UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~June~~ September 30, ~~2004~~2005

Commission file number 0-30753

FIRST FEDERAL BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Delaware

37-1397683

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

109 East Depot Street, Colchester, Illinois 62326

(Address of principal executive offices) (Zip Code)

(309) 776-3225

(Registrant’s telephone number, including area code)

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. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

~~State~~Indicate ~~the~~by ~~number~~check ofmark ~~shares~~whether ~~outstanding~~the ofregistrant ~~each of~~is ~~the~~a ~~issuer’s~~shell ~~classes~~company of(as ~~common~~defined ~~equity~~in asRule 12b-2 of the ~~latest~~Exchange ~~practicable date~~Act). Yes ¨ No x

AsIndicate ofthe ~~July~~number ~~29,~~of ~~2004~~shares ~~the~~outstanding ~~Registrant~~of ~~had~~each ~~outstanding~~of ~~1,309,886~~the ~~shares~~issuer’s classes of common stock as of the latest practicable date.

As of November 1, 2005, the Registrant had outstanding 1,244,499 shares of common stock.

FIRST FEDERAL BANCSHARES, INC.

Form 10-Q Quarterly Report

Index

		~~Page~~	Page
PART I - Financial Information
~~Item 1~~	~~Financial~~Item ~~Statements~~1	1Financial Statements	1
~~Item 2~~	~~Management’s~~Item ~~Discussion and Analysis of Financial Condition and Results of Operations~~2	7Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
~~Item 3~~	~~Quantitative~~Item ~~and Qualitative Disclosures About Market Risk~~3	10Quantitative and Qualitative Disclosures About Market Risk	11
~~Item 4~~	~~Controls~~Item ~~and Procedures~~4	12Controls and Procedures	12
PART II - Other Information
~~Item 1~~	~~Legal~~Item ~~Proceedings~~1	13Legal Proceedings	13
~~Item 2~~	~~Changes~~Item ~~in Securities, Use of Proceeds and Issuers Purchases of Equity Securities~~2	13Unregistered Sales of Equity Securities and Use of Proceeds	13
~~Item 3~~	~~Defaults~~Item ~~Upon Senior Securities~~3	13Defaults Upon Senior Securities	13
~~Item 4~~	~~Submission~~Item ~~of Matters to a Vote of Securities Holders~~4	13Submission of Matters to a Vote of Securities Holders	13
~~Item 5~~	~~Other~~Item ~~Information~~5	13Other Information	13
~~Item 6~~	~~Exhibits~~Item ~~and Reports on Form 8-K~~6	14Exhibits	14
SIGNATURES		16	15

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

First Federal Bancshares, Inc. and Subsidiary

Consolidated Statements of Financial Condition

(in thousands of dollars, except share data)

(unaudited)

	June 30,2004			December 31,2003
	September 30,2005			December 31,2004
ASSETS
Cash and cash equivalents	$	1113,~~714~~195		$	2914,~~124~~387
Time deposits in other financial institutions		295			295
Securities available-for-sale		153,481			160,337
Securities available-for-sale, at fair value		139,770			153,622
Loans receivable, net		~~133~~173,~~209~~155			~~131~~136,~~935~~331
Real estate owned, net		83520			~~149~~101
Premises and equipment		3,515			3,535
Premises and equipment, net		3,350			3,471
Accrued interest receivable		1,~~387~~703			1,~~489~~363
Goodwill		1,340			1,340
Core deposits and other intangibles		~~268~~218			~~288~~248
Other assets		21,~~431~~855			~~238~~1,329
TOTAL ASSETS	$	~~307~~335,~~723~~401		$	~~328~~312,~~730~~487
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Deposits	$	~~271~~287,~~913~~638		$	~~271~~273,~~850~~711
Advances from borrowers for taxes and insurance		~~281~~153			~~137~~184
Federal Home Loan Bank advances		617,~~000~~226			6,~~000~~450
Accrued interest payable		~~547~~717			~~484~~592
Other liabilities		~~238~~392			~~8,866~~209
Subordinated debt		7,217			—
Subordinated debentures		7,217			7,217
Total liabilities		~~286~~313,~~196~~343			~~287~~288,~~337~~363
SHAREHOLDERS’ EQUITY
Preferred stock, $.01 par value, 1,000,000 shares authorized; none issued or outstanding		—			—
Common stock, $.01 par value, 4,000,000 shares authorized; 2,242,500 shares issued		22			22
Additional paid-in capital		2223,~~975~~089			22,~~852~~954
Unearned ESOP shares		(~~1,121~~897	)		(1,~~211~~032	)
Unearned stock awards		(~~609~~271	)		(~~745~~474	)
Treasury stock (June 30 – 932,614 shares, December 31 – 388,313)		(28,415	)		(9,902	)
Treasury stock (September 30 – 998,001 shares, December 31 –925,401)		(29,969	)		(28,185	)
Retained earnings		3031,~~673~~689			3031,~~180~~393
Accumulated other comprehensive income (loss)		(1,998	)		197
Accumulated other comprehensive loss		(1,605	)		(554	)
Total shareholders’ equity		2122,~~527~~058			4124,~~393~~124
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	~~307~~335,~~723~~401		$	~~328~~312,~~730~~487

See notes to consolidated financial statements.

First Federal Bancshares, Inc. and Subsidiary

Consolidated Statements of Income

(in thousands of dollars, except share data)

(unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	Three Months EndedSeptember 30,					Nine Months EndedSeptember 30,
	2004			2003		2004			2003
	2005			2004		2005			2004
Interest income
Loans	$	2,~~084~~564		$	2,~~313~~092	$	46,~~156~~988		$	46,~~941~~248
Securities		1,~~487~~432			1,~~346~~470		24,~~955~~384			24,~~683~~425
Other interest income		4153			~~109~~30		90169			~~176~~120
Total interest income		34,~~612~~049			3,~~768~~592		711,~~201~~541			710,~~800~~793
Interest expense
Deposits		1,~~353~~893			1,~~707~~400		25,~~761~~221			34,~~483~~161
Federal Home Loan Bank advances		39170			3940		77303			78117
Note Payable		112			—		112			—
Subordinated debtentures		106			106		316			218
Total interest expense		12,~~504~~169			1,~~746~~546		25,~~950~~840			34,~~561~~496
Net interest income		21,~~108~~880			2,~~022~~046		45,~~251~~701			46,~~239~~297
Provision for loan losses		—143			—		—258			—
Net interest income after provision for loan losses		21,~~108~~737			2,~~022~~046		45,~~251~~443			46,~~239~~297
Noninterest income
Service charges and other fee income		113			111		204			206
Service charges on deposit accounts		26			25		74			61
Loan origination and servicing fees		5771			~~146~~73		~~116~~199			~~257~~189
Net gain on sale of securities		4			247		384			312
Other fee income		169			124		437			292
Recovery of impairment loss		—			355		25			355
Net gain (loss) on sale of securities		(7	)		192		222			576
Other income		12			17		27			55
Recovery of impairment loss		—			—		—			25
Total noninterest income		186			876		756			1,185
Other income		8			8		39			35
Total noninterest income		267			422		971			1,178
Noninterest expense
Compensation and benefits		1,~~170~~130			1,~~017~~019		23,~~202~~305			13,~~874~~221
Occupancy and equipment		~~131~~146			~~124~~147		~~271~~425			~~267~~418
Data processing		~~149~~168			~~165~~102		~~315~~489			~~352~~417
Federal insurance premiums		3029			3329		5988			6688
Advertising		36			3546		75116			77121
Professional fees		8558			9063		~~178~~214			~~169~~241
Other noninterest expenses		~~210~~218			~~154~~253		~~438~~665			~~347~~691
Total noninterest expense		1,~~811~~785			1,~~618~~659		35,~~538~~302			35,~~152~~197
Income before income taxes		~~483~~219			~~1,280~~809		1,~~469~~112			2,~~272~~278
Provision for income taxes		~~235~~77			~~492~~349		~~653~~396			~~867~~1,002
Net income	$	~~248~~142		$	~~788~~460	$	~~816~~716		$	1,~~405~~276
Earnings per share
Basic	$	.1613		$	.4239	$	.5162		$	.7588
Diluted	$	.1512		$	.4037	$	.4859		$	.7282
Weighted average shares		1,~~512~~130,~~589~~709			1,~~869~~165,~~251~~612		1,~~602~~149,~~184~~044			1,~~864~~455,~~335~~628
Comprehensive income (loss)	$	(~~2,629~~452	)	$	~~955~~2,064	$	(~~1,379~~335	)	$	~~1,560~~686

See notes to consolidated financial statements.

