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 December 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 600,198 shares outstanding as of February 10, 1999

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 December 31,
                     1998 (unaudited) and June 30, 1998

                   Unaudited Consolidated  Statements of Income
                     for the three months ended December 31, 1998
                     and  1997  and  for  the  six  months  ended
                     December 31, 1998 and 1997

                   Unaudited Consolidated Statements of
                     Comprehensive Income for the three months
                     ended December 31, 1998 and 1997 and for the
                     six months ended December 31, 1998 and 1997

                   Unaudited Consolidated Statements of Cash Flows for the
                     six months ended December 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>

                                                         December 31,        June 30,
                                                             1998              1998
                                                        ------------------------------
                                                         (unaudited)             
<S>                                                     <C>              <C> 

Assets Cash and cash equivalents:
             Interest-bearing .......................   $   1,000,572    $   1,858,527
             Noninterest-bearing ....................       1,811,717        1,447,847
                                                        ------------------------------
                                                            2,812,289        3,306,374
Investment securities
             Held-to-maturity securities ............       1,130,045        1,131,478
             Available-for-sale securities ..........      22,671,545       19,122,283
Federal funds sold ..................................       2,810,262          659,497
Loans receivable, net ...............................      68,484,262       65,884,941
Accrued interest receivable .........................       1,102,929          959,664
Federal Home Loan Bank stock ........................         860,000          812,400
Premises and equipment, net .........................         866,117          799,806
Foreclosed real estate ..............................          43,796             --
Goodwill ............................................       1,327,806        1,375,087
Other assets ........................................         280,883          275,416
                                                        ------------------------------
                 Total assets .......................   $ 102,389,934    $  94,326,945
                                                        ==============================

Liabilities
Deposits ............................................   $  75,785,130    $  66,595,476
Borrowed funds ......................................      15,082,074       15,724,071
Advance payments from borrowers for
    taxes and insurance .............................         190,119          221,911
Accrued expenses and other liabilities ..............         573,897          660,492
                                                        ------------------------------
                 Total liabilities ..................      91,631,220       83,201,950
                                                        ------------------------------
Redeemable common stock held by Employee
             Stock Ownership Plan (ESOP) ............         144,601          153,788
                                                        ------------------------------
Stockholders' Equity
Common stock:
             Common stock ...........................           6,511            6,511
             Additional paid-in capital .............       6,139,136        6,122,664
Retained earnings ...................................       6,055,645        5,825,363
Accumulated other comprehensive income, unrealized
    gain (loss) on securities available for sale, net          17,900             (507)
Less:
Cost of common shares acquired for treasury .........        (985,069)        (300,944)
Deferred compensation ...............................         (73,149)        (104,962)
Maximum cash obligation related to ESOP shares ......        (144,601)        (153,788)


Unearned ESOP shares ................................        (402,260)        (423,130)
                                                        ------------------------------
                 Total stockholders' equity .........      10,614,113       10,971,207
                                                        ------------------------------
                 Total liabilities and
                   stockholders' equity .............   $ 102,389,934    $  94,326,945
                                                        ==============================
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>



Washington Bancorp and Subsidiaries
Unaudited Consolidated Statements of Income
<TABLE>
                                                          Three Months Ended        Six Months Ended
                                                              December 31,            December 31,
                                                      -------------------------------------------------
                                                          1998         1997         1998        1997
                                                      -------------------------------------------------
<S>                                                   <C>          <C>          <C>          <C>   

Interest income:
     Loans receivable:
         First mortgage loans .....................   $  992,927   $  905,277   $2,010,178   $1,781,304
         Consumer and other loans .................      497,253      281,128      976,412      544,646
     Investment securities:
         Taxable ..................................      377,876      125,757      686,366      265,621
         Non-taxable ..............................       21,803        5,420       41,447       10,733
                                                      -------------------------------------------------
             Total interest income ................    1,889,859     1,317,582   3,714,403    2,602,304
                                                      -------------------------------------------------
                                                                                                                               
