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 June 30, 2003.

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the transition period from __________________ to __________________

      COMMISSON 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)

      Transitional Small Business Disclosure Format: |_| Yes |X| No

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

1,886,186 shares of common stock outstanding at July 31, 2003.

<PAGE>

                  Webster City Federal Bancorp and Subsidiaries

                                      Index

                                                                            Page
                                                                            ----

Part I. Financial Information

        Item 1. Financial Statements

                Consolidated Balance Sheets
                at June 30, 2003 and December 31, 2002                      1

                Consolidated Statements of Operations
                for the three and six months ended June 30, 2003
                and 2002                                                    2

                Consolidated Statements of Cash Flows
                for the six months ended June 30, 2003
                and 2002                                                    3

                Notes to Consolidated Financial Statements                  4

        Item 2. Management's Discussion and Analysis of
                  Financial Condition and Results of Operations             6

        Item 3. Controls and Procedures

Part II. Other Information

                  Other Information                                         9


<PAGE>

                                     Item 1

                  Webster City Federal Bancorp and Subsidiaries

                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                            June 30,      December 31,
                                                                                2003              2002
                                                                       -------------     -------------
                                                                         (Unaudited)
<S>                                                                    <C>               <C>
Assets

Cash and cash equivalents                                              $   7,059,393     $   5,251,946
Time deposits in other financial institutions                             12,074,000        10,892,000
Securities available-for-sale                                             12,704,615         7,697,110
Securities held-to-maturity (market value                                  2,946,232         3,553,789
    of $3,046,663 and $3,646,401, as of June 30, 2003
    and December 31, 2002, respectively.)
Loans receivable, net                                                     68,696,322        73,319,065
Real estate owned                                                             56,187                --
Federal Home Loan Bank (FHLB) stock, at cost                                 704,900           704,900
Office property and equipment, net                                           712,441           726,135
Deferred taxes on income                                                     257,222           242,000
Accrued interest receivable                                                  518,048           630,779
Prepaid expenses and other assets                                            511,546           536,457

                                                                       -------------     -------------
      Total assets                                                     $ 106,240,906     $ 103,554,181
                                                                       =============     =============

Liabilities and Stockholders' Equity

Deposits                                                               $  72,668,205     $  70,216,797
Federal Home Loan Bank advances                                            9,700,000         9,700,000
Advance payments by borrowers for
    taxes and insurance                                                      290,779           306,386
Accrued interest payable                                                      30,522            42,491
Current income taxes payable                                                  15,048            83,374
Accrued expenses and other liabilities                                     1,006,767           886,331

                                                                       -------------     -------------
      Total liabilities                                                $  83,711,321     $  81,235,379
                                                                       -------------     -------------

Stockholders' Equity

Serial preferred stock, $0.10 par value                                           --                --
    Authorized 10,000,000 shares; issued none
Common stock, $.10 par value. 20,000,000 shares authorized:                  214,842           215,061
    2,148,420 issued and 1,886,186 outstanding at June 30, 2003
    2,150,611 issued and 1,888,373 outstanding at December 31, 2002
Additional paid-in capital                                                 9,439,591         9,467,295
Retained earnings, substantially restricted                               16,696,354        16,456,391
Unrealized gain on securities available-for-sale                              59,737            60,994
Treasury stock, 262,238 shares as of June 30, 2003                        (3,880,939)       (3,880,939)
     and December 31, 2002, respectively
                                                                       -------------     -------------
      Total stockholders' equity                                          22,529,585        22,318,802

                                                                       -------------     -------------
      Total liabilities and stockholders' equity                       $ 106,240,906     $ 103,554,181
                                                                       =============     =============
</TABLE>

See accompanying notes to consolidated financial statements.


