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

                                    FORM 10-Q

[Mark One]

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

         For the quarterly period ended September 30, 2000

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

         For the transition period from ______________ to __________

Commission File Number:   0-25509

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

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


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

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


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

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


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

              Class                             Outstanding at November 8, 2000
             -------                           --------------------------------
  (Common Stock, $.01 par value)                         4,690,161


<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 September 30, 2000 and June 30, 2000                     1

           Condensed Consolidated Statements of Operations
           for the three-month periods ended
           September 30, 2000 and 1999                                 2

           Condensed Consolidated Statements of Changes in
           Stockholders' Equity for the three-month periods
           ended September 30, 2000 and 1999                           3

            Condensed Consolidated Statements of Comprehensive
            Income for the three-month periods ended
            September 30, 2000 and 1999                                4

            Condensed Consolidated Statements of Cash Flows
            for the three-month periods ended
                  September 30, 2000 and 1999                          5

           Notes to Condensed Consolidated Financial Statements        6

   Item 2. Management's Discussion and Analysis of
           Financial Condition and Results of
           Operations                                                  7

Part II. Other Information                                             12



<PAGE>

PART I.  FINANCIAL  INFORMATION
  ITEM 1.  FINANCIAL  STATEMENTS

  FIRST FEDERAL BANKSHARES, INC and SUBSIDIARIES
  CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>


                                                                         September 30,           June 30,
                                                                              2000                 2000
                                                                       -------------------------------------
                                                                           (Unaudited)
<S>                                                                        <C>                  <C>
Assets
------
Cash and cash equivalents                                                  $20,729,862          $20,166,706
Securities available for sale                                              111,918,527          117,326,062
   (amortized cost $117,462,287 and $124,252,112)
Securities held to maturity                                                 23,227,582           23,737,311
   (fair value of $22,850,831 and $23,067,005)
Loans receivable, net                                                      522,521,675          505,089,564
Office property and equipment, net                                          15,090,716           15,314,905
Federal Home Loan Bank stock, at cost                                        9,468,700            8,928,900
Accrued interest receivable                                                  5,018,559            4,800,415
Deferred tax asset                                                           1,847,000            2,362,000
Excess of cost over fair value of assets acquired                           19,658,596           19,900,409
Other assets                                                                 4,625,348            5,755,245
                                                                       -------------------------------------
Total assets                                                              $734,106,565         $723,381,517
                                                                       =====================================

Liabilities
Deposits                                                                  $470,574,279         $471,625,531
Advances from Federal Home Loan Bank                                       183,466,536          174,020,499
Advance payments by borrowers for
    taxes and insurance                                                      1,878,948            2,828,275
Accrued taxes on income                                                        274,043              292,740
Accrued interest payable                                                     5,775,727            4,297,514
Accrued expenses and other liabilities                                       2,193,172            2,204,039
                                                                       -------------------------------------
Total liabilities                                                          664,162,705          655,268,598
                                                                       -------------------------------------

Stockholders' equity
Common stock, $.01 par value, 12,000,000 shares authorized;
    4,834,211 and 4,833,608 shares issued
    at September 30, 2000 and June 30, 2000, respectively                       48,342               48,336
Additional paid-in capital                                                  35,998,669           36,002,723
Retained earnings, substantially restricted                                 40,631,420           39,782,321
Treasury stock, at cost, 144,050 shares
     at September 30,2000 and June 30, 2000                                 (1,273,138)          (1,273,138)
Accumulated other comprehensive income (loss)                               (3,475,760)          (4,343,049)
Unearned ESOP                                                               (1,593,090)          (1,634,600)
Unearned RRP                                                                  (392,583)            (469,674)
                                                                       -------------------------------------
Total stockholders' equity                                                  69,943,860           68,112,919
                                                                       -------------------------------------
Total liabilities and stockholders' equity                                $734,106,565         $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
                                                                                      ended September 30,
                                                                                     2000              1999
                                                                              -------------------------------------
                                                                                     (Unaudited)
<S>                                                                                  <C>                <C>
Interest income:
      Loans receivable                                                               $10,323,525        $8,853,615
      Mortgage-backed securities                                                         483,427           637,800
      Investment securities                                                            2,136,093         2,008,707
      Other interest-earning assets                                                       37,463            40,447
                                                                              -------------------------------------
           Total interest income                                                      12,980,508        11,540,569
                                                                              -------------------------------------

