UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ______)

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-12

First Federal Bancshares, Inc.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11 (a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
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Preliminary Copies

April 20, 2004

Dear Fellow Stockholder:

You are cordially invited to attend the annual meeting of stockholders of
First Federal Bancshares, Inc. We will hold the meeting at the Quincy Holiday
Inn located at 201 S. Third Street, Quincy, Illinois on May 25, 2004 at 2:00
p.m., local time.

The notice of annual meeting and proxy statement appearing on the
following pages describe the formal business to be transacted at the meeting.
During the meeting, we will also report on the operations of the Company.
Directors and officers of the Company, as well as a representative of Crowe
Chizek and Company LLC, the Company's independent auditors, will be present to
respond to appropriate questions of stockholders.

It is important that your shares are represented at this meeting, whether
or not you attend the meeting in person and regardless of the number of shares
you own. To make sure your shares are represented, we urge you to complete and
mail the enclosed WHITE proxy card. If you attend the meeting, you may vote in
person even if you have previously mailed a proxy card.

RETURN ONLY THE WHITE PROXY CARD - Your vote is important. Please sign,
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date and return only your WHITE proxy cards solicited by your Board of
Directors.

DO NOT RETURN THE GREEN PROXY CARD - A stockholder group led by Lawrence
----------------------------------
Seidman and calling itself the Committee to Preserve Shareholder Value has
announced that it intends to solicit proxies for its own nominees for director
in opposition to your Board's nominees. We urge you NOT to sign or return any
green proxy cards that may be sent to you by Mr. Seidman's group, even as a
protest vote. USING THE GREEN PROXY CARD FOR ANY REASON IS NOT A VOTE FOR YOUR
BOARD'S NOMINEES. TO VOTE FOR YOUR BOARD'S NOMINEES, YOU MUST SIGN AND RETURN A
WHITE PROXY CARD.

We look forward to seeing you at the meeting.

Sincerely,

James J. Stebor
President and Chief Executive Officer

If you have questions or need assistance in voting your shares, please call:

[GRAPHIC OMITTED]

17 State Street, 10th Floor
New York, NY 10004
(866) xxx-xxxx (Toll Free)

Banks and Brokerage Firms please call:
(212) 440-9800

Your vote at this year's annual meeting is especially important no matter how
many or how few shares you own. In order to vote for the Board's nominees,
please do the following:

-> If your shares are registered in your name, please sign, date and
mail the enclosed WHITE proxy card to Georgeson Shareholder in the
postage paid envelope provided today.

-> If your shares are held in "street name," you will receive an
instruction form from your broker, bank or other nominee that you
must follow in order to have your shares voted. Please sign, date
and mail the enclosed WHITE instruction form in your postage-paid
envelope provided. To ensure that your shares are voted, you also
should contact and give instructions to the person responsible for
your account.

-> After signing the enclosed WHITE proxy card or WHITE instruction
form do NOT sign or return any green proxy card. Remember - only
your latest dated proxy will determine how your shares will be
voted at the annual meeting. Even if you have already voted the
green proxy card, you may cancel that proxy and change your vote
by mailing the enclosed WHITE proxy card.

-> If you have any questions or need further assistance in voting your
shares, please contact our proxy solicitor:

[GRAPHIC OMITTED]
17 State Street, 10th Floor
New York, NY 10004
- Brokers, banks and other nominees - (212) 440-9800.
- Stockholders call toll free - (866) xxx-xxxx.
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Preliminary Copies

FIRST FEDERAL BANCSHARES, INC.
109 East Depot Street
Colchester, Illinois 62326
(309) 776-3225

Notice of Annual Meeting of Stockholders

On May 25, 2004, First Federal Bancshares, Inc. will hold its annual
meeting of stockholders at the Quincy Holiday Inn located at 201 S. Third
Street, Quincy, Illinois. The meeting will begin at 2:00 p.m., local time.
At the meeting, stockholders will consider and act on the following:

1. The election of two directors to serve for a term of three years;

2. The ratification of the appointment of Crowe Chizek and Company LLC
as independent auditors for the Company for the fiscal year ending
December 31, 2004; and

3. Such other business that may properly come before the meeting.

NOTE: The Board of Directors is not aware of any other business to come
before the meeting.

All holders of record of shares of First Federal Bancshares common stock
at the close of business on April 5, 2004 are entitled to receive notice of the
meeting and to vote at the meeting and any adjournments or postponements of the
meeting. In the event there are insufficient votes for a quorum or to approve or
ratify any of the foregoing proposals at the time of the annual meeting, the
annual meeting may be adjourned in order to permit further solicitation of
proxies by First Federal Bancshares.

Please complete and sign the enclosed WHITE proxy card, which is solicited
by the Board of Directors, and mail it promptly in the enclosed envelope. The
proxy will not be used if you attend the meeting and vote in person.

BY ORDER OF THE BOARD OF DIRECTORS

Millie R. Shields

CORPORATE SECRETARY

Colchester, Illinois
April 20, 2004

IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.

Preliminary Copies

FIRST FEDERAL BANCSHARES, INC.

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PROXY STATEMENT

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This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of First Federal Bancshares, Inc. ("First
Federal Bancshares" or the "Company") to be used at the annual meeting of
stockholders of the Company. First Federal Bancshares is the holding company for
First Federal Bank ("First Federal" or the "Bank"). The annual meeting will be
held at the Quincy Holiday Inn located at 201 S. Third Street, Quincy, Illinois
on May 25, 2004 at 2:00 p.m., local time. This proxy statement and the enclosed
WHITE proxy card are being first mailed to stockholders of record on or about
April 20, 2004.

RETURN ONLY THE WHITE PROXY CARD
DO NOT RETURN THE GREEN PROXY CARD
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The Committee to Preserve Shareholder Value, consisting of Lawrence
Seidman, Dennis Pollak, David L. Jansen, Mark Sill and entities controlled by
them (collectively, the "Seidman Group") have proposed their own slate of
nominees (Mr. Jansen and Mr. Sill) for election to the Board of Directors in
opposition to your Board's nominees. YOUR BOARD OF DIRECTORS DOES NOT ENDORSE
OR SUPPORT THE SEIDMAN GROUP'S NOMINEES.

You may receive a proxy statement and a green proxy card from the Seidman
Group with respect to its own nominees for director. WE URGE YOU NOT TO SIGN OR
RETURN ANY GREEN PROXY CARD THAT MAY HAVE BEEN SENT TO YOU BY THE SEIDMAN
GROUP, EVEN AS A PROTEST VOTE. USING THE GREEN PROXY CARD FOR ANY REASON IS A
VOTE AGAINST CURRENT COMPANY DIRECTORS AND MANAGEMENT. IF YOU PREVIOUSLY VOTED
ON A SEIDMAN GROUP GREEN PROXY CARD, YOU HAVE EVERY LEGAL RIGHT TO CHANGE YOUR
VOTE. YOU CAN CHANGE YOUR VOTE SIMPLY BY SIGNING, DATING AND RETURNING THE
ENCLOSED WHITE PROXY CARD. ONLY YOUR LATEST DATED PROXY CARD WILL COUNT.

GENERAL INFORMATION ABOUT VOTING

WHO CAN VOTE AT THE MEETING

You are entitled to vote your First Federal Bancshares common stock only
if the records of the Company show that you held your shares as of the close of
business on April 5, 2004. As of the close of business on April 5, 2004, a total
of _____________ shares of First Federal Bancshares common stock were
outstanding. Each share of common stock has one vote. The Company's Certificate
of Incorporation provides that record holders of the Company's common stock who
beneficially own, either directly or indirectly, in excess of 10% of the
Company's outstanding shares are not entitled to any vote in respect of the
shares held in excess of the 10% limit.

ATTENDING THE MEETING

If you are a beneficial owner of First Federal Bancshares common stock
held by a broker, bank or other nominee (i.e., in "street name"), you will need
proof of ownership to be admitted to the meeting. A recent brokerage statement
or letter from a bank or broker are examples of proof of ownership. If you want
to vote your shares of First Federal Bancshares common stock held in street name
in person at the meeting, you will have to get a written proxy in your name from
the broker, bank or other nominee who holds your shares.

VOTE REQUIRED

The annual meeting will be held only if there is a quorum present. A
quorum exists if a majority of the outstanding shares of common stock entitled
to vote is represented at the meeting. If you return valid proxy instructions or
attend the meeting in person, your shares will be counted for purposes of
determining whether there is a quorum, even if you abstain from voting. Broker
non-votes also will be counted for purposes of determining the existence of a
quorum. A broker non-vote occurs when a broker, bank or other nominee holding
shares for a beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to that item and
has not received voting instructions from the beneficial owner.

The Company's Board of Directors consists of eight members. At this year's
annual meeting, shareholders will elect two directors to serve a term of three
years. Directors must be elected by a plurality of the votes cast at the annual
meeting. This means that the nominees receiving the greatest number of votes
will be elected. There is no cumulative voting for the election of directors.
Votes that are withheld and broker non-votes will have no effect on the outcome
of the election.

In voting on the ratification of the appointment of Crowe Chizek and
Company LLC as independent auditors, you may vote in favor of the proposal, vote
against the proposal or abstain from voting. The ratification of Crowe Chizek
and Company LLC as independent auditors will be decided by the affirmative vote
of a majority of the votes cast at the annual meeting. On this matter,
abstentions and broker non-votes will have no effect on the voting.

VOTING BY PROXY

The Board of Directors of First Federal Bancshares is sending you this
proxy statement for the purpose of requesting that you allow your shares of
First Federal Bancshares common stock to be represented at the annual meeting by
the persons named in the enclosed WHITE proxy card. All shares of First Federal
Bancshares common stock represented at the annual meeting by properly executed
and dated WHITE proxy cards will be voted according to the instructions
indicated on the card. If you sign, date and return a WHITE proxy card without
giving voting instructions, your shares will be voted as recommended by the
Company's Board of Directors.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE:

FOR EACH OF THE BOARD OF DIRECTORS' NOMINEES FOR DIRECTOR; AND

FOR RATIFICATION OF CROWE CHIZEK AND COMPANY LLC AS INDEPENDENT AUDITORS.