First Federal Bancshares, Inc. and Subsidiary

Consolidated Statements of Shareholders’ Equity

~~Six~~Nine months ended ~~June~~ September 30, ~~2003~~2004 and ~~2004~~ 2005

(in thousands of dollars, except share data)

(unaudited)

	Common Stock		AdditionalPaid-inCapital			UnearnedESOPShares			UnearnedStockAwards			TreasuryStock			RetainedEarnings			AccumulatedOther Compre- hensiveIncome(loss)			Total Stock- holders’Equity
	CommonStock		AdditionalPaid-inCapital			UnearnedESOPShares			UnearnedStockAwards			TreasuryStock			RetainedEarnings			AccumulatedOtherCompre-hensiveIncome (loss)			TotalShare-holders’Equity
Balance at December 31, 2002	$	22	$	22,629		$	(1,390	)	$	(1,016	)	$	(3,272	)	$	28,090		$	1,968		$	47,031
Purchase of 10,225 shares of treasury stock		—		—			—			—			(223	)		—			—			(223	)
Options exercised (12,176 shares)				(75	)		—			—			212						—			137
ESOP shares earned		—		101			90			—			—			—			—			191
Stock awards earned		—		—			—			136			—			—			—			136
Dividends declared ($.19 per share)		—		—			—			—			—			(366	)		—			(366	)
Comprehensive income
Net income		—		—			—			—			—			1,405						1,405
Change in fair value of securities classified as available-for-sale, net of reclassification and tax effects		—		—			—			—			—			—			155			155
Total comprehensive income																						1,560
Balance at June 30, 2003	$	22	$	22,655		$	(1,300	)	$	(880	)	$	(3,283	)	$	29,129		$	2,123		$	48,466
Balance at December 31, 2003	$	22	$	22,852		$	(1,211	)	$	(745	)	$	(9,902	)	$	30,180		$	197		$	41,393
Purchase of 559,993 shares of treasury stock		—		—			—			—			(18,917	)		—			—			(18,917	)
Options exercised (15,692 shares)		—		(79	)		—			—			404			—			—			325
Options exercised (22,692 shares)				(224	)		—			—			620						—			396
ESOP shares earned		—		~~202~~265			90135			—			—			—			—			~~292~~400
Stock awards earned		—		—			—			~~136~~203			—			—			—			~~136~~203
Dividends declared ($.22 per share)		—		—			—			—			—			(323	)		—			(323	)
Dividends declared ($.33 per share)		—		—			—			—			—			(455	)		—			(455	)
Comprehensive income
Net income		—		—			—			—			—			~~816~~1,276			—			~~816~~1,276
Change in fair value of securities classified as available-for-sale, net of reclassification and tax effects		—		—			—			—			—			—			(~~2,195~~590	)		(~~2,195~~590	)
Total comprehensive income (loss)																						(1,379	)
Total comprehensive loss																						686
Balance at June 30, 2004	$	22	$	22,975		$	(1,121	)	$	(609	)	$	(28,415	)	$	30,673		$	(1,998	)	$	21,527
Balance at September 30, 2004	$	22	$	22,893		$	(1,076	)	$	(542	)	$	(28,199	)	$	31,001		$	(393	)	$	23,706
Balance at December 31, 2004	$	22	$	22,954		$	(1,032	)	$	(474	)	$	(28,185	)	$	31,393		$	(554	)	$	24,124
Purchase of 75,075 shares of treasury stock		—		—			—			—			(1,859	)		—			—			(1,859	)
Options exercised (2,475 shares)		—		(32	)		—			—			75			—			—			43
ESOP shares earned		—		167			135			—			—			—			—			302
Stock awards earned		—		—			—			203			—			—			—			203
Dividends declared ($.36 per share)		—		—			—			—			—			(420	)		—			(420	)
Comprehensive income
Net income		—		—			—			—			—			716			—			716
Change in fair value of securities classified as available-for-sale, net of reclassification and tax effects		—		—			—			—			—			—			(1,051	)		(1,051	)
Total comprehensive income																						(335	)
Balance at September 30, 2005	$	22	$	23,089		$	(897	)	$	(271	)	$	(29,969	)	$	31,689		$	(1,605	)	$	22,058

See notes to consolidated financial statements.

First Federal Bancshares, Inc. and Subsidiary

Consolidated Statements of Cash Flows

(in thousands of dollars)

(unaudited)

	Six Months Ended June 30,
	Nine Months Ended September 30,
	2004			2003
	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	~~816~~716		$	1,~~405~~276
Adjustments to reconcile net income to net cash provided by operating activities
Provision for depreciation		130			110
Depreciation and amortization		192			195
Loss (gain) on sale of real estate owned		(3	)		(8	)
Gain on sale of real estate owned		1			8
Net amortization of premiums and discounts		~~105~~109			6115
ESOP compensation expense		~~292~~302			~~191~~400
Stock award compensation expense		~~136~~203			~~136~~203
Amortization of intangible assets		2030			2030
Provision for loan losses		—			—
Deferred income tax		91			—
Dividend reinvestments		(498	)		(459	)
Provision for loan losses		258			—
Federal Home Loan Bank stock dividends		(4462	)		(5066	)
Gain on sale of securities		(384	)		(312	)
Net gain on sale of securities		(222	)		(576	)
Net changes in
Accrued interest receivable and other assets		(~~2,066~~253	)		(~~263~~899	)
Deferred loan costs		~~169~~(35	)		~~(77~~166	)
Accrued interest payable and other liabilities		~~1,827~~303			~~501~~964
Net cash from operating activities		~~500~~1,633			1,~~200~~816
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of securities available-for-sale		(505,~~045~~110	)		(8758,~~434~~646	)
Purchase of securities held-to-maturity		—			(2,000	)
Principal paydowns on mortgage-backed securities		12,540			12,958
Principal paydowns on mortgage-backed securities		9,425			7,432
Purchase of Federal Home Loan Bank stock		(42	)		(65	)
Purchase of Federal Home Loan Bank stock		(65	)		(175	)
Sale of Federal Home Loan Mortgage Corporation stock		239			—
Proceeds from maturities of securities		~~8,275~~—			308,~~500~~609
Proceeds from sale of securities available-for-sale		275,~~500~~398			2336,~~064~~699
Purchase of loans		(1,457	)		(3,569	)
Dividend reinvestments		(717	)		(767	)
Net decrease (increase) in loans receivable		(106	)		17,321
Purchase of loans		(30,599	)		(2,220	)
Proceeds from sale of real estate owned		189			362
Sale of loans		1,619			—
Purchase of property and equipment		(110	)		(311	)
Net increase in loans receivable		(8,655	)		(1,546	)
Net cash from investing activities		(6,394	)		(14,810	)
Proceeds from sale of real estate owned		169			250
Purchase of property and equipment		(71	)		(157	)
Net cash from investing activities		(25,229	)		(4,885	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits		63			6,819
Net increase (decrease) in deposits		13,927			(582	)
Net change in advances from borrowers for taxes and insurance		~~144~~(31	)		~~113~~(58	)
Purchase of treasury stock		(18,917	)		(223	)
Advances from the Federal Home Loan Bank		13,227			450
Proceeds from subordinated debt		7,217			—
Federal Home Loan Bank advance repayments		(2,451	)		—
Dividends paid		(348	)		(330	)
Purchase of treasury stock		(1,859	)		(18,917	)
Options exercised		325			137
Proceeds from subordinated debentures		—			7,217
Net cash from financing activities		(11,516	)		6,516
Dividends paid		(452	)		(493	)
Net change in cash and cash equivalents		(17,410	)		(7,094	)
Options exercised		43			396
Net cash from financing activities		22,404			(11,987	)
Net change in cash and cash equivalents		(1,192	)		(15,056	)
Cash and cash equivalents
Beginning of period		2914,~~124~~387			4229,~~827~~124
End of period	$	1113,~~714~~195		$	3514,~~733~~068
Supplemental disclosures of cash flow information
Cash paid during the period for
Interest	$	25,~~887~~715		$	34,~~625~~423
Taxes, net of refunds		~~452~~278			~~530~~562
Transfers to real estate owned		~~120~~778			~~223~~187
Transfer of securities to available-for-sale from held-to-maturity on January 24, 2003 at fair value		—			24,407
Due to broker		—			3,900
Due to broker		9,000			12,064

See notes to consolidated financial statements.

FIRST FEDERAL BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~June~~ September 30, ~~2004~~2005

(table amounts in thousands of dollars, except share data)

Note 1 -– Basis of Presentation

The accompanying interim consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain disclosures required by ~~accounting~~U.S. ~~principles~~ generally accepted inaccounting ~~the~~principles ~~United States of America~~ are not included herein. These interim consolidated statements should be read in conjunction with First Federal Bancshares, Inc.’s (“First Federal Bancshares” or the “Company”) Annual Report on Form 10-K for the year ended December 31, 2004. The December 31, ~~2003~~2004 consolidated balance sheet presented herein has been derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, but does not include all disclosures required by ~~accounting principles~~U.S. generally accepted inaccounting ~~the United States of America~~principles.

Interim statements are subject to possible adjustment in connection with the annual audit of the Company for the year ending December 31, ~~2004~~2005. In the opinion of management of the Company, the accompanying unaudited interim consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the consolidated financial position and consolidated results of operations for the periods presented. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

~~Note~~The 2preparation –of ~~Subordinated~~financial ~~Debt~~statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and ~~Trust~~assumptions ~~Preferred~~that ~~Securities~~affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reported period. Actual results could differ from these estimates.

