   (amortized cost $160,238,669 and $124,252,112)
Securities held to maturity                                                            22,007,836              23,737,311
   (fair value of $22,237,037 and $23,067,005)
Loans receivable, net                                                                 412,135,105             505,089,564
Office property and equipment, net                                                     14,894,018              15,314,905
Federal Home Loan Bank stock, at cost                                                   9,468,700               8,928,900
Accrued interest receivable                                                             4,574,617               4,800,415
Deferred tax asset                                                                      -                       2,362,000
Excess of cost over fair value of assets acquired                                      19,177,376              19,900,409
Other assets                                                                            7,110,888               5,755,245
                                                                                ------------------------------------------
Total assets                                                                         $670,659,947            $723,381,517
                                                                                ==========================================


Liabilities
Deposits                                                                             $485,255,098            $471,625,531
Advances from Federal Home Loan Bank                                                   99,911,049             174,020,499
Advance payments by borrowers for
    taxes and insurance                                                                   940,028               2,828,275
Accrued taxes on income                                                                   137,717                 292,740
Accrued interest payable                                                                5,885,752               4,297,514
Deferred tax liability                                                                    798,000               -
Accrued expenses and other liabilities                                                  2,214,895               2,204,039
                                                                                ------------------------------------------
Total liabilities                                                                     595,142,539             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 March 31, 2001 and June 30, 2000, respectively                                      48,377                  48,336
Additional paid-in capital                                                             36,004,781              36,002,723
Retained earnings, substantially restricted                                            42,265,401              39,782,321
Treasury stock, at cost, 249,875 and 144,050 shares
     at March 31, 2001 and June 30, 2000, respectively                                 (2,214,307)             (1,273,138)
Accumulated other comprehensive income (loss)                                           1,220,437              (4,343,049)
Unearned ESOP                                                                          (1,512,610)             (1,634,600)
Unearned RRP                                                                             (294,671)               (469,674)
                                                                                ------------------------------------------
Total stockholders' equity                                                             75,517,408              68,112,919
                                                                                ------------------------------------------
Total liabilities and stockholders' equity                                           $670,659,947            $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                          Nine months
                                                                         ended March 31,                       ended March 31,
                                                                      2001            2000                 2001            2000
                                                                  -----------------------------------------------------------------
Interest income:                                                                             (Unaudited)
<S>                                                               <C>              <C>                 <C>             <C>
     Loans receivable                                             $10,001,569      $9,441,789          $30,967,899     $27,318,136
     Mortgage-backed securities                                       850,026         525,111            1,699,179       1,742,741
     Investment securities                                          2,004,159       2,172,213            6,274,146       6,301,350
     Other interest-earning assets                                     31,404          41,617              105,111         123,568
                                                                  -----------------------------------------------------------------
          Total interest income                                    12,887,158      12,180,730           39,046,335      35,485,795
                                                                  -----------------------------------------------------------------

Interest expense:
     Deposits                                                       5,905,336       5,125,659           17,420,038      15,079,871
     Borrowings                                                     2,191,063       2,528,222            7,812,760       6,810,712
                                                                  -----------------------------------------------------------------
          Total interest expense                                    8,096,399       7,653,881           25,232,798      21,890,583
                                                                  -----------------------------------------------------------------
     Net interest income                                            4,790,759       4,526,849           13,813,537      13,595,212
     Provision for loan losses                                        150,000         159,000              445,000         399,000
                                                                  -----------------------------------------------------------------
     Net interest income after provision for loan losses            4,640,759       4,367,849           13,368,537      13,196,212
                                                                  -----------------------------------------------------------------

Noninterest income:
     Service charges and other fees                                   827,395         668,350            2,500,691       2,129,439
     Gain on sale of loans held for sale                               51,270          12,497              195,986         138,207
     Gain on sale of real estate owned and held for investment         48,185          43,157              226,399         404,331
     Net gain (loss) on sale of securities                            371,639      -                       377,711         (50,535)
     Real estate-related activities                                   278,346         329,464              859,738       1,061,047
     Other income                                                     364,417         446,927            1,011,964       1,180,519
                                                                  -----------------------------------------------------------------
          Total noninterest income                                  1,941,252       1,500,395            5,172,489       4,863,008
                                                                  -----------------------------------------------------------------

Noninterest expense:
     Compensation and employee benefits                             2,229,982       2,245,467            6,594,105       6,734,877
     Office property and equipment                                    639,830         565,052            1,839,712       1,718,712
     Deposit insurance premiums                                        23,336          25,044               72,367         165,149
     Data processing expense                                          122,442         110,814              364,393         333,164
     Advertising                                                       62,632         103,987              276,694         363,825
     Amortization of intangibles                                      235,082         243,156              718,597         737,741
     Other general and administrative                               1,198,413         766,650            3,096,499       2,415,751
                                                                  -----------------------------------------------------------------
          Total noninterest expense                                 4,511,717       4,060,170           12,962,367      12,469,219
                                                                  -----------------------------------------------------------------