<PAGE>

                  Webster City Federal Bancorp and Subsidiaries

                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                             For the Three Months         For the Six Months
                                                Ended June 30,              Ended June 30,
                                          -------------------------   -------------------------
                                              2003          2002          2003          2002
                                          -----------   -----------   -----------   -----------

<S>                                       <C>           <C>           <C>           <C>
Income

Interest Income:
   Loans receivable                       $ 1,229,392   $ 1,411,467   $ 2,526,417   $ 2,833,318
   Mortgage-backed & related securities        30,952        58,098        66,738       123,143
   Investment securities                      143,326       144,288       249,622       298,767
   Other interest earning assets              103,030        50,106       225,638        93,755
                                          -----------   -----------   -----------   -----------
      Total interest income                 1,506,700     1,663,959     3,068,415     3,348,983
                                          -----------   -----------   -----------   -----------

Interest Expense:
   Deposits                                   474,616       564,633       965,326     1,203,381
   FHLB advances                              126,376       126,376       251,364       251,364
                                          -----------   -----------   -----------   -----------
      Total interest expense                  600,992       691,009     1,216,690     1,454,745
                                          -----------   -----------   -----------   -----------
   Net interest income                        905,708       972,950     1,851,725     1,894,238
Provision for losses on loans                      --            --            --            --
                                          -----------   -----------   -----------   -----------
   Net interest income after
      provision for losses on loans           905,708       972,950     1,851,725     1,894,238
                                          -----------   -----------   -----------   -----------

Non-interest income:
   Fees and service charges                    53,487        64,398       105,260       130,899
   Other                                       98,577        62,616       129,396       104,539
                                          -----------   -----------   -----------   -----------
      Total non-interest income               152,064       127,014       234,656       235,438
                                          -----------   -----------   -----------   -----------

Expense

Non-interest expense:
   Compensation, payroll taxes,
     and employees benefits                   293,195       272,100       595,509       539,930
   Office property and equipment               43,917        58,233        81,713        86,986
   Data processing services                    47,977        39,525       102,656        81,435
   Federal insurance premiums                   2,838         3,129         5,677         6,258
   Other real estate expenses, net                542        19,918         1,051        19,268
   Advertising                                 10,013         8,536        18,994        13,857
   Other                                      162,954       115,121       289,402       246,758
                                          -----------   -----------   -----------   -----------
      Total non-interest expense              561,436       516,562     1,095,002       994,492
                                          -----------   -----------   -----------   -----------

     Earnings before taxes on income          496,336       583,402       991,379     1,135,184

Taxes on income                               195,495       212,800       384,967       414,442
                                          -----------   -----------   -----------   -----------

    Net earnings                          $   300,841   $   370,602   $   606,412   $   720,742
                                          ===========   ===========   -----------   -----------

Earnings per share - basic                $      0.16   $      0.20   $      0.32   $      0.38
                                          ===========   ===========   ===========   ===========

Earnings per share - diluted              $      0.16   $      0.20   $      0.32   $      0.38
                                          ===========   ===========   ===========   ===========
</TABLE>

See accompanying notes to consolidated financial statements.


<PAGE>

                  Webster City Federal Bancorp and Subsidiaries

                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                       For the Six Months
                                                                         Ended June 30,
                                                                   --------------------------
                                                                       2003           2002
                                                                   -----------    -----------
                                                                                (Unaudited)
<S>                                                                <C>            <C>
Cash flows from operating activities
   Net earnings                                                    $   606,412    $   720,742
                                                                   -----------    -----------

   Adjustments to reconcile net earnings to net cash
     provided by operating activities:
        Depreciation                                                    45,714         74,862
        Amortization of premiums and discounts, net                     (8,370)         5,050
        Gain on sale of investments available-for-sale                 (20,149)            --
        Change in:
             Accrued interest receivable                               112,731       (108,362)
             Prepaid expenses and other assets                          24,911       (175,643)
             Accrued interest payable                                  (11,969)        (8,553)
             Accrued expenses and other liabilities                    120,436        117,851
             Accrued current taxes on income                           (68,326)       (84,414)
             Deferred taxes on income                                   (1,490)         4,000
                                                                   -----------    -----------

                  Total adjustments                                    193,488       (175,209)
                                                                   -----------    -----------

                  Net cash provided by operating activities            799,900        545,533
                                                                   -----------    -----------

