FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the quarterly period ended March 31, 1998
                                       OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

     For the transition period from ______________ to _______________

     Commission file number 0-25076

                               Washington Bancorp
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

          Iowa                                                   42-1446740
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

                  102 East Main Street, Washington, Iowa 52353
               --------------------------------------------------
               (Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code: (319)653-7256

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Securities  Exchange  act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes  [X]  No  [ ]

State the number of shares  outstanding of each of the issuers classes of common
equity, as of the latest practicable date.
                                         
Common Stock, $.01 par value 640,006 shares outstanding as to May 12, 1998

Transitional Small Business Disclosure Format (check one): Yes[ ] No[X]
<PAGE>




                                     INDEX

Part I.   Financial Information
            Item 1.  Consolidated Financial Statements

                     Consolidated Balance Sheets at March 31,
                       1998 (unaudited) and June 30, 1997

                     Unaudited Consolidated Statements of Income for the
                       three months ended March 31, 1998 and 1997 and
                       for the nine months ended March 31, 1998 and 1997
 
                     Unaudited Consolidated Statements of Cash Flows
                       for the nine months ended March 31, 1998 and 1997

                     Notes to Consolidated Financial Statements

            Item 2.  Management's Discussion and Analysis

Part II.  Other Information

          Items 1 through 6

          Signatures

<PAGE>



Washington Bancorp and Subsidiary
Consolidated Statements of Financial Condition
<TABLE>


                                                                 March 31,      June 30,
                                                                  1998           1997*
                                                              ----------------------------
                                                               (unaudited)
<S>                                                            <C>             <C>
ASSETS
Cash and cash equivalents:
     Interest-bearing......................................   $  3,358,589     $   574,736
     Noninterest-bearing ..................................      1,132,037         233,069
                                                              ----------------------------
                                                                 4,490,626         807,805
Investment securities, held to maturity ...................      1,285,500              --
Investment securities, available for sale .................     17,323,618       9,849,991
Federal funds sold ........................................      2,413,064              --
Loans receivable, net .....................................     63,885,347      52,530,153
Accrued interest receivable ...............................        859,038         568,228
Federal Home Loan Bank stock ..............................        690,800         465,600
Premises and equipment, net ...............................        779,550         550,231
Foreclosed real estate ....................................             --              --
Goodwill, net .............................................      1,398,728              --
Other assets ..............................................        121,365         103,026
                                                              ----------------------------
         Total assets .....................................   $ 93,247,636    $ 64,875,034
                                                              ============================
LIABILITIES
Deposits ..................................................   $ 67,366,377    $ 44,754,328
Borrowed funds ............................................     13,791,838       8,651,765
Advance from borrowers for taxes and insurance ............        119,920         204,677
Accrued expenses and other liabilities ....................        832,199         519,441
                                                              ----------------------------
         Total liabilities ................................     82,110,334      54,130,211
                                                              ----------------------------

COMMITMENTS AND CONTINGENCIES
Redeemable common stock held by Employee
         Stock Ownership Plan (the "ESOP") ................        155,346          69,392
                                                              ----------------------------
STOCKHOLDERS' EQUITY 
     Common stock:
         Common stock .....................................          6,511           6,575
         Additional paid-in capital .......................      6,113,533       6,150,032
Retained earnings .........................................      5,645,511       5,292,419
Unrealized gain (loss) on investment securities,
         available for sale, net of income taxes ..........         16,287          (3,307)
                                                              ----------------------------
                                                                11,781,842      11,445,719
Less:
Cost of common shares acquired for treasury ...............        (86,756)        (85,827)
Deferred compensation .....................................       (124,219)       (151,739)
Maximum cash obligation related to ESOP shares ............       (155,346)        (69,392)
Unearned ESOP shares ......................................       (433,565)       (463,330)
                                                              ----------------------------
   Total stockholders' equity .............................     10,981,956      10,675,431
                                                              ----------------------------
         Total liabilities and
               stockholders' equity........................   $ 93,247,636    $ 64,875,034
                                                              ============================
</TABLE>

*Condensed from audited financial statements.
See Notes to Consolidated Financial Statements.


<PAGE>






Washington Bancorp and Subsidiary
Unaudited Consolidated Statements of Income
<TABLE>

`                                                                           Three months ended            Nine months ended
                                                                                  March 31,                     March 31,
                                                                           ---------------------------------------------------------
                                                                             1998           1997            1998           1997
                                                                           ---------------------------------------------------------
<S>                                                                        <C>            <C>            <C>              <C>  
Interest income:
     Loans receivable:
          First mortgage loans .....................................       $957,205       $884,140       $2,738,509       $2,568,807
          Consumer and other loans .................................        403,888        175,440          948,534          469,489
     Investment securities:
          Taxable ..................................................        265,151        199,561          530,772          667,001
          Non-taxable ..............................................         18,112          5,433           28,845           16,300
                                                                           ---------------------------------------------------------
               Total interest income ...............................      1,644,356      1,264,574        4,246,660        3,721,597
                                                                           --------       --------       ----------       ----------
Interest expense:
     Deposits ......................................................        727,134        557,918       1,827,409         1,662,769
     Borrowed funds ................................................        173,665         70,276         439,997           233,477
                                                                           --------       --------       ----------       ----------
               Total interest expense ..............................        900,799        628,194        2,267,406        1,896,246
                                                                           --------       --------       ----------       ----------
               Net interest income .................................        743,557        636,380        1,979,254        1,825,351
Provision for loan loss ............................................         18,000         19,085           71,000           25,085
                                                                           --------       --------       ----------       ----------
               Net interest income after provision .................        725,557        617,295        1,908,254        1,800,266
                                                                           --------       --------       ----------       ----------

Noninterest income:
     Security gains (losses), net ..................................           --             --               --                388
     Loan originations and commitment fees .........................          2,843          1,131            8,147            5,976
     Bank service charges and fees .................................         59,210         27,107          141,308           84,460
     Insurance commissions .........................................         11,691         14,189           57,400           61,700
     Other .........................................................          8,819         24,694           11,134           43,901
                                                                           --------       --------       ----------       ----------
               Total noninterest income ............................         82,563         67,121          217,989          196,425
                                                                           --------       --------       ----------       ----------
Noninterest expense:
     Compensation and benefits .....................................        253,476        185,208          661,827          544,774
     Occupancy and equipment .......................................         49,332         35,143          124,268          107,048
     Deposit insurance premium .....................................         12,947          2,014           36,829          359,167
     Data processing ...............................................         21,233         20,243           60,444           57,804
     Other .........................................................        133,224         95,810          370,922          323,968
                                                                           --------       --------       ----------       ----------
               Total noninterest expense ...........................        470,212        338,418        1,254,290        1,392,761
                                                                           --------       --------       ----------       ----------
               Income before income taxes ..........................        337,908        345,998          871,953          603,930
Income tax expense .................................................        121,935        134,989          299,530          227,534
                                                                           --------       --------       ----------       ----------
               Net income ..........................................       $215,973       $211,009       $  572,423       $  376,396
                                                                           ========       ========       ==========       ==========
Earnings per common share:
     Basic .........................................................       $   0.36       $   0.35       $     0.94       $     0.62
                                                                           ========       ========       ==========       ==========

