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 September 30, 1998

[ ]  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 5,195,597 shares
of the Registrant's common stock outstanding as of September 30, 1998.

<PAGE>

                          LEEDS FEDERAL BANKSHARES, INC

                                      INDEX

                                                                            PAGE
                                                                            ----
PART I.  FINANCIAL INFORMATION

  Item 1.  Financial Statements

    Consolidated Statements of Financial Condition as of
      September 30, 1998 (unaudited), and June 30, 1998 ..................    1

    Consolidated Statements of Income and Comprehensive Income (unaudited)
      for the three months ended September 30,1998 and 1997 ..............    2

    Consolidated Statements of Cash Flows (unaudited) for the three months
      ended September 30, 1998 and 1997 ..................................    3

    Notes to Consolidated Financial Statements (unaudited) ...............    4

  Item 2.  Management's Discussion and Analysis of
    Financial Condition and Results of Operations ........................    6

PART II. OTHER INFORMATION ...............................................    9

<PAGE>

PART I. FINANCIAL INFORMATION
-----------------------------

  Item 1. Financial Statements

                          LEEDS FEDERAL BANKSHARES,INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


                                                        Sep 30,       June 30,
                                                          1998          1998
                                                      -----------     --------
                                                      (unaudited)
Assets
------
  Cash:
    On hand and due from banks ..................... $  1,423,801     1,769,493
    Interest-bearing deposits ......................   12,078,489    11,906,061
  Short term investments ...........................   16,549,328     4,776,681
  Secured short-term loans to commercial banks .....    7,389,723    18,405,234
  Investment securities, net (held to maturity) ....   40,577,377    40,669,525
  Investment securities, net (available for sale) ..    5,900,733     8,034,695
  Mortgage backed securities, net (held to maturity)   14,897,138    16,514,383
  Loans receivable, net ............................  194,884,975   190,965,595
  Investment in Federal Home Loan Bank of Atlanta
    stock, at cost .................................    2,377,200     2,377,200
  Property and equipment, net ......................      855,154       851,265
  Cash surrender value of life insurance ...........    6,205,613     6,132,929
  Prepaid expenses and other assets ................      331,223       333,630
                                                     ------------   -----------
                                                     $303,470,754   302,736,691
                                                     ------------   -----------
Liabilities and Stockholders' Equity
------------------------------------
  Savings accounts ................................. $248,892,114   245,269,602
  Borrowed funds-Employee Stock Ownership Plan .....      552,000       552,000
  Advance payments by borrowers for taxes, insurance
    and ground rents ...............................    1,193,096     5,006,020
  Federal and state income taxes:
    Currently payable ..............................      598,855       133,676
    Deferred .......................................    1,370,315     1,296,001
  Accrued expenses and other liabilities ...........    1,229,863     1,171,882
                                                     ------------   -----------
      Total Liabilities ............................  253,836,243   253,429,181
                                                     ------------   -----------
Stockholders' Equity:
  Common Stock $1 par value:
    20,000,000 shares authorized:
    issued and outstanding 5,195,597 shares ........    5,195,597     5,195,597
  Additional paid in capital .......................    9,298,133     9,258,917
  Employee stock ownership plan ....................     (462,745)     (487,891)
  Management recognition plan ......................       (4,851)      (11,907)
  Treasury stock, at cost, 70,939 and 39,205 shares    (1,319,050)     (772,430)
  Retained income, substantially restricted ........   34,833,518    34,162,743
  Accumulated other comprehensive income ...........    2,093,909     1,962,481
                                                     ------------   -----------
      Total Stockholders' Equity ...................   49,634,511    49,307,510
                                                     ------------   -----------
                                                     $303,470,754   302,736,691
                                                     ------------   -----------

See accompanying notes to consolidated financial statements

                                      -1-

<PAGE>

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


                                                            Three Months Ended
                                                               September 30
                                                          ----------------------
                                                             1998        1997
                                                          ----------  ----------
Interest Income:
  First mortgage and other loans .......................  $3,703,894  $3,326,637
  Mortgage-backed securities ...........................     277,088     397,178
  Investment securities and short-term investments .....   1,285,630   1,305,982
                                                          ----------  ----------
    Total interest income ..............................   5,266,612   5,029,797
                                                          ----------  ----------
Interest expense:
  Savings accounts .....................................   3,185,659   2,973,703
  Other ................................................      12,223      14,735
                                                          ----------  ----------
    Total interest expense .............................   3,197,882   2,988,438
                                                          ----------  ----------
    Net interest income ................................   2,068,730   2,041,359

