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


                                    FORM 10-Q


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

                  For the quarterly period ended June 30, 2005

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

               For the transition period from _______ to ________

                           Commission File No. 0-20632

                                FIRST BANKS, INC.
             (Exact name of registrant as specified in its charter)

           MISSOURI                                      43-1175538
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

                   135 North Meramec, Clayton, Missouri   63105
               (Address of principal executive offices) (Zip code)

                                 (314) 854-4600
              (Registrant's telephone number, including area code)

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

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

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practical date.

                                                      Shares Outstanding
                     Class                             at July 31, 2005
                     -----                            ------------------
       Common Stock, $250.00 par value                      23,661

<PAGE>




                                                 FIRST BANKS, INC.

                                                 TABLE OF CONTENTS


<TABLE>
<CAPTION>



                                                                                                         Page
                                                                                                         ----
PART I.     FINANCIAL INFORMATION

   ITEM 1.  FINANCIAL STATEMENTS:

<S>                                                                                                        <C>
            CONSOLIDATED BALANCE SHEETS...............................................................     1

            CONSOLIDATED STATEMENTS OF INCOME.........................................................     2

            CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                AND COMPREHENSIVE INCOME..............................................................     3

            CONSOLIDATED STATEMENTS OF CASH FLOWS.....................................................     4

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS................................................     5

   ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                AND RESULTS OF OPERATIONS.............................................................    17

   ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK................................    35

   ITEM 4.  CONTROLS AND PROCEDURES...................................................................    36

PART II.    OTHER INFORMATION

   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.......................................    37

   ITEM 6.  EXHIBITS..................................................................................    38

SIGNATURE.............................................................................................    39

</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                          PART I - FINANCIAL INFORMATION
                                           ITEM 1 - FINANCIAL STATEMENTS

                                                 FIRST BANKS, INC.

                                            CONSOLIDATED BALANCE SHEETS
                         (dollars expressed in thousands, except share and per share data)

                                                                                             June 30,   December 31,
                                                                                               2005         2004
                                                                                               ----         ----
                                                                                            (unaudited)

                                                      ASSETS
                                                      ------

Cash and cash equivalents:
<S>                                                                                          <C>            <C>
     Cash and due from banks..............................................................  $  180,355      149,605
     Short-term investments...............................................................      48,759      117,505
                                                                                            ----------    ---------
          Total cash and cash equivalents.................................................     229,114      267,110
                                                                                            ----------    ---------

Investment securities:
     Available for sale...................................................................   1,723,578    1,788,063
     Held to maturity (fair value of $24,823 and $25,586, respectively)...................      24,630       25,286
                                                                                            ----------    ---------
          Total investment securities.....................................................   1,748,208    1,813,349
                                                                                            ----------    ---------

Loans:
     Commercial, financial and agricultural...............................................   1,535,085    1,575,232
     Real estate construction and development.............................................   1,353,589    1,318,413
     Real estate mortgage.................................................................   3,182,089    3,061,581
     Consumer and installment.............................................................      57,008       54,546
     Loans held for sale..................................................................     187,028      133,065
                                                                                            ----------    ---------
          Total loans.....................................................................   6,314,799    6,142,837
     Unearned discount....................................................................      (5,119)      (4,869)
     Allowance for loan losses............................................................    (140,164)    (150,707)
                                                                                            ----------    ---------
          Net loans.......................................................................   6,169,516    5,987,261
                                                                                            ----------    ---------

Bank premises and equipment, net of accumulated depreciation and amortization.............     143,607      144,486
Goodwill..................................................................................     154,664      156,849
Bank-owned life insurance.................................................................     109,168      106,788
Deferred income taxes.....................................................................     122,542      127,397
Other assets..............................................................................      99,557      129,601
                                                                                            ----------    ---------
          Total assets....................................................................  $8,776,376    8,732,841
                                                                                            ==========    =========

                                                   LIABILITIES
                                                   -----------

Deposits:
     Noninterest-bearing demand...........................................................  $1,272,611    1,194,662
     Interest-bearing demand..............................................................     851,892      875,489
     Savings..............................................................................   2,228,140    2,249,644
     Time deposits of $100 or more........................................................     868,478      807,220
     Other time deposits..................................................................   1,989,609    2,024,955
                                                                                            ----------    ---------
          Total deposits..................................................................   7,210,730    7,151,970
Other borrowings..........................................................................     556,291      594,750
Note payable..............................................................................          --       15,000
Subordinated debentures...................................................................     275,213      273,300
Deferred income taxes.....................................................................      29,159       34,812
Accrued expenses and other liabilities....................................................      54,409       62,116
Minority interest in subsidiary...........................................................       7,350           --
                                                                                            ----------    ---------
          Total liabilities...............................................................   8,133,152    8,131,948
                                                                                            ----------    ---------
<PAGE>

                                               STOCKHOLDERS' EQUITY
                                               --------------------

Preferred stock:
     $1.00 par value, 5,000,000 shares authorized, no shares issued and outstanding.......          --           --
     Class A convertible, adjustable rate, $20.00 par value, 750,000
       shares authorized, 641,082 shares issued and outstanding...........................      12,822       12,822
     Class B adjustable rate, $1.50 par value, 200,000 shares authorized,
       160,505 shares issued and outstanding..............................................         241          241
Common stock, $250.00 par value, 25,000 shares authorized,
     23,661 shares issued and outstanding.................................................       5,915        5,915
Additional paid-in capital................................................................       5,910        5,910
Retained earnings.........................................................................     626,481      577,836
Accumulated other comprehensive loss......................................................      (8,145)      (1,831)
                                                                                            ----------    ---------
          Total stockholders' equity......................................................     643,224      600,893
                                                                                            ----------    ---------
          Total liabilities and stockholders' equity......................................  $8,776,376    8,732,841
                                                                                            ==========    =========

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>



<PAGE>
<TABLE>
<CAPTION>

                                                 FIRST BANKS, INC.

                                  CONSOLIDATED STATEMENTS OF INCOME - (UNAUDITED)
                         (dollars expressed in thousands, except share and per share data)


                                                                            Three Months Ended    Six Months Ended
                                                                                 June 30,             June 30,
                                                                           --------------------  ------------------
                                                                              2005      2004       2005      2004
                                                                              ----      ----       ----      ----
Interest income:
<S>                                                                        <C>          <C>       <C>       <C>
     Interest and fees on loans........................................... $  99,442    83,755    193,612   167,975
     Investment securities................................................    17,395    12,693     34,944    24,314
     Short-term investments...............................................       351       137        860       423
                                                                           ---------  --------   --------  --------
          Total interest income...........................................   117,188    96,585    229,416   192,712
                                                                           ---------  --------   --------  --------
Interest expense:
     Deposits:
       Interest-bearing demand............................................       932       824      1,820     1,791
       Savings............................................................     6,331     4,593     12,075     9,370
       Time deposits of $100 or more......................................     6,246     3,039     11,600     5,995
       Other time deposits................................................    16,156     8,173     30,135    16,660
     Other borrowings.....................................................     4,234       757      7,534     1,401
     Note payable.........................................................       103        64        241       169
     Subordinated debentures..............................................     5,365     3,529     10,111     7,067
                                                                           ---------  --------   --------  --------
          Total interest expense..........................................    39,367    20,979     73,516    42,453
                                                                           ---------  --------   --------  --------
          Net interest income.............................................    77,821    75,606    155,900   150,259
Provision for loan losses.................................................    (8,000)    3,000     (8,000)   15,750
                                                                           ---------  --------   --------  --------
          Net interest income after provision for loan losses.............    85,821    72,606    163,900   134,509
                                                                           ---------  --------   --------  --------
Noninterest income:
     Service charges on deposit accounts and customer service fees........    10,177     9,792     19,476    18,741
     Gain on loans sold and held for sale.................................     6,844     3,961     11,360     8,190
     Gain on sales of branches, net of expenses...........................        --       630         --     1,020
     Bank-owned life insurance investment income..........................     1,274     1,276      2,534     2,619
     Investment management income.........................................     2,220     1,740      4,246     3,284
     Other................................................................     5,288     2,705      9,288     6,809
                                                                           ---------  --------   --------  --------
          Total noninterest income........................................    25,803    20,104     46,904    40,663
                                                                           ---------  --------   --------  --------
Noninterest expense:
     Salaries and employee benefits.......................................    34,548    28,203     67,478    55,889
     Occupancy, net of rental income......................................     5,226     4,433     10,465     9,070
     Furniture and equipment..............................................     3,814     4,290      7,838     8,703
     Postage, printing and supplies.......................................     1,324     1,221      2,952     2,543
     Information technology fees..........................................     9,395     7,992     17,545    15,988
     Legal, examination and professional fees.............................     2,082     1,688      4,453     3,251
     Amortization of intangibles associated with
       the purchase of subsidiaries.......................................     1,146       658      2,355     1,316
     Communications.......................................................       466       399        975       864
     Advertising and business development.................................     1,748     1,324      3,395     2,605
     Charitable contributions.............................................     1,572        56      1,678       130
     Other................................................................     8,452     5,141     14,394     7,648
                                                                           ---------  --------   --------  --------
          Total noninterest expense.......................................    69,773    55,405    133,528   108,007
                                                                           ---------  --------   --------  --------
          Income before provision for income taxes........................    41,851    37,305     77,276    67,165
Provision for income taxes................................................    15,005    11,302     28,303    22,893
                                                                           ---------  --------   --------  --------
          Net income......................................................    26,846    26,003     48,973    44,272
Preferred stock dividends.................................................       132       132        328       328
                                                                           ---------  --------   --------  --------
          Net income available to common stockholders..................... $  26,714    25,871     48,645    43,944
                                                                           =========  ========   ========  ========

Basic earnings per common share........................................... $1,129.05  1,093.42   2,055.92  1,857.23
                                                                           =========  ========   ========  ========

Diluted earnings per common share......................................... $1,110.42  1,074.06   2,025.30  1,827.13
                                                                           =========  ========   ========  ========

Weighted average common stock outstanding.................................    23,661    23,661     23,661    23,661
                                                                           =========  ========   ========  ========

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                                 FIRST BANKS, INC.

         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME - (UNAUDITED)
                   Six Months Ended June 30, 2005 and 2004 and Six Months Ended December 31, 2004
                             (dollars expressed in thousands, except per share data)

                                                                                                            Accu-
                                                           Adjustable Rate                                 mulated
                                                           Preferred Stock                                  Other
                                                           ---------------                                 Compre-    Total
                                                         Class A                       Additional          hensive    Stock-
                                                         Conver-               Common   Paid-In  Retained  Income    holders'
                                                          tible    Class B     Stock    Capital  Earnings  (Loss)     Equity
                                                          -----    -------     -----    -------  --------  ------     ------

<S>                                                      <C>         <C>      <C>       <C>      <C>       <C>      <C>
Consolidated balances, December 31, 2003.............    $12,822      241      5,915     5,910    495,714   29,213   549,815
                                                                                                                     -------
Six months ended June 30, 2004:
    Comprehensive income:(1)
      Net income.....................................         --       --         --        --     44,272       --    44,272
      Other comprehensive loss, net of tax:
        Unrealized losses on securities..............         --       --         --        --         --  (19,116)  (19,116)
        Derivative instruments:
          Current period transactions................         --       --         --        --         --  (18,695)  (18,695)
                                                                                                                     -------
    Total comprehensive income.......................                                                                  6,461
    Class A preferred stock dividends,
      0.50 per share.................................         --       --         --        --       (321)      --      (321)
    Class B preferred stock dividends,
      $0.04 per share................................         --       --         --        --         (7)      --        (7)
                                                         -------      ---      -----     -----    -------  -------   -------
Consolidated balances, June 30, 2004.................     12,822      241      5,915     5,910    539,658   (8,598)  555,948
                                                                                                                     -------
Six months ended December 31, 2004:
    Comprehensive income:
      Net income.....................................         --       --         --        --     38,636       --    38,636
      Other comprehensive income (loss),
        net of tax:
        Unrealized gains on securities...............         --       --         --        --         --   13,405    13,405
        Reclassification adjustment for gains
          included in net income.....................         --       --         --        --         --     (167)     (167)
        Derivative instruments:
          Current period transactions................         --       --         --        --         --   (6,471)   (6,471)
                                                                                                                     -------
    Total comprehensive income.......................                                                                 45,403
    Class A preferred stock dividends,
      $0.70 per share................................         --       --         --        --       (448)      --      (448)
    Class B preferred stock dividends,
      $0.07 per share................................         --       --         --        --        (10)      --       (10)
                                                         -------      ---      -----     -----    -------  -------   -------

Consolidated balances, December 31, 2004.............     12,822      241      5,915     5,910    577,836   (1,831)  600,893
                                                                                                                     -------
Six months ended June 30, 2005:
    Comprehensive income:(1)
      Net income.....................................         --       --         --        --     48,973       --    48,973
      Other comprehensive loss, net of tax:
        Unrealized losses on securities .............         --       --         --        --         --   (3,571)   (3,571)
        Derivative instruments:
          Current period transactions................         --       --         --        --         --   (2,743)   (2,743)
                                                                                                                     -------
    Total comprehensive income.......................                                                                 42,659
    Class A preferred stock dividends,
      $0.50 per share................................         --       --         --        --       (321)      --      (321)
    Class B preferred stock dividends,
      $0.04 per share................................         --       --         --        --         (7)      --        (7)
                                                         -------      ---      -----     -----    -------  -------   -------
Consolidated balances June 30, 2005..................    $12,822      241      5,915     5,910    626,481   (8,145)  643,224
                                                         =======      ===      =====     =====    =======  =======   =======
<PAGE>

-------------------------
(1) Disclosure of Comprehensive Income (Loss):
                                                                       Three Months Ended     Six Months Ended
                                                                            June 30,               June 30,
                                                                       ------------------     -----------------
                                                                        2005       2004        2005       2004
                                                                        ----       ----        ----       ----
    Comprehensive income (loss):
      Net income..................................................     $26,846    26,003      48,973    44,272
      Other comprehensive income (loss), net of tax:
        Unrealized gains (losses) on securities ..................      10,618   (24,607)     (3,571)  (19,116)
        Derivative instruments:
          Current period transactions.............................         684   (14,052)     (2,743)  (18,695)
                                                                       -------   -------      ------   -------
    Total comprehensive income (loss).............................     $38,148   (12,656)     42,659     6,461
                                                                       =======   =======      ======   =======

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                                                 FIRST BANKS, INC.

                                CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)
                                          (dollars expressed in thousands)

                                                                                                Six Months Ended
                                                                                                    June 30,
                                                                                            -----------------------
                                                                                              2005           2004
                                                                                              ----           ----
Cash flows from operating activities:
<S>                                                                                         <C>              <C>
     Net income.........................................................................    $  48,973        44,272
     Adjustments to reconcile net income to net cash used in operating activities:
       Depreciation and amortization of bank premises and equipment.....................        8,591         9,451
       Amortization, net of accretion...................................................        7,458         8,708
       Originations and purchases of loans held for sale................................     (715,626)     (588,123)
       Proceeds from sales of loans held for sale.......................................      577,081       461,514
       Provision for loan losses........................................................       (8,000)       15,750
       Provision for income taxes.......................................................       28,303        22,893
       Payments of income taxes.........................................................      (32,193)      (24,231)
       Decrease in accrued interest receivable..........................................        3,721           595
       Interest accrued on liabilities..................................................       73,516        42,453
       Payments of interest on liabilities..............................................      (72,747)      (42,699)
       Gain on loans sold and held for sale.............................................      (11,360)       (8,190)
       Gain on sales of branches, net of expenses.......................................           --        (1,020)
       Other operating activities, net..................................................        8,080        (2,477)
                                                                                            ---------      --------
          Net cash used in operating activities.........................................      (84,203)      (61,104)
                                                                                            ---------      --------

Cash flows from investing activities:
     Cash paid for acquired entities, net of cash and cash equivalents received.........       (3,311)           --
     Maturities of investment securities available for sale.............................      308,779       250,867
     Maturities of investment securities held to maturity...............................        1,130         2,126
     Purchases of investment securities available for sale..............................     (219,227)     (429,267)
     Purchases of investment securities held to maturity................................         (509)      (18,523)
     Net decrease (increase) in loans...................................................        7,105       (15,809)
     Recoveries of loans previously charged-off.........................................       12,059        13,539
     Purchases of bank premises and equipment...........................................       (6,718)       (3,565)
     Other investing activities, net....................................................        9,577        12,513
                                                                                            ---------      --------
          Net cash provided by (used in) investing activities...........................      108,885      (188,119)
                                                                                            ---------      --------

Cash flows from financing activities:
     (Decrease) increase in demand and savings deposits.................................       (6,397)       23,751
     Increase (decrease) in time deposits...............................................        7,306        (2,738)
     Decrease in Federal Home Loan Bank advances........................................       (6,000)           --
     (Decrease) increase in securities sold under agreements to repurchase..............      (42,259)      259,069
     Repayments of note payable.........................................................      (15,000)      (17,000)
     Cash paid for sales of branches, net of cash and cash equivalents sold.............           --       (19,353)
     Payment of preferred stock dividends...............................................         (328)         (328)
                                                                                            ---------      --------
          Net cash (used in) provided by financing activities...........................      (62,678)      243,401
                                                                                            ---------      --------
          Net decrease in cash and cash equivalents.....................................      (37,996)       (5,822)
Cash and cash equivalents, beginning of period..........................................      267,110       213,537
                                                                                            ---------      --------
Cash and cash equivalents, end of period................................................    $ 229,114       207,715
                                                                                            =========      ========

Noncash investing and financing activities:
     Loans transferred to other real estate.............................................    $   1,247         2,498
                                                                                            =========      ========

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>




<PAGE>


                                FIRST BANKS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)      BASIS OF PRESENTATION

         The  consolidated   financial  statements  of  First  Banks,  Inc.  and
subsidiaries  (First Banks or the Company) 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 U.S.  generally accepted  accounting  principles and
conform to  predominant  practices  within the banking  industry.  Management of
First  Banks 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 conformity with
U.S. generally accepted accounting principles.  Actual results could differ from
those estimates.  In the opinion of management,  all adjustments,  consisting of
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 and six months ended June 30, 2005 are
not  necessarily  indicative  of the results  that may be expected  for the year
ending December 31, 2005.

         The  consolidated  financial  statements  include  the  accounts of the
parent company and its  subsidiaries,  net of minority  interest,  as more fully
described  below,  and in  Note  2 and  Note  6 to  the  Consolidated  Financial
Statements.  All significant  intercompany  accounts and transactions  have been
eliminated.  Certain reclassifications of 2004 amounts have been made to conform
to the 2005 presentation.

         First Banks operates  through its wholly owned  subsidiary bank holding
company,  The San  Francisco  Company  (SFC),  headquartered  in San  Francisco,
California, and SFC's wholly owned subsidiary bank, First Bank, headquartered in
St. Louis  County,  Missouri.  First Bank  operates  through its branch  banking
offices and subsidiaries, FB Commercial Finance, Inc., Missouri Valley Partners,
Inc. and Small  Business Loan Source LLC (SBLS LLC) which,  except for SBLS LLC,
are wholly owned.

(2)      ACQUISITIONS, INTEGRATION COSTS AND OTHER CORPORATE TRANSACTIONS

         On April  29,  2005,  First  Banks  completed  its  acquisition  of FBA
Bancorp, Inc. (FBA) and its wholly owned subsidiary, First Bank of the Americas,
S.S.B. (FBOTA), in exchange for $10.5 million in cash. The acquisition served to
expand First Banks' banking franchise in Chicago,  Illinois. The transaction was
funded through  internally  generated funds.  FBA was  headquartered in Chicago,
Illinois,  and through FBOTA, operated three banking offices in the southwestern
Chicago  metropolitan  communities  of Back of the  Yards,  Little  Village  and
Cicero.  At the time of the acquisition,  FBA had  consolidated  assets of $73.3
million,  loans, net of unearned discount,  of $54.3 million,  deposits of $55.7
million and stockholders'  equity of $7.1 million. The transaction was accounted
for using the purchase method of accounting and accordingly, the assets acquired
and  liabilities  assumed  were  recorded at their  estimated  fair value on the
acquisition date. The fair value adjustments represent current estimates and are
subject to further  adjustments as the valuation data is finalized.  Preliminary
goodwill,  which is not  deductible  for tax purposes,  was  approximately  $2.2
million,  and the core deposit  intangibles,  which are not  deductible  for tax
purposes and are being  amortized over seven years  utilizing the  straight-line
method,  were approximately  $1.7 million.  FBA was merged with and into SFC and
FBOTA was merged with and into First Bank.