If any matters not described in this proxy statement are properly
presented at the annual meeting, the persons named in the WHITE proxy card will
use their own best judgment to determine how to vote your shares. If the annual
meeting is postponed or adjourned, your First Federal Bancshares common stock
may be voted by the persons named in the WHITE proxy card on the new annual
meeting date as well, unless you have revoked your proxy. The Company does not
know of any other matters to be presented at the annual meeting.

Proxies solicited by the Board of Directors will be returned to Georgeson
Shareholder and will be tabulated by inspectors of election designated by the
Board of Directors who will not be employees or directors of the Company or any
of its affiliates.

If your First Federal Bancshares common stock is held in "street name,"
you will receive instructions from your broker, bank or other nominee that you
must follow in order to have your shares voted.

IF YOU HAVE ANY QUESTIONS ABOUT VOTING, PLEASE CONTACT OUR PROXY
SOLICITOR, GEORGESON SHAREHOLDER, AT (866) XXX-XXXX.

HOW TO REVOKE YOUR PROXY

You may revoke your proxy at any time before the vote is taken at the
meeting. To revoke your proxy you must either advise the Corporate Secretary of
the Company in writing before your common stock has been voted at the annual
meeting, deliver a later dated proxy, or attend the meeting and vote your shares
in person. Attendance at the annual meeting will not in itself constitute
revocation of your proxy. The Company's Corporate Secretary can be reached at
the following address:

Millie R. Shields
Corporate Secretary
First Federal Bancshares, Inc.
109 East Depot Street
Colchester, Illinois 62326

PARTICIPANTS IN THE FIRST FEDERAL BANK ESOP OR 401(K) PLAN

If you participate in the First Federal Bank Employee Stock Ownership Plan
(the "ESOP") or if you held shares through the First Federal Bank Employee's
Savings & Profit Sharing Plan and Trust (the "401(k) Plan"), you will receive
with this proxy statement a voting instruction form for each plan that reflects
all shares you may vote under the plans. Under the terms of the ESOP, the ESOP
trustee votes all shares held by the ESOP, but each ESOP participant may direct
the trustee how to vote the shares of common stock allocated to his or her
account. The ESOP trustee, subject to the exercise of its fiduciary

duties, will vote all unallocated shares of Company common stock held by the
ESOP and allocated shares for which no voting instructions are received in the
same proportion as shares for which it has received timely voting instructions.
Under the terms of the 401(k) Plan, a participant is entitled to direct the
trustee as to the shares in the First Federal Bancshares, Inc. Stock Fund
credited to his or her account. The trustee will vote all shares for which no
directions are given or for which instructions were not timely received in the
same proportion as shares for which the trustee received voting instructions.
The deadline for returning your voting instructions to each plan's trustee is
May 18, 2004.

CORPORATE GOVERNANCE

GENERAL

First Federal Bancshares periodically reviews its corporate governance
policies and procedures to ensure that First Federal Bancshares meets the
highest standards of ethical conduct, reports results with accuracy and
transparency and maintains full compliance with the laws, rules and regulations
that govern First Federal Bancshares' operations. As part of this periodic
corporate governance review, the Board of Directors reviews and adopts best
corporate governance policies and practices for First Federal Bancshares.

CORPORATE GOVERNANCE POLICY

First Federal Bancshares has adopted a corporate governance policy to
govern certain activities, including:

(1) the duties and responsibilities of the Board of Directors and each
director;

(2) the composition and operation of the Board of Directors;

(3) the establishment and operation of Board committees;

(4) convening executive sessions of independent directors;

(5) succession planning;

(6) the Board of Directors' interaction with management and third
parties; and

(7) the evaluation of the performance of the Board of Directors and of
the chief executive officer.

CODE OF ETHICS AND BUSINESS CONDUCT

First Federal Bancshares has adopted a Code of Ethics and Business Conduct
that is designed to ensure that the Company's directors, executive officers and
employees meet the highest standards of ethical conduct. The Code of Ethics and
Business Conduct requires that the Company's directors, executive officers and
employees avoid conflicts of interest, comply with all laws and other legal
requirements, conduct business in an honest and ethical manner and otherwise act
with integrity and in the Company's best interest. Under the terms of the Code
of Ethics and Business Conduct, directors, executive officers and employees are
required to report any conduct that they believe in good faith to be an actual
or apparent violation of the Code.

As a mechanism to encourage compliance with the Code of Ethics and
Business Conduct, the Company has established procedures to receive, retain and
treat complaints received regarding accounting, internal accounting controls or
auditing matters. These procedures ensure that individuals may submit concerns
regarding questionable accounting or auditing matters in a confidential and
anonymous manner. The Code of Ethics and Business Conduct also prohibits the
Company from retaliating against any director, executive officer or employee who
reports actual or apparent violations of the Code.

MEETINGS OF THE BOARD OF DIRECTORS

The Company and First Federal conduct business through meetings and
activities of their Boards of Directors and their committees. During the year
ended December 31, 2003, the Board of Directors of the Company held 12 regular
meetings and two special meetings and the Board of Directors of First Federal
held 12 regular meetings and one special meeting. No director attended fewer
than 75% of the total meetings of the Boards of Directors and committees on
which he served.

COMMITTEES OF THE BOARD OF DIRECTORS OF FIRST FEDERAL BANCSHARES

AUDIT COMMITTEE. The Board of Directors has a separately-designated
standing Audit Committee established in accordance with Section 3(a)(58)(A) of
the Securities Exchange Act of 1934, as amended. The Audit Committee, consisting
of Gerald L. Prunty (Chairman), B. Bradford Billings and Murrel Hollis, meets
periodically with independent auditors and management to review accounting,
auditing, internal control structure and financial reporting matters. This
committee met six times during the year ended December 31, 2003. Each member of
the Audit Committee is independent in accordance with the listing standards of
the Nasdaq Stock Market. The Board of Directors has determined that
_____________ is an audit committee financial expert under the rules of the
Securities and Exchange Commission. The Audit Committee acts under a written
charter adopted by the Board of Directors, a copy of which is included as
APPENDIX A to this proxy statement. The report of the audit committee required
by the rules of the Securities and Exchange Commission is included in this proxy
statement. See "PROPOSAL 2-RATIFICATION OF INDEPENDENT AUDITORS-REPORT OF AUDIT
COMMITTEE."

COMPENSATION COMMITTEE. The Compensation Committee, consisting of Franklin
M. Hartzell (Chairman), B. Bradford Billings, Murrel Hollis, Gerald L. Prunty,
Dr. Stephan L. Roth and Richard D. Stephens, is responsible for all matters
regarding the Company's and the Bank's employee compensation and benefit
programs. This committee met once during the year ended December 31, 2003. Each
member of the Compensation Committee is independent under the listing standards
of the Nasdaq Stock Market. The report of the compensation committee required by
the rules of the Securities and Exchange Commission is included in this proxy
statement. See "COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION."

EXECUTIVE COMMITTEE. The Executive Committee, consisting of James J.
Stebor (Chairman), B. Bradford Billings, Franklin M. Hartzell and Gerald L.
Prunty, evaluates issues of major importance to the Company between regularly
scheduled Board meetings and reviews and approves loan applications that do not
require the approval of the full Board of Directors. Designated members of
management sit on this committee for the purpose of reviewing and approving
loan applications. In addition Eldon M. Snowden, a director emeritus of the
Company and First Federal, sits on this committee. This committee met 114 times
during the year ended December 31, 2003.

NOMINATION AND GOVERNANCE COMMITTEE. The Nomination and Governance
Committee, consisting of Franklin M. Hartzell (Chairman), Murrell Hollis, Gerald
L. Prunty, Dr. Stephan L. Roth and Richard D. Stephens, takes a leadership role
in shaping First Federal Bancshares' governance policies and practices,
including recommending to the Board of Directors the corporate governance
policies and guidelines applicable to First Federal Bancshares and monitoring
compliance with these policies and guidelines. In addition, the Nomination and
Governance Committee is responsible for identifying individuals qualified to
become Board members and recommending to the Board the director nominees for
election at the next annual meeting of stockholders. This committee also leads
the Board in its annual review of the Board's performance and recommends to the
Board director candidates for each committee for appointment by the Board. The
Nomination and Governance Committee met once to select management's nominees for
election as directors at this annual meeting.

Each member of the Nomination and Governance Committee is independent as
independence for nominating committee members is defined in the listing
standards of the Nasdaq Stock Market. The Nomination and Governance Committee
acts under a written charter adopted by the Board of Directors, a copy of which
is included as APPENDIX B to this proxy statement. The procedures of the
Nomination and Governance Committee required to be disclosed by the rules of the
Securities and Exchange Commission are included in this proxy statement. See
"NOMINATION AND GOVERNANCE COMMITTEE PROCEDURES."

ATTENDANCE AT THE ANNUAL MEETING. The Board of Directors requires
directors to attend the annual meeting of stockholders. All directors attended
the 2003 annual meeting of stockholders.

DIRECTORS' COMPENSATION

DIRECTORS' FEES. First Federal pays a fee of $700 to each of its directors
for attendance at each regular board meeting. First Federal Bancshares pays a
fee of $200 to each member of its Board of Directors for each meeting attended.
In addition, First Federal Bancshares pays a fee of $50 to each member of the
Audit Committee for each committee meeting attended. In addition to the per
meeting fees, the Chairman of the Board of First Federal Bancshares receives an
annual retainer of $5,000.

AGREEMENT WITH ELDON R. METTE. In connection with the Company's
acquisition of PFSB Bancorp, Inc. and Palmyra Savings, the Company entered into
a consulting and non-competition agreement with Mr. Mette. Under this agreement,
Mr. Mette advised the Company with respect to deposit and lending activities in
PFSB Bancorp's market area, as well as maintained and developed customer
relationships. The agreement had a one-year term, which expired on November 22,
2003, and provided for monthly payments to Mr. Mette of $5,835 for his services
as a consultant and in consideration of being subject to the non-competition
requirements.

Stock Ownership

The following table provides information as of April 5, 2004 about the
persons known to First Federal Bancshares to be the beneficial owners of more
than 5% of the Company's outstanding common stock. A person may be considered to
beneficially own any shares of common stock over which he or she has, directly
or indirectly, sole or shared voting or investing power.

