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 September 30, 2000

[ ] 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
 incorporation or organization)             (I.R.S. Employer Identification No.)

                   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  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 October 31, 2000
           -----                                 ----------------------------

 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 - (UNAUDITED):

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

                CONSOLIDATED STATEMENTS OF INCOME...................................................           3

                CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                    AND COMPREHENSIVE INCOME........................................................           4

                CONSOLIDATED STATEMENTS OF CASH FLOWS...............................................           5

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS..........................................           6

   ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS.......................................................          13

   ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..............................          24

PART II. OTHER INFORMATION

   ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K........................................................          25

SIGNATURES   .......................................................................................          26

</TABLE>

<PAGE>


                         PART I - FINANCIAL INFORMATION
                          ITEM 1 - FINANCIAL STATEMENTS

                                FIRST BANKS, INC.

                    CONSOLIDATED BALANCE SHEETS - (UNAUDITED)
             (dollars expressed in thousands, except per share data)
<TABLE>
<CAPTION>


                                                                                      September 30,   December 31,
                                                                                          2000            1999
                                                                                          ----            ----


                                                ASSETS
                                                ------


Cash and cash equivalents:
<S>                                                                                   <C>                  <C>
     Cash and due from banks.......................................................   $    157,883         126,720
     Interest-bearing deposits with other financial institutions
       with maturities of three months or less.....................................          3,897           1,674
     Federal funds sold............................................................         17,900          42,500
                                                                                      ------------     -----------
               Total cash and cash equivalents.....................................        179,680         170,894
                                                                                      ------------     -----------

Investment securities:
     Available for sale, at fair value.............................................        396,892         430,093
     Held to maturity, at amortized cost (fair value of $21,744 and $21,476
       at September 30, 2000 and December 31, 1999, respectively)..................         21,579          21,554
                                                                                      ------------     -----------
               Total investment securities.........................................        418,471         451,647
                                                                                      ------------     -----------

Loans:
     Commercial, financial and agricultural........................................      1,361,127       1,086,919
     Real estate construction and development......................................        768,252         795,081
     Real estate mortgage..........................................................      2,006,966       1,851,569
     Consumer and installment......................................................        183,699         233,374
     Loans held for sale...........................................................         46,561          37,412
                                                                                      ------------     -----------
               Total loans.........................................................      4,366,605       4,004,355
     Unearned discount.............................................................         (7,019)         (8,031)
     Allowance for loan losses.....................................................        (80,311)        (68,611)
                                                                                      ------------     -----------
               Net loans...........................................................      4,279,275       3,927,713
                                                                                      ------------     -----------

Bank premises and equipment, net of accumulated
     depreciation and amortization.................................................         90,600          75,647
Intangibles associated with the purchase of subsidiaries...........................         55,071          46,085
Accrued interest receivable........................................................         37,695          33,491
Deferred income taxes..............................................................         62,472          51,972
Other assets.......................................................................        111,365         110,298
                                                                                      ------------     -----------
               Total assets........................................................   $  5,234,629       4,867,747
                                                                                      ============     ===========
</TABLE>


The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.


<PAGE>





                                FIRST BANKS, INC.

              CONSOLIDATED BALANCE SHEETS (CONTINUED) - (UNAUDITED)
             (dollars expressed in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                                      September 30,   December 31,
                                                                                          2000            1999
                                                                                          ----            ----


                                   LIABILITIES
                                   -----------
Deposits:
     Demand:
<S>                                                                                   <C>                  <C>
       Non-interest-bearing........................................................   $    680,663         606,064
       Interest-bearing............................................................        409,905         415,113
     Savings.......................................................................      1,292,588       1,198,314
     Time:
       Time deposits of $100 or more...............................................        415,633         339,214
       Other time deposits.........................................................      1,732,259       1,693,109
                                                                                      ------------     -----------
          Total deposits...........................................................      4,531,048       4,251,814
Short-term borrowings..............................................................        103,508          73,554
Note payable.......................................................................         54,500          64,000
Accrued interest payable...........................................................         18,419          11,607
Deferred income taxes..............................................................         10,086           6,582
Accrued expenses and other liabilities.............................................         38,563          25,616
Minority interest in subsidiary....................................................         12,864          12,058
                                                                                      ------------     -----------
          Total liabilities........................................................      4,768,988       4,445,231
                                                                                      ------------     -----------

Guaranteed preferred beneficial interests in:
     First Banks, Inc. subordinated debentures.....................................         83,450          83,394
     First Banks America, Inc. subordinated debentures.............................         44,264          44,217
                                                                                      ------------     -----------
          Total guaranteed preferred beneficial interests in
              subordinated debentures..............................................        127,714         127,611
                                                                                      ------------     -----------

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

Preferred stock:
     $1.00 par value, 5,000,000 shares authorized, no shares issued
       and outstanding at September 30, 2000 and December 31, 1999.................             --              --
     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
Capital surplus....................................................................          2,997           3,318
Retained earnings..................................................................        313,052         270,259
Accumulated other comprehensive income.............................................          2,900           2,350
                                                                                      ------------     -----------
          Total stockholders' equity...............................................        337,927         294,905
                                                                                      ------------     -----------
          Total liabilities and stockholders' equity...............................   $  5,234,629       4,867,747
                                                                                      ============     ===========

</TABLE>

<PAGE>





                                FIRST BANKS, INC.

