SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                        ---------------------------------

                                   FORM 10-QSB
(Mark One)

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


     For the quarterly period ended September 30, 1999.


[ ]  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: 0-26577

                          Webster City Federal Bancorp
             (Exact name of registrant as specified in its charter)

           United States                                      42-1491186
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                          Identification Number)

820 Des Moines Street, Webster City, Iowa                     50595-0638
(Address of principal executive offices)                      (Zip Code)

Registrant's telephone number, including area code  515-832-3071



--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  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. X Yes No

     Indicate the number of shares  outstanding for each of the issuer's classes
of common stock, as of the latest practicable date.

2,122,219 shares of common stock outstanding at October 30, 1999.
                                                -----------------

<PAGE>
                  Webster City Federal Bancorp and Subsidiaries

                                      Index




Part I. Financial Information


         Item 1. Financial Statements

                  Consolidated Balance Sheets
                  at September 30, 1999 and December 31, 1998

                  Consolidated Statements of Operations
                  for the three and nine months ended September 30, 1999
                  and 1998

                  Consolidated Statements of Cash Flows
                  for the nine months ended September 30, 1999
                  and 1998

                  Notes to Consolidated Financial Statements

         Item 2. Management's Discussion and Analysis of
                   Financial Condition and Results of Operations



Part II. Other Information

                  Other Information

<PAGE>

                  Webster City Federal Bancorp and Subsidiaries

                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                             September 30,          December 31,
                                                                 1999                  1998
                                                          -----------------      ----------------
Assets                                                                  (Unaduited)

<S>                                                            <C>                  <C>
Cash and cash equivalents                                      $ 2,525,270          $ 13,186,836
Time deposits in other financial institutions                    2,585,000             2,265,000
Investment securities held to maturity                          24,340,011            19,886,768
Loans receivable, net                                           59,899,107            56,751,506
Real estate, net                                                         -                22,460
Office property and equipment, net                                 488,835               496,356
Federal Home Loan Bank stock, at cost                              613,200               613,200
Deferred taxes on income                                           137,000               137,000
Accrued interest receivable                                        659,655               663,648
Prepaid expenses and other assets                                    5,063                60,954
                                                          -----------------      ----------------

      Total assets                                            $ 91,253,141          $ 94,083,728
                                                          =================      ================


Liabilities and Stockholders' Equity

Deposits                                                      $ 66,180,999          $ 68,703,588
FHLB advance                                                     1,200,000             1,200,000
Employee stock ownership plan borrowings                                 -               159,064
Advance payments by borrowers for
    taxes and insurance                                             84,096               219,583
Accrued interest payable                                           443,994               110,393
Current income taxes payable                                             -                51,554
Accrued expenses and other liabilities                             627,959               553,811
                                                          -----------------      ----------------

      Total liabilities                                         68,537,048            70,997,993
                                                          -----------------      ----------------


Stockholders' Equity

Common stock, $.10 par value                                       212,222               211,599
Additional paid-in capital                                       9,093,712             9,012,687
Treasury Stock (63,725 shares at cost)                            (964,181)                    -
Retained earnings, substantially restricted                     14,374,340            14,020,513
Unearned employee stock ownership plan shares                            -              (159,064)
                                                          -----------------      ----------------

      Total stockholders' equity                                22,716,093            23,085,735
                                                          -----------------      ----------------

      Total liabilities and stockholders' equity              $ 91,253,141          $ 94,083,728
                                                          =================      ================
</TABLE>
                 See notes to consolidated financial statements.

