FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


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

     For the quarterly period ended December 31, 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 0-25076

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

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

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

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

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

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 651,133 shares outstanding as to February 10, 1998

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


                                     INDEX

Part I.  Financial Information

         Item 1.  Consolidated Financial Statements

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

                  Unaudited Consolidated Statements of Income for the
                    three months ended December 31, 1997 and 1996 and
                    for the six months ended December 31, 1997 and 1996

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

                                                                                December 31,           June 30,
                                                                                    1997                1997*
                                                                                ---------------------------------
                                                                                 (unaudited)
<S>                                                                             <C>                  <C>   
ASSETS
Cash and cash equivalents:
         Interest-bearing...............................................        $  2,046,535         $    574,736
         Noninterest-bearing ...........................................             367,647              233,069
                                                                                ---------------------------------
                                                                                   2,414,182              807,805
Investment securities, available for sale ..............................           6,105,677            9,849,991
Loans receivable, net ..................................................          55,827,909           52,530,153
Accrued interest receivable ............................................             568,778              568,228
Federal Home Loan Bank stock ...........................................             518,800              465,600
Premises and equipment, net ............................................             543,654              550,231
Foreclosed real estate .................................................                --                   --
Other assets ...........................................................             112,138              103,026
                                                                                ---------------------------------
         Total assets ..................................................        $ 66,091,138         $ 64,875,034
                                                                                =================================
LIABILITIES
Deposits ...............................................................        $ 44,471,416         $ 44,754,328
Borrowed funds .........................................................           9,844,772            8,651,765
Advance from borrowers for taxes and insurance .........................             178,620              204,677
Accrued expenses and other liabilities .................................             537,683              519,441
                                                                                ---------------------------------
         Total liabilities .............................................          55,032,491           54,130,211
                                                                                ---------------------------------

COMMITMENTS AND CONTINGENCIES
Redeemable common stock held by Employee Stock Ownership Plan 
  (the "ESOP") .........................................................              78,066               69,392
                                                                                ---------------------------------

STOCKHOLDERS' EQUITY Common stock:
         Common stock ..................................................               6,575                6,575
         Additional paid-in capital ....................................           6,163,563            6,150,032
Retained earnings ......................................................           5,524,313            5,292,419
Unrealized gain (loss) on investment securities, available for sale, 
  net of income taxes ..................................................               3,641               (3,307)
                                                                                ---------------------------------
                                                                                  11,698,092           11,445,719
Less:
Cost of 6,386 common shares acquired for treasury ......................             (85,827)             (85,827)
Deferred compensation ..................................................            (109,618)            (151,739)
Maximum cash obligation related to ESOP shares .........................             (78,066)             (69,392)
Unearned ESOP shares ...................................................            (444,000)            (463,330)
                                                                                ---------------------------------
        Total stockholders' equity .....................................          10,980,581           10,675,431
                                                                                ---------------------------------
         Total liabilities and stockholders' equity.....................        $ 66,091,138         $ 64,875,034
                                                                                =================================
</TABLE>

*Condensed from audited financial statements.

See Notes to Consolidated Financial Statements.
<PAGE>


Washington Bancorp and Subsidiary
Unaudited Consolidated Statements of Income
<TABLE>
                                                                       Three months ended                   Six months ended
                                                                          December 31,                         December 31,
                                                                   ---------------------------         -----------------------------
                                                                       1997             1996              1997               1996
                                                                   -----------------------------------------------------------------
<S>                                                                <C>              <C>                <C>                <C>   
Interest income:
     Loans receivable:
       First mortgage loans ................................       $  905,277       $  867,905         $1,781,304         $1,684,667
       Consumer and other loans ............................          281,128          156,382            544,646            294,049
     Investment securities:
       Taxable .............................................          125,757          235,065            265,621            467,440
       Non-taxable .........................................            5,420            5,433             10,733             10,867
                                                                   -----------------------------------------------------------------
              Total interest income ........................        1,317,582        1,264,785          2,602,304          2,457,023
                                                                   -----------------------------------------------------------------
 Interest expense:
       Deposits ...........................................           551,598          552,349          1,100,275          1,104,851
       Borrowed funds .....................................           133,502           88,727            266,332            163,201
                                                                   -----------------------------------------------------------------
              Total interest expense .......................          685,100          641,076          1,366,607          1,268,052
                                                                   -----------------------------------------------------------------
              Net interest income ..........................          632,482          623,710          1,235,697          1,188,971
Provision for loan losses ..................................           28,000            3,000             53,000              6,000
                                                                   -----------------------------------------------------------------
               Net interest income after provision
                  for loan loss ............................          604,482          620,710          1,182,697          1,182,971
                                                                   -----------------------------------------------------------------
Noninterest income:
     Security gains (losses), net ..........................               --               --                 --                388
     Loan originations and commitments .....................            2,779            2,594              5,304              4,845
     Bank service charges ..................................           42,836           26,373             82,098             57,353
     Insurance commissions .................................           36,817           34,116             45,709             47,511
     Other .................................................              861            9,642              2,315             19,207
                                                                   -----------------------------------------------------------------
               Total noninterest income ....................           83,293           72,725            135,426            129,304
                                                                   -----------------------------------------------------------------
Noninterest expense:
    Compensation and benefits ..............................          201,600          199,853            408,351            359,566
    Occupancy and equipment ................................           36,792           36,857             74,936             71,905
    SAIF deposit insurance .................................           11,706           30,435             23,882            357,153
    Data processing ........................................           17,952           23,901             39,211             37,561
    Other ..................................................          146,691           97,649            237,698            228,158
                                                                   -----------------------------------------------------------------
               Total noninterest expense ...................          414,741          388,695            784,078          1,054,343
                                                                   -----------------------------------------------------------------
               Income before income taxes ..................          273,034          304,740            534,045            257,932
 Income tax ................................................           73,804          109,991            177,595             92,545
                                                                   -----------------------------------------------------------------
               Net income ..................................       $  199,230       $  194,749         $  356,450         $  165,387
                                                                   =================================================================
                                                                                                                          
