First Federal Bankshares, Inc.

                                Important Notice

December 30, 2009

Dear Shareholder,

     We previously sent you proxy material for First Federal Bankshares,  Inc.'s
Special Meeting of Stockholders that was scheduled for December 18, 2009 for the
purpose of approving the company's Plan of  Dissolution  and  Liquidation.  This
special  meeting  has been  adjourned  to January  15,  2010  because we did not
receive the votes  necessary to approve the Plan of Dissolution  and Liquidation
due to the fact that a large number of  shareholders  have not  responded to our
solicitation.  We have  adjourned  the meeting to allow for  additional  time to
collect the votes required to approve the proposal.

     According  to  our  latest  records,  we  have  not  received  your  voting
instructions  with  respect  to the  proposal.  Time is  short  and we urge  all
shareholders  to vote in favor of the proposal.  Whether your holdings are large
or small, your vote is very important to us.

     Please vote now by using the phone or internet system. You may also vote by
following the instructions on your proxy card (enclosed), and by signing, dating
and returning your proxy in the enclosed postage-paid envelope.

                     WE URGE YOU TO TAKE ACTION IMMEDIATELY

     We  urge  you to  vote as soon  as  possible  to  save  us the  expense  of
additional  solicitations.  Voting  FOR the  proposal  now will also allow us to
distribute all remaining funds to you and other shareholders. The failure of our
shareholders  to  approve  the  proposal  may  result  in your  shares  becoming
worthless.

     If you have any questions,  need assistance  with voting,  or would like to
receive a copy of the proxy materials,  please call our proxy solicitor,  Laurel
Hill Advisory Group, LLC at: 888-742-1305.

Thank you. Your attention is needed immediately!

Sincerely,

Barry E. Backhaus

President, CEO and Chairman of the Board