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 September 30, 1996
                                       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 33-98778

                               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[ ] The issuer has been subject to such filing requirements since
March 11, 1996.

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 657,519 shares outstanding as to November 10, 1996

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



                                      INDEX

Part I.    Financial Information

           Item 1. Consolidated Financial Statements

                   Consolidated  Statements of Financial  Condition at September
                   30, 1996 (unaudited) and June 30, 1996

                   Unaudited  Consolidated  Statements  of Income  for the three
                   months ended September 30, 1996 and 1995

                   Unaudited Consolidated Statements of Cash Flows for the three
                   months ended September 30, 1996 and 1995

                   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>
                                                              September 30,      June 30,
                                                                  1996            1996*
                                                              -------------   ------------
<S>                                                           <C>             <C> 

ASSETS                                                         (Unaudited)
Cash and cash equivalents:
         Interest-bearing.................................    $  2,295,989    $  1,109,583
         Noninterest-bearing ..............................        243,254         793,769
                                                              ------------    ------------
                                                                 2,539,243       1,903,352
Investment securities, available for sale .................     12,759,186      14,628,089
Loans receivable, net .....................................     45,521,697      42,905,699
Accrued interest receivable ...............................        624,773         465,789
Federal Home Loan Bank stock ..............................        369,100         369,100
Premises and equipment, net ...............................        532,346         543,606
Foreclosed real estate ....................................         29,174            --
Other assets ..............................................         88,730          75,308
                                                              ------------    ------------
         Total assets....................................     $ 62,464,249    $ 60,890,943
                                                              ============    ============
LIABILITIES
Deposits $.......................................             $ 46,393,391    $ 44,176,448
Borrowed funds ............................................      4,729,723       5,504,742
Advance from borrowers for
         taxes and insurance ..............................         95,907         218,506
Accrued expenses and other liabilities ....................        459,241         443,082
Accrued SAIF assessment ...................................        294,310              --
                                                              ------------    ------------
         Total liabilities ................................     51,972,572      50,342,778
                                                              ------------    ------------
STOCKHOLDERS' EQUITY Common stock:
         Common stock .....................................          6,575           6,575
         Additional paid-in capital .......................      6,174,168       6,172,680
Retained earnings .........................................      4,859,487       4,941,449
Unrealized (loss) on investment securities,
         available for sale, net of income taxes ..........        (55,063)        (68,209)
Unearned shares,
         employee stock ownership plan ....................       (493,490)       (504,330)
                                                              ------------    ------------
         Total stockholders' equity .......................     10,491,677      10,548,165
                                                              ------------    ------------
         Total liabilities and
               stockholders' equity .......................   $ 62,464,249    $ 60,890,943
                                                              ============    ============
</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 September 30,
                                                                      ------------------------
                                                                         1996           1995
                                                                      ------------------------
<S>                                                                   <C>           <C>
Interest income:
         Loans receivable:
                  First mortgage loans ...........................    $  816,762    $  734,627
                  Consumer and other loans ........................      137,668       104,867
         Investment securities:
                  Taxable .........................................      232,375       178,323
                  Nontaxable ......................................        5,433        15,267
                                                                      ----------   ----------
                  Total interest income ...........................    1,192,238     1,033,084
                                                                      ----------   ----------
Interest expense:
         Deposits .................................................      552,502       563,231
         Borrowed funds ...........................................       74,474        74,301
                                                                      ----------    ----------
                  Total interest expense ..........................      626,976       637,532
                                                                      ----------    ----------
                  Net interest income .............................      565,262       395,552
                  Provision for loan loss .........................        3,000         3,000
                                                                      ----------    ----------
                  Net interest income after
                    provision for loan loss .......................      562,262       392,552
                                                                      ----------    ----------
Noninterest income:
         Security gains(losses), net ..............................          388           - -
         Loan origination and commitment fees .....................        2,251         1,213
         Service charges and fees .................................       30,980        11,898
         Insurance commissions ....................................       13,395         7,547
         Other ....................................................        9,565         1,455
                                                                      ----------    ----------
                  Total noninterest income ........................       56,579        22,113
                                                                      ----------    ----------
Noninterest expense:
         Compensation and benefits ................................      159,713       143,648
         Occupancy and equipment ..................................       35,048        32,122
         SAIF deposit insurance premium ...........................      326,718        29,148
         Data processing ..........................................       13,660        25,103
         Other ....................................................      130,509        48,986
                                                                      ----------    ----------
                  Total noninterest expense .......................      665,648       279,007
                                                                      ----------    ----------
                  Income(loss) before income taxes ................      (46,807)      135,658