Earnings per common share:
    Basic ..................................................       $     0.33       $     0.32         $     0.59         $     0.27
                                                                   =================================================================
    Diluted ................................................       $     0.32       $     0.32         $     0.57         $     0.27
                                                                   =================================================================
Dividends per common share .................................       $     0.12       $     0.10         $     0.22         $     0.18
                                                                   =================================================================
Weighted average common shares for:
     Basic earnings per share ..............................          606,249          608,712            605,766            608,170
                                                                   =================================================================
     Diluted earnings per share ............................          624,028          610,956            622,604            609,060
                                                                   =================================================================
</TABLE>

See Notes to Consolidated Financial Statements.
<PAGE>


Washington Bancorp and Subsidiary
Unaudited Consolidated Statements of Cash Flows
<TABLE>
                                                                                       Six months ended
                                                                                           December 31,
                                                                                 ----------------------------
                                                                                    1997             1996
                                                                                 ------------    ------------
<S>                                                                              <C>             <C>  
Cash Flows from Operating Activities
  Net income .................................................................   $    356,450    $    165,387
Adjustments to reconcile net income to net cash provided by operating 
   activities:
   Amortization of premiums and discounts on debt securities .................         (1,821)         36,392
   Provision for loan loss ...................................................         53,000           6,000
   (Gain) on sale of investment securities ...................................             --            (388)
   (Gain) on sale of foreclosed real estate ..................................             --         (13,585)
   Depreciation ..............................................................         28,015          28,285
   Compensation under stock award ............................................         42,120              --
   ESOP contribution expense .................................................         32,861          29,292
   Deferred income taxes .....................................................        (31,383)        (16,798)
   (Increase) in accrued interest receivable .................................           (550)        (59,407)
   (Increase) decrease in other assets .......................................         (9,112)         47,216
   Increase in accrued expenses and other liabilities ........................         45,457          55,988
                                                                                 ------------    ------------
                           Net cash provided by operating activities .........        515,037         278,382
                                                                                 ------------    ------------

Cash Flows from Investing Activities Available for sale securities:
   Sales .....................................................................             --             911
   Maturities and calls ......................................................      6,007,252       8,593,648
   Purchases .................................................................     (2,250,000)     (5,145,000)
Purchase of Federal Home Loan Bank Stock .....................................        (53,200)        (64,100)
Loans made to customers, net .................................................     (3,350,756)     (4,639,007)
Purchase of premises and equipment ...........................................        (21,438)        (14,156)
                                                                                 ------------    ------------
                           Net cash (used in) investing activities ...........        331,858      (1,267,704)
                                                                                 ------------    ------------

Cash Flows from Financing Activities
  Net increase (decrease) in deposits ........................................       (282,912)      1,471,575
  Proceeds from Federal Home Loan Bank advances ..............................     35,700,000      41,900,000
  Principal payments on Federal Home Loan Bank advances ......................    (34,506,993)    (39,750,514)
  Net (decrease) in advances from borrowers for payment of taxes 
     and insurance ...........................................................        (26,057)        (38,543)
  Payment of cash dividends ..................................................       (124,556)        (96,787)
                                                                                 ------------    ------------
                           Net cash provided by financing activities .........        759,482       3,485,731
                                                                                 ------------    ------------
                           Net increase in cash and cash equivalents .........      1,606,377       2,496,409
 
