UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON D.C. 20549

                                    FORM 10-Q

[ X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934.

       For the quarterly period ended March 31, 2005
                                      --------------

                              OR

[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
       EXCHANGE ACT OF 1934.

       For the transition period from _______ to _______

                         Commission file number 2-89283


                           IOWA FIRST BANCSHARES CORP.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


       STATE OF IOWA                                             42-1211285
--------------------------------------------------------------------------------
 (State or other jurisdiction                                 (IRS Employer of
incorporation or organization)                               Identification No.)

                             300 East Second Street
                             Muscatine, Iowa 52761
                    ----------------------------------------
                    (Address of principal executive offices)


                                  563-263-4221
                        -------------------------------
                        (Registrant's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [ X ] No [ ]

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

At May 6, 2005 there were  1,382,669  shares of the  registrant's  common  stock
outstanding.


                                       1
<PAGE>

                  IOWA FIRST BANCSHARES CORP. AND SUBSIDIARIES

                               INDEX TO FORM 10-Q


                                                                        PAGE NO.

PART 1   Financial Information

         Item 1.   Financial Statements

                   Consolidated Condensed Balance Sheets,
                   March 31, 2005 and December 31, 2004                        3

                   Consolidated Condensed Statements of
                   Income, Three Months Ended
                   March 31, 2005 and 2004                                     4

                   Consolidated Condensed Statements of
                   Cash Flows, Three Months Ended
                   March 31, 2005 and 2004                                     5

                   Notes to Consolidated Condensed
                   Financial Statements                                        6


         Item 2.   Management's Discussion and Analysis
                   Of Financial Condition and Results of
                   Operations                                               7-13

         Item 3.   Quantitative and Qualitative Disclosures About
                   Market Risk                                                14

         Item 4.   Controls and Procedures                                    14

PART II  Other Information

         Item 1.   Legal Proceedings                                          14

         Item 2.   Unregistered Sales of Equity Securities and
                   Use of Proceeds                                            14

         Item 3.   Defaults Upon Senior Securities                            14

         Item 4.   Submission of Matters to a Vote of Security Holders        14

         Item 5.   Other Information                                          14

         Item 6.   Exhibits                                                   14


Signatures                                                                    15



                                       2

<PAGE>


                  IOWA FIRST BANCSHARES CORP. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (In Thousands)
                                   (Unaudited)
<TABLE>
                                                           March 31,   December 31,
                                                              2005        2004
                                                           ------------------------
<S>                                                        <C>         <C>
                    ASSETS
Cash and due from banks ................................   $  16,528    $  14,730
Interest-bearing deposits at financial institutions ....       7,533        8,395
Federal funds sold .....................................      21,601       12,300
Investment securities available for sale ...............      35,439       30,325
Loans, net of allowance for loan losses March 31, 2005,
  $3,399; December 31, 2004, $3,385 ....................     283,039      280,899
Bank premises and equipment, net .......................       7,278        7,411
Accrued interest receivable ............................       2,096        2,046
Life insurance contracts ...............................       4,485        4,438
Restricted investment securities .......................       2,685        2,659
Other assets ...........................................         871          980
                                                           ----------------------
        TOTAL ASSETS ...................................   $ 381,555    $ 364,183
                                                           ======================

LIABILITIES AND STOCKHOLDERS' EQUITY
  LIABILITIES
Noninterest bearing deposits ...........................   $  50,974    $  50,070
Interest bearing deposits ..............................     238,858      227,665
                                                           ----------------------
        TOTAL DEPOSITS .................................     289,832      277,735
Note payable ...........................................       2,100        2,100
Securities sold under agreements to repurchase .........      11,907        5,885
Federal Home Loan Bank advances ........................      41,773       42,916
Treasury tax and loan open note ........................          60           74
Junior subordinated debentures .........................       4,125        4,125
Dividends payable ......................................         346          345
Other liabilities ......................................       1,957        1,769
                                                           ----------------------
        TOTAL LIABILITIES ..............................     352,100      334,949
                                                           ----------------------
Redeemable common stock held by employee stock
  ownership plan with 401(k) provisions (KSOP) .........       3,678        3,517
                                                           ----------------------

STOCKHOLDERS' EQUITY
Common stock ...........................................         200          200
Additional paid-in capital .............................       4,255        4,255
Retained earnings ......................................      38,836       38,416
Accumulated other comprehensive income .................         131          330
Less net cost of common shares acquired for the treasury     (13,967)     (13,967)
Less maximum cash obligation related to KSOP shares ....      (3,678)      (3,517)
                                                           ----------------------
        TOTAL STOCKHOLDERS' EQUITY .....................      25,777       25,717
                                                           ----------------------

        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .....   $ 381,555    $ 364,183
                                                           ======================
</TABLE>

See notes to Consolidated Condensed Financial Statements.

                                       3
<PAGE>

                  Iowa First Bancshares Corp. and Subsidiaries
                   Consolidated Condensed Statements of Income
                      (In Thousands, Except Per Share Data)
                                   (Unaudited)


                                                              Three Months Ended
                                                                  March 31,
                                                               2005        2004
                                                              ------------------
INTEREST AND DIVIDEND INCOME:
  Loans, including fees:
    Taxable ............................................      $4,170      $4,073
    Nontaxable .........................................          65          43
  Investment securities available for sale:
    Taxable ............................................         154         201
    Nontaxable .........................................         148         171
  Federal funds sold ...................................         148          82
  Restricted investment securities .....................          24          11
  Interest bearing deposits and other ..................          60          42
                                                              ------------------
        Total interest and dividend income .............       4,769       4,623
                                                              ------------------

INTEREST EXPENSE:
  Deposits .............................................       1,128         978
  Note payable .........................................          23          23
  Other borrowed funds .................................         546         669
  Junior subordinated debentures .......................         106         106
                                                              ------------------
        Total interest expense .........................       1,803       1,776
                                                              ------------------

