**Exhibit
                    99.1**
                first federal bankshares, inc.**PRESS
                    RELEASE****April
                    24, 2007****For
                    Immediate Release****For
                    Further Information Contact:**
                **Michael
                    W. Dosland**
                  **President
                    and Chief Executive Officer**
                  **First
                    Federal Bankshares, Inc.**
                  **329
                    Pierce Street, P.O. Box 897**
                  **Sioux
                    City, IA  51102**
                  **712.277.0222**








**FIRST
      FEDERAL BANKSHARES, INC. ANNOUNCES EARNINGS AND**


**DECLARES
      DIVIDEND**





Sioux
      City, Iowa.    First Federal Bankshares, Inc. (the
“Company”) (Nasdaq Global Market – “FFSX”), the parent company of First Federal
      Bank (the “Bank”) reported net income for the three months ended March 31, 2007,
      of $1.02 million or $0.30 per diluted share, compared to $766,000, or $0.23
      per
      diluted share in the same quarter last year.   For the nine
      months ended March 31, 2007, the company had net income of $2.4 million or
      $0.72
      per diluted share, compared to $2.6 million or $0.75 per diluted share a year
      ago, a decrease of 7%.





Earnings
      in the current period include a $510,000 or $0.15 per diluted share after-tax
      gain related to the Company’s previously announced sale of substantially all the
      assets of its title search and abstract continuation business in northwest
      Iowa.  The Company elected to sell this business because it is located
      in rural communities where the Bank has no other physical presence and because
      the business provided little prospect for significant future
      growth.  In addition, the business provided no opportunity for
      vertical or horizontal integration with the Bank's core business-community
      banking.  With this sale, the Company is no longer involved in the
      title search and abstract continuation business.





Net
      interest income for the three months and nine months ended March 31, 2007,
      totaled $3.8 million and $11.8 million, respectively, compared to $4.4 million
      and $12.9 million for the same periods ended March 31, 2006.  The cost
      of interest-bearing liabilities continued to increase more rapidly than yields
      on interest-earning assets resulting in the Company’s year-to-date net interest
      margin declining 35 basis points to 2.93% at the end of the March quarter
      compared to the same quarter last year.  In addition, loan growth has
      slowed dramatically relative to the previous year, which has had an adverse
      impact on net interest income.  These developments were partially
      offset by the purchase of $50.0 million of floating-rate trust preferred
      securities.  These purchases were funded by short-term brokered
      certificates of deposit at an after-tax annualized return on assets of
      approximately 1.0%.





Michael
      Dosland, president and chief executive officer commented, “The inverted yield
      curve continues to be a challenge for our Bank.  We continue to
      believe that, in the long-run, short-term rates will fall and/or the yield
      curve
      will return to a more normal condition.  As a result, we continue to
      position our liabilities in shorter maturities to take advantage of lower rates
      in the future.”  Dosland added, “In the near term, however, we expect
      net interest margin to continue to contract, albeit at a slower
      pace.  Although, there can be no assurances.”








The
      provision for loan losses for the quarter and nine months ended March 31, 2007,
      was $31,000 and $534,000, respectively, as compared to $320,000 and $1.07
      million for the comparable periods ended March 31, 2006.  Provision
      expense is higher in the previous fiscal year due to the Company experiencing
      significant loan growth in that period that warranted an increase in allowance
      for loan losses.  In addition, the Company recognized significant
      losses in the prior period related to loans that are no longer recorded on
      the
      books of the Company.





Non-interest
      income totaled $1.3 million for the three months ended March 31, 2007, compared
      to $1.2 million for the three months ended March 31, 2006.  The
      increase is primarily attributable to an increase on the gain on sale of loans
      as mortgage banking activity increased this quarter as compared to the same
      quarter last year.  For the nine months ended March 31, 2007,
      non-interest income totaled $4.3 million as compared to $4.2 million for the
      same period last year.  The Company recognized gains on a real estate
      development project of $75,000 for the nine month period ended March 31,
      2007.  During the same period in the previous year the Company’s real
      estate development subsidiary completed a previous project and recorded a loss
      of $242,000.  In addition, service charges on deposits increased 2% or
      $45,000. Partially offsetting these increases was a $47,000 decrease in service
      charges on loans.  The decrease is primarily due interest rates
      increasing over the prior year and as a result, slowing prepayments in
      commercial and consumer loans.  In addition, the gain on the sale of
      investments decreased $203,000 due to gains recognized in the prior period
      from
      the sale of another financial institution’s stock that was held at the holding
      company.