PERCENT OF
NUMBER OF COMMON STOCK
NAME AND ADDRESS SHARES OWNED OUTSTANDING
- ---------------- ------------ ------------

Wellington Management Company, LLP...... 201,000(1) ____%
75 State Street
Boston, Massachusetts 02109

First Federal Bank...................... 177,507(2) ____%
Employee Stock Ownership Plan
109 East Depot Street
Colchester, Illinois 62326

Endicott Management Company............. 177,700(3) ____%
237 Park Avenue
Suite 801
New York, New York 10017

First Financial Fund, Inc............... 170,000(4) ____%
Gateway Center Three
100 Mulberry Street
Newark, New Jersey

Lawrence B. Seidman..................... 130,500(5) ____%
100 Misty Lane
Parsippany, New Jersey 07054
- ---------------------------------

(1) Based on a Schedule 13G/A filed February 12, 2004. According to this
filing, Wellington Management Company, LLP has no voting power over these
shares and shares dispositive power over these shares with its advisory
clients.
(2) As of April 5, 2004, ___________ shares had been allocated to participants
in the ESOP. The trustee of the ESOP is First Bankers Trust Company, N.A.
See "GENERAL INFORMATION ABOUT VOTING--PARTICIPANTS IN THE FIRST FEDERAL
BANK ESOP" for discussion of the ESOP's voting procedures.
(3) Based on information in a Schedule 13G/A filed on February 14, 2003.
Endicott Partners, L.P., Endicott Partners II, L.P., Endicott Offshore
Investors, Ltd., W.R. Endicott, L.L.C., W.R. Endicott II, L.L.C., Endicott
Management Company, Wayne K. Goldstein and Robert I. Usdan are deemed to be
beneficial owners of 48,300, 60,450, 51,400, 48,300, 60,450, 68,950,
177,700 and 177,700 shares, respectively.
(4) Based on a Schedule 13G/A filed February 14, 2003. According to this
filing, First Financial Fund, Inc. has sole voting power and shared
dispositive power with respect to these shares. These shares are also shown
as beneficially owned by Wellington Management Company, LLP, which shares
dispositive power over these shares.
(5) Based on information contained in a Schedule 13D/A filed on January 27,
2004. Seidman and Associates, L.L.C.; Seidman Investment Partnership, L.P.;
Seidman Investment Partnership II, L.P.; Kerrimatt, L.P.; Federal Holdings,
L.L.C.; Lawrence B. Seidman; Dennis Pollack; Pollack Investment
Partnership, L.P., David L. Jansen and Mark Sill are deemed to be
beneficial owners of 41,464, 40,034, 9,655, 9,172, 9,413, 126,500, 3,000,
10,137, 500 and 500 of these shares, respectively. Lawrence B. Seidman has
no beneficial nor pecuniary interest in the shares owned by Dennis Pollack,
Pollack Investment Partnership, L.P., David L. Jansen or Mark Sill.

The following table provides information as of April 5, 2004 about the
shares of First Federal Bancshares common stock that may be considered to be
beneficially owned by each director, each nominee for director and all directors
and executive officers of the Company as a group. A person may be considered to
beneficially own any shares of common stock over which he or she has, directly
or indirectly, sole or shared voting or investment power. Unless otherwise
indicated, each of the named individuals has sole voting power and sole
investment power with respect to the number of shares shown.

OPTIONS PERCENT OF
NUMBER OF EXERCISABLE COMMON STOCK
NAME SHARES OWNED WITHIN 60 DAY OUTSTANDING(1)
- ----- -------------- --------------- ----------------

B. Bradford Billings.................. 1,600(2) 600
Franklin M. Hartzell.................. 22,585(3) 3,886
Murrel Hollis......................... 21,835(4) 1,986
Eldon R. Mette........................ 13,793 4,104
Gerald L. Prunty...................... 21,485(5) 2,486
Dr. Stephan L. Roth................... 23,728(6) 343
James J. Stebor....................... 32,003(7) 15,940
Richard D. Stephens................... 21,728(8) 2,243
All directors and executive officers
as a group (12 persons)............ 236,168 65,120

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*Does not exceed 1.0% of the Company's voting securities.
(1) Based on __________ shares of Company common stock outstanding and entitled
to vote as of April 5, 2004, plus the number of shares that may be acquired
within 60 days by each individual (or group of individuals) by exercising
stock options.
(2) Includes 900 shares held by Mr. Billings' spouse.
(3) Includes 2,500 shares held by Mr. Hartzell's spouse. Also includes
2,691 unvested shares awarded under the Company's 2001 Stock-Based Incentive
Plan for which Mr. Hartzell has voting power but not investment power.
(4) Includes 3,750 shares held by Mr. Hollis's spouse. Also includes 2,691
unvested shares awarded under the Company's 2001 Stock-Based Incentive Plan
for which Mr. Hollis has voting power but not investment power.
(5) Includes 4,550 shares held in trust by Mr. Prunty's spouse. Also includes
2,691 unvested shares awarded under the Company's 2001 Stock-Based Incentive
Plan for which Mr. Prunty has voting power but not investment power.
(6) Includes 6,000 shares held in trust by Dr. Roth's spouse. Also includes 2,691
unvested shares awarded under the Company's 2001 Stock-Based Incentive Plan
for which Dr. Roth has voting power but not investment power.
(7) Includes 100 shares held by Mr. Stebor as custodian for his daughter and
4,794 shares allocated to Mr. Stebor's account under the ESOP as to which
he has voting but not dispositive power. Also includes 10,764 unvested
shares awarded under the Company's 2001 Stock-Based Incentive Plan for
which Mr. Stebor has voting power but not investment power.
(8) Includes 2,691 unvested shares awarded under the Company's 2001 Stock-Based
Incentive Plan for which Mr. Stephens has voting power but not investment
power.

PROPOSAL 1 -- ELECTION OF DIRECTORS

The Company's Board of Directors consists of eight members, all of whom
are independent under the listing standards of the Nasdaq Stock Market except
James J. Stebor, who is an employee of the Company, and Eldon R. Mette, who
received payments under a consulting and non-competition agreement with the
Company during 2003. The Board is divided into three classes with three-year
staggered terms, with approximately one-third of the directors elected each
year. The Board of Directors' nominees for election this year, to serve for a
three-year term or until their respective successors have been elected and
qualified, are Dr. Stephan L. Roth and Richard D. Stephens, each of whom is
currently a director of First Federal Bancshares and First Federal Bank.

Unless you indicate on the WHITE proxy card that your shares should not be
voted for certain nominees, the Board of Directors intends that the proxies
solicited by it will be voted for the election of all of the Board's nominees.
If any nominee is unable to serve, the persons named in the WHITE proxy card
would vote your shares to approve the election of any substitute proposed by the
Board of Directors. At this time, the Board of Directors knows of no reason why
any nominee might be unable to serve.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DR. ROTH AND MR.
STEPHENS.

Information regarding the Board of Directors' nominees and the directors
continuing in office is provided below. Unless otherwise stated, each individual
has held his current occupation for the last five years. The age indicated for
each individual is as of December 31, 2003. The indicated period of service as a
director includes the period of service as a director of First Federal.

BOARD NOMINEES FOR ELECTION OF DIRECTORS

DR. STEPHAN L. ROTH is a retired family physician. Age 78. Director since
1976.

RICHARD D. STEPHENS is a retired attorney serving as Of Counsel to the law
firm of Flack, McRaven & Stephens in Macomb, Illinois. Age 76. Director since
1966.

DIRECTORS CONTINUING IN OFFICE

THE FOLLOWING DIRECTORS HAVE TERMS ENDING IN 2005:

FRANKLIN M. HARTZELL is a partner in the law firm of Hartzell, Glidden,
Tucker & Hartzell in Carthage, Illinois. Mr. Hartzell also serves as Director
and Secretary of Pioneer Lumber Company, located in Dallas City, Illinois. Mr.
Hartzell serves as Chairman of the Board of Directors of First Federal
Bancshares. Age 80. Director since 1965.

MURREL HOLLIS is a retired partner and the former president of
Martin-Hollis Funeral Home in Bushnell, Illinois. Mr. Hollis is also the owner
and operator of the Hollis Farm. Age 62. Director since 1992.

ELDON R. METTE is the former President and Chief Executive Officer of PFSB
Bancorp, Inc. and its savings bank subsidiary, Palmyra Savings, which were
acquired by the Company in November 2002. Age 66. Director since 2002.

THE FOLLOWING DIRECTORS HAVE TERMS ENDING IN 2006:

B. BRADFORD BILLINGS has served as the President and Chief Executive
Officer of Blessing Corporate Services, a healthcare systems corporation in
Quincy, Illinois since January 2001. Prior to January 2001, Mr. Billings served
as the Senior Vice President and Chief Operating Officer of Blessing Hospital in
Quincy, Illinois since 1981. Age 55. Director since 2002.

GERALD L. PRUNTY served as President and Chief Executive Officer of First
Federal Bank from 1969 until his retirement in 1994. Mr. Prunty serves as
Chairman of the Board of Directors of First Federal. Age 75. Director since
1967.

JAMES J. STEBOR has served as President and Chief Executive Officer of the
Company since April 2000 and as President of First Federal since 1994. Mr.
Stebor has been employed by First Federal since 1977. Age 54. Director since
1990.

PROPOSAL 2 -- RATIFICATION OF INDEPENDENT AUDITORS

The Audit Committee of the Board of Directors has appointed Crowe Chizek
and Company LLC to be the Company's independent auditors for the 2004 fiscal
year, subject to ratification by stockholders. A representative of Crowe Chizek
and Company LLC is expected to be present at the annual meeting to respond to
appropriate questions from stockholders and will have the opportunity to make a
statement should he or she desire to do so.

If the ratification of the appointment of the independent auditors is not
approved by a majority of the votes cast by stockholders at the annual meeting,
the Audit Committee will consider other independent auditors.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS.

AUDIT FEES

The following table sets forth the fees billed to the Company for the
fiscal years ending December 31, 2003 and 2002 by Crowe Chizek and Company LLC:

2003 2002
-------- --------

Audit fees.................................. $ $
Audit-related fees(1).......................
Tax fees(2).................................
All other fees(3)...........................
---------------------------------------------
(1)
(2) Consists of tax filing and tax related compliance and other advisory
services.
(3) Includes fees for assistance with securities filings other than
periodic reports, services related to the acquisition of PFSB
Bancorp, Inc. and other services.