Cash flows from investing activities
   Proceeds from the maturity of interest bearing deposits           2,682,000      1,001,000
   Purchase of interest earning deposits                            (3,864,000)    (2,093,000)
   Proceeds from sales of securities available-for-sale              4,848,708      2,497,650
   Purchase of securities available-for-sale                        (9,845,000)    (3,000,000)
   Principal collected on mortgage-backed and related securities       581,203        708,010
   Net change in loans receivable                                    4,567,306     (1,697,854)
   Purchase of Fixed Assets                                            (32,020)            --
   Purchase of FHLB Stock                                                   --        (91,700)
                                                                   -----------    -----------

            Net cash used in investing activities                   (1,061,803)    (2,675,894)
                                                                   -----------    -----------

Cash flows from financing activities
   Net change in deposits                                            2,451,408     (2,904,218)
   Net (decrease) increase in advance payments by borrowers
     for taxes and insurance                                           (15,607)         9,718
   Proceeds on exercise of stock options                                    --        199,717
   Dividends paid                                                     (366,451)      (392,266)
                                                                   -----------    -----------
            Net cash provided by (used in) financing activities      2,069,350     (3,087,049)
                                                                   -----------    -----------

            Net increase (decrease) in cash and cash equivalents     1,807,447     (5,217,410)

Cash and cash equivalents at beginning of period                     5,251,946      9,183,215
                                                                   -----------    -----------

Cash and cash equivalents at end of period                         $ 7,059,393    $ 3,965,805
                                                                   ===========    ===========

Supplemental disclosures of cash flow information:
   Cash paid during the year for:
     Interest                                                      $   953,357    $ 1,211,934
     Taxes on income                                                   338,819        384,571

     Transfers from loans to real estate acquired
     through foreclosure                                           $    56,187    $   247,160
                                                                   ===========    ===========
</TABLE>

See accompanying notes to consolidated financial statements.


<PAGE>

                  Webster City Federal Bancorp and Subsidiaries

                   Notes to Consolidated Financial Statements

                                   (Unaudited)

1. DESCRIPTION OF BUSINESS

Webster City Federal Bancorp ( the "Company" ) and its subsidiaries, Webster
City Federal Savings Bank, a federal stock savings bank, (the "Bank"), and
Security Title and Abstract, Inc., conduct operations in Webster City, Iowa, a
community of approximately 8,000 people. The Bank is primarily engaged in the
business of attracting deposits from the general public in its market area and
investing such deposits in mortgage loans secured by one-to-four family
residential real estate. The Bank's primary area of lending and other financial
services consists of Hamilton County, Iowa, and the surrounding contiguous
counties. Security Title and Abstract, Inc. is engaged in the business of
providing abstracting and title services for properties located in Hamilton
County, Iowa.

Approximately 60% of the Company's outstanding common stock is owned by WCF
Financial M.H.C., a mutual holding company (the "Holding Company"). The
remaining 40% of the Company's outstanding common stock is owned by the general
public including the Bank's Employee Stock Ownership Plan.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

The consolidated financial statements for the three and six-month periods ended
June 30, 2003 and 2002 are unaudited. In the opinion of management of the
Company, 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.

Principles of Consolidation

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

The consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America. In
preparing such financial statements, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities as of the date of the balance
sheet and revenues and expenses for the period. Actual results could differ
significantly from those estimates. Material estimates that are particularly
susceptible to significant change relate to management's determination of the
allowance for loan losses.

Reclassifications

Certain amounts in the 2002 financial statements have been reclassified to
conform to the presentation in the 2003 financial statements.


<PAGE>

3. EARNINGS PER SHARE COMPUTATIONS

2003

Earnings per share - basic is computed using the weighted average number of
common shares outstanding of 1,886,186 and 1,886,186 for the three and six
months ended June 30, 2003, respectively, and divided into the net earnings of
$300,800 and $606,400 for the three and six months ended June 30, 2003,
respectively, resulting in net earnings per share basic of $.16 and $.32 for the
three and six months ended June 30, 2003, 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 3,878 and 3,597 for the three
and six months ended June 30, 2003, respectively, due to the average price per
share being more than the stock option exercise price. Net earnings for the
three and six months ended June 30, 2003 were $300,800 and $606,400,
respectively, resulting in net earnings per share diluted of $.16 and $.32 for
the three and six months ended June 30, 2003, respectively.