         On April 27,  2005,  First  Banks  executed  an  Agreement  and Plan of
Reorganization  providing for the acquisition of Northway State Bank (NSB).  NSB
is headquartered in Grayslake, Illinois, and operates one banking office located
in Lake County in the northern Chicago metropolitan area. Under the terms of the
agreement, First Banks will acquire NSB for approximately $10.3 million in cash.
The  transaction,  which is subject to regulatory  approvals and the approval of
NSB's  shareholders,  is expected to be completed  during the fourth  quarter of
2005. At June 30, 2005,  NSB reported  assets of  approximately  $48.8  million,
loans, net of unearned  discount,  of approximately  $39.7 million,  deposits of
approximately  $43.3  million and  stockholders'  equity of  approximately  $5.1
million

         On May  2,  2005,  First  Banks  executed  an  Agreement  and  Plan  of
Reorganization providing for the acquisition of International Bank of California
(IBOC).  IBOC is  headquartered in Los Angeles,  California,  and operates seven
banking offices,  including one branch in downtown Los Angeles, four branches in
eastern Los Angeles County, in Alhambra,  Arcadia,  Artesia and Rowland Heights,
one  branch  west of  downtown  Los  Angeles,  and one  branch in  downtown  San
Francisco.  Under the terms of the agreement,  First Banks will acquire IBOC for
approximately  $33.7  million  in cash.  The  transaction,  which is  subject to
regulatory approvals and the approval of IBOC's shareholders,  is expected to be
completed  during the third  quarter of 2005.  At June 30, 2005,  IBOC  reported
assets of  approximately  $158.9 million,  loans, net of unearned  discount,  of
approximately  $118.9  million,  deposits of  approximately  $139.3  million and
stockholders' equity of approximately $18.3 million.
<PAGE>

         SBLS LLC, a newly formed  Nevada-based  limited  liability  company and
subsidiary of First Bank, purchased  substantially all of the assets and assumed
certain liabilities of Small Business Loan Source, Inc. (SBLS), headquartered in
Houston,  Texas, in exchange for cash and certain payments  contingent on future
valuations of specifically  identified  assets,  including  servicing assets and
retained interests in  securitizations,  on August 31, 2004. In conjunction with
this  transaction,  on August  30,  2004,  First Bank  granted to First  Capital
America, Inc. (FCA), a corporation owned by First Banks' Chairman and members of
his immediate family, an option to purchase Membership Interests of SBLS LLC. On
December 31, 2004,  First Bank extended the written  option under the same terms
through March 31, 2005, and on March 31, 2005,  First Bank further  extended the
written  option under the same terms through June 30, 2005.  FCA exercised  this
option on June 30, 2005 and paid First Bank $7.35  million in cash.  As a result
of this  transaction,  SBLS LLC became 51.0% owned by First Bank and 49.0% owned
by FCA.

         On June 10,  2005,  First  Bank  executed  a  Purchase  and  Assumption
Agreement  providing for the  assumption  of certain  deposit  liabilities  of a
branch office of Bank and Trust (B&T), an Illinois  commercial  bank.  Under the
terms of the  agreement,  First Bank will assume all of the deposit  liabilities
maintained at B&T's branch office located in Roodhouse,  Illinois,  for $100,000
in cash. The transaction is expected to be completed during the third quarter of
2005. At June 30, 2005, the deposit  liabilities of the Roodhouse  branch office
were approximately $7.1 million.

         During  the  first  quarter  of  2005,  First  Banks  recorded  certain
acquisition-related  adjustments  pertaining  to  its  acquisition  of  Hillside
Investors,  Ltd. (Hillside) and its wholly owned banking  subsidiary,  CIB Bank,
which was  completed  on  November  30,  2004.  Acquisition-related  adjustments
included additional purchase accounting  adjustments  necessary to appropriately
adjust the  preliminary  goodwill  of $4.3  million  recorded at the time of the
acquisition,  which was based upon current estimates  available at that time, to
reflect the receipt of additional  valuation  data.  The  aggregate  adjustments
resulted  in  a  purchase  price  reallocation  among  goodwill,   core  deposit
intangibles  and bank premises and equipment.  The purchase  price  reallocation
resulted  in the  reallocation  of $3.1  million of  negative  goodwill  to core
deposit  intangibles  and bank  premises and  equipment,  thereby  reducing such
assets by $2.8 million and $2.4  million,  net of the related tax effect of $1.1
million  and  $941,000,   respectively.   Following  the   recognition   of  the
acquisition-related adjustments, goodwill recorded was reduced from $4.3 million
to zero and the core deposit  intangibles,  which are being amortized over seven
years  utilizing the  straight-line  method,  were reduced from $13.4 million to
$10.6 million,  net of the related tax effect. The individual  components of the
$4.3 million  acquisition-related  adjustments  to goodwill and the $3.1 million
purchase price reallocation recorded in the first quarter of 2005 are summarized
as follows:

         >>    a $1.6 million increase in goodwill to adjust time deposits,  net
               of the related tax effect, to their estimated fair value;

         >>    a $967,000  increase  in  goodwill  to adjust  other real  estate
               owned,  net of the  related  tax effect,  to its  estimated  fair
               value;

         >>    a $10.0  million  reduction  in goodwill to adjust loans held for
               sale,  net of the  related tax effect,  to their  estimated  fair
               value.  These  adjustments  were based  upon the  receipt of loan
               payoffs  on  certain   loans  held  for  sale,   in  addition  to
               significantly  higher  sales prices  received  over and above the
               original  third-party  bid  estimates  for certain loans held for
               sale. All of the acquired  nonperforming loans that had been held
               for sale as of December 31, 2004 had either been sold or paid off
               as  of  March  31,  2005,   with  the  exception  of  one  credit
               relationship, which was subsequently sold in April 2005;

         >>    a $1.7  million  increase  in  goodwill,  net of the  related tax
               effect,  and a related  decrease in core deposit  intangibles  of
               $2.8 million, resulting from the purchase price reallocation; and

         >>    a $1.4  million  increase  in  goodwill,  net of the  related tax
               effect,  and a related decrease in bank premises and equipment of
               $2.4 million, resulting from the purchase price reallocation.

         First Banks accrues certain costs  associated with its  acquisitions as
of the respective consummation dates. The accrued costs relate to adjustments to
the staffing levels of the acquired  entities or to the anticipated  termination
of information  technology or item processing contracts of the acquired entities
prior to their stated  contractual  expiration dates. The most significant costs
that First  Banks  incurs  relate to salary  continuation  agreements,  or other
similar agreements,  of executive  management and certain other employees of the
acquired  entities  that were in place  prior to the  acquisition  dates.  These
agreements  provide for payments  over periods  ranging from two to 15 years and
are triggered as a result of the change in control of the acquired entity. Other

<PAGE>

severance  benefits for employees that are  terminated in  conjunction  with the
integration of the acquired  entities into First Banks' existing  operations are
normally paid to the recipients  within 90 days of the  respective  consummation
date and are expensed in the consolidated  statements of income as incurred. The
accrued severance balance of $662,000,  as summarized in the following table, is
comprised of contractual obligations under salary continuation agreements to six
individuals with remaining terms ranging from  approximately two to 11 years. As
the  obligation  to make  payments  under  these  agreements  is  accrued at the
consummation  date,  such  payments  do not have any impact on the  consolidated
statements of income. First Banks also incurs costs associated with acquisitions
that are expensed in the consolidated  statements of income.  These costs relate
principally to additional  costs incurred in  conjunction  with the  information
technology conversions of the respective entities.

         A  summary  of  the  cumulative   acquisition  and  integration   costs
attributable  to  the  Company's  acquisitions,  which  were  accrued  as of the
consummation  dates  of the  respective  acquisition,  is  listed  below.  These
acquisition and integration costs are reflected in accrued and other liabilities
in the consolidated balance sheets.
<TABLE>
<CAPTION>

                                                                                            Information
                                                                             Severance    Technology Fees     Total
                                                                             ---------    ---------------     -----
                                                                                (dollars expressed in thousands)

<S>                                                                            <C>                <C>            <C>
         Balance at December 31, 2004..................................        $ 761              --            761
         Six Months Ended June 30, 2005:
           Amounts accrued at acquisition date.........................          526             127            653
           Payments....................................................         (625)           (127)          (752)
                                                                               -----           -----          -----
         Balance at June 30, 2005......................................        $ 662              --            662
                                                                               =====           =====          =====

         On January  18,  2005,  First Bank  opened a de novo  branch  office in
Farmington,  Missouri, and on March 25, 2005, First Bank completed the merger of
two branch offices in Hillside,  located in the Chicago,  Illinois  metropolitan
area.

(3)      INTANGIBLE ASSETS ASSOCIATED WITH THE PURCHASE OF SUBSIDIARIES, NET  OF
         AMORTIZATION

         Intangible assets associated with the purchase of subsidiaries,  net of
amortization,  were comprised of the following at June 30, 2005 and December 31,
2004:

                                                        June 30, 2005                 December 31, 2004
                                                 --------------------------     ---------------------------
                                                   Gross                          Gross
                                                 Carrying      Accumulated      Carrying       Accumulated
                                                  Amount       Amortization      Amount        Amortization
                                                  ------       ------------      ------        ------------
                                                                (dollars expressed in thousands)

     Amortized intangible assets:
         Core deposit intangibles..............  $ 31,784          (9,287)        32,823           (7,003)
         Goodwill associated with
           purchases of branch offices.........     2,210          (1,074)         2,210           (1,003)
                                                 --------        --------        -------          -------
              Total............................  $ 33,994         (10,361)        35,033           (8,006)
                                                 ========        ========        =======          =======

     Unamortized intangible assets:
         Goodwill associated with the
           purchase of subsidiaries............  $153,528                        155,642
                                                 ========                        =======
</TABLE>



<PAGE>


         Amortization   of   intangibles   associated   with  the   purchase  of
subsidiaries  and branch offices was $1.1 million and $2.4 million for the three
and six months ended June 30, 2005, respectively,  and $658,000 and $1.3 million
for the comparable periods in 2004.  Amortization of intangibles associated with
the purchase of subsidiaries, including amortization of core deposit intangibles
and branch office purchases, has been estimated in the following table, and does
not take into  consideration  any pending or potential  future  acquisitions  or
branch office purchases.
<TABLE>
<CAPTION>

                                                                                 (dollars expressed in thousands)
                  Year ending December 31:
<S>                   <C>                                                                     <C>
                      2005 remaining......................................................    $ 2,334
                      2006................................................................      4,668
                      2007................................................................      4,668
                      2008................................................................      4,668
                      2009 ...............................................................      2,765
                      2010 ...............................................................      2,304
                      Thereafter..........................................................      2,226
                                                                                              -------
                         Total............................................................    $23,633
                                                                                              =======

         Changes in the carrying amount of goodwill for the three and six months ended June 30, 2005 and 2004 were
as follows:

                                                                    Three Months Ended               Six Months Ended
                                                                         June 30,                        June 30,
                                                                 -----------------------          -----------------------
                                                                    2005          2004              2005           2004
                                                                    ----          ----              ----           ----
                                                                              (dollars expressed in thousands)

           Balance, beginning of period......................... $ 152,529       145,513           156,849       145,548
           Goodwill acquired during period......................     2,217            --             2,217            --
           Acquisition-related adjustments (1)..................       (46)         (222)           (4,331)         (222)
           Amortization - purchases of branch offices...........       (36)          (36)              (71)          (71)
                                                                 ---------      --------          --------      --------
           Balance, end of period............................... $ 154,664       145,255           154,664       145,255
                                                                 =========      ========          ========      ========
           ------------------
           (1)  Acquisition-related  adjustments of $4.3 million recorded in the  first  quarter of 2005  pertain to the
                acquisition of CIB Bank, as further described in Note 2 to the Consolidated Financial Statements.

(4)      SERVICING RIGHTS

         Mortgage  Banking  Activities.  At June 30, 2005 and December 31, 2004,
First Banks serviced  mortgage  loans for others  amounting to $1.07 billion and
$1.06  billion,  respectively.  Changes in  mortgage  servicing  rights,  net of
amortization,  for the three and six months ended June 30, 2005 and 2004 were as
follows:

                                                                    Three Months Ended                Six Months Ended
                                                                         June 30,                         June 30,
                                                                   ---------------------           ----------------------
                                                                     2005         2004               2005          2004
                                                                     ----         ----               ----          ----
                                                                              (dollars expressed in thousands)

           Balance, beginning of period........................    $ 9,181       13,960             10,242        15,408
           Servicing rights acquired during the period.........        435           --                435            --
           Originated servicing rights.........................        188          465                401           819
           Amortization........................................     (1,302)      (1,892)            (2,576)       (3,694)
                                                                   -------       ------            -------       -------
           Balance, end of period..............................    $ 8,502       12,533              8,502        12,533
                                                                   =======       ======            =======       =======
</TABLE>
         The fair value of mortgage  servicing  rights was  approximately  $14.0
million  and $17.2  million at June 30, 2005 and 2004,  respectively,  and $14.6
million at December 31, 2004. The excess of the fair value of mortgage servicing
rights over the carrying value was  approximately  $5.5 million and $4.7 million
at June 30, 2005 and 2004, respectively, and $4.4 million at December 31, 2004.




<PAGE>

<TABLE>
<CAPTION>

         Amortization  of  mortgage  servicing  rights at June 30, 2005 has been
estimated in the following table:

                                                              (dollars expressed in thousands)

            Year ending December 31:
<S>             <C>                                                     <C>
                2005 remaining.......................................   $  1,875
                2006.................................................      3,227
                2007.................................................      1,936
                2008.................................................        751
                2009.................................................        713
                                                                        --------
                     Total...........................................   $  8,502
                                                                        ========

         Other  Servicing  Activities.  At June 30, 2005 and  December 31, 2004,
First Banks serviced United States Small Business Administration (SBA) loans for
others amounting to $169.6 million and $174.7 million, respectively.  Changes in
SBA servicing  rights,  net of amortization,  for the three and six months ended
June 30, 2005 were as follows:

                                                              Three Months Ended          Six Months Ended
                                                                 June 30, 2005              June 30, 2005
                                                              ------------------          ----------------
                                                                     (dollars expressed in thousands)

         Balance, beginning of period.......................      $ 12,595                     13,013
         Originated servicing rights........................           348                        539
         Amortization.......................................          (592)                    (1,201)
                                                                  --------                    -------
         Balance, end of period.............................      $ 12,351                     12,351
                                                                  ========                    =======

         The fair value of SBA servicing rights was approximately  $12.7 million
at June 30, 2005 and $13.0 million at December 31, 2004.  The excess of the fair
value of SBA servicing rights over the carrying value was approximately $386,000
at June 30, 2005 and zero at December 31, 2004.

         Amortization  of SBA  servicing  rights  at  June  30,  2005  has  been
estimated in the following table:

                                                                                 (dollars expressed in thousands)

                  Year ending December 31:
                      2005 remaining......................................................   $  1,126
                      2006................................................................      1,974
                      2007................................................................      1,663
                      2008................................................................      1,397
                      2009................................................................      1,171
                      2010................................................................        979
                      Thereafter..........................................................      4,041
                                                                                             --------
                           Total..........................................................   $ 12,351
                                                                                             ========
</TABLE>


<PAGE>



(5)      EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>

         The following is a reconciliation of the basic and diluted earnings per
share computations for the three and six months ended June 30, 2005 and 2004:

                                                                               Income             Shares         Per Share
                                                                             (numerator)      (denominator)        Amount
                                                                             -----------      -------------        ------
                                                                         (dollars in thousands, except share and per share data)

     Three months ended June 30, 2005:
<S>                                                                          <C>                  <C>            <C>
         Basic EPS - income available to common stockholders.............    $  26,714            23,661         $ 1,129.05
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          128               512             (18.63)
                                                                             ---------           -------         ----------
         Diluted EPS - income available to common stockholders...........    $  26,842            24,173         $ 1,110.42
                                                                             =========           =======         ==========

     Three months ended June 30, 2004:
         Basic EPS - income available to common stockholders.............    $  25,871            23,661         $ 1,093.42
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          128               546             (19.36)
                                                                             ---------           -------         ----------
         Diluted EPS - income available to common stockholders...........    $  25,999            24,207         $ 1,074.06
                                                                             =========           =======         ==========

     Six months ended June 30, 2005:
         Basic EPS - income available to common stockholders.............    $  48,645            23,661         $ 2,055.92
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          321               516             (30.62)
                                                                             ---------           -------         ----------
         Diluted EPS - income available to common stockholders...........    $  48,966            24,177         $ 2,025.30
                                                                             =========           =======         ==========

     Six months ended June 30, 2004:
         Basic EPS - income available to common stockholders.............    $  43,944            23,661         $ 1,857.23
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          321               565             (30.10)
                                                                             ---------           -------         ----------
         Diluted EPS - income available to common stockholders...........    $  44,265            24,226         $ 1,827.13
                                                                             =========           =======         ==========
</TABLE>

(6)      TRANSACTIONS WITH RELATED PARTIES

         First Services,  L.P., a limited partnership  indirectly owned by First
Banks'  Chairman  and  members of his  immediate  family,  provides  information
technology  and  various  related   services  to  First  Banks,   Inc.  and  its
subsidiaries.  Fees paid under  agreements with First  Services,  L.P. were $7.9
million  and $14.7  million  for the three and six months  ended June 30,  2005,
respectively,  and $6.6 million and $13.3 million for the comparable  periods in
2004.  First Services,  L.P. leases  information  technology and other equipment
from First Bank.  During each of the three month periods ended June 30, 2005 and
2004, First Services,  L.P. paid First Bank $1.1 million, and during each of the
six months ended June 30, 2005 and 2004,  First Services,  L.P. paid First Banks
$2.2 million in rental fees for the use of that equipment.

         First Brokerage America, L.L.C., a limited liability company indirectly
owned by First Banks'  Chairman and members of his  immediate  family,  received
approximately  $544,000 and $1.2 million for the three and six months ended June
30, 2005, respectively, and $876,000 and $1.8 million for the comparable periods
in  2004,  in  commissions  paid  by  unaffiliated  third-party  companies.  The
commissions  received were primarily in connection  with the sales of annuities,
securities and other insurance products to customers of First Bank.

         First Title Guaranty LLC (First  Title),  a limited  liability  company
established and administered by and for the benefit of First Banks' Chairman and
members of his immediate family, received approximately $96,000 and $183,000 for
the three and six months  ended June 30,  2005,  respectively,  and $105,000 and
$204,000  for the  comparable  periods  in 2004,  in  commissions  for  policies
purchased  by  First  Banks  or  customers  of  First  Bank  from  unaffiliated,
third-party  insurers.  The  insurance  premiums  on  which  the  aforementioned
commissions  were  earned  were  competitively  bid,  and First  Banks deems the
commissions  First Title earned from  unaffiliated  third-party  companies to be
comparable to those that would have been earned by an  unaffiliated  third-party
agent.
<PAGE>

         First Bank leases certain of its in-store  branch offices and ATM sites
from Dierbergs Markets,  Inc., a grocery store chain headquartered in St. Louis,
Missouri  that is owned and  operated by Robert J.  Dierberg  and members of his
immediate  family.  Robert J. Dierberg is the brother of First Banks'  Chairman.
Total rent expense incurred by First Bank under the lease  obligation  contracts
with  Dierbergs  Markets,  Inc.  was $86,000 and  $165,000 for the three and six
months  ended June 30,  2005,  respectively,  and $75,000 and  $146,000  for the
comparable periods in 2004.

         First  Bank  has had in the  past,  and may  have in the  future,  loan
transactions   in  the  ordinary  course  of  business  with  its  directors  or
affiliates.  These  loan  transactions  have been on the same  terms,  including
interest rates and  collateral,  as those  prevailing at the time for comparable
transactions with unaffiliated  persons and did not involve more than the normal
risk  of  collectibility  or  present  other  unfavorable  features.   Loans  to
directors,  their  affiliates and executive  officers of First Banks,  Inc. were
approximately  $27.7 million and $31.0 million at June 30, 2005 and December 31,
2004,  respectively.  First Bank does not extend  credit to its  officers  or to
officers of First Banks,  Inc., except extensions of credit secured by mortgages
on personal  residences,  loans to purchase  automobiles,  personal  credit card
accounts and deposit account overdraft  protection under a plan whereby a credit
limit has been  established  in  accordance  with First Bank's  standard  credit
criteria.