Interest expense:
      Deposits                                                                         5,609,353         4,945,158
      Borrowings                                                                       2,859,076         2,077,674
                                                                              -------------------------------------
           Total interest expense                                                      8,468,429         7,022,832
                                                                              -------------------------------------
      Net interest income                                                              4,512,079         4,517,737
      Provision for loan losses                                                          145,000           105,000
                                                                              -------------------------------------
      Net interest income after provision for loan losses                              4,367,079         4,412,737
                                                                              -------------------------------------

Noninterest income:
      Service charges and other fees                                                     829,884           693,693
      Gain on sale of loans held for sale                                                 64,081            85,464
      Gain on sale of real estate owned and held for investment                           29,500           173,186
      Net gain on sale of securities                                                       7,637                 -
      Real estate-related activities                                                     301,701           428,740
      Other income                                                                       378,182           363,247
                                                                              -------------------------------------
           Total noninterest income                                                    1,610,985         1,744,330
                                                                              -------------------------------------
Noninterest expense:
      Compensation and employee benefits                                               2,198,480         2,181,554
      Office property and equipment                                                      604,951           584,215
      Deposit insurance premiums                                                          25,044            70,892
      Data processing expense                                                            122,244           115,972
      Advertising                                                                         85,395           118,487
      Amortization of intangibles                                                        241,813           248,636
      Other general and administrative                                                   966,545           899,190
                                                                              -------------------------------------
           Total noninterest expense                                                   4,244,472         4,218,946
                                                                              -------------------------------------

      Earnings before taxes on income                                                  1,733,592         1,938,121
      Taxes on income                                                                    523,000           740,000
                                                                              -------------------------------------
      Net earnings                                                                    $1,210,592        $1,198,121
                                                                              =====================================

Per share data:
      Basic earnings per share                                                             $0.27             $0.26
                                                                              =====================================
      Diluted earnings per share                                                           $0.27             $0.26
                                                                              =====================================

      Dividends declared per share                                                        $0.080            $0.075
                                                                              =====================================
</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>
                                                                                     Three months ended September 30,
                                                                                         2000               1999
                                                                                  ---------------------------------------
                                                                                                  (Unaudited)
<S>                                                                                          <C>                 <C>
Capital Stock
   Beginning of year balance                                                                 $48,336             $48,178
   Stock options exercised                                                                         6                  70
-------------------------------------------------------------------------------------------------------------------------
End of period balance                                                                         48,342              48,248
-------------------------------------------------------------------------------------------------------------------------

Additional paid-in capital
   Beginning of year balance                                                              36,002,723          35,957,560
   Stock options exercised                                                                     1,842              21,431
   Stock depreciation of allocated ESOP shares                                                (5,896)               -
-------------------------------------------------------------------------------------------------------------------------
End of period balance                                                                     35,998,669          35,978,991
-------------------------------------------------------------------------------------------------------------------------

Treasury stock, at cost
   Beginning of year balance                                                              (1,273,138)               -
   Treasury stock purchased                                                                      -                  -
-------------------------------------------------------------------------------------------------------------------------
End of period balance                                                                     (1,273,138)               -
-------------------------------------------------------------------------------------------------------------------------

Unearned ESOP shares
   Beginning of year balance                                                              (1,634,600)         (1,813,758)
   ESOP shares allocated                                                                      41,510              44,575
-------------------------------------------------------------------------------------------------------------------------
End of period balance                                                                     (1,593,090)         (1,769,183)
-------------------------------------------------------------------------------------------------------------------------

Unearned recognition and retention plan shares
   Beginning of year balance                                                                (469,674)               -
   Amortization of RRP expense                                                                77,091                -
-------------------------------------------------------------------------------------------------------------------------
End of period balance                                                                       (392,583)               -
-------------------------------------------------------------------------------------------------------------------------

Retained earnings, substantially restricted
   Beginning of year balance                                                              39,782,321          36,283,211
   Net earnings                                                                            1,210,592           1,198,121
   Dividends paid on common stock                                                           (361,493)           (362,226)
-------------------------------------------------------------------------------------------------------------------------
End of period balance                                                                     40,631,420          37,119,106
-------------------------------------------------------------------------------------------------------------------------