     Diluted .......................................................       $   0.35       $   0.34       $     0.92       $     0.62
                                                                           ========       ========       ==========       ==========

Dividends per common share .........................................       $   0.12       $   0.10       $     0.34       $     0.28
                                                                           ========       ========       ==========       ==========

Weighted average common shares for:
     Basic earnings per share ......................................        605,969        605,603          605,869          607,318
                                                                           ========       ========       ==========       ==========

     Diluted earnings per share ....................................        624,776        614,266          623,390          610,305
                                                                           ========       ========       ==========       ==========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>






Washington Bancorp and Subsidiary
Unaudited Consolidated Statements of Cash Flows
<TABLE>
                                                                                                        Nine months ended
                                                                                                              March 31,
                                                                                                 ----------------------------------
                                                                                                     1998                  1997
                                                                                                 ------------          ------------
<S>                                                                                              <C>                   <C>  
Cash Flows from Operating Activities
         Net income ....................................................................         $    572,423          $    376,396
         income
Adjustments to reconcile net income to net cash provided by operating activities:
         Amortization of premiums and discounts on debt securities .....................                8,673                33,594
         Amortization of goodwill ......................................................               19,700                  -- 

         Provision for loan losses .....................................................               71,000                25,085
        (Gain) on sale of investment securities ........................................                 --                    (388)
         (Gain) on sale of foreclosed real estate ......................................               (3,381)              (36,911)
         Depreciation ..................................................................               48,371                40,989
         Compensation under stock award ................................................               39,442                  --
         ESOP contribution expense .....................................................               52,135                42,449
         Deferred income taxes .........................................................              (31,383)              (16,798)
         (Increase) decrease in accrued interest receivable ............................               13,228              (133,459)
         (Increase) decrease in other assets ...........................................              (17,615)               11,143
         Increase in accrued expenses and other liabilities ............................               20,729               118,720
                                                                                                 ------------          ------------
                           Net cash provided by operating activities ...................              793,322               460,820
                                                                                                 ------------          ------------

Cash Flows from Investing Activities
Held to maturity:
           Purchases ...................................................................              (65,000)                 --
Available for sale securities:
         Sales .........................................................................                 --                     911
         Maturities and calls ..........................................................            8,330,029            10,093,648
         Purchases .....................................................................           (5,250,000)           (6,145,000)
Federal funds sold, net ................................................................           (1,226,295)                 --
Purchase of Federal Home Loan Bank stock ...............................................             (225,200)              (64,100)
Loans made to customers, net ...........................................................           (3,573,890)           (6,704,922)
Purchase of premises and equipment .....................................................              (51,056)              (50,897)
Purchase of stock of Rubio Savings Bank of Brighton,
         Iowa, net of cash received ....................................................           (2,466,021)                 --
                                                                                                 ------------          ------------
                           Net cash (used in) investing activities .....................           (4,527,433)           (2,870,360)
                                                                                                 ------------          ------------

Cash Flows from Financing Activities
         Net increase (decrease) in deposits ...........................................            2,652,730             3,822,702
         Proceeds from Federal Home Loan Bank advances .................................           43,950,000            65,050,000
         Principal payments on Federal Home Loan Bank advances .........................          (38,809,926)          (64,626,498)
         Net (decrease) in advances from borrowers for payment of taxes and insurance ..              (84,758)             (118,669)
         Acquisition of 19,914 shares of common stock for Recognition and 
           Retention Plan ..............................................................                 --                (262,736)
         Acquisition of 6,386 shares of common stock for retirement ....................                 --                 (85,827)
         Acquisition of 5,000 shares of common stock for the treasury ..................              (93,750)                 --
         Dividends paid ................................................................             (197,364)             (155,412)
                                                                                                 ------------          ------------
                           Net cash provided by financing activities ...................            7,416,932             3,623,560
                                                                                                 ------------          ------------

                           Net increase in cash and cash equivalents ...................            3,682,821             1,214,020
Cash and cash equivalents:
         Beginning .....................................................................              807,805             1,903,352
                                                                                                 ------------          ------------
         Ending ........................................................................         $  4,490,626          $  3,117,372
                                                                                                 ============          ============
<PAGE>



Washington Bancorp and Subsidiary
Unaudited Consolidated Statements of Cash Flows

</TABLE>
<TABLE>
                                                                                                        Nine months ended
                                                                                                              March 31,
                                                                                                 ----------------------------------
                                                                                                     1998                  1997
                                                                                                 ------------          ------------
<S>                                                                                              <C>                   <C>  
Supplemental Disclosures of Cash Flow Information
         Cash payments for:
                           Interest paid to depositors .................................         $  1,437,901          $  1,420,143
                           Interest paid on other obligations ..........................              439,998               233,477
                           Income taxes, net of refunds ................................              310,164               161,408

Supplemental Schedule of Noncash Investing
         and Financing Activities
         Transfer from loans to foreclosed real estate .................................               61,619               106,289
         Contract sales of foreclosed real estate ......................................               65,000               143,200
Acquisition of assets and liabilities from Rubio Savings Bank of Brighton, Iowa:
         Assets acquired:
                           Cash and cash equivalents ...................................            2,331,668                  --
                           Federal funds sold ..........................................            1,186,769                  --
                           Investment securities, held to maturity .....................            1,221,156                  --
                           Investment securities, available for sale ...................           10,530,323                  --
                           Loans receivable ............................................            7,848,923                  --
                           Premises and equipment ......................................              226,634                  --
                           Goodwill ....................................................            1,818,428                  --
                           Other assets ................................................              304,762                  --
                                                                                                 ----------------------------------
                                                                                                   25,068,663                  --
         Liabilities assumed:
                           Deposits ....................................................          (19,959,320)                 --
                           Other liabilities ...........................................             (311,655)                 --
                                                                                                 ----------------------------------
                                                                                                    4,797,689          $       --
                                                                                                 ============          ============
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>




Washington Bancorp and Subsidiary
Notes to Consolidated Financial Statements



Principles of consolidation.  The accompanying consolidated financial statements
include the accounts of  Washington  Bancorp  ("Washington"  or the  "Company"),
Washington  Federal  Savings  Bank  ("Washington  Federal"  or  "WFSB"),  WFSB's
wholly-owned subsidiary Washington Financial Services, Inc., which is a discount
brokerage firm, and Rubio Savings Bank of Brighton, Iowa ("Rubio" or "RSB"). All
significant  intercompany  balances and  transactions  have been  eliminated  in
consolidation.