         On August 30, 2004,  First Bank granted to FCA, a corporation  owned by
First Banks' Chairman and members of his immediate  family,  a written option to
purchase  735  Membership  Interests of SBLS LLC, a newly  organized  and wholly
owned  limited  liability  company  of First  Bank,  at a price of  $10,000  per
Membership Interest,  or $7.35 million in aggregate.  The option could have been
exercised  by FCA at any time prior to December  31,  2004 by written  notice to
First Bank of the  intention to exercise the option and payment to First Bank of
$7.35  million.  On December 31, 2004,  First Bank  extended the written  option
under the same terms through March 31, 2005,  and on March 31, 2005,  First Bank
further  extended the written option under the same terms through June 30, 2005.
On June 30, 2005, FCA exercised this option and paid First Bank $7.35 million in
cash.  Consequently,  SBLS LLC became 51.0% owned by First Bank and 49% owned by
FCA.

         On June 30,  2005,  SBLS LLC  executed a  Multi-Party  Agreement by and
among SBLS LLC,  First Bank,  Colson  Services Corp. and the SBA, and a Loan and
Security  Agreement  by and  among  First  Bank and the SBA  (collectively,  the
Agreement)  that provides a warehouse line of credit for loan funding  purposes.
The  Agreement  provides for a maximum  credit line of $50.0  million and has an
initial term of three years with a maturity date of June 30, 2008. At the end of
the first year, First Bank, at its option, may extend the existing maturity date
by one  additional  year,  subject to certain  conditions.  Interest  is payable
monthly, in arrears, on the outstanding balances at a rate equal to First Bank's
prime lending rate.  Advances  under the Agreement are secured by the assignment
of the  majority of the assets of SBLS LLC. The balance  outstanding  under this
line of credit was $32.7 million at June 30, 2005.

(7)      REGULATORY CAPITAL

         First  Banks and First Bank are subject to various  regulatory  capital
requirements administered by the federal and state banking agencies.  Failure to
meet minimum capital  requirements can initiate  certain  mandatory and possibly
additional discretionary actions by regulators that, if undertaken, could have a
direct  material  effect on First Banks'  financial  statements.  Under  capital
adequacy  guidelines and the regulatory  framework for prompt corrective action,
First Banks and First Bank must meet specific  capital  guidelines  that involve
quantitative measures of assets, liabilities and certain off-balance sheet items
as  calculated  under  regulatory  accounting  practices.  Capital  amounts  and
classifications  are also subject to  qualitative  judgments  by the  regulators
about components, risk weightings and other factors.

         Quantitative  measures  established  by  regulation  to ensure  capital
adequacy  require  First  Banks and First Bank to maintain  minimum  amounts and
ratios  of  total  and  Tier  I  capital  (as  defined  in the  regulations)  to
risk-weighted  assets,  and of Tier I  capital  to  average  assets.  Management
believes,  as of June 30,  2005,  First  Banks  and  First  Bank  were each well
capitalized. As of June 30, 2005, the most recent notification from First Banks'
primary  regulator  categorized  First Banks and First Bank as well  capitalized
under the regulatory  framework for prompt corrective  action. To be categorized
as well  capitalized,  First Banks and First Bank must  maintain  minimum  total
risk-based,  Tier I  risk-based  and Tier I leverage  ratios as set forth in the
table below.



<PAGE>
<TABLE>
<CAPTION>


         At June 30, 2005 and December  31, 2004,  First Banks' and First Bank's
required and actual capital ratios were as follows:

                                                                         Actual                For          To Be Well
                                                                 -----------------------     Capital     Capitalized Under
                                                                 June 30,   December 31,     Adequacy    Prompt Corrective
                                                                   2005         2004         Purposes    Action Provisions
                                                                   ----         ----         --------    -----------------

         Total capital (to risk-weighted assets):
<S>                                                                <C>          <C>             <C>           <C>
              First Banks.....................................     11.23%       10.61%          8.0%          10.0%
              First Bank......................................     10.90        10.73           8.0           10.0

         Tier 1 capital (to risk-weighted assets):
              First Banks.....................................      9.29         8.43           4.0            6.0
              First Bank......................................      9.64         9.47           4.0            6.0

         Tier 1 capital (to average assets):
              First Banks.....................................      8.29         7.89           3.0            5.0
              First Bank......................................      8.62         8.86           3.0            5.0
</TABLE>

         On March 1, 2005, the Board of Governors of the Federal  Reserve System
(Board)  adopted a final rule,  Risk-Based  Capital  Standards:  Trust Preferred
Securities and the Definition of Capital, which allows for the continued limited
inclusion of trust  preferred  securities  in Tier 1 capital.  The Board's final
rule  limits  restricted  core  capital  elements  to 25% of the sum of all core
capital elements,  including  restricted core capital elements,  net of goodwill
less any associated  deferred tax liability.  Amounts of restricted core capital
elements in excess of these limits may  generally be included in Tier 2 capital.
Amounts of  qualifying  trust  preferred  securities  and  cumulative  perpetual
preferred  stock in excess of the 25% limit may be  included  in Tier 2 capital,
but limited,  together with subordinated debt and limited-life  preferred stock,
to 50% of Tier 1 capital. In addition,  the final rule provides that in the last
five  years  before  the  maturity  of the  underlying  subordinated  note,  the
outstanding amount of the associated trust preferred securities is excluded from
Tier 1 capital and included in Tier 2 capital, subject to one-fifth amortization
per year.  The final rule  provides for a five-year  transition  period,  ending
March 31, 2009, for the application of the quantitative  limits. Until March 31,
2009, the aggregate amount of qualifying  cumulative  perpetual  preferred stock
and qualifying trust preferred securities that may be included in Tier 1 capital
is limited to 25% of the sum of the following core capital elements:  qualifying
common stockholders' equity,  qualifying  noncumulative and cumulative perpetual
preferred  stock,  qualifying  minority  interest  in  the  equity  accounts  of
consolidated subsidiaries and qualifying trust preferred securities. First Banks
has evaluated the impact of the final rule on the Company's  financial condition
and results of  operations,  and determined  the  implementation  of the Board's
final rule will reduce First Banks' regulatory capital ratios.  Upon application
of the final  rules that will be in effect in March  2009,  First  Banks' Tier 1
capital (to  risk-weighted  assets) and Tier 1 capital (to average assets) would
have been 8.60% and 7.67%, respectively, at June 30, 2005.

(8)      BUSINESS SEGMENT RESULTS

         First Banks'  business  segment is First Bank. The reportable  business
segment is consistent with the management  structure of First Banks,  First Bank
and the internal reporting system that monitors performance. First Bank provides
similar products and services in its defined geographic areas through its branch
network.  The products and services  offered include a broad range of commercial
and personal deposit products,  including demand, savings, money market and time
deposit  accounts.  In addition,  First Bank markets combined basic services for
various  customer  groups,   including   packaged  accounts  for  more  affluent
customers,  and sweep accounts,  lock-box deposits and cash management  products
for  commercial  customers.  First Bank also offers both consumer and commercial
loans.  Consumer  lending  includes  residential  real  estate,  home equity and
installment  lending.  Commercial  lending  includes  commercial,  financial and
agricultural loans, real estate  construction and development loans,  commercial
real  estate  loans,  asset-based  loans and trade  financing.  Other  financial
services   include   mortgage   banking,   debit  cards,   brokerage   services,
credit-related insurance, internet banking, automated teller machines, telephone
banking,  safe deposit boxes and trust,  private banking and institutional money
management  services.  The revenues generated by First Bank consist primarily of
interest income, generated from the loan and investment security portfolios, and
service charges and fees, generated from the deposit products and services.  The
geographic areas include eastern Missouri, Illinois, including Chicago, southern
and northern California and Houston, Dallas, Irving, McKinney and Denton, Texas.
The products and services are offered to customers primarily within First Banks'
respective geographic areas.



<PAGE>


         The business  segment results are consistent with First Banks' internal
reporting system and, in all material  respects,  with U.S.  generally  accepted
accounting  principles and practices  predominant in the banking  industry.  The
business segment results are summarized as follows:

<TABLE>
<CAPTION>
                                                                          Corporate, Other
                                                                          and Intercompany
                                                  First Bank              Reclassifications (1)        Consolidated Totals
                                          --------------------------   -------------------------     -----------------------
                                            June 30,   December 31,     June 30,   December 31,      June 30,   December 31,
                                              2005         2004           2005         2004            2005         2004
                                              ----         ----           ----         ----            ----         ----
                                                                   (dollars expressed in thousands)

Balance sheet information:

<S>                                       <C>           <C>              <C>           <C>           <C>          <C>
Investment securities...................  $1,736,139    1,803,454        12,069         9,895        1,748,208    1,813,349
Loans, net of unearned discount.........   6,309,680    6,137,968            --            --        6,309,680    6,137,968
Goodwill................................     154,664      156,849            --            --          154,664      156,849
Total assets............................   8,761,233    8,720,331        15,143        12,510        8,776,376    8,732,841
Deposits................................   7,238,045    7,161,636       (27,315)       (9,666)       7,210,730    7,151,970
Note payable............................          --           --            --        15,000               --       15,000
Subordinated debentures.................          --           --       275,213       273,300          275,213      273,300
Stockholders' equity....................     886,174      877,473      (242,950)     (276,580)         643,224      600,893
                                          ==========    =========      ========      ========        =========    =========

                                                                         Corporate, Other
                                                                         and Intercompany
                                                 First Bank              Reclassifications (1)         Consolidated Totals
                                          ------------------------     ------------------------      ----------------------
                                              Three Months Ended          Three Months Ended           Three Months Ended
                                                   June 30,                    June 30,                     June 30,
                                          ------------------------     ------------------------      ----------------------
                                              2005          2004         2005           2004          2005           2004
                                              ----          ----         ----           ----          ----           ----

Income statement information:

Interest income.........................  $  117,008       96,446           180           139          117,188       96,585
Interest expense........................      33,917       17,399         5,450         3,580           39,367       20,979
                                          ----------    ---------      --------      --------        ---------    ---------
     Net interest income................      83,091       79,047        (5,270)       (3,441)          77,821       75,606
Provision for loan losses...............      (8,000)       3,000            --            --           (8,000)       3,000
                                          ----------    ---------      --------      --------        ---------    ---------
     Net interest income after
       provision for loan losses........      91,091       76,047        (5,270)       (3,441)          85,821       72,606
                                          ----------    ---------      --------      --------        ---------    ---------
Noninterest income......................      25,988       20,250          (185)         (146)          25,803       20,104
Noninterest expense.....................      69,179       54,388           594         1,017           69,773       55,405
                                          ----------    ---------      --------      --------        ---------    ---------
     Income before provision for
       income taxes.....................      47,900       41,909        (6,049)       (4,604)          41,851       37,305
Provision for income taxes..............      17,114       15,706        (2,109)       (4,404)          15,005       11,302
                                          ----------    ---------      --------      --------        ---------    ---------
     Net income.........................  $   30,786       26,203        (3,940)         (200)          26,846       26,003
                                          ==========    =========      ========      ========        =========    =========
<PAGE>

                                                                          Corporate, Other
                                                                          and Intercompany
                                                  First Bank              Reclassifications (1)        Consolidated Totals
                                           -----------------------     ------------------------      ----------------------
                                               Six Months Ended            Six Months Ended             Six Months Ended
                                                   June 30,                    June 30,                     June 30,
                                           -----------------------     ------------------------      ----------------------
                                              2005         2004          2005           2004           2005          2004
                                              ----         ----          ----           ----           ----          ----

Income statement information:

Interest income.......................... $  229,070      192,433           346           279          229,416      192,712
Interest expense.........................     63,196       35,246        10,320         7,207           73,516       42,453
                                          ----------    ---------      --------      --------        ---------    ---------
     Net interest income.................    165,874      157,187        (9,974)       (6,928)         155,900      150,259
Provision for loan losses................     (8,000)      15,750            --            --           (8,000)      15,750
                                          ----------    ---------      --------      --------        ---------    ---------
     Net interest income after
       provision for loan losses.........    173,874      141,437        (9,974)       (6,928)         163,900      134,509
                                          ----------    ---------      --------      --------        ---------    ---------
Noninterest income.......................     47,340       40,969          (436)         (306)          46,904       40,663
Noninterest expense......................    131,243      105,905         2,285         2,102          133,528      108,007
                                          ----------    ---------      --------      --------        ---------    ---------
     Income before provision for
       income taxes......................     89,971       76,501       (12,695)       (9,336)          77,276       67,165
Provision for income taxes...............     32,734       28,950        (4,431)       (6,057)          28,303       22,893
                                          ----------    ---------      --------      --------        ---------    ---------
     Net income.......................... $   57,237       47,551        (8,264)       (3,279)          48,973       44,272
                                          ==========    =========      ========      ========        =========    =========
------------------
 (1)  Corporate  and other  includes  $3.5  million and $2.3 million of interest  expense on subordinated debentures, after
      applicable income tax benefits of $1.9  million and $1.2  million, for the three months ended June 30, 2005 and 2004,
      respectively.  For the six months  ended  June 30,  2005 and 2004,  corporate  and other  includes  $6.6  million and
      $4.6  million of interest  expense on subordinated debentures,  after applicable income tax benefits of  $3.5 million
      and $2.5 million, respectively.

</TABLE>

(9)      OTHER BORROWINGS

         Other  borrowings  were comprised of the following at June 30, 2005 and
December 31, 2004:
<TABLE>
<CAPTION>

                                                                                      June 30,        December 31,
                                                                                        2005              2004
                                                                                     ---------        ------------
                                                                                  (dollars expressed in thousands)

         Securities sold under agreements to repurchase:
<S>                                                                                  <C>                <C>
              Daily...............................................................   $ 166,847          209,106
              Term................................................................     350,000          350,000
         FHLB advances............................................................      39,444           35,644
                                                                                     ---------          -------
                  Total other borrowings..........................................   $ 556,291          594,750
                                                                                     =========          =======
</TABLE>
<PAGE>

         In accordance with the Company's interest rate risk management program,
First Bank  modified its term  repurchase  agreements  under  master  repurchase
agreements  with  unaffiliated  third parties on March 21, 2005 to terminate the
interest rate cap agreements  embedded within the agreements and  simultaneously
enter into interest rate floor agreements,  also embedded within the agreements.
These modifications resulted in adjustments to the interest rate spread to LIBOR
for the agreements,  as set forth in the table below.  The modified terms of the
repurchase  agreements  became  effective  immediately  following the respective
quarterly  scheduled  interest  payment  dates that  occurred  during the second
quarter  of 2005.  First  Bank did not incur any costs in  conjunction  with the
modifications of the agreements.

         The maturity  dates,  par amounts,  interest  rate spreads and interest
rate floor/cap  strike prices on First Bank's term  repurchase  agreements as of
June 30, 2005 and December 31, 2004 were as follows:
<TABLE>
<CAPTION>

                                                                    Par         Interest Rate       Interest Rate Floor/
                     Maturity Date                                 Amount       Spread (1)(2)      Cap Strike Price (1)(2)
                     -------------                                 ------       -------------      -----------------------
                                                                        (dollars expressed in thousands)

         June 30, 2005:
<S>                                                              <C>            <C>                     <C>
              August 15, 2006.................................   $  50,000      LIBOR + 0.4600%         3.00% / Floor
              January 12, 2007................................     150,000      LIBOR + 0.0050%         3.00% / Floor
              June 14, 2007...................................      50,000      LIBOR - 0.3300%         3.00% / Floor
              June 14, 2007...................................      50,000      LIBOR - 0.3400%         3.00% / Floor
              August 1, 2007..................................      50,000      LIBOR + 0.0800%         3.00% / Floor
                                                                 ---------
                                                                 $ 350,000
                                                                 =========

         December 31, 2004:
              August 15, 2006.................................   $  50,000      LIBOR - 0.8250%         3.00% / Cap
              January 12, 2007................................     150,000      LIBOR - 0.8350%         3.50% / Cap
              June 14, 2007...................................      50,000      LIBOR - 0.6000%         5.00% / Cap
              June 14, 2007...................................      50,000      LIBOR - 0.6100%         5.00% / Cap
              August 1, 2007..................................      50,000      LIBOR - 0.9150%         3.50% / Cap
                                                                 ---------
                                                                 $ 350,000
                                                                 =========
         -------------------------
         (1)  As of June 30, 2005, the interest rates paid on the term repurchase agreements were based on the three-month
              London Interbank Offering Rate reset in arrears plus or minus the spread amount shown above minus a floating
              amount equal to the differential between the three-month London Interbank Offering Rate reset in arrears and
              the strike price shown above, if the three-month London Interbank Offering Rate reset in arrears falls below
              the strike price associated with the interest rate floor agreements.
         (2)  As of December 31, 2004, the interest rates paid on the  term repurchase agreements were based on the three-
              month London Interbank Offering Rate reset in arrears minus the spread amount shown  above  plus a  floating
              amount equal to the differential between the three-month London Interbank Offering Rate reset in arrears and
              the strike price shown above, if the three-month London Interbank Offering Rate  reset  in  arrears exceeded
              the strike price associated with the interest rate cap agreements.
</TABLE>
<PAGE>

(10)          CONTINGENT LIABILITIES

         In October  2000,  First Banks  entered  into two  continuing  guaranty
contracts.  For value  received,  and for the purpose of inducing a pension fund
and its  trustees  and a welfare  fund and its  trustees  (the Funds) to conduct
business with Missouri Valley Partners,  Inc. (MVP), First Bank's  institutional
investment  management  subsidiary,  First Banks irrevocably and unconditionally
guaranteed payment of and promised to pay to each of the Funds any amounts up to
the sum of $5.0 million to the extent MVP is liable to the Funds for a breach of
the Investment  Management Agreements (including the Investment Policy Statement
and  Investment  Guidelines),  by and  between  MVP and  the  Funds  and/or  any
violation of the Employee  Retirement  Income  Security Act by MVP  resulting in
liability  to  the  Funds.  The  guaranties  are  continuing  guaranties  of all
obligations  that may arise for  transactions  occurring prior to termination of
the Investment  Management  Agreements  and are coexistent  with the term of the
Investment Management  Agreements.  The Investment Management Agreements have no
specified  term but may be  terminated  at any time upon  written  notice by the
Trustees or, at First  Banks'  option,  upon thirty days  written  notice to the
Trustees. In the event of termination of the Investment  Management  Agreements,
such  termination  shall  have no effect on the  liability  of First  Banks with
respect to obligations  incurred  before such  termination.  The  obligations of
First Banks are joint and several  with those of MVP.  First Banks does not have
any recourse  provisions  that would enable it to recover from third parties any
amounts  paid  under the  contracts  nor does  First  Banks  hold any  assets as
collateral that, upon occurrence of a required payment under the contract, could
be  liquidated  to recover all or a portion of the  amount(s)  paid. At June 30,
2005 and  December 31,  2004,  First Banks had not recorded a liability  for the
obligations  associated  with these guaranty  contracts as the  likelihood  that
First Banks will be required to make payments under the contracts is remote.

         On June 30,  2004,  First  Bank  completed  the  sale of a  significant
portion of the leases in its commercial leasing  portfolio.  In conjunction with
the  transaction,  First Bank  recorded a liability of $2.0 million for recourse
obligations  related to the  completion of the sale. For value  received,  First
Bank, as seller,  indemnified  the buyer of certain leases from any liability or
loss   resulting   from   defaults   subsequent   to  the  sale.   First  Bank's
indemnification  for  the  recourse   obligations  is  limited  to  a  specified
percentage,  ranging from 15% to 25%, of the aggregate  lease  purchase price of
specific  pools of leases sold. As of June 30, 2005 and December 31, 2004,  this
liability was $1.1 million and $1.6 million,  respectively,  reflecting a change
in the estimated  probable loss based upon the  performance of the portfolio and
reductions in the related lease  balances for the specific  pools of leases sold
from borrower payments or repayments.

