SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20552
                           ---------------------------
                                   FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 1999

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

    For the transition period from _____________ to _____________

                         Commission File Number 0-23645

                          LEEDS FEDERAL BANKSHARES, INC
             (Exact name of registrant as specified in its charter)

UNITED STATES                                          52-2062351
-------------                                          ----------
State or other jurisdiction                         (IRS Employer
of incorporation or organization)                  Identification Number)

               1101 Maiden Choice Lane, Baltimore, Maryland 21229
               --------------------------------------------------
                    (Address of principal executive offices)

Registrant's telephone number, including area code:  410-242-1234


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

     Indicated  by a check  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 ________



APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest  practicable date: There were 4,614,391 shares
of the Registrant's common stock outstanding as of January 1, 2000.





<PAGE>


                          LEEDS FEDERAL BANKSHARES, INC

INDEX


                                                                       PAGE
PART I.  FINANCIAL INFORMATION

      Item 1.  Financial Statements

     Consolidated  Statements  of  Financial  Condition  as of
     December 31, 1999(unaudited), and June 30, 1998                      1

     Consolidated Statements of Income and Comprehensive Income
     (unaudited)for the three months and six months ended
     December, 1999 and 1998                                              2

     Consolidated Statements of Cash Flows (unaudited) for the six months
     ended December 30, 1999 and 1998                                     3

     Notes to Consolidated Financial Statements (unaudited)               5

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


PART II.  OTHER INFORMATION                                              12


<PAGE>



PART I. FINANCIAL INFORMATION

 Item 1. Financial Statements

                          LEEDS FEDERAL BANKSHARES,INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                                                             December 31,                 June 30,
                                                                                                 1999                       1999
                                                                                               -------                     ------
                                                                                               (unaudited)                 (audited)

Assets

    Cash:
<S>                                                                                         <C>                         <C>
          On hand and due from banks                                                        $3,330,930                  5,093,316
          Interest-bearing deposits                                                          2,131,440                  4,964,126
    Short-term investments                                                                   7,901,104                 12,941,254
    Secured short-term loans to commercial banks                                             5,439,872                 10,011,970
    Investment securities, net (held to maturity)                                           67,663,230                 66,167,181
    Investment securities, net (available for sale)                                          5,693,573                  6,551,478
    Mortgage backed securities, net (held to maturity)                                       9,054,002                 10,008,111
    Loans receivable, net                                                                  219,193,056                203,886,170
    Investment in Federal Home Loan Bank of Atlanta stock, at cost                           1,935,700                  1,935,700
    Property and equipment, net                                                              1,744,153                  1,484,620
    Cash surrender value of life insurance                                                   6,522,308                  6,399,473
    Accrued interest receivable                                                              2,003,956                  1,994,604
    Prepaid expenses and other assets                                                          188,450                    204,020
                                                                                              --------                  ---------

           Total assets                                                                    332,801,774                331,642,023
                                                                                           -----------                -----------

Liabilities and Stockholders' Equity

    Savings accounts                                                                       $280,526,536               274,625,611
    Borrowed funds-Employee Stock Ownership Plan                                                432,000                   470,813
    Advance payments by borrowers for taxes, insurance and groundrents                        2,436,302                 5,203,532
    Federal and state income taxes:
           Currently payable                                                                     82,804                   107,577
           Deferred                                                                           1,066,914                 1,393,803
   Accrued expenses and other liabilities                                                     1,457,698                 1,336,275
                                                                                             ----------                 ---------
                                                                                            286,002,254               283,137,611
Total liabilities                                                                           -----------               -----------

   Stockholders' Equity:
         Common Stock $1 par value:
  20,000,000 shares authorized; 5,195,597 shares
  issued and outstanding                                                                      5,195,597                 5,195,597
         Additional paid-in capital                                                           9,393,781                 9,367,161
         Employee stock ownership plan                                                         (343,820)                (390,682)
         Treasury stock, at cost,(581,206 shares and 331,941 shares)                         (7,422,456)              (4,740,869)
         Retained income, substantially restricted                                           38,168,545                36,734,317
         Accumulated other comprehensive income                                               1,807,873                 2,338,888
                                                                                             ----------                 ---------

Total stockholders' equity                                                                   46,799,520                48,504,412
                                                                                            -----------               -----------


                                                                                           $332,801,774               331,642,023
</TABLE>


See accompanying notes to consolidated financial statements.





