Item 5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On December 18, 2008, First Federal Bankshares, Inc. (the "Company"), the holding company of Vantus Bank (the "Bank"), announced the appointment of Levon
L. Mathews as President and Chief Executive Officer of the Company. On that date, Mr. Mathews was also appointed President and Chief Executive Officer of Vantus Bank (the "Bank"), the Company's wholly owned subsidiary. Mr. Mathews will begin work with the Company and the Bank on January 5, 2009. Mr. Mathews will succeed Barry E. Backhaus, who has been serving as President and Chief Executive Officer of the Company and the Bank on an interim basis.

Mr. Mathews has had a 25-year career in banking beginning with Lafayette National Bank in Lafayette, Indiana and continuing with expanded roles and responsibilities as a result of subsequent mergers that included market president responsibilities for Lafayette, Indiana and then Memphis, Tennessee. Mr. Mathews most recently served as Executive Vice President and Director of Private Banking Sales for Regions Financial Corporation, a $144 billion financial holding company headquartered in Birmingham, Alabama.

In connection with the appointment, the Company and the Bank entered into a change in control agreement (the "Agreement") with Mr. Mathews. The Agreement has an initial term of eighteen calendar months, subject to annual renewal unless written notice of non-renewal is provided to the executive. Under the Agreement, upon the occurrence of either the executive's involuntary termination of employment or the executive's voluntary termination of employment for "good reason" (as defined in the Agreement), with either occurring within twelve months following the effective date of a "change in control" (as defined in the Agreement) of the Company or the Bank (the "Termination of Employment"), the Company or the Bank will pay the executive (or in the event of his subsequent death, his estate), his base salary in effect on the date of the Termination of Employment for eighteen months following the date of the Termination of Employment.

Notwithstanding the foregoing, in order to be eligible to receive the severance payments under the Agreement, the Termination of Employment must qualify as a "Separation from Service," as defined in the Agreement. In addition, to the extent that the executive is a "Specified Employee" (as defined in the Agreement), payments will not begin until the first day of the seventh month following the executive's Separation from Service and the first payment owed to the executive will equal the first six months of accumulated payments owed to the executive thereunder, and thereafter regular payments owed to the executive will be made starting with the seventh month after the executive's Separation from Service.

The Agreement also includes non-competition and non-solicitation provisions to which the executive would be subject for a period of twelve months following his Termination of Employment. Finally, the Agreement provides for a

reduction in the amounts of the severance payments in certain circumstances if the executive becomes employed during the period in which severance payments are due under the Agreement.

The Agreement referenced in this Item 5.02 will be filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the Quarter Ended December 31, 2008.

A press release providing additional details of the foregoing is included as Exhibit 99 to this report.