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| 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                                         |

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| FIRST                  FEDERAL BANKSHARES, INC. and                  SUBSIDIARIES                                   |   |                         |      |   |                     |   |      |                         |   |
|---------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-----------|--------|--------------------------|--------|-----------|------------------------------|--------|
| CONDENSED                  CONSOLIDATED BALANCE                  SHEETS (unaudited)                                 |   |                         |      |   |                     |   |      |                         |   |
|                                                                                                                |   |                         |      |   |                     |   |      |                         |   |
|                                                                                                                |   | December                  31 |      |   | June                  30 |   |      | December                  31 |   |
| (Dollars                  in thousands, except per                  share amounts)                                  |   | 2007                         |      |   | 2007                     |   |      | 2006                         |   |
| ASSETS                                                                                                              |   |                         |      |   |                     |   |      |                         |   |
| Cash                  and cash                  equivalents                                                         |   | $                            | 20,780    |   |                     | $      | 25,738    |                         |   | $ | 19,357 |   |
| Securities                  available-for-sale, at                  fair value                                      |   |                         | 109,738   |   |                     |   | 122,309   |                         |   |   | 62,887 |   |
| Securities                  held-to-maturity, at                  cost                                              |   |                         | 8,960     |   |                     |   | 9,549     |                         |   |   | 11,899 |   |
| Non-performing                  and classified                  loans held for sale, at lower of cost or fair value |   |                         | -         |   |                     |   | -         |                         |   |   | 10,349 |   |
| Mortgage                  loans held for                  sale                                                      |   |                         | 1,663     |   |                     |   | 2,131     |                         |   |   | - |   |
| Loans                  receivable,                  net                                                             |   |                         | 420,260   |   |                     |   | 427,954   |                         |   |   | 439,560 |   |
| Office                  property and equipment,                  net                                                |   |                         | 18,478    |   |                     |   | 16,205    |                         |   |   | 14,408 |   |
| Federal                  Home Loan Bank stock, at                  cost                                             |   |                         | 5,240     |   |                     |   | 3,560     |                         |   |   | 4,583 |   |
| Accrued                  interest                  receivable                                                       |   |                         | 3,035     |   |                     |   | 2,940     |                         |   |   | 2,702 |   |
| Goodwill                                                                                                            |   |                         | 18,417    |   |                     |   | 18,417    |                         |   |   | 18,417 |   |
| Foreclosed                  and repossessed                  assets                                                 |   |                         | 3,611     |   |                     |   | 2,156     |                         |   |   | 471 |   |
| Other                  assets                                                                                       |   |                         | 15,800    |   |                     |   | 14,858    |                         |   |   | 16,007 |   |
| Total                  assets                                                                                       |   | $                            | 625,982   |   |                     | $      | 645,817   |                         |   | $ | 600,640 |   |
| LIABILITIES                                                                                                         |   |                         |      |   |                     |   |      |                         |   |   |   |   |
| Deposits                                                                                                            |   | $                            | 451,655   |   |                     | $      | 507,865   |                         |   | $ | 447,663 |   |
| Advances                  from FHLB and other                  borrowings                                           |   |                         | 102,659   |   |                     |   | 62,202    |                         |   |   | 77,888 |   |
| Advance                  payments by borrowers for                  taxes and insurance                             |   |                         | 888       |   |                     |   | 916       |                         |   |   | 914 |   |
| Accrued                  interest                  payable                                                          |   |                         | 2,478     |   |                     |   | 2,691     |                         |   |   | 2,524 |   |
| Accrued                  expenses and other                  liabilities                                            |   |                         | 1,862     |   |                     |   | 1,888     |                         |   |   | 1,962 |   |
| Total                  liabilities                                                                                  |   |                         | 559,542   |   |                     |   | 575,562   |                         |   |   | 530,951 |   |
| STOCKHOLDERS'                  EQUITY                                                                               |   |                         |      |   |                     |   |      |                         |   |   |   |   |
| Common                  stock, $.01 par                  value                                                      |   |                         | 51        |   |                     |   | 51        |                         |   |   | 51 |   |