  Net interest income ..................................       2,966       2,847
Provision for loan losses ..............................         240         170
                                                              ------------------
        Net interest income after provision for
        loan losses ....................................       2,726       2,677
                                                              ------------------
Other income:
  Trust department .....................................          99          92
  Service fees .........................................         474         429
  Investment securities gains, net .....................           0          33
  Gains on loans sold ..................................          52          20
  Corporate owned life insurance .......................          49          46
  Other ................................................          84          72
                                                              ------------------
        Total other income .............................         758         692
                                                              ------------------
Operating expenses:
  Salaries and employee benefits .......................       1,360       1,275
  Occupancy expenses, net ..............................         203         196
  Equipment expenses ...................................         167         155
  Office supplies, printing, and postage ...............          93          85
  Computer costs .......................................         136         129
  Advertising and business promotion ...................          37          35
  Other operating expenses .............................         374         296
                                                              ------------------
        Total operating expenses .......................       2,370       2,171
                                                              ------------------

  Income before income taxes ...........................      $1,114      $1,198
Income taxes ...........................................         348         375
                                                              ------------------
Net income .............................................      $  766      $  823
                                                              ==================

Net income per common share, basic and diluted .........      $ 0.55      $ 0.58
                                                              ==================

Dividends declared per common share ....................      $ 0.25      $ 0.24
                                                              ======      ======

Comprehensive income ...................................      $  567      $  827
                                                              ======      ======

See notes to Consolidated Condensed Financial Statements.

                                       4
<PAGE>

                  Iowa First Bancshares Corp. and Subsidiaries
                 Consolidated Condensed Statements of Cash Flows
               For The Three months Ended March 31, 2005 and 2004
                                 (In Thousands)
                                   (Unaudited)
<TABLE>
                                                                           2005      2004
                                                                        --------------------
<S>                                                                     <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ..........................................................   $    766    $    823
Adjustments to reconcile net income to net cash
provided by operating activities:
  Proceeds from loans sold ..........................................      3,148       2,872
  Loans underwritten ................................................     (2,729)     (2,972)
  Gains on loans sold ...............................................        (52)        (20)
  Provision for loan losses .........................................        240         170
  Investment securities gains, net ..................................         --         (33)
  Depreciation ......................................................        158         140
  Amortization of premiums and accretion of discounts
    on investment securities available for sale, net ................         70          69
  Net (increase) decrease in accrued interest receivable ............        (50)        178
  Net (increase) decrease in other assets ...........................        109         (59)
  Net increase in other liabilities .................................        307         169
                                                                        --------------------
        Net cash provided by operating activities ...................   $  1,967    $  1,337
                                                                        --------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Net (increase) decrease in interest-bearing deposits
  at financial institutions .........................................   $    862    $ (1,603)
Net increase in federal funds sold ..................................     (9,301)    (13,361)
Proceeds from sales of available for sale securities ................         --       1,151
Proceeds from maturities, calls and paydowns of available
  for sale securities ...............................................      1,315       6,135
Purchases of available for sale securities ..........................     (6,817)     (3,034)
Net increase in loans ...............................................     (2,747)     (2,944)
Purchases of bank premises and equipment ............................        (25)       (139)
Increase in cash value of life insurance contracts ..................        (47)        (44)
Net (purchases) sales of restricted investment securities ...........        (26)         66
                                                                        --------------------
        Net cash (used in) investing activities .....................   $(16,786)   $(13,773)
                                                                        --------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in noninterest-bearing deposits .............   $    904    $ (1,181)
Net increase in interest-bearing deposits ...........................     11,193      17,016
Net increase in securities sold under agreements to repurchase ......      6,022       1,177
Net decrease in treasury tax and loan open note .....................        (14)       (445)
Payments of advances from Federal Home Loan Bank ....................     (1,143)     (1,479)
Cash dividends paid .................................................       (345)       (343)
Purchases of common stock for the treasury ..........................         --        (340)
                                                                        --------------------
        Net cash provided by financing activities ...................   $ 16,617    $ 14,405
                                                                        ---------------------

        Net increase  in cash and due from banks ....................   $  1,798    $  1,969

Beginning cash and due from banks ...................................     14,730      12,988
                                                                        -------------------
Ending cash and due from banks ......................................   $ 16,528    $ 14,957
                                                                        ====================

Supplemental Disclosures of Cash Flow Information, cash payments for:
  Interest ..........................................................   $  1,653    $  1,711
  Income taxes ......................................................         31         150
Supplemental Schedule of Noncash Investing and Financing Activities:
  Change in accumulated other comprehensive income, unrealized
    gains (losses) on investment securities available for sale, net .       (199)          4
  (Increase) in maximum cash obligations related to KSOP shares .....       (161)       (290)
  Transfers of loans to other real estate owned .....................         --          25
</TABLE>

See notes to Consolidated Condensed Financial Statements.

                                       5
<PAGE>

                  IOWA FIRST BANCSHARES CORP. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Note 1.  Nature of Business and Significant Accounting Policies

Nature of business:

Iowa  First   Bancshares  Corp.  (the  "Company")  is  a  bank  holding  company
headquartered in Muscatine,  Iowa. The Company owns the outstanding stock of two
national banks, First National Bank of Muscatine  (Muscatine) and First National
Bank in Fairfield  (Fairfield).  First National Bank of Muscatine has a total of
six  locations in  Muscatine,  Iowa.  First  National  Bank in Fairfield has two
locations in  Fairfield,  Iowa.  Each bank is engaged in the general  commercial
banking   business  and  provides  full  service   banking  to  individuals  and
businesses, including checking, savings, money market and time deposit accounts,
commercial loans,  consumer loans,  real estate loans, safe deposit  facilities,
transmitting of funds,  trust services,  and such other banking  services as are
usual and customary for commercial  banks.  Some of these other services include
sweep  accounts,  lock-box  deposits,  debit  cards,  credit-related  insurance,
internet  banking,  automated teller machines,  telephone banking and investment
services  through  a  third-party   arrangement.   The  Company  also  owns  the
outstanding  stock of Iowa First Capital Trust I, which was capitalized in March
2001  for the  purpose  of  issuing  Company  Obligated  Mandatorily  Redeemable
Preferred Securities.