<PAGE>
<PAGE>
                  Webster City Federal Bancorp and Subsidiaries

                      Consolidated Statements of Operations
<TABLE>
<CAPTION>
                                              For the Three Months              For the Nine Months
                                               Ended September 30,              Ended September 30,
                                            -------------------------         -------------------------
                                               1999          1998                1999          1998
                                            -----------   -----------         -----------    ----------
                                                                    (Unaudited)
<S>                                         <C>           <C>                 <C>            <C>
Income
Interest Income:
   Loans receivable                         $1,126,751    $1,085,547          $3,326,603     $3,205,810
   Mortgage-backed & related securities        140,104       201,387             443,098       671,544
   Investment securities                       239,282       246,707             694,862       774,840
   Other interest earning assets                83,708       134,742             330,768       378,615
                                            -----------   -----------         -----------    ----------
      Total interest income                  1,589,846     1,668,383           4,795,330     5,030,809

Interest Expense:
   Deposits                                    729,429       822,975           2,190,337     2,480,127
   FHLB advance                                 14,689        14,689              43,589        40,076
   ESOP loan                                       792         3,410               5,086        11,105
                                            -----------   -----------         -----------    ----------
      Total interest expense                   744,910       841,074           2,239,012     2,531,308
                                            -----------   -----------         -----------    ----------
   Net interest income                         844,936       827,309           2,556,318     2,499,501
Provision for losses on loans                        -             -                   -             -
                                            -----------   -----------         -----------    ----------
   Net interest income after
      provision for losses on loans            844,936       827,309           2,556,318     2,499,501
                                            -----------   -----------         -----------    ----------

Non-interest income:
   Fees and service charges                     47,848        41,151             116,487       143,641
   Other                                         1,967         1,220              14,540         9,545
                                            -----------   -----------         -----------    ----------
      Total non-interest income                 49,815        42,371             131,027       153,186
                                            -----------   -----------         -----------    ----------

Expense

Non-interest expense:
   Compensation, payroll taxes
     and employees benefits                    154,939       189,782             640,831       586,636
   Office property and equipment                18,755        18,190              56,437        59,331
   Data processing services                     26,289        24,470              83,418        75,219
   Federal insurance premiums                   10,085         7,459              30,485        32,564
   Other real estate expenses, net                   -        (3,325)              1,008         1,920
   Advertising                                   7,541         8,251              20,271        21,126
   Other                                       143,243        84,871             348,819       271,661
                                            -----------   -----------         -----------    ----------
      Total non-interest expense               360,854       329,698           1,181,269     1,048,457
                                            -----------   -----------         -----------    ----------

Earnings before taxes on income                533,897       539,982           1,506,076     1,604,230

Taxes on income                                210,848       202,851             576,851       608,900
                                            -----------   -----------         -----------    ----------

Net earnings                                 $ 323,049     $ 337,131           $ 929,225     $ 995,330
                                            ===========   ===========         -----------    ----------

Earnings per share - basic                      $ 0.16        $ 0.16              $ 0.44        $ 0.48
                                            ===========   ===========         ===========    ==========

Earnings per share - diluted                    $ 0.15        $ 0.16              $ 0.44        $ 0.47
                                            ===========   ===========         ===========    ==========
</TABLE>
                 See notes to consolidated financial statements.
<PAGE>
                        Webster City Federal Bancorp and Subsidiaries

                            Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                        For the Nine Months
                                                                        Ended September 30,
                                                                  -----------------------------
                                                                      1999              1998
                                                                  -------------       ---------
                                                                            (Unaudited)
<S>                                                                  <C>              <C>
Cash flows from operating activities
   Net earnings                                                      $ 929,225        $ 995,330
                                                                  -------------       ---------
   Adjustments  to  reconcile  net  earnings to net cash
     provided by  operating activities:
        Depreciation                                                    16,776          19,665
        Amortization of premiums and discounts, net                      7,588          15,421
        Stock appreciation of allocated ESOP shares                      9,061          31,897
        Increase in accrued interest receivable                           (772)       (172,111)
        Decrease (Increase)  in prepaid expenses and other assets       55,891          (9,205)
        Increase in accrued interest payable                           333,601         392,007
        Increase in accrued expenses and other liabilities              74,146          85,508
        Decrease in accrued current taxes on income                    (51,554)        (61,103)
        Net change in ESOP stock plan                                  159,064          58,107
                                                                  -------------       ---------