     Earnings before taxes on income                                2,070,294       1,808,074            5,578,659       5,590,001
     Taxes on income                                                  797,000         644,000            2,018,000       1,962,000
                                                                  -----------------------------------------------------------------
     Net earnings                                                  $1,273,294      $1,164,074           $3,560,659      $3,628,001
                                                                  =================================================================

Per share data:
     Basic earnings per share                                           $0.29           $0.26                $0.81          $0.79
                                                                  =================================================================
     Diluted earnings per share                                         $0.29           $0.26                $0.80          $0.79
                                                                  =================================================================

     Dividends declared per share                                       $0.080          $0.075               $0.240         $0.225
                                                                  =================================================================
</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>
                                                                                          Nine months ended March 31,
                                                                                          2001                  2000
                                                                                   ------------------------------------
                                                                                       (Unaudited)
Capital Stock
<S>                                                                                       <C>                  <C>
   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                                            (10,422)             (12,074)
   Grant of RRP shares at market                                                            -                   18,250
-----------------------------------------------------------------------------------------------------------------------
End of period balance                                                                  36,004,781           35,994,165
-----------------------------------------------------------------------------------------------------------------------

Retained earnings, substantially restricted
   Beginning of year balance                                                           39,782,321           36,283,211
   Net earnings                                                                         3,560,659            3,628,001
   Dividends paid on common stock                                                      (1,077,579)          (1,037,687)
-----------------------------------------------------------------------------------------------------------------------
End of period balance                                                                  42,265,401           38,873,525
-----------------------------------------------------------------------------------------------------------------------

Treasury stock, at cost
   Beginning of year balance                                                           (1,273,138)                -
   Treasury stock purchased                                                              (941,169)          (1,930,138)
   RRP shares granted                                                                       -                  657,000
-----------------------------------------------------------------------------------------------------------------------
End of period balance                                                                  (2,214,307)          (1,273,138)
-----------------------------------------------------------------------------------------------------------------------

Accumulated other comprehensive income (loss)
   Beginning of year balance                                                           (4,343,049)          (2,202,184)
   Net change in unrealized gains (losses) on securities available-for-sale             5,800,311           (2,387,910)
   Less: reclassification adjustment for net realized gains (losses)
         included in net income (net of tax expense)                                      236,825              (31,685)
-----------------------------------------------------------------------------------------------------------------------
End of period balance                                                                   1,220,437           (4,558,409)
-----------------------------------------------------------------------------------------------------------------------

Unearned ESOP shares
   Beginning of year balance                                                           (1,634,600)          (1,813,758)
   ESOP shares allocated                                                                  121,990              138,508
-----------------------------------------------------------------------------------------------------------------------
End of period balance                                                                  (1,512,610)          (1,675,250)
-----------------------------------------------------------------------------------------------------------------------

Unearned recognition and retention plan shares
   Beginning of year balance                                                             (469,674)                -
   RRP shares granted                                                                       -                 (675,250)
   Amortization of RRP expense                                                            175,003              135,450
-----------------------------------------------------------------------------------------------------------------------
End of period balance                                                                    (294,671)            (539,800)
-----------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------
Total stockholders' equity                                                            $75,517,408          $66,837,685
=======================================================================================================================
</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                 Nine months ended
                                                                   March 31,                        March 31,
                                                      --------------------------------   -------------------------------
                                                           2001               2000             2001            2000
                                                           ----               ----             ----            ----
                                                                           (Unaudited)
<S>                                                       <C>              <C>              <C>             <C>
Net earnings                                              $1,273,294       $1,164,074       $3,560,659      $3,628,001
Other comprehensive income:
    Unrealized holding gains (losses) arising
      during the period, net of tax                        2,422,145         (259,453)       5,800,311      (2,387,910)
    Less: reclassification adjustment for net
      realized gains (losses) included in net
      income, net of tax expense                             233,018         -                 236,825         (31,685)
                                                      ---------------    -------------   --------------   -------------
Other comprehensive income (loss), net of tax              2,189,127         (259,453)       5,563,486      (2,356,225)
                                                      ---------------    -------------   --------------   -------------

                                                      ---------------    -------------   --------------   -------------
Comprehensive income                                      $3,462,421         $904,621       $9,124,145      $1,271,776
                                                      ===============    =============   ==============   =============
</TABLE>

See notes to condensed consolidated financial statements.