Basis of Presentation:

The consolidated  financial  statements  include the accounts of the Company and
all wholly-owned subsidiaries, except Iowa First Capital Trust I, which does not
meet the criteria for consolidation.  The consolidated  financial statements are
unaudited  and should be read in  conjunction  with the  consolidated  financial
statements  contained in the 2004 Annual Report on Form 10-K.  The  consolidated
financial statements have been prepared in accordance with accounting principles
generally  accepted in the United  States of America and conform to  predominant
practices  within the  banking  industry.  Management  of the Company has made a
number of  estimates  and  assumptions  relating to the  reporting of assets and
liabilities  and the disclosure of contingent  assets and liabilities to prepare
the  consolidated  financial  statements.  In the  opinion  of  management,  all
adjustments  and  normal  recurring  accruals  considered  necessary  for a fair
presentation  of the results of  operations  for the interim  periods  presented
herein have been  included.  Operating  results for the three months ended March
31, 2005 are not necessarily  indicative of the results that may be expected for
the year ending December 31, 2005.

Reclassifications:

Certain amounts in the prior year financial  statements have been  reclassified,
with no effect on net income or stockholders' equity, to conform to current year
presentations.

Note 2. Capital Stock and Earnings Per Share

Common shares and preferred stock  authorized total 6,000,000 shares and 500,000
shares,  respectively.  Basic  earnings  per share is arrived at by dividing net
income by the weighted average number of shares of common stock  outstanding for
the respective period.  Diluted earnings per share is arrived at by dividing net
income  by the  weighted  average  number  of  common  stock  and  common  stock
equivalents  outstanding for the respective period. The average number of shares
of common  stock  outstanding  for the three  months  ended  March 31,  2005 was
1,382,669.  The average  number of shares of common  stock  outstanding  for the
three  months  ended March 31, 2004 was  1,413,594.  There were no common  stock
equivalents in 2005 or 2004.

Note 3. Commitments and Contingencies

The Banks are parties to financial instruments with  off-balance-sheet risk made
in the normal course of business to meet the financing needs of their customers.
These  financial  instruments  include  commitments to extend credit and standby
letters of credit.  These instruments  involve, to varying degrees,  elements of
credit and interest rate risk in excess of the amount  recognized in the balance
sheets.

The Banks' exposure to credit loss in the event of  nonperformance  by the other
party to the financial  instrument for  commitments to extend credit and standby
letters  of  credit  is  represented  by  the   contractual   amounts  of  those
instruments.  The Banks use the same credit  policies in making  commitments and
conditional obligations as they do for on-balance-sheet instruments.

                                       6
<PAGE>

Financial instruments whose contract amounts represent credit risk:

                                             March 31, 2005    December 31, 2004
                                             -----------------------------------

Commitments to extend credit ...........       $40,417,000        $40,467,000
Standby letters of credit ..............         1,152,000          1,121,000

The commitments to extend credit above are net of  participations  sold to other
banks.  Total  participations  sold to other banks related to the commitments to
extend credit were  $10,189,000  and  $18,143,000 at March 31, 2005 and December
31, 2004, respectively.

Commitments  to extend  credit are  agreements  to lend to a customer as long as
there is no violation of any condition established in the contract.  Commitments
generally  have fixed  expiration  dates or other  termination  clauses  and may
require  payment of a fee. Since many of the  commitments are expected to expire
without  being  drawn  upon  and some of the  commitments  will be sold to other
financial  intermediaries  if drawn upon,  the total  commitment  amounts do not
necessarily  represent  future  cash  requirements.   The  Banks  evaluate  each
customer's creditworthiness on a case-by-case basis.

Standby  letters of credit  are  conditional  commitments  issued by the Bank to
guarantee the performance of a customer to a third party.  Those  guarantees are
primarily  issued to support  public and  private  borrowing  arrangements  and,
generally,  have terms of one year, or less. The credit risk involved in issuing
letters of credit is  essentially  the same as that  involved in extending  loan
facilities to customers.  The Banks hold collateral,  which may include accounts
receivable,  inventory,  property,  equipment, and income-producing  properties,
supporting those commitments if deemed necessary. In the event the customer does
not perform in accordance  with the terms of the agreement with the third party,
the Banks would be required to fund the commitment. The maximum potential amount
of future  payments  the Banks could be required to make is  represented  by the
contractual  amount shown in the summary above. If the commitment is funded, the
Banks would be entitled to seek recovery  from the  customer.  At March 31, 2005
and  December  31, 2004 no amounts  have been  recorded as  liabilities  for the
Banks' potential obligations under these guarantees.

The  Company  also  executed  contracts  for the sale of  mortgage  loans in the
secondary  market in the amount of $67,000 and $434,000 as of March 31, 2005 and
December 31, 2004, respectively.  These amounts are classified as loans held for
sale and are included in loans at the respective balance sheet dates.

Results of Operations:

Quarter ended March 31, 2005 compared with quarter ended March 31, 2004:

The  Company  recorded  net income of $766,000  for the quarter  ended March 31,
2005, compared with net income of $823,000 for the quarter ended March 31, 2004,
a decrease of $57,000 or 6.9%.  This decrease in net income  primarily  resulted
from  increased  operating  expenses  and  charge-off  of a portion  of a credit
relationship  at our  Fairfield  bank and the  associated  replenishment  of the
allowance for loan losses.

Basic and diluted  earnings per share were $.55 for the three months ended March
31,  2005,  $.03 or 5.2%  less  than the same  period  in  2004.  The  Company's
annualized  return on  average  assets  for the first  quarter  of 2005 was .82%
compared  to .89%  during the first  quarter of the prior  year.  The  Company's
annualized  return on average  equity for the three  months ended March 31, 2005
and March 31, 2004 was 12.0% and 13.0%, respectively.

