FORM 10-QSB


                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

(Mark One)

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
      SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1997
                        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 0-27910

                               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 issuer's classes of common
equity, as of the latest practicable date.

Common Stock, $.01 par value, 657,519 shares outstanding as of May 7, 1997

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 March 31,
                  1997 (unaudited) and June 30, 1996

                  Unaudited Consolidated  Statements of Income
                  for the three  months  ended  March 31, 1997
                  and 1996 and for the nine months ended March
                  31, 1997 and 1996

                  Unaudited Consolidated Statements of Cash Flows for the
                  nine months ended March 31, 1997 and 1996

                  Notes to Consolidated Financial Statements

                  Item 2.  Management's Discussion and Analysis

Part II.          Other Information

                  Items 1 through 6

                  Signatures


<PAGE>


                        Washington Bancorp and Subsidiary
                 Consolidated Statements of Financial Condition

<TABLE>
                                                                 March 31,        June 30,
                                                                   1997             1996*
                                                                ------------    ------------
ASSETS                                                          (unaudited)
<S>                                                             <C>             <C>
Cash and cash equivalents:
         Interest-bearing....................................   $  2,874,531    $  1,109,583
         Noninterest-bearing ................................        242,841         793,769
                                                                ------------    ------------
                                                                   3,117,372       1,903,352
Investment securities, available for sale ...................     10,678,448      14,628,089
Loans receivable, net .......................................     49,622,447      42,905,699
Accrued interest receivable .................................        599,248         465,789
Federal Home Loan Bank stock ................................        433,200         369,100
Premises and equipment, net .................................        553,514         543,606
Other assets ................................................         64,165          75,308
                                                                ------------    ------------
         Total assets........................................   $ 65,068,394    $ 60,890,943
                                                                ============    ============
LIABILITIES
Deposits ....................................................   $ 47,999,150    $ 44,176,448
Borrowed funds ..............................................      5,928,244       5,504,742
Advance from borrowers for taxes and insurance ..............         99,836         218,506
Accrued expenses and other liabilities ......................        557,426         443,082
                                                                ------------    ------------
         Total liabilities ..................................     54,584,656      50,342,778
                                                                ------------    ------------
STOCKHOLDERS' EQUITY Common stock:
         Common stock .......................................          6,575           6,575
         Additional paid-in capital .........................      6,183,789       6,172,680
Retained earnings ...........................................      5,162,433       4,941,449
Treasury stock ..............................................       (348,562)           --
Unrealized (loss) on investment securities, available for 
         sale, net of income taxes ..........................        (47,507)        (68,209)
Unearned shares, employee stock ownership plan ..............       (472,990)       (504,330)
                                                                ------------    ------------
         Total stockholders' equity .........................     10,483,738      10,548,165
                                                                ------------    ------------
         Total liabilities and stockholders' equity .........   $ 65,068,394    $ 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               Nine Months
                                                              Ended March 31,           Ended March 31,
                                                          -----------------------    -----------------------
                                                             1997         1996         1997         1996
                                                          ----------   ----------    ----------   ----------
<S>                                                       <C>          <C>           <C>          <C>
Interest income:
         Loans receivable:
         First mortgage loans .........................   $  884,140   $  743,806    $2,568,807   $2,213,943
         Consumer and other loans .....................      175,440      117,619       469,489      338,818
         Investment securities:
                  Taxable .............................      199,561      164,339       667,001      514,086
                  Nontaxable ..........................        5,433        6,055        16,300       40,868
                                                          ----------   ----------    ----------   ----------
                  Total interest income ...............    1,264,574    1,031,819     3,721,597    3,107,715
                                                          ----------   ----------    ----------   ----------
Interest expense:
         Deposits .....................................      557,918      560,651     1,662,769    1,693,464
         Borrowed funds ...............................       70,276       41,487       233,477      211,482
                                                          ----------   ----------    ----------   ----------
                  Total interest expense ..............      628,194      602,138     1,896,246    1,904,946
                                                          ----------   ----------    ----------   ----------
                  Net interest income .................      636,380      429,681     1,825,351    1,202,769