Non-interest
      expense for the nine months ended March 31, 2007, increased $648,000 or 5%
      over
      the same period last year.  For the three months ended March 31, 2007,
      non-interest expense increased $185,000 or 4% over the same period last
      year.  The increase is primarily attributable to calendar year salary
      increases.  In addition, the Company expensed in the current period
      the remainder of an employment and non-compete contract to a former manager
      of
      the Bank. The number of full-time equivalent employees of the Bank was 182
      as of
      March 31, 2007, compared to 175 at the same time last year.





First
      Federal’s third quarter annualized return on average equity (ROE) was 5.78%
      compared to 4.51% for the same period a year ago.  Annualized return
      on average assets (ROA) for the quarter was 0.65% compared to 0.53% twelve
      months prior.  Year-to-date, return on average equity was 4.57%
      compared to 4.89% a year ago, while return on average assets was 0.53% compared
      to 0.59% for the same period last year.  At March 31, 2007, stock
      holders equity totaled $70.1 million or $20.64 per share.





Total
      assets increased by $47.0 million, or 8%, to $647.7 million at March 31, 2007,
      from $600.7 million at March 31, 2006.  Deposits totaled $505.5
      million, an increase of $74.5 million, or 17% over the previous
      year.  The increase in assets and deposits is primarily due to the
      aforementioned purchase of trust preferred securities that were funded by
      short-term brokered certificates of deposit.





As
      previously announced, the Company completed the sale of $11.6 million of
      non-performing and classified loans during the current quarter.  The
      loan sale was completed at terms and conditions substantially in line with
      original estimates.  As a result, no additional significant gain or
      loss was recorded on the sale.  The Company also has no continuing
      relationship and/or on-going obligation related to the loans beyond the usual
      representations and warranties associated with such loan sales.





Non-performing
      loans decreased by $1.5 million, or 33%, to $3.1 million at March 31, 2007,
      from
      $4.6 million at March 31, 2006.  The decrease was due in part to the
      aforementioned loan sale.  Over 70% of the Company’s non-performing
      loans at March 31, 2007, are related to two


2


relationships.  In
      2005, the Bank purchased a $1.75 million participation in a $19.30 million
      loan
      for construction of a senior housing facility in Minnesota.  At the
      time of closing a significant portion of the units in the project were pre-sold
      with valid purchase agreements and escrowed deposits.  The loan was
      paying as agreed until December of 2006.  At that time the borrower
      started accepting requests for cancellation of the original purchase agreements
      based on accusations of fraud on the part of an unrelated third party
      responsible for marketing the project.  As a result, the bank group
      was forced to commence foreclosure proceedings against the
      borrower.  Management believes the foreclosure will be completed in
      the fourth quarter of the fiscal year.  In addition, management
      believes this loan is adequately secured and no loss is expected at this
      time.  However, there can be no assurances.





In
      2002,
      the Bank purchased a $0.5 million participation of a $3.2 million loan to a
      private golf and social club.  The loan was paying as agreed until
      December 2006.  At that time the borrower notified the bank group of a
      significant operating shortfall.  The bank group continues to work
      with the borrower to resolve the situation.  Management believes this
      loan is adequately secured by the underlying collateral, which consists
      primarily of real estate and to a lesser degree accounts receivable and
      equipment.  No loss is expected at this time.  However,
      there can be no assurances.





*Dividend
      Declared*





On
      April
      19, 2007, the Board of Directors of First Federal Bankshares, Inc. declared
      a
      quarterly cash dividend of $0.105 per share for the third quarter of the 2007
      fiscal year. The dividend is payable on May 31, 2007 to stockholders of record
      on May 17, 2007.





*About
      First Federal Bank*





The
      Company’s banking subsidiary, First Federal Bank, is headquartered in Sioux
      City, Iowa.  Founded in 1923, First Federal is a community bank
      servicing business and consumers in seven full-service offices in northwest
      Iowa, a full-service office in South Sioux City, Nebraska, and five full-service
      offices in central Iowa, including two in the Des Moines market
      area.