<PAGE>


                          LEEDS FEDERAL BANKSHARES, INC
           Consolidated Statements of Income and Comprehensive Income
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                       Six Months                                 Three Months
                                                                   Ended December 31,                         Ended December 31,

                                                              1999                   1998                   1999               1998
                                                              ====                   ====                   ====               ====

<S>                                                        <C>                   <C>                     <C>            <C>
 Interest income:
     First mortgage and other loans                         $7,579,672              7,306,304              3,856,944      3,602,410
     Mortgage-backed securities                                323,459                524,509                160,627        247,421
     Investment securities and short term
    investments                                              3,043,721              2,583,107              1,480,728      1,297,477
                                                           -----------             ----------             ----------      ---------

     Total interest income                                  10,946,852             10,413,920              5,498,299      5,147,308
                                                          ------------            -----------             ----------      ---------

Interest expense:
     Savings accounts                                        6,862,979              6,407,575              3,450,862      3,221,916
     Other                                                      18,240                 22,820                  8,732         10,597
                                                           -----------                -------                -------         ------

     Total interest expense                                  6,881,219              6,430,395              3,459,594      3,232,513
                                                           -----------             ----------             ----------      ---------

     Net interest income                                     4,065,633              3,983,525              2,038,705      1,914,795

Provision for loan losses                                       20,983                 30,916                  8,609          1,610
                                                            ----------             ----------             ----------         ------

     Net interest income after provision for
     loan losses                                             4,044,650              3,952,609              2,030,096      1,913,185
                                                           -----------             ----------             ----------      ---------

Noninterest income:
     Service fees and charges                                   74,937                 67,241                 37,910         32,906
     Other                                                     123,355                140,662                 60,880         67,554
                                                           -----------              ---------                -------         ------
                                                               198,292                207,903                 98,790        100,460
                                                              --------               --------               --------        -------
Noninterest expense:
     Compensation and employee benefits                        799,296                783,541                420,844        384,034
     Occupancy                                                 123,735                106,115                 58,506         52,219
     SAIF deposit insurance premiums                           118,658                112,260                 58,851         55,547
     Advertising                                                65,064                 50,019                 31,162         19,255
     Other                                                     345,390                341,584                199,223        172,663
                                                              --------               --------               --------        -------
                                                             1,452,143              1,393,519                768,586        683,718
                                                            ----------             ----------               --------        -------
     Income before provision for income
     taxes                                                   2,790,799              2,766,993              1,360,300      1,329,927

Provision for income taxes:                                    965,965                988,188                467,998        474,292
                                                            ----------             ----------               --------        -------

     Net income                                              1,824,834              1,778,805                892,302        855,635
                                                           -----------             ----------               --------        -------

Other comprehensive income, net of tax:
    Unrealized gains (losses) on securities
    available for sale, net                                   (531,015)               726,620               (252,611)       595,192
                                                              ---------               --------              ---------       -------

Comprehensive income                                         $1,293,819              2,505,425                639,691     1,450,827
                                                            -----------             ----------             ----------     ---------

Net income per share of common stock
     Basic                                                   $      .39                $   .35              $     .19       $  . 17
                                                            -----------               --------             ----------       -------

     Diluted                                                 $      .38                $   .35              $     .19       $   .17
                                                            -----------               --------             ----------       -------


See accompanying notes to consolidated financial statements.
</TABLE>




<PAGE>

                         LEEDS FEDERAL BANKSHARES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   Six months ended December 31, 1999 and 1998
                                   (unaudited)


<TABLE>
<CAPTION>


                                                                                                1999                        1998
                                                                                               ------                      ------