~~On March~~Note 25, 2004, FFBI Capital Trust I (the “Trust”), a Delaware statutory trust sponsored by the Company, issued $7.0 million in the form of fixed/floating rate capital securities through a pooled trust preferred securities offering. The proceeds from this issuance, along with the Company’s $217,000 capital contribution for the Trust’s common securities, were used to acquire $7.2 ~~million~~– ~~aggregate~~Earnings ~~principal~~Per ~~amount~~Share of the Company’s fixed/floating rate junior subordinated deferrable interest debentures due 2034 (the “Debentures”), which constitute the sole asset of the Trust. Prior to April 7, 2009 the interest rate on the Debentures and the capital securities is fixed at a rate of 5.838% and on or after April 7, 2009 the interest rate on the Debentures is variable and adjustable quarterly at 2.80% over the three-month LIBOR. The stated maturity of the Debentures is April 6, 2034. In addition, the Debentures are subject to redemption at par at the option of the Company, subject to prior regulatory approval, in whole or in part on any interest payment date on or after April 7, 2009.

~~Under~~For ~~new~~purposes ~~accounting~~of ~~guidance~~per share calculations, ~~FASB~~the ~~Interpretation~~Company ~~No.~~had 461,130,709 asand ~~revised~~1,165,612 inshares ~~December~~of ~~2003,~~common ~~the~~stock ~~trust~~outstanding isat ~~not~~September 30, ~~consolidated~~2005 ~~with~~and ~~the~~2004 ~~Company~~respectively. Basic ~~Accordingly,~~earnings per share for the ~~Company~~three ~~does~~months ~~not~~and ~~report~~nine ~~the~~months ~~securities~~ended ~~issued~~September 30, 2005 and 2004 were computed by dividing net income by the ~~trust~~weighted asaverage ~~liabilities,~~number ~~and~~of ~~instead~~shares ~~reports~~outstanding. asDiluted ~~liabilities~~earnings per share for the ~~subordinated~~three ~~debentures~~months ~~issued~~and bynine ~~the~~months ended ~~Company~~September 30, 2005 and ~~held~~2004 were computed by dividing net income by the ~~trust~~weighted average number of shares outstanding, asadjusted ~~these~~for ~~are~~the nodilutive ~~longer~~effect ~~eliminated~~of inthe outstanding stock options and stock awards. Computations for basic and diluted ~~consolidation~~earnings per share are provided below.

Note 3 –Tender Offer

On April 16, 2004, the Company commenced a self-tender offer for up to 560,000 shares of its common stock. On May 28, 2004, the Company purchased 559,993 of its common shares at $33.50 per share pursuant to its self tender offer, which expired May 21, 2004. The tender offer was in the form of a “modified Dutch auction tender.” Under this procedure, stockholders were given the opportunity to sell part or all of their shares to the Company at a price of not less than $31.00 per

share and not more than $34.00 per share. Upon the expiration of the offer, the Company selected the lowest purchase price that allowed it to buy 560,000 shares. All shares purchased in this offering received the same price. According to the final report from the depositary for the offer, the number of shares that were properly tendered and not withdrawn prior to the expiration of the offer exceeded the number of shares that the Company had offered to purchase. Therefore, the Company purchased, in most cases, 66.41% of the shares tendered by each of its stockholders.


	For the three months Ended September 30,				For the nine months Ended September 30,
	2005		2004		2005		2004
	(in thousands, except per share data)
Basic
Net income	$	142	$	460	$	716	$	1,276

Weighted average common shares outstanding		1,131		1,166		1,149		1,456

Basic earnings per common share	$	.13	$	.39	$	.62	$	.88

Diluted
Net income	$	142	$	460	$	716	$	1,276

Weighted average common shares outstanding		1,131		1,166		1,149		1,456
Dilutive effect of stock options		50		68		58		93
Dilutive effect of stock awards		4		9		5		13

Diluted average common shares		1,185		1,243		1,212		1,562

Diluted earnings per common share	$	.12	$	.37	$	.59	$	.82

~~The aggregate cost of the purchase totaled $18.9 million, including fees and expenses of~~Note ~~approximately~~3 ~~$157,000.~~– ~~The~~Stock-Based ~~tender~~Compensation ~~offer was financed with proceeds of the trust preferred securities issued by the Company in a pooled offering, cash on hand and a $6.0 million capital distribution from First Federal Bank.~~

~~Note~~The 4Company –applies ~~Earnings~~Accounting ~~Per~~Principles Board ~~Share~~(APB) Opinion 25 and related interpretations in accounting for its stock option plan. Accordingly, no compensation expense has been recognized at the date of grant. Had compensation expense been determined based on the fair value at the grant dates for awards under the plan consistent with the method of Statement of Financial Accounting Standards (SFAS) No. 123, “Accounting for Stock-Based Compensation,” the Company’s net income and earnings per share would have been reduced to the pro forma amounts in the table below. For purposes of pro forma disclosure, the estimated fair value of the options is amortized to expense over the options’ vesting period.

For purposes of per share calculations, the Company had 1,309,886 and 2,063,421 shares of common stock outstanding at June 30, 2004 and 2003. Basic earnings per share for the three months and six months ended June 30, 2004 and 2003 were computed by dividing net income by the weighted average number of shares outstanding. Diluted earnings per share for the three months and six months ended June 30, 2004 and 2003 were computed by dividing net income by the weighted average number of shares outstanding, adjusted for the dilutive effect of the outstanding stock options and stock awards. Computations for basic and diluted earnings per share are provided below.


	For the three months Ended September 30,				For the nine months Ended September 30,
	2005		2004		2005		2004
	(in thousands, except per share data)
Net income as reported	$	142	$	460	$	716	$	1,276
Pro forma net income		117		437		641		1,208
Earnings per share as reported
Basic		.13		.39		.62		.88
Diluted		.12		.37		.59		.82
Pro forma earnings per share
Basic		.10		.37		.56		.83
Diluted		.10		.35		.53		.77

	For the three monthsEnded June 30,				For the six monthsEnded June 30,
	2004		2003		2004		2003
	(in thousands, except per share data)
Basic
Net income	$	248	$	788	$	816	$	1,405
Weighted average common shares outstanding		1,513		1,869		1,602		1,864
Basic earnings per common share	$	.16	$	.42	$	.51	$	.75
Diluted
Net income	$	248	$	788	$	816	$	1,405
Weighted average common shares outstanding		1,513		1,869		1,602		1,864
Dilutive effect of stock options		96		79		94		74
Dilutive effect of stock awards		13		12		15		11
Diluted average common shares		1,622		1,960		1,711		1,949
Diluted earnings per common share	$	.15	$	.40	$	.48	$	.72

Pursuant to the Company’s 2001 stock-based incentive plan, which approved 89,700 shares of restricted stock, 73,999 shares were granted during 2001 and 15,701 were held in reserve for future grants. Of those held, 3,000 and 12,701 shares were awarded in 2003 and 2004, respectively. These shares vest over a five-year period. The unamortized cost of shares not yet earned (vested) is reported as a reduction of shareholders’ equity.

Note 5 – Stock Options

The Company applies Accounting Principles Board (APB) Opinion 25 and related interpretations in accounting for its stock option plan. Accordingly, no compensation cost has been recognized at the date of grant. Had compensation cost been determined based on the fair value at the grant

~~dates~~SFAS 123R, “Accounting for ~~awards~~Stock-Based ~~under~~Compensation, ~~the~~Revised,” ~~plan~~requires ~~consistent~~all ~~with~~public ~~the~~companies ~~method~~to record ofcompensation ~~Statement~~cost offor ~~Financial~~stock ~~Accounting~~options ~~Standards~~provided ~~(SFAS)~~to ~~No.~~employees ~~123, “Accounting~~in return for ~~Stock-Based~~employee ~~Compensation,”~~service. The cost is measured at the ~~Company’s~~fair ~~net~~value ~~income~~of ~~and~~the ~~earnings~~options ~~per~~when ~~share~~granted, ~~would~~and ~~have~~this ~~been~~cost ~~reduced~~is toexpensed over the ~~pro~~employee ~~forma~~service ~~amounts~~period, inwhich is normally the vesting ~~table~~period ~~below~~of the options. ~~For~~The ~~purposes~~Securities ofand ~~pro~~Exchange ~~forma~~Commission ~~disclosure,~~in April 2005 amended the ~~estimated~~compliance ~~fair~~dates ~~value~~for ofSFAS 123R to the ~~options~~ isnext ~~amortized~~fiscal toyear ~~expense~~from ~~over~~periods beginning after June 15, 2005. Compensation cost will also be recorded during the ~~options’~~remaining vesting ~~period~~periods. Estimated compensation costs for 2006, 2007, 2008 and 2009 are approximately $165,000, $19,000, $19,000 and $17,000, respectively.