Certain
      matters in the press release are “forward looking statements” intended to
      qualify for the safe harbor from liability as established by the Private
      Securities Litigation Reform Act of 1995.  Such forward looking
      statements include words and phrases such as “will likely result,” “are expected
      to,” “will continue,” “is anticipated,” “estimate,” “project,” “intends to,” or
      similar expressions.  Similarly statements that describe First
      Federal’s future plans, objectives, or goals are forward-looking
      statements.  First Federal wishes to caution the readers not to place
      undue reliance on any such forward-looking statements, which speak only as
      of
      the date of the press release, and to advise readers that various factors could
      affect First Federal’s financial performance and could cause results for future
      periods to differ materially from those anticipated or
      projected.  Such factors include, but are not limited to: (i) general
      market interest rates, (ii) general economic conditions, (iii)
      legislative/regulatory changes, (iv) monetary and fiscal policies of the U.S.
      Treasury and Federal Reserve, (v) changes in the quality or composition of
      First
      Federal’s loan and investment portfolios, (vi) demand for loan products, (vii)
      deposit flow, (viii) competition, (ix) demand for financial services in First
      Federal’s markets and (x) changes in accounting principles, policies, or
      guidelines.











3


**FIRST
                        FEDERAL BANKSHARES, INC. and SUBSIDIARIES****CONDENSED
                        CONSOLIDATED BALANCE SHEETS (unaudited)**March
                        31,
                    
                    
                    June
                        30,
                    
                    
                    March
                        31,*(Dollars
                        in thousands, except per share amounts)*
                    
                    2007
                    
                    
                    2006
                    
                    
                    2006**ASSETS**Cash
                        and cash equivalents
                    
                    $
                    22,472
                    
                    
                    $
                    39,905
                    
                    
                    $
                    29,688Securities
                        available-for-sale, at fair value
                    
                    
                    131,376
                    
                    
                    
                    47,320
                    
                    
                    
                    39,114Securities
                        held-to-maturity, at cost
                    
                    
                    11,576
                    
                    
                    
                    13,077
                    
                    
                    
                    14,408Loans
                        receivable, net
                    
                    
                    427,318
                    
                    
                    
                    457,029
                    
                    
                    
                    462,876Office
                        property and equipment, net
                    
                    
                    14,627
                    
                    
                    
                    12,545
                    
                    
                    
                    12,566Federal
                        Home Loan Bank stock, at cost
                    
                    
                    3,827
                    
                    
                    
                    5,162
                    
                    
                    
                    5,384Accrued
                        interest receivable
                    
                    
                    2,966
                    
                    
                    
                    2,628
                    
                    
                    
                    2,723Goodwill
                    
                    
                    18,417
                    
                    
                    
                    18,417
                    
                    
                    
                    18,417Other
                        assets
                    
                    
                    15,127
                    
                    
                    
                    16,452
                    
                    
                    
                    15,552Total assets
                    
                    $
                    647,706
                    
                    
                    $
                    612,535
                    
                    
                    $
                    600,728**LIABILITIES**Deposits
                    
                    $
                    505,530
                    
                    
                    $
                    446,056
                    
                    
                    $
                    431,009Advances
                        from FHLB and other borrowings
                    
                    
                    67,155
                    
                    
                    
                    92,753
                    
                    
                    
                    97,361Advance
                        payments by borrowers for taxes and insurance
                    
                    
                    380
                    
                    
                    
                    977
                    
                    
                    
                    402Accrued
                        interest payable
                    
                    
                    2,885
                    
                    
                    
                    2,038
                    
                    
                    
                    1,902Accrued
                        expenses and other liabilities
                    
                    
                    1,664
                    
                    
                    
                    2,387
                    
                    
                    
                    2,129Total liabilities
                    
                    
                    577,614
                    
                    
                    
                    544,211
                    
                    
                    
                    532,803**STOCKHOLDERS'
                        EQUITY**Common
                        stock, $.01 par value
                    
                    
                    50
                    
                    
                    
                    50
                    
                    
                    