Cash flows from operating activities:
<S>                                                                                           <C>                        <C>
     Net income                                                                               $1,824,834                 1,778,805
     Adjustments to reconcile net income to net cash provided by
     operating activities:
     Amortization of loan fees, premiums and discounts,net                                        45,798                 (116,291)
     Provision for loan losses                                                                    20,983                    30,916
     Accretion of premiums(discounts) on investments securities and
     mortgage-backed securities, net                                                             ( 6,766)                      (2)
     Depreciation                                                                                 63,834                    63,900
     Non-cash compensation under stock based  benefit plans                                       73,482                   129,335
     Decrease (increase) in accrued interest receivable on securities and
     loans  receivable                                                                            (9,352)                  240,905
     (Decrease) increase in income taxes currently payable                                       (24,773)                   58,856
     Increase in accrued expenses and other liabilities                                          121,423                   120,336
     Increase in unearned loan fees                                                               41,087                  (14,457)
     Decrease in prepaid expenses and other assets                                                15,570                   142,266

            Net cash provided by operating activities                                          2,166,120                 2,434,569




Cash flows from investing activities:
    Purchase of investment securities held to maturity                                       ( 1,700,000)             (41,840,000)
    Maturity of investment securities held to maturity                                                -0-               36,792,182
    Maturity of securities available for sale                                                         -0-                3,000,000
    Principal repayments of investment securities                                                206,681                   230,270
    Loan disbursements, net of repayments                                                    (15,414,754)              (3,106,817)
    Purchase of mortgage-backed securities                                                      (400,000)                      -0-
    Mortgage-backed securities held to maturity principal repayments                           1,358,145                 3,364,042
    Purchases of property and equipment                                                         (323,367)                (682,310)
    Investment in life insurance policies                                                       (122,835)                (139,434)

            Net cash used in investing activities                                            (16,396,130)              (2,382,067)


(continued)

<PAGE>




   Cash flows from financing activities:
      Net increase in savings accounts                                                          5,900,925               12,274,405
      Decrease in advance payments by borrowers for taxes, insurance
       and ground rents                                                                        (2,767,230)             (2,488,713)
      Payment of dividends                                                                       (390,606)               (474,788)
      Purchase of treasury stock                                                               (2,681,587)             (1,372,120)
      Repayment of borrowed funds                                                                 (38,813)                (24,000)
                                                                                               ----------               ----------
            Net cash provided by financing activities                                              22,689                7,914,784
                                                                                               ----------               ----------
Net increase (decrease) in cash and cash equivalents                                          (14,207,320)               7,967,286

Cash and cash equivalents at beginning of period                                               33,010,666               36,857,469
                                                                                               ----------               ----------

Cash and cash equivalents at end of period                                                    $18,803,346               44,824,755
                                                                                               ----------               ----------
Supplemental disclosure of cash flow information:

    Cash paid for interest on deposits and other
    borrowings                                                                                 $6,881,000                6,430,000

    Cash paid for income taxes                                                                    991,000                  929,000

                                                                                                ---------                ---------

</TABLE>



See accompanying notes to consolidated financial statements




<PAGE>




                          LEEDS FEDERAL BANKSHARES, INC
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1999
                            (Unaudited and continued)



(1)      Basis of Presentation

     The accompanying  consolidated financial statements include the accounts of
Leeds Federal Bankshares, Inc. (the Company), its wholly owned subsidiary, Leeds
Federal Savings Bank and Leeds Investment Corporation, a wholly owned subsidiary
of Leeds Federal  Savings  Bank.  Adjustments,  consisting  of normal  recurring
adjustments,  which,  in the  opinion of  management  are  necessary  for a fair
presentation of financial position and results of operations have been recorded.
The  financial  statements  have been  prepared  using the  accounting  policies
described in the June 30, 1999 Annual Report.  The results of operations for the
three  months  and six months  ended  December  31,  1999,  are not  necessarily
indicative of the results that may be expected for the entire year.

     In preparing the consolidated financial statements,  management is required
to make estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the consolidated statements of financial condition
and income and comprehensive income for the period.  Actual results could differ
significantly from those estimates.

(2)      Reclassification of Prior Year's Statements

     Certain amounts in the 1998 financial  statements have been reclassified to
conform to the 1999 presentation.