                                       7
<PAGE>

The  distribution of average assets,  liabilities and  stockholders'  equity and
interest rates, as well as interest  differential was as follows (dollar amounts
in  thousands  and  income and rates on fully  taxable  equivalent  basis  using
statutory tax rates in effect for the year presented):

<TABLE>
                                                               Three Months Ended                Three Months Ended
                                                                 March 31, 2005                    March 31, 2004
                                                        --------------------------------   ------------------------------
                                                                                 Average                          Average
                                                        Balance     Interest      Rate     Balance    Interest      Rate
                                                        -----------------------------------------------------------------
<S>                                                     <C>         <C>          <C>       <C>        <C>         <C>
Assets
Taxable loans, net ..................................   $273,487    $  4,170      6.10%    $261,603   $  4,073      6.23%
Taxable investment securities available for sale ....     20,442         154      3.01       20,040        201      4.01
Nontaxable investment securities and loans ..........     18,790         323      6.88       18,848        324      6.88
Federal funds sold ..................................     25,075         148      2.36       37,318         82      0.88
Restricted investment securities ....................      2,676          24      3.59        3,002         11      1.47
Interest-bearing deposits at financial
  institutions ......................................      7,795          60      3.08        7,538         42      2.23
                                                        --------------------               -------------------
     Total interest-earning assets ..................    348,265       4,879      5.60%     348,349      4,733      5.43%
                                                                    --------                          --------
Cash and due from banks .............................     15,664                             14,255
Bank premises and equipment, net ....................      7,337                              6,745
Life insurance contracts ............................      4,465                              4,281
Other assets ........................................      3,036                              2,934
                                                        --------                           --------
     Total ..........................................   $378,767                           $376,564
                                                        ========                           ========
Liabilities
Deposits:
  Interest-bearing demand ...........................   $129,110    $    352      1.10%    $126,074   $    178      0.57%
  Time ..............................................    109,135         776      2.88      110,039        800      2.95
Note payable ........................................      2,100          23      4.41        2,760         23      3.33
Other borrowings ....................................     51,753         546      4.28       57,087        669      4.75
Junior subordinated debentures ......................      4,125         106     10.32        4,125        106     10.32
                                                        --------------------               -------------------
     Total interest-bearing liabilities .............    296,223       1,803      2.47%     300,085      1,776      2.40%
                                                                    --------                          --------
Noninterest-bearing deposits ........................     51,057                             45,884
Other liabilities ...................................      2,044                              1,902
                                                        --------                           --------
     Total liabilities ..............................    349,324                            347,871
Redeemable common stock held by KSOP ................      3,574                              3,065
Stockholders' Equity ................................     25,869                             25,628
                                                        --------                           --------
     Total ..........................................   $378,767                           $376,564
                                                        ========                           ========
Net interest earnings ...............................               $  3,076                          $  2,957
                                                                    ========                          ========
Net Interest Margin (net interest earnings divided
  by total interest-earning assets) .................                             3.53%                             3.40%
                                                                                 ======                            ======
</TABLE>

Nonaccruing  loans are included in the average  balance of loans.  Loan fees are
not material.

                                       8
<PAGE>

The net interest  margin  increased  to 3.53%  during the first  quarter of 2005
compared  to 3.40%  during  the first  quarter  of 2004.  The  return on average
interest-earning  assets  increased 17 basis points (from 5.43% in 2004 to 5.60%
in 2005) while interest paid on average  interest-bearing  liabilities increased
only 7 basis points (from 2.40% in 2004 to 2.47% in 2005).

The Federal  Reserve Bank Board  increased  interest rates five times during the
last seven  months of 2004 and twice more the first  three  months of 2005.  The
prime  lending rate which was 4.00% at the  beginning  of 2004 had  increased to
5.75% by March 31, 2005. Over the past few years, a period of  historically  low
interest  rates,  the Company has  emphasized  the  utilization of interest rate
floors on selected  commercial and agricultural  loans. During 2004 most, if not
all, of such loans  subject to interest  rate  floors were  actually  paying the
floor rate.  This resulted in the rates  received on taxable loans during all of
2004 falling slightly less than the rates paid on  interest-bearing  liabilities
(38 basis points and 42 basis points,  respectively).  As market  interest rates
have risen, rates received on taxable loans have decreased thirteen basis points
while rates paid on  interest-bearing  liabilities  have  increased  seven basis
points when  comparing the first  quarter of 2005 with 2004.  This result occurs
due, in large  measure,  to the loans  which are  subject to floor rate  pricing
lagging  market  interest rate  increases  until such time as the floor rate has
been exceeded and the loan  repricing date met.  Additionally,  the mix of loans
comprising the taxable loan  portfolio,  and pricing of new loan volume compared
to existing loan rates,  impact the overall  yield  earned.  The extent of these
impacts in the future  will depend  upon,  among  other  things,  the amount and
timing of future market interest rate hikes and competitive pressures.

Rates  received  on  taxable  investment  securities  available  for  sale  have
decreased  during the first  quarter of 2005,  compared to the first  quarter of
2004,  by  100  basis  points.  Over  the  same  time  period,   rates  paid  on
interest-bearing  liabilities increased seven basis points. This was largely due
to  maturities  and early calls of taxable  investment  securities  coupled with
reinvestment at appreciably lower interest rates. This portfolio,  however, with
an  average  maturity  of only  approximately  two years may be able to  reprice
higher if market  interest  rates remain at their  current  level or  experience
further increases.

Rates received during the quarter ended March 31, 2005,  versus the same quarter
of 2004,  on  nontaxable  investment  securities  available  for sale and  loans
remained unchanged while rates paid on  interest-bearing  liabilities  increased
seven basis points. Most of the nontaxable  investment  securities available for
sale were purchased when market  interest rates were higher than rates currently
available,  despite  recent  interest rate hikes.  In the current  interest rate
environment,  when nontaxable  investment securities mature or are sold, called,
or otherwise paid down, the reinvestment rate available is frequently lower than
the yield of the liquidating security.