Basis of presentation.  Interim Financial Information (unaudited): The financial
statements and notes related  thereto for the three month period ended March 31,
1998 and for the nine month period ended March 31, 1998, are  unaudited,  but in
the opinion of management  include all  adjustments,  consisting  only of normal
recurring  adjustments,  necessary  for a fair  presentation  of  the  financial
position  and  results of  operations.  The  operating  results  for the interim
periods are not  indicative of the  operating  results to be expected for a full
year or for other interim  periods.  Not all  disclosures  required by generally
accepted accounting  principles necessary for a complete  presentation have been
included.  It  is  recommended  that  these  consolidated   condensed  financial
statements be read in conjunction with the Annual Report on Form 10- KSB for the
year ended June 30, 1997 and all related amendments and exhibits  (including all
financial  statements  and  notes  therein),  filed  by  the  Company  with  the
Securities and Exchange Commission.

Recapture of Bad Debt Reserves.  Prior to the enactment,  on August 20, 1996, of
the Small  Business Job  Protection  Act of 1996 (the "1996  Act"),  for federal
income tax purposes,  thrift institutions such as Washington Federal,  which met
certain  definitional tests primarily relating to their assets and the nature of
their  business,  were  permitted to establish tax reserves for bad debt, and to
make  annual  additions  thereto,   which  additions  could,   within  specified
limitations,  be deducted in arriving at their taxable income.  WFSB's deduction
with respect to "qualifying loans," which are generally loans secured by certain
interests  in real  property,  could  be  computed  using an  amount  based on a
six-year  moving  average of WFSB's  actual  loss  experience  (the  "Experience
Method"),  or a  percentage  equal  to 8% of  WFSB's  taxable  income ( the "PTI
Method"),  computed  without  regard  to  this  deduction  and  with  additional
modifications  and  reduced  by the  amount  of any  permitted  addition  to the
non-qualifying reserve.

Under the 1996 Act, the PTI Method was repealed and WFSB will be required to use
the Experience Method of computing additions to its bad debt reserve for taxable
years  beginning  with the Banks  taxable  year  beginning  January 1, 1996.  In
addition,  WFSB will be required to  recapture  (i.e.,  take into income) over a
six-year period,  beginning with the taxable year beginning January 1, 1996, the
excess of the  balance of its bad debt  reserves  (other  than the  supplemental
reserve)  as of  December  31,  1995 over the greater of (a) the balance of such
reserves as of December  31, 1987 (or over a lesser  amount if WFSB's  portfolio
decreased  since  December  31,  1987) or (b) an amount that would have been the
balance of such  reserves as of December  31, 1995 had WFSB always  computed the
additions to its reserves using the six-year moving average  Experience  Method.
However,  under the 1996 Act, such recapture  requirements will be suspended for
each of the two successive taxable years beginning January 1, 1996 in which WFSB
originates a minimum amount of certain  residential loans during such years that
is not less than the average of the principal amounts of such loans made by WFSB
during its six taxable years preceding  January 1, 1996. This  legislation  will
result in the WFSB's  recapture of reserves  with an aggregate  tax liability of
approximately  $156,000.  Since WFSB has already  provided a deferred income tax
liability  of this amount for  financial  reporting  purposes,  there will be no
adverse impact to WFSB's  financial  condition or results of operations from the
enactment of this legislation.

Deposit  Insurance  Funds Act of 1996.  In response to the  SAIF/BIF  assessment
disparity, the Deposit Insurance Funds Act of 1996 (the "Funds Act") was enacted
into law on  September  30,  1996.  The Funds Act amended  the  Federal  Deposit
Insurance Act (the "FDIA") in several ways to  recapitalize  the SAIF and reduce
the disparity in the  assessment  rates for the BIF and the SAIF.  The Funds Act
authorized  the FDIC to impose a special  assessment  on all  institutions  with
SAIF-assessable  deposits in the amount  necessary to recapitalize  the SAIF. As
implemented  by the FDIC,  institutions  with  SAIF-assessable  deposits  paid a
special  assessment  of 65.7 basis points on the Savings  Association  Insurance
Fund (SAIF)  deposits  held as of March 31,  1995.  Washington  Federal  Savings
Bank's  assessment  totalled  $294,000.  As a result of the special  assessment,
WFSB's deposit insurance premium was reduced to 6.48 basis points based upon its
current risk  classification  and the new  assessment  schedule for SAIF insured
institutions. These premiums are subject to change in future periods.
<PAGE>


Earnings  per common  share.  The FASB issued  Statement  No. 128,  Earnings per
Share,  which  supersedes  APB Opinion No. 15.  Statement  No. 128  requires the
presentation  of earnings  per share by all  entities  that have common stock or
potential common stock,  such as options,  warrants and convertible  securities,
outstanding that trade in a public market.  Those entities that have only common
stock outstanding are required to present basic earnings per-share amounts.  All
other  entities are  required to present  basic and diluted  per-share  amounts.
Diluted  per-share  amounts assume the  conversion,  exercise or issuance of all
potential  common  stock  instruments  unless  the effect is to reduce a loss or
increase  the income per common  share from  continuing  operations.  Washington
initially  applied Statement No. 128 for the period ended December 31, 1997 and,
as required by the  Statement,  has restated all per share  information  for the
disclosed prior periods to conform to the Statement.

Because Washington Bancorp has potential common stock outstanding (stock options
to employees),  Washington is required to present basic and diluted earnings per
share ("EPS"). Washington has granted options to directors and certain employees
to purchase 60,272 shares of the Company's  common stock to expire no later than
October 15, 2006 and 2,818  shares of the  Company's  common  stock to expire no
later than October 15, 2007.

ESOP  obligations  and expense.  The receivable from the Company's ESOP has been
treated as a reduction  from  equity.  Any  principal  repayment  of the debt is
treated as an  increase  in equity.  Compensation  expense for the ESOP is based
upon the fair value of shares allocated to participants.

Stock  awards.  Expense  for  common  stock to be  issued  under  the  Company's
recognition and retention plan is based upon the fair value of the shares at the
date of grant, allocated over the period of vesting.

Redeemable  common stock held by ESOP.  The  Company's  maximum cash  obligation
related to these shares is classified outside  stockholders'  equity because the
shares are traded on the "Bulletin Board" of the National  Quotation Bureau Inc.
and could be put to the Company for cash. The maximum cash obligation represents
the  approximate  market  value of the  allocated  ESOP shares at the end of the
reporting period.