	For the three monthsEnded June 30,				For the six monthsEnded June 30,
	2004		2003		2004		2003
	(in thousands, except per share data)
Net income as reported	$	248	$	788	$	816	$	1,405
Pro forma net income		226		766		771		1,362
Earnings per share as reported
Basic		.16		.42		.51		.75
Diluted		.15		.40		.48		.72
Pro forma earnings per share
Basic		.15		.41		.48		.73
Diluted		.14		.39		.45		.71

Pursuant to its 2001 stock-based incentive plan, the Company awarded 89,700 shares of restricted stock during 2001. These shares vest over a five-year period. The unamortized cost of shares not yet earned (vested) is reported as a reduction of shareholders’ equity.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

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 Litigation Reform Act of 1995 as amended, and is including this statement for 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 such as “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 affect on the operations and future prospects of the Company and its wholly-owned ~~subsidiaries~~ subsidiary include, but are not limited to, changes in: interest rates; general economic conditions; legislative/regulatory provisions; monetary and fiscal policies of the U.S. Government, including policies 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 Company’s market area; and accounting principles, policies, and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Company and its business, including ~~additional~~ additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.

The following discussion compares the consolidated financial condition of First Federal Bancshares and its wholly owned subsidiary, First Federal, at ~~June~~ September 30, ~~2004~~2005 to its consolidated financial condition at December 31, ~~2003~~2004 and the consolidated results of its operations for the three-month and ~~six~~nine-month periods ended ~~June~~ September 30, ~~2004~~2005 to the same periods in ~~2003~~ 2004. This discussion should be read in conjunction with the interim consolidated financial statements and footnotes included herein.

FINANCIAL CONDITION

Total assets were $335.4 million at September 30, 2005 and $312.5 million at December 31, 2004. During the nine months ended September 30, 2005, cash and cash equivalents decreased $1.2 million to $13.2 million and securities available-for-sale decreased $13.9 million to $139.8 million primarily as a result of principal paydowns on mortgage-backed securities. Loans receivable increased $36.8 million primarily due to increases of $33.1 million in loans originated, $17.8 million in purchased 1-4 family loans, $12.8 million in purchased participation loans, and $8.8 million in commercial loans, net of repayment of principal. These purchases are part of the Company’s strategy to increase income through an increase in interest-earning assets, in particular loans receivable. Management feels the asset growth needed in loans receivable can be accomplished through purchasing loans to augment local residential and commercial production. Any future purchases will be dependent upon the Company’s local lending production and pricing levels.

~~FINANCIAL~~The ~~CONDITION~~allowance for loan losses was $941,000 at September 30, 2005 and $942,000 at December 31, 2004. There were no impaired loans at either date. The allowance for loan losses represented .54% of total loans and 76.42% of nonperforming loans at September 30, 2005 compared to .69% of total loans and 51.45% of nonperforming loans at December 31, 2004. Nonperforming assets totaled $1.8 million and $2.0 million at September 30, 2005 and December 31, 2004, respectively. The ratio of non-performing assets to total assets at September 30, 2005 was .52% compared to .63% at December 31, 2004.

Total ~~assets~~liabilities ~~were~~at September 30, 2005 were $~~307~~313.73 million atcompared ~~June~~to ~~30, 2004 and~~ $~~328~~288.74 million at December 31, ~~2003. During the six months ended June 30,~~ 2004, ~~cash~~an ~~and~~increase ~~cash~~of ~~equivalents decreased~~ $1724.~~4 million to $11.7 million and securities available-for-sale decreased $6.~~9 million ~~to $153~~.5 ~~million~~The asincrease ~~excess~~in ~~funds~~total ~~were~~liabilities ~~used~~ primarily ~~for~~reflects ~~the~~an ~~tender~~increase ~~offer.~~in ~~Loans~~customer ~~increased~~deposits of $113.39 million asand a ~~result~~$10.8 ofmillion aincrease ~~shift~~in ~~away from loan originations through the~~ Federal Home Loan Bank ~~Mortgage~~advances, ~~Partnership~~which ~~Finance~~were ~~Program~~both ~~loans~~used ~~and~~to ~~toward~~fund ~~adjustable~~the ~~rate~~increase ~~portfolio~~in loans receivable.

~~The~~Shareholders’ ~~allowance~~equity ~~for~~at ~~loan~~September 30, ~~losses~~2005 was $~~928,000~~22.1 atmillion ~~June~~compared ~~30,~~to ~~2004 and~~ $~~963,000~~24.1 million at December 31, ~~2003.~~2004, ~~There~~a ~~were~~decrease noof ~~impaired~~$2.0 ~~loans at either date~~million. The ~~allowance~~decrease ~~for~~in ~~loan~~equity ~~losses represented~~primarily ~~.70%~~reflects ofthe ~~total~~repurchase ~~loans and 59.23%~~ of ~~nonperforming~~75,050 ~~loans~~shares attotaling approximately ~~June~~$1.9 30million, ~~2004~~and ~~compared~~a todecrease ~~.72%~~in ofthe ~~total~~fair ~~loans~~value ~~and 83.52%~~ of ~~nonperforming~~securities ~~loans at December 31~~available-for-sale, ~~2003.~~net ~~Nonperforming~~of ~~assets~~tax ~~totaled~~of $1.~~7 million and $~~1.4 million atoffset ~~June~~by ~~30,~~net ~~2004 and~~income ~~December~~of 31$716, ~~2003, respectively~~000. ~~The~~Other ~~ratio~~items ofaffecting ~~non-performing~~equity ~~assets~~include toESOP ~~total~~and ~~assets~~stock atawards ~~June 30~~earned, ~~2004~~dividends ~~was~~paid, ~~.56%~~and options ~~compared to~~ exercised.~~42%~~ ~~at December 31, 2003.~~

~~Total~~RESULTS ~~liabilities~~OF atOPERATIONS ~~June~~FOR THE ~~30,~~THREE ~~2004~~MONTHS ~~were~~ENDED ~~$286.2~~SEPTEMBER ~~million compared to $287.3 million at December 31~~30, ~~2003,~~2005 aAND ~~decrease~~SEPTEMBER ~~of $1.1 million. The decrease in total liabilities primarily reflects the addition of $7.2 million of subordinated debt in connection with the issuance of trust preferred securities~~30, ~~offset~~2004 ~~by a decrease in other liabilities of $8.6 million primarily due to the payment and settlement of amounts due to broker for the purchase of securities available-for-sale.~~

~~Shareholders’~~Net ~~equity~~income decreased ~~at June 30~~$318,000 ~~2004~~to ~~was~~ $~~21.5~~142,000 ~~million~~for ~~compared~~the toquarter ~~$41.4~~ended ~~million~~September 30, at2005 ~~December~~compared ~~31,~~to ~~2003,~~the asame ~~decrease~~period ofin ~~$19~~2004.9 ~~million.~~ The decrease in ~~equity~~net ~~primarily~~income ~~reflects~~was ~~the~~a ~~repurchase~~result of ~~559,993~~a ~~shares~~decrease ofin ~~stock~~net ~~totaling~~interest ~~$18.9 million~~income ~~through~~and ~~the~~an ~~tender~~increase ~~offer~~in ~~previously~~provision ~~discussed~~for ~~and~~loan alosses, ~~decrease~~and decreased innoninterest ~~the~~income ~~fair~~and ~~value~~increased ofnoninterest ~~securities~~expense ~~available-for-sale,~~partially ~~net~~offset ofby ~~tax~~a ofdecrease ~~$2.2~~in ~~million,~~the ~~offset~~provision byfor ~~net~~ income ~~of $816,000~~taxes.

~~RESULTS~~Net OFinterest ~~OPERATIONS~~income ~~FOR~~was ~~THE~~$1.9 ~~THREE~~million ~~MONTHS~~for ~~ENDED~~the ~~JUNE~~quarter ended September 30, 2005 compared to $2.0 million for the same prior year period. The ratio of average interest-earning assets to average interest-bearing liabilities decreased to 105.18% from 106.20% for the three-month periods, respectively. The net interest spread and the net interest margin decreased to 2.17% and 2.31%, respectively, for the quarter ended September 30, 2005 from 2.58% and 2.71%, respectively, for the same period in 2004. ~~AND~~The ~~JUNE~~decrease in the spread and margin was due to increases in both volume and rate of interest-bearing liabilities primarily as a result of an increase of $10.8 million in Federal Home Loan Bank advances, which increased the average rate by 127 basis points. The increase in the cost of funds exceeded the increase in the yield on interest-earning assets as interest-bearing liabilities repriced upward more quickly than interest-earning assets in reaction to the increasing short-term interest rate environment and flat yield curve. The average yield on interest-earning assets increased to 4.97% for the quarter ended September 30, ~~2003~~2005 from 4.76% for the same quarter in 2004, while the average cost of interest-bearing liabilities increased to 2.80% for the quarter ended September 30, 2005 from 2.18% for the same period in 2004.