            Total adjustments                                          603,801         360,186
                                                                  -------------       ---------

            Net cash provided by operating activities                1,533,026        1,355,516
                                                                  -------------       ---------

Cash flows from investing activities
   Proceeds from the maturity of interest bearing deposits           3,111,000        4,285,000
   Purchase of interest bearing deposits                            (3,431,000)       (6,955,000)
   Proceeds from the maturity of investment securities               3,900,000        9,650,000
   Proceeds from redemption of FHLB Stock                                    -         166,300
   Purchase of investment securities                                (9,905,818)       (7,902,281)
   Principal collected on mortgage-backed and related securities     2,611,503        3,676,453
   Purchase of  mortgage-backed securities                          (1,070,487)              -
   Proceeds on sale of real estate                                      22,460         109,175
   Net change in loans receivable                                   (3,143,630)       (2,585,387)
   Purchase of office property and equipment                            (9,255)              -
                                                                  -------------       ---------

            Net cash (used in) provided by investing activities     (7,915,227)        444,260
                                                                  -------------       ---------

Cash flows from financing activities
   Net change in savings deposits                                   (2,522,589)       (4,856,362)
   Proceeds from FHLB advance                                                -        1,200,000
   Net decrease in advance payments by borrowers
     for taxes and insurance                                          (135,487)       (173,250)
   Proceeds from stock options                                          72,586          36,337
   Payments on ESOP borrowings                                        (159,064)        (58,107)
   Treasury stock purchase                                            (964,181)              -
   Dividends paid                                                     (570,630)       (565,173)
                                                                  -------------       ---------
            Net cash used in financing activities                   (4,279,365)       (4,416,555)
                                                                  -------------       ---------

            Net decrease in cash and cash equivalents              (10,661,566)       (2,616,779)

Cash and cash equivalents at beginning of period                    13,186,836        5,892,852
                                                                  -------------       ---------

Cash and cash equivalents at end of period                         $ 2,525,270        $3,276,073
                                                                  =============       =========
<PAGE>
<CAPTION>
                                                                        For the Nine Months
                                                                        Ended September 30,
                                                                  -----------------------------
                                                                      1999              1998
                                                                  -------------       ---------
                                                                            (Unaudited)
<S>                                                                  <C>              <C>
Supplemental disclosures of cash flow information:
   Cash paid during the year for:
     Interest                                                      $ 1,856,736        $2,088,120
     Taxes on income                                                   834,691         653,991
   Transfers from loans to real estate acquired
     through foreclosure                                                   $ -        $ 72,353
                                                                  =============       =========
</TABLE>

                       See notes to consolidated financial statements.
<PAGE>



                  Webster City Federal Bancorp and Subsidiaries

                   Notes to Consolidated Financial Statements
                                   (Unaudited)


1. REORGANIZATION
   --------------

Webster City Federal Bancorp (the "Registrant" or "Bancorp") is the successor to
Webster City Federal  Savings  Bank, a federal  stock  savings bank (the "Bank")
which  reorganized  into the holding company  structure,  effective July 1, 1999
(the "Holding Company  Reorganization").  In the Holding Company Reorganization,
each  outstanding  share of the Bank's common stock was converted into one share
of the Registrant's  common stock, and each stockholder of the Bank received the
same  ownership  interest in the  Registrant  immediately  following the Holding
Company  Reorganization  as he or she had in the Bank immediately  prior to that
transaction.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICES
   -----------------------------------------

The consolidated  financial statements for the nine-month period ended September
30, 1999 are  unaudited.  In the opinion of  management  of Webster City Federal
Bancorp these financial  statements reflect all adjustments,  consisting only of
normal  recurring  accruals  necessary  to  present  fairly  these  consolidated
financial statements.  The results of operations for the interim periods are not
necessarily  indicative  of results  that may be  expected  for an entire  year.
Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been omitted.