  Provision for loan losses ............................      29,306       2,840
                                                          ----------  ----------
    Net interest income after provision for loan losses    2,039,424   2,038,519
                                                          ----------  ----------
Noninterest income:
  Service fees and charges .............................      34,335      37,726
  Other ................................................      73,108      33,996
                                                          ----------  ----------
                                                             107,443      71,722
                                                          ----------  ----------
Noninterest expense:
  Compensation and employee benefits ...................     399,507     431,121
  Occupancy ............................................      53,896      49,565
  SAIF deposit insurance premiums ......................      56,713      55,154
  Advertising ..........................................      30,764      56,124
  Other ................................................     168,921     151,788
                                                          ----------  ----------
                                                             709,801     743,752
                                                          ----------  ----------
  Income before provision for income taxes .............   1,437,066   1,366,489

Provision for income taxes .............................     513,896     501,931
                                                          ----------  ----------
    Net Income .........................................     923,170     864,558
                                                          ----------  ----------
Changes in accumulated other comprehensive income:
  Unrealized gains on securities available for sale, net     131,428      36,293
                                                          ----------  ----------
    Comprehensive income ...............................  $1,054,598     900,851
                                                          ----------  ----------
Net income per share of common stock
  Basic ................................................       $ .18       $ .17
  Diluted ..............................................       $ .18       $ .17


See accompanying notes to consolidated financial statements

                                      -2-

<PAGE>

                         LEEDS FEDERAL BANKSHARES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 Three months ended September 30, 1998 and 1997
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                    1998           1997
                                                                ------------    ----------                        ----
<S>                                                             <C>                <C>    
Cash flows from operating activities:
  Net Income
  Adjustments to reconcile net income to net cash provided by   $    923,170       864,558
    operating activities:
      Amortization of loan fees, premiums and discounts, net .       (24,512)      (11,660)
      Provision for loan losses ..............................        29,306         2,840
      Accretion of premiums(discounts) on investments
        securities and mortgage-backed securities, net .......           666        (3,274)
      Depreciation ...........................................        33,035        35,784
      Non-cash compensation under stock based benefit plans ..        71,418        81,249
      (Increase) decrease in accrued interest receiveable
        on securities and loans receiveable ..................       237,781       (59,231)
      Increase in income taxes currently payable .............       465,179       183,069
      Increase in accrued expenses and other liabilities .....        57,981        83,586
      Increase in unearned loan fees .........................        20,542        25,731
      (Increase) decrease in prepaid expenses and other assets         2,407       (58,004)
                                                                ------------    ----------
          Net cash provided by operating activities ..........     1,816,973     1,144,648
                                                                ------------    ----------
Cash flows from investing activities:
  Purchase of investment securities held to maturity .........   (17,187,441)   (1,784,506)
  Purchase of securities available for sale ..................             0      (975,000)
  Maturity of investment securities held to maturity .........    17,200,000     3,668,293
  Maturity of securities available for sale ..................     2,200,000             0
  Loan disbursements, net of repayments ......................    (3,955,160)   (3,789,205)
  Mortgage-backed securities held to maturity
    principal repayments .....................................     1,608,535     1,308,802
  Purchases of property and equipment ........................       (36,924)      (53,680)
  Investment in life insurance policies ......................       (72,684)      (33,666)
                                                                ------------    ----------
          Net cash used in investing activities ..............  $   (243,674)   (1,658,962)
                                                                ------------    ----------
Cash flows from financing activities:
  Net increase in savings accounts ...........................     3,622,512     1,118,197
  Decrease in advance payments by borrowers for taxes,
    insurance and ground rents ...............................    (3,812,924)   (3,705,739)
  Payment of dividends .......................................      (252,395)     (234,250)
  Purchase of treasury stock .................................      (546,620)            0
  Repayment of borrowed funds ................................             0       (24,000)
                                                                ------------    ----------
          Net cash used in financing activities ..............      (989,427)   (2,845,792)
                                                                ------------    ----------
Net increase (decrease) in cash and cash equivalents .........       583,872    (3,360,106)

Cash and cash equivalents at beginning of period .............    36,857,469    31,306,699
                                                                ------------    ----------
Cash and cash equivalents at end of period ...................  $ 37,441,341    27,946,593
                                                                ------------    ----------
</TABLE>

See accompanying notes to consolidated financial statements.