Interest expense:
     Deposits .....................................      905,353      551,598    1,706,485    1,100,275
     Borrowed funds ...............................      226,578      133,502      455,354      266,332
                                                      -------------------------------------------------
             Total interest expense ...............    1,131,931      685,100    2,161,839    1,366,607 
                                                      -------------------------------------------------
             Net interest income ..................      757,928      632,482    1,552,564    1,235,697
Provision for loan losses .........................       34,000       28,000       56,000       53,000
                                                      -------------------------------------------------
             Net interest income after
               provision for loan losses ..........      723,928       604,482   1,496,564    1,182,697 
                                                      -------------------------------------------------
Noninterest income:
     Security gains, net ..........................       10,922           - -      10,922          - -
     Loan origination and commitment fees .........        2,763         2,779       3,363        5,304
     Service charges and fees .....................       59,502        42,836     145,024       82,098
     Insurance commisions .........................       14,293        36,817      21,772       45,709
     Other ........................................        9,671           861      10,656        2,315
                                                      -------------------------------------------------
             Total noninterest income .............       97,151        83,293     191,737      135,426 
                                                      -------------------------------------------------
Noninterest expense:
     Compensation and benefits ....................      289,628        201,600    580,119      408,351  
     Occupancy and equipment ......................       60,089         36,792    113,553       74,936
     SAIF/BIF deposit insurance premium ...........       14,985         11,706     29,181       23,882
     Data processing ..............................       19,680         17,952     42,816       39,211
     Goodwill .....................................       23,640             --     47,281           --
     Other ........................................      158,253        146,691    285,323      237,698   
                                                      -------------------------------------------------
             Total noninterest expense ............      566,275        414,741  1,098,273      784,078 
                                                      -------------------------------------------------
             Income before income taxes ...........      254,804        273,034    590,028      534,045
Income tax expense ................................       82,379         73,804    222,440      177,595 
                                                      -------------------------------------------------
             Net income ...........................   $  172,425     $  199,230 $  367,588   $  356,450
                                                      =================================================
Earnings per common share
     Basic ........................................   $     0.31     $     0.33 $     0.65   $     0.59
                                                      =================================================
     Diluted ......................................   $     0.30     $     0.32 $     0.63   $     0.57
                                                      =================================================

Dividends per common share ........................   $     0.12     $     0.12 $     0.24   $     0.22
                                                      =================================================

Weighted average common shares for:
     Basic earnings per share .....................      557,258         606,249   565,595      605,766  
                                                      =================================================

     Diluted earnings per share ...................      573,081         624,028   582,112      622,604
                                                      =================================================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>



Washington Bancorp and Subsidiaries
Unaudited Consolidated Statements of Comprehensive Income
<TABLE>
                                                      Three Months Ended        Six Months Ended
                                                         December 31,             December 31,
                                                   -----------------------------------------------
                                                      1998         1997        1998         1997
                                                   -----------------------------------------------
<S>                                                <C>          <C>          <C>         <C>  
Net income .....................................   $ 172,425    $ 199,230    $ 367,588   $ 356,450
Gross unrealized gains (losses) on
     securities available for sale .............     (75,181)     (11,306)      40,772      11,117
Less reclassification adjustments for
     gains included in net income ..............     (10,922)          --      (10,922)         --
Income tax expense related to items
     of other comprehensive income .............      32,039        4,240      (11,443)     (4,169) 
                                                   -----------------------------------------------
Comprehensive income ...........................   $ 118,361    $ 192,164    $ 385,995   $ 363,398
                                                   ===============================================
</TABLE>
<PAGE>


Washington Bancorp and Subsidiaries
Unaudited  Consolidated  Statements of Cash Flows 
Six months ended  December 31, 1998 and 1997
<TABLE>
                                                                      1998            1997
                                                                 ----------------------------
<S>                                                              <C>             <C>   
Cash Flows from Operating Activities
        Net income ...........................................   $    367,588    $    356,450
        Adjustments to reconcile net income to
              net cash provided by operating activities:
              Amortization of premiums and discounts
                on debt securities ...........................        (47,490)         (1,821)
              Amortization of goodwill .......................         47,281              --
              Provision for loan losses ......................         56,000          53,000
              (Gain) on sale of investment securities ........        (10,922)             --
              (Gain)loss on sale of foreclosed real estate ...         (9,562)             --
              Depreciation ...................................         35,806          28,015
              Compensation under stock awards ................         31,813          42,120
              ESOP contribution expense ......................         37,342          32,861
              Deferred income tax ............................             --         (31,383)
              (Increase) in accrued interest receivable ......       (143,266)           (550)
              (Increase)decrease in other assets .............         14,091          (9,112)
              Increase(decrease) in accrued expenses
                and other liabilities ........................       (117,595)         45,457
                                                                 ----------------------------
                       Net cash provided by operating
                       activities ............................        261,086         515,037
                                                                 ----------------------------
Cash Flows from Investing Activities
        Available for sale securities:
              Sales ..........................................      1,000,000              --
              Maturities and calls ...........................     10,450,432       6,007,252
              Purchases ......................................    (14,910,000)     (2,250,000)
        Federal funds sold, net ..............................     (2,150,765)             --
        Purchase of Federal Home Loan Bank stock .............        (47,600)        (53,200)
        Loans made to customers, net .........................     (2,689,555)     (3,350,756)
        Purchase of premises and equipment ...................       (102,117)        (21,438)
                                                                  ---------------------------
                       Net cash (used in) investing
                       activities ............................     (8,449,605)        331,858
                                                                  ---------------------------