This report contains certain  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange  Act  of  1934,  as  amended.   The  Bancorp  intends  such
forward-looking  statements  to be covered  by the safe  harbor  provisions  for
forward-looking  statements  contained in the Private  Securities  Reform Act of
1995,  and is  including  this  statement  for the purposes of these safe harbor
provisions.  Forward-looking statements,  which are based on certain assumptions
and describe  future plans,  strategies  and  expectations  of the Bancorp,  are
generally  identifiable  by use  of the  words  "believe,"  "expect,"  "intend,"
"anticipate,"  "estimate,"  "project,"  or similar  expressions.  The  Bancorp's
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain.  Factors which could have a material adverse effect on the
operations and future prospects of the Bancorp and its subsidiaries include, but
are not limited to, changes in: interest  rates,  general  economic  conditions,
legislative/regulatory   changes,  monetary  and  fiscal  polices  of  the  U.S.
Government,  including  polices of the U.S.  Treasury  and the  Federal  Reserve
Board, the quality or composition of the loan or investment  portfolios,  demand
for loan products, deposit flows, competition,  demand for financial services in
the Bancorp's  market area and accounting  principles,  polices and  guidelines.
These risks and uncertainties should be considered in evaluating forward-looking
statements and undue reliance should not be placed on such statements.

Principles of Consolidation
---------------------------

The consolidated  financial  statements  include the accounts of the Bancorp and
its wholly owned subsidiary, Webster City Federal Savings Bank, which is engaged
in banking  and its wholly  owned  subsidiary,  WCF  Service  Corporation  which
engaged in the sales of mortgage  life  insurance to the Bank's loan  customers.
All material inter-company accounts and transactions have been eliminated.
<PAGE>

3. EARNINGS PER SHARE COMPUTATIONS
----------------------------------

1999
----
Earnings  per share - basic is computed  using the  weighted  average  number of
common  shares  outstanding  of 2,082,968  and  2,097,597 for the three and nine
months ended September 30, 1999, respectively.  Divided into the net earnings of
$323,000 and $929,200  for the three and nine months ended  September  30, 1999,
respectively, resulting in earnings per share of $.16 and $.44 for the three and
nine months ended September 30, 1999, respectively.

Earnings per share - diluted is computed  using the weighted  average  number of
common shares outstanding after giving effect to additional shares assumed to be
issued in relation to the  Bancorp's  stock option plan using the average  price
per share for the period.  Such  additional  shares were 6,965 and 7,291 for the
three and nine months ended September 30, 1999,  respectively.  Earnings for the
three and nine months  ended  September  30, 1999 were  $323,000  and  $929,200,
respectively, resulting in earnings per share of $.15 and $.44 for the three and
nine months ended September 30, 1999, respectively.

1998
----
Earnings  per share - basic is computed  using the  weighted  average  number of
common  shares  outstanding  of 2,113,993  and  2,112,950 for the three and nine
months ended  September 30, 1998,  respectively,  reduced by the 20,127 weighted
average  unearned  ESOP shares and divided into the net earnings of $337,100 and
$995,300 for the three and nine months ended  September 30, 1998,  respectively,
resulting  in earnings  per share of $.16 and $.48 for the three and nine months
ended September 30, 1998, respectively.

Earnings per share - diluted is computed  using the weighted  average  number of
common shares outstanding after giving effect to additional shares assumed to be
issued in relation to the Bank's stock  option plan using the average  price per
share for the  period.  Such  additional  shares  were 14,709 and 21,789 for the
three and nine months ended September 30, 1998,  respectively.  Earnings for the
three and nine months  ended  September  30, 1998 were  $337,100  and  $995,300,
respectively, resulting in earnings per share of $.16 and $.47 for the three and
nine months ended September 30, 1998, respectively.