Accumulated other comprehensive income (loss)
   Beginning of year balance                                                              (4,343,049)         (2,202,184)
   Net change in unrealized losses on securities available-for-sale                          867,289            (816,777)
-------------------------------------------------------------------------------------------------------------------------
End of period balance                                                                     (3,475,760)         (3,018,961)
-------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity                                                               $69,943,860         $68,358,201
=========================================================================================================================
</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
                                                                                             September 30,
                                                                                  --------------------------------
                                                                                       2000               1999
                                                                                       ----               ----
                                                                                              (Unaudited)
<S>                                                                                   <C>              <C>
Net earnings                                                                          $1,210,592       $1,198,121
Other comprehensive income:
         Unrealized holding gains (losses) arising during the period, net of tax         872,733         (816,777)
         Less: reclassification adjustment for net realized gains
              inclulded in net income, net of tax expense                                 (5,444)               -
                                                                                  --------------- ----------------
Other comprehensive income (loss), net of tax                                            867,289         (816,777)
                                                                                  --------------- ----------------

                                                                                  --------------- ----------------
Comprehensive income                                                                  $2,077,881         $381,344
                                                                                  =============== ================
</TABLE>




See notes to condensed consolidated financial statements.


                                      -4-
<PAGE>


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

<TABLE>
<CAPTION>
                                                                                  Three months ended September 30,
                                                                                      2000                1999
                                                                               ----------------------------------------
                                                                                              (Unaudited)
<S>                                                                                     <C>                 <C>
Cash flows from operating activities:
Net earnings                                                                            $1,210,592          $1,198,121
Adjustments to reconcile net earnings to net cash
     provided by operating activities:
   Loans originated for sale to investors                                               (6,603,850)         (6,635,103)
   Proceeds from sale of loans originated for sale                                       6,559,780           7,407,277
   Provision for loan losses                                                               145,000             105,000
   Depreciation and amortization                                                           683,665             552,833
   Net gain on sale of loans                                                               (64,081)            (85,464)
   Net gain on sale of real estate owned and held for development                          (29,500)           (173,186)
   Net loan fees deferred                                                                   (2,606)             33,862
   Amortization of premiums and discounts on loans,
     mortgage-backed securities, and investment securities                                 165,232             198,495
   (Increase) decrease in accrued interest receivable                                     (218,144)            193,602
   Decrease (increase) in other assets                                                   1,644,358          (1,937,070)
   Increase in accrued interest payable                                                  1,478,213             428,611
   Decrease in accrued expenses and other liabilities                                      (10,867)           (346,553)
   (Decrease) increase in taxes payable                                                    (18,697)             39,457
                                                                               ----------------------------------------
Net cash provided by operating activities                                                4,939,095             979,882
                                                                               ----------------------------------------

Cash flows from investing activities:
   Purchase of securities held-to-maturity                                                   -                (519,205)
   Proceeds from maturities of securities held-to-maturity                                 509,975           1,140,961
   Proceeds from sale of securities available-for-sale                                   5,928,476               -
   Purchase of securities available-for-sale                                                 -              (2,000,000)
   Purchase of Federal Home Loan Bank Stock                                               (539,800)              -
   Proceeds from maturities of securities available-for-sale                               878,770           2,230,391
   Loans purchased                                                                      (1,753,000)         (1,570,000)
   Increase in loans receivable                                                        (15,995,238)         (7,091,040)
   Proceeds from sale of real estate owned and held for development                         66,198           1,541,255
   Net expenditures on real estate owned and held for development                         (452,766)           (258,520)
   Proceeds from sale of office property and equipment                                       -                  49,005
   Purchase of office property and equipment                                               (80,445)           (572,474)
                                                                               ----------------------------------------
Net cash used in investing activities                                                  (11,437,830)         (7,049,627)
                                                                               ----------------------------------------

Cash flows from financing activities:
   (Decrease) increase in deposits                                                      (1,051,252)          5,186,171
   Proceeds from advances from FHLB                                                     23,500,000          10,000,000
   Repayment of advances from FHLB                                                     (14,077,885)         (7,073,615)
   Net decrease in advances from borrowers for taxes and insurance                        (949,327)           (892,082)
   Issuance of common stock, net                                                             1,848              21,501
   Cash dividends paid                                                                    (361,493)           (362,226)
                                                                               ----------------------------------------
Net cash provided by financing activities                                                7,061,891           6,879,749
                                                                               ----------------------------------------
Net increase in cash and cash equivalents                                                  563,156             810,004
Cash and cash equivalents at beginning of period                                        20,166,706          15,067,956
                                                                               ----------------------------------------
Cash and cash equivalents at end of period                                             $20,729,862         $15,877,960
                                                                               ========================================
</TABLE>


  See notes to condensed consolidated financial statements.