Provision for loan loss ...............................       19,085        3,000        25,085       12,000
                                                          ----------   ----------    ----------   ----------
                  Net interest income after
                    provision for loan loss ...........      617,295      426,681     1,800,266    1,190,769
                                                          ----------   ----------    ----------   ----------
Noninterest income:
         Security gains, net ..........................         --         13,627           388       32,534
         Loan origination - commitment fees. . ...1,131        5,326        5,976         7,441
         Service charges and fees .....................       27,107       27,465        84,460       58,242
         Insurance commissions ........................       14,189        5,794        61,700       32,231
         Other ........................................       24,694        5,234        43,901        8,086
                                                          ----------   ----------    ----------   ----------
                  Total noninterest income ............       67,121       57,446       196,425      138,534
                                                          ----------   ----------    ----------   ----------
Noninterest expense:
         Compensation and benefits ....................      185,208      139,244       544,774      418,565
         Occupancy and equipment ......................       35,143       33,000       107,048      111,672
         SAIF deposit insurance premium................        2,014       29,079       359,167       86,266
         Data processing ..............................       20,243       22,593        57,804       64,922
         Other ........................................       95,810       80,583       323,968      194,250
                                                          ----------   ----------    ----------   ----------
                  Total noninterest expense ...........      338,418      304,499     1,392,761      875,675
                                                          ----------   ----------    ----------   ----------
                  Income before income taxes ..........      345,998      179,628       603,930      453,628
Income tax expense ....................................      134,989       65,936       227,534      158,139
                                                          ----------   ----------    ----------   ----------
                  Net income ..........................      211,009   $  113,692    $  376,396   $  295,489
                                                          ==========   ==========    ==========   ==========
Earnings per common share .............................   $     0.34   $     0.01*   $     0.61   $     0.01*
                                                          ==========   ==========    ==========   ==========
Dividends per common share ............................   $     0.10          n/a    $     0.28          n/a
                                                          ==========   ==========    ==========   ==========
Weighted average common shares ........................      617,843      605,459       616,934      605,459
                                                          ==========   ==========    ==========   ==========

</TABLE>
See Notes to Consolidated Financial Statements
*Net income subsequent to conversion on March 11, 1996 was $4,899.
<PAGE>

                                                                    
                        Washington Bancorp and Subsidiary
                 Unaudited Consolidated Statements of Cash Flows
<TABLE>
                                                                      Nine Months
                                                                    Ended March 31,
                                                              --------------------------
                                                                  1997           1996
                                                              -----------    -----------
<S>                                                           <C>            <C>

Cash Flows from Operating Activities
         Net income .......................................   $   376,396    $   295,489
Adjustments to reconcile net income to net cash
         provided by operating activities:
         Amortization of premiums and
              discounts on debt securities ................        33,594         61,801
         Provision for loan loss ..........................        25,085         12,000
         (Gain) on sale of investment securities ..........          (388)       (32,534)
         (Gain) on sale of foreclosed real estate .........       (36,911)          --
         Depreciation .....................................        40,989         60,845
         ESOP contribution expense ........................        42,449           --
         Deferred income taxes ............................       (16,798)        16,347
         (Increase)decrease in accrued
                  interest receivable .....................      (133,459)       (10,330)
         (Increase)decrease in other assets ...............        11,143          6,549
         Increase(decrease) in accrued expenses
                  and other liabilities ...................       118,720        111,311
                                                              -----------    -----------
         Net cash provided by operating activities ........       460,820        521,478
                                                              -----------    -----------
Cash Flows from Investing Activities
  Held to maturity securities:
         Maturities and calls .............................          --          166,988
  Available for sale securities:
         Sales ............................................           911      3,518,244
         Maturities and calls .............................    10,093,648      2,093,554
         Purchases ........................................    (6,145,000)      (890,000)
  Loans made to customers, net ............................    (6,704,922)    (1,032,210)

  Purchase of FHLB Stock ..................................        (7,200)       (64,100)
  Purchase of premises and equipment ......................       (50,897)       (23,575)
                                                              -----------    -----------
         Net cash provided by(used in) investing activities    (2,870,360)     3,825,801
                                                              -----------    -----------