4. DIVIDENDS
   ---------

On July 21,  1999 the  Bancorp  declared a cash  dividend  on its  common  stock
payable  on August 24,  1999 to  stockholders  of record as of August 10,  1999,
equal to $.20 per share or approximately  $411,699.  Of this amount, the payment
of approximately $230,000 (representing the dividend payable on 1,150,000 shares
owned by WCF Financial, M.H.C., the Bancorp's mutual holding company) was waived
by the mutual holding company,  resulting in an actual dividend  distribution of
$181,699.
<PAGE>
                  Webster City Federal Bancorp and Subsidiaries

                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations


FINANCIAL CONDITION
-------------------

Total  assets  decreased by $2.8  million,  or 3.0%,  from  December 31, 1998 to
September 30, 1999. Cash and cash  equivalents  decreased $10.7 million or 80.9%
while time deposits in other financial  institutions  increased $320,000 to $2.6
million from $2.3 million.  Loans  receivable  increased  $3.1 million,  or 5.5%
during the same  period.  At  September  30,  1999,  the Bank had no real estate
owned.  Investment  securities increased $4.5 million or 22.4% from December 31,
1998  to  September  30,  1999  primarily  due to  moving  funds  from  cash  to
higher-yielding investments in securities. The increase in investment securities
was  partially  offset  by  principal   payments  received  on   mortgage-backed
securities.  During the nine month period  deposits  decreased $2.5 million,  or
3.7%.

Total  stockholders'  equity decreased by $369,300 to $22.7 million at September
30, 1999 from $23.1 at December 31, 1998 as earnings of $929,200 were  partially
offset by the repurchase of common stock totaling  $964,100 and three  quarterly
dividends totaling $575,400.

CAPITAL
-------

The Bancorp's total stockholders' equity decreased by $369,600, to $22.7 million
at September  30, 1999 from $23.1  million at December  31, 1998.  The Office of
Thrift  Supervision  (OTS) requires that the Bank meet certain  minimum  capital
requirements.  As of  September  30,  1999 the Bank was in  compliance  with all
regulatory capital requirements.  The Bank's required, actual and excess capital
levels as of September 30, 1999 were as follows:
<TABLE>
<CAPTION>

                           Required         % of                Actual           % of              Excess
                            Amount         Assets               Amount          Assets             Capital
                            ------         ------               ------          ------             -------
                                                      (Dollars in thousands)

<S>                          <C>            <C>                 <C>             <C>                <C>
Tier 1 (Core) Capital        $3,665         4.0%                $21,960         23.97%             $18,295
Risk-based Capital           $3,370         8.0%                $22,343         53.04%             $18,973
</TABLE>

LIQUIDITY
---------

OTS  regulations  require  the Bank to  maintain  an  average  daily  balance of
qualified liquid assets (cash, certain time deposits and specified United States
government,  state or federal agency  obligations) equal to a monthly average of
not less than 4% of its net withdrawable deposits plus short term borrowings. At
September 30, 1999, the Bank's quarterly  average  liquidity  position was $20.4
million or 30.0% compared to $13.8 million or 19.7% at December 31, 1998.

RESULTS OF OPERATIONS
---------------------

Interest  Income.  Interest income declined to $1.6 million for the three months
ended  September  30, 1999  compared to $1.7  million for the three months ended
September 30, 1998.  This decline in interest income was due to a decline in the
average interest  earnings assets of $1.7 million to $92.3 million for the three
month  period  ended  September  30, 1999  compared to $93.9 for the same period
ended September 30, 1998.  Interest income declined to $4.8 million for the nine
months  ended  September  30, 1999 from $5.0  million for the nine months  ended
September  30,  1998.  The declines was the results of a decrease in the average
yield on  interest-earning  assets to 7.01% for the nine months ended  September
30, 1999 from 7.19% for the nine months  ended  September  30, 1998 as well as a
decrease in the average  balance of interest  earning  assets of $2.2 million or
2.4% to $91.1  million for the nine months ended  September  30, 1999 from $93.3
million for the corresponding periods ended September 30, 1998.
<PAGE>
Interest  on loans for the three  months  ended  September  30,  1999  increased
$41,200 or 3.8% compared to the three months ended September 30, 1998.  Interest
on loans for the nine months ended September 30, 1999 increased $120,800 or 3.8%
compared to the nine months ended  September 30, 1998.  The  increases  resulted
primarily from an increase in total loans outstanding during the periods, offset
by a decrease in the yields on loans  receivable  from 7.75%,  and 7.73% for the
three and nine months ended September 30, 1998, respectively, to 7.73% and 7.72%
for the three and nine months ended  September  30, 1999.  The  decreases in the
yields  on loans  receivable  were  primarily  due to lower  market  rates and a
substantial  volume of adjustable  rate loans repricing at a lower rate based on
the lagging index used by the Bank.