                                       -5-


<PAGE>
6

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

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 ended September 30, 2000 and 1999 are unaudited.

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

A summary of  significant  accounting  policies  followed  by the Company is set
forth in Note 1 of the  Company's  2000  Annual  Report to  Stockholders  and is
incorporated herein by reference.

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

2. REORGANIZATION AND CONVERSION

First Federal Bankshares,  Inc. (the "Company") is the holding company for First
Federal Bank (the  "Bank").  The Company owns 100% of the Bank's  common  stock.
Currently,  the Company engages in no other  significant  activities  beyond its
ownership of the Bank's  common  stock.  Prior to April 13,  1999,  the Bank was
owned  approximately  53.49% by First Federal  Bankshares,  M.H.C.  (the "Mutual
Holding Company") and 46.51% by public shareholders. On April 13, 1999, pursuant
to a plan of conversion and reorganization,  and after a series of transactions:
(1) the Company was formed to own all of the capital stock of the Bank,  (2) the
Company sold the ownership  interest in the Bank  previously  held by the Mutual
Holding  Company to the public in a subscription  offering (the  Offering),  (3)
previous  public  shareholders  of the  Bank had  their  shares  exchanged  (the
Exchange) into common shares of the Company (exchange ratio of 1.64696 to 1) and
(4) the Mutual Holding Company ceased to exist.


                                       -6-
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


3. EARNINGS PER SHARE

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

                                                Three months ended
                                                  September 30,
                                                2000        1999
                                                ----        ----
Basic earnings per share computation:
   Net earnings                              $1,210,592  $1,198,121
   Wieghted-average common shares
         outstanding                          4,455,529   4,641,309
                                              ---------   ---------

      Basic earnings per share                    $0.27       $0.26
                                              =========   =========

Diluted earnings per share computation:
   Net earnings                              $1,210,592  $1,198,121
   Weighted average common
      shares outstanding - basic              4,455,529   4,641,309
   Incremental option shares using
      treasury stock method                      33,104      18,877
 Weighted average diluted
         shares outstanding                   4,488,633   4,660,186
                                              ---------   ---------

      Diluted earnings per share                  $0.27       $0.26
                                              =========   =========

4. DIVIDENDS

On July 20,  2000 the  Company  declared a cash  dividend  on its common  stock,
payable  on August 31,  2000 to  stockholders  of record as of August 17,  2000,
equal to $.08 per share. Dividends totaling $361,493 were paid to stockholders.

On October 26, 2000 the Company  declared a cash  dividend on its common  stock,
payable on November 30, 2000 to  stockholders  of record as of November 16, 2000
equal to $.08 per share.  Approximately $361,490 will be paid to stockholders on
November 30, 2000.

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

FINANCIAL CONDITION

Total assets increased by $10.7 million, or 1.5%, to $734.1 million at September
30, 2000 from $723.4  million at June 30, 2000. The increase in total assets was
primarily due to an increase in loans receivable.  Loans receivable increased by
$17.4  million,  or 3.4%,  to $522.5  million at September  30, 2000 from $505.1
million at June 30, 2000. The increase in loans  receivable was primarily due to
an increase in the origination of commercial real estate and commercial business
loans,  which  generally  have interest  rates higher than those of  residential
single-family  mortgages.  Partially  offsetting  the  increase  in loans  was a
decrease   in  the   balance   of  total   investment   securities.


                                      -7-
<PAGE>

Securities  available-for-sale  ("AFS")  decreased by $5.4 million,  or 4.6%, to
$111.9  million at  September  30,  2000 from $117.3  million at June 30,  2000.
During  the  three  months  ended  September  30,  2000  the  Company  sold  AFS
mortgage-backed  securities  with  principal  balances  totaling $5.9 million in
order to fund loan growth. Securities held-to-maturity decreased by $510,000, or
2.1%, to $23.2 million at September 30, 2000 from $23.7 million at June 30, 2000
due to principal repayment and amortization.