| Additional                  paid-in                  capital                                                        |   |                         | 39,388    |   |                     |   | 39,230    |                         |   |   | 38,951 |   |
| Retained                  earnings, substantially                  restricted                                       |   |                         | 59,014    |   |                     |   | 58,704    |                         |   |   | 57,715 |   |
| Treasury                  stock, at                  cost                                                           |   |                         | (28,536   | )      |                     |   | (26,886   | )                            |   |   | (26,224 | ) |
| Accumulated                  other comprehensive                  loss                                              |   |                         | (2,871    | )      |                     |   | (179      | )                            |   |   | (79 | ) |
| Unearned                  ESOP                                                                                      |   |                         | (606      | )      |                     |   | (665      | )                            |   |   | (725 | ) |
| Total                  stockholders'                  equity                                                        |   |                         | 66,440    |   |                     |   | 70,255    |                         |   |   | 69,689 |   |
| Total                  liabilities and                  stockholders' equity                                        |   | $                            | 625,982   |   |                     | $      | 645,817   |                         |   | $ | 600,640 |   |
|                                                                                                                |   |                         |      |   |                     |   |      |                         |   |   |   |   |
| Actual                  number of shares                  outstanding at end                                        |   |                         |      |   |                     |   |      |                         |   |   |   |   |
| of                  period, net of treasury                  stock                                                  |   |                         | 3,302,971 |   |                     |   | 3,389,971 |                         |   |   | 3,410,748 |   |
| Average                  shares outstanding used to                  compute:                                       |   |                         |      |   |                     |   |      |                         |   |   |   |   |
| Basic                  earnings per                  share                                                          |   |                         | 3,248,309 |   |                     |   | 3,316,774 |                         |   |   | 3,309,482 |   |
| Diluted                  earnings per                  share                                                        |   |                         | 3,265,856 |   |                     |   | 3,343,532 |                         |   |   | 3,342,938 |   |
| Shareholders'                  equity to total                  assets                                              |   |                         | 10.61     | %      |                     |   | 10.88     | %                            |   |   | 11.60 | % |
| Book                  value per                  share                                                              |   | $                            | 20.12     |   |                     | $      | 20.72     |                         |   | $ | 20.43 |   |

----

| FIRST                  FEDERAL BANKSHARES, INC. and                  SUBSIDIARIES             |   |                                                 |   |   |                                               |   |   |   |   |   |
|-----------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|--------|----------------------------------------------------|--------|--------|--------|--------|--------|
| CONDENSED                  CONSOLIDATED STATEMENTS                  OF OPERATIONS (unaudited) |   |                                                 |   |   |                                               |   |   |
|                                                                                          |   |                                                 |   |   |                                               |   |   |   |   |   |   |   |
|                                                                                          |   | Three                  months                  ended |   |   | Six                  months                  ended |   |
|                                                                                          |   | December                  31                         |   |   | December                  31                       |   |
| (Dollars                  in thousands, except per                  share amounts)            |   | 2007                                                 |   |   | 2006                                               |   |   | 2007   |   |   | 2006 |   |
| Interest                  on                  loans                                           |   | $                                                    | 7,403  |   |                                               | $      | 7,535  |   |   | $      | 14,834 |   |   | $ | 15,171 |   |
| Interest                  on investment                  securities                           |   |                                                 | 1,994  |   |                                               |   | 1,004  |   |   |   | 4,019 |   |   |   | 1,798 |   |
| Interest                  on cash and cash                  equivalents                       |   |                                                 | 8      |   |                                               |   | 110    |   |   |   | 58 |   |   |   | 244 |   |
| Total                  interest                  income                                       |   |                                                 | 9,405  |   |                                               |   | 8,649  |   |   |   | 18,911 |   |   |   | 17,213 |   |
| Interest                  on deposit                  liabilities                             |   |                                                 | 3,915  |   |                                               |   | 3,784  |   |   |   | 8,477 |   |   |   | 7,206 |   |
| Interest                  on                  borrowings                                      |   |                                                 | 1,289  |   |                                               |   | 1,003  |   |   |   | 2,153 |   |   |   | 2,040 |   |
| Total                  interest                  expense                                      |   |                                                 | 5,204  |   |                                               |   | 4,787  |   |   |   | 10,630 |   |   |   | 9,246 |   |