~~Net~~The ~~income~~provision ~~decreased~~for ~~$540,000~~loan tolosses was $~~248~~143,000 for the quarter ended ~~June~~ September 30, ~~2004~~ 2005 compared to zero for the same period in ~~2003.~~2004 ~~The decrease in net income was~~ primarily adue ~~result~~to ofallocations afor ~~decrease~~$23.1 million in ~~noninterest~~1-4-family ~~income~~mortgages ~~associated~~and ~~with~~commercial ~~gains~~mortgages onoriginated ~~sales of securities~~ and ~~recovery~~purchased ofduring ~~impairment losses recognized in~~ the ~~prior~~ current period. InManagement ~~addition~~considered ~~non-interest~~the ~~expense~~allowance ~~increased~~for ~~and~~loan ~~was~~losses ~~partially~~to be ~~offset~~adequate byduring aboth ~~slight increase in net interest income~~periods.

~~Net~~On ~~interest~~a ~~income~~quarterly ~~was~~basis, ~~$2.1~~management ~~million~~of ~~for~~ the Company ~~quarter~~meets ~~ended~~to ~~June~~review ~~30,~~the ~~2004~~allowance ~~compared~~for toloan $2losses.0 ~~million~~Management ~~for~~classifies ~~the~~loans ~~same~~in ~~prior~~compliance ~~year~~with ~~period~~regulatory classifications. ~~The~~Classified ~~increase~~loans inare ~~net~~individually ~~interest~~reviewed ~~income~~to ~~was primarily~~arrive aat ~~result~~specific ofreserves anfor ~~increase~~those inloans. Once the ~~net~~specific ~~interest~~portion ~~spread and~~ of the ~~net~~allowance ~~interest~~is ~~margin~~calculated, tomanagement ~~2.52%~~calculates ~~and~~a ~~2.69%,~~historical ~~respectively,~~portion for ~~the~~each ~~quarter~~loan ~~ended~~category ~~June~~based ~~30,~~on ~~2004~~loan ~~from~~loss ~~2.27%~~history, ~~and~~peer ~~2.58%~~data, ~~respectively,~~current ~~for~~economic ~~the~~conditions ~~same~~and ~~periods~~trends in ~~2003.~~the ~~The~~portfolio, ~~increase~~including indelinquencies ~~the spread~~ and ~~margin~~impairments, ~~was~~as ~~due~~well ~~largely~~as changes toin the ~~decrease~~composition inof the ~~cost~~loan ofportfolio. ~~funds~~Although ~~exceeding~~management ~~the~~believes ~~decrease~~that in the ~~yield~~allowance onfor ~~interest-earning~~loan ~~assets~~losses asreflected ~~interest-earning~~probable ~~assets~~incurred ~~and~~losses ~~interest-bearing~~on ~~liabilities~~existing ~~repriced~~loans ~~downward~~at inSeptember 30, ~~reaction~~2005, tothere ~~the~~could ~~decreased~~be ~~interest rate~~no ~~environment.~~assurance ~~The~~that ~~average~~such ~~yield~~losses onwill ~~interest-earning~~not exceed ~~assets~~estimated ~~decreased~~amounts. toFuture ~~4.61%~~adjustments ~~for~~to the ~~quarter~~allowance ~~ended~~may ~~June~~be ~~30,~~necessary ~~2004~~due ~~from~~to ~~4.81%~~economic, ~~for~~operating, ~~the~~regulatory ~~same~~and ~~quarter~~other inconditions ~~2003,~~that ~~while~~may ~~the~~be ~~average~~beyond ~~yield~~the onCompany’s ~~interest-bearing~~control. ~~liabilities~~The ~~decreased~~allowance ~~to 2.09%~~ for ~~the~~loan ~~quarter ended~~losses ~~June~~as of September 30, ~~2004~~2005 ~~from~~was maintained ~~2.54%~~at ~~for~~a ~~the~~level ~~same~~that ~~period~~represents inmanagement’s ~~2003.~~best ~~The~~estimate ~~ratio~~ of ~~average~~probable ~~interest-earning~~incurred ~~assets~~losses toinherent ~~average~~in ~~interest-bearing liabilities decreased to 108.97% from 114.05% for~~ the ~~three-month~~loan ~~periods, respectively~~portfolio.

The provision for loan losses was zero for both quarters ended June 30, 2004 and 2003. Management considered the allowance for loan losses to be adequate during both periods due relatively stable delinquency trends.

On a quarterly basis, management of the Company meets to review the allowance for loan losses. Management classifies loans in compliance with regulatory classifications. Classified loans are individually reviewed to arrive at specific reserves for those loans. Once the specific portion of the allowance is calculated,

~~management~~Noninterest ~~calculates~~income awas ~~historical~~$267,000 ~~portion~~ for ~~each~~the ~~loan~~three-month ~~category~~period ~~based~~ended ~~on loan loss history~~September 30, ~~peer~~2005 ~~data,~~compared ~~current~~to ~~economic conditions and trends in the portfolio~~$422,000 ~~including delinquencies and impairments, as well as changes in the composition of the loan portfolio. Although management believes that the allowance~~ for ~~loan losses reflected probable incurred losses on~~the ~~existing~~same ~~loans~~period atin ~~June 30,~~ 2004~~, there can be no assurance that such losses will not exceed estimated amounts~~. ~~Future~~The ~~adjustments~~decrease toin ~~the~~noninterest ~~allowance~~income ~~may~~was beprimarily ~~necessary~~a ~~due~~result toof ~~economic,~~a ~~operating~~$199,000 ~~regulatory~~decrease ~~and~~in ~~other~~net ~~conditions~~gains ~~that~~on ~~may be beyond~~ the ~~Company’s~~ ~~control.~~sale ~~The allowance for loan losses as~~ of ~~June 30~~securities, ~~2004~~partially ~~was~~offset ~~maintained~~by atan aincrease ~~level that represents management’s best estimate~~ of ~~losses~~$45,000 in ~~the~~other ~~loan~~fee ~~portfolio~~income ~~and~~due ~~such~~to ~~losses~~the ~~were~~implementation ~~both~~of ~~probable~~an ~~and~~overdraft protection ~~reasonably estimatable~~program.

Noninterest ~~income~~expense was $~~186,000~~1.8 million for the ~~three-month~~quarter ~~period~~ ended ~~June~~ September 30, ~~2004~~ 2005 compared to $~~876,000~~1.7 million for the same ~~period~~prior inyear ~~2003~~period. ~~The~~Compensation ~~decrease~~and inbenefits ~~noninterest~~expense ~~income~~increased ~~was~~$111,000 ~~primarily~~due ato ~~result~~annual ofsalary aincreases and increased health insurance premiums. Data processing expense increased $~~243~~66,000 compared ~~decrease~~to inthe ~~net~~same ~~gains~~quarter onin ~~the~~2004. ~~sale~~These ofincreases ~~securities~~were ~~and~~offset by a $~~355~~35,000 decrease onin ~~the~~other ~~recovery~~non-interest ~~from~~expenses anand ~~impairment~~slight ~~loss~~decreases ~~related~~in toadvertising and professional fees. The Company received notice in October 2005 from the third-party ~~certificates~~administrator of ~~deposit~~its ~~purchased~~retirement ~~through~~plan aregarding ~~broker~~an ~~who~~increase ~~was~~in ~~charged~~its byrequired contribution for the ~~SEC~~2005 ~~with~~– ~~securities~~2006 ~~fraud~~plan year which will increase compensation and benefits expense by approximately $43,000 quarterly beginning in ~~relation~~the tofourth ~~these~~quarter ~~certificates~~2005.

~~Noninterest~~The ~~expense~~Company’s ~~was~~income ~~$1.8~~tax ~~million~~expense ~~and~~decreased $~~1.6~~272,000 ~~million~~to $77,000 for the quarter ~~quarters~~ ended ~~June~~ September 30, ~~2004~~2005 ~~and~~compared ~~2003.~~to ~~The~~$349,000 ~~increase~~during inthe ~~noninterest~~same ~~expense~~period in 2004 primarily ~~reflects~~as ~~increased compensation~~a ~~and~~result ~~benefits~~of decreased income. Income tax expense ofwas ~~$153,000~~approximately ~~associated~~35% ~~with~~and an43% ~~increase~~of inpretax ~~employee~~income ~~benefits~~for ~~including~~the ~~health~~quarter ~~insurance~~ended ~~premiums~~September 2005 and ~~retirement funds~~2004, respectively. ~~Occupancy~~The ~~and~~decrease ~~equipment~~in ~~expense~~the ~~and~~effective ~~other~~tax ~~noninterest~~rate ~~expenses~~is ~~also~~primarily ~~experienced~~due ~~increases~~to the filing of a consolidated tax return during the current period, ~~while~~thereby ~~data~~allowing ~~processing~~the Company to utilize and ~~professional~~record ~~fees~~the ~~decreased~~tax ~~slightly~~benefits not recorded in the prior comparative period.