         On August 31, 2004, SBLS LLC acquired  substantially  all of the assets
and assumed certain liabilities of SBLS. The Amended and Restated Asset Purchase
Agreement (Asset Purchase  Agreement)  governing this  transaction  provides for
certain payments to the seller  contingent on future  valuations of specifically
identified  assets,   including  servicing  assets  and  retained  interests  in
securitizations.  As of June 30, 2005 and December  31,  2004,  SBLS LLC had not
recorded a  liability  for the  obligations  associated  with  these  contingent
payments,  as the  likelihood  that SBLS LLC will be required  to make  payments
under the Asset Purchase Agreement is not ascertainable at the present time.
<PAGE>

(11)     SUBSEQUENT EVENTS

         On August 11,  2005,  First Banks  entered into an Amended and Restated
Secured Credit  Agreement with a group of  unaffiliated  financial  institutions
(Credit  Agreement)  in the  amount  of $122.5  million.  The  Credit  Agreement
replaced a secured  credit  agreement  dated August 14, 2003,  and  subsequently
amended on August 12, 2004, that provided a $75.0 million  revolving credit line
and a $25.0 million letter of credit  facility.  The Credit  Agreement  contains
material  changes to the structure and terms of the  financing  arrangement,  of
most significance is the addition of a term loan. The Credit Agreement  provides
a $15.0 million  revolving credit facility  (Revolving  Credit),  a $7.5 million
letter of credit  facility (LC Facility) and a $100.0 million term loan facility
(Term Loan).  Interest is payable on outstanding  principal loan balances of the
Revolving  Credit at a floating rate equal to either the lender's prime rate or,
at First Banks' option,  the London Interbank  Offering Rate  (Eurodollar  Rate)
plus a margin  determined by the outstanding  loan balances and First Banks' net
income  for  the  preceding  four  calendar  quarters.   If  the  loan  balances
outstanding  under Revolving Credit are accruing at the prime rate,  interest is
paid monthly.  If the loan balances  outstanding  under the Revolving Credit are
accruing at the  Eurodollar  Rate,  interest is payable  based on the one,  two,
three or six-month  Eurodollar  Rate,  as selected by First  Banks.  Interest is
payable on  outstanding  principal  loan balances of the Term Loan at a floating
rate equal to the Eurodollar  Rate plus a margin  determined by the  outstanding
loan  balances  and First  Banks'  net income for the  preceding  four  calendar
quarters. First Banks borrowed $80.0 million on the Term Loan on August 11, 2005
and  will  borrow  the  remaining  $20.0  million  on  November  11,  2005.  The
outstanding principal balance of the Term Loan is payable in ten equal quarterly
installments of $5.0 million commencing on March 31, 2006, with the remainder of
the Term Loan balance to be repaid in full, including any unpaid interest,  upon
maturity.  Amounts may be borrowed  under the Revolving  Credit until August 10,
2006, at which time the principal and interest  outstanding  is due and payable.
The Credit Agreement requires  maintenance of certain minimum capital ratios for
First Banks and First Bank,  certain  maximum  nonperforming  assets  ratios for
First Bank and a minimum return on assets ratio for First Banks. In addition, it
contains additional covenants, including a limitation on the amount of dividends
on First  Banks'  common  stock  that may be paid to  stockholders.  The  Credit
Agreement is secured by First Banks' ownership  interest in the capital stock of
its subsidiaries.

         On August 5, 2005,  First Bank entered into a contract  with World Wide
Technology,  Inc.  (WWT),  a wholly owned  subsidiary  of World Wide  Technology
Holding Co.,  Inc.  (WWTHC).  WWTHC is an electronic  procurement  and logistics
company in the  information  technology  industry  headquartered  in St.  Louis,
Missouri.  The  contract  provides  for WWT to  provide  information  technology
services  associated  with the  deployment  of personal  computers to First Bank
employees in an effort to further  modernize  the  technological  infrastructure
throughout  the First Bank branch  banking  network.  Mr.  David L.  Steward,  a
director  of First  Banks and a member of the Audit  Committee  of First  Banks,
serves as the Chairman of the Board of Directors of WWTHC.  The Audit  Committee
of First Banks has reviewed and approved the  utilization of WWT for information
technology  services  with  fees not to  exceed  $500,000  for the  year  ending
December 31,  2005.  At the present  time,  First Bank has not made any payments
under the contract.




<PAGE>


     ITEM 2 - MANAGEMENT'S DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITION AND
              RESULTS OF OPERATIONS

         The  discussion  set forth in  Management's  Discussion and Analysis of
Financial Condition and Results of Operations  contains certain  forward-looking
statements  with respect to our financial  condition,  results of operations and
business.  Generally,  forward looking  statements may be identified through the
use of words  such as:  "believe,"  "expect,"  "anticipate,"  "intend,"  "plan,"
"estimate," or words of similar meaning or future or conditional  terms such as:
"will," "would," "should," "could," "may," "likely,"  "probably," or "possibly."
Examples  of  forward  looking  statements  include,  but  are not  limited  to,
estimates  or  projections  with  respect  to our  future  financial  condition,
expected or  anticipated  revenues with respect to our results of operations and
our business. These forward-looking  statements are subject to certain risks and
uncertainties,  not all of which can be predicted or  anticipated.  Factors that
may cause our 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 us,  including but not limited to:  fluctuations in interest
rates and in the economy,  including the threat of future terrorist  activities,
existing  and  potential  wars and/or  military  actions  related  thereto,  and
domestic responses to terrorism or threats of terrorism;  the impact of laws and
regulations  applicable  to us and  changes  therein;  the impact of  accounting
pronouncements  applicable to us and changes therein;  competitive conditions in
the  markets in which we conduct  our  operations,  including  competition  from
banking and non-banking  companies with substantially greater resources than us,
some of which may offer and develop products and services not offered by us; our
ability to control  the  composition  of our loan  portfolio  without  adversely
affecting interest income; the credit risk associated with consumers who may not
repay loans;  the geographic  dispersion of our offices;  the impact our hedging
activities may have on our operating results;  the highly regulated  environment
in which we operate;  and our ability to respond to changes in technology.  With
regard to our efforts to grow  through  acquisitions,  factors that could affect
the accuracy or  completeness of  forward-looking  statements  contained  herein
include the competition of larger acquirers with greater resources; fluctuations
in the prices at which acquisition targets may be available for sale; the impact
of making  acquisitions  without  using our common  stock;  and  possible  asset
quality issues,  unknown  liabilities or integration  issues with the businesses
that we have  acquired.  We do not  have a duty to and  will  not  update  these
forward-looking statements. Readers of this Quarterly Report on Form 10-Q should
therefore  consider these risks and uncertainties in evaluating  forward looking
statements and should not place undo reliance on these statements.

                                     General

         We are a registered  bank holding  company  incorporated in Missouri in
1978 and  headquartered  in St. Louis County,  Missouri.  We operate through our
wholly owned subsidiary bank holding company, The San Francisco Company, or SFC,
headquartered  in San  Francisco,  California,  and its wholly owned  subsidiary
bank,  First Bank,  headquartered  in St.  Louis  County,  Missouri.  First Bank
operates  through its branch  banking  offices and  subsidiaries,  FB Commercial
Finance,  Inc.,  Missouri Valley  Partners,  Inc. and Small Business Loan Source
LLC,  or SBLS LLC which,  except  for SBLS LLC,  are  wholly  owned.  First Bank
currently operates 170 branch banking offices in California,  Illinois, Missouri
and Texas. At June 30, 2005, we had total assets of $8.78 billion, loans, net of
unearned discount,  of $6.31 billion,  total deposits of $7.21 billion and total
stockholders' equity of $643.2 million.

         Through First Bank,  we offer a broad range of commercial  and personal
deposit  products,  including  demand,  savings,  money  market and time deposit
accounts.  In addition,  we market combined basic services for various  customer
groups,  including  packaged  accounts for more  affluent  customers,  and sweep
accounts,   lock-box  deposits  and  cash  management  products  for  commercial
customers.  We also offer both consumer and commercial  loans.  Consumer lending
includes   residential  real  estate,  home  equity  and  installment   lending.
Commercial lending includes  commercial,  financial and agricultural loans, real
estate  construction  and  development  loans,  commercial  real  estate  loans,
asset-based loans and trade financing. Other financial services include mortgage
banking, debit cards,  brokerage services,  credit-related  insurance,  internet
banking,  automated teller machines,  telephone banking,  safe deposit boxes and
trust, private banking and institutional money management services.

         Primary  responsibility  for  managing  our banking unit rests with the
officers  and  directors  of each  unit,  but we  centralize  overall  corporate
policies,  procedures  and  administrative  functions  and  provide  centralized
operational  support functions for our subsidiaries.  This practice allows us to
achieve various operating efficiencies while allowing our banking units to focus
on customer service.
<PAGE>

                               Financial Condition

         Total assets were $8.78  billion and $8.73 billion at June 30, 2005 and
December 31, 2004, respectively, reflecting an increase of $43.5 million for the
six months ended June 30, 2005. The increase in total assets is  attributable to
our acquisition of FBA Bancorp,  Inc., or FBA, on April 29, 2005, which provided
total assets of $73.3  million,  partially  offset by  decreases  in  investment
securities,  cash and cash  equivalents  and other assets.  Total loans,  net of
unearned  discount,  increased $171.7 million to $6.31 billion at June 30, 2005,
from $6.14  billion at December 31, 2004,  reflecting  continued  internal  loan
growth,  the acquisition of FBA, which provided loans, net of unearned discount,
of $54.3 million, partially offset by loan sales and/or payoffs or reductions of
balances  associated with certain  acquired  loans,  as further  discussed under
"--Loans and Allowance for Loan Losses." Total deposits  increased $58.8 million
to $7.21  billion at June 30,  2005,  from $7.15  billion at December  31, 2004,
resulting  from the  acquisition  of FBA, a single source  temporary  deposit of
$216.4 million, partially offset by an anticipated level of attrition associated
with the deposits acquired from CIB Bank, as further discussed below.  Available
cash and cash equivalents  decreased $38.0 million to $229.1 million at June 30,
2005, from $267.1 million at December 31, 2004.  Investment securities decreased
$65.1 million to $1.75 billion at June 30, 2005,  from $1.81 billion at December
31, 2004,  primarily  reflecting  maturities of $309.9  million and purchases of
$219.7 million, including $100.0 million of securities purchases associated with
the investment of funds provided by the temporary  deposit  mentioned above. The
increase in loans was primarily  funded by available  cash and cash  equivalents
and  maturities  of  investment  securities.  Goodwill  declined $2.2 million to
$154.7  million at June 30, 2005,  from $156.8 million at December 31, 2004, and
reflects the  reallocation of the purchase price associated with our acquisition
of CIB Bank,  offset by  goodwill  associated  with our  acquisition  of FBA, as
further  discussed in Note 2 to our  Consolidated  Financial  Statements.  Other
assets  decreased  $30.0 million to $99.6 million at June 30, 2005,  from $129.6
million at December 31, 2004.  This decrease is  attributable  to a $7.6 million
decline in our derivative  financial  instruments  from $4.7 million at December
31,  2004,  due to a decline in the fair value of certain  derivative  financial
instruments,  the maturity of $200.0  million  notional  amount of interest rate
swap  agreements  on March 21, 2005 and the  termination  of $150.0  million and
$101.2 million  notional amount of interest rate swap agreements on February 25,
2005 and May 27, 2005, respectively, as further discussed under "--Interest Rate
Risk Management." Additionally, the decline in other assets reflects: a decrease
in accrued  interest  receivable,  primarily  related to our interest  rate swap
agreements;   decreases  in  servicing  assets  and  core  deposit  intangibles;
reductions  in other real estate owned;  and the receipt of certain  receivables
during the first  quarter of 2005,  including a  receivable  for current  income
taxes of $8.3  million  and a  receivable  for  fiduciary  related  fees of $3.4
million.

         Total  deposits  increased  $58.8  million to $7.21 billion at June 30,
2005,  from $7.15  billion at December  31,  2004.  The  increase  is  primarily
attributable  to our  acquisition of FBA, which provided total deposits of $55.7
million.  A single  source  temporary  commercial  money  market  deposit with a
balance of $216.4  million at June 30, 2005 also  contributed to the increase in
total  deposits.  The  overall  increase  was  largely  offset by a decrease  in
deposits  attributable to an anticipated level of attrition  associated with the
deposits  acquired  from CIB  Bank,  particularly  savings  and  time  deposits,
including brokered and internet deposits. The acquisition of CIB Bank, which was
completed on November 30, 2004,  provided total  deposits of $1.10 billion.  Our
continued  deposit  marketing  efforts and efforts to further  develop  multiple
account relationships with our customers, in addition to slightly higher deposit
rates on certain  products,  have  contributed  to some deposit  growth  despite
continued  aggressive  competition  within our market areas and the  anticipated
level of  attrition  associated  with our recent  acquisitions.  The deposit mix
reflects our continued  efforts to  restructure  the  composition of our deposit
base as the majority of our deposit  development  programs  are directed  toward
increased transaction accounts, such as demand and savings accounts, rather than
higher-cost time deposits.

         Other borrowings  decreased $38.5 million to $556.3 million at June 30,
2005,  from $594.8 million at December 31, 2004. The decrease is attributable to
a $42.3 million decrease in daily securities sold under agreements to repurchase
due to changes in  customer  activity  and  demand,  partially  offset by a $3.8
million  increase in Federal Home Loan Bank advances,  primarily due to advances
that were  assumed  with our FBA  acquisition.  We fully repaid our note payable
with funds  generated from  dividends  from First Bank,  reducing the balance by
$11.0 million in January 2005 and repaying the remaining balance of $4.0 million
in June 2005. Our  subordinated  debentures  increased to $275.2 million at June
30,  2005 from $273.3  million at  December  31, 2004 due to changes in the fair
value of our interest  rate swap  agreements  that are  designated as fair value
hedges and  utilized to hedge  certain  issues of our  subordinated  debentures,
partially offset by the continued amortization of debt issuance costs.
<PAGE>

         Minority  interest in SBLS LLC was $7.4  million at June 30,  2005.  On
June 30, 2005,  First  Capital  America,  Inc.,  or FCA,  exercised an option to
purchase Membership  Interests of SBLS LLC for $7.4 million in cash. As a result
of this  transaction,  SBLS LLC  became 51% owned by First Bank and 49% owned by
FCA,  as  further  described  in Note 1,  Note 2 and Note 6 to our  Consolidated
Financial Statements.

         Stockholders'  equity was $643.2 million and $600.9 million at June 30,
2005 and  December  31,  2004,  respectively,  reflecting  an  increase of $42.3
million. The increase is primarily  attributable to net income of $49.0 million,
partially offset by a $6.3 million decrease in accumulated  other  comprehensive
income. The decrease in accumulated other  comprehensive  income is comprised of
$2.7  million  associated  with  changes  in the fair  value  of our  derivative
financial instruments and $3.6 million associated with changes in our unrealized
gains and losses on available-for-sale  investment  securities.  The decrease is
reflective  of increases in  prevailing  interest  rates,  a decline in the fair
value of our  derivative  financial  instruments,  and the  maturity  of  $200.0
million notional amount of our interest rate swap agreements  designated as cash
flow  hedges  during the first  quarter  of 2005,  as  further  discussed  under
"--Interest Rate Risk Management."

                              Results of Operations

Net Income

         Net income was $26.8  million  and $49.0  million for the three and six
months  ended June 30, 2005  respectively,  compared to $26.0  million and $44.3
million for the  comparable  periods in 2004.  Our return on average  assets was
1.25% and 1.14% for the three and six months ended June 30, 2005,  respectively,
compared to 1.43% and 1.22% for the  comparable  periods in 2004.  Our return on
average  stockholders' equity was 17.43% and 16.06% for the three and six months
ended  June 30,  2005,  respectively,  compared  to 18.21%  and  15.72%  for the
comparable  periods in 2004.  Net income for the three and six months ended June
20, 3005 reflects  increased net interest income and noninterest  income,  and a
negative  provision for loan losses,  partially offset by increased  noninterest
expense  and an  increased  provision  for  income  taxes.  Net  income for 2004
includes a gain of $2.7 million,  before  applicable  income taxes,  recorded in
February 2004 relating to the sale of a residential and recreational development
property that was foreclosed on in January 2003, and gains, net of expenses,  of
$1.0 million,  before  applicable  income  taxes,  recorded in February 2004 and
April 2004 on the sale of two Midwest branch banking offices.

         The  increase  in earnings  in 2005  reflects  our focus to continue to
improve asset quality,  maintain an acceptable net interest margin,  improve our
noninterest income and control operating expenses.  Net interest-earning  assets
provided  by  our  2004  and  2005  acquisitions,   higher-yielding   investment
securities,  internal  loan  growth  and  higher  interest  rates on loans  have
contributed to increased net interest income. This increase was partially offset
by  increased   interest  expense   associated  with  higher  deposit  rates,  a
redistribution of deposit balances toward higher-yielding  products, and the mix
of the CIB  deposit  base  acquired,  as  well  as  increased  levels  of  other
borrowings  and  increased  rates  on  such  borrowings,  and  the  issuance  of
additional   subordinated   debentures  late  in  2004  to  partially  fund  our
acquisition of CIB Bank. Net interest income was adversely affected by a decline
in earnings on our  interest  rate swap  agreements  that were  entered  into in
conjunction  with our  interest  rate risk  management  program to mitigate  the
effects  of  decreasing  interest  rates.  This  decline  was the  result of the
maturity and termination of certain  interest rate swap  agreements,  as further
discussed under  "--Interest  Rate Risk  Management."  The current interest rate
environment,  conditions  within our  markets  and the impact of the  decline in
earnings on our interest rate swap agreements  continue to exert pressure on our
net interest income and net interest margin.

         Our overall asset quality levels reflect continued  improvement  during
2005, resulting in a $13.6 million, or 15.11% reduction in nonperforming assets,
and a $21.5  million,  or 75.1%  reduction in loans past due 90 days or more and
still accruing  interest  since December 31, 2004. A significant  portion of our
nonperforming  assets  at June  30,  2005  is  comprised  of  $42.9  million  of
nonperforming   loans  associated  with  our  acquisition  of  CIB  Bank,  which
represents 57.75% of total  nonperforming  loans at June 30, 2005. The reduction
in both  nonperforming  loans  and  loans  past  due 90 days or more  and  still
accruing interest reflects our ongoing emphasis on improving asset quality,  the
sale of certain acquired  nonperforming  loans, a notable  reduction in net loan
charge-offs,  as well as loan payoffs and/or  external  refinancings  of various
credits,  as further discussed under "--Loans and Allowance for Loan Losses" and
"--Provision for Loan Losses." Several of these factors contributed to a notable
decrease in our provision for loan losses. We recorded a negative  provision for
loan losses of $8.0  million for the three and six months  ended June 30,  2005,
compared to a $3.0 million and $15.8  million  provision for loan losses for the
comparable  periods in 2004. We continue to closely  monitor our loan  portfolio
and  consider  these  factors in our overall  assessment  of the adequacy of the
allowance for loan losses. While we continue our efforts to reduce nonperforming
loans, we expect the overall level of such loans to remain at somewhat  elevated
levels in the near future as a result of the significant  level of nonperforming
loans associated with the CIB Bank acquisition.
<PAGE>

         Noninterest  income was $25.8  million and $46.9  million for the three
and six months ended June 30, 2005, respectively, in comparison to $20.1 million
and $40.7 million for the comparable periods in 2004. The increase for the first
six months of 2005 is attributable to increased gains on loans sold and held for
sale, loan servicing fees, increased investment  management fees associated with
our  institutional  money management  subsidiary,  increased  service charges on
deposit accounts and customer  service fees related to higher deposit  balances,
and a recovery of loan collection expenses. The increase is also attributable to
a decrease in  write-downs  and net losses on the sale of certain assets related
to the commercial leasing portfolio.  The overall increase in noninterest income
for 2005 was partially offset by a decline in rental income  associated with our
reduced  commercial leasing activities and an increase in losses on the disposal
of fixed assets, primarily associated with the demolition of a branch drive-thru
facility in the first quarter of 2005. In addition,  we recorded $1.0 million in
gains,  net of expenses,  resulting  from the sale of two Midwest branch banking
offices in February 2004 and April 2004.