Cash and cash equivalents:
  Beginning ..................................................................        807,805       1,903,352
                                                                                 ------------    ------------
  Ending .....................................................................   $  2,414,182    $  4,399,761
                                                                                 ============    ============

 Supplemental Disclosures of Cash Flow Information
   Cash payments for:
     Interest paid to depositors .............................................   $    916,770    $    872,644
     Interest paid on other obligations ......................................        266,332         163,201
     Income taxes, net of refunds ............................................        125,400          78,100

Supplemental Schedule of Noncash Investing and Financing Activities:
     Transfer from loans to foreclosed real estate ...........................             --         106,289
     Contract sales of foreclosed real estate ................................             --          90,700

</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>


Washington Bancorp and Subsidiary
Notes to Consolidated Financial Statements



Principles of consolidation.  The accompanying consolidated financial statements
include the accounts of  Washington  Bancorp  ("Washington"  or the  "Company"),
Washington  Federal Savings Bank (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.

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

Recapture of Bad Debt Reserves.  Prior to the enactment,  on August 20, 1996, of
the Small  Business Job  Protection  Act of 1996 (the "1996  Act"),  for federal
income tax purposes,  thrift  institutions  such as 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 an
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.

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


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

Because Washington Bancorp has potential common stock outstanding (stock options
to employees),  Washington is required to present basic and diluted earnings per
share ("EPS"). Washington has granted options to directors and certain employees
to purchase 65,751 shares of the Company's  common stock to expire no later than
October 15, 2006.

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

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

Redeemable  common stock held by ESOP.  The  Company's  maximum cash  obligation
related to these shares is classified outside  stockholders'  equity because the
shares are not  readily  traded and could be put to the  Company  for cash.  The
maximum cash obligation represents the approximate market value of the allocated
ESOP shares at the end of the reporting period.

Regulatory capital  requirements.  Pursuant to the Financial Information Reform,
Recovery and Enforcement Act of 1989 ("FIRREA"),  savings institutions must meet
three  separate  minimum  capital-to-asset  requirements.  The  following  table
summarizes,  as of December 31, 1997 the capital  requirements of the Bank under
FIRREA  and its  actual  capital  ratios.  As of  December  31,  1997  the  Bank
substantially exceeded all current regulatory capital requirement standards.


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

Tangible Capital:
         Capital Level .......................           $9,105           13.80%
         Requirement .........................              990            1.50%
                                                         ------           ------
         Excess ..............................           $8,115           12.30%
                                                         ======           ======

Core Capital:
         Capital Level .......................           $9,105           13.80%
         Requirement .........................            1,980            3.00%
                                                         ------           ------
         Excess ..............................           $7,125           10.80%
                                                         ======           ======


Risk-Based Capital:
         Capital Level .......................           $9,338           20.57%
         Requirement .........................            3,632            8.00%
                                                         ------           ------
         Excess ..............................           $5,706           12.57%
                                                         ======           ======
<PAGE>



Part I - Financial Information

Item 2.  Management's Discussion and Analysis

Forward-Looking Statements

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

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

General

Washington Bancorp  ("Washington" or the "Company") is an Iowa corporation which
was organized in October 1995 by Washington  Federal  Savings Bank  ("Washington
Federal" or 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.

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.  In
addition,  as of January 15, 1998,  the Rubio  Savings  Bank of Brighton,  Iowa,
became a wholly-owned  subsidiary of Washington Bancorp. Rubio will operate as a
completely separate state chartered  financial  institution with its own charter
and board of  directors.  As of December 31, 1997,  Rubio  Savings Bank reported
assets of $22.6  million  compared  to $22.3  million as of December  31,  1996.
Deposits  of both  institutions  are insured by the  Federal  Deposit  Insurance
Corporation to the full extent permitted by law and regulation.

Washington  attracts  deposits from the general  public in its local market 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  were  approved  and have since
expired.  The purpose of the applications was to preserve  potential  Washington
Federal  branching  opportunities.  If future  applications  are  submitted,  no
assurance can be given that the  applications  will satisfy the  legislation nor
that Washington Federal will open any branch offices.

Financial Condition

Total  assets.  Total  consolidated  assets  increased  $1.2  million from $64.9
million at June 30, 1997 to $66.1 million at December 31, 1997. The increase was
primarily due to a $3.3 million  increase in loans receivable and a $1.6 million
increase  in cash  and  cash  equivalents  partially  offset  by a $3.7  million
decrease in investment  securities.  The increase was primarily funded by a $1.2
million  increase in Federal Home Loan Bank  advances and the net proceeds  from
the reduction in investment securities.