                                       -4-


<PAGE>

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

<TABLE>
<CAPTION>
                                                                                    Nine months ended March 31,
                                                                                    2001                   2000
                                                                             --------------------------------------
Cash flows from operating activities:                                                       (Unaudited)
<S>                                                                              <C>                    <C>
Net earnings                                                                     $3,560,659             $3,628,001
Adjustments to reconcile net earnings to net
 cash provided by operating activities:
   Loans originated for sale to investors                                       (26,728,680)           (17,190,882)
   Proceeds from sale of loans originated for sale                               24,378,691             17,463,178
   Provision for loan losses                                                        445,000                399,000
   Depreciation and amortization                                                  1,534,133              1,955,935
   Gain on sale of loans held for sale                                             (195,986)              (138,207)
   Net (gain) loss on sale of securities available-for-sale                        (377,711)                50,535
   Net gain on sale of real estate owned and held for development                  (226,399)              (404,331)
   Net loan fees deferred                                                           (22,418)                98,805
   Amortization of premiums and discounts on loans,
     mortgage-backed securities, and investment securities                          527,758                608,945
   Increase in other assets                                                        (611,741)            (1,509,117)
   Increase (decrease) in accrued expenses and other liabilities                  1,444,071               (150,819)
                                                                             --------------------------------------
Net cash provided by operating activities                                         3,727,377              4,811,043
                                                                             --------------------------------------

Cash flows from investing activities:
   Purchase of securities held-to-maturity                                           -                    (519,205)
   Proceeds from maturities of securities held-to-maturity                        1,731,198              4,134,358
   Proceeds from sale of securities available-for-sale                           61,740,507              3,131,067
   Purchase of securities available-for-sale                                     (3,000,000)            (8,875,000)
   Purchase of Federal Home Loan Bank Stock                                        (539,800)              (834,600)
   Proceeds from maturities of securities available-for-sale                     17,195,621              5,222,473
   Loans purchased                                                               (9,785,000)           (15,654,000)
   Increase in loans receivable                                                  (7,641,228)           (26,571,111)
   Proceeds from sale of real estate owned and held for development                 998,947              2,592,036
   Net expenditures on real estate owned and held for development                  (531,172)              (824,173)
   Proceeds from sale of office property and equipment                                  200                152,264
   Purchase of office property and equipment                                       (506,158)            (1,020,473)
                                                                             --------------------------------------
Net cash provided by (used in) investing activities                              59,663,115            (39,066,364)
                                                                             --------------------------------------

Cash flows from financing activities:
   Increase in deposits                                                          13,629,567             19,299,626
   Proceeds from advances from FHLB                                              36,500,000             57,500,000
   Repayment of advances from FHLB                                             (110,686,990)           (35,223,997)
   Net decrease in advances from borrowers for taxes and insurance               (1,888,247)            (1,354,386)
   Issuance of common stock, net                                                     12,521                 30,528
   Purchase of treasury stock                                                      (941,169)            (1,930,138)
   Cash dividends paid                                                           (1,077,579)            (1,037,687)
                                                                             --------------------------------------
Net cash (used in) provided by financing activities                             (64,451,897)            37,283,946
                                                                             --------------------------------------
Net (decrease) increase in cash and cash equivalents                             (1,061,405)             3,028,625
Cash and cash equivalents at beginning of period                                 20,166,706             15,067,956
                                                                             --------------------------------------
Cash and cash equivalents at end of period                                      $19,105,301            $18,096,581
                                                                             ======================================

Supplemental disclosure of noncash operating activities:
   Loans converted to securities                                               $111,495,480              -
                                                                             ======================================
</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  nine  months  ended  March  31,  2001  and 2000 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.

                                    Three months ended     Nine months ended
                                         March 31,              March 31,
                                     2001       2000         2001       2000
                                  ---------------------   ---------------------
Basic EPS computation:
---------------------
   Net earnings                   $1,273,294 $1,164,074   $3,560,659 $3,628,001
   Weighted-average common
      shares outstanding           4,378,154  4,483,497    4,422,966  4,587,830
                                   ---------  ---------   ----------  ---------

      Basic earnings per share         $0.29      $0.26        $0.81      $0.79
                                   =========  =========   ==========  =========

Diluted EPS computation:
-----------------------
   Net earnings                   $1,273,294 $1,164,074   $3,560,659 $3,628,001
   Weighted average common
      shares outstanding - basic   4,378,154  4,483,497    4,422,966  4,587,830
   Incremental option shares
      using treasury stock method     63,611     21,239       46,644     19,310
                                   ---------  ---------    ---------  ---------

   Weighted average diluted
      shares outstanding           4,441,765  4,504,736    4,469,610  4,607,140
                                   ---------  ---------    ---------  ---------

      Diluted earnings per share       $0.29      $0.26        $0.80      $0.79
                                   =========  =========    =========  =========
4. DIVIDENDS

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. Dividends totaling $354,618 were paid to stockholders.

On April 19, 2001 the  Company  declared a cash  dividend  on its common  stock,
payable on May 31,  2001 to  stockholders  of record as of May 17, 2001 equal to
$.08 per share.  Approximately  $354,114 will be paid to stockholders on May 31,
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.