                    50Additional
                        paid-in capital
                    
                    
                    39,144
                    
                    
                    
                    38,293
                    
                    
                    
                    38,191Retained
                        earnings, substantially restricted
                    
                    
                    58,384
                    
                    
                    
                    57,014
                    
                    
                    
                    56,600Treasury
                        stock, at cost
                    
                    
                    (26,765
                    )
                    
                    
                    (25,921
                    )
                    
                    
                    (25,921
                    )Accumulated
                        other comprehensive income (loss)
                    
                    
                    (26
                    )
                    
                    
                    (326
                    )
                    
                    
                    (177
                    )Unearned
                        ESOP
                    
                    
                    (695
                    )
                    
                    
                    (786
                    )
                    
                    
                    (818
                    )Total stockholders' equity
                    
                    
                    70,092
                    
                    
                    
                    68,324
                    
                    
                    
                    67,925Total liabilities and stockholders' equity
                    
                    $
                    647,706
                    
                    
                    $
                    612,535
                    
                    
                    $
                    600,728Actual
                        number of shares outstanding at endof
                        period, net of treasury stock
                    
                    
                    3,395,371
                    
                    
                    
                    3,380,109
                    
                    
                    
                    3,375,609Average
                        shares outstanding used to compute:Basic
                        earnings per share
                    
                    
                    3,316,039
                    
                    
                    
                    3,366,086
                    
                    
                    
                    3,389,694Diluted
                        earnings per share
                    
                    
                    3,346,111
                    
                    
                    
                    3,417,367
                    
                    
                    
                    3,440,973Shareholders'
                        equity to total assets
                    
                    
                    10.82
                    %
                    
                    
                    11.15
                    %
                    
                    
                    11.31
                    %Book
                        value per share
                    
                    $
                    20.64
                    
                    
                    $
                    20.21
                    
                    
                    $
                    20.12




4


**FIRST
                          FEDERAL BANKSHARES, INC. and SUBSIDIARIES****CONDENSED
                          CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)**Three
                          months ended
                      
                      
                      Nine
                          months endedMarch
                          31,
                      
                      
                      March
                          31,*(Dollars
                          in thousands, except per share amounts)*
                      
                      2007
                      
                      
                      2006
                      
                      
                      2007
                      
                      
                      2006Interest
                          on loans
                      
                      $
                      7,341
                      
                      
                      $
                      7,498
                      
                      
                      $
                      22,512
                      
                      
                      $
                      21,629Interest
                          on investment securities
                      
                      
                      1,530
                      
                      
                      
                      680
                      
                      
                      
                      3,329
                      
                      
                      
                      2,009Interest
                          on deposits
                      
                      
                      74
                      
                      
                      
                      75
                      
                      
                      
                      318
                      
                      
                      
                      169Total
                          interest income
                      
                      
                      8,945
                      
                      
                      
                      8,253
                      
                      
                      
                      26,159
                      
                      
                      
                      23,807Interest
                          on deposit liabilities
                      
                      
                      4,183
                      
                      
                      
                      2,748
                      
                      
                      
                      11,390
                      
                      
                      
                      7,537Interest
                          on borrowings
                      
                      
                      919
                      
                      
                      
                      1,144
                      
                      
                      
                      2,958
                      
                      
                      
                      3,419Total
                          interest expense
                      
                      
                      5,102
                      
                      
                      
                      3,892
                      
                      
                      
                      14,348
                      
                      
                      
                      10,956Net
                          interest income
                      
                      
                      3,843
                      
                      
                      
                      4,361
                      
                      
                      
                      11,811
                      
                      
                      
                      12,851Provision
                          for loan losses
                      
                      
                      31
                      
                      
                      
                      320
                      
                      
                      
                      534
                      
                      
                      
                      1,070Net
                          interest income after provision
                      
                      
                      3,812
                      
                      
                      
                      4,041
                      
                      
                      
                      11,277
                      
                      
                      
                      11,781Service
                          charges on deposit accounts
                      
                      
                      706
                      
                      
                      
                      697
                      
                      
                      
                      2,363
                      
                      
                      
                      2,318Service
                          charges on loans
                      
                      
                      80
                      
                      
                      
                      68
                      
                      
                      