                 CONSOLIDATED STATEMENTS OF INCOME - (UNAUDITED)
             (dollars expressed in thousands, except per share data)
<TABLE>
<CAPTION>


                                                                         Three months ended       Nine months ended
                                                                             September 30,          September 30,
                                                                        --------------------    -------------------
                                                                            2000     1999        2000       1999
                                                                            ----     ----        ----       ----
Interest income:
<S>                                                                     <C>         <C>         <C>        <C>
     Interest and fees on loans.......................................  $ 99,758    81,919      285,584    235,558
     Investment securities............................................     7,085     6,347       21,104     20,454
     Federal funds sold and other.....................................       739       779        2,772      1,234
                                                                        --------    ------     --------   --------
         Total interest income........................................   107,582    89,045      309,460    257,246
                                                                        --------    ------     --------   --------
Interest expense:
     Deposits:
       Interest-bearing demand........................................     1,480     1,269        4,365      3,565
       Savings........................................................    13,176    10,962       37,246     32,976
       Time deposits of $100 or more..................................     7,932     2,986       13,787      8,452
       Other time deposits............................................    22,691    21,197       72,913     62,158
     Interest rate exchange agreements, net...........................        --     1,409           --      3,997
     Short-term borrowings............................................     1,641       847        4,156      3,106
     Note payable.....................................................     1,220       874        3,731      2,406
                                                                        --------    ------     --------   --------
         Total interest expense.......................................    48,140    39,544      136,198    116,660
                                                                        --------    ------     --------   --------
         Net interest income..........................................    59,442    49,501      173,262    140,586
Provision for loan losses.............................................     3,865     2,880       11,067      8,743
                                                                        --------    ------     --------   --------
         Net interest income after provision for loan losses..........    55,577    46,621      162,195    131,843
                                                                        --------    ------     --------   --------
Noninterest income:
     Service charges on deposit accounts and customer service fees....     5,184     4,434       14,648     12,791
     Gain on mortgage loans sold and held for sale....................     1,898     1,605        5,166      5,439
     Net (loss) gain on sales of available-for-sale securities........      (180)        1          199        793
     Net loss on trading securities...................................        --        --           --       (303)
     Other............................................................     3,848     2,981       11,772     13,419
                                                                        --------    ------     --------   --------
         Total noninterest income.....................................    10,750     9,021       31,785     32,139
                                                                        --------    ------     --------   --------
Noninterest expense:
     Salaries and employee benefits...................................    18,200    15,560       53,437     45,631
     Occupancy, net of rental income..................................     3,754     3,505       10,409      9,347
     Furniture and equipment..........................................     2,851     2,179        8,524      6,178
     Postage, printing and supplies...................................     1,027     1,003        3,210      3,156
     Data processing fees.............................................     5,714     4,658       16,377     13,881
     Legal, examination and professional fees.........................     1,108     1,700        3,111      4,942
     Gain on sales of other real estate, net of expenses..............      (259)     (391)        (483)      (405)
     Guaranteed preferred debentures..................................     2,996     3,014        9,008      9,042
     Other............................................................     7,385     6,287       18,893     18,478
                                                                        --------    ------     --------   --------
         Total noninterest expense....................................    42,776    37,515      122,486    110,250
                                                                        --------    ------     --------   --------
         Income before provision for income taxes and minority
           interest in income of subsidiary...........................    23,551    18,127       71,494     53,732
Provision for income taxes............................................     8,947     6,689       26,688     19,792
                                                                        --------    ------     --------   --------
         Income before minority interest in income of subsidiary......    14,604    11,438       44,806     33,940
Minority interest in income of subsidiary.............................       546       416        1,489      1,088
                                                                        --------    ------     --------   --------
         Net income...................................................    14,058    11,022       43,317     32,852
Preferred stock dividends.............................................       196       196          524        524
                                                                        --------    ------     --------   --------
         Net income available to common stockholders..................  $ 13,862    10,826       42,793     32,328
                                                                        ========    ======     ========   ========
Earnings per common share:
     Basic............................................................  $ 585.87    457.54     1,808.59   1,366.29
     Diluted..........................................................    570.33    444.11     1,750.62   1,320.33
                                                                        ========    ======     ========   ========

Weighted average shares of common stock outstanding...................    23,661    23,661       23,661     23,661
                                                                        ========    ======     ========   ========
</TABLE>

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.


<PAGE>



<TABLE>
<CAPTION>


                                   FIRST BANKS, INC.

 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME - (UNAUDITED)
      Nine months ended September 30, 2000 and 1999 and three months ended December 31, 1999
                (dollars expressed in thousands, except per share data)



                                                                                                             Accu-
                                                     Adjustable rate                                        mulated
                                                     preferred stock                                         other     Total
                                                   ------------------
                                                   Class A                                Compre-           compre-   stock-
                                                   conver-             Common    Capital  hensive Retained  hensive  holders'
                                                    tible     Class B   stock    surplus  income  earnings  income    equity
                                                    -----     -------   -----    -------  ------ --------   ------    ------