         Noninterest  expense was $69.8 million and $133.5 million for the three
and six months ended June 30, 2005, respectively, in comparison to $55.4 million
and $108.0  million for the comparable  periods in 2004.  Our efficiency  ratio,
which is defined as the ratio of noninterest  expense to the sum of net interest
income  and  noninterest  income,  was  67.33%  and 65.84% for the three and six
months ended June 30, 2005, respectively,  compared to 57.89% and 56.57% for the
comparable periods in 2004. The overall increase in our noninterest expenses and
our efficiency  ratio was  attributable to expenses  resulting from our 2004 and
2005  acquisitions,   increases  in  salaries  and  employee  benefits  expense,
charitable  contribution  expense, and expenditures and losses, net of gains, on
other real estate,  as further  discussed  below. We continue to closely monitor
noninterest expense levels following our recent acquisitions and anticipate that
the implementation of certain expense reduction measures will result in a future
improvement  in our  efficiency  ratio.  Salary and  employee  benefit  expenses
increased due to the impact of our  acquisitions in 2004 and 2005, which added a
total of 21 branch offices,  the addition of five de novo branch offices in 2004
and 2005,  and  generally  higher costs of  employing  and  retaining  qualified
personnel,  including higher employee benefit costs.  Noninterest  expenses also
increased due to a $2.7 million  nonrecurring  gain recorded in February 2004 on
the  sale of a  residential  and  recreational  development  property  that  was
foreclosed on in January 2003.

Net Interest Income

         Net interest income (expressed on a tax-equivalent  basis) increased to
$78.1  million and $156.6  million  for the three and six months  ended June 30,
2005,  respectively,  compared  to $75.9  million  and  $150.9  million  for the
comparable periods in 2004,  reflecting  continued growth. Our net interest rate
margin  was 3.94% and 3.96% for the three and six months  ended  June 30,  2005,
respectively, in comparison to 4.56% for the three and six months ended June 30,
2004.  Net interest  income is the  difference  between  interest  earned on our
interest-earning assets, such as loans and securities,  and interest paid on our
interest-bearing  liabilities,  such as deposits  and  borrowings.  Net interest
income is  affected  by the level and  composition  of assets,  liabilities  and
stockholders' equity, as well as the general level of interest rates and changes
in interest  rates.  Interest  income on a  tax-equivalent  basis  includes  the
additional  amount  of  interest  income  that  would  have  been  earned if our
investment in certain tax-exempt interest earning assets had been made in assets
subject to federal,  state and local  income taxes  yielding the same  after-tax
income.  Net interest  margin is determined by dividing net interest income on a
tax-equivalent  basis by average  interest-earning  assets.  The  interest  rate
spread  is the  difference  between  the  average  equivalent  yield  earned  on
interest-earning   assets  and  the  average   rate  paid  on   interest-bearing
liabilities.

         We  primarily  credit the increase in net  interest  income  during the
three and six months ended June 30, 2005 to net interest-earning assets provided
by our  2004  and  2005  acquisitions,  higher-yielding  investment  securities,
internal loan growth and higher  interest  rates on loans,  partially  offset by
increased   interest   expense   associated   with  higher   deposit   rates,  a
redistribution of deposit balances toward higher-yielding  products, and the mix
of the CIB  deposit  base  acquired,  as  well  as  increased  levels  of  other
borrowings and the issuance of additional  subordinated  debentures in late 2004
to partially fund our acquisition of CIB Bank. Net interest income was adversely
impacted by a decline in earnings on our interest rate swap agreements that were
entered into in conjunction  with our interest rate risk  management  program to
mitigate the effects of decreasing  interest rates.  As further  discussed under
"--Interest  Rate  Risk  Management,"  these  derivative  financial  instruments
contributed  $297,000 and $3.9 million to net interest  income for the three and
six months ended June 30, 2005, respectively,  compared to the $15.4 million and
$31.7 million for the comparable  periods in 2004. The decreased earnings on our
interest rate swap  agreements  for the three and six months ended June 30, 2005
contributed  to a compression  of our net interest  margin of  approximately  76
basis points and 70 basis points, respectively, and reflect the impact of higher
interest rates and maturities of interest rate swap agreements of $800.0 million
during 2004 and $200.0  million in March  2005,  as well as the  termination  of

<PAGE>

$150.0 million and $101.2  million of interest rate swap  agreements on February
25, 2005 and May 27, 2005,  respectively.  Although the Company has  implemented
other methods to mitigate the reduction in net interest  income  resulting  from
the  decreased  earnings on our interest  rate swap  agreements,  including  the
funding of investment security purchases through the issuance of term repurchase
agreements, the reduction of our interest rate swap agreements has resulted in a
reduction of net  interest  income and further  compression  of our net interest
margin, which was partially offset by the impact of the rising rate environment.

         Average  interest-earning  assets  increased to $7.95 billion and $7.98
billion for the three and six months  ended June 30,  2005,  respectively,  from
$6.70 billion and $6.65 billion for comparable  periods in 2004. The increase is
primarily  attributable  to our  three  acquisitions  completed  in 2004,  which
provided assets of $1.38 billion in aggregate,  and our acquisition completed in
2005,  which provided  assets of $73.3 million.  Internal growth within our loan
portfolio also contributed to the increase in average  interest-earning  assets.
In addition,  we purchased  $250.0  million of callable U.S.  Government  agency
securities in conjunction with the issuance of $250.0 million of term repurchase
agreements  that we entered  into in  conjunction  with our  interest  rate risk
management  program  during the first and second  quarters of 2004.  The current
interest rate  environment,  overall  economic  conditions  and the maturity and
termination  of certain  interest  rate swap  agreements,  as  discussed  above,
continue to exert pressure on our net interest margin.

         Average  investment  securities  increased  $413.7  million  and $500.3
million to $1.68  billion and $1.71  billion for the three and six months  ended
June 30,  2005,  respectively,  from $1.26  billion  and $1.21  billion  for the
comparable periods in 2004. The yield on our investment  portfolio was 4.22% and
4.18% for the three and six months  ended June 30,  2005,  compared to 4.11% for
the comparable  periods in 2004. The overall  increase in the average balance of
investment securities relates primarily to our 2004 and 2005 acquisitions, which
provided investment securities of $438.0 million and $5.4 million, respectively.
Funds  available from  maturities of investment  securities  were used to fund a
decrease in deposits  associated with an anticipated  level of attrition  during
the first quarter of 2005  associated  with the time deposits  acquired with the
acquisition  of CIB Bank.  The  remaining  funds  available  from  maturities of
investment   securities  were  used  to  fund  the  reinvestment  in  additional
higher-yielding  investment  securities.   Additionally,  a  portion  of  excess
short-term  investments,  which include federal funds sold and  interest-bearing
deposits,   was  also  utilized  to  fund  deposit  attrition  and  to  purchase
higher-yielding available-for-sale investment securities, resulting in a decline
in average  short-term  investments  to $47.8  million and $65.4 million for the
three and six months ended June 30, 2005,  respectively,  from $58.2 million and
$90.5 million for the  comparable  periods in 2004.  Our  investment  securities
purchases  during June 2005  included the purchase of $100.0  million of Federal
Home Loan Bank discount  notes  associated  with the funds  provided by a single
source temporary deposit, as previously  discussed.  During 2004, our investment
securities  purchases  included the purchase of $250.0  million of callable U.S.
Government agency securities,  representing the underlying securities associated
with $250.0 million,  in aggregate,  of three-year  term  repurchase  agreements
under master  repurchase  agreements that we consummated in the first and second
quarters of 2004, as further  described in Note 9 to our Consolidated  Financial
Statements.

         Average loans, net of unearned  discount,  were $6.23 billion and $6.21
billion for the three and six months ended June 30, 2005, respectively, compared
to $5.38 billion and $5.35 billion for the comparable periods in 2004. The yield
on our loan  portfolio  was 6.41% and 6.30% for the three and six  months  ended
June 30, 2005, respectively, in comparison to 6.27% and 6.32% for the comparable
periods in 2004.  Although  our loan  portfolio  yields  increased  with  rising
interest  rates during 2005,  total  interest  income on our loan  portfolio was
adversely  impacted by decreased  earnings on our interest rate swap  agreements
designated  as cash flow hedges.  Higher  interest  rates and the  maturities of
interest rate swap  agreements of $750.0  million in 2004 and $200.0  million in
March  2005   resulted  in  decreased   earnings  on  our  swap   agreements  of
approximately  $22.6 million,  contributing to a reduction in yields on our loan
portfolio,  and a compression  of our net interest  margin of  approximately  57
basis  points for the six months  ended June 30,  2005 as  compared  to the same
period in 2004. We attribute the increase in average loans of $851.7 million for
the six  months  ended  June 30,  2005,  over  the  comparable  period  in 2004,
primarily to our  acquisitions  completed  during 2004 and 2005,  which provided

<PAGE>

total loans of $780.9 million,  in aggregate,  and $54.3 million,  respectively.
The  increase is also the result of internal  loan growth,  partially  offset by
reductions  in our  nonperforming  loan  portfolio  due to the  sale of  certain
nonperforming  loans,  loan  payoffs  and/or  external   refinancings.   Average
commercial, financial and agricultural loans increased $77.5 million for the six
months ended June 30, 2005,  over the comparable  period in 2004, as a result of
our 2004  acquisitions.  This increase was  partially  offset by a $47.4 million
decrease in average lease financing volumes resulting from our business strategy
initiated  in  late  2002  to  reduce  our  commercial  leasing  activities  and
subsequently  sell  a  significant  portion  of  the  remaining  leases  in  our
commercial leasing portfolio in June 2004. Average real estate  construction and
development  loans  increased  approximately  $209.7  million for the six months
ended June 30, 2005, over the comparable  period in 2004,  primarily as a result
of our recent  acquisitions  and seasonal  increases  on existing and  available
credit lines as well as new loan production.  Average real estate mortgage loans
increased  approximately  $537.4 million for the six months ended June 30, 2005,
over the comparable  period in 2004.  This increase is  attributable to a $418.9
million  increase in  commercial  real estate  loans  resulting  from our recent
acquisitions,  as well as a $118.5 million  increase in residential  real estate
mortgage loans due to our recent acquisitions and our business strategy decision
to retain a portion of our residential  mortgage loan production that would have
been  previously  sold in the  secondary  market.  Average  loans  held for sale
increased  approximately  $21.1  million for the six months ended June 30, 2005,
over the comparable  period in 2004,  resulting  from increased  volumes of loan
originations  coupled  with the timing of loan sales in the  secondary  mortgage
market.

         Average  deposits  increased to $7.04 billion and $7.07 billion for the
three and six months ended June 30, 2005,  from $6.01  billion and $6.00 billion
for the comparable  periods in 2004. For the three and six months ended June 30,
2005,  the  aggregate  weighted  average  rate  paid  on our  deposit  portfolio
increased 69 basis points and 55 basis points to 2.05% and 1.92%,  respectively,
from  1.36% and 1.37%  for the  comparable  periods  in 2004,  and is  primarily
attributable to the current rising interest rate  environment and the mix of the
CIB Bank deposit base  acquired in November  2004.  In addition,  the  decreased
earnings associated with certain of our interest rate swap agreements designated
as fair value hedges, as well as the termination of $150.0 million of fair value
hedges on February 25, 2005,  resulted in a decrease in our net interest  income
and net interest  margin of  approximately  $3.8  million and ten basis  points,
respectively,  for the six months  ended  June 30,  2005,  compared  to the same
period in 2004. The increase in average deposits is primarily  reflective of our
acquisitions  completed during 2004 and 2005,  which provided  deposits of $1.21
billion, in aggregate, and $55.7 million, respectively. Although overall average
deposit levels have increased as a result of our 2004 and 2005 acquisitions, the
overall  increase in average  deposits  was  partially  offset by a  significant
decrease in deposits due to an anticipated  level of attrition  associated  with
the deposits  acquired from CIB Bank.  Excluding the impact of our acquisitions,
the  change in our  average  deposit  mix  reflects  our  continued  efforts  to
restructure  the  composition of our deposit base as the majority of our deposit
development programs are directed toward increased  transactional accounts, such
as demand  and  savings  accounts,  rather  than time  deposits,  and  emphasize
attracting more than one account relationship with customers. Average demand and
savings  deposits  were $4.21  billion  and $4.25  billion for the three and six
months ended June 30, 2005,  respectively,  from $4.07 billion and $4.06 billion
for the  comparable  periods in 2004.  Average total time deposits  increased to
$2.83  billion  and $2.82  billion  for the three and six months  ended June 30,
2005,  respectively,  compared  to $1.93 and $1.94  billion  for the  comparable
periods in 2004.

         Average other borrowings increased to $569.2 million and $573.6 million
for the three and six months  ended June 30,  2005,  respectively,  compared  to
$439.1  million  and $413.9  million  for the  comparable  periods in 2004.  The
aggregate weighted average rate paid on our other borrowings was 2.98% and 2.65%
for the three and six months  ended June 30,  2005,  respectively,  compared  to
0.69% and 0.68% for the  comparable  periods in 2004. The increased rate paid on
our other borrowings reflects the increased short-term interest rate environment
that  began in the  second  quarter  of 2004.  The  increase  in  average  other
borrowings  is  primarily  attributable  to $250.0  million  of term  repurchase
agreements  that we consummated  during 2004, as further  described in Note 9 to
our Consolidated Financial Statements.
<PAGE>

         Our note payable  averaged  $4.0 million and $5.8 million for the three
and six months ended June 30, 2005,  respectively,  compared to $1.1 million and
$4.7 million for the comparable  periods in 2004. The aggregate weighted average
rate paid on our note  payable was 10.44% and 8.38% for the three and six months
ended  June 30,  2005,  respectively,  compared  to  23.66%  and  7.20%  for the
comparable  periods ended June 30, 2004. The weighted average rate paid reflects
unused  credit  commitment  and letter of credit  facility  fees on our  secured
credit  facility  agreement.  Amounts  outstanding  under our revolving  line of
credit with a group of unaffiliated  financial institutions bear interest at the
lead  bank's  corporate  base rate or, at our  option,  at the London  Interbank
Offering  Rate  plus a margin  determined  by the  outstanding  balance  and our
profitability  for the preceding  four calendar  quarters.  Thus,  our revolving
credit line  represents  a  relatively  high-cost  funding  source as  increased
advances have the effect of increasing the weighted  average rate of non-deposit
liabilities. However, the borrowing level for these periods has been minimal. On
August  11,  2005,  we entered  into an  Amended  and  Restated  Secured  Credit
Agreement  and  restructured  our  overall  financing  arrangement,  as  further
described in Note 11 to our Consolidated Financial Statements.

         Average  subordinated  debentures were $273.8 million for the three and
six months ended June 30, 2005,  compared to $209.0  million and $210.0  million
for the comparable  periods ended June 30, 2004. The aggregate  weighted average
rate paid on our  subordinated  debentures was 7.86% and 7.45% for the three and
six  months  ended  June 30,  2005  respectively,  and  6.79%  and 6.77% for the
comparable periods in 2004. Interest expense on our subordinated  debentures was
$5.4 million and $10.1 million for the three and six months ended June 30, 2005,
respectively,  compared  to $3.5  million and $7.1  million  for the  comparable
periods in 2004.  As  previously  discussed,  the increase for the three and six
months ended June 30, 2005  primarily  reflects the issuance of $61.9 million of
additional   subordinated   debentures  in  late  2004  to  partially  fund  our
acquisition  of CIB Bank,  as well as the earnings  impact of our interest  rate
swap agreements. The issuance of the additional subordinated debentures resulted
in  a  decrease  in  our  net  interest   income  and  net  interest  margin  of
approximately  $1.5 million and three basis  points,  respectively,  for the six
months  ended June 30,  2005,  compared to the  comparable  period in 2004.  The
termination  of $101.2  million of fair value hedges on May 27, 2005, as further
discussed under "--Interest Rate Risk Management," resulted in a decrease in our
net interest  income and net interest margin of  approximately  $1.3 million and
three  basis  points,  respectively,  for the six months  ended  June 30,  2005,
compared to the comparable period in 2004.


<PAGE>


         The following  table sets forth,  on a  tax-equivalent  basis,  certain
information  relating to our average  balance  sheets,  and reflects the average
yield earned on  interest-earning  assets, the average cost of  interest-bearing
liabilities and the resulting net interest income for the periods indicated:
<TABLE>
<CAPTION>

                                              Three Months Ended June 30,                      Six Months Ended June 30,
                                -------------------------------------------------  -------------------------------------------------
                                           2005                      2004                     2005                    2004
                                -------------------------- ----------------------  ----------------------- -------------------------
                                           Interest                Interest                 Interest                 Interest
                                  Average  Income/ Yield/ Average  Income/ Yield/  Average  Income/ Yield/  Average  Income/  Yield/
                                  Balance  Expense  Rate  Balance  Expense  Rate   Balance  Expense  Rate   Balance  Expense   Rate
                                  -------  -------  ----  -------  -------  ----   -------  -------  ----   -------  --------  ----
                                                                      (dollars expressed in thousands)
          Assets
          ------

Interest-earning assets:
<S>                             <C>         <C>    <C>    <C>        <C>     <C>   <C>        <C>     <C>   <C>        <C>     <C>
   Loans (1)(2)(3)(4).......... $6,227,487  99,534  6.41% $5,375,102 83,861  6.27% $6,205,923 193,804 6.30% $5,354,228 168,189 6.32%
   Investment securities (4)...  1,676,866  17,629  4.22   1,263,191 12,894  4.11   1,709,203  35,414 4.18   1,208,927  24,725 4.11
   Short-term investments......     47,788     351  2.95      58,164    137  0.95      65,447     860 2.65      90,461     423 0.94
                                ---------- -------        ---------- ------        ---------- -------       ---------- -------
        Total interest-earning
          assets...............  7,952,141 117,514  5.93   6,696,457 96,892  5.82   7,980,573 230,078 5.81   6,653,616 193,337 5.84
                                           -------                   ------                   -------                  -------
Nonearning assets..............    653,522                   631,260                  653,976                  641,890
                                ----------                ----------               ----------               ----------
        Total assets........... $8,605,663                $7,327,717               $8,634,549               $7,295,506
                                ==========                ==========               ==========               ==========

      Liabilities and
      ---------------
    Stockholders' Equity
    --------------------

Interest-bearing liabilities:
   Interest-bearing deposits:
     Interest-bearing demand
       deposits................ $  882,567     932  0.42% $  854,874    824  0.39% $  884,053   1,820 0.42% $  861,793   1,791 0.42%
     Savings deposits..........  2,082,986   6,331  1.22   2,143,816  4,593  0.86   2,140,218  12,075 1.14   2,152,863   9,370 0.88
     Time deposits of $100
       or more.................    846,317   6,246  2.96     459,164  3,039  2.66     826,965  11,600 2.83     448,791   5,995 2.69
     Other time deposits (3)...  1,988,122  16,156  3.26   1,474,899  8,173  2.23   1,989,449  30,135 3.05   1,489,267  16,660 2.25
                                ---------- -------        ---------- ------        ---------- -------       ---------- -------
        Total interest-bearing
          deposits.............  5,799,992  29,665  2.05   4,932,753 16,629  1.36   5,840,685  55,630 1.92   4,952,714  33,816 1.37
   Other borrowings............    569,222   4,234  2.98     439,070    757  0.69     573,585   7,534 2.65     413,932   1,401 0.68
   Note payable (5)............      3,956     103 10.44       1,088     64 23.66       5,801     241 8.38       4,717     169 7.20
   Subordinated debentures (3).    273,803   5,365  7.86     209,036  3,529  6.79     273,802  10,111 7.45     209,963   7,067 6.77
                                ---------- -------        ---------- ------        ---------- -------       ---------- -------
        Total interest-bearing
          liabilities..........  6,646,973  39,367  2.38   5,581,947 20,979  1.51   6,693,873  73,516 2.21   5,581,326  42,453 1.53
                                           -------                   ------                   -------                  -------
Noninterest-bearing liabilities:
   Demand deposits.............  1,243,568                 1,073,988                1,225,511                1,047,866
   Other liabilities...........     97,246                    97,585                  100,299                   99,955
                                ----------                ----------               ----------               ----------
        Total liabilities......  7,987,787                 6,753,520                8,019,683                6,729,147
Stockholders' equity...........    617,876                   574,197                  614,866                  566,359
                                ----------                ----------               ----------               ----------
        Total liabilities and
          stockholders' equity. $8,605,663                $7,327,717               $8,634,549               $7,295,506
                                ==========                ==========               ==========               ==========

Net interest income............             78,147                   75,913                   156,562                  150,884
                                           =======                   ======                   =======                  =======
Interest rate spread...........                     3.55                     4.31                     3.60                     4.31
Net interest margin (6)........                     3.94%                    4.56%                    3.96%                    4.56%
                                                   =====                    =====                     ====                     ====
--------------------
(1)  For purposes of these computations, nonaccrual loans are included in the average loan  amounts.
(2)  Interest income on loans includes loan fees.
(3)  Interest income and  interest expense include the effects of  interest rate swap agreements.
(4)  Information is  presented  on a  tax-equivalent basis assuming a tax  rate of 35%.  The tax-equivalent adjustments were
     approximately $326,000 and $662,000 for the three and six months ended June 30, 2005, and $307,000 and $625,000 for the
     comparable periods in 2004, respectively.
(5)  Interest expense on the note payable includes commitment, arrangement and renewal fees.
(6)  Net interest  margin  is  the  ratio of net interest income (expressed on a tax-equivalent basis)  to average interest-
     earning assets.
</TABLE>


<PAGE>


Provision for Loan Losses

         We recorded an $8.0 million negative  provision for loan losses for the
three and six months ended June 30, 2005,  in comparison to a provision for loan
losses of $3.0 million and $15.8  million  recorded for the three and six months
ended June 30, 2004.  The negative  provision  for loan losses during the second
quarter of 2005 is  attributable to an improvement in  nonperforming  loans from
December 31, 2004 to June 30, 2005,  resulting from loan payoffs and/or external
refinancings and a significant reduction in net loan charge-offs.  Nonperforming
loans at June 30, 2005 decreased $11.5 million, or 13.46%, to $74.3 million from
$85.8  million at December  31,  2004.  Loans past due 90 days or more and still
accruing interest decreased $21.5 million, or 75.1%, to $7.1 million at June 30,
2005 from $28.7  million at December  31, 2004.  The  decrease in  nonperforming
loans and past due loans during the six months  ended June 30, 2005  reflects an
improvement  in asset quality  resulting  from the sale of  approximately  $14.3
million of certain acquired nonperforming loans, a notable reduction in net loan
charge-offs,  as well as loan payoffs and/or  external  refinancings  of various
credits,   including   $58.8  million  in  payoffs   relating  to  eight  credit
relationships,  as further  discussed  under  "--Loans  and  Allowance  for Loan
Losses." We recorded  net loan  recoveries  of $3.6 million for the three months
ended June 30, 2005 and net loan  charge-offs of $3.0 million for the six months
ended June 30, 2005,  compared to net loan charge-offs of $5.4 million and $10.8
million for the  comparable  periods in 2004.  Our allowance for loan losses was
$140.2  million at June 30, 2005,  compared to $144.2  million at March 31, 2005
and $150.7  million at December 31,  2004.  Our  allowance  for loan losses as a
percentage  of loans,  net of  unearned  discount,  was 2.22% at June 30,  2005,
compared  to 2.34% at March  31,  2005 and  2.46%  at  December  31,  2004.  Our
allowance for loan losses as a percentage of nonperforming  loans was 188.77% at
June 30, 2005, compared to 180.71% at March 31, 2005 and 175.65% at December 31,
2004.  Management  continues to closely  monitor its  operations  to address the
ongoing  challenges  posed  by the  current  economic  environment  and  expects
nonperforming  loans to remain at  somewhat  elevated  levels in the near future
primarily as a result of the significant level of nonperforming loans associated
with our CIB Bank acquisition, which represent 57.75% of our total nonperforming
loans at June 30,  2005.  Management  considers  these  factors  in its  overall
assessment of the adequacy of the allowance for loan losses.