Cash Flows from Financing Activities
      Net increase in deposits ...............................      9,189,654        (282,912)
      Proceeds from Federal Home Loan Bank advances ..........      6,250,000      35,700,000
      Principal payments on Federal Home Loan Bank advances ..     (6,891,997)    (34,506,993)
      Net increase (decrease) in advances from borrowers .....        (31,792)        (26,057)
      Acquisition of common stock ............................       (684,125)             --
      Dividends paid .........................................       (137,306)       (124,556)
                                                                  ---------------------------
                    Net cash provided by financing
                    activities ...............................      7,694,434         759,482
                                                                  ---------------------------
                    Net increase(decrease) in cash and cash
                    equivalents ..............................       (494,085)      1,606,377

Cash and cash equivalents:
                    Beginning ................................      3,306,374         807,805
                                                                 ----------------------------
                    Ending ...................................   $  2,812,289    $  2,414,182
                                                                 ============================

Supplemental Disclosures of Cash Flow Information
      Cash payments for:
              Interest paid to depositors ....................   $  1,695,481    $    916,770
              Interest paid on other obligations .............        455,354         266,332
              Income taxes, net of refunds ...................        301,100         125,400

Supplemental Schedule of Noncash Investing
      and Financing Activities
      Transfers from loans to foreclosed
              real estate ....................................   $    163,967    $         --
      Contract sales of foreclosed real estate ...............        129,733              --
</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 December
31, 1998 and for the six month period ended  December 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, 1998 and all related amendments and exhibits  (including all
financial  statements  and  notes  therein),  filed  by  the  Company  with  the
Securities and Exchange Commission.

Goodwill.  Goodwill  resulting from the Company's  acquisition of Rubio is being
amortized by the  straight-line  method over 15 years.  Goodwill is periodically
reviewed for impairment based upon an assessment of future  operations to ensure
that it is appropriately valued.

Foreclosed real estate. Real estate properties acquired through loan foreclosure
are initially recorded at the lower of cost or fair value less estimated selling
expenses  at  the  date  of  foreclosure.  Costs  relating  to  development  and
improvement  of property  are  capitalized,  whereas  costs  relating to holding
property are expensed.

Earnings per common share.  In 1997, the Financial  Accounting  Standards  Board
issued Statement No. 128,  "Earnings Per Share."  Statement No. 128 replaced the
calculation  of  primary  and fully  diluted  earnings  per share with basic and
diluted earnings per share. Basic per share amounts are computed by dividing net
income by the weighted-average number of common shares outstanding.  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. In accordance with Statement
of Position  93-6,  shares owned by the ESOP that have not been  committed to be
released are not considered  outstanding  for the purpose of computing  earnings
per share. The Company  initially  applied  Statement No. 128 for the year ended
June 30, 1998 and has restated all per share  information for the prior years to
conform to Statement No. 128.

Unearned ESOP shares and expense.  The  receivable  from the Company=s  ESOP has
been treated as a reduction of equity. This amount is reduced as the ESOP shares
are allocated. 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 not  readily  traded 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.

Comprehensive  Income. In 1997, the Financial  Accounting Standards Board issued
Statement  No.  130,  "Reporting   Comprehensive   Income."  Statement  No.  130
establishes  standards for reporting and display of comprehensive income and its
components   (revenue,   expenses,   gains,   and  losses)  in  a  full  set  of
general-purpose  financial  statements.  The Company initially applied Statement
No. 130 for the three  months  ended  September  30, 1998 and the  statement  of
comprehensive income has been added to the accompanying financial statements.
<PAGE>


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

                                                         At December 31, 1998
                                                         Amount          Percent
                                                         (Dollars in thousands)
                                                              (unaudited)
Tangible Capital:
         Capital Level .......................           $6,547           8.47%
         Requirement .........................            1,159           1.50%
                                                         ------           -----
         Excess ..............................           $5,388           6.97%


Core Capital:
         Capital Level .......................           $6,547           8.47%
         Requirement .........................            3,091           4.00%
                                                         ------           -----
         Excess ..............................           $3,456           4.47%


Risk-Based Capital:
         Capital Level .......................           $6,852          12.23%
         Requirement .........................            4,482           8.00%
                                                         ------           -----
         Excess ..............................           $2,370           4.23%

The following table summarizes the capital requirements of Rubio Savings Bank of
Brighton.  As of December  31,  1998 Rubio  substantially  exceeded  all current
regulatory capital requirement standards.