<S>                                                <C>          <C>    <C>         <C>   <C>      <C>       <C>     <C>
Consolidated balances, December 31, 1998.........  $12,822      241    5,915       780            231,867   11,738  263,363
Nine months ended September 30, 1999:
    Comprehensive income:
      Net income.................................       --       --       --        --   32,852    32,852       --   32,852
      Other comprehensive income, net of tax
        Unrealized losses on securities, net of
          reclassification adjustment (1)........       --       --       --        --   (7,526)       --   (7,526)  (7,526)
                                                                                         ------
      Comprehensive income.......................                                        25,326
                                                                                         ======
    Class A preferred stock dividends,
      $0.80 per share............................       --       --       --        --               (513)      --     (513)
    Class B preferred stock dividends,
      $0.07 per share............................       --       --       --        --                (11)      --      (11)
    Effect of capital stock transactions of
       majority-owned subsidiary.................       --       --       --    (3,341)                --       --   (3,341)
    Reclassification of retained earnings........       --       --       --     5,000             (5,000)      --       --
    Reduction of deferred tax asset
      valuation reserve..........................       --       --       --       540                 --       --      540
                                                   -------     ----    -----    ------            -------   ------  -------
Consolidated balances, September 30, 1999........   12,822      241    5,915     2,979            259,195    4,212  285,364
Three months ended December 31, 1999:
    Comprehensive income:
      Net income.................................       --       --       --        --   11,326    11,326       --   11,326
      Other comprehensive income, net of tax
        Unrealized losses on securities, net of
          reclassification adjustment (1)........       --       --       --        --   (1,862)       --   (1,862)  (1,862)
                                                                                         ------
      Comprehensive income.......................                                         9,464
                                                                                         ======
    Class A preferred stock dividends,
      $0.40 per share............................       --       --       --        --               (256)      --     (256)
    Class B preferred stock dividends,
      $0.04 per share............................       --       --       --        --                 (6)      --       (6)
    Effect of capital stock transactions of
       majority-owned subsidiary.................       --       --       --        68                 --       --       68
    Reduction of deferred tax asset
      valuation allowance........................       --       --       --       271                 --       --      271
                                                   -------     ----    -----    ------            -------   ------  -------
Consolidated balances, December 31, 1999.........   12,822      241    5,915     3,318            270,259    2,350  294,905
Nine months ended September 30, 2000:
    Comprehensive income:
      Net income.................................       --       --       --        --   43,317    43,317       --   43,317
      Other comprehensive income, net of tax
        Unrealized gains on securities, net of
          reclassification adjustment (1)........       --       --       --        --      550        --      550      550
                                                                                         ------
      Comprehensive income.......................                                        43,867
                                                                                         ======
    Class A preferred stock dividends,
      $0.80 per share............................       --       --       --        --               (513)      --     (513)
    Class B preferred stock dividends,
      $0.07 per share............................       --       --       --        --                (11)      --      (11)
    Effect of capital stock transactions of
       majority-owned subsidiary.................       --       --       --      (321)                --       --     (321)
                                                   -------     ----    -----     -----            -------   ------  -------
Consolidated balances, September 30, 2000........  $12,822      241    5,915     2,997            313,052    2,900  337,927
                                                   =======     ====    =====     =====            =======   ======  =======
</TABLE>

<PAGE>

-------------------------
(1)  Disclosure of reclassification adjustment:
<TABLE>
<CAPTION>
                                                                           Three months ended  Nine months ended  Three months ended
                                                                             September 30,       September 30,        December 31,
                                                                           -----------------   -----------------  ------------------
                                                                            2000      1999      2000      1999           1999
                                                                            ----      ----      ----      ----           ----

<S>                                                                        <C>        <C>        <C>    <C>             <C>
     Unrealized gains (losses) arising during the period...............    $ 1,900    (2,610)    679    (7,011)         (1,863)
     Less reclassification adjustment for (losses) gains included
        in net income..................................................       (117)       --     129       515              (1)
                                                                           -------   -------     ---    ------          ------
     Unrealized gains (losses) on securities...........................    $ 2,017    (2,610)    550    (7,526)         (1,862)
                                                                           =======   =======     ===    ======          ======

</TABLE>

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.


<PAGE>





                                FIRST BANKS, INC.

               CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)
                        (dollars expressed in thousands)
<TABLE>
<CAPTION>

                                                                                               Nine months ended
                                                                                                  September 30,
                                                                                             ---------------------
                                                                                               2000        1999

Cash flows from operating activities:
<S>                                                                                          <C>          <C>
     Net income...........................................................................   $ 43,317     32,852
     Adjustments to reconcile net income to net cash
         provided by operating activities:
       Depreciation and amortization of bank premises and equipment.......................      6,967      5,375
       Amortization, net of accretion.....................................................      5,878      9,529
       Originations and purchases of loans held for sale..................................   (378,628)  (378,045)
       Proceeds from the sale of loans held for sale......................................    290,102    437,397
       Provision for loan losses..........................................................     11,067      8,743
       Provision for income taxes.........................................................     26,688     19,792
       Payments of income taxes...........................................................     (7,684)   (18,816)
       Increase in accrued interest receivable............................................     (3,262)      (326)
       Net decrease in trading securities.................................................         --      3,425
       Interest accrued on liabilities....................................................    136,198    116,660
       Payments of interest on liabilities................................................   (129,984)  (113,634)
       Gain on sale of branch facility....................................................     (1,355)    (4,474)
       Net gain on sales of available-for-sale investment securities......................       (199)      (793)
       Other operating activities, net....................................................    (18,648)    (6,933)
       Minority interest in income of subsidiary..........................................      1,489      1,088
                                                                                             --------    -------
         Net cash (used in) provided by operating activities..............................    (18,054)   111,840
                                                                                             --------    -------