2002

Earnings per share - basic is computed using the weighted average number of
common shares outstanding of 1,857,595 and 1,874,734 for the three and six
months ended June 30, 2002, respectively, and divided into the net earnings of
$382,500 and $720,700 for the three and six months ended June 30, 2002,
respectively, resulting in net earnings per share basic of $.20 and $.38 for the
three and six months ended June 30, 2002, 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 3,653 and 3,207 for the three
and six months ended June 30, 2002, respectively, due to the average price per
share being more than the stock exercise option price. Net earnings for the
three and six months ended June 30, 2002 were $382,500 and $720,700,
respectively, resulting in net earnings per share diluted of $.20 and $.38 for
the three and six months ended June 30, 2002, respectively.

4. DIVIDENDS

On April 16, 2003 the Company declared a cash dividend on its common stock
payable on May 21, 2003 to stockholders of record as of May 5, 2003, equal to
$.25 per share or approximately $471,547. Of this amount, the payment of
approximately $287,500 (representing the dividend payable on 1,150,000 shares
owned by WCF Financial, M.H.C., the Company's mutual holding company) was waived
by the mutual holding company, resulting in an actual dividend distribution of
$184,047.

5. INTANGIBLE ASSET

A Company subsidiary maintains an intangible asset relating to a customer list.
It has an estimated useful life of 15 years and is being amortized using the
straight-line method. At June 30, 2003, the gross carrying amount was $145,000
with accumulated amortization of $27,400. Amortization expense for the six
months ended June 30, 2003 and 2002 was $4,800 and $4,800 respectively.

The estimated amortization expense for the following five year period is as
follows:

      December 31, 2003          $ 9,667.
      December 31, 2004            9,667.
      December 31, 2005            9,667.
      December 31, 2006            9,667.
      December 31, 2007            9,667.


<PAGE>

6. STOCK - BASED COMPENSATION

SFAS No. 123, Accounting for Stock-Based Compensation, established accounting
and disclosure requirements using a fair-value-based method of accounting for
stock-based employee compensation plans. As allowed by SFAS No. 123, the Company
has elected to continue to apply the intrinsic-value-based method of accounting
described above, and has adopted only the disclosure requirements of SFAS No.
123. The following table illustrates the effect on net income if the
fair-value-based method had been applied to all outstanding and unvested awards
in each period.

<TABLE>
<CAPTION>
                                       Quarter Ended   Six Months Ended   Quarter Ended  Six Months Ended
                                       June 30, 2003    June 30, 2003     June 30, 2002   June 30, 2002
                                       -------------    -------------     -------------   -------------

<S>                                      <C>              <C>              <C>              <C>
Net income, as reported                  $  300,841       $  606,412       $  370,602       $  720,742
Add stock -based employee
  compensation expense included in
   reported net income, net of tax               --               --               --               --
Deduct total stock-based employee
   compensation expense determined
   under fair-value-based method for
   all rewards, net of tax                       --               --               --               --

         Pro forma                       $  300,841       $  606,412       $  370,602       $  720,742

Earnings per share

As reported:
     Basic                                      .16              .32              .20              .38
     Diluted                                    .16              .32              .20              .38
Pro forma:
     Basic                                      .16              .32              .20              .38
     Diluted                                    .16              .32              .20              .38
</TABLE>

                  Webster City Federal Bancorp and Subsidiaries

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

FINANCIAL CONDITION

Total assets increased by $2.7 million, or 2.6%, from December 31, 2002 to June
30, 2003. Cash and cash equivalents increased $1.8 million or 34.3%, due to an
increase in the number of loans paid off and an increase in deposits during the
period. Loans receivable decreased $4.6 million, or 6.3% during the same period.
As a portfolio lender the Bank felt it best to allow some loans be paid off or
refinanced at other financial institutions due the rate environment that we are
currently in. At June 30, 2003, the Company had $56,200 in real estate owned.
Securities available-for-sale increased by $5.0 million or 65.1% from December
31, 2002 to June 30, 2003, and investment securities held-to-maturity decreased
$607,600 or 17.1%, from December 31, 2002 to June 30, 2003. The increase in
securities available-for-sale was due to the purchase of additional securities
during the first part of 2003. During the six-month period, deposits increased
$2.5 million, or 3.5%, due to an increase in public funds being deposited.