                                                           At December 31, 1998
                                                          Amount         Percent
                                                          (Dollars in thousands)
                                                           (unaudited)
Tier 1 or Leverage Capital:
         Capital Level .........................          $2,670          10.59%
         Requirement ...........................             756           3.00%
                                                          ------          -----
         Excess ................................          $1,814           7.59%


Tier 1 Risk-based Capital:
         Capital Level .........................          $2,670          22.56%
         Requirement ...........................             473           4.00%
                                                          ------          -----
         Excess ................................          $2,197          18.56%


Risk-Based Capital:
         Capital Level .........................          $2,785          23.53%
         Requirement ...........................             947           8.00%
                                                          ------          -----
         Excess ................................          $1,838          15.53%
<PAGE>



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 Awill likely
result,@ Aare  expected  to,@ Awill  continue,@  Ais  anticipated,@  Aestimate,@
Aproject,@   Abelieve@   or  similar   expressions   are  intended  to  identify
Aforward-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.

Impact of the Year 2000

         The Banks  have  conducted  a  comprehensive  review of their  computer
systems to  identify  applications  that could be  affected  by the "Year  2000"
issue,  and have developed  implementation  plans to address the issue.  Rubio's
data processing is performed by an in-house  system.  Washington  Federal's data
processing  is  out-sourced.   Washington  Federal's  primary  software  vendor,
Intrieve, has fully renovated its programs to be Year 2000 compliant. Washington
Federal has  participated  in two major tests of the Intrieve  software  system.
Testing on Rubio's data processing system was performed on October 12, 1998. The
testing for both Banks was successful with few applications requiring additional
attention. All "mission-critical " applications have been tested and replaced or
updated and are now Year 2000  compliant.  Also,  large loan customers have been
assessed  for Year  2000  status.  Businesses  and  individuals  which  were not
compliant are being  reviewed  quarterly.  New loan customers are being assessed
for Year 2000 compliance at the time of application.  Management does not expect
the costs of preparing for the Year 2000 to have a significant  impact on either
Bank's financial position or results of operations, however, despite assurances,
there can be no guarantee that the vendors' systems will be Year 2000 compliant.
Consequently  the Banks  could  incur  incremental  costs to  convert to another
vendor.  The Banks  have  identified  certain  of their  hardware  and  software
equipment  that will not be Year 2000  compliant and have already  purchased new
equipment  and software.  The capital  expenditures  to date were  approximately
$91,000 and are not expected to exceed $100,000.

General

         Washington   Bancorp   ("Washington"  or  the  "Company")  is  an  Iowa
corporation  which was organized in October 1995 by Washington  Federal  Savings
Bank  ("Washington  Federal")  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. Its deposits are insured up
to the applicable limits by the Federal Deposit Insurance Corporation ("FDIC").

         In March  1996,  Washington  Federal  converted  to the  stock  form of
organization  through the sale and  issuance of its common stock to the Company.
On June 24, 1997,  Washington  entered into a merger  agreement to acquire Rubio
Savings Bank of Brighton, Iowa ("Rubio"). Rubio is held as a separate subsidiary
of Washington.  In January 1998,  Washington  became a bank holding company upon
the completion of its acquisition of Rubio.  The principal assets of the Company
are  Washington  Federal  and Rubio  (collectively,  the  "Banks").  The Company
presently has no separate  operations and its business consists primarily of the
business of the Banks. All references to the Company, unless otherwise indicated
at or before March 11, 1996 refer to Washington Federal.
<PAGE>


         Washington  Federal  attracts  deposits from the general  public in its
local  market area 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  Federal also makes  commercial  loans,  consumer  loans,  automobile
loans,  and has  occasionally  been a purchaser  of  fixed-rate  mortgage-backed
securities.

         Washington  Federal  filed  applications  with  the  Office  of  Thrift
Supervision  (the  "OTS")  on  August  19,  1998  for two  branch  offices.  The
applications to branch into Wellman, Iowa and Richland, Iowa have been approved.
Washington  Federal opened the Wellman branch in December of 1998 and intends to
open the Richland branch in 1999.

         Rubio  attracts  deposits  from the general  public in its local market
area and the  businesses  in the  Brighton  area.  The  deposits  are  primarily
invested  in  United  States  Treasury  bonds,   agricultural  operating  loans,
commercial loans,  one- to- four family  residential real estate loans, and farm
real estate loans.  Rubio also makes  commercial  real estate loans,  automobile
loans and other consumer loans.

         The executive office of the Company is located at 102 East Main Street,
Washington, Iowa 52353, telephone (319)653-7256.

Financial Condition

Total  assets.  Total  consolidated  assets  increased  $8.1  million from $94.3
million at June 30, 1998 to $102.4  million at December 31,  1998.  The increase
was primarily due to a $3.5 million  increase in investment  securities,  a $2.2
million  increase  in federal  funds sold and a $2.6  million  increase in loans
receivable  funded by a $9.2 million increase in deposits  partially offset by a
$642,000  decrease in borrowed  funds and a $357,000  decrease in  stockholder's
equity.