Cash flows from investing activities:
     Cash paid for acquired entities, net of cash and cash equivalents received...........     (9,115)   (15,961)
     Proceeds from sales of investment securities available for sale......................     28,488     64,640
     Maturities of investment securities available for sale...............................    256,998    230,315
     Maturities of investment securities held to maturity.................................        712      2,330
     Purchases of investment securities available for sale................................   (150,180)  (148,230)
     Purchases of investment securities held to maturity..................................       (769)    (1,982)
     Net increase in loans................................................................   (265,191)  (259,737)
     Recoveries of loans previously charged-off...........................................      7,954      6,931
     Purchases of bank premises and equipment.............................................    (21,022)   (13,561)
     Other investing activities...........................................................      3,960       (695)
                                                                                             --------   --------
         Net cash used in investing activities............................................   (148,165)  (135,950)
                                                                                             --------   --------

Cash flows from financing activities:
     Increase (decrease) in demand and savings deposits...................................     83,733    (58,424)
     Increase in time deposits............................................................     70,473     96,248
     Increase in federal funds purchased..................................................      1,900         --
     Decrease in Federal Home Loan Bank advances..........................................         --    (25,000)
     Increase (decrease)in securities sold under agreements to repurchase.................     28,054        (71)
     (Decrease) increase in note payable..................................................     (9,500)    22,952
     Payment of preferred stock dividends.................................................       (524)      (524)
     Sale of branch deposits..............................................................        892    (48,979)
     Other financing activities...........................................................        (23)        --
                                                                                             --------    -------
         Net cash provided by (used in) financing activities..............................    175,005    (13,798)
                                                                                             --------    -------
         Net increase (decrease) in cash and cash equivalents.............................      8,786    (37,908)
Cash and cash equivalents, beginning of period............................................    170,894    214,762
                                                                                             --------    -------
Cash and cash equivalents, end of period..................................................   $179,680    176,854
                                                                                             ========    =======

Noncash investing and financing activities:
     Loans transferred to other real estate...............................................   $  1,226      2,549
     Loans held for sale transferred to available-for-sale investment securities..........     18,584      4,065
     Loans exchanged for and transferred to available-for-sale investment securities......     37,634         --
     Loans held for sale transferred to loans.............................................     63,783      21,831
                                                                                             ========    =======
</TABLE>

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.


<PAGE>


                                FIRST BANKS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  BASIS OF PRESENTATION

         The accompanying 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 1999
Annual Report on Form 10-K.  The  consolidated  financial  statements  have been
prepared in accordance with generally accepted accounting principles and conform
to practices prevalent among financial  institutions.  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 generally
accepted accounting principles.  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 nine months
ended September 30, 2000 are not necessarily  indicative of the results that may
be expected for the year ending December 31, 2000.

         The  consolidated  financial  statements  include the accounts of First
Banks,  Inc.  and its  subsidiaries,  net of  minority  interest,  as more fully
described below.  All significant  intercompany  accounts and transactions  have
been  eliminated.  Certain  reclassifications  of 1999 amounts have been made to
conform with the 2000 presentation.

         First Banks operates  through its subsidiary  bank holding  company and
financial  institutions  (collectively  referred to as the Subsidiary Banks) and
through its non-banking subsidiary, First Capital Group, Inc., as follows:

   First Bank, headquartered in St. Louis County, Missouri (First Bank);
   First Bank & Trust, headquartered in Newport Beach, California (FB&T);
   First Capital Group, Inc., headquartered in Albuquerque, New Mexico (FCG);
   First Banks America, Inc., headquartered in St. Louis County, Missouri (FBA),
      and its wholly owned subsidiaries:
          First Bank Texas N.A., headquartered in Houston, Texas (FB Texas);
          First Bank of California, headquartered in Sacramento, California
              (FB California); and
          Redwood Bank, headquartered in San Francisco, California.

         The  Subsidiary  Banks  and FCG are  wholly  owned by their  respective
parent companies except FBA, which was 84.30% and 83.37% owned by First Banks at
September 30, 2000 and December 31, 1999, respectively.

(2)  ACQUISITIONS

         Completed Transactions
         ----------------------

         On February 29, 2000, FBA completed its  acquisition of Lippo Bank, San
Francisco,  California,  in  exchange  for $17.2  million  in cash.  Lippo  Bank
operated  three banking  locations in San  Francisco,  San Jose and Los Angeles,
California.  The  acquisition was funded from available cash. At the time of the
transaction,  Lippo Bank had $85.3  million in total  assets,  $40.9  million in
loans,  net of unearned  discount,  $37.4 million in investment  securities  and
$76.4 million in total  deposits.  This  transaction was accounted for using the
purchase method of accounting. The excess of the cost over the fair value of the
net assets acquired was  approximately  $5.6 million and is being amortized over
15 years. Lippo Bank was merged into FB California on May 31, 2000.

         On February 29, 2000,  First Banks completed its acquisition of certain
assets and liabilities of FCG,  Albuquerque,  New Mexico,  in exchange for $65.1
million in cash. FCG is a leasing company that specializes in commercial leasing
and operates a multi-state  leasing  business.  The  acquisition was funded from
available cash. At the time of the  transaction,  FCG had $64.6 million in total
assets,  consisting almost solely of commercial  leases, net of unearned income.
The premium paid on the lease  portfolio  acquired was $1.5 million and is being
amortized as a yield adjustment over approximately four years. FCG operates as a
direct subsidiary of First Banks, Inc.