Total stockholders' equity increased by $210,800 to $22.5 million at June 30,
2003 from $22.3 million at December 31, 2002 as earnings of $606,400 were
partially offset by two quarterly cash dividends totaling $366,500.


<PAGE>

CAPITAL

The Company's total stockholders' equity increased by $210,800, to $22.5 million
at June 30, 2003 from $22.3 million at December 31, 2002. The Office of Thrift
Supervision (OTS) requires that the Bank meet certain minimum capital
requirements. As of June 30, 2003, the Bank was in compliance with all
regulatory capital requirements. The Bank's required, actual and excess capital
levels as of June 30, 2003 were as follows:

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

Tier 1 (Core) Capital       $ 3,169      3.0%     $21,808     20.64%     $18,639
Risk-based Capital          $ 4,022      8.0%     $22,053     43.86%     $18,031

RESULTS OF OPERATIONS

Interest Income. Interest income decreased by $157,300 or 9.5% for the three
months ended June 30, 2003 compared to the three months ended June 30, 2002.
This was the result of a decrease in the average yield on interest-earning
assets to 5.88% for the three months ended June 30, 2003 from 6.85% for the
three months ended June 30, 2002 partially offset by an increase in the average
balance of interest earning assets of $5.4 million or 5.5% to $102.4 million for
the three months ended June 30, 2003 from $97.0 million for the three months
ended June 30, 2002. Interest income totaled $3.1 million for the six months
ended June 30, 2003 compared to $3.3 million for the six months ended June 30,
2002. This was the result of a decrease in the average yield on interest-earning
assets to 6.04% for the six months ended June 30, 2003 from 6.84% for the six
months ended June 30, 2002 partially offset by an increase in the average
balance of interest earning assets of $3.7 million or 3.6% to $101.6 million for
the six months ended June 30, 2003 from $97.9 million for the six months ended
June 30, 2002.

Interest on loans for the three months ended June 30, 2003 decreased $182,100 or
12.9% compared to the three months ended June 30, 2002. The decrease resulted
primarily from a decrease in average loans outstanding to $68,800 for the three
months ended June 30, 2003 from $75,200 for the same period ended June 30, 2002,
and a decrease in the average yield on loans receivable from 7.51% for the three
months ended June 30, 2002 to 7.15% for the three months ended June 30, 2003.
Interest on loans for the six months ended June 30, 2003 decreased $306,900 or
10.8% compared to the six months ended June 30, 2002. The decrease resulted from
a decrease in average total loans outstanding during the period from $74,700 for
the period ending June 30, 2002 to $70,100 for the same period ending June 30,
2003 and a decrease in the yield on loans receivable from 7.58% for the six
months ended June 30, 2002 to 7.21% for the six months ended June 30, 2003. The
decrease in the average yield on loans receivable was primarily due to lower
market rates and adjustable rate loans repricing at a lower rate based on the
lagging index used by the Bank.

Interest on mortgage-backed securities decreased by $27,100 or 46.7% for the
three-month period ended June 30, 2003 as compared to the same period ended June
30, 2002. The decline resulted from a decrease of $1.4 million or 38.8% in the
average balance of mortgage-backed securities to $2.2 million for the three
months ended June 30, 2003 compared to $3.6 million for three months ended June
30, 2002 and a decrease of 75 basis points in the average yield on
mortgage-backed securities to 5.68% for the three months ended June 30, 2003
from 6.43% for the three months ended June 30, 2002. Interest on mortgage-backed
securities decreased $56,400 or 45.8% for the six months ended June 30, 2003
compared to same period ended June 30, 2002. The decline resulted from a
decrease of $1.5 million or 39.8% in the average balance of mortgage-backed
securities to $2.3 million for the six months ended June 30, 2003 compared to
$3.8 million for the six months ended June 30, 2002 and a decrease of 80 basis
points in the average yield on mortgage-backed securities to 5.73% for the six
months ended June 30, 2003 from 6.53% for the six months ended June 30, 2002.