Statement of Financial  Accounting  Standards  ("SFAS") No. 133  "Accounting for
Derivative  Instruments and Hedging  Activities," and SFAS No. 138,  "Accounting
for Certain Derivative Instruments and Certain Hedging Activities - An Amendment
to FASB  Statement  No. 133," were adopted by the Company  beginning  January 1,
2001.  The  adoption  of the  standards  did not have a  material  effect on the
Company's consolidated financial statements.

                                       7

<PAGE>

6. LOAN SECURITIZATION AND SALES

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"). 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  securitized  a total  of  $112.7  million  of the  Mortgage  Loans
effective  March 1, 2001.  In March 2001 the Company  sold $49.0  million of the
mortgage-backed  securities ("MBS") created in the securitization and recognized
pretax gains of approximately  $382,000.  As of the date hereof, the Company has
commitments  to sell an  additional  $39.8 million of the MBS during the quarter
ending June 30, 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.

The Company retained servicing rights,  which are considered retained interests,
in the securitized  loans. Gain or loss on the sale of the loans depends in part
on the  previous  carrying  value  amount of the  financial  assets sold and the
retained  interests  based  on  their  relative  fair  value  at the date of the
transfer.  To obtain fair values,  quoted  market  prices are used if available.
However,  quotes are  generally not  available  for retained  interests,  so the
Company  expects to estimate fair value based on the present value of the future
expected cash flows using  management's  best estimates of the key assumptions -
prepayment  speeds and residual cash flows discount rate  commensurate  with the
risks involved.

Capitalized  mortgage  servicing  rights  originated  for the three months ended
March 31, 2001 totaled  $700,250  and the fair value of the  mortgage  servicing
rights at March 31, 2001 was approximately $713,000. At March 31, 2001 there was
no valuation allowance for capitalized  mortgage  servicing.  The Company had no
capitalized mortgage servicing rights prior to March 2001.



PART 1. ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                        AND RESULTS OF OPERATIONS

FINANCIAL CONDITION

Total assets decreased by $52.7 million, or 7.3%, to $670.7 million at March 31,
2001 from $723.4 million at June 30, 2000. In March 2001 the Company securitized
$112.7 million of fixed-rate  single-family mortgage loans and subsequently sold
$49.0 million of the  mortgage-backed  securities created in the securitization.
Loans  receivable  decreased by $93.0  million,  or 18.4%,  to $412.1 million at
March  31,  2001 from  $505.1  million  at June 30,  2000  primarily  due to the
securitization process. Securities available-for-sale ("AFS") increased by $44.9
million,  or 38.2%,  to $162.2  million at March 31, 2001 from $117.3 million at
June  30,  2000.  The  increase  in the  balance  of  AFS  was  due to the  loan
securitization  transaction  that added net balances  totaling  $63.7 million of
mortgage-backed  securities to the AFS portfolio  during the quarter

                                       8

<PAGE>

ended March 31,  2001.  Partly  offsetting  the  increase in AFS due to the loan
securitization  was a decrease in the balance of callable  agency  securities as
issues totaling $15.2 million were called in the generally lower market interest
rate environment during the quarter.  Securities  held-to-maturity  decreased by
$1.7 million,  or 7.3%, to $22.0 million at March 31, 2001 from $23.7 million at
June 30, 2000 due to principal repayment and amortization.

Deposits  increased by $13.6  million,  or 2.9%, to $485.2  million at March 31,
2001 from $471.6  million at June 30, 2000.  Advances from the Federal Home Loan
Bank (the "FHLB")  decreased by $74.1  million,  or 42.6%,  to $99.9  million at
March 31, 2001 from $174.0  million at June 30,  2000.  Proceeds  from sales and
redemptions of AFS securities and increased  deposit balances were used to repay
short-term  advances  during the three  months  ended  March 31,  2001.  Advance
payments by borrowers  for taxes and  insurance  decreased by $1.9  million,  or
66.8%,  to $940,000 at March 31, 2001 from $2.8  million at June 30, 2000 due to
the  payment of state real  estate  taxes due in March  2001.  Accrued  interest
payable  increased by $1.6 million,  or 37.0%, to $5.9 million at March 31, 2001
from $4.3 million at June 30, 2000 largely due to increased  balances in deposit
accounts  and to higher rates being paid on time  certificates  purchased in the
higher market interest rate environment immediately preceding the current fiscal
quarter.

Total stockholders' equity increased by $7.4 million, or 10.9%, to $75.5 million
at March 31, 2001 from $68.1  million at June 30,  2000.  Earnings  totaled $3.6
million for the first nine months of the fiscal year.  In addition,  accumulated
other comprehensive income(loss) increased by $5.6 million. The Company reported
a net  unrealized  loss on AFS securities of $4.3 million at June 30, 2000 and a
net  unrealized  gain of $1.2 million at March 31, 2001.  The higher  valuations
occurred as market  interest  rates dropped after three 50 basis point  interest
rate  decreases  were  announced by the Federal  Reserve  Board during the three
months ended March 31,  2001.  Dividends  declared  during the nine months ended
March 31, 2001 totaled $1.1 million excluding dividends on unallocated  Employee
Stock Ownership Plan ("ESOP") shares.