| Net                  interest                  income                                         |   |                                                 | 4,201  |   |                                               |   | 3,862  |   |   |   | 8,281 |   |   |   | 7,967 |   |
| Provision                  for loan                  losses                                   |   |                                                 | 492    |   |                                               |   | 403    |   |   |   | 513 |   |   |   | 503 |   |
| Net                  interest income after                  provision                         |   |                                                 | 3,709  |   |                                               |   | 3,459  |   |   |   | 7,768 |   |   |   | 7,464 |   |
| Service                  charges on deposit                  accounts                         |   |                                                 | 835    |   |                                               |   | 857    |   |   |   | 1,618 |   |   |   | 1,763 |   |
| Fees                  on commercial and consumer                  loans                       |   |                                                 | 123    |   |                                               |   | 51     |   |   |   | 221 |   |   |   | 85 |   |
| Gain                  on sale of real estate held                  for development            |   |                                                 | 47     |   |                                               |   | 20     |   |   |   | 47 |   |   |   | 60 |   |
| Mortgage                  banking                  revenue                                    |   |                                                 | 177    |   |                                               |   | 178    |   |   |   | 371 |   |   |   | 378 |   |
| Other                  income                                                                 |   |                                                 | 403    |   |                                               |   | 397    |   |   |   | 837 |   |   |   | 817 |   |
| Total                  non-interest                  income                                   |   |                                                 | 1,585  |   |                                               |   | 1,503  |   |   |   | 3,094 |   |   |   | 3,103 |   |
| Personnel                  expense                                                            |   |                                                 | 2,825  |   |                                               |   | 2,618  |   |   |   | 5,631 |   |   |   | 5,138 |   |
| Office                  property and                  equipment                               |   |                                                 | 701    |   |                                               |   | 687    |   |   |   | 1,402 |   |   |   | 1,365 |   |
| Data                  processing, ATM and debit                  card transaction             |   |                                                 |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| costs,                  and other item processing                  expense                    |   |                                                 | 417    |   |                                               |   | 294    |   |   |   | 787 |   |   |   | 603 |   |
| Professional,                  insurance, and                  regulatory expense             |   |                                                 | 252    |   |                                               |   | 275    |   |   |   | 507 |   |   |   | 559 |   |
| Advertising,                  donations, and public                  relations                |   |                                                 | 303    |   |                                               |   | 217    |   |   |   | 766 |   |   |   | 384 |   |
| Communications,                  postage, and                  office supplies                |   |                                                 | 225    |   |                                               |   | 208    |   |   |   | 435 |   |   |   | 402 |   |
| Other                  expense                                                                |   |                                                 | 225    |   |                                               |   | 206    |   |   |   | 459 |   |   |   | 372 |   |
| Total                  non-interest                  expense                                  |   |                                                 | 4,948  |   |                                               |   | 4,505  |   |   |   | 9,987 |   |   |   | 8,823 |   |
| Income                  from continuing operations                  before income taxes       |   |                                                 | 346    |   |                                               |   | 457    |   |   |   | 875 |   |   |   | 1,744 |   |
| Income                  tax                  expense                                          |   |                                                 | 28     |   |                                               |   | 77     |   |   |   | 143 |   |   |   | 441 |   |
| Income                  from continuing                  operations                           |   |                                                 | 318    |   |                                               |   | 380    |   |   |   | 732 |   |   |   | 1,303 |   |
| Income                  from discontinued                  operations, net of tax             |   |                                                 | -      |   |                                               |   | 32     |   |   |   | - |   |   |   | 76 |   |
| Net                  income                                                                   |   | $                                                    | 318    |   |                                               | $      | 412    |   |   | $      | 732 |   |   | $ | 1,379 |   |
|                                                                                          |   |                                                 |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| Basic                  earnings per                  share:                                   |   |                                                 |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from continuing                  operations                           |   | $                                                    | 0.10   |   |                                               | $      | 0.11   |   |   | $      | 0.23 |   |   | $ | 0.40 |   |
| Income                  from discontinued                  operations                         |   |                                                 | -      |   |                                               |   | 0.01   |   |   |   | - |   |   |   | 0.02 |   |
| Net                  income per                  share                                        |   | $                                                    | 0.10   |   |                                               | $      | 0.12   |   |   | $      | 0.23 |   |   | $ | 0.42 |   |