Income tax expense(credit) ........................................      (17,446)       46,925
                                                                      ----------    ----------
                  Net income(loss) ................................   $  (29,361)   $   88,733
                                                                      ==========    ==========
Earnings(loss) per common share
         subsequent to conversion .................................   $    (0.05)         n/a
                                                                      ==========    ==========
Dividends per common share
                                                                      $     0.08          n/a
                                                                      ==========    ==========

Weighted average common shares ....................................      607,628          n/a
                                                                      ==========    ==========

</TABLE>
See Notes to Consolidated Financial Statements ....................   
<PAGE>



                        Washington Bancorp and Subsidiary
                 Unaudited Consolidated Statements of Cash Flows

<TABLE>
                                                                    Three Months
                                                                 Ended September 30,
                                                              --------------------------
                                                                 1996           1995
                                                              -----------    -----------
<S>                                                           <C>            <C>
Cash Flows from Operating Activities
         Net income(loss) .................................   $   (29,361)   $    88,733
Adjustments to reconcile net income to net cash
         provided by operating activities:
         Amortization of premiums and
              discounts on debt securities ................        19,415         17,232
         Provision for loan loss ..........................         3,000          3,000
         (Gain) on sale of investment securities ..........          (388)           - -
         (Gain) loss on sale of foreclosed real estate ....        (7,720)           - -
         Depreciation .....................................        12,910         15,116
         ESOP contribution expense ........................        12,328            - -
         Deferred income taxes ............................      (109,778)         2,369
         (Increase)in accrued interest receivable .........      (158,984)       (33,675)
         (Increase)decrease in other assets ...............         4,813        (60,060)
         Increase in accrued expenses
                  and other liabilities ...................        99,814         18,335
         Increase in accrued SAIF assessment ..............       294,310            - -
                                                              -----------    -----------
                  Net cash provided by operating activities       140,359         51,050
                                                              -----------    -----------

Cash Flows from Investing Activities
Held to maturity securities:
         Maturities and calls .............................           - -         90,000
Available for sale securities:
         Sales ............................................           911            - -
         Maturities and calls .............................     2,015,000        800,000
         Purchases ........................................      (145,000)           - -
Loans made to customers, net ..............................    (2,640,452)      (926,036)
Purchase of premises and equipment ........................        (1,650)       (13,870)
                                                              -----------    -----------
                  Net cash (used in) investing activities .      (771,191)       (49,906)
                                                              -----------    -----------

Cash Flows from Financing Activities
         Net increase in deposits .........................   $ 2,216,943    $ 2,062,070
         Proceeds from Federal Home
                  Loan Bank advance .......................     8,500,000      5,520,000
         Principal payments on
                  Federal Home Loan Bank advances .........    (9,275,019)    (6,593,196)
         Net(decrease) in advances from borrowers for
                  taxes and insurance .....................      (122,599)       (92,786)
         Payment of cash dividends ........................       (52,602)           - -
                                                              -----------    -----------
                  Net cash provided by financing activities     1,266,723        896,088
                                                              -----------    -----------

                  Net increase in cash and cash equivalents       635,891        897,232
Cash and cash equivalents:
         Beginning ........................................     1,903,352      1,658,043
                                                              -----------    -----------
         Ending ...........................................   $ 2,539,243    $ 2,555,275
                                                              ===========    ===========