CAPITAL

The OTS  requires  that the Bank meet  minimum  tangible,  leverage  (core)  and
risk-based capital requirements. As of March 31, 2001 the Bank was in compliance
with all regulatory capital requirements. The Bank's required, actual and excess
capital levels as of March 31, 2001 are as follows:

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

Tangible Capital     $ 9,669   1.5%     $49,058     7.61%     $39,389
Core Capital          19,339   3.0%      49,058     7.61%      29,719
Risk-based Capital    30,948   8.0%      52,722    12.68%      21,774


COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
March 31, 2001 and 2000

General.  Net  earnings  for the three  months ended March 31, 2001 totaled $1.3
million,  or $0.29 per  diluted  share  compared to $1.2  million,  or $0.26 per
diluted share for the three months ended March 31, 2000.

                                       9

<PAGE>

Interest  Income.  Interest  income  increased  by $706,000,  or 5.8%,  to $12.9
million for the three  months  ended  March 31, 2001 from $12.2  million for the
three  months  ended  March 31,  2000,  partly due to an increase in the average
balance of  interest-earning  assets.  The average  balance of  interest-earning
assets  increased  by $5.6  million,  or 0.9%,  to $659.3  million for the three
months ended March 31, 2001 from $653.7 million for the three months ended March
31, 2000. In addition, the average yield on interest-earning assets increased by
37 basis  points to 7.82% for the three  months  ended March 31, 2001 from 7.45%
for the three  months  ended  March  31,  2000,  due to  higher  yields on loans
receivable and mortgage-backed securities.

Interest  income on loans for the three months ended March 31, 2001 increased by
$560,000,  or 5.9%,  to $10.0  million for the three months ended March 31, 2001
from $9.4 million for the three  months  ended March 31,  2000.  The increase in
interest  income on loans was primarily due to an increase of 54 basis points in
the average  yield on loans to 8.27% for the three  months  ended March 31, 2001
from 7.73% for the three  months  ended  March 31,  2000.  The  increase  in the
average yield on loans was largely 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.  The average balance of loans receivable decreased by $4.7 million to
$483.8 million for the three months ended March 31, 2001 from $488.5 million for
the three  months  ended  March  31,  2000 due to the  securitization  of $112.7
million of  single-family  fixed-rate  loans during the three months ended March
31, 2001.

Interest income on mortgage-backed  securities ("MBS") increased by $325,000, or
61.9%,  to $850,000 for the three months ended March 31, 2001 from  $525,000 for
the three months ended March 31,  2000.  The increase in interest  income on MBS
was  primarily  due to an increase in the average  balance of MBS as a result of
the  securitization of mortgage loans during the period.  The average balance of
MBS increased by $18.2 million,  or 56.5%, to $50.5 million for the three months
ended March 31, 2001 from $32.3  million  for the three  months  ended March 31,
2000.  The average  yield on MBS  increased  to 6.73% for the three months ended
March 31, 2001 from 6.50% for the three months ended March 31, 2000, largely due
to the  loan  securitization  transaction.  The  weighted  average  yield of the
mortgage-backed  securities  added to the portfolio in March 2001 as a result of
the loan securitization was 6.97%

Interest income on investment securities decreased by $168,000, or 7.7%, to $2.0
million for the three  months  ended  March 31,  2001 from $2.2  million for the
three  months  ended March 31, 2000  primarily  due to a decrease in the average
balance of investment  securities.  The average balance of investment securities
decreased by $7.4 million, or 5.7%, to $122.5 million for the three months ended
March 31, 2001 from $129.9 million for the three months ended March 31, 2000. In
addition,  the average  yield on  investment  securities  decreased  by 14 basis
points to 6.55% for the three  months  ended  March 31,  2001 from 6.69% for the
three months ended March 31, 2000.  During the quarter  ended March 31, 2001 the
Federal  Reserve  Bank  lowered the federal  funds target rate by a total of 150
basis points.  In the generally  lower market interest rate  environment,  $15.2
million of  higher-than-market-rate  agency securities owned by the Company were
called during the three months ended March 31, 2001.

Interest  Expense.  Interest  expense  increased by $443,000,  or 5.8%,  to $8.1
million for the three  months  ended  March 31,  2001 from $7.7  million for the
three months ended March 31, 2000.  Interest on deposits  increased by $780,000,
or 15.2%,  to $5.9  million for the three  months ended March 31, 2001 from $5.1
million for the three months  ended March 31, 2000.  The increase in interest on

                                       10

<PAGE>

deposits  was partly due to a 49 basis point  increase  in the  average  cost of
deposits to 5.08% for the three  months  ended March 31, 2001 from 4.59% for the
three months  ended March 31,  2000.  For the three months ended March 31, 2001,
over 60% of the Company's  deposit  account  balances  consisted of time deposit
accounts as opposed to  transaction  accounts so the lower market  interest rate
environment  during  the period  did not  result in an  immediate  corresponding
decrease in the Company's cost of deposits.  Interest on deposits also increased
due to an increase in the average  balance of deposits.  The average  balance of
deposits  increased by $18.5  million,  or 4.1%, to $465.4 million for the three
months ended March 31, 2001 from $446.9 million for the three months ended March
31, 2000.