         Tables summarizing  nonperforming assets, past due loans and charge-off
and recovery  experience  are  presented  under  "--Loans and Allowance for Loan
Losses."

Noninterest Income

         Noninterest  income was $25.8  million and $46.9  million for the three
and six months ended June 30, 2005, respectively, in comparison to $20.1 million
and  $40.7  million  for the  comparable  periods  in 2004.  Noninterest  income
consists  primarily of service charges on deposit  accounts and customer service
fees,  mortgage-banking revenues,  investment management income, bank owned life
insurance investment income and other income.

         Service  charges on deposit  accounts  and  customer  service fees were
$10.2  million  and $19.5  million  for the three and six months  ended June 30,
2005,  respectively,  in  comparison  to $9.8 million and $18.7  million for the
comparable periods in 2004. The increase in service charges and customer service
fees is primarily  attributable  to increased  demand deposit  account  balances
associated  with our  acquisitions  of  Continental  Community  Bank  and  Trust
Company,  or CCB, CIB Bank and FBA,  completed in July 2004,  November  2004 and
April 2005,  respectively.  The  increase  is also  attributable  to  additional
products  and  services  available  and  utilized  by our  expanded  retail  and
commercial customer base, increased fee income from customer service charges for
non-sufficient fund and returned check fees coupled with enhanced control of fee
waivers, higher earnings allowances on commercial deposit accounts and increased
income associated with automated teller machine services and debit cards.

         The gain on loans  sold and held for sale was $6.8  million  and  $11.4
million  for the three and six months  ended  June 30,  2005,  respectively,  in
comparison to $4.0 million and $8.2 million for the comparable  periods in 2004.
We attribute  the increase in 2005 to an increase in the volume of mortgage loan
sales in the secondary market as a result of increased loan origination volumes.
The increase was also attributable to $1.3 million of gains on SBA loans sold by
SBLS LLC.

         Gains, net of expenses, on the sale of two Midwest banking offices were
$630,000 and $1.0 million for the three and six months ended June 30, 2004,  and
reflect a $390,000  gain,  net of  expenses,  on the sale of one of our Missouri
branch  banking  offices in February 2004, and a $630,000 gain, net of expenses,
on the sale of one of our Illinois  banking offices in April 2004. There were no
sales of branch  banking  offices during the three and six months ended June 30,
2005.

         Investment  management income was $2.2 million and $4.2 million for the
three and six months ended June 30, 2005,  respectively,  in  comparison to $1.7
million  and  $3.3  million  for the  comparable  periods  in  2004,  reflecting
increased  portfolio  management  fees  generated  by  our  institutional  money
management  subsidiary  attributable  to growth in assets under  management as a
result of new business development.


<PAGE>


         Other  income was $5.3  million and $9.3  million for the three and six
months ended June 30, 2005, respectively, in comparison to $2.7 million and $6.8
million for the comparable  periods in 2004. We attribute the primary components
of the increase in 2005 to:

         >>    an  increase  of $2.0  million in loan  servicing  fees.  The net
               increase is primarily  attributable  to increased fees from loans
               serviced for others,  including  SBLS LLC loan  servicing fees of
               $1.8 million,  partially  offset by amortization of SBA servicing
               rights  of  $1.2  million,  decreased  amortization  of  mortgage
               servicing  rights of $1.1 million,  increased  unused  commitment
               fees of  $447,000  and a lower  level of  interest  shortfall  on
               mortgage loans.  Interest shortfall is the difference between the
               interest collected from a loan-servicing customer upon prepayment
               of the loan and a full  month's  interest  that is required to be
               remitted to the security owner;

         >>    a  $500,000  recovery  of  agent  loan  collection  expenses,  as
               permitted under a loan participation  agreement prior to recovery
               of  principal  and  interest,   from  funds  collected  from  the
               liquidation of a portion of the collateral  that secured the loan
               by the receiver;

         >>    a net  decrease  in losses on the  valuation  or sale of  certain
               repossessed  assets,  primarily related to our commercial leasing
               portfolio.  Net gains  for 2005  were  $441,000  and  included  a
               $287,000 gain on the sale of repossessed  leasing equipment.  Net
               losses for 2004 were $654,000 and included a $750,000  write-down
               on repossessed aircraft leasing equipment;

         >>    an increase of $478,000  reflecting the reduction of a contingent
               liability  established in conjunction  with the sale of a portion
               of our commercial  leasing  portfolio in June 2004. The reduction
               of the  contingent  liability  in June  2005  was the  result  of
               further  reductions  in related  lease  balances for the specific
               pools of leases  sold,  as  further  discussed  in Note 10 to our
               Consolidated Financial Statements;

         >>    an increase of $431,000 in fees from fiduciary activities; and

         >>    our  acquisitions  of CCB and CIB Bank completed  during 2004 and
               FBA completed in April 2005; partially offset by

         >>    a decline  of  $852,000  in  rental  income  associated  with our
               reduced commercial leasing activities;

         >>    a decline of $392,000 in income  associated  with standby letters
               of credit;

         >>    a decline of $113,000 in brokerage revenue  primarily  associated
               with overall market conditions and reduced customer demand;

         >>    a net increase in losses,  net of gains,  on the  disposition  of
               certain  assets,  primarily  attributable  to a $319,000 net loss
               resulting from the demolition of a branch drive-thru  facility in
               the first quarter of 2005; and

         >>    an  increase  in net losses on our  derivative  instruments.  Net
               losses on derivative instruments were $590,000 for the six months
               ended June 30,  2005,  compared  to $455,000  for the  comparable
               period in 2004.

Noninterest Expense

         Noninterest  expense was $69.8 million and $133.5 million for the three
and six months ended June 30, 2005, respectively, in comparison to $55.4 million
and $108.0 million for the comparable  periods in 2004. Our efficiency ratio was
67.33%  and  65.84%  for  the  three  and  six  months   ended  June  30,  2005,
respectively,  from 57.89% and 56.57% for the  comparable  periods in 2004.  The
efficiency  ratio is used by the  financial  services  industry  to  measure  an
organization's  operating efficiency.  The efficiency ratio represents the ratio
of  noninterest  expense to net  interest  income and  noninterest  income.  The
increases  in  noninterest  expense  and our  efficiency  ratio  for  2005  were
primarily attributable to increases in expenses resulting from our 2004 and 2005
acquisitions,  increases in salaries and employee benefits  expense,  charitable
contribution  expense,  and  expenses  and losses,  net of gains,  on other real
estate.

         Salaries  and  employee  benefits  expense was $34.5  million and $67.5
million  for the three and six months  ended  June 30,  2005,  respectively,  in
comparison  to $28.2  million and $55.9  million for the  comparable  periods in
2004.  We  attribute  the overall  increase to  increased  salaries and employee
benefits  expenses  associated  with  an  aggregate  of 21  additional  branches
acquired in 2004 and 2005,  four de novo branches opened in 2004 and one de novo
branch  opened in January  2005,  in addition  to  generally  higher  salary and
employee  benefit  costs  associated  with  employing  and  retaining  qualified
personnel,  including higher employee benefits expense.  Our number of employees
on a full-time  equivalent  basis increased to  approximately  2,230 at June 30,
2005, from approximately 1,970 at June 30, 2004.
<PAGE>

         Occupancy,  net of rental income,  and furniture and equipment  expense
totaled $9.0  million and $18.3  million for the three and six months ended June
30, 2005, respectively,  in comparison to $8.7 million and $17.8 million for the
comparable  periods in 2004.  The increase is  attributable  to higher levels of
expense  resulting from our acquisitions in 2004 and 2005, which added 21 branch
offices,  and the opening of five de novo branch  offices in 2004 and 2005.  The
increase is also attributable to increased  technology  equipment  expenditures,
continued expansion and renovation of various corporate and branch offices,  and
increased   depreciation   expense  associated  with  capital  expenditures  and
acquisitions.

         Information technology fees were $9.4 million and $17.5 million for the
three and six months ended June 30, 2005,  respectively,  in  comparison to $8.0
million and $16.0  million  for the  comparable  periods in 2004.  As more fully
described in Note 6 to our Consolidated  Financial  Statements,  First Services,
L.P., a limited partnership  indirectly owned by our Chairman and members of his
immediate  family,  provides  information  technology  and  operational  support
services  to our  subsidiaries  and us.  We  attribute  the level of fees to our
recent acquisitions,  growth and technological  advancements consistent with our
product and service offerings, continued expansion and upgrades to technological
equipment,  networks and  communication  channels,  partially  offset by expense
reductions  resulting  from  the  information   technology  conversions  of  our
acquisitions   completed  in  2004,  as  well  as  the  achievement  of  certain
efficiencies  associated with the implementation of various technology projects.
The information  technology  conversions of CCB, CIB Bank and FBA were completed
in September 2004, February 2005 and June 2005, respectively.

         Legal,  examination  and  professional  fees were $2.1 million and $4.5
million  for the three and six months  ended  June 30,  2005,  respectively,  in
comparison to $1.7 million and $3.3 million for the comparable  periods in 2004.
The  continued   expansion  of  overall   corporate   activities,   the  ongoing
professional  services  utilized  by  certain  of  our  acquired  entities,  and
increased legal fees associated with commercial loan  documentation,  collection
efforts and  certain  defense  litigation  costs  primarily  related to acquired
entities have all  contributed  to the overall  expense levels in 2004 and 2005.
The  increase  in  2005 is also  attributable  to  $471,000  of  fees  paid  for
information technology,  accounting and other services provided by the seller of
CIB Bank  pursuant to a service  agreement to provide  services from the date of
sale,  November 30, 2004,  through the date of system  conversion,  mid-February
2005.

         Amortization   of   intangibles   associated   with  the   purchase  of
subsidiaries  was $1.1  million  and $2.4  million  for the three and six months
ended June 30, 2005,  respectively,  in  comparison to $658,000 and $1.3 million
for the comparable  periods in 2004. The increase is primarily  attributable  to
core deposit  intangibles  associated with our  acquisitions of CCB and CIB Bank
completed in 2004 and our acquisition of FBA completed in April 2005.

         Communications and advertising and business  development  expenses were
$2.2 million from $4.4 million for the three and six months ended June 30, 2005,
respectively,  compared  to $1.7  million and $3.5  million  for the  comparable
periods in 2004. The expansion of our sales, marketing and product group in 2004
and broadened  advertising campaigns have contributed to higher expenditures and
are consistent with our continued  focus on expanding our banking  franchise and
the products and services  available to our  customers.  Our spring  advertising
campaign  contributed to the increase in the second quarter of 2005. We continue
our  efforts  to manage  these  expenses  through  renegotiation  of  contracts,
enhanced focus on advertising and  promotional  activities in markets that offer
greater benefits, as well as ongoing cost containment efforts.

         Charitable  contributions expense was $1.6 million and $1.7 million for
the three and six months ended June 30, 2005, respectively,  compared to $56,000
and  $130,000  for the  comparable  periods in 2004.  The increase in expense is
primarily  attributable  to a $1.5 million  contribution in May 2005 to an urban
revitalization development project located in the city of St. Louis. In exchange
for this  contribution,  we received  Missouri  state tax  credits  that will be
utilized to reduce certain state income taxes.

         Other  expense was $8.5 million and $14.4 million for the three and six
months ended June 30, 2005, respectively, in comparison to $5.1 million and $7.6
million for the comparable periods in 2004. Other expense  encompasses  numerous
general and  administrative  expenses including  insurance,  freight and courier
services,  correspondent  bank  charges,  miscellaneous  losses and  recoveries,
expenses on other real estate owned,  memberships  and  subscriptions,  transfer
agent fees,  sales taxes and travel,  meals and  entertainment.  The increase is
primarily attributable to:

         >>    an increase of $3.8 million of  expenditures  and losses,  net of
               gains,  on other real  estate.  Expenditures  and losses,  net of
               gains,  on other real estate were  $570,000  and $608,000 for the
               three and six  months  ended  June 30,  2005,  respectively,  and
               included an $812,000  expense in May 2005  related to a parcel of
               other real estate acquired in conjunction with the acquisition of
               CIB  Bank.   These   expenditures   were   partially   offset  by
               approximately  $413,000  of gains  recorded  on the sale of three

<PAGE>

               holdings  of other  real  estate  during  the  first  and  second
               quarters of 2005.  Gains,  net of losses and  expenses,  on other
               real estate were  $404,000 and $3.1 million for the three and six
               months  ended June 30,  2004,  and  included a $2.7  million gain
               recorded  in  February  2004  on the  sale of a  residential  and
               recreational  development  property that was transferred to other
               real estate in January 2003 and  approximately  $390,000 of gains
               recorded  on the sale of two  additional  holdings  of other real
               estate in the second quarter of 2004;

         >>    expenses associated with our acquisitions  completed during 2004,
               particularly CIB Bank, and 2005; and

         >>    continued growth and expansion of our banking franchise.

Provision for Income Taxes

         The  provision for income taxes was $15.0 million and $28.3 million for
the three and six months ended June 30, 2005,  respectively,  in  comparison  to
$11.3  million  and  $22.9  million  for the  comparable  periods  in 2004.  The
effective tax rate was 35.85% and 36.63% for the three and six months ended June
30, 2005,  respectively,  in comparison to 30.30% and 34.08% for the  comparable
periods in 2004.  In June 2004,  we  recorded a reversal  of a $2.8  million tax
reserve that was no longer deemed  necessary as a result of the  resolution of a
potential tax liability.  Excluding this transaction, the effective tax rate was
37.80% and 38.25% for the three and six months  ended June 30,  2004.  The lower
effective tax rate for the three and six months ended June 30, 2005, compared to
the comparable periods in 2004 after adjusting for the nonrecurring transaction,
was primarily the result of a lower effective state tax rate and the utilization
of certain state tax credits.

                          Interest Rate Risk Management

         We utilize derivative financial instruments to assist in our management
of interest rate  sensitivity  by modifying the  repricing,  maturity and option
characteristics  of certain assets and  liabilities.  The  derivative  financial
instruments  we held as of June 30, 2005 and December 31, 2004 are summarized as
follows:
<TABLE>
<CAPTION>

                                                                      June 30, 2005             December 31, 2004
                                                                ------------------------    ------------------------
                                                                  Notional      Credit       Notional       Credit
                                                                   Amount      Exposure       Amount       Exposure
                                                                   ------      --------       ------       --------
                                                                            (dollars expressed in thousands)

<S>                                                               <C>              <C>        <C>             <C>
         Cash flow hedges.....................................    $300,000         521        500,000         1,233
         Fair value hedges....................................      25,000         997        276,200         9,609
         Interest rate lock commitments.......................       9,200          --          5,400            --
         Forward commitments to sell
           mortgage-backed securities.........................      43,000          --         34,000            --
                                                                  ========         ===        =======         =====
</TABLE>

         The notional  amounts of our  derivative  financial  instruments do not
represent amounts exchanged by the parties and, therefore,  are not a measure of
our credit exposure  through our use of these  instruments.  The credit exposure
represents  the  loss we would  incur in the  event  the  counterparties  failed
completely  to  perform  according  to the  terms  of the  derivative  financial
instruments  and the  collateral  held to support the credit  exposure was of no
value.

         During the three and six months  ended June 30,  2005,  we realized net
interest  income on our  derivative  financial  instruments of $297,000 and $3.9
million,  respectively, in comparison to $15.4 million and $31.7 million for the
comparable  periods  in 2004.  The  decrease  is  primarily  attributable  to an
increase in prevailing  interest  rates that began in mid-2004 and has continued
into 2005, the maturity of $800.0 million  notional amount of interest rate swap
agreements  during 2004 and $200.0 million in March 2005, and the termination of
$150.0 million and $101.2 million of interest rate swap agreements designated as
fair  value  hedges in  February  2005 and May 2005,  respectively,  as  further
discussed below.  Although the Company has implemented other methods to mitigate
the reduction in net interest income,  as further  discussed below, the maturity
and  termination of the swap agreements has resulted in a compression of our net
interest margin of  approximately  70 basis points for the six months ended June
30,  2005,  in  comparison  to the same  period  in 2004,  and will  result in a
reduction  of future net  interest  income and  further  compression  of our net
interest  margin  unless  interest  rates  increase.  We recorded  net losses on
derivative  instruments,  which  are  included  in  noninterest  income  in  our
consolidated  statements  of income,  of  $590,000  for the three and six months
ended June 30, 2005, in comparison to net gains of $487,000 and $455,000 for the
three and six months ended June 30, 2004, respectively.  The net losses recorded
in 2005 reflect changes in the value of our fair value hedges and the underlying
hedged  liabilities  during 2005 until the  termination of the $150.0 million of
interest rate swap agreements  designated as fair value hedges in February 2005,
as further discussed below.
<PAGE>

Cash Flow Hedges.  During September 2000, March 2001, April 2001, March 2002 and
July 2003,  we entered into interest  rate swap  agreements  of $600.0  million,
$200.0  million,  $175.0  million,  $150.0 million and $200.0  million  notional
amount,  respectively,  to effectively lengthen the repricing characteristics of
certain  interest-earning  assets to correspond  more closely with their funding
source  with the  objective  of  stabilizing  cash flow,  and  accordingly,  net
interest income over time. The underlying hedged assets are certain loans within
our commercial loan portfolio.  The swap agreements,  which have been designated
as cash flow hedges,  provide for us to receive a fixed rate of interest and pay
an adjustable rate of interest  equivalent to the weighted average prime lending
rate minus 2.70%, 2.82%, 2.82%, 2.80% and 2.85%, respectively.  The terms of the
swap agreements provide for us to pay and receive interest on a quarterly basis.
In November  2001,  we  terminated  $75.0  million  notional  amount of the swap
agreements  originally  entered into in April 2001,  which would have expired in
April  2006,  in order to  appropriately  modify our overall  hedge  position in
accordance  with our interest rate risk  management  program.  In addition,  the
$150.0 million notional amount swap agreement that we entered into in March 2002
matured in March 2004, the $600.0 million  notional  amount swap agreements that
we entered into in September  2000  matured in  September  2004,  and the $200.0
million  notional  amount  swap  agreement  that we  entered  into in March 2001
matured on March 21, 2005. The amount receivable by us under the swap agreements
was $2.4  million  and $2.7  million at June 30,  2005 and  December  31,  2004,
respectively,  and the amount  payable by us under the swap  agreements was $1.8
million and $1.4 million at June 30, 2005 and December 31, 2004, respectively.

