FIRST FEDERAL BANKSHARES, INC.

                    Notice of Adjournment of Special Meeting

January 21, 2010

Fellow Shareholder,

     The Board of Directors of First Federal Bankshares, Inc. (the "Company") is
seeking shareholder approval to dissolve and liquidate the Company. To date, 44%
of the Company's  outstanding shares have voted in favor of dissolution and only
1% have voted against. However, a vote of 50.1% in favor is required to dissolve
the company and distribute the remaining  assets to  shareholders.  If we do not
receive  the  necessary  vote,  we  will be  forced  to  consider  alternatives,
including bankruptcy, which may result in your shares becoming worthless. As you
can see, your vote is very important.

     We  previously   sent  you  proxy   materials  for  a  Special  Meeting  of
Shareholders  scheduled  for  December 18,  2009.  The Special  Meeting has been
adjourned to solicit  additional votes. The Special Meeting will be held Friday,
February 12, 2010, at 12:00 p.m., local time, at 801 4th St., Sioux City, Iowa.

                     WE URGE YOU TO TAKE ACTION IMMEDIATELY
  Voting today is necessary so all votes can be processed before February 12.

     We  strongly  urge you to mail the  enclosed  ballot  today so we can limit
accounting,  legal and mailing  expenses  and proceed with the  distribution  to
shareholders.  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.

     Your vote on  dissolution  will not affect your right to your  receive your
share of any assets that may be distributed at a later date, including any funds
that the Company receives after the date of the Special Meeting.

     So please  take a minute and call the toll free  number or mail your ballot
today. If you have already voted your shares,  please disregard this notice.  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 very much.

/s/ Barry E. Backhaus

Barry E. Backhaus, Chairman