Loans  receivable.  Loans  receivable,  net  increased  $3.3  million from $52.5
million at June 30, 1997 to $55.8 million at December 31, 1997. This increase is
primarily due to increased loan demand in Washington's market area. Washington's
non-performing  assets were $38,000 or .06% of total assets at December 31, 1997
as compared to $229,000 or .35% of total assets at June 30, 1997.
<PAGE>


Investment securities. Available-for-sale securities decreased $3.7 million from
$9.8  million  at June 30,  1997 to $6.1  million at  December  31,  1997.  This
decrease  is  primarily  due to the call of $4.5  million in  government  agency
securities  and the  maturity  of $1.5  million in U.S.  Treasuries,  government
agency and  corporate  securities.  The funds were  primarily  used to fund loan
activity. The portfolio of available-for-sale  securities is comprised primarily
of investment  securities carrying fixed interest rates. The fair value of these
securities  is subject to changes  in  interest  rates.  The fair value of these
securities  was more on  December  31, 1997 than their  carrying  value due to a
decline in interest rates since the purchase date of the securities.  Therefore,
the total balance of available for sale securities  includes the gross effect of
the unrealized gain.

Deposits.  Deposits  decreased  $283,000  from $44.8 million at June 30, 1997 to
$44.5  million at December  31,  1997.  Interest  credited to customer  accounts
totalled  $887,000,   while  withdrawals  exceeded  deposits  by  $1.2  million.
Transaction  and savings  deposits  increased as a percentage of total  deposits
from  $14.3  million  or  32.0% at June 30,  1997 to $14.3  million  or 32.2% at
December  31,  1997.  As a result of the  increase  in  transaction  and savings
deposits,  certificates  of deposit  decreased as a percentage of total deposits
from  $30.4  million  or  68.0% at June 30,  1997 to $30.1  million  or 67.8% at
December 31, 1997.

FHLB Borrowings.  The total principal  balance in advances from the Federal Home
Loan Bank of Des Moines (FHLB)  increased $1.2 million from $8.6 million at June
30, 1997 to $9.8 million at December 31, 1997.  The increase is primarily due to
the increased need to borrow to fund loan activity because of the increased loan
demand as well as the decrease in total  deposits.  The borrowings are primarily
long-term advances.

Advances from borrowers for taxes and  insurance.  The total balance in advances
from borrowers for taxes and insurance  decreased  $26,000 from $205,000 at June
30, 1997 to $179,000 at December 31, 1997.  The decrease is primarily due to the
reimbursement of escrow surplus pursuant to the annual escrow analysis done each
December.  

Total  stockholders'  equity.  Total  stockholders'  equity increased
$305,000  from $10.7  million at June 30, 1997 to $11.0  million at December 31,
1997. The increase is primarily due to net income of $355,000,  the amortization
of deferred  compensation  under the  Recognition and Retention Plan of $42,000,
the net  unrealized  gain in  available  for sale  securities  of $7,000 and the
allocation of shares in the Employee Stock  Ownership Plan of $24,000  partially
offset by the cash dividend paid to stockholders totalling $124,000.

Results of Operations - Three Months Ended  December 31, 1997 As Compared To The
Three Months Ended December 31, 1996

Performance  summary.  Net earnings  increased  $4,000 to $199,000 for the three
months ended December 31, 1997 from $195,000 for the three months ended December
31, 1996.  The increase is  primarily  due to an increase in interest  income of
$53,000,  a  decrease  in income  tax  expense of  $36,000  and an  increase  in
noninterest  income of  $10,000,  partially  offset by an  increase  in interest
expense of $44,000,  an increase in provision  for loan loss of $25,000,  and an
increase in noninterest  expense of $26,000.  For the three months  December 31,
1997 the annualized return on average assets was 1.21% compared to 1.22% for the
three months ended  December 31, 1996,  while the  annualized  return on average
equity was 7.31% for the three months ended  December 31, 1997 compared to 7.36%
for the three months ended December 31, 1996.