PRE-APPROVAL OF SERVICES BY THE INDEPENDENT AUDITOR

The Audit Committee has adopted a policy for pre-approval of audit and
permitted non-audit services by the Company's independent auditor. The Audit
Committee will consider annually and, if appropriate, approve the provision of
audit services by its external auditor and consider and, if appropriate,
pre-approve the provision of certain defined audit and non-audit services. The
Audit Committee also will consider on a case-by-case basis and, if appropriate,
approve specific engagements that are not otherwise pre-approved.

Any proposed engagement that does not fit within the definition of a
pre-approved service may be presented to the Audit Committee for consideration
at its next regular meeting or, if earlier consideration is required, to the
Audit Committee or one or more of its members. The member or members to whom
such authority is delegated shall report any specific approval of services at
its next regular meeting. The Audit Committee will regularly review summary
reports detailing all services being provided to the Company by its external
auditor.

REPORT OF THE AUDIT COMMITTEE

The Company's management is responsible for the Company's internal
controls and financial reporting process. The independent auditors are
responsible for performing an independent audit of the Company's consolidated
financial statements and issuing an opinion on the conformity of those financial
statements with generally accepted accounting principles. The Audit Committee
oversees the Company's internal controls and financial reporting process on
behalf of the Board of Directors.

In this context, the Audit Committee has met and held discussions with
management and the independent auditors. Management represented to the Audit
Committee that the Company's consolidated financial statements were prepared in
accordance with generally accepted accounting principles, and the Audit
Committee has reviewed and discussed the consolidated financial statements with
management and the independent auditors. The Audit Committee discussed with the
independent auditors matters required to be discussed by Statement on Auditing
Standards No. 61 (Communication With Audit Committees), including the quality,
not just the acceptability, of the accounting principles, the reasonableness of
significant judgments, and the clarity of the disclosures in the financial
statements.

In addition, the Audit Committee has received the written disclosures and
the letter from the independent auditors required by the Independence Standards
Board Standard No. 1 (Independence Discussions With Audit Committees) and has
discussed with the independent auditors the auditors' independence from the
Company and its management. In concluding that the auditors are independent, the
Audit Committee considered, among other factors, whether the non-audit services
provided by the auditors were compatible with its independence.

The Audit Committee discussed with the Company's independent auditors the
overall scope and plans for their audit. The Audit Committee meets with the
independent auditors, with and without management present, to discuss the
results of their examination, their evaluation of the Company's internal
controls, and the overall quality of the Company's financial reporting.

In performing all of these functions, the Audit Committee acts only in an
oversight capacity. In its oversight role, the Audit Committee relies on the
work and assurances of the Company's management, which has the primary
responsibility for financial statements and reports, and of the independent
auditors

who, in their report, express an opinion on the conformity of the Company's
financial statements to generally accepted accounting principles. The Audit
Committee's oversight does not provide it with an independent basis to determine
that management has maintained appropriate accounting and financial reporting
principles or policies, or appropriate internal controls and procedures designed
to assure compliance with accounting standards and applicable laws and
regulations. Furthermore, the Audit Committee's considerations and discussions
with management and the independent auditors do not assure that the Company's
financial statements are presented in accordance with generally accepted
accounting principles, that the audit of the Company's financial statements has
been carried out in accordance with generally accepted auditing standards or
that the Company's independent auditors are in fact "independent."

In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board has approved,
that the audited consolidated financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2003 for filing with
the Securities and Exchange Commission. The Audit Committee and the Board of
Directors also have approved, subject to stockholder ratification, the selection
of the Company's independent auditors.

AUDIT COMMITTEE THE BOARD OF DIRECTORS
OF FIRST FEDERAL BANCSHARES, INC.

Gerald L. Prunty, Chairman
B. Bradford Billings
Murrel Hollis

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following information is furnished for Mr. Stebor. No other executive
officer of First Federal Bancshares or First Federal received a salary and bonus
of $100,000 or more during the year ended December 31, 2003.

LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION AWARDS
------------------------------------ -------------------------
RESTRICTED SECURITIES
NAME AND STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY(2) BONUS AWARDS(3) OPTIONS COMPENSATION
- ------------- -------- --------- ------- --------- --------- ------------

James J. Stebor............ 2003 $162,025 $1,500 $ -- -- $76,349(4)
President and Chief Executive Officer 2002 149,700 1,500 -- -- 44,071
2001 142,350 1,500 270,894 44,850 34,908

(1) Does not include the aggregate amount of perquisites and other personal benefits, which was less than $50,000
or 10% of the total annual salary and bonus reported.
(2) Includes board of directors and board committee fees.
(3) The dollar amount set forth in the table represents the market value of 17,940 shares on the date of grant.
The restricted stock award vests in five equal annual installments commencing on October 10, 2002. As of
December 31, 2003, the market value of the unvested shares of restricted stock held by Mr. Stebor was $378,892.
Dividends, if any, are paid on the restricted stock.
(4) For 2003, consists of the value of stock allocation under the employee stock ownership plan.

AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table provides for Mr. Stebor information regarding the
exercise of options during the year ended December 31, 2003 and unexercised
stock options as of December 31, 2003.

NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES AT FISCAL YEAR-END IN-THE-MONEY OPTIONS/SARS
ACQUIRED VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------- ----------- --------- ----------- ------------- ----------- -------------

James J. Stebor............... 2,000 $32,820 15,940 26,910 $320,394 $540,891
- ---------------------------------
(1) Value of unexercised in-the-money stock options equals the market value of
shares covered by in-the-money options on December 31, 2003 ($35.20 per
share) less the option exercise price ($15.10 per share). Options are
in-the-money if the market value of shares covered by the options is
greater than the exercise price.

EMPLOYMENT AGREEMENTS

EMPLOYMENT AGREEMENTS. First Federal and First Federal Bancshares each
have entered into employment agreements with Mr. Stebor. The employment
agreements provide for a three-year term. The term of the First Federal
Bancshares employment agreement extends on a daily basis until written notice of
non-renewal is given by the Board of Directors or Mr. Stebor. The term of the
First Federal employment agreement is renewable on an annual basis. The
employment agreements provide for a base salary of $110,000, subject to
increase. In addition to the base salary, the employment agreements provide for,
among other things, participation in stock and employee benefits plans and
fringe benefits applicable to executive personnel. The employment agreements
provide for termination by First Federal or First Federal Bancshares for cause,
as defined in the employment agreements, at any time. If First Federal or First
Federal Bancshares chooses to terminate Mr. Stebor's employment for reasons
other than for cause, or if Mr. Stebor resigns from First Federal or First
Federal Bancshares after specified circumstances that would constitute
constructive termination, Mr. Stebor or, if Mr. Stebor dies, his beneficiary,
would be entitled to receive an amount equal to the benefit plan base salary
payments that would have been paid to Mr. Stebor for the remaining term of the
employment agreement and the contributions that would have been made on Mr.
Stebor's behalf to any employee benefit plans of First Federal and First Federal
Bancshares during the remaining term of the employment agreement. First Federal
and First Federal Bancshares also would continue to pay for Mr. Stebor's health
and welfare benefit plan coverage for the remaining term of the employment
agreement. Upon termination of Mr. Stebor's employment for reasons other than
cause or a change in control, Mr. Stebor must adhere to a one-year
non-competition agreement.

Under the employment agreements, if, following a change in control of
First Federal or First Federal Bancshares, Mr. Stebor's employment is
involuntarily terminated or if Mr. Stebor voluntarily terminates his employment
in connection with circumstances specified in the agreement, then Mr. Stebor or,
if Mr. Stebor dies, his beneficiary, would be entitled to a severance payment
equal to the greater of the payments and benefits that would have been paid for
the remaining term of the agreement or three times the average of Mr. Stebor's
five preceding taxable years' annual compensation. First Federal and First
Federal Bancshares also would continue Mr. Stebor's health and welfare benefits
coverage for thirty-six months. Even though both employment agreements provide
for a severance payment if a change in control occurs, Mr. Stebor would not
receive duplicate payments or benefits under the agreements. Under applicable
law, an excise tax would be triggered by change in control-related payments that
equal or exceed three times Mr. Stebor's average annual taxable compensation
over the five years preceding the change in control. The excise tax would equal
20% of the amount of the payment in excess of one times Mr. Stebor's average
taxable compensation over the preceding five-year period. In the event that
payments related to a change in control of First Federal Bancshares are subject
to this excise tax, First Federal Bancshares will provide Mr. Stebor with an
additional amount sufficient to enable Mr. Stebor to retain the full value of
his change in control benefits as if the excise tax had not applied.

First Federal Bancshares guarantees the payments to Mr. Stebor under First
Federal's employment agreement if they are not paid by First Federal. First
Federal Bancshares also will make all payments due under the First Federal
Bancshares' employment agreement. First Federal or First Federal Bancshares will
pay or reimburse all reasonable costs and legal fees incurred by Mr. Stebor
under any dispute or question of interpretation relating to the employment
agreements, if Mr. Stebor is successful on the merits in a legal judgment,
arbitration or settlement. The employment agreements also provide that First
Federal and First Federal Bancshares will indemnify Mr. Stebor to the fullest
extent legally allowable for all expenses and liabilities he may incur in
connection with any suit or proceeding in which he may be involved by reason of
his having been a director or officer of First Federal Bancshares or First
Federal.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. First Federal maintains a
supplemental executive retirement plan to provide for supplemental retirement
benefits with respect to the employee stock ownership plan. The plan provides
benefits to eligible individuals (those designated by the Board of Directors of
First Federal or its affiliates) that cannot be provided under the employee
stock ownership plan as a result of the limitations imposed by the Internal
Revenue Code, but that would have been provided under the employee stock
ownership plan but for such limitations. In addition to providing for benefits
lost under tax-qualified plans as a result of limitations imposed by the
Internal Revenue Code, the plan also provides supplemental benefits to
designated individuals upon a change of control before the complete scheduled
repayment of the employee stock ownership plan loan. Generally, upon such an
event, the supplemental executive retirement plan provides the individual with
a benefit equal to what the individual would have received under the employee
stock ownership plan and the supplemental plan had he or she remained employed
throughout the term of the employee stock ownership plan loan less the benefits
actually provided under the plans on behalf of the individual. An individual's
benefits under the supplemental executive retirement plan generally become
payable upon the change in control of First Federal or First Federal
Bancshares. The Board of Directors has designated Mr. Stebor as a participant
in the supplemental executive retirement plan.