 Loans  receivable.  Loans  receivable,  net  increased  $2.6 million from $65.9
million at June 30, 1998 to $68.5 million at December 31, 1998. This increase is
primarily  due to  increased  loan  demand in the  Company=s  market  area.  The
Company's  non-performing  assets  were  $463,000  or 0.46 % of total  assets at
December  31, 1998 as  compared  to $89,000 or .09% of total  assets at June 30,
1998.  Management remains committed to maintaining the non-performing  assets to
total assets ratio within industry standards.

Investment securities. Available-for-sale securities increased $3.5 million from
$19.1  million at June 30,  1998 to $22.6  million at  December  31,  1998.  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 December 31, 1998 than their  carrying  value due to a decline in market
rates of interest  since the purchase  date of the  securities.  Therefore,  the
total balance of available for sale securities  includes the gross effect of the
unrealized gain.

Accrued interest receivable. Accrued interest receivable increased $143,000 from
$960,000 at June 30, 1998 to $1.1 million at December 31, 1998.  The increase is
primarily due to the increase in loans receivable,  net and the level of accrued
interest on available-for-sale securities with semi-annual interest payments.

Deposits. Deposits increased $9.2 million from $66.6 million at June 30, 1998 to
$75.8  million at December  31,  1998.  Interest  credited to customer  accounts
totaled $1.7  million,  while  deposits  exceeded  withdrawals  by $7.5 million.
Transaction  and savings  deposits  decreased as a percentage of total  deposits
from  $24.3  million  or  36.4% at June 30,  1998 to $25.6  million  or 33.7% at
December 31, 1998.  Certificates  of deposit  increased as a percentage of total
deposits  from $42.3 million or 63.6% at June 30, 1998 to $50.2 million or 66.3%
at December 31, 1998.

FHLB Borrowings.  The total principal  balance in advances from the Federal Home
Loan Bank of Des Moines (FHLB) decreased $642,000 from $15.7 million at June 30,
1998 to $15.1 million at December 31, 1998. The decrease is primarily due to the
increase in deposits and the decreased  need to borrow to fund loan activity and
investment activity. The borrowings are primarily long-term advances.
<PAGE>


Advances from borrowers for taxes and  insurance.  The total balance in advances
from borrowers for taxes and insurance  decreased  $32,000 from $222,000 at June
30,  1998 to  $190,000 at  December  31,  1998  primarily  due to the payment of
semi-annual credit life and disability  insurance premiums and the annual escrow
analysis  performed each December.  Escrow overages in excess of $50.00 are sent
directly to the customer.  Escrow  shortages are spread out over a  twelve-month
period and added to the regular monthly escrow payment.

Total stockholders'  equity.  Total stockholders' equity decreased $357,000 from
$11.0  million at June 30,  1998 to $10.6  million at  December  31,  1998.  The
decrease is  primarily  due to the  purchase of 37,000  shares of the  Company's
common stock at a total cost of $684,000  and  dividends  paid of $137,000.  The
decrease was partially offset by net income of $368,000, the net unrealized gain
in available-  for- sale  securities of $18,000,  the  amortization  of deferred
compensation under the Recognition and Retention Plan of $32,000, the allocation
of shares in the  Employee  Stock  Ownership  Plan of $37,000  and the change in
redeemable  common  stock  of  $9,000.  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 and the fair value of these  securities  is  greater  than their
carrying value as of December 31, 1998.


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

Performance  summary.  Net earnings  decreased $27,000 to $172,000 for the three
months ended December 31, 1998 from $199,000 for the three months ended December
31, 1997.  The decrease is primarily  due to an increase in interest  expense of
$447,000,  an increase in noninterest expense of $151,000, an increase in income
tax  expense of $9,000,  and an increase  in  provision  for loan loss of $6,000
partially  offset by an increase in interest  income of $572,000 and an increase
in noninterest  income of $14,000.  For the three months ended December 31, 1998
the  annualized  return on average  assets was 0.68%  compared  to 1.21% for the
three months ended  December 31, 1997,  while the  annualized  return on average
equity was 6.53% for the three months ended  December 31, 1998 compared to 7.31%
for the three months ended December 31, 1997.

Net interest income.  Net interest income increased $126,000 to $758,000 for the
three  months ended  December 31, 1998 from  $632,000 for the three months ended
December 31, 1997.  The increase is primarily due to the increase of $572,000 in
interest  income to $1.9 million for the three  months  ended  December 31, 1998
from $1.3 million for the three months ended December 31, 1997 partially  offset
by an  increase in  interest  expense of $447,000 to $1.1  million for the three
months ended December 31, 1998 from $685,000 for the three months ended December
31, 1997.