Interest on investment securities decreased by $1,000 or .7% for the three
months ended June 30, 2003 compared to the same period ended June 30, 2002. This
was due to a decrease in the average yield of 104 basis points from 5.04%, for
the three months ended June 30, 2002 to 4.08% for the three months ended June
30, 2003, partially offset by an increase in the average balance of investment
securities from $11.4 million for the three months ended June 30, 2002 to $14.1
million for the three months ended June 30, 2003. Interest on investment
securities decreased by $49,100 or 16.4% for the six months ended June 30, 2003
as compared to the same period ended June 30, 2002. This was due to a decrease
in the average yield of 104 basis


<PAGE>

points from 5.15%, for the six months ended June 30, 2002 to 4.11%, for the six
months ended June 30, 2003 partially offset by an increase in the average
balance of investment securities from $11.6 million for the six months ended
June 30, 2002 to $12.2 million for the six months ended June 30, 2003.

Interest Expense. Interest expense decreased by $90,000, or 13.0%, from $691,000
for the three months ended June 30, 2002 to $601,000 for the three months ended
June 30, 2003. Interest expense decreased by $238,100 or 16.4%, from $1.5
million for the six months ended June 30, 2002 to $1.2 million for the six
months ended June 30, 2003. The decrease in interest expense was due to a
decrease in deposit interest rates of 84 basis points from 3.55% for the six
month period ended June 30, 2002 to 2.71% for the same six month period ended
June 30, 2003. Interest on FHLB advances remained unchanged at 5.19% for both
periods.

Net Interest Income. Net interest income before provision for losses on loans
decreased by $67,200 or 6.9% from $973,000 for the three months ended June 30,
2002 to $905,700 for the three months ended June 30, 2003. Net interest income
before provisions for losses on loans decreased by $42,500 or 2.2% for the six
months ended June 30, 2003 compared to the same period ended June 30, 2002. The
Company's interest rate spread for the three months ended June 30, 2003
decreased by 29 basis points to 2.95% from 3.24% for the three months ended June
30, 2002. The Company's interest rate spread for the six months ended June 30,
2003 decreased by 4 basis points to 3.04% from 3.08% for the six months ended
June 30, 2002.

Provision for Losses on Loans. There were no additional provisions for losses on
loans for the three and six months ended June 30, 2003. The Company had charge
offs of $5,200 and recoveries of $6,500 during the three month period ended June
30, 2003 and charge offs of $17,700 and recoveries of $18,800 during the three
month period ended June 30, 2002. The Company had charge offs of $39,100 and
recoveries of $14,600 during the six month period ended June 30, 2003 and had
charge-offs of $26,700 and recoveries of $18,800 during the six month period
ended June 30, 2002. On June 30, 2003 the Company had $355,500 in non-accrual
loans compared to $471,700 on June 30, 2002. 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 probable 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. Total non-interest income increased by $25,000 or 19.7% for
the three-month period ended June 30, 2003 as compared to the same period ended
June 30, 2002. The increase was due to a gain on the sale of a security offset
by a decrease in loan fees earned. Non-interest income remained unchanged for
the six months ended June 30, 2003 as compared to the same period ended June 30,
2002.

Non-interest Expense. Non-interest expense increased $44,900 or 8.7% for the
three-month period ended June 30, 2003 compared to the same period ended June
30, 2002. Non-interest expense increased $100,500 or 10.1% for the six-month
period ended June 30, 2003 compared to the same period ended June 30, 2002. Data
processing expenses increased $8,500 or 21.5% for the three-month period ended
June 30,2003 compared to the same period ended June 30,2002. Data processing
expenses increased $21,200 or 26.0% for the six-month period ended June 30, 2003
compared to the same period ended June 30, 2002. The increases were due to our
data processor giving us a deeper discount on services during the first years of
service. Other expenses increased due to additional professional fees.
Compensation and benefit costs increased $21,100 or 7.8% from $272,100 for the
three months ended June 30, 2002 to $293,200 for the three month period ended
June 30, 2003. Compensation and benefit costs increased by $55,600 or 10.3% from
$539,900 for the six months ended June 30, 2002 to $595,500 for the six months
ended June 30, 2003. The increases were primarily due to an increase of $11,100
in the Company's contribution to its employee retirement plan and a 3.5%
increase in employee compensation.