|                                                                                          |   |                                                 |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                  earnings per                  share:                                 |   |                                                 |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from continuing                  operations                           |   | $                                                    | 0.10   |   |                                               | $      | 0.11   |   |   | $      | 0.22 |   |   | $ | 0.39 |   |
| Income                  from discontinued                  operations                         |   |                                                 | -      |   |                                               |   | 0.01   |   |   |   | - |   |   |   | 0.02 |   |
| Net                  income per                  share                                        |   | $                                                    | 0.10   |   |                                               | $      | 0.12   |   |   | $      | 0.22 |   |   | $ | 0.41 |   |
|                                                                                          |   |                                                 |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  dividends declared per                  share                           |   | $                                                    | 0.105  |   |                                               | $      | 0.105  |   |   | $      | 0.210 |   |   | $ | 0.205 |   |

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| FIRST                  FEDERAL BANKSHARES, INC and                  SUBSIDIARIES                                                                                                       |   |                                                               |    |   |                                                             |   |    |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|---------|--------|------------------------------------------------------------------|--------|---------|--------|--------|--------|
| SELECTED                  FINANCIAL DATA                  (unaudited)                                                                                                                  |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |
|                                                                                                                                                                                   |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |
|                                                                                                                                                                                   |   | At                  or for the three months                  ended |    |   | At                  or for the six months                  ended |   |
|                                                                                                                                                                                   |   | December                  31                                       |    |   | December                  31                                     |   |
| (Dollars                  in thousands, except per                  share amounts)                                                                                                     |   | 2007                                                               |    |   | 2006                                                             |   |    | 2007   |   |   | 2006 |   |
| Average                  total                  assets                                                                                                                                 |   | $                                                                  | 627,507 |   |                                                             | $      | 596,890 |   |   | $      | 629,536 |   |   | $ | 594,044 |   |
| Average                  interest-earning                  assets                                                                                                                      |   |                                                               | 563,207 |   |                                                             |   | 541,706 |   |   |   | 566,179 |   |   |   | 538,682 |   |
| Average                  interest-bearing                  liabilities                                                                                                                 |   |                                                               | 510,941 |   |                                                             |   | 480,272 |   |   |   | 512,934 |   |   |   | 477,159 |   |
| Average                  interest-earning assets to                  average                                                                                                           |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |   |   |   |   |
| interest-bearing                  liabilities                                                                                                                                          |   |                                                               | 110.23  | %      |                                                             |   | 112.79  | %      |   |   | 110.38 | % |   |   | 112.89 | % |
|                                                                                                                                                                                   |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                   |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |   |   |   |   |
| Activity                  in the allowance for loan                  losses during the period:                                                                                         |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |   |   |   |   |
| Balance                  at beginning of                  period                                                                                                                       |   | $                                                                  | 1,743   |   |                                                             | $      | 5,482   |   |   | $      | 1,797 |   |   | $ | 5,466 |   |
| Provision                  for loan                  losses                                                                                                                            |   |                                                               | 492     |   |                                                             |   | 403     |   |   |   | 513 |   |   |   | 503 |   |
| Charge-offs:                                                                                                                                                                           |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |   |   |   |   |