For the three  months  ended  December  31, 1998 the  average  yield on interest
earning  assets was 7.82%  compared to 8.20% for the three months ended December
31, 1997.  The average cost of  interest-bearing  liabilities  was 5.18% for the
three  months  ended  December  31, 1998  compared to 5.18% for the three months
ended  December  31,  1997.  The  average  balance of  interest  earning  assets
increased $32.5 million to $96.7 million for the three months ended December 31,
1998 from $64.2  million for the three  months ended  December 31, 1997.  During
this same period, the average balance of interest-bearing  liabilities increased
$34.6 million to $87.5 million for the three months ended December 31, 1998 from
$52.9 million for the three months ended December 31, 1997.

Due to the  decrease in yield on the  interest-earning  assets and the  constant
rates paid on the interest-bearing liabilities, the average interest rate spread
was 2.64% for the three months ended December 31, 1998 compared to 3.03% for the
three months ended  December 31, 1997.  Due to the increase in  interest-bearing
liabilities as a percentage of interest-earning assets, the average net interest
margin was 3.14% for the three months ended  December 31, 1998 compared to 3.94%
for the three months ended December 31, 1997.

Provision for loan loss. Provision for loan loss increased $6,000 to $34,000 for
the three months ended December 31, 1998 from $28,000 for the three months ended
December 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 $440,000 or .64% of loans
receivable,  net at  December  31,  1998  compared  to $254,000 or .46% of loans
receivable,  net at  December  31,  1997.  The  allowance  for  loan  loss  as a
percentage of non-performing assets was 94.99% at December 31, 1998, compared to
668.62% at December 31, 1997.
<PAGE>

Noninterest  income.  Noninterest  income  increased  $14,000 to $97,000 for the
three  months  ended  December  31, 1998 from $83,000 for the three months ended
December 31, 1997.  The increase is primarily due to an increase in bank service
charges of  $17,000,  an  increase  in gains on the sale of  available  for sale
securities  of $11,0000  and an increase in other  noninterest  income of $9,000
partially offset by a decrease in insurance commissions of $23,000.

Bank service charges and fees increased  $17,000 to $60,000 for the three months
ended  December 31, 1998 from  $43,000 for the three  months ended  December 31,
1997  primarily  due to an $8,000  increase in  overdraft  fee income,  a $5,000
increase in checking  account  service  charges and stop payments,  and a $3,000
increase  in  credit  card and  merchant  fees.  Gain on the  sale of  available
securities increased $11,000 for the three months ended December 31, 1998 due to
the sale of U.S. Treasury securities.  Other noninterest income increased $9,000
to $10,000  for the three  months  ended  December  31, 1998 from $1,000 for the
three months ended  December 31, 1997 primarily due to the gain on REO property.
Insurance  commissions  decreased  $23,000 to $14,000 for the three months ended
December  31, 1998 from  $36,000 for the three  months  ended  December 31, 1997
primarily  due to the  fluctuations  in the  volume of sales of credit  life and
disability products.

Noninterest expense.  Noninterest expense increased $151,000 to $566,000 for the
three  months ended  December 31, 1998 from  $415,000 for the three months ended
December 31,  1997.  The  increase is  primarily  due to an $88,000  increase in
compensation  and benefits,  a $24,000 increase in goodwill  expense,  a $23,000
increase in occupancy and equipment,  an $11,000  increase in other  expense,  a
$3,000  increase  in FDIC  insurance  premium,  and a  $2,000  increase  in data
processing.  These  increases were primarily due to the acquisition of Rubio and
the addition of  Washington  Federal's  branch in Wellman,  Iowa and to a lesser
extent, Year 2000 expenses.

Income tax expense. Income tax expense increased $9,000 to $82,000 for the three
months ended  December 31, 1998 from $73,000 for the three months ended December
31, 1997. The increase in income tax expense  despite the decrease in net income
before income taxes is primarily due to the tax effect of goodwill expense.


Results of  Operations - Six Months  Ended  December 31, 1998 As Compared To The
Six Months Ended December 31, 1997

Performance  summary.  Net  earnings  increased  $11,000 to $367,000 for the six
months ended  December 31, 1998 from $356,000 for the six months ended  December
31, 1997.  The increase is  primarily  due to an increase in interest  income of
$1.1 million and an increase in noninterest income of $56,000,  partially offset
by an increase  in  interest  expense of  $795,000,  an increase in  noninterest
expense of  $314,000,  an  increase  in income tax  expense of  $45,000,  and an
increase in provision for loan loss of $3,000. For the six months ended December
31, 1998 the annualized return on average assets was 0.75% compared to 1.09% for
the six months ended December 31, 1997,  while the annualized  return on average
equity was 6.87% for the six months ended  December  31, 1998  compared to 6.59%
for the six months ended December 31, 1997.