Supplemental Disclosures of Cash Flow Information
         Cash payments for:
                  Interest paid to depositors .............   $   514,732    $   552,048
                  Interest paid on other obligations ......        74,474         74,301
                  Income taxes, net of refunds ............        39,050         67,200

Supplemental Schedule of Noncash Investing
         and Financing Activities
         Transfer from loans to foreclosed real estate ....   $    60,454            - -
         Contract sales of foreclosed real estate .........        39,000            - -

</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>



                        Washington Bancorp and Subsidiary

                   Notes to Consolidated Financial Statements



Basis of presentation.  Interim Financial Information (unaudited): The financial
statements and notes related  thereto for the three month period ended September
30,  1996,  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,  1996 and all related
amendments and exhibits (including all financial  statements and notes therein),
filed by the Company with the Securities and Exchange Commission.

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

Organization.  On March 11, 1996,  Washington  Bancorp  sold  604,917  shares of
common stock at $10.00 per share and simultaneously  invested $3,089,356 for all
the  outstanding   common  shares  of  Washington  Federal  Savings  Bank  in  a
transaction accounted for like a pooling of interests.

Prior to March 11, 1996, the Bank was a federally chartered mutual savings bank.
After a  reorganization,  effective  March 11, 1996, the Bank became a federally
chartered  stock  savings  bank and 100% of the Bank's  common stock is owned by
Washington Bancorp.

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 the Bank,  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.  The Bank'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 the Bank's actual loss  experience  (the  "Experience
Method"),  or a percentage  equal to 8% of the Bank'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 the Bank 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,  the Bank will be required to recapture  (i.e.,  take into income)
over a six-year period, beginning with the Bank's 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 the
Bank'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 the Bank
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 the Bank 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 the Bank during its six taxable  years  preceding  January 1,
1996. This  legislation will result in the Bank's recapture of reserves with the
aggregate tax  liability of  approximately  $88,000.  Since the Bank has already
provided a deferred income tax liability of this amount for financial  reporting
purposes,  there will be no adverse impact to the Bank's financial  condition or
results of operations from the enactment of this legislation.
<PAGE>



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 will pay a
special assessment,  subject to adjustment,  of 65.7 basis points on the Savings
Association Insurance Fund (SAIF) deposits held as of March 31, 1995. Washington
Federal  Savings  Bank's  estimated  assessment  totals  $294,310.  Although the
assessment  will not be collected  until November 27, 1996, the Office of Thrift
Supervision(OTS),  in accordance with generally accepted accounting  principles,
advised in Notice  SN96-11  that the special  SAIF  assessment  be accrued as of
September  30, 1996 and that the amount be reported as a component  of operating
income in the quarter ended  September 30, 1996. The Funds Act provides that the
amount of special  assessment will be deductible for federal income tax purposes
for the taxable year in which the special assessment is paid.

The  SAIF-assessable  base for the fourth quarter of 1996 was assessed at a rate
of 23 to 31  basis  points  as  part of the  regular  annual  deposit  insurance
assessment.  In view of the  recapitalization  of the SAIF,  the FDIC proposed a
reduction of the assessment  rate for the  SAIF-assessable  deposits for periods
beginning October 1, 1996. Overpayment of the fourth quarter assessments will be
refunded or credited  using  regular  quarterly  payment  procedures.  Beginning
January 1, 1997 the  SAIF-assessable  base will range from 0 to 27 basis points,
the same risk-based  assessment as BIF members.  The Funds Act expanded the base
of the payments on the bonds (the "FICO bonds")  issued in the late 1980s by the
Financing  Corporation to recapitalize  the now defunct Federal Savings and Loan
Insurance  Corporation  to include the  deposits  of both SAIF- and  BIF-insured
deposits  beginning  January 1, 1997.  Until  December 31, 1999, or such earlier
date on  which  the  last  savings  association  ceases  to  exist,  the rate of
assessment for BIF-assessable  deposits will be one-fifth of the rate imposed on
SAIF-assessable  deposits.  The anticipated FICO assessments of 6.4 basis points
on SAIF members and 1.3 basis points on BIF members will be added to the regular
assessment.