Regulatory capital  requirements.  Pursuant to the Financial Information Reform,
Recovery and Enforcement Act of 1989 ("FIRREA"), savings institutions must three
separate minimum capital-to-asset  requirements. The following table summarizes,
as of March 31, 1998 the capital requirements of Washington Federal Savings Bank
under  FIRREA  and  its  actual  capital  ratios.  As of  March  31,  1998  WFSB
substantially exceeded all current regulatory capital requirement standards.

                                              At March 31, 1998
                                            ----------------------
                                              Amount    Percent
                                            ----------------------
                                            (Dollars in thousands)
                                                 (unaudited)
Tangible Capital:
         Capital Level ................       $6,520     9.53%
         Requirement ..................        1,027     1.50%
                                              ----------------
         Excess .......................       $5,493     8.03%
                                              ================

Core or Leverage Capital:
         Capital Level ................       $6,520     9.53%
         Requirement ..................        2,053     3.00%
                                              ----------------
         Excess .......................       $4,467     6.53%
                                              ================

Risk-Based Capital:
         Capital Level ................       $6,673    14.47%
         Requirement ..................        3,745     8.00%
                                              ----------------
         Excess .......................       $2,928     6.47%
                                              ================
<PAGE>



Likewise, Rubio Savings Bank of Brighton continues in a strong capital position.
The following table summarizes, as of March 31, 1998 the capital requirements of
Rubio Savings Bank of Brighton and its actual  capital  ratios.  As of March 31,
1998, RSB  substantially  exceeded all current  regulatory  capital  requirement
standards.

                                                   At March 31, 1998
                                                -----------------------
                                                Amount          Percent
                                                -----------------------
                                                (Dollars in thousands)
                                                     (unaudited)
Tier 1 or Leverage Capital:
         Capital Level ..................      $2,430            11.24%
         Requirement ....................         865             4.00%
                                               ------------------------
         Excess .........................      $1,565             7.24%
                                               ========================

Tier 1 Risk-based Capital:
         Capital Level ..................      $2,430            25.82%
         Requirement ....................         377             4.00%
                                               ------------------------
         Excess .........................      $2,053            21.82%
                                               ========================

Risk-Based Capital:
         Capital Level ..................      $2,522            26.80%
         Requirement ....................         753             8.00%
                                               ------------------------
         Excess .........................      $1,769            18.80%
                                               ========================

<PAGE>



Part I - Financial Information

Item 2.  Management's Discussion and Analysis

Forward-Looking Statements

         When used in this Form 10-QSB or future filings by the Company with the
Securities  and Exchange  Commission,  in the Company's  press releases or other
public  or  shareholder  communications,  or in oral  statements  made  with the
approval of an authorized  executive officer,  the words or phrases "will likely
result," "are  expected  to," "will  continue,"  "is  anticipated,"  "estimate,"
"project,"   "believe"   or  similar   expressions   are  intended  to  identify
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation  Reform Act of 1995.  The  Company  wishes to caution  readers not to
place undue reliance on any such forward-looking statements, which speak only as
of the date made, and to advise readers that various factors, including regional
and national  economic  conditions , changes in levels of market interest rates,
credit risks of lending  activities,  and  competitive  and regulatory  factors,
could affect the Company's  financial  performance and could cause the Company's
actual results for future periods to differ materially from those anticipated or
projected.

         The  Company  does  not  undertake,   and  specifically  disclaims  any
obligations,  to revise any forward-looking statements to reflect the occurrence
of anticipated or unanticipated  events or circumstances  after the date of such
statements.

General

         Washington   Bancorp   ("Washington"  or  the  "Company")  is  an  Iowa
corporation  which was organized in October 1995 by Washington  Federal  Savings
Bank ("Washington  Federal" or "WFSB") for the purpose of becoming a savings and
loan holding company.  Washington Federal is a federally  chartered savings bank
headquartered  in Washington,  Iowa.  Originally  chartered in 1934,  Washington
Federal converted to a federal savings bank in 1994.

         In March  1996,  Washington  Federal  converted  to the  stock  form of
organization  through the sale and  issuance of its common stock to the Company.
The  principal  asset of the Company  was the  outstanding  stock of  Washington
Federal, its wholly-owned subsidiary. As of January 15, 1998, Washington Bancorp
became a bank holding  company and the Rubio  Savings  Bank of  Brighton,  Iowa,
became a  wholly-owned  subsidiary of  Washington  Bancorp.  Rubio  continues to
operate as a completely separate state-chartered  financial institution with its
own charter and board of directors. Deposits of both institutions are insured by
the Federal Deposit  Insurance  Corporation to the full extent  permitted by law
and regulation.

         Washington  attracts  deposits  from the  general  public  in its local
market areas and uses such deposits  primarily to invest in one- to  four-family
residential  loans  secured by owner  occupied  properties  and  non-residential
properties,  as well as construction  loans on such properties.  Washington also
makes commercial loans,  consumer loans,  automobile loans, and has occasionally
been a purchaser of fixed-rate mortgage-backed securities.

Financial Condition

Total  assets.  Total  consolidated  assets  increased  $28.3 million from $64.9
million at June 30, 1997 to $93.2  million at March 31,  1998.  The increase was
primarily due to the acquisition of Rubio with total assets of $25.1 million and
liabilities of $20.3 million.  Other than the acquisition of Rubio, the increase
was a due to a  $3.6  million  increase  in  loans  receivable,  a $1.3  million
increase in cash and cash  equivalents,  and a $1.2 million  increase in federal
funds  sold,   partially  offset  by  a  $3.0  million  decrease  in  investment
securities.  The increase  was  primarily  funded by a $5.1 million  increase in
Federal Home Loan Bank advances, a $2.7 million increase in deposits and the net
proceeds from the maturities and calls in investment securities.

Loans  receivable.  Loans  receivable,  net  increased  $11.4 million from $52.5
million at June 30, 1997 to $63.9  million at March 31, 1998.  This increase was
primarily due to the  acquisition  of Rubio with loans  receivable,  net of $7.8
million. There was also a $3.6 million increase in loans receivable,  net due to
the continued increase in loan demand in Washington's market area.  Washington's
non-performing assets were $202,000 or .22% of total assets at March 31, 1998 as
compared to $229,000 or .35% of total assets at June 30, 1997.
<PAGE>


Investment securities.  Held-to-maturity  securities increased $1.3 million from
$0 at June 30,  1997 to $1.3  million  at March  31,  1998.  This  increase  was
primarily due to the  acquisition of Rubio with  held-to-maturity  securities of
$1.2 million.  Available-for-sale  securities  increased  $7.5 million from $9.8
million at June 30, 1997 to $17.3  million at March 31, 1998.  This increase was
primarily  due  to  the  acquisition  of  Rubio  with  total  available-for-sale
securities of $10.5 million. This increase was partially offset by a decrease of
$3.0 million,  primarily  due to the call of $6.1 million in  government  agency
securities  and the  maturity  of $2.2  million in U.S.  Treasuries,  government
agency and corporate  securities  and the purchase of $5.2 million in government
agency securities.  Proceeds from the decrease in available-for-sale  securities
were primarily used to fund loan activity.  The portfolio of  available-for-sale
securities  is  comprised  primarily of  investment  securities  carrying  fixed
interest  rates.  The fair  value of these  securities  is subject to changes in
interest  rates.  The fair value of these  securities was more on March 31, 1998
than their  carrying value due to a decline in interest rates since the purchase
date of the  securities.  Therefore,  the total  balance of  available  for sale
securities includes the gross effect of the unrealized gain.