Taxes on Income. Income taxes for the three months ended June 30, 2003,
decreased by $17,300 or 8.1%, compared to the same period ended June 30, 2002.
Income taxes for the six months ended June 30, 2003, decreased by $29,500 or
7.1%, compared to the same six month period ended June 30, 2002. The effective
income tax rate for the three months ended June 30, 2003 was 39.4% compared to
36.5% for the three months ended June 30, 2002. The effective income tax rate
for the first six months of 2003 was 38.8% compared to 36.5% for the first six
months of 2002. The increase in the effective tax rate was due to the Company
adjusting the tax estimate to better match its year tax amount due the IRS.


<PAGE>

Net Earnings. Net earnings decreased $69,800 or 18.8% to $300,800 for the three
months ended June 30, 2003 compared to $370,600 for the three months ended June
30, 2002. Net earnings decreased $114,300 or 15.9% to $606,400 for the six-month
period ended June 30, 2003 compared to $720,700 for the same period ended June
30, 2002.

Impact of New Accounting Standards

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations (SFAS No. 143). SFAS No. 143 requires the Company to record the fair
value of an asset retirement obligation as a liability in the period in which it
incurs a legal obligation associated with the retirement of tangible long-lived
assets that result from the acquisition, construction, development, and/or
normal use of the assets. The Company also records a corresponding asset which
is depreciated over the life of the asset. The Company was required to adopt
SFAS No. 143 on January 1, 2003. The adoption of SFAS No. 143 was not material
to the Company's financial statements.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.
SFAS No. 145 amends existing guidance on reporting gains and losses on the
extinguishment of debt to prohibit the classification of the gain or loss as
extraordinary, as the use of such extinguishments have become part of the risk
management strategy of many companies. SFAS No. 145 also amends SFAS No. 13 to
require sale-leaseback accounting for certain lease modifications that have
economic effects similar to sale-leaseback transactions. The provisions of the
Statement related to the rescission of the Statement No. 4 are applied in fiscal
years beginning after May 15, 2002. Earlier application of these provisions is
encouraged. The provisions of the Statement related to Statement No. 13 were
effective for transactions occurring after May 15, 2002, with early application
encouraged. The impact of adopting SFAS No. 145 on the Company's financial
statements was not material.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities. This Statement addresses financial accounting and
reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring). The provisions of this
Statement are effective for exit and disposal activities that are initiated
after December 31, 2002. The effect of this Statement on the Company's financial
statements was not material.

In October 2002, the FASB Statement No. 147 (FAS 147), Acquisitions of Certain
Financial Institutions, which amends Statement No. 72 (FAS 72), Accounting for
Certain Acquisitions of Banking or Thrift Institutions and no longer requires
the separate recognition and subsequent amortization of goodwill that was
originally required by FAS 72. FAS 147 also amend Statement No. 144 (FAS 144),
Accounting for the Impairment or Disposal of Long-Lived Assets, to include in
its scope long-term customer-relationship intangible assets (such as core
deposit intangibles). The effects of implementation on the Company's financial
statements were not material.

In November 2002, the FASB issued Interpretation No. 45, Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness to Others, an interpretation of FASB Statements No. 5, 57, and 107
and a rescission of FASB Interpretation No. 34. This Interpretation elaborates
on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees issued. The Interpretation
also clarifies that a guarantor is required to recognize, at inception of a
guarantee, a liability for the fair value of the obligation undertaken. The
initial recognition and measurement provisions of the Interpretation are
applicable to guarantees issued or modified after December 31, 2002. The
disclosure requirements are effective for financial statements of interim and
annual periods ending after December 15, 2002. The effects of implementation on
the Company's financial statements were not material.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation - Transition and Disclosure, an amendment of FASB Statement No.
123. This Statement amends FASB Statement No. 123, Accounting for Stock-Based
Compensation, to provide alternative methods of transition for a voluntary
change to the fair value method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of
Statement No. 123 to require prominent disclosures of both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. Certain of
the disclosure modifications are required for fiscal years ending after December
15, 2002 and are included in the notes to these consolidated financial
statements.