Interest on  mortgage-backed  securities  decreased  by $61,300 or 30.4% for the
three-month period ended September 30, 1999 as compared to the same period ended
September  30, 1998.  Th decrease was primarily due to a decrease in the average
balance  outstanding of $2.9 million from $11.7 million in 1998 compared to $8.8
dueing the same three  month  period  ended  September  30,  1999.  Interest  on
mortgage-backed securities decreased $228,400 or 34.0% for the nine months ended
September  30, 1999  compared to same period ended  September  30,  1998.  These
declines  resulted  from a  decrease  of $3.6  million  or 27.9% in the  average
balance of  mortgage-backed  securities  $9.3  million for the nine months ended
September 30, 1999 compared to $12.9 million for the nine months ended September
30, 1998. A decrease of 57 basis points in the average yield on  mortgage-backed
securities to 6.35% for the nine months ended  September 30, 1999 from 6.92% for
the  nine  months  ended  September  30,  1998 as  higher  rate  mortgage-backed
securities were paid off and remaining adjustable rate loans were repricing at a
lower rate.

Interest Expense. Interest expense decreased by $96,200, or 11.4%, from $841,100
for the three months ended  September  30, 1998 to $744,900 for the three months
ended  September  30, 1999.  The decrease was primarily due to a decrease in the
average balance  outstanding of $1.8 million from $69.2 million in 1998 compared
to $67.4  during the same three  month  period  ended  September  30, 1999 and a
reduction of the ESOP loan average  balance from $191,300 in 1998 compared to $0
in 1999.Interest  expense  decreased by $292,300 or 11.5%, from $2.5 million for
the nine months  ended  September  30,  1998 to $2.3 for the nine  months  ended
September  30, 1999.  The decrease in interest  expense was due to a decrease in
average  deposits  outstanding  by $2.7 million from $69.2  million for the nine
months  ended  September  30, 1998 to $6.6  million  for the nine  months  ended
September 30, 1999. The average cost of deposits  decreased 38 basis points from
4.78% nine months ended September 30, 1998 compared to 4.39% for the nine months
ended September 30, 1999.

Net Interest  Income.  Net interest income before  provision for losses on loans
increased by $17,600 or 2.1% from $827,300 for the three months ended  September
30, 1998 compared to $844,900 for the three months ended September 30, 1999. Net
interest income increased by $56,800 or 2.3% for the nine months ended September
30, 1999  compared to the same period ended  September  30, 1998.  The Bancorp's
interest rate spread at September 30, 1999 increased by 20 basis points to 2.61%
from 2.41% at September 30, 1998.

Provision for Losses on loans.  There were no provisions for losses on loans for
the three and nine months ended  September 30, 1999 or September  30, 1998.  The
allowance for losses on loans is based on  management's  periodic  evaluation of
the loan  portfolio and reflects an amount that,  in  management's  opinion,  is
adequate  to  absorb  losses  in  the  existing  portfolio.  In  evaluating  the
portfolio,  management  takes into  consideration  numerous  factors,  including
current economic conditions,  prior loan loss experience, the composition of the
loan portfolio, and management's estimate of anticipated credit losses.

Non-interest  Income.  Non-interest  income increased by $7,400 or 17.5% for the
three-month period ended September 30, 1999 as compared to the same period ended
September 30, 1998.  Non-interest income decreased $22,200 or 14.5% for the nine
months ended  September 30, 1999 as compared to the same period ended  September
30,  1998.  The  decrease  was  related to a decrease  in loan fees and  service
charges collected offset by an increase in other charges.