(3)      Net Income per Share of Common Stock

     Basic  earnings per share (EPS) is calculated by dividing net income by the
weighted average number of common shares  outstanding for the applicable period.
Diluted EPS is calculated  after  adjusting the numerator and the denominator of
the basic EPS calculation for the effect of all dilutive potential common shares
outstanding  during the period.  Information  related to the  calculation of net
income per share of common stock is summarized as follows:

<PAGE>


                          LEEDS FEDERAL BANKSHARES, INC
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1999
                            (Unaudited and continued)


<TABLE>
<CAPTION>


                                                                      Six Months                                 Six Months
                                                               Ended December 31, 1999                    Ended December 31, 1998

                                                              Basic           Diluted                   Basic            Diluted
                                                              =====           =======                   =====            ========

<S>                                                          <C>              <C>                     <C>              <C>
     Net income                                              $1,824,834       $1,824,834              $1,778,805       $1,778,805
                                                             ----------       ----------              ----------       ----------
     Weighted-average shares outstanding                      4,705,623        4,705,623               5,053,102        5,053,102

     Dilutive securites
     Options                                                                      36,726                                   73,702
                                                              ----------      ----------              ----------         --------

     Adjusted weighted-average shares used
       in EPS computation                                      4,705,623       4,742,349               5,053,102        5,126,804
                                                              ----------      ----------              ----------         ---------






                                                                    Three Months                                Three Months
                                                               Ended December 31, 1999                    Ended December 31, 1998

                                                              Basic           Diluted                   Basic            Diluted
                                                              =====           =======                   =====            ========


<S>                                                          <C>               <C>                      <C>              <C>
     Net income                                              $  892,302        $  892,302               $  855,635       $  855,635
                                                             ----------        ----------               ----------       ----------

     Weighted-average shares outstanding                      4,643,359         4,643,369                5,029,281        6,209,281

     Dilutive securites
     Options                                                                       29,489                                    66,281
                                                              ---------        ----------                ---------        ---------
    Adjusted weighted-average shares used
       in EPS computation                                     4,643,359         4,672,848                5,029,281        5,095,562
                                                            ---------        ----------                ---------        ---------

</TABLE>



<PAGE>


(4)      Dividends on Common Stock

     On December 15,1999, the Company declared a quarterly cash dividend of $.15
per share. The dividends were payable to stockholders of record as of January 5,
2000 and were paid on January 19, 2000. Leeds Federal  Bankshares,  M.H.C.  (the
MHC), which owns 3,300,000 shares of stock in the Company, waived receipt of its
quarterly dividend, thereby reducing the actual dividend payout to approximately
$200,000.  The dollar  amount of dividends  waived by the MHC is considered as a
restriction on the retained earnings of the Company.  The amount of any dividend
waived by the MHC shall be available for declaration of a dividend solely to the
MHC. At December 31, 1999,  the cumulative  amount of such waived  dividends was
$8,738,400.

(5)  Impact of New Accounting Standards

     The  Financial   Accounting  Standards  Board  has  issued  SFAS  No.  133,
Accounting for Derivative  Instruments and Hedging Activities,  as amended (SFAS
No.  133).  SFAS No.133  establishes  accounting  and  reporting  standards  for
derivative  instruments,  including certain derivative  instruments  embedded in
other  contracts  (collectively  referred  to as  derivatives),  and for hedging
activities.  SFAS No. 133 requires that an entity  recognize all  derivatives as
either assets or liabilities in the statement of financial  position and measure
those  instruments  at fair value.  It is effective  for all fiscal  quarters of
fiscal  years  beginning  after  June  15,  2000.  Initial  application  of this
Statement  should be as of the beginning of an entity's fiscal quarter.  On that
date, hedging  relationships must be designated anew and documented  pursuant to
the  provisions  of  SFAS  No.  133.  Earlier  application  of SFAS  No.  133 is
encouraged,  but it may not be applied  retroactively to financial statements of
prior periods.  Management has not determined  when it will adopt the provisions
of SFAS No. 133 but believes that  adoption  will not have a material  effect on
the Company's financial position or results of operations.