<PAGE>

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities (FIN 46). FIN 46 addresses consolidation by business
enterprises of variable interest entities that have certain characteristics. It
requires a business enterprise that has a controlling interest in a variable
interest entity (as defined by FIN 46) to include the assets, liabilities and
results of the activities of the variable interest entity of the consolidated
financial statements of the business enterprise. FIN 46 applies immediately to
variable interest entities created after January 31, 2003, and to variable
interest entities in which an enterprise obtains an interest after that date.
For variable interest acquired before February 1, 2003, it applies in the first
fiscal year or interim period beginning after June 15, 2003. The impact of
adopting FIN 46 will not be material as the Company does not presently have any
variable interest entities.

Safe Harbor Statement

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 Company 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 Company, are
generally identifiable by use of the words "believe," "expect," "intend,"
"anticipate," "estimate," "project," or similar expressions. The Company'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 Company 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.

                                     Item 3

                             Controls and Procedures

      (a) Evaluation of disclosure controls and procedures.

Under the supervision and with participation of our management, including the
Company's Chief Executive Officer and Chief Financial Officer, the Company
evaluated the effectiveness of the design and operation of the Company's
disclosure controls and procedures (as defined in Rule 13a-14(c) under the
Securities Exchange Act of 1934) as of the end of the period covered by this
report. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that, as of the end of the period covered by this
report, the Company's disclosure controls and procedures were effective in
timely alerting them to the material information relating to the Company's (or
its consolidated subsidiaries) required to be included in its periodic SEC
filings.

      (b) Changes in internal controls.

There has been no change made in the Company's internal control over financial
reporting that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.

<PAGE>

                  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.

      The Registrant convened its 2003 Annual Meeting of Stockholders on April
16, 2003. At the meeting the stockholders of the Registrant considered and voted
upon:

            1.    The election of Stephen L. Mourlam, Kyle R. Swon and Dennis J.
                  Tasler as directors for a term of three years.

            2.    The ratification of the appointment of KPMG LLP as auditors of
                  the Registrant for the fiscal year ending December 31, 2003.

            The election of Stephen L. Mourlam, as director was as approved by a
            vote of 1,760,962 votes in favor, 6,500 withheld and 0 abstaining.

            The election of Kyle R. Swon, as director was as approved by a vote
            of 1,760,962 votes in favor, 6,500 withheld and 0 abstaining.

            The election of Dennis J. Tasler, as director was as approved by a
            vote of 1,763,262 votes in favor, 4,200 withheld and 0 abstaining.

            The ratification of the engagement of KPMG LLP as auditors was
            approved by a vote of 1,766,362 votes in favor, 600 opposed and 500
            abstaining.

Item 5. Other Information

      None

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

            Exhibit 31.1      Certification of Chief Executive Officer, Pursuant
                              to Section 302 of the Sarbanes-Oxley Act

            Exhibit 31.2      Certification of Chief Financial Officer, Pursuant
                              to Section 302 of the Sarbanes-Oxley Act

            Exhibit 32.1      Certification of Chief Executive Officer, Pursuant
                              to Section 906 of the Sarbanes-Oxley Act

            Exhibit 32.2      Certification of Chief Financial Officer, Pursuant
                              to Section 906 of the Sarbanes-Oxley Act

            On April 21, 2003 a Form 8-K report was filed relating to earnings
            and dividends for the first quarter of 2003.


<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: August 8, 2003                   By:
                                           -------------------------------------
                                           Phyllis A. Murphy
                                           President and Chief Executive Officer


Date: August 8, 2003                   By:
                                           -------------------------------------
                                           Stephen L. Mourlam
                                           Executive Vice President/
                                           Chief Financial Officer