The rate received on overnight  federal funds sold to other banks  increased 148
basis points during the first  quarter of 2005,  compared to the same quarter of
2004.  This increase is primarily  attributable  to the monetary policy shift of
the  Federal  Reserve  Bank which has caused  overnight  federal  funds rates to
significantly  rise. For the quarter ended March 31, 2005, average federal funds
sold to total average  assets had been reduced to 6.6% from 9.9% during the same
quarter  in 2004.  These  federal  funds  sold can be used to fund  future  loan
demand, deposit or other liability outflows, investment securities purchases, or
various other purposes as identified by management.

The  rate  earned  on  interest-bearing   deposits  at  financial   institutions
(primarily  FDIC  insured  certificates  of deposit)  increased  85 basis points
during the first  quarter of 2005  versus  the same  quarter of 2004,  while the
average balance decreased $257,000.  This asset category yielded 72 basis points
over federal funds sold with little,  if any, credit risk. The average  duration
of interest-bearing  deposits at financial  institutions was less than two years
during the quarter ended March 31, 2005.

During  this  period  of  rising  market  interest  rates,  the  rates  paid  on
interest-bearing  demand deposits rose 53 basis points.  In contrast,  the rates
paid on time deposits were  actually  reduced seven basis points when  comparing
the first quarters of 2005 and 2004 as time deposits tend to reprice higher at a
slower  pace  than   interest-bearing   demand  deposits  due  to  their  longer
maturities.

                                       9
<PAGE>

The rate paid on the note payable outstanding  increased 108 basis points during
the first quarter of 2005  compared to the same quarter last year.  This was the
result of seven  increases  during the last seven months of 2004 and first three
months of 2005 in the prime lending rate to which the note payable rate is tied.

The  usage of  wholesale  funding  sources  (primarily  Federal  Home  Loan Bank
advances),  while  mitigating  intermediate  and  long-term  interest rate risk,
tended to  represent a  relatively  higher cost of funds than  deposits  for the
Company.  The  Company's  average  rate  paid for such  Federal  Home  Loan Bank
advances and other funds, however, was reduced by 47 basis points when comparing
the  first  quarters  of 2005 and  2004.  Management  has  reduced  reliance  on
wholesale  funding  sources as evidenced by the average balance in this category
declining over $5 million during the first quarter of 2005 compared to the first
quarter of 2004.

Intense  competition  for all  types of loans  and  deposits  tends to limit the
Company's  ability  to  control  pricing  and  other  terms  when  dealing  with
customers.  Despite  these  limitations,  the Company  was able to increase  the
overall net  interest  margin to 3.53%  during the three  months ended March 31,
2005, compared to 3.40% for the same period last year.

Provisions for loan losses were $240,000 and $170,000 for the three months ended
March 31, 2005 and March 31, 3004,  respectively.  Net loan  charge-offs for the
quarter ended March 31, 2005 totaled  $226,000  compared to net  charge-offs  of
$140,000 for the same quarter in 2004. The vast majority of net loan charge-offs
in 2005 was attributable to one borrower.

The allowance  for possible  loan losses is  maintained at the level  considered
adequate  by  management  of the Banks to  provide  for  probable  losses in the
existing loan  portfolio.  The  allowance is increased by provisions  charged to
operating expense and reduced by net charge-offs. In determining the adequacy of
the  allowance  balance  the  Banks  make  continuous  evaluations  of the  loan
portfolio and related  off-balance sheet commitments,  consider current economic
conditions,  the  composition  of  the  loan  portfolio,  historical  loan  loss
experience, review of specific problem loans, the estimated net realizable value
or the fair value of the underlying collateral,  and other factors. There can be
no assurance that loan losses will not exceed the estimated  amounts or that the
company will not be required to make  additional  provisions  for loan losses in
the  future.  Asset  quality  is a constant  priority  for the  Company  and its
subsidiary  banks.  Should  the  economic  climate  deteriorate,  borrowers  may
experience  difficulty,  and  the  level  of  non-performing,  charge-offs,  and
delinquencies could rise thus requiring further increases in the provision.

Nonaccrual loans totaled $1,662,000 at March 31, 2005, a very modest decrease of
$6,000 from  December 31, 2004.  There was a total of $38,000  other real estate
owned at March 31, 2005 compared to $77,000 at December 31, 2004. Loans past due
90 days or more and still accruing totaled $255,000,  which was $48,000 or 23.2%
more than at year-end 2004. The allowance for possible loan losses of $3,399,000
at March 31, 2005,  represented 1.2% of gross loans and 174% of total nonaccrual
loans,  other real  estate  owned,  and loans past due 90 days or more and still
accruing.

Other income results from the charges and fees collected by the Company from its
customers  for  various  services  performed,  gross trust  department  revenue,
miscellaneous  other  income,  gains  (or  losses)  from the sale of  investment
securities in the available for sale category and loans,  as well as income from
corporate owned life insurance. Total other income for the first quarter of 2005
was $758,000; $66,000 or 9.5% more than the first quarter of 2004. Service fees,
particularly on deposit accounts,  were the largest single area of growth in the
other  income  category,  exhibiting  an  increase  of $45,000  or 10.5%.  Trust
department  income rose $7,000 or 7.6% while gains on loans sold grew $32,000 or
160.0%.  Income on  corporate  owned life  insurance  increased  $3,000 or 6.5%.
Finally,  miscellaneous  other income increased  $12,000 or 16.7%. No securities
gains were  recognized  during the first  quarter of 2005 compared to $33,000 of
gains in 2004.