<PAGE>
         On August 31, 2000,  First Banks  completed its  acquisition of Bank of
Ventura, which operates one office in Ventura,  California.  The shareholders of
Bank of Ventura  received $26.47 per share in cash, or a total of  approximately
$14.2 million. At the time of the transaction, Bank of Ventura had $63.8 million
in total assets, $39.4 million in loans, net of unearned discount, $15.5 million
in investment  securities and $57.3 million in deposits.  This  transaction  was
accounted for using the purchase  method of  accounting.  The excess of the cost
over the fair value of the net assets  acquired was  approximately  $8.4 million
and is being  amortized over 15 years.  Bank of Ventura was merged with and into
FB&T on August 31, 2000.

         Pending Transactions
         --------------------

         On June 27, 2000, FBA and Commercial Bank of San Francisco  (Commercial
Bank)  executed  a  definitive   agreement  providing  for  the  acquisition  of
Commercial  Bank,  San  Francisco,  California,  by FBA.  Under the terms of the
agreement,  the shareholders of Commercial Bank will receive $17.75 per share in
cash, or a total of  approximately  $25.8 million.  Commercial Bank operates one
branch office in the San Francisco  financial  district.  At September 30, 2000,
Commercial Bank had $155.5 million in total assets,  $98.6 million in loans, net
of unearned discount,  $46.0 million in investment securities and $111.7 million
in deposits. FBA completed this transaction on October 31, 2000.

         On June 29, 2000,  First Banks and FBA executed a definitive  agreement
providing for the acquisition of First Banks' wholly owned subsidiary,  FB&T, by
FBA.  Under the terms of the  agreement,  First Banks will  exchange  all of the
outstanding  stock of FB&T for  approximately 6.5 million shares of common stock
of  FBA,  which  will  increase  First  Banks'  ownership  percentage  of FBA to
approximately 93.0%. This transaction and related internal  reorganizations will
allow First Banks and FBA to merge their Texas and  California  interests.  FB&T
operates 27 banking  locations in the counties of Los Angeles,  Orange,  Ventura
and Santa Barbara,  California as well as branches in San Jose and Walnut Creek,
in Northern  California.  First Banks completed this  transaction on October 31,
2000.

         On August 23,  2000,  FBA and  Millennium  Bank  executed a  definitive
agreement  providing for the  acquisition  of Millennium  Bank,  San  Francisco,
California,  by FBA.  Under  the terms of the  agreement,  the  shareholders  of
Millennium   Bank  will  receive  $8.10  per  share  in  cash,  or  a  total  of
approximately $20.7 million. Millennium Bank has one office in the San Francisco
financial district and one office in Oakland, California. At September 30, 2000,
Millennium Bank had $110.4 million in total assets,  $76.6 million in loans, net
of unearned discount,  $28.4 million in investment  securities and $97.6 million
in  deposits.  FBA  expects  this  transaction,  which is subject to  regulatory
approvals, will be completed during or before the first quarter of 2001.

     On September 22, 2000,  FBA executed a definitive  agreement to acquire The
San  Francisco  Company and its  wholly-owned  banking  subsidiary,  Bank of San
Francisco.  Under  the  terms of this  agreement,  the  shareholders  of The San
Francisco  Company  will  receive  $1.95  per  share  in  cash,  or a  total  of
approximately $63.0 million. Bank of San Francisco operates one branch office in
the San  Francisco  financial  district.  At  September  30,  2000,  Bank of San
Francisco had $191.8 million in total assets,  $105.1  million in loans,  net of
unearned discount,  $38.9 million in investment securities and $142.3 million in
deposits. FBA expects this transaction, which is subject to regulatory approvals
and other  conditions,  will be completed  during or before the first quarter of
2001.

(3)      EARNINGS PER SHARE

         The following is a reconciliation of the numerators and denominators of
the basic and  diluted  earnings  per share (EPS)  computations  for the periods
indicated:
<TABLE>
<CAPTION>
                                                                               Income         Shares        Per share
                                                                             (numerator)   (denominator)      amount
                                                                             -----------   -------------     --------
                                                                           (dollars in thousands, except per share data)
     Three months ended September 30, 2000:
<S>                                                                          <C>               <C>         <C>
         Basic EPS - income available to common stockholders.............    $  13,862         23,661      $   585.87
                                                                                                           ==========
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          192            982
                                                                             ---------        -------
         Diluted EPS - income available to common stockholders...........    $  14,054         24,643      $   570.33
                                                                             =========        =======      ==========

     Three months ended September 30, 1999:
         Basic EPS - income available to common stockholders.............    $  10,826         23,661      $   457.54
                                                                                                           ==========
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          192          1,149
                                                                             ---------        -------
         Diluted EPS - income available to common stockholders...........    $  11,018         24,810      $   444.11
                                                                             =========        =======      ==========
</TABLE>


<PAGE>
<TABLE>
<CAPTION>


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

     Nine months ended September 30, 2000:
<S>                                                                          <C>               <C>         <C>
         Basic EPS - income available to common stockholders.............    $  42,793         23,661      $ 1,808.59
                                                                                                           ==========
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          513          1,076
                                                                             ---------        -------
         Diluted EPS - income available to common stockholders...........    $  43,306         24,737      $ 1,750.62
                                                                             =========        =======      ==========

     Nine months ended September 30, 1999:
         Basic EPS - income available to common stockholders.............    $  32,329         23,661      $ 1,366.29
                                                                                                           ==========
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          513          1,212
                                                                             ---------        -------
         Diluted EPS - income available to common stockholders...........    $  32,842         24,873      $ 1,320.33
                                                                             =========        =======      ==========
</TABLE>

 (4)     TRANSACTIONS WITH RELATED PARTIES

         First Brokerage America,  L.L.C., a limited liability corporation which
is  indirectly  owned by First  Banks'  Chairman  and  members of his  immediate
family,  received approximately $500,000 and $1.6 million for the three and nine
months  ended  September  30,  2000,  and  $676,000  and  $1.6  million  for the
comparable  periods in 1999,  respectively,  in commissions paid by unaffiliated
third-party  companies.  The commissions received were primarily associated with
sales of annuities and securities and other  insurance  products to individuals,
including customers of the Subsidiary Banks.