Deposits.  Deposits  increased $22.6 million from $44.8 million at June 30, 1997
to $67.4  million  at March 31,  1998.  The  increase  is  primarily  due to the
acquisition  of Rubio with  deposits of $20.0 million in addition to an increase
of $2.6 million.  Interest  credited to customer accounts totalled $1.4 million,
while deposits  exceeded  withdrawals by $1.2 million.  Transaction  and savings
deposits increased as a percentage of total deposits from $14.3 million or 32.0%
at June 30, 1997 to $25.6 million or 37.9% at March 31, 1997. As a result of the
increase in transaction and savings deposits,  certificates of deposit decreased
as a percentage  of total  deposits from $30.4 million or 68.0% at June 30, 1997
to $41.8 million or 62.1% at March 31, 1998.

FHLB Borrowings.  The total principal  balance in advances from the Federal Home
Loan Bank of Des Moines (FHLB)  increased $5.2 million from $8.6 million at June
30, 1997 to $13.8  million at March 31, 1998.  The increase is primarily  due to
the increased need to borrow to fund loan activity and to fund the one-time $2.8
million  dividend paid from Washington  Federal to the Company to facilitate the
acquisition  of Rubio  Savings Bank of Brighton.  The  borrowings  are primarily
long-term advances.

Advances from borrowers for taxes and  insurance.  The total balance in advances
from borrowers for taxes and insurance  decreased  $85,000 from $205,000 at June
30, 1997 to $120,000 at March 31, 1998.  The  decrease is  primarily  due to the
semi-annual  disbursement  of escrow  funds for the payment of real estate taxes
which were due March 31, 1998.

Total stockholders'  equity.  Total stockholders' equity increased $307,000 from
$10.7 million at June 30, 1997 to $11.0 million at March 31, 1998.  The increase
is  primarily  due to net  income of  $572,000,  the  amortization  of  deferred
compensation  under the  Recognition  and  Retention  Plan of  $39,000,  the net
unrealized  gain in available for sale  securities of $20,000 and the allocation
of shares in the Employee Stock  Ownership Plan of $52,000  partially  offset by
the cash dividend paid to stockholders  totalling  $197,000,  the acquisition of
5,000  shares of of the  Company's  common  stock at a cost of  $94,000  and the
change in the maximum cash obligation related to ESOP shares of $86,000.

Results of  Operations  - Three  Months  Ended March 31, 1998 As Compared To The
Three Months Ended March 31, 1997

Performance  summary.  Net earnings  increased  $5,000 to $216,000 for the three
months  ended March 31, 1998 from  $211,000 for the three months ended March 31,
1997.  The  increase is  primarily  due to an  increase  in  interest  income of
$380,000, an increase in noninterest income of $16,000, a decrease in income tax
expense of  $13,000  and a decrease  in the  provision  for loan loss of $1,000,
partially  offset by an increase in interest expense of $273,000 and an increase
in  noninterest  expense of  $132,000.  For the three  months March 31, 1998 the
annualized  return on average  assets was 1.02%  compared to 1.30% for the three
months ended March 31, 1997,  while the annualized  return on average equity was
7.87% for the three months ended March 31, 1998  compared to 7.98% for the three
months ended March 31, 1997.

Net interest income.  Net interest income increased $107,000 to $743,000 for the
three months ended March 31, 1998 from $636,000 for the three months ended March
31, 1997.  The increase is primarily due to the increase of $380,000 in interest
income to $1,644,000  for the three months ended March 31, 1998 from  $1,264,000
for the three  months  ended  March 31,  1997  offset by an increase in interest
expense of $273,000 to $901,000  for the three  months ended March 31, 1998 from
$628,000 for the three months ended March 31, 1997.
<PAGE>


For the three months ended March 31, 1998 the average yield on  interest-earning
assets was 8.13%  compared to 8.23% for the three  months  ended March 31, 1997.
The average cost of interest-bearing  liabilities was 5.20% for the three months
ended March 31,  1998  compared  to 4.97% for the three  months  ended March 31,
1997. The average balance of interest-earning  assets increased $20.5 million to
$82.0  million for the three months ended March 31, 1998 from $61.5  million for
the three  months ended March 31,  1997.  During this same  period,  the average
balance of interest-bearing liabilities increased $19.7 million to $70.3 million
for the three  months  ended  March 31,  1998 from $50.6  million  for the three
months ended March 31, 1997.

Due to the decrease in yield on the interest-earning  assets and the increase in
rates paid on the interest-bearing liabilities, the average interest rate spread
was 2.93% for the three  months  ended March 31, 1998  compared to 3.26% for the
three months ended March 31, 1997. The average net interest margin was 3.68% for
the three  months  ended March 31, 1998  compared to 3.92% for the three  months
ended March 31, 1997.

Provision for loan loss. Provision for loan loss decreased $1,000 to $18,000 for
the three  months  ended March 31, 1998 from  $19,000 for the three months ended
March 31, 1997.  Washington's loan portfolio  consists  primarily of residential
mortgage  loans and it has  experienced a minimal  amount of  charge-offs in the
past three  years.  The  allowance  for loan losses of $366,000 or .57% of loans
receivable,  net at  March  31,  1998  compares  to  $222,000  or .45% of  loans
receivable,  net at March 31, 1997.  The allowance for loan loss as a percentage
of non-performing  assets was 180.97% at March 31, 1998,  compared to 154.53% at
March 31, 1997.

Noninterest  income.  Noninterest  income  increased  $16,000 to $83,000 for the
three  months ended March 31, 1998 from $67,000 for the three months ended March
31, 1997.  The increase is primarily  due to an increase in bank service fees of
$32,000  and an  increase  in  loan  originations  and  commitments  of  $2,000,
partially  offset by a decrease  in other  noninterest  income of $16,000  and a
decrease in insurance commissions of $2,000.

Bank service charges and fees increased  $32,000 to $59,000 for the three months
ended March 31, 1998 from $27,000 for the three months ended March 31, 1997. The
increase is primarily  due to an increase in overdraft  fee income of $21,000 to
$39,000 for the three  months  ended  March 31, 1998 from  $18,000 for the three
months ended March 31, 1997,  an increase in checking  account fees of $6,000 to
$10,000  for the three  months  ended  March 31,  1998 from $4,000 for the three
months ended March 31, 1997 and an increase in late fees  collected of $1,000 to
$5,000  for the three  months  ended  March 31,  1998 from  $4,000 for the three
months ended March 31, 1997.