RETIREMENT PLAN

First Federal is a participant in the Financial Institutions Retirement
Fund, a multi-employer, non-contributory defined benefit retirement plan. The
following table indicates the annual retirement benefits that would be payable
upon retirement at age 65 to a participant electing to receive his or her
retirement benefit in the standard form of benefit, assuming various specified
levels of compensation and various specified years of credited service. Under
the Internal Revenue Code, maximum annual benefits under the pension plan are
presently limited to $160,000 per year and annual compensation for calculation
purposes is limited to $200,000 per year for the 2003 calendar year.

HIGHEST FIVE YEARS OF SERVICE
YEAR AVERAGE -------------------------------------------------------
COMPENSATION 15 20 25 30 35+
- -------------- --------- --------- --------- --------- ----------

$ 75,000 $ 22,500 $30,000 $ 37,500 $ 45,000 $ 52,500
100,000 30,000 40,000 50,000 60,000 70,000
125,000 37,500 50,000 62,500 75,000 87,500
150,000 45,000 60,000 75,000 90,000 105,000
175,000 52,500 70,000 87,500 105,000 122,500
200,000 60,000 80,000 100,000 120,000 140,000
250,000 75,000 100,000 125,000 150,000 175,000
300,000 90,000 120,000 150,000 180,000 210,000
350,000 105,000 140,000 175,000 210,000 245,000

The retirement plan provides for monthly payments to, or on behalf of,
each covered employee. All full-time employees are eligible to participate in
the retirement plan after completion of one year of service to First Federal
and the attainment of age 21. To obtain one year of service, an employee must
complete at least 1,000 hours of service in 12 consecutive months. Benefits are
based upon benefit service and salary excluding bonuses, fees, etc. Employees
become vested following five years of service. As of December 31, 2003, Mr.
Stebor had 26 years of credited service under the retirement plan.

The normal retirement age is 65 and the early retirement age is before age
65, but after age 45. Normal retirement benefits are equal to 2% multiplied by
the years of service to First Federal and by the employee's average base salary
for the five highest consecutive years preceding retirement. If an employee
elects early retirement, but defers the receipt of benefits until age 65, the
formula for computation of early retirement benefits is the same as if the
employee had retired at the normal retirement age. However, if the employee
elects early retirement benefits payable under the retirement plan, the benefits
are equal to the benefits payable assuming retirement at age 65 reduced by
applying an early retirement factor based on age and vesting service when
payments begin. Payment may also be deferred to any time up to age 70, in which
case the retirement allowance payable at age 65 will be increased by 0.8% for
each month of deferment after age 65. The maximum increase allowable is 48%.
Under the retirement plan, First Federal makes annual contributions computed on
an actuarial basis to fund the benefits.

Upon retirement, the regular form of benefit under the retirement plan is
an annuity payable in equal monthly installments for the life of the employee.
Optional annuity or lump sum benefit forms may also be elected by the employee.
Benefits under the retirement plan are not integrated with social security.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The following is a report of the Compensation Committee of the Board of
Directors regarding executive compensation. The Compensation Committee's
membership and duties are described on page 5.

COMPENSATION POLICIES

The Compensation Committee bases its executive compensation policy on the
same principles that guide the Company in establishing all of its compensation
programs. The Company designs programs to attract, retain and motivate highly
talented individuals at all levels of the organization while balancing the
interests of stockholders. The Company emphasizes using a competitive base
salary and program of retirement benefits as a means of attracting and retaining
employees, rather than performance-based cash compensation. The Company
maintains a modest bonus program that provides all employees with a bonus equal
to the lesser of 5% of annual salary or $1,500. Following the Company's initial
public offering in 2000, the Company introduced equity-based compensation as a
means of promoting the creation of long-term value for stockholders.

COMPONENTS OF EXECUTIVE COMPENSATION

BASE SALARY. Salary levels for all employees, including executive
officers, are set so as to reflect the duties and levels of responsibilities
inherent in the position and to reflect competitive conditions in the banking
business in the Company's market area. Comparative salaries paid by other
financial institutions are considered in establishing the salary for a given
position. The Compensation Committee utilizes the Bank Compensation and Benefits
Survey compiled by the Illinois Bankers Association as well as other surveys
prepared by trade groups and independent benefits consultants. Base salaries for
all employees, including the executive officers, are reviewed annually by the
Compensation Committee, which takes into account the competitive level of pay as
reflected in the surveys consulted. In setting base salaries, the Compensation
Committee also considers a number of factors relating to the particular
executive, including individual performance, job responsibilities, level of
experience, ability and knowledge of the position. These factors are considered
subjectively in the aggregate and none of the factors is accorded a specific
weight.

LONG-TERM INCENTIVE COMPENSATION. Under the Company's 2001 Stock-Based
Incentive Plan, the Compensation Committee is authorized, in its discretion, to
grant stock options and restricted stock awards in such proportions and upon
such terms and conditions as the Compensation Committee may determine. All stock
options granted have an exercise price equal to the fair market value of the
Company's common stock at the time of grant and are exercisable within a 10-year
period. In order to assure the retention of high level executives and to tie the
compensation of those executives to the creation of long term value for
stockholders, the Compensation Committee requires that stock options granted
under the 2001 Stock-Based Incentive Plan vest in equal portions over a
five-year period.

The awards of restricted stock to executive officers and other key
employees represent shares of First Federal Bancshares common stock that the
recipient cannot sell or otherwise transfer until the applicable restriction
period lapses. Restricted stock awards also are intended to increase the
ownership of executives in the Company, thereby further integrating the
compensation of the executive with the creation of long term value for
stockholders. The Compensation Committee has provided that

restricted stock awards granted under the 2001 Stock-Based Incentive Plan vest
in equal portions over five years.

In 2001, the Compensation Committee awarded a substantial number of the
options and shares of restricted stock available under the 2001 Stock-Based
Incentive Plan. No options or shares of restricted stock were awarded to
employees in 2003.

JAMES J. STEBOR - CHIEF EXECUTIVE OFFICER COMPENSATION. The Compensation
Committee fixed the 2003 base salary for the Company's Chief Executive Officer,
James J. Stebor, in a manner consistent with the base salary guidelines applied
for executive officers of the Company as described above. In general, the
Compensation Committee considers the Company's financial performance, peer group
financial performance and compensation survey data when making decisions
regarding the Chief Executive Officer's compensation. In recognition of Mr.
Stebor's leadership and contribution to the success of the Company, the
Compensation Committee increased Mr. Stebor's base salary for 2003. Consistent
with all employees, the Compensation Committee did not grant Mr. Stebor any
stock options or restricted stock awards during 2003.

The Compensation Committee of the Board of Directors
of First Federal Bancshares, Inc.

Franklin M. Hartzell, Chairman
B. Bradford Billings
Murrell Hollis
Gerald L. Prunty
Dr. Stephan L. Roth
Richard D. Stephens

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Mr. Prunty, who serves on the Compensation Committee, is the former
President and Chief Executive Officer of First Federal.

STOCK PERFORMANCE GRAPH

The following graph compares the cumulative total stockholder return on
the Company's common stock with the cumulative total return on the Nasdaq Index
(U.S. Companies) and with the SNL All Thrifts Index. Total return assumes the
reinvestment of all dividends. The graph assumes $100 was invested at the close
of business on September 28, 2000, the initial day of trading of the Company's
common stock.

[GRAPHIC OMITTED]

Period Ended
---------------------------------------------

Index 9/28/00 12/31/00 12/31/01 12/31/02 12/31/03
- ----- -------- --------- -------- -------- --------

First Federal Bancshares, Inc........ $100.00 $105.82 $132.52 $166.39 $292.89
NASDAQ - Total US.................... 100.00 65.04 51.51 35.44 53.38
SNL Thrift Index..................... 100.00 121.37 129.72 154.75 219.07

THE REPORT OF THE AUDIT COMMITTEE, THE REPORT OF THE COMPENSATION COMMITTEE, AND
THE STOCK PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY
GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY
FILING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY
INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED
FILED UNDER SUCH ACTS.

OTHER INFORMATION RELATING TO DIRECTORS AND EXECUTIVE OFFICERS

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than 10% of
any registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Executive officers, directors and greater than 10% stockholders are required by
regulation to furnish the Company with copies of all Section 16(a) reports they
file.

Based solely on the Company's review of copies of the reports it has
received and written representations provided to it from the individuals
required to file the reports, the Company believes that each of its executive
officers and directors has complied with applicable reporting requirements for
transactions in First Federal Bancshares common stock during the year ended
December 31, 2003.

TRANSACTIONS WITH MANAGEMENT

The Sarbanes-Oxley Act of 2002 generally prohibits loans by the Company to
its executive officers and directors. However, the Sarbanes-Oxley Act contains a
specific exemption from such prohibition for loans by First Federal to its
executive officers and directors in compliance with federal banking regulations.
Federal regulations require that all loans or extensions of credit to executive
officers and directors must generally be made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, unless the loan or extension of
credit is made under a benefit program generally available to all other
employees and does not give preference to any insider over any other employee,
and must not involve more than the normal risk of repayment or present other
unfavorable features. First Federal currently makes new loans and extensions of
credit to First Federal's executive officers, directors and employees at
different rates than those offered to the general public; however, First Federal
does not give preference to any director or officer over any other employee, and
such loans do not involve more than the normal risk of repayment or present
other unfavorable features. In addition, loans made to a director or executive
officer in an amount that, when aggregated with the amount of all other loans to
the person and his or her related interests, are in excess of the greater of
$25,000 or 5% of First Federal's capital and surplus, up to a maximum of
$500,000, must be approved in advance by a majority of the disinterested members
of the Board of Directors.

NOMINATION AND GOVERNANCE COMMITTEE PROCEDURES

GENERAL

It is the policy of the Nomination and Governance Committee of the Board
of Directors of Company to consider director candidates recommended by
stockholders who appear to be qualified to serve on the Company's Board of
Directors. The Nomination and Governance Committee may choose not to consider an
unsolicited recommendation if no vacancy exists on the Board of Directors and
the Nomination and Governance Committee does not perceive a need to increase the
size of the Board of Directors. In order to avoid the unnecessary use of the
Nomination and Governance Committee's resources, the Nomination and Governance
Committee will consider only those director candidates recommended in accordance
with the procedures set forth below.