Net interest  income.  Net interest income  increased $8,000 to $632,000 for the
three  months ended  December 31, 1997 from  $624,000 for the three months ended
December 31, 1996.  The increase is primarily  due to the increase of $52,000 in
interest  income to $1,317,000 for the three months ended December 31, 1997 from
$1,265,000 for the three months ended December 31, 1996 offset by an increase in
interest  expense of $44,000 to $685,000 for the three months ended December 31,
1997 from $641,000 for the three months ended December 31, 1996.
<PAGE>


For  the  three   months  ended   December   31,  1997  the  average   yield  on
interest-earning  assets was 8.20%  compared to 8.28% for the three months ended
December 31, 1996. The average cost of  interest-bearing  liabilities  was 5.18%
for the three  months ended  December  31, 1997  compared to 5.14% for the three
months ended December 31, 1996. The average  balance of interest  earning assets
increased  $3.1 million to $64.2 million for the three months ended December 31,
1997 from $61.1  million for the three  months ended  December 31, 1996.  During
this same period, the average balance of interest-bearing  liabilities increased
$3.0 million to $52.9 million for the three months ended  December 31, 1997 from
$49.9 million for the three months ended December 31, 1996.

Due to the decrease in yield on the interest-earning  assets and the increase in
rates paid on the interest-bearing liabilities, the average interest rate spread
was 3.03% for the three months ended December 31, 1997 compared to 3.14% for the
three months ended December 31, 1996. The average net interest  margin was 3.94%
for the three  months ended  December  31, 1997  compared to 4.08% for the three
months ended December 31, 1996.

Provision for loan loss.  Provision for loan loss  increased  $25,000 to $28,000
for the three  months  ended  December 31, 1997 from $3,000 for the three months
ended  December  31, 1996.  The increase is primarily  due to an increase in the
size of the loan portfolio.  Washington's loan portfolio  consists  primarily of
residential   mortgage  loans  and  it  has  experienced  a  minimal  amount  of
charge-offs  in the past three years.  The allowance for loan losses of $254,000
or .46% of loans  receivable,  net at December 31, 1997  compares to $217,000 or
 .46% of loans receivable,  net at December 31, 1996. The allowance for loan loss
as a  percentage  of  non-performing  assets was 668.62% at December  31,  1997,
compared to 1354.93% at December 31, 1996.

Noninterest  income.  Noninterest  income  increased  $10,000 to $83,000 for the
three  months  ended  December  31, 1997 from $73,000 for the three months ended
December 31, 1996.  The increase is primarily due to an increase in bank service
fees of $17,000 and an increase in insurance  commissions  of $3,000,  partially
offset by a decrease in other noninterest income of $9,000.

Bank service charges and fees increased  $17,000 to $43,000 for the three months
ended  December 31, 1997 from  $26,000 for the three  months ended  December 31,
1996.  The increase is primarily  due to an increase in overdraft  fee income of
$11,000 to $30,000 for the three months ended December 31, 1997 from $19,000 for
the three months ended  December 31, 1996, an increase in checking  account fees
of $3,000 to $5,000 for the three months ended December 31, 1997 from $2,000 for
the three months ended  December 31, 1996 and an increase in late fees collected
of $1,000 to $4,000 for the three months ended December 31, 1997 from $3,000 for
the three months ended December 31, 1996.

Insurance  commission  income  increased  $3,000 to $37,000 for the three months
ended  December 31, 1997 from  $34,000 for the three  months ended  December 31,
1996  primarily due to an increase in the volume of the sales of credit life and
disability products.

Other  noninterest  income decreased $9,000 to $1,000 for the three months ended
December  31, 1997 from  $10,000 for the three  months  ended  December 31, 1996
primarily due to a decrease in the gains  realized on  foreclosed  properties in
1997 when compared to the gains realized on foreclosed properties in 1996.

Noninterest  expense.  Noninterest expense increased $26,000 to $415,000 for the
three  months ended  December 31, 1997 from  $389,000 for the three months ended
December  31,  1996.  The  increase  is  primarily  due to an  increase in other
noninterest  expense of $49,000 and an increase in compensation  and benefits of
$2,000, offset by a decrease in SAIF deposit premiums of $18,000 and an decrease
in data processing of $6,000.
<PAGE>


Other  noninterest  expense  increased  $49,000 to $147,000 for the three months
ended  December 31, 1997 from  $98,000 for the three  months ended  December 31,
1996 primarily due to an increase in auditing and accounting  fees of $12,000 to
$21,000 for the three months  ended  December 31, 1997 from $9,000 for the three
months  ended  December  31,  1996 due to the  timing  of bill  payments  and an
increase in checking  account  expense of $8,000 to $10,000 for the three months
ended December 31, 1997 from $2,000 for the three months ended December 31, 1996
due to a new checking account program. There was also an increase in supplies of
$7,000 to $14,000 for the three months  ended  December 31, 1997 from $7,000 for
the three  months ended  December 31, 1996,  an increase in postage of $2,000 to
$13,000 for the three months ended  December 31, 1997 from $11,000 for the three
months  ended  December  31, 1996 and an increase  in  advertising  of $2,000 to
$19,000 for the three months  ended  December 31, 1997 from $17,00 for the three
months ended  December 31, 1996 due to the  promotion of a new checking  account
and other bank  products.  An increase in other  professional  fees of $5,000 to
$9,000 for the three  months  ended  December 31, 1997 from $4,000 for the three
months ended  December 31, 1996 was due to the printing of the annual report and
fees incurred as a result of being a public company.  There was also an increase
in fees paid to Federal Home Loan Bank of $4,000 to $10,000 for the three months
ended December 31, 1997 from $6,000 for the three months ended December 31, 1996
and an increase in appraisal expenses for loans retained in the Bank's portfolio
of $3,000 to $3,000 for the three  months  ended  December  31,  1997 due to the
timing of bill payments.