         First Services,  L.P., a limited partnership  indirectly owned by First
Banks'  Chairman and his adult children,  provides data processing  services and
technological,  telecommunication  and operational support for First Banks, Inc.
and its Subsidiary Banks.  Fees paid under agreements with First Services,  L.P.
were  $5.0  million  and $14.2  million  for the  three  and nine  months  ended
September  30,  2000,  and $4.1  million and $12.3  million  for the  comparable
periods in 1999, respectively.  During the three months ended September 30, 2000
and  1999,  First  Services,  L.P.  paid  First  Banks  $411,000  and  $328,000,
respectively,  and during the nine  months  ended  September  30, 2000 and 1999,
First Services,  L.P. paid First Banks $1.3 million and $812,000,  respectively,
in rental fees for the use of data processing and other equipment owned by First
Banks. The fees paid by First Banks for data processing  services and the rental
fees  charged  by First  Banks  are at least as  favorable  as could  have  been
obtained from unaffiliated third parties.

(5)      REGULATORY CAPITAL

         First Banks and the Subsidiary Banks 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 the  Subsidiary  Banks  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 the  Subsidiary  Banks 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 September 30, 2000,  First Banks and the Subsidiary  Banks were
each well capitalized under the applicable regulations.

         As of  September  30,  2000,  the most recent  notification  from First
Banks' primary  regulator  categorized  First Banks and the Subsidiary  Banks as
well capitalized under the regulatory framework for prompt corrective action. To
be categorized as well  capitalized,  First Banks and the Subsidiary  Banks must
maintain minimum total risk-based,  Tier I risk-based and Tier I leverage ratios
as set forth in the table below.




<PAGE>


         At  September  30, 2000 and  December  31,  1999,  First Banks' and the
Subsidiary Banks' required and actual capital ratios were as follows:
<TABLE>
<CAPTION>

                                                                                                         To be well
                                                               Actual                                 capitalized under
                                                     ---------------------------
                                                      September 30,December 31,      For capital      prompt corrective
                                                          2000         1999       adequacy purposes   action provisions
                                                          ----         ----       -----------------   -----------------

         Total capital (to risk-weighted assets):
<S>                                                       <C>          <C>               <C>                <C>
              First Banks.............................    10.32%       10.05%            8.0%               10.0%
              First Bank..............................    10.80        10.60             8.0                10.0
              FB&T....................................    10.34        10.96             8.0                10.0
              FB California...........................    11.42        10.81             8.0                10.0
              FB Texas................................    12.12        12.42             8.0                10.0
              Redwood Bank............................    11.44        11.17             8.0                10.0

         Tier 1 capital (to risk-weighted assets):
              First Banks.............................     8.66%        8.00%            4.0%                6.0%
              First Bank..............................     9.54         9.35             4.0                 6.0
              FB&T....................................     9.08         9.70             4.0                 6.0
              FB California...........................    10.16         9.56             4.0                 6.0
              FB Texas................................    10.86        11.17             4.0                 6.0
              Redwood Bank............................    10.19        10.15             4.0                 6.0

         Tier 1 capital (to average assets):
              First Banks.............................     8.07%        7.14%            3.0%                5.0%
              First Bank..............................     8.65         8.10             3.0                 5.0
              FB&T....................................     8.68         8.57             3.0                 5.0
              FB California...........................     9.31         9.95             3.0                 5.0
              FB Texas................................    10.20        10.39             3.0                 5.0
              Redwood Bank............................     8.31         8.48             3.0                 5.0
</TABLE>

(6)      BUSINESS SEGMENT RESULTS

         First Banks' business segments are its Subsidiary Banks. The reportable
business  segments are consistent  with the management  structure of First Banks
and  the  Subsidiary   Banks,  the  internal   reporting  system  that  monitors
performance  and,  in  all  material  respects,  generally  accepted  accounting
principles and practices predominant in the banking industry.

         Through the respective  branch  networks,  the Subsidiary Banks provide
similar  products and services in their defined  geographic  areas. The products
and services  offered  include a broad range of commercial and personal  banking
services,  including  certificates of deposit,  individual  retirement and other
time deposit  accounts,  checking and other demand  deposit  accounts,  interest
checking  accounts,  savings accounts and money market  accounts.  Loans include
commercial,   financial  and   agricultural,   real  estate   construction   and
development,  commercial and residential real estate,  commercial leasing, trade
finance,  consumer and  installment,  student and Small Business  Administration
loans.  Other financial  services  include  mortgage  banking,  credit and debit
cards, brokerage services,  credit-related insurance, automatic teller machines,
telephone   banking,   safe  deposit  boxes  and  trust,   private  banking  and
institutional money management services. The revenues generated by each business
segment  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  products  and  services  are  offered to
customers primarily within their respective geographic areas, with the exception
of loan participations executed between the Subsidiary Banks.