                                   (continued)
</TABLE>
<PAGE>


                        Washington Bancorp and Subsidiary
           Unaudited Consolidated Statements of Cash Flows (Continued)
<TABLE>

                                                                                             Nine Months
                                                                                           Ended March 31,
                                                                                     ---------------------------
                                                                                        1997             1996
                                                                                     -----------    ------------
<S>                                                                                  <C>            <C>
Cash Flows From Financing Activities
         Net increase in deposits................................................    $ 3,822,702    $  6,069,379
         Proceeds from Federal Home Loan Bank advances...........................     65,050,000      14,320,000
         Principal payments on
                  Federal Home Loan Bank advances ...............................    (64,626,498)    (18,520,924)
         Net(decrease) in advances from borrowers for
                  taxes and insurance ...........................................       (118,669)        (95,495)
         Purchase of 26,300 shares of common stock
                  for the treasury ..............................................       (348,563)           --
         Proceeds from issuance of 604,917 shares
                  of common stock ...............................................           --         6,049,170
         Payments for expenses incurred relating to
                  conversion to stock form ......................................           --          (396,477)
         Payment of cash dividends ..............................................       (155,412)           --

                                                                                    ------------    ------------
                  Net cash provided by(used in)
                           financing activities .................................      3,623,560       7,425,653
                                                                                    ------------    ------------

                  Net increase in cash
                           and cash equivalents .................................      1,214,020      11,772,932
Cash and cash equivalents:
         Beginning ..............................................................      1,903,352       1,658,043
                                                                                    ------------    ------------
         Ending .................................................................   $ 13,430,975    $  3,117,372
                                                                                    ============    ============

Supplemental Disclosures of Cash Flow Information
         Cash payments for:
                  Interest paid to depositors....................................   $  1,420,143    $  1,650,441
                  Interest paid on other obligations ............................        233,477         221,482
                  Income taxes, net of refunds ..................................        161,408         134,446
Supplemental Schedule of Noncash Investing
         and Financing Activities
         Transfer from loans to foreclosed real estate...........................        106,289            --
         Contract sales of foreclosed real estate ...............................        143,200            --
</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 periods and nine month
periods  ended March 31,  1997 and 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 has been  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 is 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  $156,000.  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  paid 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 assessment totalled $294,310. 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  calendar  year 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 reduced the assessment  rate for the  SAIF-assessable  deposits for periods
beginning  October  1,  1996.  Overpayment  of  the  fourth  quarter  assessment
totalling $5,806 was credited toward the regular  quarterly  payment due January
2, 1997.  Beginning January 1, 1997 the SAIF-assessable base ranges from 0 to 27
basis points, the same risk-based assessment as BIF members.  Washington Federal
Savings Bank has a risk classification of 1A and an annual  SAIF-assessable base
rate of 0.

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 SAIFand  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 FICO assessment of 6.5 basis
points on SAIF members and 1.3 basis points on BIF members has been added to the
regular assessment.

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.  Using the  treasury  stock
method,  the amount of  dilution  as a result of the  potential  exercise of the
stock option plan is reported as a number of shares of common  stock  considered
outstanding for the purpose of computing  earnings per share.  Weighted  average
shares of common stock purchased for the treasury are not considered outstanding
for the purpose of computing  earnings per share. The weighted average shares of
common stock  allocated  under the recognition and retention plan are considered
outstanding for the purpose of computing earnings per share.  Earnings per share
information  for the three  months  ended March 31,  1997 and nine months  ended
March 31, 1997 is  calculated  by dividing  net income by the  weighted  average
number of shares  outstanding.  Earnings  per  share  information  for the three
months ended March,  1996 and the nine months ended March, 1996 is calculated by
dividing  net  income,  subsequent  to the  mutual to stock  conversion,  by the
weighted  average  number  of  shares  outstanding.  Net  income  subsequent  to
conversion was $4,899 for the periods ended March 31, 1996.

<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 March 31,  1997 the  capital  requirements  of the Bank under
FIRREA  and  its  actual  capital  ratios.   As  of  March  31,  1997  the  Bank
substantially exceeded all current regulatory capital requirement standards.