Deposits  decreased by $1.0 million,  or .2%, to $470.6 million at September 30,
2000 from $471.6  million at June 30, 2000.  Advances from the Federal Home Loan
Bank increased by $9.5 million, or 5.4%, to $183.5 million at September 30, 2000
from $174.0  million at June 30,  2000.  The increase in the balance of advances
partially  funded the increase in loan balances.  Advance  payments by borrowers
for taxes and insurance  decreased by $949,000,  or 33.6%,  due to the payout in
September 2000 of the first half of Iowa real estate taxes from escrow accounts.

Total  stockholders'  equity  increased  by $1.8  million  to $69.9  million  at
September  30, 2000 from $68.1 million at June 30, 2000.  Earnings  totaled $1.2
million for the first quarter of the fiscal year. In addition, accumulated other
comprehensive  income  (loss)  decreased  by  $867,000 as  unrealized  losses on
available-for-sale  securities  decreased due to higher market  valuations.  The
higher valuations occurred as market interest rates stabilized after a series of
six interest rate  increases by the Federal  Reserve Board between June 1999 and
May 2000.  Dividends  declared  during the quarter  totaled  $362,000  excluding
dividends on unallocated Employee Stock Ownership Plan ("ESOP") shares.

LIQUIDITY

OTS regulations  require that thrift  institutions  such as the Bank maintain an
average daily balance of liquid assets (cash,  certain time  deposits,  banker's
acceptances  and specified  United States  government,  state or federal  agency
obligations)  in each calendar  quarter of not less than 4% of the average daily
balance  of its  liquidity  base (net  withdrawable  deposits  plus  short  term
borrowings)  during the preceding  quarter.  For the quarter ended September 30,
2000 the Company's  average liquidity  position was $142.8 million,  or 25.7% of
its liquidity base for the preceding quarter.



CAPITAL
The  Company's  total  equity  increased  by $1.8  million  to $69.9  million at
September  30, 2000 from $68.1  million at June 30, 2000.  The OTS requires that
the  Bank  meet  minimum  tangible,   leverage  (core)  and  risk-based  capital
requirements.  As of  September  30,  2000 the Bank was in  compliance  with all
regulatory capital requirements.  The Bank's required, actual and excess capital
levels as of September 30, 2000 are as follows:

                                                             Excess of
                                                             Actual Over
                      Required  % of      Actual     % of    Regulatory
                       Amount  Assets     Amount    Assets   Requirement
                       ------  ------     ------    ------   -----------
                                  (Amounts in thousands)
 Tangible Capital     $10,681   1.5%     $47,783     6.71%     $37,102
 Core Capital          21,361   3.0%      47,783     6.71%      26,422
 Risk-based Capital    33,902   8.0%      51,310    12.11%      17,408


                                       -8-
<PAGE>



COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
September 30, 2000 and 1999

General.  Net earnings for each of the three months ended September 30, 2000 and
1999 totaled $1.2 million.  Diluted  earnings per share totaled $0.27 and $0.26,
respectively, for the three months ended September 30, 2000 and 1999.

Interest Income.  Interest income increased by $1.4 million,  or 12.5%, to $13.0
million for the three months ended September 30, 2000 from $11.6 million for the
three months ended September 30, 1999, largely due to an increase in the average
balance of  interest-earning  assets.  The average  balance of  interest-earning
assets  increased by $41.7  million,  or 6.6%,  to $673.0  million for the three
months ended  September 30, 2000 from $631.3  million for the three months ended
September 30, 1999. The average yield on  interest-earning  assets  increased to
7.71% for the three  months  ended  September  30, 2000 from 7.31% for the three
months  ended  September  30,  1999,  primarily  due to  higher  yields on loans
receivable and investment and mortgage-backed securities in the generally higher
interest rate environment and to changes in the mix of interest-earning assets.

Interest income on loans for the three months ended September 30, 2000 increased
by $1.4 million, or 16.6%, to $10.3 million for the three months ended September
30, 2000 from $8.9 million for the three months ended  September  30, 1999.  The
increase in interest  income on loans was  primarily due to an increase of $51.4
million, or 11.1%, in the average balance of loans receivable, to $514.5 million
for the three months ended  September 30, 2000 from $463.1 million for the three
months ended  September 30, 1999. The average yield on loans  increased to 8.03%
for the three  months ended  September  30, 2000 from 7.65% for the three months
ended  September 30, 1999. The increase in the average yield on loans was due to
the Company's  strategy of increasing  its portfolio of commercial  real estate,
commercial business and consumer loans that generally have higher interest rates
than residential single-family mortgages.