                                      -3-

<PAGE>

                         LEEDS FEDERAL BANKSHARES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1998
                                   (Unaudited)


(1)  Basis of Presentation

     The consolidated financial statements include the accounts of Leeds Federal
Bankshares,  Inc. (the Company) and its wholly owned  subsidiary,  Leeds Federal
Savings Bank. Leeds Investment  Corporation (the Subsidiary),  is a wholly owned
subsidiary of Leeds Federal Savings Bank (collectively,  the 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,  1998  Annual  Financial
Statements.  The results of operations for the three months ended  September 30,
1998, 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  statements of financial  condition and income
and expenses for the period.  Actual  results  could differ  significantly  from
those estimates.


(2)  Net Income per Share of Common Stock

     Basic 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:

<TABLE>
<CAPTION>
                                             Three Months              Three Months
                                         Ended September 30,       Ended September 30,
                                                 1998                      1997
                                       -----------------------   -----------------------
                                          Basic       Diluted       Basic       Diluted
                                       ----------   ----------   ----------   ----------
<S>                                    <C>          <C>          <C>          <C>       
Net Income ..........................  $  923,170   $  923,170   $  864,558   $  864,558
Dividends on unvested common stock ..      (2,016)        (933)      (3,658)      (1,765)
                                       ----------   ----------   ----------   ----------
Adjusted net income used in EPS
  calculations ......................  $  921,154   $  922,237   $  860,900   $  862,793
                                       ----------   ----------   ----------   ----------
Weighted average shares outstanding .   5,058,038    5,058,038    5,068,614    5,068,613

Dilutive securities:
  Options ...........................          --       79,895           --       76,949
  Unvested common stock awards ......          --        7,739           --       14,906
                                       ----------   ----------   ----------   ----------
Adjusted weighted-average shares used
  in EPS computation ................   5,058,038    5,145,672    5,068,614    5,160,468
                                       ----------   ----------   ----------   ----------
</TABLE>

                                      -4-

<PAGE>

(3)  Dividends on Common Stock

     On September 9, 1998,  the Company  declared a quarterly  cash  dividend of
$.14 per share.  The  dividends  were  payable to  stockholders  of record as of
September 30, 1998 and were paid on October 21, 1998. 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  $253,300.  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 declarations a dividend
solely to the MHC. At September 30, 1998, the  cumulative  amount of such waived
dividends was $6,395,400.


(4)  Impact of New Accounting Standards

     In June 1998,  the FASB  issued  SFAS No. 133  "Accounting  for  Derivative
Instruments and Hedging  Activities."  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
reorganize  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 or fiscal years  beginning after June 15, 1999.  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 is
encouraged, but is permitted only as of the beginning of any fiscal quarter that
begins after issuance of SFAS No. 133. It should 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 it will not have a
material effect on the Company's financial position or results of operations.


                                      -5-

<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 may contain
forward-looking  statements.   consisting  of  estimates  with  respect  to  the
financial condition,  results of operations and business of the Company that are
subject to various factors which could cause actual results to differ materially
from these  estimates.  These factors  include,  but are not limited to, general
economic conditions, changes in interest rates, deposit flows, loan demand, real
estate values, and competition;  changes in accounting principles,  policies, or
guidelines;   changes  in  legislation  or  regulation;   and  other   economic,
competitive,  governmental,  regulatory, and technological factors affecting the
Company's operations,  pricing,  products and services.  Readers shouldn't 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 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, 1998 to
September 30, 1998
---------------------------------------------------------------

     Cash on hand and due from banks,  interest bearing  deposits,  other liquid
investments and investment  securities  totaled  approximately  $86.3 million, a
decrease of  approximately  $1.6  million,  or 1.8%,  from June 30, 1998 levels.
Mortgage-backed  securities  totaled $14.9 million,  a decrease of $1.6 million,
due to repayments of principal.  Loans  receivable  totaled $194.9  million,  an
increase of $3.9 million, or 2.0%,  reflecting  increased lending activity.  The
decreases  in cash items and  mortgage-backed  securities  were used to fund the
increase in loans receivable.