                      220
                      
                      
                      
                      267Gain
                          (loss) on sale of real estate held for development
                      
                      
                      15
                      
                      
                      
                      -
                      
                      
                      
                      75
                      
                      
                      
                      (242
                      )Gain
                          on sale of investments
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      203Gain
                          on sale of loans
                      
                      
                      135
                      
                      
                      
                      91
                      
                      
                      
                      481
                      
                      
                      
                      489Other
                          income
                      
                      
                      363
                      
                      
                      
                      389
                      
                      
                      
                      1,182
                      
                      
                      
                      1,191Total
                          non-interest income
                      
                      
                      1,299
                      
                      
                      
                      1,245
                      
                      
                      
                      4,321
                      
                      
                      
                      4,226Compensation
                          and benefits
                      
                      
                      2,521
                      
                      
                      
                      2,473
                      
                      
                      
                      7,535
                      
                      
                      
                      7,266Office
                          property and equipment
                      
                      
                      751
                      
                      
                      
                      723
                      
                      
                      
                      2,116
                      
                      
                      
                      2,115Data
                          processing, ATM and debit card transactioncosts
                          and other item processing expense
                      
                      
                      244
                      
                      
                      
                      244
                      
                      
                      
                      741
                      
                      
                      
                      741Professional,
                          insurance and regulatory expense
                      
                      
                      252
                      
                      
                      
                      313
                      
                      
                      
                      810
                      
                      
                      
                      779Advertising,
                          donations and public relations
                      
                      
                      160
                      
                      
                      
                      160
                      
                      
                      
                      544
                      
                      
                      
                      536Communications,
                          postage and office supplies
                      
                      
                      212
                      
                      
                      
                      202
                      
                      
                      
                      614
                      
                      
                      
                      596Other
                          expense
                      
                      
                      345
                      
                      
                      
                      185
                      
                      
                      
                      867
                      
                      
                      
                      546Total
                          non-interest expense
                      
                      
                      4,485
                      
                      
                      
                      4,300
                      
                      
                      
                      13,227
                      
                      
                      
                      12,579Income
                          from continuing operations before incometaxes
                      
                      
                      626
                      
                      
                      
                      986
                      
                      
                      
                      2,371
                      
                      
                      
                      3,428Income
                          tax expense
                      
                      
                      120
                      
                      
                      
                      248
                      
                      
                      
                      561
                      
                      
                      
                      936Income
                          from continuing operations
                      
                      
                      506
                      
                      
                      
                      738
                      
                      
                      
                      1,810
                      
                      
                      
                      2,492Income
                          from discontinued operations, net of tax(including
                          gain on disposal of $510, net of tax, in 2007)
                      
                      
                      514
                      
                      
                      
                      28
                      
                      
                      
                      589
                      
                      
                      
                      97Net
                          income
                      
                      $
                      1,020
                      
                      
                      $
                      766
                      
                      
                      $
                      2,399
                      
                      
                      $
                      2,589Per
                          share information:Basic
                          earnings per share:Income
                          from continuing operations
                      
                      $
                      0.15
                      
                      
                      $
                      0.22
                      
                      
                      $
                      0.54
                      
                      
                      $
                      0.73Income
                          from discontinued operations
                      
                      
                      0.16
                      
                      
                      
                      0.01
                      
                      
                      
                      0.18
                      
                      
                      
                      0.03Net
                          income per share
                      
                      $
                      0.31
                      
                      
                      $
                      0.23
                      
                      
                      $
                      0.72
                      
                      
                      $
                      0.76Diluted
                          earnings per share:Income
                          from continuing operations
                      
                      $
                      0.15
                      
                      
                      $
                      0.22
                      
                      
                      $
                      0.54
                      
                      
                      $
                      0.72Income
                          from discontinued operations
                      
                      
                      0.15
                      
                      
                      
                      0.01
                      
                      
                      
                      0.18
                      
                      
                      
                      0.03Net
                          income per share
                      
                      $
                      0.30
                      
                      
                      $
                      0.23
                      
                      
                      $
                      0.72
                      
                      
                      $
                      0.75Cash
                          dividends declared per share
                      