Operating  expenses include all the costs incurred to operate the Company except
for interest expense,  the loan loss provision and income taxes. For the quarter
ended March 31, 2005,  salaries and employee benefits,  the largest component of
operating expenses,  increased $85,000 or 6.7% due to normal raises,  incentives
and the rising  cost of health  care.  Additionally,  a new branch was opened in
December 2004 with the first quarter of 2005  reflecting  the related  operating
expenses,  including  salaries and benefits.  Occupancy  and equipment  expenses
increased  $19,000 or 5.4% as  depreciation  and property  taxes rose. All other
operating  expenses  increased  $95,000 or 17.4% due in large measure to the new
branch  discussed  above and final  settlement in the first quarter of 2004 of a
non-recurring  liability at an amount approximately $20,000 more advantageous to
the Company  than  previously  anticipated  and  accrued  for.  Total  operating
expenses  increased $199,000 or 9.2% during the first quarter of 2005 versus the
same quarter last year. Increased costs of regulatory  compliance and technology
spending  continue to  challenge  the Company in its effort to control  expenses
while maintaining  strong  productivity,  efficiency,  capacity and high quality
customer service.

                                       10
<PAGE>

Income tax expense for the quarter ended March 31, 2005 of $348,000  represented
31.2% of income before taxes.  For the  comparable  quarter last year income tax
expense was 31.3% of income before tax.

The efficiency ratio,  defined as noninterest  expense,  excluding the provision
for loan losses,  as a percent of net interest income plus  noninterest  income,
was  63.6%  and  61.3% for the  three  months  ended  March  31,  2005 and 2004,
respectively.  The primary  reasons for this change in the efficiency  ratio are
discussed previously in this report.

Discussion and Analysis of Financial Condition

The  Company's  assets at March 31, 2005  totaled  $381,555,000,  an increase of
$17,372,000  or 4.8% from December 31, 2004.  As of March 31, 2005,  the Company
had  $21,601,000  of federal funds sold compared to  $12,300,000 at December 31,
2004.  This increase  resulted from growth in deposits and securities sold under
agreements  to  repurchase  (see below for  further  discussion).  These  liquid
assets,  federal funds sold, may be used to fund future loan growth,  deposit or
other liability outflows, purchases of investment securities available for sale,
or various other purposes as identified by management.

At  March  31,  2005,   interest-bearing   deposits  at  financial  institutions
(primarily  fully  FDIC  insured  certificates  of  deposit)  as  well  as  some
interest-bearing   demand  accounts  at  various  banking  institutions  totaled
$7,533,000  versus $8,395,000 at December 31, 2004. This decline was chiefly due
to the yield spreads available on new interest-bearing  deposits being less than
Company established target spreads to alternative investments.

Total  available for sale  securities  increased  $5,114,000 or 16.9% during the
first three months of 2005 to total  $35,439,000  at March 31,  2005.  The Banks
emphasize  purchase of securities with maturities of five years and less as such
purchases  typically offer reasonable yields with limited credit risk as well as
limited  interest  rate risk.  Additionally,  selected  securities  with  longer
maturities  are  owned in order  to  enhance  overall  portfolio  yield  without
significantly  increasing  risk. In the relatively low, but rising interest rate
environment  which  continued  during  the  first  quarter  of 2005,  the  banks
purchased more securities than the total of securities that were sold,  matured,
called,  or paid down.  However,  most of the securities that were purchased had
rather short maturities or likely early call dates.  Average taxable  investment
securities  available for sale had an average duration of only approximately two
years.  Securities  sold during the first  quarter of 2005 and 2004 totaled none
and $1,151,000,  respectively,  and resulted in net gains recognized of none and
$33,000, respectively.

Net loans totaled  $283,039,000  at March 31, 2005, an increase of $2,140,000 or
0.8% from December 31, 2004.  Competition for high-quality loans remains intense
in all loan categories.  The Company's first quarter 2005 proceeds from sales of
real estate loans in the secondary market totaled  $3,148,000  versus $2,872,000
for the same period in 2004.

Total deposits at March 31, 2005, were $289,832,000,  an increase of $12,097,000
or 4.4%  from  the  balance  at  December  31,  2004.  Certificates  of  deposit
represented on average for the three months ended March 31, 2005,  approximately
38% of total deposits.  Interest-bearing demand deposits,  comprised of savings,
money market and NOW accounts,  represented another 44% of average deposits. The
final 18% of average deposits were in noninterest-bearing  accounts.  Securities
sold under  agreements  to  repurchase  increased  $6,022,000  (102.3%) to total
$11,907,000 as more corporate  dollars were directed to this category.  Advances
borrowed from the Federal Home Loan Bank  declined by  $1,143,000  from year-end
2004, totaling $41,773,000 at quarter end.

The note payable balance of $2,100,000 at March 31, 2005, was unchanged from the
balance at December 31, 2004. The next  scheduled  annual  principal  payment of
$600,000 is due at the end of the third quarter of 2005. This is a variable rate
revolving  five-year  term note  priced at Prime Rate less one  percent,  with a
floor of 3.25% and a ceiling of 5.25%.

Interest Rate Sensitivity

The Company  manages its balance  sheet to minimize the impact of interest  rate
movements on its earnings.  The term "rate sensitive" refers to those assets and
liabilities  which are  "sensitive" to  fluctuations  in rates and yields.  When
interest  rates move,  earnings may be affected in many ways.  Interest rates on
assets and liabilities  may change at different  times or by different  amounts.
Maintaining a proper  balance  between rate  sensitive  earning  assets and rate
sensitive   liabilities  is  the  principal  function  of  asset  and  liability
management of a banking organization.

                                       11
<PAGE>

A positive  repricing gap for a given period exists when total  interest-earning
assets exceed total interest-bearing  liabilities and a negative gap exists when
total  interest-bearing  liabilities are in excess of  interest-earning  assets.
Generally a positive  repricing gap will result in increased net interest income
in a rising rate environment and decreased net interest income in a falling rate
environment.  A negative  repricing gap tends to produce  increased net interest
income in a falling rate  environment  and  decreased  net interest  income in a
rising rate environment.  At March 31, 2005, rate sensitive liabilities exceeded
rate sensitive assets within a one year maturity range and, thus, the Company is
theoretically  positioned to benefit from a decline in interest rates within the
next year.