~~The~~RESULTS ~~Company’s~~OF ~~federal~~OPERATIONS ~~income~~FOR ~~tax~~THE ~~expense~~NINE MONTHS ~~decreased~~ENDED ~~$257,000~~SEPTEMBER ~~to $235~~30,~~000~~ ~~for~~2005 ~~the~~AND ~~quarter~~SEPTEMBER ~~ended June~~ 30, 2004 compared to $492,000 during the same period in 2003. Income tax expense was approximately 49% and 38% of pretax income in June 2004 and 2003, respectively. The increase in the effective tax rate is a result of the net losses incurred at the holding company throughout 2004 for which a valuation allowance has been established.

~~RESULTS~~Net OFincome ~~OPERATIONS~~decreased $560,000 ~~FOR~~to ~~THE~~$716,000 ~~SIX~~for ~~MONTHS~~the ~~ENDED~~nine ~~JUNE~~months ended September 30, 2005 compared to $1.3 million for the nine-month period ended September 30, 2004. The decrease in net income was primarily a result of a decrease in net interest income and ~~AND~~noninterest ~~JUNE~~income, 30and an increase in the provision for loan losses and noninterest expense, ~~2003~~offset by a decrease in the provision for income taxes.

Net interest income ~~decreased~~was $~~589~~5.7 million for the nine months ended September 30,~~000~~ 2005 compared to $~~816~~6.3 million for the same prior year period. The ratio of average interest-earning assets to average interest-bearing liabilities decreased to 105.55% from 108.63% for the nine-month periods,~~000~~ respectively. The net interest spread and the net interest margin decreased to 2.26% and 2.40%, respectively, for the ~~six~~nine months ended ~~June~~ September 30, ~~2004~~2005 ~~compared~~from to2.53% and 2.70%, respectively, for the same period in ~~2003~~2004. The decrease in ~~net~~the ~~income~~spread and margin was ~~primarily~~due ato ~~result~~an increase in volume and rate of interest-bearing liabilities. These increases were primarily a result ~~decrease~~of insubordinated ~~non-interest~~debt ~~income~~issued ~~associated~~in connection with the ~~recovery~~trust preferred securities offering, an increase of ~~impairment~~$10.8 ~~losses~~million ~~recognized~~in Federal Home Loan Bank advances, and the increase in ~~2003.~~the ~~The~~cost ~~Company~~of ~~also~~funds ~~experienced an~~exceeding the increase in ~~noninterest~~the ~~expense~~yield on interest-earning assets as interest-bearing liabilities repriced upward more quickly than interest-earning assets in reaction to the increasing short-term interest rate environment, partially offset by athe ~~slight~~ increase in ~~net~~volume of interest-earning assets. ~~income~~The ~~and~~average ayield ~~decrease~~on interest-earning assets increased to 4.85% for the nine months ended September 30, 2005 from 4.62% for the same period in 2004, while the ~~income~~average ~~tax~~cost ~~provision~~of interest-bearing liabilities increased to 2.59% for the nine months ended September 30, 2005 from 2.09% for the same period in 2004.

~~Net~~The ~~interest~~provision ~~income~~for loan losses was $~~4.3~~258,000 ~~million~~ for the ~~six~~nine months ended ~~June~~ September 30, ~~2004~~2005 compared to ~~$4.2~~zero ~~million~~ for the same period in ~~2003. The increase in net interest income was primarily a result of an increase in net interest spread to 2.48% for the six months ended June 30,~~ 2004 ~~from 2.41% for the same previous year period, offset by a slight decrease in the net interest margin to 2.69% from 2.74% for the same period in 2003. The increase in the spread was~~ due ~~largely~~ to ~~the~~increased ~~decrease~~loan involume ~~the cost of funds exceeding the decrease~~ in ~~the yield on interest~~1-~~earning~~4 ~~assets~~family asmortgages ~~interest-earning assets~~ and ~~interest-bearing~~commercial ~~liabilities~~mortgages ~~repriced downward in reaction to the decreased interest rate environment. The average yield on interest-earning assets decreased 48 basis points to 4.56%~~ for the ~~six~~nine months ended ~~June~~ September 30, ~~2004 from 5~~2005.~~04%~~ ~~for~~Commercial ~~the~~mortgage ~~same~~loans ~~period~~are ininherently ~~2003,~~more ~~while~~risky ~~the~~than ~~average yield on interest~~1-~~bearing liabilities~~4 ~~decreased~~family ~~55 basis points to 2~~mortgages.~~08%~~ ~~for~~Management considered the ~~six~~allowance ~~months ended June 30, 2004 from 2.63%~~ for ~~the~~loan ~~same~~losses ~~period in 2003. The ratio of average interest-earning assets~~ to ~~average~~be ~~interest-bearing~~adequate ~~liabilities~~during ~~was~~both ~~111.16% from 114.16% for the six-month~~ periods ~~ended June 30, 2004 and June 30, 2003~~.

The provision for loan losses was zero for both six-month periods ended June 30, 2004 and 2003. Management considered the allowance for loan losses to be adequate during both periods due to relatively stable delinquency trends.

Noninterest income was $756,000 for the six-month period ended June 30, 2004 compared to $1.2 million for the same period in 2003. The decrease in noninterest income was primarily a result of a decrease of $330,000 in the recovery from an impairment loss related to certificates of deposit purchased through a broker who

Noninterest income was ~~charged~~$971,000 byfor the ~~SEC~~nine-month ~~with~~period ~~securities~~ended ~~fraud~~September 30, in2005 ~~relationship~~compared to ~~these~~$1.2 ~~certificates,~~million afor the same period in 2004. The decrease in noninterest income was primarily a result of a $~~141~~354,000 decrease in ~~loan origination~~net ~~and~~gains ~~servicing~~on ~~fees~~the ~~due~~sale of securities. In addition, in 2004 the Company recorded a $25,000 recovery of impairment loss related to ~~decreased~~certificates ~~loan~~of deposit ~~originations~~purchased through a broker who was charged by the ~~Federal~~SEC ~~Home~~with ~~Loan~~securities ~~Bank~~fraud ~~Mortgage~~in ~~Partnership~~relationship ~~Finance~~to ~~program,~~these ~~and~~certificates. aThe ~~decrease~~decreases were partially offset by an increase of $2813,000 in ~~other~~service ~~income~~charges, ~~offset~~an byincrease of $10,000 in loan origination and servicing fees, and an increase of $72145,000 in ~~net~~other ~~gain~~fee onincome due to the ~~sale~~implementation of ~~securities~~ an overdraft protection program.

Noninterest expense was $3.5.3 million for the nine-month period ended September 30, 2005 and $35.2 million for the ~~six-~~ nine months ended ~~June~~ September 30, 2004. Compensation and ~~2003.~~benefits ~~The~~expense ~~increase~~and indata ~~noninterest~~processing expense ~~primarily reflects~~ increased ~~compensation~~$84,000 and ~~benefits~~$72,000, ~~expense~~respectively, offor ~~$328~~the nine-month period ended September 30,~~000~~ ~~associated~~2005 ~~with~~compared anto ~~increase~~the same period in ~~employee~~2004. ~~benefits~~The ~~including~~increases ~~health~~were ~~insurance~~offset ~~premiums~~partially ~~and retirement~~by ~~funds~~a $27,000 decrease ~~and~~in anprofessional ~~increase~~fees ofand a $9126,000 decrease in other noninterest ~~expenses~~expense. ~~Occupancy~~The ~~and~~Company ~~equipment~~received ~~expense~~notice ~~and~~in ~~professional~~October ~~fees~~2005 ~~also~~from ~~experienced~~the ~~slight~~third-party ~~increases~~administrator ~~during~~of ~~the~~its ~~period,~~retirement ~~offset~~plan byregarding ~~slight~~an ~~decreases~~increase in ~~data~~its ~~processing,~~required ~~federal~~contribution ~~insurance~~for the 2005 ~~premiums,~~– 2006 plan year which will increase compensation and ~~advertising~~benefits expense by approximately $43,000 quarterly beginning in the fourth quarter 2005.

The Company’s ~~federal~~ income tax expense decreased $~~214~~606,000 to $~~653~~396,000 for the ~~six~~nine-~~months~~month period ended ~~June~~ September 30, ~~2004~~2005 compared to $1.0 million during the same period in ~~2003~~2004 as a result of decreased income. Income tax expense was approximately 36% and 44% of pretax income in ~~2004~~September ~~compared~~2005 toand ~~38%~~2004, ~~of pretax income in 2003~~respectively. The ~~increase~~decrease in the effective tax rate is aprimarily ~~result~~due to the filing of a consolidated tax return during the ~~net~~current ~~losses~~period, ~~incurred~~thereby atallowing the ~~holding~~Company ~~company~~to ~~throughout~~utilize ~~2004~~and ~~for~~record ~~which~~the atax ~~valuation~~benefits ~~allowance~~not ~~has~~recorded ~~been~~in ~~established~~the prior comparative period.