         In October 2004,  we  implemented  the guidance  required by the FASB's
Derivatives  Implementation Group on Statement of Financial Accounting Standards
No.  133   Implementation   Issue  No.  G25,   Cash  Flow   Hedges:   Using  the
First-Payments-Received Technique in Hedging the Variable Interest Payments on a
Group of Non-Benchmark-Rate-Based Loans, or DIG issue G25, and de-designated all
of  the  specific   pre-existing  cash  flow  hedging  relationships  that  were
inconsistent with the guidance in DIG Issue G25. Consequently,  the $4.1 million
net gain associated with the  de-designated  cash flow hedging  relationships at
September  30, 2004,  is being  amortized to interest  income over the remaining
lives of the respective hedging  relationships,  which ranged from approximately
six  months  to  three  years  at the  date of  implementation.  We  elected  to
prospectively  re-designate new cash flow hedging relationships based upon minor
revisions  to the  underlying  hedged  items as required by the  guidance in DIG
Issue G25.  The  implementation  of DIG Issue G25 did not and is not expected to
have a material  impact on our  consolidated  financial  statements,  results of
operations or interest rate risk management program.

         The maturity dates, notional amounts,  interest rates paid and received
and fair value of our  interest  rate swap  agreements  designated  as cash flow
hedges as of June 30, 2005 and December 31, 2004 were as follows:
<TABLE>
<CAPTION>

                                                                 Notional    Interest Rate  Interest Rate    Fair
                          Maturity Date                           Amount         Paid         Received       Value
                          -------------                           ------         ----         --------       -----
                                                                         (dollars expressed in thousands)

         June 30, 2005:
<S>                <C>                                          <C>              <C>           <C>          <C>
             April 2, 2006...................................   $ 100,000        3.18%         5.45%        $ 1,179
             July 31, 2007...................................     200,000        3.15          3.08          (3,902)
                                                                ---------                                   -------
                                                                $ 300,000        3.16          3.87         $(2,723)
                                                                =========        ====          ====         =======

         December 31, 2004:
             March 21, 2005..................................   $ 200,000        2.43%         5.24%        $ 1,155
             April 2, 2006...................................     100,000        2.43          5.45           2,678
             July 31, 2007...................................     200,000        2.40          3.08          (2,335)
                                                                ---------                                   -------
                                                                $ 500,000        2.42          4.42         $ 1,498
                                                                =========        ====          ====         =======
</TABLE>

Fair Value Hedges. We entered into the following  interest rate swap agreements,
designated  as  fair  value  hedges,   to  effectively   shorten  the  repricing
characteristics  of certain  interest-bearing  liabilities  to  correspond  more
closely with their funding source with the objective of stabilizing net interest
income over time:

         >>    During  January  2001,  we entered  into $50.0  million  notional
               amount of  three-year  interest rate swap  agreements  and $150.0
               million   notional   amount  of  five-year   interest  rate  swap
               agreements  that  provided  for us to  receive  a  fixed  rate of
               interest and pay an adjustable rate of interest equivalent to the
               three-month London Interbank Offering Rate. The underlying hedged

<PAGE>

               liabilities were a portion of our other time deposits.  The terms
               of the  swap  agreements  provided  for us to pay  interest  on a
               quarterly basis and receive  interest on a semiannual  basis. The
               amount  receivable  by us  under  the  swap  agreements  was $3.9
               million at December 31, 2004,  and the amount payable by us under
               the swap  agreements  was  $695,000  at  December  31,  2004.  In
               September 2003, we discontinued hedge accounting treatment on the
               $50.0  million  notional  amount of  three-year  swap  agreements
               entered  into in  January  2001  due to the  loss  of our  highly
               correlated  hedge  positions  between the swap agreements and the
               underlying hedged liabilities.  Consequently,  the resulting $1.3
               million basis adjustment of the underlying hedged liabilities was
               recorded as a reduction of interest  expense  over the  remaining
               weighted average maturity of the underlying hedged liabilities of
               approximately  three  months.  This $50.0  million  notional swap
               agreement matured in January 2004.  Effective  February 25, 2005,
               we terminated  the remaining  $150.0 million  notional  amount of
               five-year  interest rate swap agreements that hedged a portion of
               our other time deposits.  The  termination of the swap agreements
               resulted from an increasing level of  ineffectiveness  associated
               with the  correlation  of the hedge  positions  between  the swap
               agreements and the underlying  hedged  liabilities  that had been
               anticipated  as  the  swap  agreements  neared  their  originally
               scheduled  maturity  dates in January 2006.  The  resulting  $3.1
               million basis adjustment of the underlying hedged  liabilities is
               being  recorded as interest  expense over the remaining  weighted
               average  maturity  of  the  underlying   hedged   liabilities  of
               approximately ten months.

         >>    During May 2002, March 2003 and April 2003, we entered into $55.2
               million,   $25.0  million  and  $46.0  million  notional  amount,
               respectively,  of interest rate swap  agreements that provide for
               us to receive a fixed rate of interest and pay an adjustable rate
               of  interest  equivalent  to  the  three-month  London  Interbank
               Offering  Rate plus  2.30%,  2.55% and 2.58%,  respectively.  The
               underlying  hedged  liabilities are a portion of our subordinated
               debentures.  The terms of the swap  agreements  provide for us to
               pay and  receive  interest on a  quarterly  basis.  There were no
               amounts  receivable or payable by us at June 30, 2005 or December
               31, 2004. Effective May 27, 2005, we terminated the $55.2 million
               and  $46.0  million   notional   swap   agreements  in  order  to
               appropriately modify our future hedge position in accordance with
               our interest rate risk management program. The resulting $854,000
               basis  adjustment  of  the  underlying  hedged  liabilities,   in
               aggregate,  is being recorded as a reduction of interest  expense
               over  the   remaining   maturities  of  the   underlying   hedged
               liabilities, which range from 26 to 28 years.

         The maturity dates, notional amounts,  interest rates paid and received
and fair value of our interest  rate swap  agreements  designated  as fair value
hedges as of June 30, 2005 and December 31, 2004 were as follows:
<TABLE>
<CAPTION>

                                                                  Notional   Interest Rate  Interest Rate    Fair
                          Maturity Date                            Amount        Paid         Received       Value
                          -------------                            ------        ----         --------       -----
                                                                         (dollars expressed in thousands)

         June 30, 2005:
<S>                                                             <C>              <C>           <C>         <C>
             March 20, 2033...................................  $  25,000        5.64%         8.10%       $  (280)
                                                                =========       =====         =====        =======

         December 31, 2004:
             January 9, 2006 (1)..............................  $ 150,000        2.06%         5.51%       $ 3,610
             December 31, 2031 (2)............................     55,200        4.27          9.00          2,171
             March 20, 2033...................................     25,000        4.52          8.10           (929)
             June 30, 2033 (2)................................     46,000        4.55          8.15         (1,689)
                                                                ---------                                  -------
                                                                $ 276,200        3.14          6.88        $ 3,163
                                                                =========        ====          ====        =======
         ------------------
         (1) The interest rate swap agreements were terminated effective February 25, 2005, as further discussed above.
         (2) The interest rate swap agreements were terminated effective May 27, 2005, as further discussed above.
</TABLE>
<PAGE>

Interest  Rate Cap  Agreements.  During 2003 and 2004, we entered into five term
repurchase agreements under master repurchase agreements with unaffiliated third
parties,  as  further  described  in  Note  9  to  our  Consolidated   Financial
Statements.  The  underlying  securities  associated  with the  term  repurchase
agreements are  mortgage-backed  securities and callable U.S.  Government agency
securities  and are  held by  other  financial  institutions  under  safekeeping
agreements.  The term repurchase agreements were entered into with the objective
of  stabilizing  net interest  income over time and further  protecting  our net
interest  margin  against  changes in interest  rates.  The interest  rate floor
agreements included within the term repurchase agreements (and the interest rate
cap  agreements  previously  included  within  the term  repurchase  agreements)
represent  embedded  derivative  instruments  which, in accordance with existing
accounting literature governing derivative  instruments,  are not required to be
separated from the term repurchase  agreements and accounted for separately as a
derivative  financial  instrument.  As such, the term repurchase  agreements are
reflected in other borrowings in the consolidated balance sheets and the related
interest  expense is reflected as interest  expense on other  borrowings  in the
consolidated  statements  of  income.  As  further  described  in  Note 9 to our
Consolidated  Financial  Statements,  on March 21, 2005, in accordance  with our
interest  rate  risk  management   program,  we  modified  our  term  repurchase
agreements under master repurchase agreements with unaffiliated third parties to
terminate the interest rate cap  agreements  embedded  within the agreements and
simultaneously  enter into interest rate floor agreements,  also embedded within
the  agreements.  These  modifications  resulted in  adjustments to the existing
interest rate spread to LIBOR for the underlying agreements.  The modified terms
of the term repurchase  agreements became effective during the second quarter of
2005.  We did not incur  any  costs  associated  with the  modifications  of the
agreements  nor did the  modifications  result  in a  change  to the  accounting
treatment of the embedded derivative instruments.

Pledged  Collateral.  At June 30,  2005 and  December  31,  2004,  we had a $5.0
million  letter of  credit  issued on our  behalf  to the  counterparty  and had
pledged  investment  securities  available  for sale  with a fair  value of $1.8
million and $527,000,  respectively,  in connection  with our interest rate swap
agreements.  At June 30, 2005,  we had pledged cash of $368,000 as collateral in
connection with our interest rate swap agreements.  At December 31, 2004, we had
accepted cash of $6.0 million as collateral in connection with our interest rate
swap agreements.

Interest Rate Lock  Commitments / Forward  Commitments  to Sell  Mortgage-Backed
Securities.  Derivative  financial  instruments issued by us consist of interest
rate lock commitments to originate  fixed-rate loans to be sold.  Commitments to
originate  fixed-rate loans consist  primarily of residential real estate loans.
These net loan  commitments  and loans  held for sale are  hedged  with  forward
contracts  to sell  mortgage-backed  securities.  The  carrying  value  of these
interest  rate lock  commitments  included in other  assets in the  consolidated
balance  sheets was $54,000 and $20,000 at June 30, 2005 and  December 31, 2004,
respectively.
<PAGE>

                       Loans and Allowance for Loan Losses

         Interest earned on our loan portfolio  represents the principal  source
of income  for First  Bank.  Interest  and fees on loans were 84.9% and 84.4% of
total  interest  income  for the  three  and six  months  ended  June 30,  2005,
respectively,  in  comparison to 86.7% and 87.2% for the  comparable  periods in
2004. Total loans, net of unearned  discount,  increased $171.7 million to $6.31
billion,  or 71.9% of total assets, at June 30, 2005, compared to $6.14 billion,
or 70.3% of total assets,  at December 31, 2004. The overall  increase in loans,
net of unearned  discount,  in 2005 is primarily  attributable  to internal loan
growth  and the  acquisition  of FBA,  which  provided  loans,  net of  unearned
discount, of $54.3 million. The net increase is primarily attributable to:

         >>    an  increase  of  $120.5  million  in our  real  estate  mortgage
               portfolio primarily attributable to the acquisition of FBA, which
               provided real estate mortgage loans of $54.2 million,  as well as
               internal growth within our loan portfolio;  management's business
               strategy decision in mid-2003 to retain a portion of the new loan
               production in our residential real estate mortgage portfolio as a
               result of continued weak loan demand in other sectors of our loan
               portfolio;  and a home equity  product line campaign that we held
               in mid-2004;

         >>    an  increase  of $54.0  million in loans held for sale  resulting
               from the timing of loan sales in the secondary  mortgage  market,
               coupled with an overall increase in loan origination  volumes for
               the three and six months  ended June 30,  2005 as compared to the
               comparable  periods  in  2004,  partially  offset  by the sale of
               certain acquired loans; and

         >>    an increase of $35.2 million in our real estate  construction and
               development   portfolio   resulting   primarily   from  new  loan
               originations and seasonal  fluctuations on existing and available
               credit lines; partially offset by

         >>    a decrease  of $40.1  million in our  commercial,  financial  and
               agricultural  portfolio,  due  partially to a decline in internal
               loan volumes and an  anticipated  amount of attrition  associated
               with our  acquisitions  completed  during 2004,  particularly CIB
               Bank,  as  well  as  general  runoff  of  balances   within  this
               portfolio.



<PAGE>


         Nonperforming  assets include nonaccrual loans,  restructured loans and
other real estate.  The following table presents the categories of nonperforming
assets and certain ratios as of June 30, 2005 and December 31, 2004:
<TABLE>
<CAPTION>

                                                                                   June 30,        December 31,
                                                                                     2005              2004
                                                                                     ----              ----
                                                                                (dollars expressed in thousands)
         Commercial, financial and agricultural:
<S>                                                                              <C>                  <C>
           Nonaccrual.........................................................   $     8,838          10,147
           Restructured.......................................................            --               4
         Real estate construction and development:
           Nonaccrual.........................................................        10,022          13,435
         Real estate mortgage:
           One-to-four family residential:
              Nonaccrual......................................................        10,613           9,881
              Restructured....................................................            11              11
           Multi-family residential loans:
              Nonaccrual......................................................           976             434
           Commercial real estate loans:
              Nonaccrual......................................................        42,871          50,671
         Lease financing:
           Nonaccrual.........................................................           766             907
         Consumer and installment:
           Nonaccrual.........................................................           155             310
                                                                                 -----------      ----------
                  Total nonperforming loans...................................        74,252          85,800
         Other real estate....................................................         2,001           4,030
                                                                                 -----------      ----------
                  Total nonperforming assets..................................   $    76,253          89,830
                                                                                 ===========      ==========

         Loans, net of unearned discount......................................   $ 6,309,680       6,137,968
                                                                                 ===========      ==========

         Loans past due 90 days or more and still accruing....................   $     7,146          28,689
                                                                                 ===========      ==========

         Ratio of:
           Allowance for loan losses to loans.................................          2.22%           2.46%
           Nonperforming loans to loans.......................................          1.18            1.40
           Allowance for loan losses to nonperforming loans...................        188.77          175.65
           Nonperforming assets to loans and other real estate................          1.21            1.46
                                                                                 ===========      ==========
</TABLE>

         Nonperforming  loans,  consisting  of loans on  nonaccrual  status  and
certain  restructured  loans, were $74.3 million at June 30, 2005, in comparison
to $79.8 million at March 31, 2005 and $85.8 million at December 31, 2004. Other
real estate owned was $2.0 million,  $1.8 million,  and $4.0 million at June 30,
2005, March 31, 2005 and December 31, 2004, respectively.  Nonperforming assets,
consisting of nonperforming loans and other real estate owned,  improved by $5.3
million,  or 6.55%,  during the second quarter of 2005,  and $13.6  million,  or
15.11%,  during the first six months of 2005, to $76.3 million at June 30, 2005,
compared to $81.6  million at March 31, 2005 and $89.8  million at December  31,
2004. A significant portion of nonperforming assets includes nonperforming loans
associated  with our  acquisition  of CIB Bank,  which have  decreased  to $42.9
million,  or 57.75% of our total  nonperforming  loans,  at June 30, 2005,  from
$43.7  million  at March 31,  2005 and  $50.5  million  at  December  31,  2004.
Nonperforming  loans were 1.18% of loans, net of unearned discount,  at June 30,
2005,  compared  to 1.30% and 1.40% at March 31,  2005 and  December  31,  2004,
respectively.  Additionally,  loans past due 90 days or more and still  accruing
interest  decreased  $21.5  million to $7.1  million at June 30, 2005 from $28.7
million at December 31, 2004. The decrease in  nonperforming  loans and past due
loans during the six months ended June 30, 2005  primarily  resulted  from:  our
continued emphasis on improving asset quality;  the sale of approximately  $14.3
million of certain acquired  nonperforming loans,  specifically $2.8 million and
$11.5  million  during the first and second  quarters of 2005,  respectively;  a
notable reduction in net loan  charge-offs,  which reflected net loan recoveries
of  $3.6  million  for the  three  months  ended  June  30,  2005  and net  loan
charge-offs of $3.0 million for the six months ended June 30, 2005;  upgrades to
the  credit  ratings of certain  loans;  and  significant  loan  payoffs  and/or
external  refinancings  of  various  credits,  including  $58.5  million of loan
payoffs on eight credit  relationships  during the first and second  quarters of
2005. A portion of the loan  payoffs and sales during the first  quarter of 2005
pertaining to certain acquired nonperforming loans that were classified as loans
held for sale as of  December  31, 2004  contributed  to a  reallocation  of the
purchase price on our acquisition of Hillside, as further discussed in Note 2 to
our Consolidated Financial Statements. Additionally, we recorded a write-down on
an acquired  parcel of other real estate owned to its estimated fair value based
upon additional data received. This $1.6 million write-down on other real estate
owned, which was also recorded as an acquisition-related adjustment in the first
quarter of 2005 and is further discussed in Note 2 to our Consolidated Financial
Statements, further contributed to the decrease in nonperforming assets.
<PAGE>

         We recorded  net loan  recoveries  of $3.6 million for the three months
ended June 30, 2005 and net loan  charge-offs of $3.0 million for the six months
ended June 30, 2005, in comparison to net loan  charge-offs  of $5.4 million and
$10.8 million for the comparable  periods in 2004.  Loan  charge-offs  were $2.4
million and $15.0  million for the three and six months ended June 30, 2005,  in
comparison  to $12.8  million and $24.3  million for the  comparable  periods in
2004.  Loan recoveries were $6.0 million and $12.1 million for the three and six
months ended June 30, 2005,  in comparison to $7.4 million and $13.5 million for
the comparable periods in 2004. The allowance for loan losses was $140.2 million
at June 30,  2005,  compared  to $144.2  million  at March 31,  2005 and  $150.7
million at December 31, 2004.  Our  allowance for loan losses as a percentage of
loans, net of unearned discount,  was 2.22% at June 30, 2005,  compared to 2.34%
at March 31, 2005 and 2.46% at December 31, 2004.  Our allowance for loan losses
as a percentage of nonperforming loans was 188.77% at June 30, 2005, compared to
180.71% at March 31,  2005 and  175.65% at  December  31,  2004.  We continue to
closely monitor our loan portfolio and address the ongoing  challenges  posed by
the current economic  environment,  including reduced loan demand within certain
sectors of our loan portfolio. We consider this in our overall assessment of the
adequacy  of  the  allowance  for  loan  losses.   Despite  the  improvement  in
nonperforming  assets  during  2005,  we  anticipate  nonperforming  assets will
continue to remain at somewhat elevated levels in the near future as a result of
the significant level of acquired  nonperforming loans associated with our three
acquisitions in the later part of 2004, particularly our acquisition of CIB Bank
in November 2004.

         Each month, the credit  administration  department  provides management
with detailed  lists of loans on the watch list and summaries of the entire loan
portfolio by risk rating. These are coupled with analyses of changes in the risk
profile  of the  portfolio,  changes in  past-due  and  nonperforming  loans and
changes  in watch  list and  classified  loans over  time.  In this  manner,  we
continually  monitor the overall  increases or decreases in the level of risk in
the  portfolio.  Factors are applied to the loan  portfolio for each category of
loan risk to  determine  acceptable  levels of  allowance  for loan  losses.  In
addition,  a quarterly  evaluation  of each lending  unit is performed  based on
certain factors,  such as lending personnel  experience,  recent credit reviews,
loan concentrations and other factors. Based on this evaluation,  changes to the
allowance  for  loan  losses  may  be  required  due to the  perceived  risk  of
particular  portfolios.  The calculated  allowance required for the portfolio is
then  compared  to the actual  allowance  balance to  determine  the  provisions
necessary  to  maintain  the  allowance  at  appropriate  levels.  In  addition,
management exercises a certain degree of judgment in its analysis of the overall
adequacy of the allowance for loan losses. In its analysis, management considers
the change in the portfolio,  including  growth,  composition,  the ratio of net
loans to total  assets,  and the economic  conditions of the regions in which we
operate.  Based on this quantitative and qualitative  analysis,  adjustments are
made to the allowance  for loan losses.  Such  adjustments  are reflected in our
consolidated statements of income.