Interest on FHLB advances  decreased by $337,000,  or 13.3%, to $2.2 million for
the three  months  ended March 31, 2001 from $2.5  million for the three  months
ended March 31, 2000.  The decrease in interest on borrowings was largely due to
a decrease  in the average  balance of FHLB  advances.  The  average  balance of
advances  decreased by $21.2 million,  or 12.4%, to $149.3 million for the three
months ended March 31, 2001 from $170.5 million for the three months ended March
31, 2000.  The Company paid off  outstanding  advance  balances  totaling  $53.5
million  in March  2001  with  proceeds  from the  sale  and  redemption  of AFS
securities.  The decrease in interest  expense on  borrowings  was also due to a
decrease of 6 basis  points in the average cost of  borrowings  to 5.87% for the
three  months  ended March 31, 2001 from 5.93% for the three  months ended March
31, 2000.

Net Interest Income. Net interest income increased by $264,000, or 5.8%, to $4.8
million for the three  months  ended  March 31,  2001 from $4.5  million for the
three months ended March 31, 2000.  The  Company's  interest rate spread for the
three  months  ended March 31, 2001  increased to 2.55% from 2.50% for the three
months ended March 31, 2000.

Provision  for  Loan  Loss.  Provision  for loan  losses  totaled  $150,000  and
$159,000,  respectively, for the three months ended March 31, 2001 and 2000. 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 $441,000,  or 29.4% to $1.9
million for the three  months  ended  March 31,  2001 from $1.5  million for the
three months ended March 31,  2000.  Income from service  charges and other fees
increased  by $159,000,  or 23.8%,  for the three months ended March 31, 2001 as
compared to the three  months  ended  March 31,  2000.  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 $39,000 to $51,000 for the three months ended
March 31,  2001 from  $12,000 for the three  months  ended March 31, 2000 due to
increased activity in residential loan originations.  The Company recorded a net
gain on the sale of  securities  totaling  $372,000  for the three  months ended
March  31,  2001.  The gain on sale of  securities  was  primarily  due to gains
realized  on  the  sale  of  $49.0  million  of the  mortgage-backed  securities
securitized  in March  2001.  Income from other real  estate-related  activities
decreased by $51,000, or 15.5%, to $278,000 for the three months ended March 31,
2001 from  $330,000 for the three  months ended March 31, 2000,  partly due to a
decrease in sales revenue in the Company's real estate brokerage subsidiary in a
generally slower real estate market as compared to the prior year period.

                                       11

<PAGE>

Other  noninterest  income  decreased by $83,000,  or 18.5%, to $364,000 for the
three months ended March 31, 2001 from $447,000 for the three months ended March
31,  2000.  Other  noninterest  income for the three months ended March 31, 2000
included a one-time gain on the sale of office property totaling $107,000.

Noninterest expense. Noninterest expense increased by $452,000, or 11.1% to $4.5
million for the three  months  ended  March 31,  2001 from $4.1  million for the
three months ended March 31, 2000.  Compensation  and benefits  expense  totaled
$2.2  million for each of the three months ended March 31, 2001 and 2000 largely
due to a reduction in full-time-equivalent  ("FTE") employees. This reduction in
expense due to fewer FTE's more than offset additional expense related to annual
salary increases which took effect in January 2001.

Office property and equipment  expense and data processing  expense increased by
$75,000,  or 13.2%, and $12,000,  or 10.5%,  respectively,  for the three months
ended  March  31,  2001 as  compared  to the  same  period  of the  prior  year.
Advertising  expense  decreased by $41,000,  or 39.8%,  to $63,000 for the three
months  ended March 31, 2001 from  $104,000 for the three months ended March 31,
2000. Other general and administrative expenses increased by $432,000, or 56.3%,
to $1.2 million for the three months ended March 31, 2001 from  $767,000 for the
three  months  ended March 31, 2000.  Legal and  consulting  fees related to the
Company's strategic development plan totaled $275,000 for the three months ended
March 31, 2001. In addition,  Delaware  franchise  tax expense and  contribution
expense increased over the prior fiscal year period.