     Deposits increased approximately $3.6 million, to a total of $248.9 million
at September 30, 1998.  Such increase was primarily  attributable to the general
market  interest  rate 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 maintain deposit levels.

     The Company is subject to capital  standards  which  generally  require the
maintenance  of  regulatory  capital  sufficient  to meet  each of three  tests,
hereinafter  described as the  tangible  capital  requirement,  the core capital
requirement and the risk-based capital  requirement.  At September 30, 1998, the
Bank had tangible  capital of $47.5 million,  or 15.8% of total adjusted assets,
which was $43.0 million in excess of the requirement of minimum tangible capital
of $4.5  million,  or 1.5% of  total  adjusted  assets;  core  capital  of $47.5
million, or 15.8% of total adjusted assets, which was $38.5 million in excess of
the  requirement  of  minimum  core  capital of $9.0  million,  or 3.0% of total
adjusted  assets;  and  risk-based  capital of $48.3  million,  or 31.0% of risk
weighted  assets,  which was $35.8  million  in excess of the  requirement  of a
minimum risk-based capital of 8% of risk weighted assets.


Comparison of Operating Results for Three Month Periods Ended
September 30, 1998 and 1997
-------------------------------------------------------------

General
-------

     The  Company's  net income for the three months ended  September  30, 1998,
totaled  $923,000,  an increase of $58,000,  or 6.7% as compared to $865,000 for
the three months ended  September 30, 1997. Such increase was due principally to
small  increases  in net  interest  income  and  noninterest  income and a small
decrease in noninterest  expenses,  which was partially offset by an increase in
provision for loan losses.

                                      -6-

<PAGE>

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

     Interest income on loans  increased by $377,000,  or 11.4%, to $3.7 million
for the three months ended September 30, 1998,  compared to $3.3 million for the
three  months  ended  September  30, 1997,  as a result of total  average  loans
increasing  $16.7 million to $192.7 million for the current quarter  compared to
$176.0 for the same quarter last year.  The increase in average loans  reflected
increased  loan demand.  Yield on average loans  increased to 7.7% for the three
months ended September 30, 1998, from 7.6% for the same period last year.  Funds
principally  from an  increase  in average  saving  deposits  and a decrease  in
mortgage-backed  securities  were used to fund the  increase  in average  loans.
Interest  income  on  mortgage-backed   securities  decreased  by  $120,000  due
principally to a decrease in average  balance of  mortgage-backed  securities to
$15.7  million  from $21.7  million at  September  30,  1997.  Average  yield on
mortgage  backed  securities  decreased to 7.1%,  from 7.3%. The decrease in the
average  balance of  mortgage-backed  securities was  attributable  to principal
repayments.

     Interest  income  on  investment  securities  and  short-term   investments
("Investments")  remained  relatively  unchanged  at $1.3  million for the three
months  ended  September  30,  1998,  and  1997.  Average  yield of  Investments
decreased to 6.1%, from 6.3%. The decrease in average yields was the result of a
general market decrease in interest rates on short term investments.

     Total interest  expense  increased by  approximately  $209,000,  during the
quarter  ended  September  30, 1998 to $3.2  million  from $3.0  million for the
quarter ended September 30, 1997. This increase was the result of an increase in
average balances of interest-bearing  liabilities  outstanding to $247.6 million
from $233.9  million and by an increase in the average  rate paid on deposits to
5.2% from 5.1%. The increase in average balances of interest-bearing liabilities
was a result of general market conditions.

     As a result  of the  foregoing  changes,  interest  income  increased  by a
greater amount than to interest expense resulting in an increase in net interest
income of $27,000,  to $2.1 million during the three months ended  September 30,
1998,  as compared to $2.0 million  during the three months ended  September 30,
1997.


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

     The Company  provided  $29,000 for loan losses for the three  months  ended
September  30,  1998,  and $3,000 for the three  month  period  ended  September
30,1997.  Based on  management's  review and  analysis,  the  allowance for loan
losses as of September 30, 1998, is considered adequate.


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

     Noninterest  income increased by  approximately  $35,000 to $107,000 during
the three months ended  September  30, 1998,  as compared to $72,000  during the
three months ended  September 30, 1997. The increase was primarily the result of
increases in income from life insurance contracts.