                                              At March 31,  1997
                                            ----------------------
                                             Amount        Percent
                                            -------        -------
                                            (Dollars in thousands)
                                                 (unaudited)

Tangible Capital:
         Capital Level ..............        $8,481          13.0%
         Requirement ................           977           1.5%
                                             ------         ------
         Excess .....................        $7,504          11.5%
                                             ======         ======

Core Capital:
         Capital Level ..............        $8,481          13.0%
         Requirement ................         1,953           3.0%
                                             ------         ------
         Excess .....................        $6,528          10.0%
                                             ======         ======

Risk-Based Capital:
         Capital Level ..............        $8,682          20.9%
         Requirement ................         3,322           8.0%
                                             ------         ------
         Excess .....................        $5,360          12.9%
                                             ======         ======

<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.

Under  the  Deposit  Insurance  Funds Act of 1996 the Bank was  assessed  a 65.7
basis-point, one-time SAIF fee which totalled $294,310. As of September 30, 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 $5,806 credit for the fourth quarter  overpayment was applied toward the first
quarter 1997 assessment billing. Since January 1, 1997 the Bank has been charged
an annual SAIF FICO assessment rate of 6.5 basis points.

Washington  Bancorp  repurchased  26,300 shares of common stock during the three
months ended March 31, 1997 with the intention  that such shares will be used to
fund the recognition and retention plan.

Financial Condition

Total assets.  Total  consolidated  assets have  increased from $60.9 million at
June 30, 1996 to $65.1 million at March 31, 1997. This net increase is primarily
due an  increase  in net loans  receivable  funded  primarily  by a decrease  in
available  for sale  investment  securities,  an increase  in deposits  and to a
lesser extent, an increase in borrowings.

Loans receivable. Loans receivable, net increased from $42.9 million at June 30,
1996 to $49.6  million at March 31, 1997.  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
$36,656 at March 31, 1997.  There was also a $3.6 million 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 $10.6  million at March 31, 1997.  This  decrease is
primarily  due to the  maturity or call of $10.1  million in  available-for-sale
securities  which  were  partially  used to fund  loan  activity  and  partially
reinvested in available-for-sale securities. 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 March,  1997 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.

Accrued interest receivable. Accrued interest receivable increased from $466,000
at June 30, 1996 to $599,000 at March 31, 1997. The increase is primarily due to
the increase in loans receivable, net.
<PAGE>


Deposits.  Deposits  increased  from  $44.2  million  at June 30,  1996 to $48.0
million at March 31, 1997.  Interest credited to customer accounts totalled $1.4
million,  while deposits exceeded  withdrawals by $2.4 million.  Transaction and
savings deposits  increased as a percentage of total deposits from $13.9 million
or 31.4% at June 30,  1996 to $16.5  million  or 34.4% at March 31,  1997.  As a
result of the increase in  transaction  and savings  deposits,  certificates  of
deposit  decreased as a percentage of total deposits from $30.3 million or 68.6%
at June 30, 1996 to $31.5 million or 65.6% at March 31, 1997.

FHLB Borrowings.  The total principal  balance in advances from the Federal Home
Loan Bank of Des Moines (FHLB)  increased  from $5.5 million at June 30, 1996 to
$5.9 million at March 31, 1997.  The increase is primarily  due to the increased
need to borrow to fund loan activity.

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 $100,000 at March 31, 1997.  The decrease is primarily  due to the payment of
the second half of the county real estate taxes due on March 31, 1997.

Total stockholders'  equity.  Total stockholders'  equity decreased $64,000 when
comparing  March 31, 1997 to June 30, 1996. The decrease is primarily due to the
repurchase of 26,300 shares of common stock with the intention  that such shares
will be used to fund the  recognition  and retention plan at a cost of $349,000.
The $376,000  net income for the nine months ended March 31, 1997 was  partially
offset by the cash dividends paid to shareholders  on August 15, 1996,  November
15, 1996, and February 15, 1997 totalling  $155,000.  The decrease in equity was
also  offset by the  $42,000  decrease  in  unearned  shares of the ESOP and the
$20,000 decrease in unrealized loss on available-for-sale securities.