         The business segment results are summarized as follows:





<PAGE>
<TABLE>
<CAPTION>
                                                          First Bank            FB California (1)          Redwood Bank (2)
                                                   ------------------------ -------------------------  -------------------------
                                                   September 30,December 31, September 30,December 31, September 30,December 31,
                                                        2000        1999        2000        1999          2000        1999
                                                        ----        ----        ----        ----          ----        ----
                                                                   (dollars expressed in thousands)
Balance sheet information:
<S>                                                 <C>           <C>          <C>         <C>           <C>         <C>
Investment securities............................   $ 206,724     241,624      46,443      20,743        17,707      37,539
Loans, net of unearned discount..................   2,685,321   2,527,649     448,197     379,632       140,858     138,902
Total assets.....................................   3,127,512   3,028,046     575,488     431,838       193,393     199,988
Deposits.........................................   2,657,834   2,689,671     499,179     367,563       166,992     173,703
Stockholders' equity.............................     278,295     263,466      64,578      47,990        24,115      24,275
                                                    =========    ========    ========     =======       =======     =======

                                                          First Bank             FB California (1)        Redwood Bank (2)
                                                    ---------------------     ---------------------     -------------------
                                                      Three months ended        Three months ended       Three months ended
                                                         September 30,             September 30,             September 30,
                                                    ---------------------     ---------------------     -------------------
                                                     2000          1999          2000        1999         2000       1999
                                                     ----          ----          ----        ----         ----       ----
Income statement information:

Interest income..................................   $  63,621      55,300      12,704       8,582         4,252       3,866
Interest expense.................................      29,939      26,136       4,936       3,050         1,724       1,447
                                                    ---------    --------     -------     -------       -------     -------
     Net interest income.........................      33,682      29,164       7,768       5,532         2,528       2,419
Provision for loan losses........................       3,500       1,950          15          15           150          60
                                                    ---------    --------     -------     -------       -------     -------
     Net interest income after
       provision for loan losses.................      30,182      27,214       7,753       5,517         2,378       2,359
                                                    ---------    --------     -------     -------       -------     -------
Noninterest income...............................       7,965       7,106       1,499         934           (71)        122
Noninterest expense..............................      22,914      20,124       4,381       3,785         1,379       1,496
                                                    ---------    --------     -------     -------       -------     -------
     Income (loss) before provision
       (benefit) for income taxes and
       minority interest in income of
       subsidiary................................      15,233      14,196       4,871       2,666           928         985
Provision (benefit) for income taxes.............       5,324       4,874       1,897       1,089           491         443
                                                    ---------    --------     -------     -------       -------     -------
     Income (loss) before minority
       interest in income of subsidiary..........       9,909       9,322       2,974       1,577           437         542
Minority interest in income of subsidiary........          --          --          --          --            --          --
                                                    ---------    --------     -------     -------       -------     -------
     Net income..................................   $   9,909       9,322       2,974       1,577           437         542
                                                    =========    ========     =======     =======       =======     =======

                                                          First Bank             FB California (1)        Redwood Bank (2)
                                                    ---------------------     --------------------      -------------------
                                                       Nine months ended         Nine months ended        Nine months ended
                                                         September 30,             September 30,             September 30,
                                                    ---------------------     --------------------      -------------------
                                                      2000          1999        2000        1999          2000       1999
                                                      ----          ----        ----        ----          ----       ----
Income statement information:

Interest income..................................   $ 184,248     162,891      35,325      24,714        12,136       8,796
Interest expense.................................      84,459      78,312      13,285       9,125         4,832       3,282
                                                    ---------     -------     -------     -------       -------     -------
     Net interest income.........................      99,789      84,579      22,040      15,589         7,304       5,514
Provision for loan losses........................       9,250       6,650         150          95           432         133
                                                    ---------     -------     -------     -------       -------     -------
     Net interest income after
       provision for loan losses.................      90,539      77,929      21,890      15,494         6,872       5,381
                                                    ---------     -------     -------     -------       -------      ------
Noninterest income...............................      23,930      25,901       3,222       2,358          (120)        325
Noninterest expense..............................      64,840      58,246      13,663      11,410         4,312       3,403
                                                    ---------     -------     -------     -------       -------     -------
     Income (loss) before provision
       (benefit) for income taxes and
       minority interest in income of
       subsidiary................................      49,629      45,584      11,449       6,442         2,440       2,303
Provision (benefit) for income taxes.............      17,254      15,391       4,474       2,742         1,292       1,087
                                                    ---------     -------     -------     -------       -------      ------
     Income (loss) before minority
       interest in income of subsidiary..........      32,375      30,193       6,975       3,700         1,148       1,216
Minority interest in income of subsidiary........          --          --          --          --            --          --
                                                    ---------     -------     -------     -------       -------      ------
     Net income..................................   $  32,375      30,193       6,975       3,700         1,148       1,216
                                                    =========     =======     =======     =======       =======      ======
----------------
(1)  Lippo Bank was  acquired  by FBA on  February  29,  2000 and merged  into FB California  on May 31,  2000.
(2)  Redwood  Bank was acquired by FBA on March 4, 1999.
(3)  Corporate  and other  includes  $1.0 million and $5.9 million  of  guaranteed  preferred  debenture  expense,  after applicable
     income  tax  benefit  of  $2.0  million  and  $3.1 million  for  the three and nine months ended  September 30,  2000 and 1999.
     In addition,  corporate  and other  includes FCG and holding company expenses.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                                           Corporate, other
                                                                            and intercompany
                    FB Texas                         FB&T               reclassifications (3)         Consolidated  totals
           ---------------------------  ----------------------------  -------------------------     --------------------------
           September 30, December  31,  September  30,  December 31,    September 30, December 31,  September 30, December 31,
                 2000          1999           2000          1999          2000            1999         2000          1999
                 ----          ----           ----          ----          ----            ----         ----          ----
                                             (dollars expressed in thousands)