Compensation  and  benefits  increased  $2,000 to $202,000  for the three months
ended  December 31, 1997 from  $200,000 for the three months ended  December 31,
1996 due to an increase in employee  compensation of $11,000 to $102,000 for the
three  months  ended  December  31, 1997 from $91,000 for the three months ended
December 31, 1996 due to normal  salary  increases and an increase in the number
of full time equivalent  employees.  There was also an increase in incentives of
$3,000 to $4,000 for the three months ended December 31,1997 from $1,000 for the
three  months  ended  December  31,  1996 due to  incentives  paid  for  product
promotions,  an  increase  in payroll  taxes of $3,000 to $10,000  for the three
months ended  December 31, 1997 from $7,000 for the three months ended  December
31,  1996 and an  increase  in  insurance  premiums of $1,000 to $10,000 for the
three  months  ended  December  31, 1997 from $9,000 for the three  months ended
December 31, 1996.  The  increases  were  partially  offset by a decrease in the
expense  for the  Recognition  and  Retention  Plan of $9,000 to $16,000 for the
three  months  ended  December  31, 1997 from $25,000 for the three months ended
December 31, 1996  primarily due to the  amortization  of the expense based upon
the fair value of the shares on the date of the grant allocated over a five-year
term of  vesting,  a decrease  in the ESOP  expense of $5,000 to $16,000 for the
three  months  ended  December  31, 1997 from $21,000 for the three months ended
December 31, 1996 and a decrease in directors' compensation of $2,000 to $15,000
for the three months  ended  December 31, 1997 from $17,000 for the three months
ended December 31, 1996.

SAIF  deposit  insurance  premiums  decreased  $18,000 to $12,000  for the three
months ended  December 31, 1997 from $30,000 for the three months ended December
31, 1996  primarily  due to the decrease in the annual  assessment  rate to 6.48
basis points from 23 basis points charged for the protection of FDIC  insurance.
Data processing  decreased $6,000 to $18,000 for the three months ended December
31, 1997 from $24,000 for the three months ended December 31, 1996 primarily due
to the timing of bill payments.

Income tax  expense.  Income tax  expense  decreased  $36,000 to $74,000 for the
three  months ended  December 31, 1997 from  $110,000 for the three months ended
December  31,  1996  primarily  due to the  treatment  of  the  Recognition  and
Retention Plan market value deductibility for income tax purposes.

Results of  Operations - Six Months  Ended  December 31, 1997 As Compared To The
Six Months Ended December 31, 1996 

Performance  summary.  Net earnings  increased  $191,000 to $356,000 for the six
months ended  December 31, 1997 from $165,000 for the six months ended  December
31, 1996. The increase is primarily due to a decrease in noninterest  expense of
$270,000  primarily  due to the one-time SAIF  assessment in September  1996, an
increase in interest income of $145,000 and an increase in noninterest income of
$6,000,  partially  offset by an  increase in  interest  expense of $98,000,  an
increase in  provision  for loan loss of $47,000,  and an increase in income tax
expense of $85,000.  For the six months ended  December 31, 1997 the  annualized
return on average  assets was 1.09%  compared to 0.53% for the six months  ended
December 31, 1996,  while the annualized  return on average equity was 6.59% for
the six months  ended  December  31,  1997  compared to 3.13% for the six months
ended December 31, 1996.

Net interest income. Net interest income increased $47,000 to $1,236,000 for the
six months  ended  December  31, 1997 from  $1,189,000  for the six months ended
December 31, 1996.  The increase is primarily due to the increase of $145,000 in
interest  income to $2,602,000  for the six months ended  December 31, 1997 from
$2,457,000  for the six months ended  December 31, 1996 offset by an increase in
interest  expense of $98,000 to $1,367,000 for the six months ended December 31,
1997 from $1,268,000 for the six months ended December 31, 1996.
<PAGE>


For the six months ended December 31, 1997 the average yield on interest-earning
assets was 8.14%  compared to 8.22% for the six months ended  December 31, 1996.
The average cost of  interest-bearing  liabilities  was 5.19% for the six months
ended  December 31, 1997 compared to 5.21% for the six months ended December 31,
1996. The average balance of  interest-earning  assets increased $4.2 million to
$63.9 million for the six months ended  December 31, 1997 from $59.7 million for
the six months ended  December 31,  1996.  During this same period,  the average
balance of interest-bearing  liabilities increased $4.2 million to $52.9 million
for the six months ended December 31, 1997 from $48.7 million for the six months
ended December 31, 1996.