Insurance  commission  income  decreased  $2,000 to $12,000 for the three months
ended March 31,  1998 from  $14,000  for the three  months  ended March 31, 1997
primarily due to the  fluctuations in the volume of the sales of credit life and
disability products.

Other noninterest  income decreased $16,000 to $9,000 for the three months ended
March 31, 1998 from $25,000 for the three months ended March 31, 1997  primarily
due to a decrease in the gains realized on foreclosed properties.

Noninterest expense.  Noninterest expense increased $132,000 to $470,000 for the
three months ended March 31, 1998 from $338,000 for the three months ended March
31,  1997.  The  increase is primarily  due to an increase in  compensation  and
benefits of $68,000,  an increase in other  noninterest  expense of $37,000,  an
increase in occupancy and equipment of $14,000, an increase in deposit insurance
of $11,000 and an increase in data processing of $1,000.

Compensation  and  benefits  increased  $68,000 to $253,000 for the three months
ended March 31, 1998 from $185,000 for the three months ended March 31, 1997 due
to an  increase in employee  compensation  of $58,000 to $186,000  for the three
months  ended March 31, 1998 from  $128,000 for the three months ended March 31,
1997 due to normal  salary  increases and an increase in the number of full-time
equivalent employees.  There was also an increase in retirement and ESOP expense
of $11,000 to $24,000 for the three months ended March 31, 1998 from $13,000 for
the three months ended March 31, 1997 primarily due to the  amortization  of the
cost of shares in the ESOP and the addition of Rubio's retirement benefits. Also
employee  benefits and insurance  premiums  increased  $9,000 to $18,000 for the
three  months  ended March  31,1998 from $9,000 for the three months ended March
31,  1997 due to an increase  in  insurance  costs as well as an increase in the
number of employees insured.  Travel and work expense increased $5,000 to $7,000
for the three months ended March 31, 1998 from $2,000 for the three months ended
March 31, 1997, and bonuses accrued and incentives  paid for product  promotions
increased $3,000 to $7,000 for the three months ended March 31, 1998 from $4,000
for the three  months  ended  March 31,  1997.  The  increases  were offset by a
decrease in the expense for the  Recognition  and  Retention  Plan of $16,000 to
$6,000 for the three  months  ended  March 31,  1998 from  $22,000 for the three
months ended March 31, 1997 primarily due to the  amortization of the expense of
the  awarded  shares  based upon the fair value of the shares on the date of the
grant and a decrease  in credit  life and  disability  insurance  broker fees of
$1,000 to $3,000 for the three  months  ended March 31, 1998 from $4,000 for the
three months ended March 31, 1997.
<PAGE>


Other  noninterest  expense  increased  $37,000 to $133,000 for the three months
ended March 31,  1998 from  $96,000  for the three  months  ended March 31, 1997
primarily  due to the  amortization  of goodwill from the  acquisition  of Rubio
Savings Bank of Brighton of $20,000,  an increase in federal examination fees of
$8,000 to $13,000 for the three  months ended March 31, 1998 from $5,000 for the
three months ended March 31, 1997, an increase in professional organization fees
of $5,000 to 9,000 for the three months ended March 31, 1998 from $5,000 for the
three  months  ended March 31, 1997 due to the timing of bill  payments,  and an
increase in legal fees of $5,000 to $7,000 for the three  months ended March 31,
1998 from $2,000 for the three  months ended March 31, 1997 due to the timing of
bill payments.

Occupancy  and  equipment  expense  increased  $14,000 to $49,000  for the three
months  ended March 31, 1998 from  $35,000 for the three  months ended March 31,
1997.  The  increase is primarily  due to an increase in building and  equipment
maintenance  of $6,000 to $15,000 for the three months ended March 31, 1998 from
$7,000 for the three months ended March 31, 1997 due to  maintaining  two office
buildings since the  acquisition of Rubio,  an increase in telephone  expense of
$3,000 to $5,000 for the three  months  ended March 31, 1998 from $2,000 for the
three months ended March 31, 1997, an increase in depreciation expense of $2,000
to $13,000 for the three  months ended March 31, 1998 from $11,000 for the three
months ended March 31, 1997 and an increase in property tax expense of $1,000 to
$8,000  for the three  months  ended  March 31,  1998 from  $7,000 for the three
months ended March 31, 1997.

Deposit  insurance  premiums  increased  $11,000 to $13,000 for the three months
ended March 31, 1998 from $2,000 for the three months ended March 31, 1997.  The
increase is  primarily  due to the refund of premium  paid for the three  months
ended March 31, 1997 as a result of the  one-time  SAIF  premium  assessed as of
September 30, 1996 and the increase in total deposits  since the  acquisition of
Rubio.  Data processing  increased  $1,000 to $21,000 for the three months ended
March 31, 1998 from $20,000 for the three months ended March 31, 1997.

Income tax  expense.  Income tax expense  decreased  $13,000 to $122,000 for the
three months ended March 31, 1998 from $135,000 for the three months ended March
31, 1997  primarily due to the treatment of the  Recognition  and Retention Plan
market value deductibility for income tax purposes.


Results of Operations - Nine Months Ended March 31, 1998 As Compared To The Nine
Months Ended March 31, 1997 

Performance  summary.  Net earnings increased $196,000 to $572,000 for the three
months  ended March 31, 1998 from  $376,000  for the nine months ended March 31,
1997.  The  increase is  primarily  due to an  increase  in  interest  income of
$525,000,  a decrease  in  noninterest  expense of  $139,000  and an increase in
noninterest  income of  $22,000,  partially  offset by an  increase  in interest
expense of $371,000,  an increase in provision for loan loss of $46,000,  and an
increase in income tax expense of $72,000.  For the nine months  ended March 31,
1998 the annualized return on average assets was 1.02% compared to 0.79% for the
nine months ended March 31, 1997, while the annualized  return on average equity
was 7.02% for the nine months  ended  March 31,  1998  compared to 4.75% for the
nine months ended March 31, 1997.

Net interest income.  Net interest income increased $154,000 to $2.0 million for
the nine months ended March 31, 1998 from $1.8 million for the nine months ended
March 31, 1997.  The  increase is  primarily  due to the increase of $525,000 in
interest  income to $4.2  million for the nine months  ended March 31, 1998 from
$3.7  million for the nine months  ended March 31, 1997 offset by an increase in
interest expense of $371,000 to $2.3 million for the nine months ended March 31,
1998 from $1.9 million for the nine months ended March 31, 1997.