PROCEDURES TO BE FOLLOWED BY STOCKHOLDERS

To submit a recommendation of a director candidate to the Nomination and
Governance Committee, a stockholder should submit the following information in
writing, addressed to the Chairman of the Nomination and Governance Committee,
care of the Corporate Secretary, at the main office of the Company:

1. The name of the person recommended as a director candidate;

2. All information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors
pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended;

3. The written consent of the person being recommended as a director
candidate to being named in the proxy statement as a nominee and to
serving as a director if elected;

4. As to the stockholder making the recommendation, the name and
address, as they appear on the Company's books, of such stockholder;
provided, however, that if the stockholder is not a registered
holder of the Company's common stock, the stockholder should submit
his or her name and address along with a current written statement
from the record holder of the shares that reflects ownership of the
Company's common stock; and

5. A statement disclosing whether such stockholder is acting with or on
behalf of any other person and, if applicable, the identity of such
person.

In order for a director candidate to be considered for nomination at the
Company's annual meeting of stockholders, the recommendation must be received by
the Nomination and Governance Committee at least 120 calendar days prior to the
date the Company's proxy statement was released to stockholders in connection
with the previous year's annual meeting, advanced by one year.

MINIMUM QUALIFICATIONS

The Nomination and Governance Committee has adopted a set of criteria that
it considers when it selects individuals to be nominated for election to the
Board of Directors. First a candidate must meet the eligibility requirements set
forth in the Company's bylaws, which include a residency requirement, an age
limitation and a requirement that the candidate not have been subject to certain
criminal or regulatory actions. A candidate also must meet any qualification
requirements set forth in any Board or committee governing documents.

The Nomination and Governance Committee will consider the following
criteria in selecting nominees: financial, regulatory and business experience;
familiarity with and participation in the local community; integrity, honesty
and reputation; dedication to the Company and its stockholders; independence;
and any other factors the Nomination and Governance Committee deems relevant,
including age, diversity, size of the Board of Directors and regulatory
disclosure obligations.

In addition, prior to nominating an existing director for re-election to
the Board of Directors, the Nomination and Governance Committee will consider
and review an existing director's Board and committee attendance and
performance; length of Board service; experience, skills and contributions that
the existing director brings to the Board; and independence.

PROCESS FOR IDENTIFYING AND EVALUATING NOMINEES

The process that the Nomination and Governance Committee follows when it
identifies and evaluates individuals to be nominated for election to the Board
of Directors is as follows:

IDENTIFICATION. For purposes of identifying nominees for the Board of
Directors, the Nomination and Governance Committee relies on personal contacts
of the committee members and other members of the Board of Directors, as well as
their knowledge of members of the communities served by First Federal. The
Nomination and Governance Committee also will consider director candidates
recommended by stockholders in accordance with the policy and procedures set
forth above. The Nomination and Governance Committee has not previously used an
independent search firm to identify nominees.

EVALUATION. In evaluating potential clients, the Nomination and Governance
Committee determines whether the candidate is eligible and qualified for service
on the Board of Directors by evaluating the candidate under the selection
criteria set forth above. In addition, the Nomination and Governance Committee
will conduct a check of the individual's background and interview the candidate.

SUBMISSION OF BUSINESS PROPOSALS AND STOCKHOLDER NOMINATIONS

The Company must receive proposals that stockholders seek to include in
the proxy statement for the Company's next annual meeting no later than December
21, 2004. If next year's annual meeting is held on a date more than 30 calendar
days from May 25, 2005, a stockholder proposal must be received by a reasonable
time before the Company begins to print and mail its proxy solicitation for such
annual meeting. Any stockholder proposals will be subject to the requirements of
the proxy rules adopted by the Securities and Exchange Commission.

The Company's Bylaws provides that in order for a stockholder to make
nominations for the election of directors or proposals for business to be
brought before the annual meeting, a stockholder must deliver notice of such
nominations and/or proposals to the Secretary not less than 90 nor more than 120
days prior to the date of the annual meeting; provided that if less than 100
days' notice or prior public disclosure of the date of the annual meeting is
given to stockholders, such notice must be received not later than the close of
the 10th day following the day on which notice of the date of the annual meeting
was mailed to stockholders or prior public disclosure of the meeting date was
made. A copy of the Bylaws may be obtained from the Company.

STOCKHOLDER COMMUNICATIONS

The Company encourages stockholder communications to the Board of
Directors and/or individual directors. Stockholders who wish to communicate with
the Board of Directors or an individual director should send their
communications to the care of Cathy Pendell, Chief Financial Officer, at 109
East Depot Street, Colchester, Illinois 62326. Communications regarding
financial or accounting policies should be sent to the attention of the Chairman
of the Audit Committee. All other communications should be sent to the attention
of the Chairman of the Nomination and Governance Committee.

MISCELLANEOUS

The Company will pay the cost of this proxy solicitation. The Company will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of First Federal Bancshares common stock. In addition to
soliciting proxies by mail, directors, officers and regular employees of the
Company may solicit proxies personally or by telephone without receiving
additional compensation. Exhibit C to this proxy statement sets forth
information relating to the Company's directors who may be considered
participants in the solicitation of proxies under Securities and Exchange
Commission rules by reason of their position as directors or because they may
solicit proxies on the Company's behalf. Georgeson Shareholder, a proxy
solicitation firm, will be paid a fee of $15,000, plus out-of-pocket expenses to
assist the Company in soliciting proxies. Approximately __ persons will be used
by Georgeson Shareholder in such solicitation. The total amount estimated to be
expended in connection with this proxy contest and the total amount expended
through April 5, 2004 is $__________ and $__________, respectively, both of
which exclude the amount normally expended in connection with a solicitation for
the election of directors in the absence of a contest and costs represented by
salaries and wages of regular employees and officers of the Company.

The Company's Annual Report to Stockholders has been mailed to persons who
were stockholders as of the close of business on April 5, 2004. Any stockholder
who has not received a copy of the Annual Report may obtain a copy by writing to
the Secretary of the Company. The Annual Report is not to be treated as part of
the proxy solicitation material or as having been incorporated in this proxy
statement by reference.

A COPY OF THE COMPANY'S ANNUAL REPORT FOR FORM 10-K, WITHOUT EXHIBITS, FOR
THE YEAR ENDED DECEMBER 31, 2003, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WILL BE FURNISHED WITHOUT CHARGE TO PERSONS WHO WERE STOCKHOLDERS AS
OF THE CLOSE OF BUSINESS ON APRIL 5, 2004 UPON WRITTEN REQUEST TO CATHY D.
PENDELL, TREASURER, FIRST FEDERAL BANCSHARES, INC., 109 EAST DEPOT STREET,
COLCHESTER, ILLINOIS 62326.

If you and others who share your address own your shares in street name,
your broker or other holder of record may be sending only one annual report and
proxy statement to your address. This practice, known as "householding," is
designed to reduce our printing and postage costs. However, if a stockholder
residing at such an address wishes to receive a separate annual report or proxy
statement in the future, he or she should contact the broker or other holder of
record. If you own your shares in street name and are receiving multiple copies
of our annual report and proxy statement, you can request householding by
contacting your broker or other holder of record.

Whether or not you plan to attend the annual meeting, please vote by
marking, signing, dating and promptly returning the enclosed WHITE proxy card in
the enclosed envelope.

BY ORDER OF THE BOARD OF DIRECTORS

Millie R. Shields

CORPORATE SECRETARY
Colchester, Illinois
April 20, 2004

APPENDIX A

FIRST FEDERAL BANCSHARES, INC.

AUDIT COMMITTEE CHARTER

MISSION STATEMENT

The committee's role is to assist the board of directors in overseeing all
material aspects of First Federal Bancshares' (the "Company") financial
reporting, internal control, and audit functions, including a particular focus
on the qualitative aspects of financial reporting to stockholders, on compliance
with significant applicable legal, ethical, and regulatory requirements and to
ensure the objectivity of the financial statements. The role also includes
maintenance of strong, positive working relationships with management, external
and internal auditors, counsel, and other committee advisors.

Organization

COMMITTEE COMPOSITION. The committee shall consist of at least three board
members, all of whom shall satisfy all applicable requirements of the Nasdaq
Stock Market. Committee appointments, including selection of the committee
chairperson, shall be approved annually by the full board.

MEETINGS. The committee shall meet at least quarterly. Additional meetings
shall be scheduled as considered necessary by the committee or chairperson. A
quorum of the committee shall be declared when a majority of the appointed
members of the committee are in attendance.

EXTERNAL RESOURCES. The committee shall be authorized to engage
independent counsel and other advisors, as the committee requires, to carry out
its responsibilities. In connection therewith, the committee shall be provided
appropriate funding, as determined by the committee, for payment to independent
counsel and other advisors. In addition, the committee shall be provided funding
for ordinary administrative expenses of the committee.

RECEIPT OF COMPLAINTS. The committee shall have in place procedures for
(1) receiving, retaining and treating complaints regarding accounting, internal
controls, or auditing matters, and (2) the confidential, anonymous submission by
employees of concerns regarding questionable accounting or auditing matters.

ROLES AND RESPONSIBILITIES

COMMUNICATION WITH THE BOARD OF DIRECTORS AND MANAGEMENT

o The chairperson and others on the committee shall, to the extent
appropriate, have contact throughout the year with senior
management, the board of directors, external auditors and legal
counsel, as applicable, to strengthen the committee's knowledge of
relevant current and prospective business issues, risks and
exposures. This will include requests by the committee that members
of management, counsel, the external auditors, as applicable,
participate in committee meetings, as necessary, to carry out the
committee's responsibilities.

o The committee, with input from management and other key committee
advisors, shall develop an annual plan, which shall include an
agenda and procedures for the review of the Company's quarterly
financial data, its year end audit, and the review of the
independence of its accountants.

o The committee, through the committee chairperson, shall report
periodically, as deemed necessary, but at least semi-annually, to
the full board.