LIQUIDITY

The Company must maintain an adequate level of liquidity to ensure the availability of sufficient funds to fund loan originations and deposit withdrawals, to satisfy other financial commitments, and to take advantage of investment opportunities. The Company invests excess funds in overnight deposits and other short-term interest-bearing assets to provide liquidity to meet these needs. At ~~June~~ September 30, ~~2004~~2005, cash and cash equivalents totaled $1113.72 million. At ~~June~~ September 30, ~~2004~~ 2005, the Company had commitments to fund loans of $~~582,000~~1.3 million. At the same time, certificates of deposit which are scheduled to mature in one year or less totaled $~~108~~109.0 million. Management believes, based on past experience that a significant portion of those deposits will remain with the Company. Based on the foregoing, in addition to the Company’s high level of core deposits and capital, the Company considers its liquidity and capital resources sufficient to meet its outstanding short-term and long-term needs. First Federal Bank has the ability to borrow funds at the Federal Home Loan Bank (FHLB) per the Credit Policy of the FHLB. Services utilized have been term advances and open lines of credit. At September 30, 2005 the Bank had $17.0 million in FHLB advances with an average weighted rate of 3.88% and tiered maturities from January 2006 through June 2008. In addition, an advance totaling $226,000 at 5.07% is scheduled for payments to amortize over a ten-year period, maturing in August 2015. Collateral used for these purposes are mortgage-backed securities issued by government sponsored agencies, namely, GNMA and FNMA, with a total value of $30.6 million, or 21.9% of total available-for-sale securities, and therefore does not significantly impact the Company’s liquidity.

CAPITAL RESOURCES

The Bank is subject to capital-to-asset requirements in accordance with bank regulations. The following table summarizes the Bank’s regulatory capital requirements versus actual capital as of June 30, 2004:

	ACTUAL				REQUIRED				EXCESS
	AMOUNT		%		AMOUNT		%		AMOUNT		%
Core capital (to adjusted total assets)	$	22,998	7.58	%	$	12,136	4.00	%	$	10,862	3.58	%
Tangible capital (to adjusted total assets)		22,998	7.58			4,551	1.50			18,447	6.08
Risk-based capital (to adjusted total assets)		23,795	19.04			9,998	8.00			13,797	11.04

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Qualitative Aspects of Market Risk. The Company’s most significant form of market risk is interest rate risk. The principal objectives of the Company’s interest rate risk management are to evaluate the interest rate risk inherent in certain balance sheet accounts, determine the level of risk appropriate given the Company’s

~~business~~CAPITAL ~~strategy,~~RESOURCES operating environment, capital and liquidity requirements and performance objectives, and manage the risk consistent with the Board of Director’s approved guidelines. The Company has an Asset/Liability Committee, responsible for reviewing its asset/liability policies and interest rate risk position, which meets monthly and reports trends and interest rate risk position to the Board of Directors quarterly. The extent of the movement of interest rates is uncertainty that could have a negative impact on the earnings of the Company.

The ~~Company~~Bank ~~has~~is ~~used~~subject ~~the following strategies~~ to ~~manage interest rate risk: (1) emphasizing the origination of adjustable~~capital-~~rate and balloon loans and not originating long~~to-~~term,~~asset ~~fixed-rate~~requirements ~~loans for retention~~ in ~~its~~accordance ~~portfolio;~~with ~~(2)~~bank ~~emphasizing~~regulations. ~~shorter~~The ~~term~~following ~~consumer~~table ~~loans;~~summarizes ~~(3) introducing floating-rate commercial business loans tied to~~ the ~~prime~~ rate; (4) maintaining a high quality securities portfolio that provides adequate liquidity and flexibility to take advantage of opportunities that may arise from fluctuations in market interest rates, the overall maturity of which is monitoredBank’s inregulatory ~~relation~~capital torequirements ~~the~~versus ~~repricing~~actual ofcapital ~~its~~as ~~loan portfolio; and (5) using Federal Home Loan Bank advances to better structure maturities~~ of ~~its interest rate sensitive liabilities. The Company currently does not participate in hedging programs~~September 30, ~~interest rate~~2005: ~~swaps or other activities involving the use of off-balance sheet derivative financial instruments.~~

Quantitative Aspects of Market Risk. The Company primarily utilizes an interest sensitivity analysis prepared by the Office of Thrift Supervision to review the level of interest rate risk of the Bank. This analysis measures interest rate risk by computing changes in the net portfolio value of the Bank’s cash flows from assets, liabilities and off-balance sheet items in the event of a range of assumed changes in market interest rates. Net portfolio value represents the market value of portfolio equity and is equal to the market value of assets minus the market value of liabilities, with adjustments made for off-balance sheet items. This analysis assesses the risk of loss in market risk sensitive instruments in the event of a sudden and sustained 100 to 300 basis point increase or decrease in market interest rates with no effect given to any steps that management might take to counter the effect of that interest rate movement. The following table, which is based on information provided to the Bank by the Office of Thrift Supervision, presents the change in the Bank’s net portfolio value at March 31, 2004, the latest date for which information is available, that would occur upon an immediate change in interest rates based on Office of Thrift Supervision assumptions, but without giving effect to any steps that management might take to counteract that change. The Company expects June’s net portfolio value to be similar to that of March 31, 2004 as shown below. All model outputs associated with the –300 and –200 bp scenarios are not applicable because of the abnormally low prevailing interest rate environment.


	ACTUAL				REQUIRED				EXCESS
	AMOUNT		%		AMOUNT		%		AMOUNT		%
Core capital (to adjusted total assets)	$	24,020	7.22	%	$	13,310	4.00	%	$	10,710	3.22	%
Tangible capital (to adjusted total assets)		24,020	7.22			4,991	1.50			19,029	5.72
Risk-based capital (to risk-weighted assets)		24,478	15.39			12,723	8.00			11,755	7.39

Change in Interest Rates inBasis Points (Rate Shock)	Net Portfolio Value						NPV as % of Portfolio Value of Assets
	Amount		$ Change		% Change		NPV Ratio		Basis Point Change
	(Dollars in thousands)
300	$	25,913	(12,879	)	(33	)%	8.47	%	(349	) bp
200		31,086	(7,706	)	(20	)	9.94		(202	) bp
100		35,377	(3,415	)	(9	)	11.09		(87	) bp
Static		38,792	—		—		11.96		—
(100)		40,598	1,806		5		12.37		41	bp
(200)		N/A	N/A		N/A		N/A		N/A
(300)		N/A	N/A		N/A		N/A		N/A

The decline in capital was a result of the Bank’s dividend payments to the Company totaling $2.0 million during the first quarter 2005. These dividends were primarily used by the Company to repurchase its stock. Although the level of capital has declined, it continues to exceed minimum requirements for a well-capitalized institution.

~~The Office of Thrift Supervision uses~~ ~~certain~~ITEM ~~assumptions in assessing the interest rate risk of savings associations~~3. ~~These~~QUANTITATIVE ~~assumptions~~AND ~~relate~~QUALITATIVE toDISCLOSURES ~~interest~~ABOUT ~~rates,~~MARKET ~~loan~~RISK ~~prepayment rates, deposit decay rates, and the market values of certain assets under differing interest rate scenarios, among others.~~

AsQualitative ~~with~~Aspects ~~any~~of ~~method~~Market Risk. The Company’s most significant form of ~~measuring~~market risk is interest rate risk,. ~~certain shortcomings~~The principal objectives of the Company’s interest rate risk management are to evaluate the interest rate risk inherent in certain balance sheet accounts, determine the ~~method~~level of ~~analysis~~risk ~~presented~~appropriate ingiven the ~~foregoing~~Company’s ~~table~~business strategy, operating environment, capital and liquidity requirements and performance objectives, and manage the risk consistent with the Board of Director’s approved guidelines. ~~For~~The ~~example~~Company has an Asset/Liability Committee, ~~although~~responsible ~~certain~~for ~~assets~~reviewing its asset/liability policies and ~~liabilities~~interest ~~may~~rate risk position, which meets monthly and reports trends and interest rate risk position to the Board of Directors quarterly. The extent of the movement of interest rates is uncertainty that could have a negative impact on the earnings of the Company.

The Company has used the following strategies to manage interest rate risk: (1) emphasizing the origination and purchase of adjustable-rate and balloon loans and not originating long-term, fixed-rate loans for retention in its loan portfolio; (2) emphasizing shorter term consumer loans; (3) introducing floating-rate commercial business loans tied to the prime rate; (4) maintaining a high quality securities portfolio that provides adequate liquidity and flexibility to take advantage of opportunities that may arise from fluctuations in market interest rates, the overall maturity of which is monitored in relation to the repricing of its loan portfolio; and (5) using Federal Home Loan Bank advances to better structure maturities of its interest rate sensitive liabilities. The Company currently does not participate in hedging programs, interest rate swaps or other activities involving the use of off-balance sheet derivative financial instruments.