For the nine months ended March 31, 1998 the average  yield on  interest-earning
assets was 8.03% compared to 8.24% for the nine months ended March 31, 1997. The
average cost of interest-bearing liabilities was 5.11% for the nine months ended
March 31, 1998  compared to 5.14% for the nine months ended March 31, 1997.  The
average  balance of  interest-earning  assets  increased  $10.3 million to $70.5
million for the nine months ended March 31, 1998 from $60.2 million for the nine
months ended March 31, 1997.  During this same  period,  the average  balance of
interest-bearing  liabilities  increased  $10.0 million to $59.2 million for the
nine months  ended March 31, 1998 from $49.2  million for the nine months  ended
March 31, 1997.

Due to the decrease in yield on the interest-earning  assets and the decrease in
rates paid on the interest-bearing liabilities, the average interest rate spread
was 2.92% for the nine months  ended  March 31,  1998  compared to 3.10% for the
nine months ended March 31, 1997. The average net interest  margin was 3.74% for
the nine months ended March 31, 1998 compared to 3.85% for the nine months ended
March 31, 1997.
<PAGE>


Provision for loan loss.  Provision for loan loss  increased  $46,000 to $71,000
for the nine months  ended March 31, 1998 from $25,000 for the nine months ended
March 31, 1997.  The increase is primarily due to an increase in the size of the
loan portfolio.  Washington's loan portfolio  consists  primarily of residential
mortgage  loans and it has  experienced a minimal  amount of  charge-offs in the
past three  years.  The  allowance  for loan losses of $366,000 or .57% of loans
receivable,  net at  March  31,  1998  compares  to  $222,000  or .45% of  loans
receivable,  net at March 31, 1997.  The allowance for loan loss as a percentage
of non- performing assets was 180.97% at March 31, 1998,  compared to 154.53% at
March 31, 1997.

Noninterest  income.  Noninterest  income increased  $22,000 to $218,000 for the
nine months  ended March 31, 1998 from  $196,000 for the nine months ended March
31,  1997.  The  increase is  primarily  due an increase in bank service fees of
$57,000  and an  increase  in  loan  originations  and  commitments  of  $2,000,
partially  offset by a decrease  in other  noninterest  income of $33,000  and a
decrease in insurance commissions of $4,000.

Bank service charges and fees increased  $57,000 to $141,000 for the nine months
ended  March 31,  1998 from  $84,000  for the nine  months  ended March 31, 1997
primarily  due to an increase in overdraft  fee income of $35,000 to $93,000 for
the nine  months  ended March 31,  1998 from  $58,000 for the nine months  ended
March 31, 1997 due to more  stringent  enforcement  of the fee  schedule and the
acquisition of Rubio.  There was also an increase in checking account fee income
of $11,000 to $23,000 for the nine months  ended March 31, 1998 from $12,000 for
the nine months ended March 31, 1997 due to a new checking  account  program and
the  acquisition  of Rubio,  an  increase in late  payment  charges of $5,000 to
$15,000  for the nine  months  ended  March 31,  1998 from  $10,000 for the nine
months  ended March 31,  1997,  the increase in merchant fee income of $3,000 to
$3,000 for the nine months  ended March 31, 1998 and an increase in safe deposit
box rental  income of $2,000 to $4,000 for the nine months  ended March 31, 1998
from $2,000 for the nine months ended March 31, 1997.

Loan  originations and commitment income increased $2,000 to $8,000 for the nine
months  ended March 31, 1998 from  $6,000 for the three  months  ended March 31,
1997 due to an increase  in  secondary  market  origination  fee  income.  Other
noninterest  income decreased $33,000 to $11,000 for the nine months ended March
31, 1998 from $44,000 for the nine months ended March 31, 1997  primarily due to
a decrease in the gains realized on foreclosed properties.  Insurance commission
income decreased $4,000 to $57,000 for the nine months ended March 31, 1998 from
$61,000 for the nine months ended March 31, 1997  primarily due to a decrease in
the volume of the sales of credit life and disability products.

Noninterest expense.  Noninterest expense decreased $139,000 to $1.3 million for
the nine months ended March 31, 1998 from $1.4 million for the nine months ended
March 31, 1997.  The  decrease is primarily  due to the decrease in SAIF deposit
premiums  of  $322,000,  partially  offset by an increase  in  compensation  and
benefits of $117,000,  an increase in other noninterest expense of $47,000,  and
increase in occupancy and  equipment  expense of $17,000 and an increase in data
processing of $2,000.

SAIF  deposit  insurance  premiums  decreased  $322,000  to $37,000 for the nine
months  ended March 31, 1998 from  $359,000  for the nine months ended March 31,
1997 primarily due to the $294,000  one-time SAIF assessment and the decrease in
the annual  assessment rate to 6.3 basis points from 23 basis points charged for
the protection of FDIC insurance at Washington Federal deposits.  Rubio's annual
assessment rate is 1.3 basis points.

Compensation  and  benefits  increased  $117,000 to $662,000 for the nine months
ended March 31,  1998 from  $545,000  for the nine  months  ended March 31, 1997
primarily due to an increase in the employee  compensation  and payroll taxes of
$71,000 to $403,000 for the nine months  ended March 31, 1998 from  $332,000 for
the nine  months  ended March 31, 1997 due to regular  salary  increases  and an
increase in the number of full-time  equivalent  employees.  Employee  insurance
benefits  increased  $12,000 to $38,000 for the nine months ended March 31, 1998
from $26,000 for the nine months ended March 31,  1997.  Incentives  and bonuses
increased  $10,000 to $17,000  for the nine  months  ended  March 31,  1998 from
$7,000 for the nine  months  ended  March 31,  1997 due to  incentives  paid for
product  promotions  and an increase in  full-time  equivalent  employees.  ESOP
expenses  increased  $8,000 to $50,000 for the nine months  ended March 31, 1998
from  $42,000 for the nine  months  ended March 31,  1997.  Other work  expenses
increased  $7,000 to  $21,000  for the nine  months  ended  March 31,  1998 from
$14,000 for the nine months ended March 31, 1997.
<PAGE>


Other  noninterest  expense  increased  $47,000 to $371,000  for the nine months
ended March 31,  1998 from  $324,000  for the nine  months  ended March 31, 1997
primarily due to the  amortization of goodwill for the purchase of Rubio Savings
Bank of Brighton of $20,000  and an  increase  in  checking  account  expense of
$9,000 to $12,000 for the nine  months  ended March 31, 1998 from $3,000 for the
nine months ended March 31, 1997 due to a new checking  account  program.  There
was also an increase in supplies of $9,000 to $36,000 for the nine months  ended
March 31,  1997 from  $27,000  for the nine  months  ended  March 31,  1997,  an
increase in advertising of $8,000 to $53,000 for the nine months ended March 31,
1998 from  $45,000 for the nine  months  ended March 31, 1997 and an increase in
postage and  delivery  of $8,000 to $38,000 for the nine months  ended March 31,
1998 from $30,000 for the nine months ended March 31, 1997 due to the  promotion
of a new checking  account and other bank products.  Legal fees increased $3,000
to $16,000  for the nine months  ended March 31, 1998 from  $13,000 for the nine
months ended March 31, 1997. The increases  were partially  offset by a decrease
in auditing and  accounting of $9,000 to $37,000 for the nine months ended March
31, 1998 from $46,000 for the nine months ended March 31, 1997.