Due to the decrease in yield on the interest-earning  assets and the decrease in
rates paid on the interest-bearing liabilities, the average interest rate spread
was 2.95% for the six months ended  December 31, 1997  compared to 3.01% for the
six months ended  December 31, 1996.  The average net interest  margin was 3.87%
for the six months ended  December 31, 1997 compared to 3.97% for the six months
ended December 31, 1996.

Provision for loan loss.  Provision for loan loss  increased  $47,000 to $53,000
for the six months ended  December 31, 1997 from $6,000 for the six months ended
December 31, 1996.  The increase is primarily  due to an increase in the size of
the  loan  portfolio.   Washington's  loan  portfolio   consists   primarily  of
residential   mortgage  loans  and  it  has  experienced  a  minimal  amount  of
charge-offs  in the past three years.  The allowance for loan losses of $254,000
or .46% of loans  receivable,  net at December 31, 1997  compares to $217,000 or
 .46% of loans receivable,  net at December 31, 1996. The allowance for loan loss
as a  percentage  of  non-performing  assets was 668.62% at December  31,  1997,
compared to 1354.93% at December 31, 1996.

Noninterest income.  Noninterest income increased $6,000 to $135,000 for the six
months ended  December 31, 1997 from $129,000 for the six months ended  December
31,  1996.  The  increase is  primarily  due an increase in bank service fees of
$25,000,  partially offset by a decrease in other noninterest  income of $17,000
and a decrease in insurance commissions of $2,000.

Bank service  charges and fees  increased  $25,000 to $82,000 for the six months
ended  December 31, 1997 from $57,000 for the six months ended December 31, 1996
primarily from an increase in overdraft fee income of $14,000 to $54,000 for the
six months  ended  December  31,  1997 from  $40,000  for the six  months  ended
December 31, 1996 due to more stringent  enforcement of the fee schedule.  There
was also an increase in checking  account fee income of $4,000 to $7,000 for the
six months  ended  December  31,  1997 from  $3,000 for the three  months  ended
December 31, 1996 due to a new checking  account program and an increase in late
payment  charges of $4,000 to $9,000 for the six months ended  December 31, 1997
from $5,000 for the six months ended December 31, 1996.

Other  noninterest  income decreased  $17,000 to $2,000 for the six months ended
December  31,  1997 from  $19,000  for the six months  ended  December  31, 1996
primarily due to a decrease in the gains  realized on  foreclosed  properties in
1997 when compared to the gains realized on foreclosed properties in 1996.

Insurance commission income decreased $2,000 to $46,000 for the six months ended
December  31,  1997 from  $48,000  for the six months  ended  December  31, 1996
primarily  due to a  decrease  in the  volume of the  sales of  credit  life and
disability products in the first three months..

Noninterest expense.  Noninterest expense decreased $270,000 to $784,000 for the
six months  ended  December  31, 1997 from  $1,054,000  for the six months ended
December 31, 1996. The decrease is primarily due to the decrease in SAIF deposit
premiums  of  $333,000,  partially  offset by an increase  in  compensation  and
benefits of $48,000,  an increase in other noninterest  expense of $10,000,  and
increase in occupancy  and  equipment  expense of $3,000 and an increase in data
processing of $1,000.
<PAGE>


SAIF deposit insurance premiums decreased $333,000 to $24,000 for the six months
ended December 31, 1997 from $357,000 for the six months ended December 31, 1996
primarily due to the $294,000  one-time SAIF  assessment and the decrease in the
annual assessment rate to 6.48 basis points from 23 basis points charged for the
protection of FDIC insurance.