Net interest income.  Net interest income increased $317,000 to $1.5 million for
the six months  ended  December  31,  1998 from $1.2  million for the six months
ended  December 31, 1997.  The increase is primarily due to the increase of $1.1
million in interest income to $3.7 million for the six months ended December 31,
1998 from $2.6  million for the six months  ended  December  31, 1997  partially
offset by an increase in  interest  expense of $795,000 to $2.2  million for the
six months  ended  December  31, 1998 from $1.4 million for the six months ended
December 31, 1997.

For the six months ended December 31, 1998 the average yield on interest earning
assets was 7.92%  compared to 8.14% for the six months ended  December 31, 1997.
The average cost of  interest-bearing  liabilities  was 4.97% for the six months
ended  December 31, 1998  compared to 5.19% for the three months ended  December
31, 1997. The average balance of interest earning assets increased $29.8 million
to $93.7  million for the six months ended  December 31, 1998 from $63.9 million
for the six months ended December 31, 1997. During this same period, the average
balance of interest-bearing liabilities increased $34.2 million to $87.1 million
for the six months ended December 31, 1998 from $52.9 million for the six months
ended December 31, 1997.
<PAGE>

Due to the decrease in yield on the interest-earning  assets and the decrease in
rate paid on the interest-bearing  liabilities, the average interest rate spread
was 2.95% for the six months ended  December 31, 1998  compared to 2.95% for the
six months  ended  December 31,  1997.  Due to the increase in  interest-bearing
liabilities as a percentage of interest-earning assets, the average net interest
margin was 3.31% for the six months ended  December  31, 1998  compared to 3.87%
for the six months ended December 31, 1997.

Provision for loan loss. Provision for loan loss increased $3,000 to $56,000 for
the six months  ended  December  31, 1998 from  $53,000 for the six months ended
December 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 $440,000 or .64% of loans
receivable,  net at  December  31,  1998  compared  to $254,000 or .46% of loans
receivable,  net at  December  31,  1997.  The  allowance  for  loan  loss  as a
percentage of non-performing assets was 94.99% at December 31, 1998, compared to
668.62% at December 31, 1997.

Noninterest income. Noninterest income increased $56,000 to $192,000 for the six
months ended  December 31, 1998 from $135,000 for the six months ended  December
31, 1997.  The increase is primarily due an increase in bank service  charges of
$63,000,  an increase in gains on the sale of available  for sale  securities of
$11,000 and an increase in other  noninterest  income of $8,000 partially offset
by a  decrease  in  insurance  commissions  of $24,000  and a  decrease  in loan
origination and commitment fees of $2,000.

Bank service  charges and fees increased  $63,000 to $145,000 for the six months
ended  December 31, 1998 from $82,000 for the six months ended December 31, 1997
primarily due to an increase in overdraft fee income of $43,000,  an increase in
checking  account service  charges and stop payments of $11,000,  an increase in
credit  card and  merchant  fees of $5,000,  an  increase  in check  cashing and
commercial  exchange  fees of $2,000 and an increase in safe  deposit box rental
fee  income of  $1,000.  Gain on the sale of  available-  for-  sale  securities
increased  $11,000 for the six months ended December 31, 1998 due to the sale of
U.S. Treasury  securities.  Other noninterest income increased $8,000 to $10,000
for the six months ended  December 31, 1998 from $2,000 for the six months ended
December  31,  1997  primarily  due  to the  gain  on  REO  property.  Insurance
commissions  decreased  $24,000 to $22,000 for the six months ended December 31,
1998 from $46,000 for the six months ended  December 31, 1997  primarily  due to
the fluctuations in the volume of sales of credit life and disability  products.
Loan  origination and commitment fee income  decreased  $2,000 to $3,000 for the
six months ended December 31, 1998 from $5,000 for the six months ended December
31,  1997 due to the  fluctuations  in  volume  of loans  sold to the  secondary
market.

Noninterest expense.  Noninterest expense increased $314,000 to $1.1 million for
the six months ended  December  31, 1998 from  $784,000 for the six months ended
December 31, 1997. The increase is primarily due to an increase in  compensation
and benefits of $172,000,  an increase in other expense of $48,000,  an increase
in goodwill  expense of  $47,000,  an increase in  occupancy  and  equipment  of
$38,000,  an increase in FDIC  insurance  premium of $5,000,  and an increase in
data processing of $4,000.