Results of Operations - Nine Months Ended March 31, 1997 As Compared To The Nine
Months Ended March 31, 1996

Performance  summary.  Net earnings  increased  $81,000 to $376,000 for the nine
months  ended March 31, 1997 from  $295,000  for the nine months ended March 31,
1996.  The  increase is  primarily  due to the  increase of $614,000 in interest
income,  a $9,000  decrease  in  interest  expense,  and a $58,000  increase  in
noninterest  income.  This was  partially  offset by the $294,000  one-time SAIF
assessment  included in the $517,000 increase in non-interest  expense.  For the
nine months  ended March 31, 1997 the  annualized  return on average  assets was
0.79%  compared to 0.71% for the nine months  ended  March 31,  1996,  while the
annualized  return on average  equity was 4.76% for the nine months  ended March
31,  1997  compared  to 7.69% for the nine  months  ended  March 31,  1996.  The
decrease in the  annualized  return on average  equity is due to the increase in
stockholders' equity from the conversion in March of 1996.

Net interest income.  Net interest income increased $623,000 to $1.8 million for
the nine months ended March 31, 1997 from $1.2 million for the nine months ended
March 31, 1996.  The  increase is  primarily  due to the increase of $614,000 in
interest  income to $3.7  million for the nine months  ended March 31, 1997 from
$3.1  million  for the nine  months  ended  March  31,  1996.  Interest  expense
decreased $9,000 when comparing the nine months ended March 31, 1997 to the nine
months ended March 31, 1996.

For the nine months ended March 31, 1997 the average  yield on  interest-earning
assets was 8.24% compared to 7.75% for the nine months ended March 31, 1996. The
increase in the average  yield on  interest-earning  assets can be attributed to
the increase in loans  receivable;  particularly  commercial  loans. The average
cost of  interest-bearing  liabilities was 5.14% for the nine months ended March
31,  1997  compared  to 5.20% for the nine  months  ended  March 31,  1996.  The
decrease in average cost of  interest-bearing  liabilities  can be attributed to
the increase in transaction  and savings  accounts,  which have a lower interest
rate,  as a ratio of total  deposits.  The average  balance of  interest-earning
assets  increased $16.7 million to $60.2 million for the nine months ended March
31, 1997 from $53.5  million for the nine months  ended March 31,  1996.  During
this same period, the average balance of interest-bearing  liabilities increased
$384,000 to $49.2  million  for the nine months  ended March 31, 1997 from $48.8
million for the nine months ended March 31, 1996. 
<PAGE>


Due  primarily  to the  increase in yield on the  interest-earning  assets,  the
average  interest rate spread was 3.10% for the nine months ended March 31, 1997
compared to 2.55% for the nine  months  ended  March 31,  1996.  The average net
interest margin (annualized net interest income divided by total average assets)
was 3.85% for the nine months  ended  March 31,  1997  compared to 2.89% for the
nine months ended March 31, 1996.

Provision for loan loss.  Provision for loan loss  increased  $13,000 to $25,000
for the nine months  ended March 31, 1997 from $12,000 for the nine months ended
March 31, 1996.  The increase is primarily  due to a special  provision  made in
January  1997 as a result  of a gain on a  foreclosed  property  which  totalled
$15,000. The regular provision for loan loss expense decreased $2,000 to $10,000
for the nine months  ended March 31, 1997 from $12,000 for the nine months ended
March 31, 1996.

Noninterest  income.  Noninterest  income increased  $58,000 to $196,000 for the
nine months  ended March 31, 1997 from  $139,000 for the nine months ended March
31, 1996. The $26,000  increase in service  charges and fees is primarily due to
the increase in overdraft  fees when  comparing  the nine months ended March 31,
1997 to the nine  months  ended  March 31,  1996 as a result  of more  stringent
guidelines on overdrawn accounts.  The $30,000 increase in insurance commissions
to $62,000 for the nine months  ended March 31, 1997 from $32,000 for the period
ended  March 31,  1996 is a result of the  increased  sales of credit  insurance
products on the loan portfolio. The $36,000 increase in other noninterest income
is primarily due to the increase in gains on real estate sold when comparing the
nine months ended March 31, 1997 to the nine months ended March 31, 1996.  These
increases were offset by a $1,000  decrease in loan fees and a $32,000  decrease
in gains from the sale of available-for-sale  securities when comparing the nine
months ended March 31, 1997 to the nine months ended March 31, 1996.