Net earnings and income tax expense.  Net earnings  before  income taxes totaled
$2.1 million and $1.8  million,  respectively,  for the three months ended March
31, 2001 and 2000.  Income tax  expense  increased  by  $153,000,  or 23.8%,  to
$797,000 for the three  months ended March 31, 2001 from  $644,000 for the three
months ended March 31, 2000. The Company's effective tax rate increased to 38.5%
for the three  months ended March 31, 2001 from 35.6% for the three months ended
March 31, 2000 partly due to a decrease of $2.6  million in the average  balance
of tax-exempt  investment  securities to $7.0 million for the three months ended
March 31, 2001 from $9.6 million for the three months ended March 31, 2000.

COMPARISON OF THE RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED
MARCH 31, 2001 AND 2000

General.  Net earnings  totaled $3.6 million for each of the nine-month  periods
ended March 31, 2001 and 2000. On a per share basis,  earnings totaled $0.80 per
diluted  share for the nine months ended March 31, 2001 as compared to $0.79 per
diluted share for the nine months ended March 31, 2000.

Interest Income.  Interest income increased by $3.5 million,  or 10.0%, to $39.0
million for the nine months ended March 31, 2001 from $35.5 million for the nine
months ended March 31, 2000,  largely due to an increase in the average  balance
of  interest-earning  assets.  The average  balance of  interest-earning  assets
increased by $29.4 million, or 4.6%, to $669.2 million for the nine months ended
March 31, 2001 from $639.8 million for the nine months ended March 31, 2000. The
average yield on interest-earning  assets increased to 7.78% for the nine months
ended  March 31,  2001 from  7.40% for the nine  months  ended  March 31,  2000,
primarily  due  to  higher  yields  on  loans  receivable  and   mortgage-backed
securities and to changes in the mix of interest-earning assets.

Interest income on loans  increased by $3.7 million,  or 13.4%, to $31.0 million
for the nine months ended March 31, 2001 from $27.3  million for the nine months
ended March 31, 2000. The increase in interest income on loans was primarily

                                       12

<PAGE>

due to an increase of $34.0  million,  or 7.2%, in the average  balance of loans
receivable,  to $507.4  million  for the nine  months  ended March 31, 2001 from
$473.4  million for the nine months ended March 31, 2000.  The average  yield on
loans increased to 8.14% for the nine months ended March 31, 2001 from 7.69% for
the nine months ended March 31, 2000.

Interest income on MBS decreased by $44,000,  or 2.5%, for the nine months ended
March 31, 2001 as compared to the nine months ended March 31, 2000. The decrease
was primarily due to a decrease of $2.6 million, or 7.3%, in the average balance
of MBS to $33.5  million  for the nine  months  ended  March 31, 2001 from $36.1
million  for the nine  months  ended March 31,  2000.  The average  yield on MBS
increased  to 6.77% for the nine months  ended March 31, 2001 from 6.44% for the
nine months ended March 31, 2000.

Interest  income on investment  securities  totaled $6.3 million for each of the
nine-month  periods  ended  March 31,  2001 and 2000.  The  decrease in interest
income on investment  securities was primarily due to a decrease of $1.1 million
in the average  balance of investment  securities to $126.0 million for the nine
months ended March 31, 2001 from $127.1  million for the nine months ended March
31, 2000.  The average yield on investment  securities  totaled 6.64% and 6.61%,
respectively, for the nine months ended March 31, 2001 and 2000.

Interest Expense. Interest expense increased by $3.3 million, or 15.3%, to $25.2
million for the nine months ended March 31, 2001 from $21.9 million for the nine
months ended March 31, 2000.  Interest on deposits increased by $2.3 million, or
15.5%,  to $17.4  million  for the nine  months  ended March 31, 2001 from $15.1
million for the nine months  ended March 31, 2000 due to  increases  in both the
average  balance of deposits and in rates paid on deposits.  The average balance
of deposits increased by $11.0 million,  or 2.5%, to $458.3 million for the nine
months ended March 31, 2001 from $447.3  million for the nine months ended March
31, 2000. The average cost of deposits increased by 57 basis points to 5.07% for
the nine months  ended March 31, 2001 from 4.50% for the nine months ended March
31, 2000.

Interest on borrowings  increased by $1.0 million, or 14.7%, to $7.8 million for
the nine months ended March 31, 2001 from $6.8 million for the nine months ended
March 31, 2000. The increase in interest paid on borrowings was primarily due to
an  increase in the  average  balance of FHLB  advances.  Average  FHLB  advance
balances  increased by $13.5  million,  or 8.7%, to $167.7  million for the nine
months ended March 31, 2001 from $154.2  million for the nine months ended March
31,  2000.  The  increase in interest  expense was also due to an increase of 32
basis  points in the  average  cost of  borrowings  to 6.21% for the nine months
ended March 31, 2001 from 5.89% for the nine months ended March 31, 2000.

Net Interest  Income.  Net interest  income  increased by $218,000,  or 1.6%, to
$13.8  million for the nine months  ended March 31, 2001 from $13.6  million for
the nine  months  ended  March 31,  2000.  The  Company's  interest  rate spread
decreased  by 13 basis  points to 2.41% for the nine months ended March 31, 2001
from 2.54% for the nine months ended March 31, 2000.