Non-interest  Expense.  Non-interest  expense  increased $31,200 or 9.5% for the
three-month  period ended  September  30, 1999 compared to the same period ended
September 30, 1998.  Non-interest  expense  increased  $132,800 or 12.7% for the
nine -month  period ended  September  30, 1999 compared to the same period ended
September 30, 1998.  Compensation  and benefit costs decreased  $34,800 or 18.3%
from $189,800 for the three months ended  September 30, 1998 to $154,900 for the
three month period ended  September  30, 1999.  Compensation  and benefit  costs
increased by $54,200 to $640,800 for the nine months  ended  September  30, 1999
from  $586,600 for the nine months ended  September  30,  1998.  The  nine-month
increase was  primarily  due to the Bank paying off the balance of the ESOP loan
of $141,800 on June 30, 1999 offset by a change in personnel.
<PAGE>
Taxes on Income.
----------------

Income  taxes for the three  months  ended  September  30,  1999,  increased  to
$210,800  compared to $202,900  for the same period  ended  September  30, 1998.
Income taxes for the nine months ended September 30, 1999,  decreased $32,000 or
5.3% to $576,900 from  $608,900 for the  nine-month  period ended  September 30,
1998.  The  effective  income  tax rate for the nine  months  of 1999 was  38.3%
compared to 38.0% for the first nine months of 1998.

Net Earnings. Net earnings totaled $323,000 for the three months ended September
30, 1999 compared to $337,100 for the three months ended September 30, 1998. Net
earnings  decreased  $66,100 or 6.6% for the nine -month period ended  September
30, 1999 compared to the same period ended September 30, 1998.

Impact of Year 2000 Compliance
------------------------------

The federal banking regulators recently issued guidelines  establishing  minimum
safety  and  soundness  standards  for  achieving  Year  2000  compliance.   The
guidelines,  which took effect  October  15, 1998 and apply to all  FDIC-insured
depository  institutions,  establish  standards for developing and managing Year
2000 project plans,  testing remediation efforts and planning for contingencies.
The guidelines are based upon guidance  previously  issued by the agencies under
the  auspices of the Federal  Financial  Institutions  Examination  Council (the
"FFIEC'),  but are not intended to replace or supplant the FFIEC  guidance which
will continue to apply to all federally insured depository institutions.

The  guidelines  were issued under section 39 of the Federal  Deposit  Insurance
Act, as amended (the "FDIA'),  which requires the federal banking  regulators to
establish  standards  for the safe and  sound  operation  of  federally  insured
depository  institutions.  Under section 39 of the FDIA, if an institution fails
to meet any of the standards  established in the guidelines,  the  institution's
primary  federal  regulator  nay  require the  institution  to submit a plan for
achieving compliance. If an institution fails to submit an acceptable compliance
plan,  or fails in any  respect to  implement  a  compliance  plan that has been
accepted by its primary federal regulator, the regulator is required to issue an
order  directing  the  institution  to cure  the  deficiency.  Such an  order is
enforceable  in court in the same manner as a cease and desist order.  Until the
deficiency  cited in the regulator's  order is cured, the regulator may restrict
the  institution's  rate of growth,  require the  institution  to  increase  its
capital,  restrict  the rates the  institution  pays on  deposits or require the
institution  to take any  action  the  regulator  deems  appropriate  under  the
circumstances.  In addition to the enforcement procedures established in section
39 of the FDIA,  noncompliance with the standards  established by the guidelines
may  also be  grounds  for  other  enforcement  action  by the  federal  banking
regulators,   including   cease  and  desist  orders  and  civil  money  penalty
assessments.

The Board of Directors are aware of potential  risk that the year 2000 poses for
the Bank and has assigned an  individual,  to establish Year 2000 formal project
plans,  which  have  been  developed  and  adopted  by  the  Bank.  Testing  and
contingency  plans have also been  developed  and  adopted by the Bank.  Testing
procedures have been completed.