Noninterest expense.  Noninterest expense increased $517,000 to $1.4 million for
the nine months  ended March 31, 1997 from  $876,000  for the nine months  ended
March 31, 1996.  The  $273,000  increase in SAIF  deposit  insurance  premium is
primarily due to the $294,000 one-time SAIF assessment. Compensation and benefit
expense increased  $126,000 to $545,000 for the nine months ended March 31, 1997
from  $419,000  for the nine  months  ended  March 31,  1996.  The  increase  in
compensation is partially due to an $18,000  increase in fees paid to the credit
insurance  brokers to $37,000  for the nine  months  ended  March 31,  1997 from
$18,000 for the nine months ended March 31, 1996 as a result of increased credit
insurance sales.  Also there were normal salary increases and increases in other
employee  benefits  totalling  $108,000 which includes a $46,000 expense for the
recognition  and  retention  plan which was  ratified  on October 15, 1996 and a
$42,000 expense for the ESOP. Other noninterest  expense  increased  $130,000 to
$324,000  for the nine months  ended March 31, 1997 from  $194,000  for the nine
months  ended March 31, 1996  primarily as a result of the increase in operating
costs since the formation of Washington  Bancorp including a $27,000 increase in
the fees paid for  auditing  and  accounting  services,  a $16,000  increase  in
advertising  expense, and a $12,000 increase in attorney fees paid. Property tax
expense has increased $7,000 to $19,000 for the nine months ended March 31, 1997
from $12,000 for the nine months ended March 31, 1996. Also,  telephone  expense
increased $9,000,  postage and delivery expense  increased  $7,000,  and service
fees for electronic  banking  products  increased $5,000 when comparing the nine
months ended March 31, 1997 to the nine months ended March 31, 1996.         

Results of  Operations  - Three  Months  Ended March 31, 1997 As Compared To The
Three Months Ended March 31, 1996 Performance  summary.  Net earnings  increased
$97,000 to $211,000 for the three months ended March 31, 1997 from  $114,000 for
the three  months ended March 31,  1996.  The  increase is primarily  due to the
increase  of  $233,000  in  interest  income  and  an  increase  of  $10,000  in
noninterest  income.  This was  partially  offset by an  increase  of $26,000 in
interest  expense,  a $16,000  increase in  provision  for loan loss,  a $34,000
increase  in  noninterest  expense  and an  increase  of  $69,000  in income tax
expense.  For the three  months  ended March 31, 1997 the  annualized  return on
average  assets was 1.30%  compared to .81% for the three months ended March 31,
1996,  while the  annualized  return on  average  equity was 7.98% for the three
months  ended March 31, 1997  compared to 8.88% for the three months ended March
31, 1996.

Net interest income.  Net interest income increased $207,000 to $636,000 for the
three months ended March 31, 1997 from $429,000 for the three months ended March
31, 1996.  The increase is primarily due to the increase of $233,000 in interest
income to $1.2  million  for the three  months  ended  March 31,  1997 from $1.0
million for the three months ended March 31, 1996.  Interest  expense  increased
$26,000 to $628,000 for the three months ended March 31, 1997 from  $602,000 for
the three months ended March 31, 1996.
<PAGE>



For the three months ended March 31, 1997 the average yield on  interest-earning
assets was 8.23%  compared to 7.72% for the three  months  ended March 31, 1996.
The increase in average  yield on  interest-earning  assets can be attributed to
the increase in loans  receivable;  particularly  commercial  loans. The average
cost of interest-bearing  liabilities was 4.97% for the three months ended March
31,  1997  compared to 4.99% for the three  months  ended  March 31,  1996.  The
decrease in average cost of  interest-bearing  liabilities  can be attributed to
the increase in transaction  and savings  deposits,  which have a lower interest
rate, as a percentage of total deposits. The average balance of interest-earning
assets  increased $8.0 million to $61.5 million for the three months ended March
31, 1997 from $53.5  million for the three months  ended March 31, 1996.  During
this same period, the average balance of interest-bearing  liabilities increased
$2.3  million to $50.6  million for the three  months  ended March 31, 1997 from
$48.3 million for the three months ended March 31, 1996.