The Funds Act also  provides  for the  merger of the SAIF and BIF on  January 1,
1999,  with such merger  being  conditioned  upon the prior  elimination  of the
thrift charter.  The Secretary of the Treasury is required to conduct a study of
relevant  factors with respect to the  development  of a common  charter for all
insured depository institutions and abolition of separate charters for banks and
thrifts and to report the  Secretary's  conclusions and findings to the Congress
on or before March 31, 1997.

Earnings per common  share.  The earnings per common share amounts were computed
using the  weighted  average  number of shares  outstanding  during the  periods
presented.  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.  Earnings per share information
for the three  months ended  September  30, 1996 is  calculated  by dividing net
income (loss) by the weighted average number of shares outstanding. Earnings per
share is not  applicable  for the three months ended  September 30, 1995 because
the Bank was a mutual association at that time.




<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 September 30, 1996 the capital requirements of the Bank under
FIRREA  and its  actual  capital  ratios.  As of  September  30,  1996  the Bank
substantially exceeded all current regulatory capital requirement standards.


                                              At September 30, 1996
                                             -----------------------
                                             Amount          Percent
                                             ------          -------
                                             (Dollars in thousands)
                                                  (unaudited)

Tangible Capital:
         Capital Level ..............        $8,033           12.8%
         Requirement ................           938            1.5%
                                             ------           -----
         Excess .....................        $7,095           11.3%


Core Capital:
         Capital Level ..............        $8,033           12.8%
         Requirement ................         1,875            3.0%
                                             ------           -----
         Excess .....................        $6,158            9.8%


Risk-Based Capital:
         Capital Level ..............        $8,224           19.8%
         Requirement ................         3,322            8.0%
                                             ------           -----
         Excess .....................        $4,902           11.8%

<PAGE>


                         Part I - Financial Information



Item 2.  Management's Discussion and Analysis

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 the  "Bank") 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,  the Bank  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, the Bank 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 is the outstanding stock of the Bank, its wholly-owned  subsidiary.  The
Company presently has no separate operations and its business consists primarily
of the business of the Bank.  All  references to the Company,  unless  otherwise
indicated at or before March 11, 1996 refer to the Bank.

Washington  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 also makes commercial
loans,  consumer loans,  automobile loans, and has occasionally been a purchaser
of fixed-rate mortgage-backed securities.

In  anticipation  of  possible  federal  legislation  that  may  inhibit  future
branching  opportunities  for savings  associations,  Washington  Federal  filed
applications with the Office of Thrift  Supervision  ("OTS") on October 20, 1995
for three branch offices.  These  applications  have been approved and are valid
through February 1997.  Although management has not made a determination to open
any branch  offices,  the purpose of the  applications  is to possibly  preserve
Washington Federal's branching opportunities. No assurance can be given that the
applications will satisfy the legislation nor that Washington  Federal will open
any branch offices.

Under the Deposit  Insurance  Funds Act of 1996 and in accordance with generally
accepted accounting principles,  the 65.7 basis-point,  one-time SAIF assessment
was  accrued as of  September  30,  1996.  The Bank's  estimated  assessment  is
$294,310.  Until  October  1, 1996 the Bank was  assessed  at a rate of 23 basis
points  for the  protection  of FDIC  insurance.  Effective  October 1, 1996 the
annual  assessment  rate  was  reduced  and a  credit  for  the  fourth  quarter
overpayment  will be applied toward the first quarter 1997  assessment  billing.
The  Bank  anticipates  an  annual  SAIF  assessment  rate of 6.4  basis  points
beginning January 1, 1997.

Financial Condition

Total assets.  Total  consolidated  assets have  increased from $60.9 million at
June 30, 1996 to $62.5  million at  September  30,  1996.  This net  increase is
primarily  due an  increase  in loans  funded by  seasonal  fluctuations  in the
deposits.