Compensation and benefits increased $48,000 to $408,000 for the six months ended
December  31, 1997 from  $360,000  for the six months  ended  December  31, 1996
primarily due to an increase in the  Recognition  and Retention  Plan expense of
$17,000 to $42,000 for the six months  ended  December 31, 1997 from $25,000 for
the six months ended December 31, 1996, and an increase in employee compensation
of $14,000 to $214,000 for the six months ended  December 31, 1997 from $200,000
for the six months ended December 31, 1996 due to regular  salary  increases and
an increase in  full-time  equivalent  employees.  There was also an increase in
employee  incentives of $5,000 to $10,000 for the six months ended  December 31,
1997 from $5,000 for the six months ended  December  31, 1996 due to  incentives
paid for  product  promotions,  an  increase  in  employment  taxes of $4,000 to
$20,000 for the six months  ended  December  31,  1997 from  $16,000 for the six
months ended  December 31, 1996, an increase in employee  insurance  benefits of
$3,000 to $20,000 for the six months  ended  December  31, 1997 from $17,000 for
the six months  ended  December  31,  1996,  and an increase in ESOP  expense of
$2,000 to $32,000 for the six montsh  ended  December  31, 1997 from $30,000 for
the six months ended December 31, 1996.

Other noninterest expense increased $10,000 to $238,000 for the six months ended
December  31, 1997 from  $228,000  for the six months  ended  December  31, 1996
primarily  due to an increase in checking  account  expense of $8,000 to $10,000
for the six months ended  December 31, 1997 from $2,000 for the six months ended
December  31,  1996 due to a new  checking  account  program.  There was also an
increase in supplies of $8,000 to $24,000 for the six months ended  December 31,
1997 from  $16,000 for the six months ended  December  31, 1996,  an increase in
advertising of $6,000 to $39,000 for the six months ended December 31, 1997 from
$33,000 for the six months  ended  December  31, 1996 and an increase in postage
and  delivery of $4,000 to $24,000 for the six months  ended  December  31, 1997
from $20,000 for the six months ended  December 31, 1996 due to the promotion of
a new checking  account and other bank  products.  The increases  were partially
offset by a decrease  in  auditing  and account of $8,000 to $29,000 for the six
months ended  December  31, 1997 from $37,000 for the six months ended  December
31, 1996, a decrease in other miscellaneous  professional services incurred as a
result of being a public  company of $9,000 to $5,000  for the six months  ended
December 31, 1997 from $14,000 for the six months ended December 31, 1996, and a
decrease in legal fees of $1,000 to $9,000 for the six months ended December 31,
1997 from $10,000 for the six months ended December 31, 1996.

Occupancy and equipment  expense  increased $3,000 to $75,000 for the six months
ended  December 31, 1997 from $72,000 for the six months ended December 31, 1996
primarily  due to an  increase  in real  estate  tax  expense.  Data  processing
increased  $1,000 to $39,000  for the six months  ended  December  31, 1997 from
$38,000 for the six months ended December 31, 1996.

Income tax expense. Income tax expense increased $85,000 to $178,000 for the six
months ended  December  31, 1997 from $93,000 for the six months ended  December
31, 1996 primarily due to the increase in income before income taxes.

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.
<PAGE>


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 4% of net
withdrawable  savings deposits and borrowings payable upon demand or in one year
or less during the proceeding  calendar month.  Liquid assets for the purpose of
this ratio include cash,  certain time  deposits,  U.S.  Government,  government
agency,  and  corporate  securities  and  other  obligations   generally  having
remaining  maturities  of less  than  five  years.  The  Bank  has  historically
maintained  its  liquidity  ratio at  levels in  excess  of those  required.  At
December 31, 1997, the Bank's liquidity ratio was 13.48%.

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  December  31,  1997,  the Bank had  outstanding
commitments to extend credit which amounted to $1.5 million.
<PAGE>



PART II - Other Information


Item 1.  Legal Proceedings.

         None

Item 2.  Changes in Securities.

         None

Item 3.  Defaults Upon Senior Securities.

         None

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

         None

Item 5.  Other Information.

Employee  Benefit  Plans.  In  conjunction  with 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 December 31, 1997 the ESOP held 52,602 shares of the Company's  common stock,
4,337 of which were  allocated,  3,864 of which were released for allocation and
the remaining 44,401 were unreleased  (unearned)  shares.  The 44,401 unreleased
(unearned) shares had a fair market value of approximately  $799,000 at December
31, 1997.

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

Item 6.  Exhibits and Reports on Form 8-K

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

                 11       Computation of Earnings Per Share

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

         Form 8-K was filed on January 30, 1998 for the  Acquisition of
         Rubio Savings Bank of Brighton, Iowa.

<PAGE>


                                   Signatures

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


                               Washington Bancorp
                               ------------------
                                  (Registrant)

Date     February 10, 1998                     /s/ Stan Carlson
         -----------------                     ---------------------------------
                                               Stan Carlson, President and Chief
                                               Executive Officer

Date     February 10, 1998                     /s/ Leisha A. Linge
         -----------------                     ---------------------------------
                                               Leisha A. Linge,Controller