REVIEW OF THE EXTERNAL AUDIT

o The committee shall appoint the Company's external auditor and shall
be responsible for their compensation, retention and oversight
(including resolution of disagreements between management and the
auditor regarding financial reporting).

o The committee shall meet with the external auditors, at least
annually, who shall report all relevant issues to the committee.

o The external auditors, in their capacity as independent public
accountants, shall be responsible to the board of directors and the
audit committee as representatives of the stockholders.

o The committee shall review the annual financial statements,
including the overall scope and focus of the annual audit. This
review should include a determination of whether the annual
financial Statements are complete and consistent with the
information known to committee members. This review shall also
include a review of key financial statement issues and risks, their
impact or potential effect on reported financial information, the
processes used by management to address such matters, related
auditor views, and the basis for audit conclusions. Any important
conclusions on concerning the year-end audit work should be
discussed well in advance of the public release of the annual
financial statements.

o The committee shall annually review the performance (effectiveness,
objectivity, and independence) of the external auditors. The
committee shall ensure receipt of a formal written statement from
the external auditors consistent with standards set by the
Independence Standards Board. Additionally, the committee shall
discuss with the auditor relationships or services that may affect
auditor objectivity or independence. If the committee is not
satisfied with the auditors' assurances of independence, it shall
take appropriate action to ensure the independence of the external
auditor.

o The committee shall review any important recommendations on
financial reporting, controls, other matters, and management's
response.

o If the external auditors identify significant issues relative to the
overall board responsibility that have been communicated to
management but, in their judgment, have not been adequately
addressed, they should communicate these issues to the committee.

o The committee shall approve, in advance, all permissible non-audit
services to be performed by the external auditor. Such approval
process will ensure that the external auditor does not provide any
non-audit services to the Company that are prohibited by law or
regulation. Alternatively, the committee may establish pre-approval
policies and procedures with respect to permissible non-audit
services to be performed by the external auditor.

REPORTING TO STOCKHOLDERS

o The committee should be briefed on the processes used by management
in producing its interim financial statements and review and discuss
with management any questions or issues concerning the statements.
Any important issues on interim financial statements should be
discussed well in advance of the public release of the interim
financial statements.

A-2

o The committee will ensure that management requires that the external
auditors review the financial information included in the Company's
interim financial statements before the Company files its quarterly
reports with the Securities and Exchange Commission.

o The committee shall review all major financial reports in advance of
filings or distribution, including the annual report.

o The committee shall annually provide a written report of its
activities and findings, a copy of which shall be included within
the proxy statement for the annual meeting. The report shall appear
over the names of the audit committee. Such report shall be
furnished to and approved by the full board of directors prior to
its inclusion in the proxy statement. The report will state whether
the committee: (i) has reviewed and discussed the audited financial
statements with management; (ii) has discussed with the independent
auditors the matters to be discussed by Statement of Auditing
Standards No. 61; (iii) has received the written disclosures and the
letter from the independent auditors regarding the independence
required by Independence Standards Board Standard No. 1; (iv) has
discussed with the auditors their independence; and (iv) based on
the review and discussion of the audited financial statements with
management and the independent auditors, has recommended to the
board of directors that the audited financial statements be included
in the Company's annual report on Form 10-KSB.

o The Company shall disclose that the committee is governed by a
written charter, a copy of which has been approved by the full board
of directors. The committee shall review the charter annually,
assess its adequacy and propose appropriate amendments to the full
board of directors. A copy of the charter shall be filed as an
appendix to the proxy statement at least every three years.

REGULATORY EXAMINATIONS

o The committee shall review the results of examinations by regulatory
authorities and management's response to such examinations.

COMMITTEE SELF ASSESSMENT AND EDUCATION

o The committee shall review, discuss, and assess its own performance
as well as the committee role and responsibilities, seeking input
from senior management, the full board, and others.

o The committee shall review significant accounting and reporting
issues, including recent professional and regulatory pronouncements
and understand their impact on the Company's business, results of
operation and financial statements.

A-3

APPENDIX B

FIRST FEDERAL BANCSHARES, INC.

NOMINATION AND GOVERNANCE COMMITTEE CHARTER

MISSION

The Nomination and Governance Committee (the "Committee") is responsible for
identifying individuals qualified to become Board members and recommending to
the Board the director nominees for election at the next annual meeting of
stockholders. It leads the Board in its annual review of the Board's performance
and recommends to the Board director candidates for each committee for
appointment by the Board.

The Committee takes a leadership role in shaping corporate governance policies
and practices including recommending to the Board the Corporate Governance
Guidelines applicable to the Company and monitoring Company compliance with
those policies and Guidelines.

MEMBERSHIP

The members of the Committee shall meet the independence requirements of the
Nasdaq National Market listing standards and any other applicable laws, rules
and regulations governing independence, as determined by the Board. Members of
the Committee and the Committee Chair shall be appointed by the Board on the
recommendation of the Committee.

DUTIES AND RESPONSIBILITIES RELATING TO NOMINATIONS

The Committee shall have the following duties and responsibilities relating to
nominations:

o Review the appropriateness of the size of the Board relative to its
various responsibilities. Review the overall composition of the
Board, taking into consideration such factors as business experience
and specific areas of expertise of each Board member, and make
recommendations to the Board as necessary.

o Consider criteria for identifying and selecting individuals who may
be nominated for election to the Board, which shall reflect at a
minimum all applicable laws, rules, regulations and listing
standards, including a potential candidate's experience, areas of
expertise, familiarity with the Company's market area and other
factors relative to the overall composition of the Board.

o Recommend to the Board the slate of nominees for election to the
Board at the Company's annual meeting of stockholders.

o As the need arises to fill vacancies, actively seek individuals
qualified to become Board members for recommendation to the Board.

o Consider unsolicited nominations for Board membership in accordance
with guidelines developed by the Committee.

o Periodically review and recommend to the Board the compensation
structure for non-employee directors for Board and committee
service.

DUTIES AND RESPONSIBILITIES RELATING TO CORPORATE GOVERNANCE

The Committee shall have the following duties and responsibilities relating to
corporate governance:

o Review and assess the adequacy of the Company's policies and
practices on corporate governance, including the Corporate
Governance Guidelines of the Company, and recommend any proposed
changes to the Board for approval.

o Review and assess the adequacy of the Company's Code of Ethics and
Business Conduct and other internal policies and guidelines and
monitor that the principles described therein are being incorporated
into the Company's culture and business practices.

o Review the Company's business practices, particularly as they relate
to preserving the good reputation of the Company.

o Recommend to the Board the number, identity and responsibilities of
Board committees and the Chair and members of each committee. This
shall include advising the Board on committee appointments and
removal from committees or from the Board, rotation of committee
members and Chairs and committee structure and operations.

o Review the adequacy of the charters adopted by each committee of the
Board, and recommend changes as necessary.

o Periodically assess the effectiveness of the Board of Directors in
meeting its responsibilities and representing the long-term
interests of stockholders.

o Report annually to the Board with an assessment of the Board's
performance and the performance of the Board committees, to be
discussed with the full Board following the end of each fiscal year.

o Review adherence by directors to corporate guidelines regarding
transactions with the Company.

o Monitor the orientation and continuing education programs for
directors.

o Conduct an annual review of the Committee's performance,
periodically assess the adequacy of its charter and recommend
changes to the Board as needed.

o Regularly report to the Board on the Committee's activities.

o Obtain advice and assistance, as needed, from internal or external
legal, accounting, search firms or other advisors, including the
retention, termination and negotiation of terms and conditions of
the assignment.

o Delegate responsibility to subcommittees of the Committee as
necessary or appropriate.

B-2

APPENDIX C

The following table sets forth the names, principal business occupations,
business addresses (or home addresses if retired) of those individuals deemed to
be participants in this proxy solicitation under the federal securities laws
(the "Participants"). The number of shares of common stock of First Federal
Bancshares, Inc. (the "Company") beneficially owned, directly or indirectly, as
of April 5, 2004 is included under "Stock Ownership" of the Company's Proxy
Statement. None of the Participants owns any securities of record but not
beneficially.

NAME, PRINCIPAL OCCUPATION AND BUSINESS ADDRESS
- -----------------------------------------------

B. Bradford Billings
President and Chief Executive Officer
Blessing Corporate Services, Inc.
Broadway at 11th Street
P.O. Box 7005
Quincy, Illinois 62305

Franklin M. Hartzell, Esq.
Partner
Hartzell, Glidden, Tucker & Hartzell
P.O. Box 70
Cathage, Illinois 62321

Murrel Hollis
Retried

Eldon R. Mette
Retired

Gerald L. Prunty
Retired

Dr. Stephan L. Roth
Retired

James J. Stebor
President and Chief Executive Officer
First Federal Bancshares, Inc.
First Federal Bank
109 East Depot Street
Colchester, Illinois 62326

Richard D. Stephens
Retired - Of Counsel
Flack McRaven & Stephens
32 West Side Square
Macomb, Illinois 614222

Except as described below and other than stock options and stock awards
granted to each of the individuals above, and the participation by Mr. Stebor in
the First Federal Bank Employee Stock Ownership Plan, no Participant is or was
within the past year, a party to a contract, arrangement or understanding with
any person with respect to any securities of the Company. None of the
Participants owns any securities of any parent or subsidiary of the Company.

C-1

Except for Mr. Stebor, who entered into an employment agreement with the
Company and First Federal Bank, no Participant has any arrangement or
understanding with any person: (i) with respect to any future employment by the
Company or its affiliates or (ii) with respect to any future transactions to
which the Company or any of its affiliates may be a party. For a description of
the material terms of the employment agreements with Mr. Stebor, see "Executive
Compensation - Employment Agreements" in the Company's Proxy Statement.

The following table sets forth all purchases and sales of the Company's
common stock by the Participants since April 5, 2002 and the dates and amounts
of such transactions.