| Single-family                  mortgage                  loans                                                                                                                         |   |                                                               | -       |   |                                                             |   | -       |   |   |   | - |   |   |   | (20 | ) |
| Commercial                  real estate                  loans                                                                                                                         |   |                                                               | (182    | )      |                                                             |   | -       |   |   |   | (182 | ) |   |   | - |   |
| Commercial                  business                  loans                                                                                                                            |   |                                                               | (15     | )      |                                                             |   | (2,617  | )      |   |   | (71 | ) |   |   | (2,617 | ) |
| Consumer                  loans                                                                                                                                                        |   |                                                               | (33     | )      |                                                             |   | (49     | )      |   |   | (79 | ) |   |   | (127 | ) |
| Total                  loans                  charged-off                                                                                                                              |   |                                                               | (230    | )      |                                                             |   | (2,666  | )      |   |   | (332 | ) |   |   | (2,764 | ) |
| Loans                  transferred to held for                  sale                                                                                                                   |   |                                                               | -       |   |                                                             |   | (1,300  | )      |   |   | - |   |   |   | (1,300 | ) |
| Recoveries                                                                                                                                                                             |   |                                                               | 51      |   |                                                             |   | 125     |   |   |   | 78 |   |   |   | 139 |   |
| Charge-offs                  net of                  recoveries                                                                                                                        |   |                                                               | (179    | )      |                                                             |   | (3,841  | )      |   |   | (254 | ) |   |   | (3,925 | ) |
| Balance                  at end of                  period                                                                                                                             |   | $                                                                  | 2,056   |   |                                                             | $      | 2,044   |   |   | $      | 2,056 |   |   | $ | 2,044 |   |
|                                                                                                                                                                                   |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                   |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |   |   |   |   |
| Non-performing                  loans                  receivable                                                                                                                      |   | $                                                                  | 2,988   |   |                                                             | $      | 2,775   |   |   | $      | 2,988 |   |   | $ | 2,775 |   |
| Non-performing                  loans to total                  loans receivable                                                                                                       |   |                                                               | 0.70    | %      |                                                             |   | 0.63    | %      |   |   | 0.70 | % |   |   | 0.63 | % |
| Allowance                  for loan losses to                  non-performing loans                                                                                                    |   |                                                               | 68.81   | %      |                                                             |   | 73.66   | %      |   |   | 68.81 | % |   |   | 73.66 | % |
| Ratio                  of allowance for loan losses                  to total loans                                                                                                    |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |   |   |   |   |
| held                  for investment at end of                  period                                                                                                                 |   |                                                               | 0.47    | %      |                                                             |   | 0.46    | %      |   |   | 0.47 | % |   |   | 0.46 | % |
|                                                                                                                                                                                   |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                   |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |   |   |   |   |
| Selected                  operating data:                  (1)                                                                                                                         |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |   |   |   |   |
| Return                  on average                  assets                                                                                                                             |   |                                                               | 0.20    | %      |                                                             |   | 0.28    | %      |   |   | 0.23 | % |   |   | 0.46 | % |
| Return                  on average                  equity                                                                                                                             |   |                                                               | 1.86    | %      |                                                             |   | 2.35    | %      |   |   | 2.12 | % |   |   | 3.93 | % |