Quantitative Aspects of Market Risk. The Company primarily utilizes an interest sensitivity analysis prepared by the Office of Thrift Supervision to review the level of interest rate risk of the Bank. This analysis measures interest rate risk by computing changes in the net portfolio value of the Bank’s cash flows from assets, liabilities and off-balance sheet items in the event of a range of assumed changes in market interest rates. Net portfolio value represents the market value of portfolio equity and is equal to the market value of assets minus the market value of liabilities, with adjustments made for off-balance sheet items. This analysis assesses the risk of loss in market risk sensitive instruments in the event of a sudden and sustained 100 to 300 basis point increase or decrease in market interest rates with no effect given to any steps that management might take to counter the effect of that interest rate movement. The following table, which is based on information provided to the Bank by the Office of Thrift Supervision, presents the change in the Bank’s net portfolio value at September 30, 2005, the latest date for which information is available, that would occur upon an immediate change in interest rates based on Office of Thrift Supervision assumptions, but without giving effect to any steps that management might take to counteract that change. All model outputs associated with the –300 bp scenarios are not applicable because of the abnormally low prevailing interest rate environment.

similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable rate mortgage loans, have features which restrict changes in interest rates on a short-term basis and over the life of the asset. Further, if interest rates change, expected rates of prepayments on loans and early withdrawals from certificates could deviate significantly from those assumed in calculating the table.


Change in Interest Rates in Basis Points (Rate Shock)	Net Portfolio Value						NPV as % of Portfolio Value of Assets
	Amount		$ Change		% Change		NPV Ratio		Basis Point Change
	(Dollars in thousands)
300	$	18,069	(13,903	)	(43	)%	5.69	%	(378	)bp
200		23,360	(8,612	)	(27	)	7.19		(228	)bp
100		28,038	(3,934	)	(12	)	8.46		(101	)bp
Static		31,972	—		—		9.47		—
(100)		34,710	2,737		9		10.13		66	bp
(200)		35,370	3,398		11		10.24		77	bp

The Office of Thrift Supervision uses certain assumptions in assessing the interest rate risk of savings associations. These assumptions relate to interest rates, loan prepayment rates, deposit decay rates, and the market values of certain assets under differing interest rate scenarios, among others.

As with any method of measuring interest rate risk, certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable rate mortgage loans, have features, which restrict changes in interest rates on a short-term basis and over the life of the asset. Further, if interest rates change, expected rates of prepayments on loans and early withdrawals from certificates could deviate significantly from those assumed in calculating the table.

ITEM 4: CONTROLS AND PROCEDURES

The Company’s management, including the Company’s principal executive officer and principal financial officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the “SEC”) (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Periodically, there have been various claims and lawsuits involving the Company, such as claims to enforce liens, condemnation proceedings on properties in which the Company holds security interest, claims involving the making and servicing of real property loans and other issues incident to the Company’s business. In the opinion of management, after consultation with the Company’s legal counsel, no significant loss is expected from any of such pending claims or lawsuits. The Company is not a party to any material pending legal proceedings.

ITEM 2. ~~CHANGES~~UNREGISTERED INSALES ~~SECURITIES, USE~~ OF ~~PROCEEDS~~EQUITY SECURITIES AND ~~ISSUERS~~USE ~~PURCHASES~~ OF ~~EQUITY SECURITIES~~PROCEEDS.

The following table provides certain information with ~~regards~~regard to shares repurchased by the Company in the ~~second~~third quarter of ~~2004~~ 2005.

Period	(a) Total Number ~~ofShares~~of Shares (or Units) Purchased		~~Average Price PaidPer Share~~	(b) Average Price Paid per Share (or Unit)		~~Total NumberPurchased asPubliclyAnnouncedPrograms~~	(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Appropriate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
April 1, 2004 through April 30, 2004	—			—		—
July 1, 2005 through July 31, 2005	—				—		—	—
May 1, 2004 through May 31, 2004 (1)	559,993		$	33.50		559,993
August 1, 2005 through August 31, 2005	—				—		—	—
June 1, 2004 through June 30, 2004	—			—		—
September 1, 2005 through September 30, 2005	25	(1)		$	20.79		—	—
Total	559,993		$	33.50		559,993

(1) OnPurchased ~~April~~through ~~16,~~unsolicited ~~2004,~~private ~~the Company commenced a self-tender offer for up to 560,000 shares of its common stock~~transactions. ~~On May 28, 2004, the Company announced the completion of the self-tender offer, which expired May 21, 2004.~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.

None

ITEM 5. OTHER INFORMATION.

None

ITEM 6. EXHIBITS ~~AND REPORTS ON FORM 8-K.~~

(a) Exhibits


3.1		Certificate of Incorporation of First Federal Bancshares, Inc. (1)

3.2		Bylaws of First Federal Bancshares, Inc. (2)

4.0		Specimen Stock Certificate of First Federal Bancshares, Inc. (1)

10.1		Employment Agreement between First Federal Bancshares, Inc. and James J. Stebor (3)

10.2		Employment Agreement between First Federal Bank and James J. Stebor (3)

10.3		First Federal Bank Supplemental Executive Retirement Plan (3)

10.4		First Federal Bank Employee Severance Compensation Plan (3)

10.5		First Federal Bancshares, Inc. 2001 Stock-Based Incentive Plan (4)

10.6		PFSB Bancorp, Inc. 2000 Stock-Based Incentive Plan (5)

10.7		Form of NSO Award Agreement (6)

31.1		Rule 13a – 14(a)/15d – 14(a) Certification of the Chief Executive Officer.

31.2		Rule 13a – 14(a)/15d – 14(a) Certification of the Chief Financial Officer.

32.1		Section 1350 Certification of the Chief Executive Officer.

32.2		Section 1350 Certification of the Chief Financial Officer.

3.1		Certificate of Incorporation of First Federal Bancshares, Inc. (1)
3.2		Bylaws of First Federal Bancshares, Inc. (2)
4.0		Specimen Stock Certificate of First Federal Bancshares, Inc. (1)
10.1		Employment Agreement between First Federal Bancshares, Inc. and James J. Stebor (3)
10.2		Employment Agreement between First Federal Bank and James J. Stebor (3)
10.3		First Federal Bank Supplemental Executive Retirement Plan (3)
10.4		First Federal Bank Employee Severance Compensation Plan (3)
10.5		First Federal Bancshares, Inc. 2001 Stock-Based Incentive Plan (4)
10.6		Non-Competition and Consulting Agreement by and between First Federal Bank and Eldon R. Mette (5)
10.7		PFSB Bancorp, Inc. 2000 Stock-Based Incentive Plan (6)
31.1		Rule 13a – 14(a)/15d – 14(a) Certification of the Chief Executive Officer.
31.2		Rule 13a – 14(a)/15d – 14(a) Certification of the Chief Financial Officer.
32.1		Section 1350 Certification of the Chief Executive Officer.
32.2		Section 1350 Certification of the Chief Financial Officer.

(1)	Incorporated herein by reference from the Exhibits to Form SB-2, Registration Statement and amendments thereto, initially filed on May 5, 2000, Registration No. 333-36368.

(2)	Incorporated herein by reference from the Exhibits to the Annual Report on Form 10-KSB, filed on March 28, 2002.

(3)	Incorporated herein by reference from the Exhibits to the Quarterly Report on Form 10-QSB filed on November 14, 2000.

(4)	Incorporated herein by reference from the Exhibits to the Quarterly Report on Form 10-QSB filed on August 13, 2001.

(5) Incorporated ~~herein~~ by reference ~~from~~to ~~the~~PFSB ~~Exhibits~~Bancorp, toInc.’s ~~the~~Registration ~~Annual~~Statement ~~Report~~ on Form 10S-K,8 (SEC No. 333-35020) filed on April 1118, ~~2003~~2000.

(6) Incorporated by reference tofrom ~~PFSB~~the ~~Bancorp,~~Exhibits ~~Inc.’s~~to ~~Registration~~the ~~Statement~~Annual Report on Form S10-8K, ~~(SEC No. 333-35020)~~ filed on ~~April~~March 1831, ~~2000~~2005.

(b) Reports on Form 8-K

The Company furnished a Current Report on Form 8-K on May 13, 2004 announcing financial results for the quarter ended March 31, 2004. The press release was included as an exhibit to the Form 8-K.

The Company furnished a Current Report on Form 8-K on June 4, 2004 announcing the new date of its annual meeting of stockholders. The press release was included as an exhibit to the Form 8-K.

The Company furnished a Current Report on Form 8-K on June 22, 2004 announcing withdrawal of certain nominees to the Board of Directors for the 2004 annual meeting of stockholders.

SIGNATURES

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

		FIRST FEDERAL BANCSHARES, INC.
Date: August 4, 2004		/s/ James J. Stebor
Date: November 7, 2005		/s/ James J. Stebor
		James J. Stebor
		President and Chief Executive Officer
Date: August 4, 2004		/s/ Cathy D. Pendell
Date: November 7, 2005		/s/ Cathy D. Pendell
		Cathy D. Pendell
		Treasurer

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Filing Compare · FIRST FEDERAL BANCSHARES INC /DE