                      $
                      0.105
                      
                      
                      $
                      0.100
                      
                      
                      $
                      0.310
                      
                      
                      $
                      0.300




5




**FIRST
                        FEDERAL BANKSHARES, INC and SUBSIDIARIES****SELECTED
                        FINANCIAL DATA (unaudited)**At
                        or for the three months
                    
                    
                    At
                        or for the nine monthsMarch
                        31,
                    
                    
                    March
                        31,*(Dollars
                        in thousands, except per share amounts)*
                    
                    2007
                    
                    
                    2006
                    
                    
                    2007
                    
                    
                    2006Average
                        interest-earning assets
                    
                    $
                    560,102
                    
                    
                    $
                    537,744
                    
                    
                    $
                    545,670
                    
                    
                    $
                    530,482Average
                        interest-bearing liabilities
                    
                    
                    500,187
                    
                    
                    
                    476,433
                    
                    
                    
                    484,689
                    
                    
                    
                    467,141Average
                        interest-earning assets to averageinterest-bearing
                        liabilities
                    
                    
                    111.98
                    %
                    
                    
                    112.87
                    %
                    
                    
                    112.58
                    %
                    
                    
                    113.56
                    %Activity
                        in the allowance for loan lossesduring
                        the period:Balance
                        at beginning of period
                    
                    $
                    2,044
                    
                    
                    $
                    5,572
                    
                    
                    $
                    5,466
                    
                    
                    $
                    6,718Provision
                        for loan losses (1)
                    
                    
                    31
                    
                    
                    
                    320
                    
                    
                    
                    534
                    
                    
                    
                    1,070Charge-offs:Single-family
                        mortgage loans
                    
                    
                    (4
                    )
                    
                    
                    -
                    
                    
                    
                    (24
                    )
                    
                    
                    (29
                    )Commercial
                        real estate loans
                    
                    
                    -
                    
                    
                    
                    (16
                    )
                    
                    
                    -
                    
                    
                    
                    (58
                    )Commercial
                        business loans
                    
                    
                    (3
                    )
                    
                    
                    (273
                    )
                    
                    
                    (2,620
                    )
                    
                    
                    (1,867
                    )Consumer
                        loans
                    
                    
                    (63
                    )
                    
                    
                    (85
                    )
                    
                    
                    (190
                    )
                    
                    
                    (367
                    )Total
                        loans charged-off
                    
                    
                    (70
                    )
                    
                    
                    (374
                    )
                    
                    
                    (2,834
                    )
                    
                    
                    (2,321
                    )Loans
                        transferred to held for sale (2)
                    
                    
                    
                    
                    
                    
                    -
                    
                    
                    
                    (1,300
                    )
                    
                    
                    -Recoveries
                    
                    
                    26
                    
                    
                    
                    12
                    
                    
                    
                    165
                    
                    
                    
                    63Charge-offs
                        net of recoveries
                    
                    
                    (44
                    )
                    
                    
                    (362
                    )
                    
                    
                    (3,969
                    )
                    
                    
                    (2,258
                    )Balance
                        at end of period
                    
                    $
                    2,031
                    
                    
                    $
                    5,530
                    
                    
                    $
                    2,031
                    
                    
                    $
                    5,530Non-performing
                        loans receivable
                    
                    $
                    3,094
                    
                    
                    $
                    4,618
                    
                    
                    $
                    3,094
                    
                    
                    $
                    4,618Non-performing
                        loans to total loans receivable
                    
                    
                    0.72
                    %
                    
                    
                    0.99
                    %
                    
                    
                    0.72
                    %
                    
                    
                    0.99
                    %Allowance
                        for loan losses to non-performing loans
                    
                    
                    65.64
                    %
                    
                    
                    119.75
                    %
                    
                    
                    65.64
                    %
                    
                    
                    119.75
                    %Ratio
                        of allowance for loan losses to total loansheld
                        for investment at end of period
                    
                    
                    0.47
                    %
                    
                    
                    1.18
                    %
                    
                    
                    0.47
                    %
                    
                    
                    1.18
                    %Selected
                        operating data: (3)Return
                        on average assets
                    