Interest  income  on  mortgage-backed  securities  for the  three  months  ended
September 30, 2000 decreased by $154,000,  or 24.2%,  when compared to the three
months  ended  September  30,  1999.  The  average  balance  of  mortgage-backed
securities  decreased by $11.3 million,  or 28.3%, to $28.6 million at September
30,  2000 from  $39.9  million at  September  30,  1999.  The  average  yield on
mortgage-backed  securities  increased  to  6.75%  for the  three  months  ended
September 30, 2000 from 6.39% for the three months ended  September 30, 1999, as
variable rate securities repriced upward in the generally higher market interest
rate environment.

Interest income on investment  securities increased by $127,000, or 6.3%, as the
average balance of investment  securities increased by $2.6 million, or 2.1%, to
$127.6  million at September 30, 2000 from $125.0 million at September 30, 1999.
The average yield on investment securities increased by 26 basis points to 6.69%
for the three  months ended  September  30, 2000 from 6.43% for the three months
ended September 30, 1999.

Interest Expense.  Interest expense increased by $1.5 million, or 20.6%, to $8.5
million for the three months ended  September 30, 2000 from $7.0 million for the
three  months  ended  September  30,  1999.  Interest on deposits  increased  by
$664,000,  or 13.4%,  to $5.6 million for the three months ended  September  30,
2000 from $4.9  million for the three  months  ended  September  30,  1999.  The
increase in interest on deposits was primarily due to a 56 basis point  increase

                                       -9-
<PAGE>

in the average cost of deposits to 4.97% for the three  months  ended  September
30, 2000 from 4.41% for the three months ended September 30, 1999. The generally
higher  market  interest  rate  environment   during  the  current  fiscal  year
influenced the rates paid on deposits.  Strong  competition for deposits in this
environment  made it more  difficult  for the  Company  to  attract  transaction
accounts,  as has been its  strategy in recent  years.  The  average  balance of
deposits increased by only $2.5 million,  or .5%, to $451.1 million at September
30, 2000 from $448.7 million at September 30, 1999.

In order  to fund the  increase  in loan  balances  the  Company  increased  its
borrowing  from the  Federal  Home  Loan  Bank (the  "FHLB").  Interest  on FHLB
advances  increased by $781,000,  or 37.6%, to $2.9 million for the three months
ended  September 30, 2000 from $2.1 million for the three months ended September
30,  1999.  The  increase in  interest on  borrowings  was  primarily  due to an
increase in the average  balance of  advances.  The average  balance of advances
increased by $38.1  million,  or 26.8%,  to $180.0 million at September 30, 2000
from $141.9 million at September 30, 1999. The increase in interest  expense was
also due to an increase of 49 basis points in the average cost of  borrowings to
6.35% for the three  months  ended  September  30, 2000 from 5.86% for the three
months ended September 30, 1999.

Net Interest Income.  The increase in interest income was offset by the increase
in interest  expense.  Net interest  income totaled $4.5 million for each of the
three months ended  September  30, 2000 and 1999.  The  Company's  interest rate
spread for the three months  ended  September  30, 2000  decreased to 2.35% from
2.56% for the three months ended September 30, 1999.


Provision  for Loan Loss.  Provision  for loan losses  increased by $40,000,  or
38.1%,  to $145,000 for the three months ended  September 30, 2000 from $105,000
for the three  months  ended  September  30, 2000 and 1999.  Provision  for loan
losses was increased due to increased loan balances. The allowance for losses on
loans is based on  management's  periodic  evaluation of the loan  portfolio and
reflects an amount that, in management's  opinion,  is adequate to absorb losses
in the existing  portfolio.  In evaluating the portfolio,  management takes into
consideration  numerous factors,  including current economic  conditions,  prior
loan loss  experience,  the composition of the loan portfolio,  and management's
estimate of anticipated credit losses.