Loans receivable. Loans receivable, net increased from $42.9 million at June 30,
1996 to $45.5 million at September  30, 1996.  This increase is primarily due to
the Bank's  continued  emphasis on serving the mortgage  needs of our customers.
The average  first  mortgage  loan balance rose from $34,510 at June 30, 1996 to
$35,692 at September 30, 1996.  There was also a notable  increase in commercial
lending as a result of an active  solicitation  program,  the Bank's  reputation
within the community and current  commercial  credit customers  recommending the
Bank's services to others.

Investment  securities.   Available-for-sale  securities  decreased  from  $14.6
million at June 30, 1996 to $12.8 million at September  30, 1996.  This decrease
is primarily  due to the  maturity of $2.0 million  which were used to fund loan
activity and  decrease  FHLB  borrowings.  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 less on September 30,
1996 than their  carrying  value due to an increase in interest  rates since the
purchase   date  of  the   securities.   Therefore,   the   total   balance   of
available-for-sale  securities  is offset by the gross effect of the  unrealized
loss.
<PAGE>


Accrued interest receivable. Accrued interest receivable increased from $466,000
at June 30, 1996 to $625,000 at September  30,  1996.  The increase is primarily
due to the level of  accrued  interest  on  available-for-sale  securities  with
semi-annual interest payments.

Deposits.  Deposits  increased  from  $44.2  million  at June 30,  1996 to $46.3
million at September 30, 1996.  Interest  credited to customer accounts totalled
$418,000,  while deposits exceeded withdrawals by $1,799,000.  This is primarily
due to the seasonal  fluctuation  in the cash  position of a local  governmental
agency.  Transaction and savings deposits rose as a percentage of total deposits
from  $16.0  million  or  34.6% at June 30,  1996 to $18.4  million  or 37.6% at
September  30,  1996.  As a result of the  increase in  transaction  and savings
deposits,  certificates  of deposit  decreased as a percentage of total deposits
from  65.4%  ($30.3  million)  at June 30,  1996 to  62.4%  ($30.6  million)  at
September 30, 1996.

FHLB Borrowings.  The total principal  balance in advances from the Federal Home
Loan Bank of Des Moines (FHLB)  decreased  from $5.5 million at June 30, 1996 to
$4.7  million at  September  30,  1996.  The  decrease is  primarily  due to the
decreased  need to borrow to fund loan  activity  because  of the  reduction  in
investment security holdings and the increase in total deposits. The majority of
the  borrowings  are  long-term  advances  that are paying off  through  monthly
amortization.

Advances from borrowers for taxes and  insurance.  The total balance in advances
from borrowers for taxes and insurance  decreased from $219,000 at June 30, 1996
to $96,000 at September  30, 1996.  The decrease is primarily due to the payment
of the  first  installment  of the  1996-97  county  real  estate  tax bills due
September 30, 1996.

Accrued SAIF  assessment.  In  accordance  with  generally  accepted  accounting
principles  the one-time SAIF  assessment of $294,310 is shown as an outstanding
liability on the September 30, 1996 balance sheet.

Total stockholders'  equity.  Total stockholders'  equity decreased $56,000 when
comparing  June 30, 1996 to September 30, 1996. The decrease is primarily due to
the cash dividend paid to stockholders' on August 15, 1996 totalling $53,000 and
the net loss in this  quarter  due to the SAIF  assessment.  This  decrease  was
partially offset by the decrease in unearned shares of the ESOP and the decrease
in unrealized loss on available-for-sale securities.