Occupancy  and  equipment  expense  increased  $17,000 to $124,000  for the nine
months  ended March 31, 1998 from  $107,000  for the nine months ended March 31,
1997  primarily  due to an increase in building  and  equipment  maintenance  of
$11,000 to $30,000 for the nine months ended March 31, 1998 from $19,000 for the
nine  months  ended  March 31,  1997,  an increase in real estate tax expense of
$3,000 to $22,000 for the nine months ended March 31, 1998 from $19,000 for nine
months  ended March 31,  1997,  an increase  in  telephone  expense of $2,000 to
$13,000  for the nine  months  ended  March 31,  1998 from  $11,000 for the nine
months  ended March 31,  1997,  and an increase in utilities of $1,000 to $8,000
for the nine months  ended March 31, 1998 from $7,000 for the nine months  ended
March 31, 1997. Data processing  increased $2,000 to $60,000 for the nine months
ended March 31, 1998 from $58,000 for the nine months ended March 31, 1997.

Income tax  expense.  Income tax expense  increased  $71,000 to $300,000 for the
nine months  ended March 31, 1998 from  $228,000 for the nine months ended March
31, 1997 primarily due to the increase in income before income taxes.

Liquidity  and  capital  resources.  The banks'  principal  sources of funds are
deposits,  amortization  and prepayment of loan principal,  borrowings,  and the
sale and maturities of investment  securities.  While  scheduled loan repayments
and maturing  investments  are relatively  predictable,  deposit flows and early
loan  repayments  are  more  influenced  by  interest  rates,  general  economic
conditions,  and  competition.  The banks  generally  manage the  pricing of its
deposits  to  maintain  a steady  deposit  balance,  but have  from time to time
decided not to pay deposit rates that are as high as those of their competition,
and when necessary, to supplement deposits with alternative sources of funds.

Federal  regulations  historically  have required the banks to maintain  minimum
levels of liquid  assets.  The required  percentage has varied from time to time
based upon economic  conditions and savings flows and for Washington  Federal is
currently 4% of net withdrawable  savings  deposits and borrowings  payable upon
demand or in one year or less  during  the  proceeding  calendar  month.  Liquid
assets for the purpose of this ratio include cash,  certain time deposits,  U.S.
Government,  government agency,  and corporate  securities and other obligations
generally  having  remaining  maturities  of less  than five  years.  Washington
Federal has  historically  maintained its liquidity ratio at levels in excess of
those  required.  At March 31, 1998,  Washington  Federal's  liquidity ratio was
13.70%.

Liquidity management is both a daily and long-term responsibility of management.
The banks  adjust their  investments  in liquid  assets based upon  management's
assessment  of (i) expected  loan demand,  (ii) expected  deposit  flows,  (iii)
yields  available on  interest-bearing  deposits,  and (iv) the objective of its
asset/liability  management  program.  Excess liquidity is invested generally in
interest-bearing  overnight deposits and other short-term  government and agency
obligations.  If the banks  require  funds beyond their ability to generate them
internally,  Washington Federal has additional  borrowing capacity with the FHLB
of Des Moines and  collateral  eligible for reverse  repurchase  agreements  and
Rubio has additional borrowing capacity with the Federal Reserve.

The banks  anticipate  that they will have  sufficient  funds  available to meet
current  loan  commitments.  At March  31,  1998,  the  Washington  Federal  had
outstanding  commitments  to extend  credit  which  amounted to $2.9 million and
Rubio Savings Bank had  outstanding  commitments to extend credit which amounted
to $572,000.

<PAGE>


PART II - Other Information


Item 1.  Legal Proceedings.

                  None

Item 2.  Changes in Securities.

                  None

Item 3.  Defaults Upon Senior Securities.

                  None

Item 4.  Submission of Matters to a Vote of Security Holders.

                  None

Item 5.  Other Information.

                  Employee   Benefit  Plans.  In  conjunction   with  Washington
Federal's  conversion to stock  ownership,  the Company  established an Employee
Stock Ownership Plan (ESOP) for eligible employees.  The plan was established by
amending  Washington  Federal's  existing  profit  sharing  plan.  Employees  of
Washington  Federal  are  eligible to  participate  after they attain age 21 and
complete one year of service  during  which they work at least 1,000 hours.  The
Company  issued  52,602  shares of  common  stock to the ESOP on the date of the
conversion and reorganization.

                  At March 31, 1998 the ESOP held 52,602 shares of the Company's
common stock,  8,201 of which were  allocated,  1,044 of which were released for
allocation  and the remaining  43,356 were  unreleased  (unearned)  shares.  The
43,356  unreleased  (unearned)  shares had a fair market value of  approximately
$821,000 at March 31, 1998.

                  Year 2000  Compliance.  The "Year  2000" issue is one that has
received  much  publicity  and  addresses  the  ability of  computer  systems to
recognize the year 2000 and  thereafter.  The banks outsource their primary data
processing  functions and has received  verification from its vendors that plans
have been developed by them to address and correct the problems  associated with
the issue.  Washington has established a technology team to determine the status
of the banks' equipment and software as it relates to "Year 2000" readiness. The
Company does not anticipate that the "Year 2000" issue will pose any significant
operational  problems.  However,  no assurance can be given that the "Year 2000"
issue will not have an adverse impact on the Company's earnings.


Item 6.  Exhibits and Reports on Form 8-K

                  (a)     Exhibits (listed by numbers corresponding to
                          the Exhibit Table of Item 601 on Regulation S-B)

                          11       Computation of Earnings Per Share

                          27       Financial Data Schedule
                  (b)     Reports on Form 8-K

                  Form 8-K/A was filed on March 31, 1998 to report the  proforma
                  financial  information  related  to the  acquisition  of Rubio
                  Savings Bank of Brighton, Iowa.
<PAGE>




                                   Signatures

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                               Washington Bancorp
                                  (Registrant)

Date     May 13, 1998                          /s/ Stan Carlson
                                               ---------------------------------
                                               Stan Carlson, President and Chief
                                               Executive Officer

Date     May 13, 1998                          /s/ Leisha A. Linge
                                               ---------------------------------
                                               Leisha A. Linge, Controller