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

     Noninterest  expense  for  the  three  months  ended  September  30,  1998,
decreased by  approximately  $34,000,  to $710,000  compared to $744,000 for the
three months ended  September 30, 1997. Such decrease was due to small decreases
in  compensation  and employee  benefits,  principally  reduced ESOP costs,  and
advertising, partially offset by an increase in other noninterest expenses.


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

     The  effective  income tax rate for the three  months ended  September  30,
1998,  was 35.8%,  compared to 36.7% for the three  months ended  September  30,
1997. The decrease was due to increased state tax-free investments.

                                      -7-

<PAGE>

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

     As of September 30, 1998, the Company had a $2.5 million loan which matured
in June,  1998, and has not been repaid.  The borrower has paid all interest due
on the loan through  October,  31,  1998.  The borrower has informed the Company
that it has received a lender's commitment to refinance the loan, although there
can be no assurance  that such  refinancing  will be obtained.  Management  also
obtained a current  appraisal,  and based in part on such appraisal,  management
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  38.76% during the quarter ended September 30, 1998, and equaled 38.30%
at September 30, 1998.


Capability of the Company's Data Processing Software and Hardware
to Accommodate the Year 2000
-----------------------------------------------------------------

     The Company relies upon computers for the daily conduct of its business and
for data  processing  generally.  There is concern among  industry  experts that
commencing on January 1, 2000,  computers  will be unable to "read" the new year
and there may be widespread  computer  malfunctions.  The Year 2000 issue is the
result of computer  programs  being written using two digits rather than four to
define the applicable  year. Any of the Company's  computer  programs that would
have date  sensitive  software may recognize a date during "00" as the year 1900
rather  than  the  year  2000.  This  could  result  in  a  systems  failure  or
miscalculations  causing disruptions of operations.  Management has assessed its
electronic systems, programs,  applications and other electronic components used
in the operation of the Company.  The Company  contracts with service bureaus to
provide the  majority of its data  processing  and is dependent  upon  purchased
application  software.  Management  believes  that  it  has  implemented  a plan
pursuant to which the progress  toward full compliance of its service bureau and
other software  vendors will be tracked and tested well in advance of January 1,
2000.  The Company has  substantially  completed  end-to-end  tests with primary
servicers,  which allowed the Company to simulate daily  processing on sensitive
century dates,  and expects to complete the entire project by December 31, 1998.
The  Company  is  currently  developing  a  contingency  plan in the event  that
unforseeable  external  factors disrupt it's normal  operations as the year 2000
approaches.  There can be no assurance that the Company's  contingency plan will
fully mitigate the effects of such potential failures. The Company has contacted
its commercial borrowers and has been informed that they are either compliant or
in process of becoming  compliant  in  connection  with the year 2000 issue.  As
commercial  loans  represent less than 2% of the Company's  assets,  the Company
believes that the effect of the Year 2000 Issue on these borrowers will not have
an adverse  effect on the Company in general.  The Company has not  incurred any
material costs, and management believes that it will incur costs of no more than
$25,000  in  connection  with the year  2000  issue,  although  there  can be no
assurances in this regard.


Stock Repurchase Plan To Repurchase Up To 275,000 Shares of Common Stock
------------------------------------------------------------------------

     As of September 30, 1998, the Company has repurchased  70,939 shares of its
common stock in connection with its plan to repurchase up to 275,000 shares,  or
approximately  5.3%,  of its  outstanding  shares of common stock as part of its
capital management strategy.

                                      -8-

<PAGE>

PART II.  OTHER INFORMATION
---------------------------


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

     The  Company  is not  involved  in any  litigation,  or is it  aware of any
pending  litigation,  other than legal  proceedings  incidental to the Company's
business.  In the opinion of  management,  no material loss is expected from any
such pending claims or lawsuits.


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

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


                                      -9-

<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.


                                       LEEDS FEDERAL BANKSHARES, INC.



Date: November 9, 1998                 By: /s/ Gordon E. Clark
      ---------------------                -------------------------------------
                                           Gordon E. Clark
                                           President and Chief Executive Officer



Date: November 9, 1998                 By: /s/ Kathleen Trumpler
      ---------------------                -------------------------------------
                                           Kathleen Trumpler
                                           Treasurer and Chief Financial Officer