Results of Operations - Three Months Ended September 30, 1996 As Compared To The
Three  Months  Ended  September  30,  1995  Performance  summary.  Net  earnings
decreased  $118,000 to ($29,000)  for the three months ended  September 30, 1996
from  $89,000 for the three  months ended  September  30, 1995.  The decrease is
primarily  due to the  accounting as of September 30, 1996 for the one-time SAIF
assessment  as a  component  of  operating  income and an increase of $92,000 in
noninterest  expense.  This was  partially  offset by an increase of $159,000 in
interest  income,  a decrease  of $11,000 in  interest  expense,  an increase of
$34,000 in noninterest  income, and a decrease of $64,000 in income tax expense.
For the three months  September 30, 1996 the return on average assets was (.19%)
compared to .65% for the three months ended September 30, 1995, while the return
on average  equity was (1.12%) for the three  months  ended  September  30, 1996
compared to 8.01% for the three months ended September 30, 1995.
<PAGE>


Net interest income.  Net interest income increased $169,000 to $565,000 for the
three months ended  September  30, 1996 from $396,000 for the three months ended
September 30, 1995. The increase is primarily due to the increase of $159,000 in
interest income to $1,192,000 for the three months ended September 30, 1996 from
$1,033,000 for the three months ended September 30, 1995.  Interest expense fell
$11,000 to $627,000 for the three months ended  September 30, 1996 from $638,000
for the three months ended September 30, 1995.

For  the  three  months  ended   September   30,  1996  the  average   yield  on
interest-earning  assets was 8.16%  compared to 7.71% for the three months ended
September 30, 1995. The average cost of  interest-bearing  liabilities was 4.99%
for the three months ended  September  30, 1996  compared to 5.14% for the three
months ended September 30, 1995. The average balance of interest  earning assets
increased $4.8 million to $58.4 million for the three months ended September 30,
1996 from $53.6 million for the three months ended  September  30, 1995.  During
this same period, the average balance of interest-bearing  liabilities increased
$700,000 to $50.2  million for the three  months ended  September  30, 1996 from
$49.5 million for the three months ended September 30, 1995.


<PAGE>

Due to the increase in yield on the interest-earning  assets and the decrease in
rates paid on the interest-bearing liabilities, the average interest rate spread
was 3.17% for the three months ended  September  30, 1996  compared to 2.57% for
the three  months ended  September  30,  1995.  The average net interest  margin
(annualized  net interest  income divided by total average assets) was 3.66% for
the three months ended September 30, 1996 compared to 2.96% for the three months
ended September 30, 1995.

Noninterest  income.  Noninterest  income  increased  $34,000 to $57,000 for the
three  months ended  September  30, 1996 from $22,000 for the three months ended
September  30,  1995.  The $19,000  increase in service  charges and fees is due
primarily to the $11,000  increase of overdraft  fees when  comparing  the three
months ended  September 30, 1996 to the three months ended September 30, 1995 as
a result of more stringent guidelines on overdrawn accounts. The $6,000 increase
in insurance  commissions  to $13,000 for the three months ended  September  30,
1996 from  $7,000 for the period  ended  September  30,  1995 is a result of the
increased sales of credit insurance  products on the loan portfolio.  The $8,000
increase in other  noninterest  income is due primarily to a gain on real estate
sold in the three months ended September 30, 1996.

Noninterest expense.  Noninterest expense increased $386,000 to $665,000 for the
three months ended  September  30, 1996 from $279,000 for the three months ended
September  30,  1995.  This  is  primarily  due to the  $294,310  one-time  SAIF
assessment  that was  accounted  for as of September  30, 1996 as a component of
operating  expense.  Compensation  and  benefit  expense  increased  $16,000  to
$160,000  for the three months ended  September  30, 1996 from  $144,000 for the
three months ended  September 30, 1995.  The increase  represents  normal salary
increases and increases in other employee  benefits.  Other noninterest  expense
increased $82,000 to $131,000 for the three months ended September 30, 1996 from
$49,000  for the  three  months  ended  September  30,  1995 as a result  of the
increase in operating costs since the formation of Washington Bancorp.

Liquidity  and  capital  resources.  The Bank's  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, and, most recently, the restructuring of the thrift
industry.  The Bank generally  manages the pricing of its deposits to maintain a
steady  deposit  balance,  but has from time to time  decided not to pay deposit
rates  that are as high as  those of its  competition,  and when  necessary,  to
supplement deposits with alternative sources of funds.