         Changes in the  allowance  for loan losses for the three and six months
ended June 30, 2005 and 2004 were as follows:
<TABLE>
<CAPTION>

                                                                Three Months Ended            Six Months Ended
                                                                     June 30,                     June 30,
                                                              ----------------------        ---------------------
                                                                2005          2004            2005         2004
                                                                ----          ----            ----         ----
                                                                       (dollars expressed in thousands)

<S>                                                           <C>           <C>             <C>           <C>
         Balance, beginning of period.......................  $ 144,154     124,871         150,707       116,451
         Acquired allowance for loan losses.................        419          --             419            --
              Other adjustments (1)(2)                               --      (1,479)             --          (479)
                                                              ---------     -------         -------       -------
                                                                144,573     123,392         151,126       115,972
                                                              ---------     -------         -------       -------
         Loans charged-off..................................     (2,385)    (12,801)        (15,021)      (24,295)
         Recoveries of loans previously charged-off.........      5,976       7,375          12,059        13,539
                                                              ---------     -------         -------       -------
           Net loan recoveries (charge-offs)................      3,591      (5,426)         (2,962)      (10,756)
                                                              ---------     -------         -------       -------
         Provision for loan losses..........................     (8,000)      3,000          (8,000)       15,750
                                                              ---------     -------         -------       -------
         Balance, end of period ............................  $ 140,164     120,966         140,164       120,966
                                                              =========     =======         =======       =======
         ---------------
         (1)  In December 2003, we established a $1.0 million specific reserve for estimated losses on a $5.3 million
              letter of credit that was recorded in accrued and other liabilities in our consolidated balance sheets.
              In January 2004, the letter of credit was fully  funded as a loan and the related $1.0 million specific
              reserve was reclassified from accrued and other liabilities to the allowance for loan losses.
         (2)  On June 30, 2004, First Banks reclassified $1.5 million from the allowance for loan losses  to  accrued
              and other liabilities to establish a specific reserve associated with the commercial  leasing portfolio
              sale and related recourse obligations for certain leases sold.
</TABLE>
<PAGE>

                                    Liquidity

         Our  liquidity  is the ability to maintain a cash flow that is adequate
to fund  operations,  service debt  obligations  and meet  obligations and other
commitments  on a timely basis.  We receive  funds for  liquidity  from customer
deposits,  loan  payments,  maturities  of  loans  and  investments,   sales  of
investments and earnings.  In addition,  we may avail ourselves of other sources
of funds by issuing  certificates  of deposit in  denominations  of  $100,000 or
more, borrowing federal funds, selling securities under agreements to repurchase
and utilizing  borrowings from the Federal Home Loan Bank and other  borrowings,
including our revolving  credit line.  The aggregate  funds  acquired from these
sources were $1.42 billion at June 30, 2005 and December 31, 2004.

         The  following  table  presents the  maturity  structure of these other
sources of funds,  which consists of certificates of deposit of $100,000 or more
and other borrowings, including our note payable, at June 30, 2005:

<TABLE>
<CAPTION>
                                                               Certificates of Deposit      Other
                                                                 of $100,000 or More     Borrowings         Total
                                                                 -------------------     ----------         -----
                                                                          (dollars expressed in thousands)

<S>                                                                   <C>                 <C>               <C>
         Three months or less.....................................    $219,375            166,991           386,366
         Over three months through six months.....................     152,556                 --           152,556
         Over six months through twelve months....................     225,797              4,000           229,797
         Over twelve months.......................................     270,750            385,300           656,050
                                                                      --------            -------         ---------
              Total...............................................    $868,478            556,291         1,424,769
                                                                      ========            =======         =========
</TABLE>

         In addition to these  sources of funds,  First Bank has  established  a
borrowing  relationship  with  the  Federal  Reserve  Bank  of St.  Louis.  This
borrowing  relationship,  which is  secured by  commercial  loans,  provides  an
additional liquidity facility that may be utilized for contingency  purposes. At
June 30, 2005 and December 31, 2004, First Bank's  borrowing  capacity under the
agreement was approximately $767.2 million and $778.7 million,  respectively. In
addition,  First Bank's borrowing  capacity  through its  relationship  with the
Federal Home Loan Bank was  approximately  $563.1  million and $505.2 million at
June 30, 2005 and December 31, 2004, respectively. Exclusive of the Federal Home
Loan Bank  advances  outstanding  of $39.4 million and $35.6 million at June 30,
2005 and December 31, 2004,  respectively,  which represent  advances assumed in
conjunction  with various  acquisitions,  First Bank had no amounts  outstanding
under its borrowing arrangement with the Federal Home Loan Bank at June 30, 2005
and December 31, 2004.

         In addition  to our owned  banking  facilities,  we have  entered  into
long-term leasing  arrangements to support our ongoing activities.  The required
payments under such  commitments and other  contractual  obligations at June 30,
2005, are as follows:
<TABLE>
<CAPTION>

                                                            Less than       1-3          3-5         Over
                                                             1 Year        Years        Years       5 Years      Total
                                                             ------        -----        -----       -------      -----
                                                                       (dollars expressed in thousands)

<S>                                                        <C>             <C>          <C>         <C>          <C>
         Operating leases...............................   $    9,829      14,289       9,164       17,497       50,779
         Certificates of deposit (1)....................    1,846,403     812,899     165,982       32,803    2,858,087
         Other borrowings (1)...........................      170,991     365,500       8,800       11,000      556,291
         Subordinated debentures (1)....................           --          --          --      275,213      275,213
         Other contractual obligations..................        1,678         323          77           20        2,098
                                                           ----------   ---------    --------     --------    ---------
              Total.....................................   $2,028,901   1,193,011     184,023      336,533    3,742,468
                                                           ==========   =========    ========     ========    =========
         ---------------
         (1) Amounts exclude the related interest expense accrued on these obligations as of June 30, 2005.
</TABLE>

         Management  believes the available  liquidity and operating  results of
First  Bank will be  sufficient  to  provide  funds for growth and to permit the
distribution  of  dividends  to us  sufficient  to meet our  operating  and debt
service  requirements,  both on a short-term  and  long-term  basis,  and to pay
interest  on the  subordinated  debentures  that  we  issued  to our  affiliated
statutory and business financing trusts.
<PAGE>

                       Effects of New Accounting Standards

         In November 2003, the Emerging  Issues Task Force,  or EITF,  reached a
consensus  on certain  disclosure  requirements  under  EITF Issue No 03-1,  The
Meaning  of  Other-Than-Temporary  Impairment  and Its  Application  to  Certain
Investments.  The new  disclosure  requirements  apply to investment in debt and
marketable  equity  securities  that are  accounted  for  under  SFAS  No.  115,
Accounting for Certain  Investments in Debt and Equity Securities,  and SFAS No.
124,  Accounting for Certain  Investments Held by Not-for-Profit  Organizations.
Effective  for fiscal  years  ending after  December  15,  2003,  companies  are
required to disclose information about debt or marketable equity securities with
market  values below  carrying  values.  We  previously  adopted the  disclosure
requirements of EITF Issue No. 03-1. In March 2004, the EITF came to a consensus
regarding EITF 03-1.  Securities in scope are those subject to SFAS 115 and SFAS
124. The EITF adopted a three-step  model that requires  management to determine
if impairment  exists,  decide  whether it is other than  temporary,  and record
other-than-temporary  losses in earnings.  In September  2004, the FASB approved
issuing a Staff Position to delay the  requirement to record  impairment  losses
under  EITF  03-1,  but  broadened  the  scope to  include  additional  types of
securities.  As  proposed,  the delay  would  have  applied  only to those  debt
securities  described in paragraph 16 of EITF 03-1,  the Consensus that provides
guidance  for  determining  whether  an  investment's  impairment  is other than
temporary  and  should be  recognized  in  income.  On June 29,  2005,  the FASB
directed to issue EITF Issue 03-1-a, Implementation Guidance for the Application
of Paragraph 16 of EITF Issue No. 03-1, as final. The final EITF, to be retitled
FAS 115-1, The Meaning of Other-Than Temporary Impairment and Its Application to
Certain  Investments,  is  expected  to be  issued  in  August  2005 and will be
effective  for  other-than-temporary  impairment  analysis  conducted in periods
beginning after September 15, 2005.

         In December 2003,  the Accounting  Standards  Executive  Committee,  or
AcSEC, issued SOP 03-3, Accounting for Certain Loans or Debt Securities Acquired
in a Transfer,  effective  for loans  acquired in fiscal years  beginning  after
December 15, 2004. The scope of SOP 03-3 applies to problem loans that have been
acquired, either individually in a portfolio, or in an acquisition.  These loans
must have evidence of credit  deterioration and the purchaser must not expect to
collect  contractual  cash flows.  SOP 03-3  updates  Practice  Bulletin  No. 6,
Amortization of Discounts on Certain  Acquired  Loans,  for more recently issued
literature,  including  FASB  Statements  No. 114,  Accounting  by Creditors for
Impairment of a Loan; No. 115,  Accounting  for Certain  Investments in Debt and
Equity  Securities;  and No. 140,  Accounting  for  Transfers  and  Servicing of
Financial Assets and Extinguishments of Liabilities.  Additionally, it addresses
FASB Statement No. 91,  Accounting for  Nonrefundable  Fees and Costs Associated
with  Originating or Acquiring  Loans and Initial Direct Costs of Leases,  which
requires  that  discounts be  recognized as an adjustment of yield over a loan's
life.  SOP 03-3 states that an institution  may no longer  display  discounts on
purchased  loans  within the scope of SOP 03-3 on the balance  sheet and may not
carry over the  allowance  for loan losses.  For those loans within the scope of
SOP 03-3,  this statement  clarifies that a buyer cannot carry over the seller's
allowance   for  loan   losses  for  the   acquisition   of  loans  with  credit
deterioration.  Loans acquired with evidence of  deterioration in credit quality
since  origination  will need to be  accounted  for under a new method  using an
income  recognition model. This prohibition also applies to purchases of problem
loans not  included in a purchase  business  combination,  which  would  include
syndicated  loans  purchased  in the  secondary  market  and loans  acquired  in
portfolio purchases. We implemented SOP 03-3 in conjunction with our acquisition
of FBA, which we completed on April 29, 2005. The implementation of SOP 03-3, as
it pertains to this  individual  transaction,  did not have a material impact on
our consolidated financial statements or results of operations. We will continue
to evaluate the impact of SOP 03-3 on our consolidated  financial statements and
results  of  operations  as it relates to the  recently  announced  acquisitions
described  in  Note  2 to  our  Consolidated  Financial  Statements  and  future
transactions.

         On March 1, 2005, the Board of Governors of the Federal Reserve System,
or Board,  adopted a final rule,  Risk-Based Capital Standards:  Trust Preferred
Securities and the Definition of Capital,  that allows for the continued limited
inclusion of trust preferred  securities in Tier 1 capital, as further discussed
in Note 7 to our  Consolidated  Financial  Statements.  The  Board's  final rule
limits  restricted  core capital  elements to 25% of the sum of all core capital
elements,  including restricted core capital elements,  net of goodwill less any
associated  deferred tax liability.  Amounts of restricted core capital elements
in excess of these limits may  generally be included in Tier 2 capital.  Amounts
of qualifying  trust  preferred  securities and cumulative  perpetual  preferred
stock in excess of the 25% limit may be included in Tier 2 capital, but limited,
together with subordinated debt and limited-life preferred stock, to 50% of Tier
1 capital.  In  addition,  the final rule  provides  that in the last five years
before the maturity of the underlying  subordinated note, the outstanding amount
of the associated trust preferred securities is excluded from Tier 1 capital and
included in Tier 2 capital,  subject to  one-fifth  amortization  per year.  The
final rule provides for a five-year  transition  period,  ending March 31, 2009,
for the  application  of the  quantitative  limits.  Until March 31,  2009,  the
aggregate  amount  of  qualifying   cumulative  perpetual  preferred  stock  and

<PAGE>

qualifying trust preferred  securities that may be included in Tier 1 capital is
limited to 25% of the sum of the  following  core capital  elements:  qualifying
common stockholders' equity,  qualifying  noncumulative and cumulative perpetual
preferred  stock,  qualifying  minority  interest  in  the  equity  accounts  of
consolidated subsidiaries and qualifying trust preferred securities. First Banks
has evaluated the impact of the final rule on the Company's  financial condition
and results of  operations,  and determined  the  implementation  of the Board's
final rule, as adopted,  will reduce First Banks' regulatory  capital ratios, as
set forth in Note 7 to our Consolidated Financial Statements.

         In May 2005,  the FASB  issued SFAS No. 154 --  Accounting  Changes and
Error  Corrections.  SFAS No.  154,  a  replacement  of APB  Opinion  No.  20 --
Accounting  Changes and FASB Statement No. 3 -- Reporting  Accounting Changes in
Interim Financial Statements.  SFAS No. 154 requires  retrospective  application
for voluntary changes in accounting  principles unless it is impracticable to do
so. SFAS No. 154 is effective for accounting  changes and  corrections of errors
in fiscal  years  beginning  after  December  15,  2005.  Early  application  is
permitted for accounting  changes and  corrections of errors during fiscal years
beginning  after June 1, 2005. We are currently  evaluating the  requirements of
SFAS No. 154 and do not expect it to have a material effect on our  consolidated
financial statements or results of operations.




<PAGE>


       ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         At December 31, 2004, our risk management  program's  simulation  model
indicated a loss of projected  net interest  income in the event of a decline in
interest  rates.  We are  "asset-sensitive,"  indicating  that our assets  would
generally reprice with changes in rates more rapidly than our liabilities. While
a decline in interest  rates of less than 100 basis points was projected to have
a  relatively  minimal  impact on our net  interest  income,  an  instantaneous,
parallel  decline in the interest  yield curve of 100 basis  points  indicated a
pre-tax  projected loss of approximately  8.9% in net interest income,  based on
assets and  liabilities  at December 31, 2004. At June 30, 2005, we remain in an
"asset-sensitive" position and thus, remain subject to a higher level of risk in
a  declining  interest  rate  environment.  Although we do not  anticipate  that
instantaneous shifts in the yield curve as projected in our simulation model are
likely,  these are  indications  of the effects that  changes in interest  rates
would have over time.  Our  asset-sensitive  position,  coupled with declines in
income  associated  with our  interest  rate swap  agreements  and  increases in
prevailing  interest  rates  beginning in mid-2004 and  continuing  in 2005,  is
reflected in our net interest margin for the three and six months ended June 30,
2005 as compared to the comparable  periods in 2004 and further  discussed under
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations -- Results of Operations." During the three and six months ended June
30, 2005,  our  asset-sensitive  position and overall  susceptibility  to market
risks have not  changed  materially.  However,  prevailing  interest  rates have
continued to rise during the three and six months ended June 30, 2005.




<PAGE>

                        ITEM 4 - CONTROLS AND PROCEDURES

         Our  Chief  Executive  Officer,  who is  our  principal  executive  and
principal financial officer,  has evaluated the effectiveness of our "disclosure
controls and  procedures" (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities  Exchange  Act of 1934,  or the Exchange  Act),  as of the end of the
period covered by this report.  Based on such  evaluation,  our Chief  Executive
Officer  has  concluded  that,  as of the  end of  such  period,  the  Company's
disclosure  controls and  procedures  are  effective in  recording,  processing,
summarizing  and  reporting,  on a  timely  basis,  information  required  to be
disclosed  by the  Company in the  reports  that it files or  submits  under the
Exchange Act.  There have not been any changes in the Company's internal control
over  financial  reporting  (as such  term is  defined  in Rules  13a-15(f)  and
15d-15(f) under the Exchange Act) during the fiscal quarter to which this report
relates that have materially  effected,  or are reasonably  likely to materially
affect, the Company's control over financial reporting.



<PAGE>


                           Part II - OTHER INFORMATION

          ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         At the April 29, 2005  Annual  Meeting of  Shareholders  of First Banks
Messrs.  James F.  Dierberg,  Allen H. Blake,  Gordon A.  Gundaker,  Terrance M.
McCarthy,  Steven F.  Schepman,  David L.  Steward,  Hal J. Upbin and Douglas H.
Yaeger, constituting all of the directors, were unanimously re-elected.

<PAGE>

                                ITEM 6 - EXHIBITS


The exhibits are numbered in  accordance  with the Exhibit  Table of Item 601 of
Regulation S-K.

     Exhibit Number                     Description
     --------------                     -----------

         31          Rule 13a-14(a) / 15d-14(a) Certifications - filed herewith.

         32          Section 1350 Certifications - filed herewith.





<PAGE>


                                    SIGNATURE


         Pursuant to the  requirements  of Section 13 or 15(d) 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.


Date:  August 12, 2005

                               FIRST BANKS, INC.


                               By:/s/ Allen H. Blake
                                  ----------------------------------------------
                                      Allen H. Blake
                                      President, Chief Executive Officer and
                                      Chief Financial Officer
                                      (Principal Executive Officer and Principal
                                      Financial and Accounting Officer)



<PAGE>


                                                                      EXHIBIT 31

                           CERTIFICATIONS REQUIRED BY
                        RULE 13a-14(a) OR RULE 15d-14(a)
                    UNDER THE SECURITIES EXCHANGE ACT OF 1934


I, Allen H. Blake, certify that:

1.   I  have reviewed this Quarterly Report on Form 10-Q (the "Report") of First
     Banks, Inc. (the "Registrant");

2.   Based on my knowledge, this Report does not contain any untrue statement of
     a  material  fact  or  omit  to state a material fact necessary to make the
     statements made, in light of the circumstances  under which such statements
     were made, not misleading with respect to the period covered by this
     Report;

3.   Based  on  my  knowledge, the  financial  statements, and  other  financial
     information  included  in  this  Report, fairly  present  in  all  material
     respects  the  financial condition, results of operations and cash flows of
     the Registrant as of, and for, the periods presented in this Report;

4.   The Registrant's other  certifying  officer(s)  and  I  are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

     a)   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          Registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this Report is being prepared;

     b)   Evaluated the  effectiveness of the Registrant's  disclosure  controls
          and procedures and presented in this Report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this Report based on such evaluation; and

     c)   Disclosed  in this  Report  any  change in the  Registrant's  internal
          control over financial reporting that occurred during the Registrant's
          most recent fiscal quarter (the Registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  Registrant's  internal
          control over financial reporting; and

5.   The Registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the Registrant's auditors and the audit committee of the Registrant's board
     of directors (or persons performing the equivalent functions):

     a)   All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  Registrant's  ability to
          record, process, summarize and report financial information; and

     b)   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  Registrant's  internal
          control over financial reporting.


Date:  August 12, 2005

                               FIRST BANKS, INC.


                               By:/s/ Allen H. Blake
                                  ----------------------------------------------
                                      Allen H. Blake
                                      President, Chief Executive Officer and
                                      Chief Financial Officer
                                      (Principal Executive Officer and Principal
                                      Financial and Accounting Officer)


<PAGE>


                                                                      EXHIBIT 32

                           CERTIFICATIONS PURSUANT TO
                             18 U.S.C. SECTION 1350


         I,  Allen H.  Blake,  President,  Chief  Executive  Officer  and  Chief
Financial  Officer of First Banks,  Inc. (the "Company"),  certify,  pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

         (1)   The  Quarterly  Report  on  Form  10-Q  of the  Company  for  the
               quarterly  period  ended  June  30,  2005  (the  "Report")  fully
               complies with the  requirements of Sections 13(a) or 15(d) of the
               Securities Exchange Act of 1934; and

         (2)   The information  contained in the Report fairly presents,  in all
               material  respects,   the  financial  condition  and  results  of
               operations of the Company.


Date:  August 12, 2005

                               By:/s/ Allen H. Blake
                                  ----------------------------------------------
                                      Allen H. Blake
                                      President, Chief Executive Officer and
                                      Chief Financial Officer
                                      (Principal Executive Officer and Principal
                                      Financial and Accounting Officer)