Due  primarily  to the  increase in yield on the  interest-earning  assets,  the
average interest rate spread was 3.26% for the three months ended March 31, 1997
compared to 2.73% for the three  months  ended March 31,  1996.  The average net
interest margin (annualized net interest income divided by total average assets)
was 3.92% for the three  months  ended March 31, 1997  compared to 2.91% for the
three months ended March 31, 1996.

Provision for loan loss.  Provision for loan loss  increased  $16,000 to $19,000
for the three months ended March 31, 1997 from $3,000 for the three months ended
March 31, 1996.  The increase is primarily  due to a special  provision  made in
January  1997 as a result  of a gain on a  foreclosed  property  which  totalled
$15,000.  The regular provision for loan loss expense increased $1,000 to $4,000
for the three months ended March 31, 1997 from $3,000 for the three months ended
March 31, 1996 as a result of the increase in total loans receivable.

Noninterest  income.  Noninterest  income  increased  $10,000 to $67,000 for the
three  months ended March 31, 1997 from $57,000 for the three months ended March
31, 1996. The $8,000 increase in insurance  commissions to $14,000 for the three
months ended March 31, 1997 from $8,000 for the period ended March 31, 1996 is a
result  of the  increased  sales  of  credit  insurance  products  on  the  loan
portfolio.  Other noninterest  income increased $20,000 primarily as a result of
an increase in gains on real estate sold when  comparing  the three months ended
March 31, 1997 to the three  months ended March 31,  1996.  Loan fees  decreased
$4,000 as a result of a decline in mortgage loan refinancing or secondary-market
originating and gains from the sale of  available-for-sale  securities decreased
$14,000 when comparing the three months ended March 31, 1997 to the three months
ended March 31, 1996.  The gains on the sale of  securities  in the three months
ended March 31, 1996 were a result of an  opportunity to sell available for sale
securities.

Noninterest  expense.  Noninterest expense increased $34,000 to $338,000 for the
three months ended March 31, 1997 from $304,000 for the three months ended March
31, 1996. Compensation and benefit expense increased $46,000 to $185,000 for the
three months ended March 31, 1997 from $139,000 for the three months ended March
31, 1996. The increase represents normal salary increases,  a $6,000 increase in
fees paid to the credit  insurance  brokers to $8,000 for the three months ended
March 31,  1997 from  $2,000 for the three  months  ended  March 31,  1996,  and
increases  in other  employee  benefits  including  the $22,000  expense for the
Recognition  and  Retention  Plan  approved on October 15, 1996 at the Company's
annual meeting.  Other noninterest  expense increased $15,000 to $96,000 for the
three  months ended March 31, 1997 from $81,000 for the three months ended March
31,  1996 as a result of the $3,000  increase  in cost of real  estate sold when
comparing  the three months ended March 31, 1997 to the three months ended March
31,  1996,  as well as a $5,000  increase  in  professional  services,  a $6,000
increase in miscellaneous  expenses and a $1,000 increase in legal services when
comparing  the three months ended March 31, 1997 to the three months ended March
31, 1996.

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 March
31, 1997, the Bank's liquidity ratio was 5.37%.
<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  March  31,  1997,  the  Bank  had  outstanding
commitments to extend credit which amounted to $405,000.



<PAGE>




                           Part II - Other Information


Item 1.  Legal Proceedings.

         None

Item 2.  Changes in Securities.

         None

Item 3.  Defaults Upon Senior Securities.

         None

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

         None

Item 5.  Other Information.

         At March 31, 1997 the ESOP held 52,602 shares of the  Company's  common
         stock,  5,303 of which were released for  allocation  and the remaining
         47,299  were  unreleased   (unearned)  shares.  The  47,299  unreleased
         (unearned) shares had a fair market value of approximately  $674,010 at
         March 31, 1997.

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     May 7, 1997                     /s/ Stan Carlson
         -----------                     ---------------------------------------
                                         Stan Carlson, President and Chief
                                         Executive Officer

Date     May 7, 1997                     /s/ Leisha A. Linge
         -----------                     ---------------------------------------
                                         Leisha A. Linge, Controller