Federal  regulations  historically  have  required the Bank 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 5% 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.  The  Bank  has  historically
maintained  its  liquidity  ratio at  levels in  excess  of those  required.  At
September 30, 1996, the Bank's liquidity ratio was 13.30%.
<PAGE>



Liquidity management is both a daily and long-term responsibility of management.
The Bank  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 the Bank  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 Bank  anticipates  that it will  have  sufficient  funds  available  to meet
current loan  commitments.  At  September  30,  1996,  the Bank had  outstanding
commitments to extend credit which amounted to $1,931,000.



<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  15,  1996  the  stockholders  of
         Washington Bancorp  re-elected two directors,  ratified the adoption of
         the 1996 Stock Option and Incentive Plan,  ratified the Recognition and
         Retention  Plan (RRP),  and ratified the  appointment  of McGladrey and
         Pullen,  LLP as the  auditors for the fiscal year ending June 30, 1997.
         Total voting by proxy was 600,890 of the 657,519 shares outstanding.

         Directors, J. Richard Wiley and Richard L. Weeks were re-elected by 98%
         of the voted proxies.

         The 1996 Stock Option  Plans was ratified by 88% of the voted  proxies.
         Pursuant to the 1996 Stock Option Plan,  65,751 shares of the Company's
         Common Stock will be repurchased from the open market, upon approval of
         the Office of Thrift Supervision, for issuance by the Company under the
         Stock Option Plan. In general, the term of stock options will expire no
         later than  October 15,  2006.  The  Compensation  Committee  may grant
         either  "Incentive  Stock  Options" as defined under Section 422 of the
         Code or stock  options not intended to qualify as such  ("non-qualified
         stock options").  The initial awards are 32,874 shares to a four-person
         executive group,  and 19,726 shares to the  seven-person  non-executive
         directorial group.

         The  Recognition  and  Retention  Plan was ratified by 88% of the voted
         proxies.  Pursuant to the RRP,  26,300 shares of the  Company's  Common
         Stock will be  repurchased  from the open market,  upon approval of the
         Office of Thrift  Supervision,  for  issuance by the Company  under the
         RRP. In general, the RRP is administered by the Company's  Compensation
         Committee.  RRP shares have been  awarded to  directors,  officers  and
         employees  and will vest in five equal  annual  installments,  with the
         first  installment  vesting on October 15, 1997. RRP Shares are subject
         to  forfeiture  if the  recipient  ceases to  remain in the  continuous
         service (as defined by the RRP) as an employee, officer or director. In
         addition,  the vesting of RRP Shares is subject to the Bank meeting its
         fully  phased-in  capital  requirements.  The initial awards are 13,152
         shares  to a  four-person  executive  group,  and  7,889  shares to the
         seven-person non-executive directorial group.

         The appointment of McGladrey and Pullen,  LLP as the corporate auditors
         for the fiscal year  ending  June 30,  1996 was  ratified by 99% of the
         voted proxies.

Item 5. Other Information.

         Employee  Benefit Plans. In conjunction  with the Bank's  conversion to
         stock  ownership,  the Company  established an Employee Stock Ownership
         Plan  (ESOP)  for  eligible  employees.  The  plan was  established  by
         amending the Savings Bank's existing profit sharing plan.  Employees of
         the Bank 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  September  30,  1996 the ESOP held 52,602  shares of the  Company's
         common  stock,  3,253 of which were  released  for  allocation  and the
         remaining  49,349  were  unreleased   (unearned)   shares.  The  49,349
         unreleased  (unearned)  shares had a fair market value of approximately
         $530,500 at September 30, 1996.
<PAGE>



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     November 11, 1996          /s/ Stan Carlson
                                   ---------------------------------
                                   Stan Carlson, President and Chief
                                   Executive Officer

Date     November 11, 1996         /s/ Leisha A. Linge
                                  -----------------------------------
                                  Leisha A. Linge
                                  Controller