<PAGE>


                         LEEDS FEDERAL BANKSHARES, INC.

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

Forward Looking Statements
--------------------------

     In addition to  historical  information,  this  Quarterly  Report  contains
forward- looking statements.  The forward-looking  statements  contained in this
document are subject to certain risks and uncertainties  that could cause actual
results  to  differ  materially  from  those  projected  in the  forward-looking
statements.  Important factors that might cause such a difference  include,  but
are not limited to,  those  discussed  in this  section  entitled  "Management's
Discussion  and  Analysis of  Financial  Condition  and Results of  Operations."
Readers should not place undue reliance on these forward-looking  statements, as
they reflect  management's  analysis as of the date of this report.  The Company
has no  obligation  to update  or revise  these  forward-looking  statements  to
reflect  events or  circumstances  that  occur  after  the date of this  report.
Readers should  carefully  review the risk factors  described in other documents
the Company files from time to time with the Securities and Exchange Commission,
including current reports filed on Form 8-K.

     Discussion  of Financial  Condition  Changes from June 30, 1999 to December
31, 1999
-----------------------------------------------------------------------------

     Cash on hand and due from banks,  interest bearing  deposits,  other liquid
investments and investment  securities  totaled  approximately  $94.1 million at
December 31, 1999, a decrease of  approximately  $13.6 million,  or 12.5%,  from
June 30, 1999.  Mortgage-backed  securities  totaled $9.1 million, a decrease of
$1.0 million,  or 9.5%, due primarily to repayments of principal,  offset by the
purchase of a  mortgage-backed  security  totaling  $400,000.  Loans  receivable
totaled $219.2 million,  an increase of $15.3 million, or 7.5%, due primarily to
an increase in mortgage originations.

     Deposits increased approximately $5.9 million, to a total of $280.5 million
at December 31, 1999. Such increase was primarily attributable to general market
trends.  The Company has offered savings rates that are  competitive  with other
banks.  However,  it has not  relied  on  brokered  funds  or  negotiated  jumbo
certificates to achieve increased deposit levels.

     The Bank is  subject to  capital  standards  which  generally  require  the
maintenance  of  regulatory  capital  sufficient  to meet  each of three  tests,
hereinafter  described as the Tier 1 core capital  requirement,  the Tier 1 risk
based  capital  requirement  and the total risk based  capital  requirement.  At
December 31, 1999, the Bank had Tier 1 core capital of $44.5  million,  or 13.5%
of total adjusted  assets,  which was $31.4 million in excess of the requirement
of minimum core capital of $13.1 million, or 4% of total adjusted assets; Tier 1
risk based capital of $44.5 million, or 27.6% of risk weighted assets, which was
$38.0 million in excess of the  requirement of minimum Tier 1 risk based capital
of $6.5 million,  or 4% of risk weighted assets; and total risk-based capital of
$46.6  million,  or 28.9% of risk  weighted  assets,  which was $33.7 million in
excess of the  requirement of a minimum total  risk-based  capital of 8% of risk
weighted assets.

Comparison of Operating Results for Three and Six Month Periods Ended December
31, 1999 and 1998.
------------------------------------------------------------------------------
General
-------

     The  Company's  net income for the three  months  ended  December 31, 1999,
totaled  $892,000,  an increase of $37,000,  or 4.3% as compared to $856,000 for
the three months ended December 31, 1998, due  principally to an increase in net
interest  income  partially  offset  by an  increase  in  noninterest  expenses.
Unrealized gains (losses) on securities available for sale decreased $848,000


<PAGE>



     to ($252,611)  for the three months ended December 31, 1999, as compared to
the same  period  last year,  as a result of a decrease in the fair value of the
Company's  investment  securities  available  for sale,  due to an  increase  in
interest  rates during the quarter.  The Company's net income for the six months
ended  December  31,  1999,  remained  relatively  unchanged  at $1.8 million as
compared to the same period in 1998.  Unrealized  gains  (losses) on  securities
available for sale decreased $1.3 million to ($531,000) for the six months ended
December  31, 1999,  as compared to the same period last year,  as a result of a
decrease in the fair value of the Company's investment  securities available for
sale, due to an increase in interest rates during the period.