Provision for Loan Loss.  Provision for loan loss expense  increased by $46,000,
or 11.5%, to $445,000 for the nine months ended March 31, 2001 from $399,000 for
the nine months ended March 31, 2000.  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.

                                       13

<PAGE>

Noninterest Income.  Noninterest income increased by $309,000,  or 6.4%, to $5.2
million for the nine months  ended March 31, 2001 from $4.9 million for the nine
months  ended  March 31,  2000.  Service  charges  and other fees  increased  by
$371,000,  or 17.4%,  to $2.5  million for the nine months  ended March 31, 2001
from $2.1  million for the nine months  ended  March 31,  2000.  During the nine
months  ended March 31, 2001,  gain on sale of loans held for sale  increased by
$58,000,  or 41.8%,  when  compared  to the nine months  ended  March 31,  3000,
reflecting an increase in mortgage  origination  activity in the current  fiscal
year period.  Gain on sale of real estate held for development  totaled $216,000
and $284,000,  respectively,  for the nine months ended March 31, 2001 and 2000.
Gain on sale of real estate owned totaled  $10,000 and  $120,000,  respectively,
for the nine  months  ended  March 31,  2001 and 2000.  Income  from  other real
estate-related  activities decreased by $201,000,  or 19.0%, to $860,000 for the
nine months  ended March 31,  2001 from $1.1  million for the nine months  ended
March 31, 2000. The decrease in real estate-related  income was primarily due to
decreased  revenues  from the Company's  real estate  brokerage  company.  Other
noninterest income decreased by $169,000, or 14.3%, to $1.0 million for the nine
months  ended March 31, 2001 from $1.2  million for the nine months  ended March
31,  2000.  Other  noninterest  income for the nine months  ended March 31, 2000
included a one-time gain totaling  $107,000 on the sale of office  property.  In
addition,  the  decrease  in other  noninterest  income  was partly due to lower
earnings in the Company's non-bank  subsidiaries  during the current fiscal year
period.

Noninterest  expense.  Noninterest  expense  increased by $493,000,  or 4.0%, to
$13.0  million for the nine months  ended March 31, 2001 from $12.5  million for
the nine  months  ended  March  31,  2000.  Compensation  and  benefits  expense
decreased by $141,000,  or 2.1%, to $6.6 million for the nine months ended March
31, 2001 from $6.7  million for the nine months  ended March 31, 2000  primarily
due to a reduction in FTE's during the current fiscal year period.

Deposit insurance premium expense and advertising  expense decreased by $93,000,
or 56.2%, and $87,000, or 24.0%,  respectively,  for the nine months ended March
31,  2001 as  compared to the nine  months  ended  March 31,  2000.  The deposit
insurance  premium rate decreased to $0.0201 per hundred dollars of deposits for
the nine  months  ended  March 31,  2001 from  $0.0461  per  hundred  dollars of
deposits  for the nine months  ended March 31,  2000.  The  decreases in certain
noninterest  expense  categories  were more than offset by  increases  in office
property and  equipment  costs and other  general and  administrative  expenses.
Office property and equipment  expense and data processing  expense increased by
$121,000  and  $31,000,  respectively,  over the prior year.  Other  general and
administrative  expenses  increased by $681,000,  or 28.2%,  for the nine months
ended March 31, 2001 as compared to the nine months ended March 31, 2000.  Legal
and consulting fees related to the Company's strategic  development plan totaled
$325,000  for the nine  months  ended  March 31,  2001.  In  addition,  Delaware
franchise tax expense and contribution  expense  increased over the prior fiscal
year period.

Net earnings and income tax expense.  Net earnings  before  income taxes totaled
$5.6 million for each of the  nine-month  periods  ended March 31, 2001 and 2000
and income tax expense  totaled $2.0 million for each of the nine-month  periods
ended March 31, 2001 and 2000.  The  Company's  effective tax rate was 36.2% and
35.1% for the nine months ended March 31, 2001 and 2000.


                                       14

<PAGE>


PART 1. ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The  information  appearing  on  page  11 of  the  Company's  annual  report  to
shareholders  under the heading "Market Risk Management" is incorporated  herein
by reference.  There have been no material  changes in information  about market
risk  from the end of the  preceding  fiscal  year to the  date of this  interim
balance sheet.


PART II. OTHER INFORMATION

Legal Proceedings

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

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


Exhibits and Reports on Form 8-K

     (a)  Exhibits

          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:  May 14, 2001                 BY: /s/ Barry E. Backhaus
                                                 ---------------------------
                                                 Barry E. Backhaus
                                                 President and
                                                 Chief Executive Officer



         DATE:  May 14, 2001                 BY: /s/ Katherine Bousquet
                                                 ---------------------------
                                                 Katherine Bousquet
                                                 Vice President and Treasurer
                                                 (Principal Financial and
                                                 Accounting Officer



                                       16