Compensation  and  benefits  increased  $172,000 to $580,000  for the six months
ended December 31, 1998 from $408,000 for the six months ended December 31, 1997
primarily due to the increase in full-time  equivalent  employees as a result of
the acquisition of Rubio and Washington Federal's new branch in Wellman, Iowa.

Other noninterest expense increased $48,000 to $285,000 for the six months ended
December  31, 1998 from  $237,000  for the six months  ended  December  31, 1997
primarily due to the increased  cost of operating  additional  offices since the
acquisition of Rubio and the opening of Washington  Federal's branch in Wellman,
Iowa.  The increase is primarily  due to an increase in supplies of $21,000,  an
increase in  expenses  related to the Year 2000 issue and  computer  software of
$13,000,  an  increase  in ATM and debit card  processing  fees of  $10,000,  an
increase in fees paid for services provided by outside contractors of $8,000, an
increase in postage expense of $8,000,  an increase in checking  account expense
of $4,000 and an increase  in  education  and  association  fees of $3,000.  The
increase is partially offset by a decrease in advertising  expense of $11,000, a
decrease in auditing and accounting fees of $5,000, and a decrease in legal fees
of $3,000.
<PAGE>

Goodwill expense  increased $47,000 to $47,000 for the six months ended December
31, 1998 due to the  acquisition  of Rubio.  Occupancy and  equipment  increased
$38,000 to $113,000 for the six months ended  December 31, 1998 from $75,000 for
the six  months  ended  December  31,  1997  primarily  due to the  addition  of
Washington  Federal's  branch in  Wellman,  Iowa and the  addition  of the Rubio
Savings Bank of Brighton's office building.  FDIC insurance  premiums  increased
$5,000 to $29,000 for the six months  ended  December  31, 1998 from $24,000 for
the six months ended December 31, 1997 primarily due to the increase in deposits
since the acquisition of Rubio. Data processing  increased $4,000 to $43,000 for
the six months  ended  December  31, 1998 from  $39,000 for the six months ended
December 31, 1997.

Income tax expense. Income tax expense increased $45,000 to $222,000 for the six
months ended  December 31, 1998 from $177,000 for the six months ended  December
31, 1997.

Liquidity  and  capital  resources.  The Banks'  principal  sources of funds are
deposits,  amortization  and prepayment of loan principal,  borrowings,  and the
sale and maturity 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,  and, most recently,  the restructuring of the thrift industry.
The Banks  generally  manage the  pricing of the  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 the competition,  and when necessary, to supplement
deposits with alternative sources of funds.

Federal  regulations  historically have required  Washington Federal to maintain
minimum levels of liquid assets. The required percentage has varied from time to
time based upon economic conditions and savings flows and 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 December 31, 1998, Washington Federal's liquidity ratio was 25.75%.

Liquidity management is both a daily and long-term responsibility of management.
Washington   Federal  adjusts  its  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 Washington Federal requires funds beyond
its ability to generate them internally,  it has additional  borrowing  capacity
with the FHLB of Des Moines  and  collateral  eligible  for  reverse  repurchase
agreements.

The Banks  anticipate  that they will have  sufficient  funds  available to meet
current  loan  commitments.   At  December  31,  1998,  Washington  Federal  had
outstanding  commitments  to extend  credit  which  amounted to $1.6 million and
Rubio Savings Bank had  outstanding  commitments to extend credit which amounted
to $910,000.
<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.

                  At the annual meeting on October 20, 1998 the  stockholders of
Washington  Bancorp  re-elected  three directors and ratified the appointment of
McGladrey  and Pullen,  LLP as the  auditors for the fiscal year ending June 30,
1999. Total voting by proxy was 513,431 of the 603,006 shares outstanding.

                  Director  James D.  Gorham  received  490,669  "for" votes and
22,112  "withhold"  votes.  Director Mary Levy received  490,035 "for" votes and
22,737 "withhold" votes.  Director Dean Edwards received 501,964 "for" votes and
11,087 "withhold" votes. McGladrey and Pullen, LLP received 510,385 "for" votes,
1,520 "against" votes and no "abstain" votes.


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 the
Company 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  December  31,  1998 the ESOP  held  52,602  shares  of the
Company's common stock,  12,376 of which were allocated and the remaining 40,226
were unreleased (unearned) shares. The 40,226 unreleased (unearned) shares had a
fair market value of approximately $709,000 at December 31, 1998.

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

                  No reports in Form 8-K have been filed  during the quarter for
                  which this report was filed.


<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     February 10, 1999                 /s/ Stan Carlson                  
                                               ---------------------------------
                                               Stan Carlson, President and Chief
                                               Executive Officer

Date     February 10, 1999                 /s/ Leisha A. Linge               
                                               ---------------------------------
                                               Leisha A. Linge,Controller