Net Interest Income
-------------------

     Interest  income on loans for the three  months  ended  December  31, 1999,
totaled  $3.9  million,  an increase of $255,000,  or 7.1%,  as compared to $3.6
million for the three months ended December 31, 1998, due to a $24.8 million, or
12.8%, increase in average balance in loans to $218.8 million,  partially offset
by a  decrease  in  average  yield on loans to 7.1% for the three  months  ended
December  31,  1999,  from 7.4% for the three  months  ended  December 31, 1998.
Interest  income on loans for the six months ended  December  31, 1999,  totaled
$7.6  million,  an increase of $273,000,  or 3.7%, as compared to the six months
ended December 31, 1998.  Average  balances on loans increased by $21.2 million,
or 11.0%,  to $214.5  million,  for the six months ended  December 31, 1999,  as
compared to the six months ended December 31, 1998, while average yield on loans
decreased to 7.1%,  from 7.6%. The increases in the average balance in loans was
the result of  increased  loan  demand  during  the three and six  months  ended
December  31,  1999,  as compared to the same  periods  last year.  Decreases in
average  yields on loans  for  these  periods  was due  principally  to new loan
originations at lower yields.

     Interest  income on  mortgage-backed  securities  decreased by $86,000,  to
$161,000  for the three months ended  December 31, 1999,  from  $247,000 for the
three  months  ended  December  31,  1998.   Average  yield  on  mortgage-backed
securities   decreased   to  6.9%,   from  7.0%,   while   average   balance  of
mortgage-backed  securities decreased by $4.8 million to $9.3 million from $14.1
million,  for the three  months ended  December  31, 1999,  compared to the same
period last year.  Interest income on  mortgage-backed  securities  decreased by
$202,000, to $323,000 for the six months ended December 31, 1999, as compared to
$525,000 for the prior period,  due principally to a decrease in average balance
of  mortgage-backed  securities  of $5.4  million  to $9.5  million  from  $14.9
million,  and a decrease in the average yield on  mortgage-backed  securities to
6.8%,  from 7.1%.  The  decreases  in the  average  balance  of  mortgage-backed
securities  and  average  yields on these  securities  during  the three and six
months ended  December  31, 1999,  as compared to the same periods last year was
attributable to higher principal repayments on higher yielding securities.

     Interest  income  on  investment  securities  and  short-term   investments
("Investments")  increased  by  $183,000,  to $1.5  million for the three months
ended  December 31, 1999,  from $1.3 million for the three months ended December
31, 1998. The average balance of Investments  increased by $2.5 million to $93.6
million for the three months ended December 31, 1999, from $91.1 million for the
same period in the prior year, while yield on Investments increased to 6.3% from
5.7%.  Interest  income on  Investments  increased  by $461,000 to $3.0  million
during the six months ended  December  31,  1999,  from $2.6 million for the six
months ended December 31, 1998. The average balance of Investments  increased by
$9.7 million to $97.5 million for the six months ended  December 31, 1999,  from
$87.8 million for the same period in the prior year,  while yield on Investments
increased to 6.2% from 5.9%. The increases in average balance of Investments for
the three and six months ended  December 31, 1999, was the result of an increase
in the supply of funds to invest in such  securities.  The  increases in average
yield on  Investments  for these periods was due to increases in market rates on
short term investments.


<PAGE>


     Total  interest  expense  increased by  approximately  $227,000  during the
quarter  ended  December  31,  1999 to $3.5  million  from $3.2  million for the
quarter ended December 31, 1998.  This increase was the result of an increase in
average balances of interest bearing liabilities  outstanding to $279.8. million
from $253.4  million,  while average  rates paid on deposits  decreased to 5.0%,
from 5.1%.  For the six months ended December 31, 1999,  total interest  expense
increased  by $451,000  to $6.9  million,  from $6.4  million for the six months
ended December 31, 1998.  The increase was the result of an increase in average
balances of interest  bearing  liabilities  outstanding  to $278.4  million from
$250.5  million,  while  average  rates paid on deposits  decreased to 4.9% from
5.1%.  The  increases  in  average  balance  on  interest  bearing   liabilities
outstanding for the three and six months ended December 31, 1999, as compared to
the same periods last year, was due to increased  customer  deposits,  while the
decrease in average  rates paid on deposits for these  periods  decreased due to
general market conditions.

