SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C.  20549


_________





FORM
      8-K





Current
      Report


Pursuant
      to Section 13 or 15(d) of the


Securities
      Exchange Act of 1934





Date
      of
      Report (Date of earliest event reported):  December 31,
      2007


________________





First
      Federal Bankshares,
      Inc.


(Exact
      name of registrant as specified in its charter)








Delaware
            0-25509
            42-1485449(State
                or other jurisdiction
            (Commission
                File No.)
            (I.R.S.
                Employer Identification No.)of
                incorporation)





329
      Pierce Street, Sioux
      City, Iowa  51101


(Address
      of principal executive offices)





(712)
      277-0200


(Registrant’s
      telephone number, including area code)








Check
      the
      appropriate box below if the Form 8-K is intended to simultaneously satisfy
      the
      filing obligations of the registrant under any of the following provisions
      (see
      General Instructions A.2. below):





o
            Written
                communications pursuant to Rule 425 under the securities Act (12
                C.F.R.
                230.425)





o
            Soliciting
                material pursuant to Rule 14a-2 under the Exchange Act (17 C.F.R.
                240.14a-12)





o
            Pre-commencement
                communications pursuant to Rule 14d-2(b) under the Exchange Act (17
                C.F.R.
                240.14d-2(b))





o
            Pre-commencement
                communications pursuant to Rule 13e-4(c) under the Exchange Act (17
                C.F.R.
                240.13e-4(c))








Section 4
      – Matters Related to Accountants and Financial Statements





Item
      4.02.  Non-Reliance on Previously Issued Financial Statements or a
      Related Audit Report or Completed Interim Review.





On
      February 19, 2008, the Audit Committee of the Board of Directors of First
      Federal Bankshares, Inc. (the “Company”), upon the recommendation of the
      Company’s management, concluded that the Company’s Unaudited Consolidated
      Statements of Financial Condition, Unaudited Consolidated Statements of Changes
      in Stockholders’ Equity, and Unaudited Consolidated Statements of Comprehensive
      Income as of and for the three and six month periods ended December 31, 2007,
      should no longer be relied upon. The Company intends to file an amended Form
      10-Q that will include a restatement of the aforementioned financial
      statements.  The restatement will not affect the Company’s Unaudited
      Consolidated Statements of Income or Unaudited Consolidated Statements of Cash
      Flows for the three and six month periods ended December 31, 2007.





The
      restatement was necessitated by an error in determining the fair value of one
      of
      the Company’s trust-preferred pooled securities, which are included in the
      Company’s securities available-for-sale.  The error was due to
      inaccurate pricing information from the third party entities that provide this
      information to the Company.





Management
      anticipates that, as a result of the restatement, the fair value of the
      Company’s securities available for sale as of December 31, 2007, will decline by
      $2.7 million and the Company’s total stockholders’ equity will decline by $1.7
      million (as a result of a like increase in accumulated other comprehensive
      loss,
      which is a component of stockholders’ equity).  In addition, the
      Company’s deferred income tax asset will increase by $1.0 million, which is
      included as a component of other assets in the Company’s Unaudited Consolidated
      Statements of Financial Condition.





The
      Audit
      Committee discussed the matters described in this Current Report with the
      Company’s independent accountant.





Section 8
        – Other Events





Item
        8.01. Other Events.





Federal
      law and regulation generally permit the Company's federal savings
      association subsidiary to invest up to 35% of its assets in commercial
      paper and corporate debt securities. Notwithstanding this investment limit,
      guidance issued by the Office of Thrift Supervision
      ("OTS") imposes lower limits on such investments, absent OTS
      approval.  The Company was recently advised by the
      OTS that the aggregate amount of the Company's portfolio of
      trust-preferred pooled securities ($57.9 million at December 31, 2007)
      exceeds OTS regulatory guidelines. The Company is currently in discussions
      with the OTS about the size of this portfolio and, in response to an OTS
      request, expects to file with the OTS by March 15, 2008, a plan
      to come into compliance with such regulatory guidelines and the timeframe
      for doing so. As part of such plan, the Company intends to seek OTS approval
      to
      allow the Company to retain such





securities,
      notwithstanding the regulatory guidelines. There can be no assurance that the
      Company will obtain the approval. Any future directive by the OTS to
      sell such securities could result in a material adverse effect on the
      Company's future earnings and stockholders' equity.





Section 9
        – Financial Statements and Exhibits





Item
        9.01. Financial Statements and Exhibits.





Not
      applicable.














SIGNATURE





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





FIRST
                  FEDERAL BANKSHARES, INC.DATE:  February
                  25, 2008
              By:
              /s/Michael
                  W.
                  DoslandMichael
                  W. DoslandPresident
                  and Chief Executive
                  Officer







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