                    
                    0.65
                    %
                    
                    
                    0.53
                    %
                    
                    
                    0.53
                    %
                    
                    
                    0.59
                    %Return
                        on average equity
                    
                    
                    5.78
                    %
                    
                    
                    4.51
                    %
                    
                    
                    4.57
                    %
                    
                    
                    4.89
                    %Net
                        interest rate spread
                    
                    
                    2.38
                    %
                    
                    
                    2.96
                    %
                    
                    
                    2.49
                    %
                    
                    
                    2.91
                    %Net
                        yield on average interest-earning assets (4)
                    
                    
                    2.79
                    %
                    
                    
                    3.29
                    %
                    
                    
                    2.93
                    %
                    
                    
                    3.28
                    %Efficiency
                        ratio (5)
                    
                    
                    87.01
                    %
                    
                    
                    76.72
                    %
                    
                    
                    81.90
                    %
                    
                    
                    74.68
                    %


(1)
              Data
                  for the nine months ended March 31, 2007 includes a $1.3 million
                  loss on
                  transfer of $11.6 million of  non-performing and classified
                  loans to held for sale, and $0.6 million on other commercial business
                  loans. These amounts are net of a $1.5 million reduction in the
                  allowance
                  for loan losses due to the significant decline in non-performing
                  and
                  classified assets resulting from the aforementioned transfer to
                  loans held
                  for sale.


(2)
              Data
                  for the nine months ended March 31, 2007, consists of $2.0 million
                  relating to commercial real estate loans and, $0.1 milion relating
                  to
                  single-family mortgage loans, offset by $0.8 million recovery in
                  commercial  business
                  loans.
 (3)
                Annualized
                    except for efficiency ratio.
 (4)
                Net
                    interest income, tax-effected, divided by average interest-earning
                    assets.
 (5)
                Noninterest
                    expense divided by net interest income plus noninterest income,
                    less gain
                    (loss) on sale of other real estate owned, investments and fixed
                    assets.




6




**FIRST
                          FEDERAL BANKSHARES, INC and SUBSIDIARIES****SELECTED
                          FINANCIAL DATA (unaudited)**WeightedMarch
                          31,
                      
                      
                      Average*(Dollars
                          in thousands, except per share amounts)*
                      
                      
                      
                      2007
                      
                      
                      RateTime
                          deposits maturing within ...Three
                          months
                      
                      
                      
                      $
                      93,975
                      
                      
                      
                      4.84
                      %Four
                          to six months
                      
                      
                      
                      
                      55,259
                      
                      
                      
                      4.82
                      %Seven
                          to twelve months
                      
                      
                      
                      
                      98,401
                      
                      
                      
                      4.88
                      %More
                          than twelve months
                      
                      
                      
                      
                      43,262
                      
                      
                      
                      4.45
                      %Total
                          time deposits
                      
                      
                      
                      $
                      290,897
                      
                      
                      
                      4.80
                      %FHLB
                          advances and all other borrowings maturing within...Three
                          months
                      
                      
                      
                      $
                      5,655
                      
                      
                      
                      5.19
                      %Four
                          to six months
                      
                      
                      
                      
                      8,000
                      
                      
                      
                      3.69
                      %Seven
                          to twelve months
                      
                      
                      
                      
                      10,000
                      
                      
                      
                      5.41
                      %More
                          than twelve months
                      
                      
                      
                      
                      43,500
                      
                      
                      
                      5.25
                      %Total
                          FHLB advances and all other borrowings
                      
                      
                      
                      $
                      67,155
                      
                      
                      
                      5.08
                      %


Three
                        months ended
                    
                    
                    Nine
                        months endedMarch
                        31,
                    
                    
                    March
                        31,2007
                    
                    
                    2006
                    
                    
                    2007
                    
                    
                    2006Market
                        price per share:High
                        for the period
                    
                    $
                    22.22
                    
                    
                    $
                    22.90
                    
                    
                    $
                    22.51
                    
                    
                    $
                    22.90Low
                        for the period
                    
                    $
                    21.31
                    
                    
                    $
                    19.11
                    
                    
                    $
                    21.31
                    
                    
                    $
                    17.30Close
                        at end of period
                    
                    $
                    21.31
                    
                    
                    $
                    22.60
                    
                    
                    $
                    21.31
                    
                    
                    $
                    22.60




7