     As a result of the foregoing  changes,  the increase in interest income was
partially offset by an increase in interest expense  resulting in an increase in
net interest  income of  $124,000,  or 6.5%,  to $2.0  million  during the three
months ended  December 31,  1999,  as compared to $1.9 million  during the three
months ended  December 31, 1998.  During the six months ended December 31, 1999,
net interest  income  increased by $82,000,  or 2.1%,  to $4.1 million from $4.0
million for the same period in the previous year.

Provision for Loan Losses
-------------------------

     The Bank had a provision  for loan  losses of $9,000 for the quarter  ended
December  31,  1999,  and $21,000 for the six months  ended  December  31, 1999.
During the three and six months ended December 31, 1998, the Bank had provisions
for loan  losses of $2,000 and  $31,000  respectively.  The  allowance  for loan
losses,  which was $743,000 and $725,000 at December 31, 1999 and June 30, 1999,
respectively,  is established in accordance with generally  accepted  accounting
principles  and exists to absorb  potential  losses  inherent  in the  Company's
overall loan portfolio.  In addition to historical loss experience,  the Company
considers  other  factors  that are  likely to cause  credit  losses;  including
changes in economic and business  conditions  and  developments,  changes in the
nature  and  volume  of the  portfolio,  trends  in the  level  of past  due and
classified loans, and the status of nonperforming  loans.  Based on management's
review and  analysis of the  allowance  for loan losses as of December 31, 1999,
management considered the allowance for loan losses to be adequate.

Noninterest Income
------------------

     Noninterest  income  totaled  $99,000 and $100,000  during the three months
ended  December  31,  1999 and  1998,  respectively.  For the six  months  ended
December 31, 1999,  noninterest income decreased to $198,000,  from $208,000 for
the six months ended December 31, 1998. The decrease was primarily the result of
a  decrease  in  income  from  life  insurance  contracts,  partially  offset by
increases in service fee income, for the six months ended December 31, 1999.

Noninterest Expense
-------------------

     Noninterest expense for the three months ended December 31, 1999, increased
by $85,000 to  $769,000,  from  $684,000,  compared  to the three  months  ended
December  31, 1998.  Compensation  and employee  benefits  increased  $37,000 to
$421,000  for the three months ended  December 31, 1999,  from  $384,000 for the
same period last year, due to additional  staffing in  anticipation of opening a
branch and increasing  salaries,  partially  offset by a decrease in the noncash
charge to expense for ESOP shares  earned due to a decrease in the market  price
of the Company's stock.  Occupancy,  advertising and other expenses increased by
$45,000 for the quarter ended December 31, 1999, due to


<PAGE>

an increase in marketing and other activities.  During the six months ended
December 31, 1999,  noninterest expense increased $59,000 to $1.5 million,  from
$1.4 million,  compared to the six months ended December 31, 1998. This increase
was also due to increased compensation costs, higher levels of advertising,  and
increased occupancy expenses.

Provision for Income Taxes
--------------------------

     The effective  income tax rate for the three and six months ended  December
31, 1999, was 34.4% and 34.6% respectively,  compared to 35.7% for the three and
six months ended December 31, 1998. The decrease was due to lower state taxes.

Classified Loans
----------------

     There  were no  loans  which  were 90 or more  days  delinquent  but  still
accruing at December 31, 1999,  and such loans totaled  $7,000 at June 30, 1999.
Loans 90 or more days  delinquent  and not  accruing  totaled  $2.7  million  at
December  31, and June 30, 1999.  At December  31, 1999,  the Company had a $2.5
million loan which matured in June,  1998,  and has not been repaid.  Management
has  obtained  an  appraisal,  and based on the  appraisal  and  other  factors,
believes the Company will not incur a material loss on this loan.