| Net                  interest rate                  spread                                                                                                                             |   |                                                               | 2.62    | %      |                                                             |   | 2.42    | %      |   |   | 2.55 | % |   |   | 2.54 | % |
| Net                  yield on average                  interest-earning assets (2)                                                                                                     |   |                                                               | 3.02    | %      |                                                             |   | 2.89    | %      |   |   | 2.96 | % |   |   | 3.00 | % |
| Efficiency                  ratio                  (3)                                                                                                                                 |   |                                                               | 85.53   | %      |                                                             |   | 83.94   | %      |   |   | 87.74 | % |   |   | 79.29 | % |
| (1)  Annualized                  except                  for efficiency ratio.                                                                                               |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |   |   |   |   |
| (2) Net                  interest income,                  tax-effected, divided by average interest-earning                  assets.                                             |   |                                                               |    |   |                                                             |   |    |   |   |
| (3) Non-interest                  expense                  divided by net interest income plus non-interest income, less gain                  (loss)                  on sale of |   |                                                               |    |   |                                                             |
|  other                  real estate owned,                  investments, and fixed assets.                                                                                        |   |                                                               |    |   |                                                             |   |    |   |   |   |   |   |   |   |   |   |

----

| FIRST                  FEDERAL BANKSHARES, INC and                  SUBSIDIARIES            |   |   |   |                         |    |   |     |
|---------------------------------------------------------------------------------------------|--------|--------|--------|------------------------------|---------|--------|----------|
| SELECTED                  FINANCIAL DATA                  (unaudited)                       |   |   |   |                         |    |   |     |   |
|                                                                                        |   |   |   |                         |    |   | Weighted |   |
|                                                                                        |   |   |   | December                  31 |    |   | Average  |   |
| (Dollars                  in thousands, except per                  share amounts)          |   |   |   | 2007                         |    |   | Rate     |   |
| Time                  deposits maturing                  within...                          |   |   |   |                         |    |   |     |   |
| Three                  months                                                               |   |   |   | $                            | 68,297  |   |     |   | 4.83 | % |
| Four                  to six                  months                                        |   |   |   |                         | 83,650  |   |     |   | 4.91 | % |
| Seven                  to twelve                  months                                    |   |   |   |                         | 33,565  |   |     |   | 4.47 | % |
| More                  than twelve                  months                                   |   |   |   |                         | 57,369  |   |     |   | 4.70 | % |
| Total                  time                  deposits                                       |   |   |   | $                            | 242,881 |   |     |   | 4.77 | % |
|                                                                                        |   |   |   |                         |    |   |     |   |   |   |
| FHLB                  advances and all other                  borrowings maturing within... |   |   |   |                         |    |   |     |   |   |   |
| Three                  months                                                               |   |   |   | $                            | 63,909  |   |     |   | 4.73 | % |
| Four                  to six                  months                                        |   |   |   |                         | 9,000   |   |     |   | 5.54 | % |
| Seven                  to twelve                  months                                    |   |   |   |                         | 13,000  |   |     |   | 5.50 | % |
| More                  than twelve                  months                                   |   |   |   |                         | 16,750  |   |     |   | 4.98 | % |
| Total                  FHLB advances and all other                  borrowings              |   |   |   | $                            | 102,659 |   |     |   | 4.94 | % |
|                                                                                        |   |   |   |                         |    |   |     |   |   |   |

|                                     |   | Three                  months                  ended |   |   | Six                  months                  ended |   |
|------------------------------------------|--------|------------------------------------------------------|--------|--------|----------------------------------------------------|--------|
|                                     |   | December                  31                         |   |   | December                  31                       |   |
|                                     |   | 2007                                                 |   |   | 2006                                               |   |   | 2007 |   |   | 2006 |   |
| Market                  price per share: |   |                                                 |   |   |                                               |   |   |   |   |   |   |   |
| High                  for the period     |   | $                                                    | 19.00  |   |                                               | $      | 22.51 |   |   | $ | 19.00 |   |   | $ | 22.51 |   |
| Low                  for the period      |   | $                                                    | 12.80  |   |                                               | $      | 21.40 |   |   | $ | 17.50 |   |   | $ | 21.40 |   |
| Close                  at end of period  |   | $                                                    | 14.05  |   |                                               | $      | 21.70 |   |   | $ | 14.05 |   |   | $ | 21.70 |   |