Noninterest Income.  Noninterest income decreased by $133,000,  or 7.6%, to $1.6
million for the three months ended  September 30, 2000 from $1.7 million for the
three months ended  September 30, 1999. The decrease in  noninterest  income was
primarily  due to  decreases  in income  related  to  single-family  residential
mortgage origination  activity.  Single-family  residential mortgage origination
activity was generally lower during the three months ended September 30, 2000 as
compared to the three months  ended  September  30, 1999.  Gain on sale of loans
held for sale  decreased by $21,000,  or 25.0%,  to $64,000 for the three months
ended  September 30, 2000 from $85,000 for the three months ended  September 30,
1999.  Gain on sale of real  estate  held for  development  totaled  $30,000 and
$55,000,  respectively,  for the three months ended September 30, 2000 and 1999;
and,  gain on sale of real estate  owned  totaled  $118,000 for the three months
ended  September  30,  1999 with no gain  recorded  for the three  months  ended
September 30, 2000. Income from other real estate-related  activities  decreased
by $127,000, or 29.6%, to $302,000 for the three months ended September 30, 2000
from $429,000 for the three months ended September 30, 1999,  primarily due to a
decrease in sales revenue in the Company's real estate brokerage subsidiary in a
generally  slower real estate market.  Partially  offsetting  these decreases in
noninterest income was an increase of $136,000, or 19.6%, in service charges and


                                      -10-
<PAGE>

other fees for the three  months  ended  September  30,  2000 as compared to the
three months ended September 30, 1999. The increase in service charges and other
fees resulted from prepayment penalty income and service fees from the Company's
growing  business  and  personal  deposit  account  relationships.  Other income
increased by $23,000,  or 6.2%, to $386,000 for the three months ended September
30, 2000 from $363,000 for the three months ended September 30, 1999 largely due
to receipt of interest  totaling  $65,000 on  franchise  tax refunds  from prior
years.

Noninterest  expense.  Noninterest  expense totaled $4.2 million for each of the
three months ended  September 30, 2000 and 1999. The Company has focused renewed
attention on controlling noninterest expense since the completion of recent bank
acquisitions  in the two  preceding  fiscal  years.  Compensation  and  benefits
expense  totaled $2.2 million for each of the three months ended  September  30,
2000  and  1999  largely  due to a  reduction  in  full-time-equivalent  ("FTE")
employees.  This reduction in FTE's largely offset additional expense related to
annual salary increases, which took effect in January 2000.

Office property and equipment  expense and data processing  expense increased by
$21,000, or 3.6%, and $6,000, or 5.4%, respectively,  for the three months ended
September  30, 2000 as  compared  to the same period of the prior year.  Deposit
insurance  premium  expense and  advertising  expense  decreased by $46,000,  or
64.7%, and $33,000, or 27.9%, respectively, for the three months ended September
30, 2000 as compared to the three months ended  September 30, 1999.  The deposit
insurance  premium rate decreased to $0.0206 per hundred dollars of deposits for
the  quarter  ended  September  30, 2000 from  $0.0580  per  hundred  dollars of
deposits  for  the  quarter  ended   September  30,  1999.   Other  general  and
administrative  expenses  increased  by $67,000,  or 7.5%,  for the three months
ended  September  30, 2000 as compared to the three months ended  September  30,
1999.

Net earnings and income tax expense.  Net earnings  before  income taxes totaled
$1.7  million  and  $1.9  million,  respectively,  for the  three  months  ended
September 30, 2000 and 1999. Income tax expense decreased by $217,000, or 29.3%,
to $523,000 for the three months ended  September 30, 2000 from $740,000 for the
three months ended  September  30, 1999.  The decrease in income tax expense was
largely  due to receipt of state  franchise  tax  refunds  from prior years that
totaled $105,000. The refunds were in settlement of an issue that had been under
examination  for several years.  The Company had not previously  accrued the tax
benefit  related to the  resolution of this issue since the outcome was unknown.
The Company's effective tax rate, excluding the franchise tax refund,  decreased
to 36.2% for the three months ended  September 30, 2000 from 38.2% for the three
months ended September 30, 1999.





                                      -11-
<PAGE>



PART II. OTHER INFORMATION

Legal Proceedings

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

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

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

      27 - Financial Data Schedule


(b)      Reports on Form 8-K

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


                                      -12-
<PAGE>







                                   SIGNATURES

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


                                             FIRST FEDERAL BANKSHARES, INC.



         DATE:  November 8, 2000             BY: /s/ Barry E. Backhaus
                                                 ----------------------
                                                 Barry E. Backhaus
                                                 President and
                                                   Chief Executive Officer



         DATE:  November 8, 2000             BY: /s/ Katherine Bousquet
                                                 -----------------------
                                                  Katherine Bousquet
                                                  Vice President and Treasurer
                                                    (Principal Financial and
                                                     Accounting Officer


                                      -13-