The  Bank's  contingency  plans  include  two  components,  which  are  business
remediation and business resumption. The business remediation plan was developed
to mitigate the risk associated with the failure to successfully complete system
renovation, validation or implementation of the Bank's Year 2000 readiness. This
plan  pertains  to  mission-critical  systems  developed  in-house,  by  outside
software vendors, and by third-party service providers.  The business resumption
plan is designed  to be  implemented  in the event there are system  failures at
critical dates.

The Bank  anticipates that it will incur internal staff costs and other expenses
related to the  enhancements  necessary to become Year 2000 compliant.  Based on
the Bank's current knowledge, the expense related to Year 2000 compliance is not
expected to have a material effect on the Bank's  financial  position or results
of operations. It is estimated that the costs incurred by the Bank for Year 2000
compliance will be approximately $ 10,000.
<PAGE>
Accurate data processing is essential to the operation of the Bank and a lack of
accurate  processing by its vendors could have a significant  adverse  impact on
the Bank's  financial  condition  and results of  operations.  The Bank has been
assured by its data processing  service bureau that their computer services will
function  properly on and after  January 1, 2000.  If by the end of this year it
appears  that the  Bank's  data  processing  service  bureau  is not  year  2000
compliant or will be unable to resolve this problem in a timely manner, then the
Bank will identify a secondary data processing  service provider to complete the
task.  Notwithstanding  the  foregoing,  if the Bank is unable to  resolve  this
potential  problem in time,  the Bank will likely  experience  significant  data
processing  delays,  mistakes or failures.  These  delays,  mistakes or failures
could have a significant  adverse impact on the financial  condition and results
of operations of the Bank.

The Bank has also tested such things as vault doors, alarms, phones, etc. and is
not aware of any significant problems with such systems.

The  Bank  has  also  received  year  2000  updates  from  most of its  material
non-information  system  providers,  and  based  on  these  updates  we  do  not
anticipate any significant year 2000 issues.

In addition to expenses related to our own computer system, the Bank could incur
losses if loan payments are delayed due to year 2000  problems  affecting any of
our significant borrowers or impairing the payroll systems of large employers in
the Bank's  market  area.  We have been  communicating  with these  company's to
assess  their  progress  in  evaluating   their  systems  and  implementing  any
corrective measures required by them to be prepared for the year 2000.

SFAS No. 133
------------

"Accounting for Derivative Instruments and Hedging Activities," and SFAS 137, an
amendment to SFAS 133,  will be effective for the Bancorp  beginning  January 1,
2001.  Management is evaluating the impact the adoption of SFAS 133 and SFAS 137
will  have on the  Bancorp's  consolidated  financial  statements.  The  Bancorp
expects to adopt SFAS 133 and 137 when required.



                  Webster City Federal Bancorp and Subsidiaries

                           PART II. Other Information




Item 1. Legal Proceedings
        -----------------

         There are  various  claims  and  lawsuits  in which the  Registrant  is
periodically involved incidental to the Registrant's business. In the opinion of
management,  no material  loss is expected  from any of such  pending  claims or
lawsuits.


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
        -----------------
         None


Item 6. Exhibits and Reports on Form 8-K.
        ---------------------------------

         (a) Exhibits:
                  None

         (b) No form 8-K reports were filed during the quarter  ended  September
             30, 1999.

<PAGE>
                  Webster City Federal Bancorp and Subsidiaries

                                   Signatures

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.


                              WEBSTER CITY FEDERAL BANCORP
                              Registrant


Date:November 12, 1999   By:/s/Phyllis A. Murphy
     -----------------         -------------------------------------
                               Phyllis A. Murphy
                               President and Chief Executive Officer




Date:November 12, 1999    By:/s/Stephen L. Mourlam
     -----------------          -------------------------------------
                                Stephen L. Mourlam
                                Executive Vice President/Chief Financial Officer