Number of Type of Beneficial
Name Date Transactions(1) Shares Ownership
- --------------------- ----------- --------------- ----------- ---------------------------

B. Bradford Billings 3/3/2003 Purchase 100 Direct
3/3/2003 Purchase 200 Indirect - By spouse's IRA
11/19/2003 Purchase 200 Indirect - By spouse's IRA
2/11/2004 Purchase 100 Indirect - By spouse's IRA

Franklin M. Hartzell 9/9/2003 Option exercise 600 Direct

Murrel Hollis 10/23/2003 Option exercise 2,500 Indirect - By trust

Eldon R. Mette 2/24/2004 Option exercise 8,000 Direct

Gerald L. Prunty 10/15/2002 Option exercise 500 Indirect - By trust
10/15/2002 Option exercise 500 Indirect - By spouse's trust
7/8/2003 Option exercise 500 Indirect - By trust
7/8/2003 Option exercise 500 Indirect - By spouse's trust

Dr. Stephan L. Roth 11/1/2002 Option exercise 500 Indirect - By spouse's trust
11/1/2002 Option exercise 700 Indirect - By trust
11/19/2002 Option exercise 403 Indirect - By trust
3/4/2003 Option exercise 500 Indirect - By trust
5/9/2003 Option exercise 140 Indirect - By trust
10/20/2003 Option exercise 1,400 Indirect - By trust
1/5/2004 Option exercise 500 Indirect - By trust

James J. Stebor(2) 11/22/2002 Purchase 25 Indirect - By custodian for daughter
12/31/2002 Allocation 2,171 Indirect - By ESOP
9/30/2003 Option exercise 2,000 Direct
11/26/2003 Purchase 25 Indirect - By custodian for daughter
12/31/2003 Allocation 2,169 Indirect - By ESOP

Richard D. Stephens 6/3/2003 Option exercise 2,243 Direct

(1) None of the Participants borrowed or otherwise obtained funds for the purpose
of acquiring or holding securities of the Company.

C-2

Preliminary Copies

- -------------------------------------------------------------------------------
PROXY - FIRST FEDERAL BANCSHARES, INC.
- -------------------------------------------------------------------------------

ANNUAL MEETING OF STOCKHOLDERS

Proxy Solicited by Board of Directors for Annual Meeting - May 25, 2004, 2:00
p.m., local time

The undersigned hereby appoints B. Bradford Billings, Franklin M. Hartzell and
Gerald L. Prunty, and each of them, with full power of substitution, to act as
proxy for the undersigned, and to vote all shares of common stock of First
Federal Bancshares, Inc. that the undersigned is entitled to vote at the annual
meeting of stockholders, to be held on May 25, 2004, at 2:00 p.m., local time,
at the Quincy Holiday Inn located at 201 S. Third Street, Quincy, Illinois and
at any and all adjournments thereof, with all of the powers the undersigned
would possess if personally present at such meeting.

THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED. IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED "FOR" BOTH OF THE PROPOSALS LISTED. IF ANY
OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING THIS PROXY WILL BE VOTED BY
THE PROXIES IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING. THIS PROXY
ALSO CONFERS DISCRETIONARY AUTHORITY TO VOTE WITH RESPECT TO THE ELECTION OF ANY
PERSON AS DIRECTOR WHERE THE NOMINEES ARE UNABLE TO SERVE OR FOR GOOD CAUSE WILL
NOT SERVE AND WITH RESPECT TO ANY OTHER BUSINESS THAT MAY PROPERLY COME BEFORE
THE ANNUAL MEETING OR ANY ADJOURNMENT THEREOF.

PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.

(Continue and to be voted on reverse side.)

FIRST FEDERAL BANCSHARES

/__/ Mark this box with an X if you have made
changes to your name or address details above.

- ------------------------------------------------------------------------------
ANNUAL MEETING PROXY CARD
- ------------------------------------------------------------------------------

A. ELECTION OF DIRECTORS
The Board of Directors recommends a vote FOR all nominees.

1. Election of Directors. Nominees: (01) Dr. Stephan L. Roth and (02)
Richard D. Stephens

FOR VOTE WITHHELD EXCEPTIONS
--- ------------- ----------

/__/ /__/ /__/

To withhold your vote for any individual nominee, mark the "EXCEPTIONS" box and
write that nominee's name on the line provided below.

Exceptions
- ------------------------------------------------------------------------------

B. ISSUES
The Board of Directors recommends a vote FOR proposal 2.

2. The ratification of the appointment of Crowe Chizek and Company LLC as
independent auditors of First Federal Bancshares, Inc. for the fiscal year
ending December 31, 2004.

FOR AGAINST ABSTAIN
--- ------- -------

/__/ /__/ /__/

C. AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR
YOUR INSTRUCTIONS TO BE EXECUTED.

Note: Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.

Signature 1 - Please keep signature within the box Signature 2 - Please keep
signature within the box Date (mm/dd/yyyy)

- ---------------------- -------------------------- -------------------------

- ---------------------- -------------------------- -------------------------
37

First Federal Bank Letterhead

Dear ESOP Participant:

On behalf of the Board of Directors, I am forwarding to you the attached
YELLOW vote authorization form for the purpose of conveying your voting
instructions to First Bankers Trust Company, N.A., our ESOP Trustee, on the
proposals presented at the Annual Meeting of Stockholders of First Federal
Bancshares, Inc. (the "Company") on May 25, 2004. Also enclosed is a Notice and
Proxy Statement for the Company's Annual Meeting of Stockholders and a First
Federal Bancshares, Inc. Annual Report to Stockholders.

As a participant in the First Federal Bank Employee Stock Ownership Plan
(the "ESOP") you are entitled to vote all shares of Company common stock
allocated to your account as of April 5, 2004. As of April 5, 2004, the ESOP
held ______________ shares of Company common stock, of which _____________
shares had been allocated to participants' accounts. These allocated shares of
Company common stock will be voted as directed by the ESOP participants; so
long as timely instructions from the participants are received by the ESOP
Trustee. If you do not direct the ESOP Trustee as to how it should vote the
shares allocated to your ESOP account, the ESOP Trustee will vote those shares
in a manner calculated to most accurately reflect the instructions received
from other participants.

At this time, in order to direct the voting of the shares of Company
common stock allocated to your ESOP account, please complete and sign the
attached YELLOW vote authorization form and return it in the enclosed
postage-paid envelope. The ESOP Trustee must receive your instructions by May
18, 2004. Your vote will not be revealed, directly or indirectly, to any
employee or director of the Company or First Federal Bank.

Sincerely,

James J. Stebor
PRESIDENT AND CHIEF EXECUTIVE OFFICER

Name:____________________
Shares:___________________

VOTE AUTHORIZATION FORM
-----------------------

I understand that First Bankers Trust Company, N.A., the ESOP Trustee, is
the holder of record and custodian of all shares of First Federal Bancshares,
Inc. (the "Company") common stock allocated to me under the First Federal Bank
Employee Stock Ownership Plan. I understand that my voting instructions are
solicited on behalf of the Company's Board of Directors for the Annual Meeting
of Stockholders to be held on May 25, 2004.

Accordingly, you are to vote my shares as follows:

1. The election as directors of all nominees listed (unless the "FOR ALL
EXCEPT" box is marked and the instructions below are complied with).

Dr. Stephan L Roth and Richard D. Stephens

FOR ALL
FOR VOTE WITHHELD EXCEPT
--- ------------- ------
/__/ /__/ /__/

INSTRUCTION: To withhold your vote for any individual nominee, mark "FOR ALL
EXCEPT" and write that nominee's name on the line provided below.

- ------------------------------------------------------------------------------

2. The ratification of the appointment of Crowe Chizek and Company LLC
as independent auditors of First Federal Bancshares, Inc. for the
fiscal year ending December 31, 2004.

FOR AGAINST ABSTAIN
--- ------- -------
/__/ /__/ /__/

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" BOTH OF THE LISTED
PROPOSALS.

The ESOP Trustee is hereby authorized to vote any shares allocated to me in its
trust capacity as indicated above.

Date_______________________ Signature______________________________

PLEASE DATE, SIGN AND RETURN THIS FORM IN THE ENCLOSED POSTAGE-PAID ENVELOPE NO
LATER THAN MAY 18, 2004.

[FIRST FEDERAL BANK LETTERHEAD]

Dear First Federal Bank 401(k) Plan Participant:

On behalf of the Board of Directors of First Federal Bancshares, Inc. (the
"Company"), I am forwarding to you the attached BLUE vote authorization form for
the purpose of conveying your voting instructions to the Bank of New York, the
trustee for the First Federal Bancshares, Inc. Stock Fund (the "Employer Stock
Fund") in the First Federal Bank Employees' Savings and Profit Sharing Plan &
Trust (the "401(k) Plan"), on the proposals presented at the Annual Meeting of
Stockholders of the Company on May 25, 2004. Also enclosed is a Notice and Proxy
Statement for the Company's Annual Meeting of Stockholders and the First Federal
Bancshares, Inc. Annual Report to Stockholders.

As a 401(k) Plan participant investing in the Employer Stock Fund, you are
entitled to direct the Employer Stock Fund trustee as to the voting of shares of
Company common stock credited to your account as of April 5, 2004, the record
date for the 2004 Annual Meeting of Stockholders.

At this time, in order to direct the voting of your shares of Company
common stock held in the Employer Stock Fund, you must complete and sign the
enclosed BLUE vote authorization form and return it in the accompanying
postage-paid envelope no later than May 18, 2004. Your vote will not be
revealed, directly or indirectly, to any employee or director of the Company or
First Federal Bank.

Sincerely,

James J. Stebor
President and Chief Executive Officer

VOTE AUTHORIZATION FORM
-----------------------

I understand that the Bank of New York (the "Employer Stock Fund
Trustee"), is the holder of record and custodian of all shares of First Federal
Bancshares, Inc. (the "Company") common stock credited to my account under the
First Federal Bank Employees' Savings and Profit Sharing Plan & Trust (the
"401(k) Plan"). Further, I understand that my voting instructions are solicited
on behalf of the Company's board of directors for the Annual Meeting of
Stockholders to be held on May 25, 2004.

The Employer Stock Fund Trustee is hereby authorized to vote all shares
credited to me under the 401(k) Plan in its capacity as follows:

1. The election as Directors of all nominees listed (unless the "FOR ALL
EXCEPT" box is marked and the instructions below are complied with).

Dr. Stephan L. Roth and Richard D. Stephens

FOR ALL
FOR VOTE WITHHELD EXCEPT
--- ------------- ------
/__/ /__/ /__/

INSTRUCTION: To withhold your vote for any individual nominee, mark "FOR ALL
EXCEPT" and write that nominee's name on the line provided below.

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2. The ratification of the appointment of Crowe Chizek and Company LLC
as independent auditors of First Federal Bancshares, Inc. for the
fiscal year ending December 31, 2004.

FOR AGAINST ABSTAIN
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" BOTH OF THE LISTED
PROPOSALS.

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Date Signature

PLEASE DATE, SIGN AND RETURN THIS FORM IN THE ENCLOSED ENVELOPE NO LATER THAN
MAY 18, 2004.