The Company's  repricing gap position is useful for measuring  general  relative
risk  levels.  However,  even with  perfectly  matched  repricing  of assets and
liabilities,  interest rate risk cannot be avoided entirely.  Interest rate risk
remains in the form of prepayment risk of assets and liabilities, timing lags in
adjusting  certain assets and  liabilities  that have varying  sensitivities  to
market interest rates, and basis risk. Basis risk refers to the possibility that
the repricing  behavior of variable-rate  assets could differ from the repricing
characteristics  of  liabilities  which  reprice in the same time  period.  Even
though  these  assets are  match-funded,  the spread  between  asset  yields and
funding costs could change.  Because the repricing gap position does not capture
these risks,  Management  utilizes simulation modeling to measure and manage the
rate sensitivity exposure of earnings. The Company's simulation model provides a
projection  of the  effect on net  interest  income  of  various  interest  rate
scenarios and balance sheet strategies.

Liquidity

For  banks,  liquidity  represents  ability  to meet both loan  commitments  and
deposit withdrawals.  Factors which influence the need for liquidity are varied,
but include general economic  conditions,  asset/liability mix, bank reputation,
future  FDIC  funding  needs,  changes  in  regulatory  environment,  and credit
standing.  Assets which provide liquidity consist principally of loans, cash and
due from banks, interest-bearing deposits at financial institutions,  investment
securities,  and short-term  investments  such as federal  funds.  Maturities of
securities  held for  investment  purposes and loan payments  provide a constant
flow of funds available for cash needs. Additionally, liquidity can be gained by
the sale of loans or securities  prior to maturity if such assets had previously
been designated as available for sale. Interest rates, relative to the rate paid
by the  security or loan sold,  along with the maturity of the security or loan,
are the major determinates of the price which can be realized upon sale.

The  stability  of the  Company's  funding,  and  thus  its  ability  to  manage
liquidity,  is greatly enhanced by its consumer deposit base.  Consumer deposits
tend to be small in size,  diversified  across a large base of individuals,  and
are government  insured to the extent  permitted by law. Total deposits at March
31, 2005, were $289,832,000 or 76.0% of total liabilities and equity.

Federal funds sold overnight totaled $21,601,000 or 5.7% of March 31, 2005 total
assets.  These  federal  funds sold may be used to fund loans as well as deposit
withdrawals, or for other purposes as defined by management.

Securities  available  for  sale  with  a fair  value  totaling  $35,439,000  at
quarter-end  included net  unrealized  gains of  approximately  $209,000.  These
securities may be sold in whole or in part to increase liquid assets, reposition
the investment portfolio, or for other purposes as defined by management.

Capital

Stockholders'  equity  increased  $60,000  (0.2%)  during the three months ended
March 31,  2005.  The  year-to-date  increase  included  net income of $766,000,
decrease of $199,000 in  accumulated  other  comprehensive  income,  $346,000 of
dividends  declared  to  shareholders,  and  $161,000  increase  in the  maximum
obligation related to KSOP shares.

Federal regulatory agencies have adopted various capital standards for financial
institutions,  including risk-based capital standards. The primary objectives of
the  risk-based  capital  framework  are to  provide  a  consistent  system  for
comparing capital  positions of financial  institutions and to take into account
the  different   inherent  risks  among  financial   institutions'   assets  and
off-balance-sheet items.

Risk-based  capital  standards have been  supplemented  with  requirements for a
minimum Tier 1 capital to assets ratio (leverage ratio). In addition, regulatory
agencies consider the published capital levels as minimum levels and may require
a financial institution to maintain capital at higher levels.

                                       12
<PAGE>

A comparison of the Company's capital as of March 31, 2005 with the requirements
to be considered adequately capitalized is presented below.

                                                                   For Capital
                                                   Actual      Adequacy Purposes
                                                   -----------------------------

Total capital to risk-weighted assets .........     12.9%            8.00%
Tier 1 capital to risk-weighted assets ........     11.7%            4.00%
Tier 1 capital to average assets ..............      8.7%            4.00%

Impact of Inflation and Changing Prices

The financial statements and related data presented herein have been prepared in
accordance with accounting principles generally accepted in the United States of
America,  which  require the  measurement  of financial  position and  operating
results  in terms of  historical  dollars  without  considering  changes  in the
relative  purchasing  power of money  over time due to  inflation.  Unlike  most
industrial companies, virtually all of the assets and liabilities of a financial
institution are monetary in nature.

As a result,  interest  rates  have a more  significant  impact  on a  financial
institution's  performance  than the  effects  of general  levels of  inflation.
Interest  rates do not  necessarily  move in the same  direction  or in the same
magnitude  as the price of goods and  services.  In the  current  interest  rate
environment,  liquidity and the maturity  structure of the Company's  assets and
liabilities are critical to the maintenance of acceptable performance levels.

Trends, Events or Uncertainties

Officers  and  Directors of the Company and its  subsidiaries  have had, and may
have in the future,  banking  transactions in the ordinary course of business of
the Company's subsidiaries. In the opinion of management, all such transactions,
with one exception,  are on  substantially  the same terms,  including  interest
rates on loans and  collateral,  as those  prevailing at the time for comparable
transactions  with others,  involve no more than normal risk of  collectibility,
and present no other unfavorable features. One loan relationship, which resulted
in a first quarter 2005 net charge-off of $211,000,  was with a related party of
a subsidiary bank director.

In the normal  course of  business,  the Banks are  involved  in  various  legal
proceedings.  In the current opinion of management, any liability resulting from
such  proceedings  would not have a material  effect on the Company's  financial
statements.