Liquidity
---------

     The Company is required to maintain  levels of liquid  assets as defined by
OTS regulations. This requirement, which varies from time to time (currently set
at 4%) depending upon economic  conditions  and deposit  flows,  is based upon a
percentage of deposits and short-term borrowings.  The Company's liquidity ratio
averaged  36.06% during the quarter ended  December 31, 1999, and equaled 35.74%
at December 31, 1999.

Capability of the Bank's Data Processing Software to Accommodate the Year 2000
------------------------------------------------------------------------------

     The following  information  constitutes  "Year 2000  Readiness  Disclosure"
under the Year 2000 Information and Readiness Disclosure Act.

     The Company has not incurred any significant  disruptions to its operations
to date relating to the year 2000 transition. Beyond January 1, 2000, including,
for example, potential problems related to the first leap year of the year 2000,
the Company  continues to monitor its  contingency  plan in the event it becomes
necessary  to invoke it. The  Company is aware of  potential  Year 2000 risks to
third parties,  including  vendors,  depositors and borrowers and their possible
impact on the Company.  Based on our assessment of operations  through  February
10, 2000, the Company is not aware of any significant Year 2000 issues, although
there can be no assurances in this regard.

Stock Repurchase Plan and Increased Dividend
--------------------------------------------

     As of December 31, 1999, the Company has repurchased  581,206 shares of its
common stock in connection with its plan to repurchase  approximately 20% of its
outstanding shares of common stock. The Company has the Board's authorization to
repurchase an additional  442,235  shares as part of its current plan, as in the
opinion of management, market conditions warrant.

     On December  15,  1999,  as part of its capital  management  strategy,  the
Company  announced an increase in its quarterly  dividend to $.15, from $.14 for
prior periods.


<PAGE>



PART II.  OTHER INFORMATION

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

     The  Company  is not  involved  in any  litigation,  nor is it aware of any
pending  litigation,  other  than  legal  proceedings  incidental  to the Bank's
business.  In the opinion of  management,  no material loss is expected from any
such claims or lawsuits.

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

     (A)  On  November  3,  1999,   the  Company  held  its  annual  meeting  of
stockholders.

     (B) At the annual meeting  Directors  Clark and Doyle were elected to three
year terms. The following table shows the terms of all directors.

    Director's Name                             Term Began        Term Expires
    ---------------                             ----------        ------------
    John F. Amer                                    1998              2001
    Gordon E. Clark                                 1999              2002
    John F. Doyle                                   1999              2002
    Raymond J. Hartman, Jr.                         1997              2000
    Joan H. McCleary                                1997              2000
    Marguerite E. Wolf                              1998              2001

     (C) There  were  present  at the  Annual  Meeting in person or by proxy the
holders of 4,800,341 votes,  said votes  constituting a majority and more than a
quorum of the outstanding votes entitled to be cast.

     The stockholders  acted on the following two matters at the Annual Meeting,
approving each. Set forth below are the results of the  stockholder  vote on the
matters considered at the Annual Meeting.

     (1) The following  directors were elected by the  stockholders to serve for
three year terms:

                                                Votes For              Withheld
                                                ---------              --------
       Gordon E. Clark                          4,540,006              25,111
       John F. Doyle                            4,540,156              24,961

     (2) The appointment of KPMG LLP to be the Company's auditors for the fiscal
year ending June 30, 2000, was approved as follows:

                                                       For              Against
                                                      -----             -------
   Number of Votes                                 4,542,586              7,250

     Exhibits and Report on Form 8-K

     No Form 8-K reports were filed during the quarter.
<PAGE>


                                   SIGNATURES

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


                                                LEEDS FEDERAL BANKSHARES, INC.


 Date February 14, 2000                           \s\ Gordon E. Clark
                                                  ---------------------------
                                                  Gordon E. Clark
                                                  President and Chief
                                                  Executive Officer



 Date  February 14, 2000                          /s/ Kathleen Trumpler
                                                  ---------------------------
                                                  Kathleen Trumpler
                                                  Treasurer and Chief
                                                  Financial Officer