The  Company  has in the  past  from  time to  time  purchased,  as they  became
available  in the  market,  shares  of its  outstanding  common  stock  for  the
treasury.  During the first  quarter of 2005 and 2004 total shares  purchased by
the Company for the treasury were none and 11,643, respectively.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES  LITIGATION REFORM ACT With
the  exception of the  historical  information  contained  in this  report,  the
matters  described  herein may contain certain  forward-looking  statements with
respect to the Company's  financial  condition,  results of  operations,  plans,
objectives,  future performance and business.  These forward-looking  statements
are  subject  to  certain  risks  and  uncertainties,  not all of  which  can be
predicted or anticipated.  Forward-looking  statements,  which may be based upon
beliefs,  expectations  and  assumptions  of  the  Company's  management  and on
information currently available to management, are generally identifiable by the
use of words  such as  "believe,"  "expect,"  "anticipate,"  "bode,"  "predict,"
"suggest,"  "appear,"  "plan,"  "intend,"  "estimate,"  "may," "will,"  "would,"
"could," "should, or other similar expressions.  Additionally, all statements in
this document,  including forward-looking statements,  speak only as of the date
they are made, and the Company  undertakes no obligation to update any statement
in light of new information or future events.  The Company's  ability to predict
results  or the  actual  effect  of future  plans or  strategies  is  inherently
uncertain. Factors that may cause actual results to differ materially from those
contemplated by the forward-looking  statements herein include market conditions
as well as  conditions  affecting  the banking  industry  generally  and factors
having  a  specific  impact  on  the  Company,  including  but  not  limited  to
fluctuations  in  interest  rates  and in the  economy;  the  impact of laws and
regulations  applicable  to the  Company  and  changes  therein;  the  impact of
accounting  pronouncements  applicable  to  the  Company  and  changes  therein;
competitive  conditions in the markets in which the Company operates,  including
competition from banking and non-banking  companies with  substantially  greater
resources;  the  Company's  ability  to  control  the  composition  of its  loan
portfolio without adversely affecting interest income; the Company's  dependence
on third party  suppliers;  and the  Company's  ability to respond to changes in
technology.  Readers of this Form 10-Q should therefore not place undue reliance
on forward-looking statements.

Additional  factors which could have a material adverse effect on the operations
and future  prospects of the Company and its subsidiaries  include,  but are not
limited to, those listed in the Form 10-K filed with the Securities and Exchange
Commission for the year ended December 31, 2004.

                                       13
<PAGE>

Item 3.   Quantitative and Qualitative Disclosures About Market Risk

There were no material changes in the quantitative and qualitative  market risks
since the prior year-end.  Such risks were described in the Form 10-K filed with
the Securities and Exchange Commission for the year ended December 31, 2004.

Item 4.  Disclosure Controls and Procedures

As of the end of the period  covered by this  report,  the Company  conducted an
evaluation,  under the supervision and with the  participation  of the principal
executive  officer  (Chairman  of the Board,  President  and CEO) and  principal
financial  officer   (Executive  Vice  President,   Chief  Operating  Officer  &
Treasurer),  of the Company's  disclosure controls and procedures (as defined in
Rules  13a-15(e) and 15d-15(e)  under the  Securities  Exchange Act of 1934 (the
"Exchange Act")). Based on this evaluation,  the principal executive officer and
principal financial officer concluded that the Company's disclosure controls and
procedures are effective to ensure that information  required to be disclosed by
the  Company  in  reports  that it files or submits  under the  Exchange  Act is
recorded,  processed,  summarized and reported within the time periods specified
in Securities and Exchange  Commission  rules and forms.  There was no change in
the Company's  internal  control over financial  reporting  during the Company's
most recently  completed  fiscal  quarter that has  materially  affected,  or is
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.

                            Part II OTHER INFORMATION


Item 1.  Legal Proceedings

The Company has no legal proceedings which are deemed material.

Item 2.  Unregistered  Sales of Equity Securties and Use of Proceeds

During the quarter ended March 31, 2005, the Company did not purchase any of its
own common stock.

Item 3.  Defaults Upon Senior Securities

There have been no defaults upon senior securities by the Company.

Item 4.  Submission of Matters to a Vote of Security Holders

At the Annual  Meeting of the Company held at its offices on April 21, 2005, the
shareholders elected the following individuals to the Board of Directors for the
indicated terms:

                           Votes in Favor      Votes Withheld             Term
                           -----------------------------------------------------

Craig R. Foss ..........     1,082,192                  50              3 years
Donald R. Heckman ......       969,672             112,570              3 years
D. Scott Ingstad .......     1,082,192                  50              3 years
Beverly J. White .......       970,032             112,210              3 years

At this Annual Meeting the shareholders  also ratified the election of McGladrey
& Pullen,  LLP as independent  registered  public accounting firm for the fiscal
year ending  December  31, 2005 with  968,812  votes in favor and 113,430  votes
against or withheld.

Item 5.  Other Information

There has been no new information not previously  disclosed requiring disclosure
under this item.

Item 6. Exhibits

(a)     Exhibits

        Exhibit 31.1 - Certification pursuant to Rule 13a-15(e) and 15d-15(e)

        Exhibit 31.2 - Certification pursuant to Rule 13a-15(e) and 15d-15(e)

        Exhibit 32.1 - Certification   pursuant   to   Section   906  of  the
                       Sarbanes-Oxley Act of 2002

        Exhibit 32.2 - Certification   pursuant   to   Section   906  of  the
                       Sarbanes-Oxley Act of 2002

                                       14
<PAGE>

                                   SIGNATURES

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



                           IOWA FIRST BANCSHARES CORP.

                                  (Registrant)



May 16, 2005                                     /s/ D. Scott Ingstad
------------                                     -------------------------------
Date                                             D. Scott Ingstad, Chairman of
                                                 the Board, President and CEO



May 16, 2005                                     /s/ Kim K. Bartling
------------                                     -------------------------------
Date                                             Kim K. Bartling, Executive Vice
                                                 President, Chief Operating
                                                 Officer & Treasurer


                                       15