<S>            <C>             <C>          <C>           <C>             <C>           <C>           <C>           <C>
               25,703          30,439       104,446       103,636         17,448        17,666        418,471       451,647
              229,150         213,731       856,460       736,828           (400)         (418)     4,359,586     3,996,324
              292,890         278,988     1,113,018       944,013        (67,672)      (15,126)     5,234,629     4,867,747
              254,271         244,248       972,323       804,976        (19,551)      (28,347)     4,531,048     4,251,814
               30,097          30,338       110,600       102,014       (169,758)     (173,178)       337,927       294,905
              =======         =======     =========       =======       ========      ========       ========       =======

                                                                           Corporate, other
                                                                           and intercompany
                       FB Texas              First Bank & Trust            reclassifications (3)      Consolidated totals
                ----------------------    ------------------------     ------------------------      ----------------------
                  Three months ended         Three months ended          Three months ended            Three months ended
                     September 30,              September 30,               September 30,                 September 30,
                ----------------------    ------------------------     ------------------------      ----------------------
                 2000            1999         2000           1999        2000             1999        2000            1999
                 ----            ----         ----           ----        ----             ----        ----            ----


                6,044           5,500        21,945        15,766           (984)           31        107,582        89,045
                2,575           2,185         9,146         6,231           (180)          495         48,140        39,544
              -------         -------     ---------        ------       --------      --------       --------       -------
                3,469           3,315        12,799         9,535           (804)         (464)        59,442        49,501
                  155              15            45           840             --            --          3,865         2,880
              -------         -------     ---------        ------       --------      --------       --------       -------

                3,314           3,300        12,754         8,695           (804)         (464)        55,577        46,621
              -------         -------     ---------        ------       --------      --------       --------       -------
                  459             504         1,467         1,103           (569)         (748)        10,750         9,021
                2,155           2,367         8,035         7,111          3,912         2,632         42,776        37,515
              -------         -------     ---------        ------       --------      --------       --------       -------


                1,618           1,437         6,186         2,687         (5,285)       (3,844)        23,551        18,127
                  546             492         2,458         1,080         (1,769)       (1,289)         8,947         6,689
              -------         -------     ---------        ------       --------      --------       --------       -------

                1,072             945         3,728         1,607         (3,516)       (2,555)        14,604        11,438
                   --              --            --            --            546           416            546           416
              -------         -------     ---------        ------       --------      --------       --------       -------
                1,072             945         3,728         1,607         (4,062)       (2,971)        14,058        11,022
              =======         =======     =========        ======       ========      ========       ========       =======

                                                                           Corporate, other
                                                                           and intercompany
                       FB Texas              First Bank & Trust            reclassifications (3)       Consolidated totals
                ----------------------    ------------------------     -------------------------      ---------------------
                   Nine months ended          Nine months ended           Nine months ended             Nine months ended
                     September 30,              September 30,               September 30,                 September 30,
                ----------------------    ------------------------     ------------------------      ----------------------
                 2000            1999      2000              1999        2000             1999        2000            1999
                 ----            ----      ----              ----        ----             ----        ----            ----

               17,702          16,523        61,250        44,121         (1,201)          201        309,460       257,246
                7,295           6,510        25,010        18,220          1,317         1,211        136,198       116,660
              -------         -------     ---------        ------       --------      --------       --------       -------
               10,407          10,013        36,240        25,901         (2,518)       (1,010)       173,262       140,586
                  450              75           785         1,790             --            --         11,067         8,743
              -------         -------     ---------        ------       --------      --------       --------       -------

                9,957           9,938        35,455        24,111         (2,518)       (1,010)       162,195       131,843
              -------         -------     ---------        ------       ---------     --------       --------       -------
                1,445           1,560         4,650         3,467         (1,342)       (1,472)        31,785        32,139
                6,460           6,877        22,633        20,336         10,578         9,978        122,486       110,250
              -------         -------     ---------        ------       --------      --------       --------       -------


                4,942           4,621        17,472         7,242        (14,438)      (12,460)        71,494        53,732
                1,703           1,588         6,950         3,140         (4,985)       (4,156)        26,688        19,792
              -------         -------     ---------        ------       --------      ---------      --------       -------

                3,239           3,033        10,522         4,102         (9,453)       (8,304)        44,806        33,940
                   --              --            --            --          1,489         1,088          1,489         1,088
              -------         -------     ---------        ------       --------      --------       --------       -------
                3,239           3,033        10,522         4,102        (10,942)       (9,392)        43,317        32,852
              =======         =======     =========        ======       ========      ========       ========       =======
</TABLE>


<PAGE>
(7)  SUBSEQUENT EVENT

         On October 19, 2000,  First  Preferred  Capital Trust II, or FPCT II, a
newly formed  Delaware  business  trust  subsidiary  of First Banks,  issued 2.3
million shares of 10.24% cumulative trust preferred  securities at $25 per share
in  an  underwritten  public  offering,  and  issued  71,135  shares  of  common
securities  to First Banks at $25 per share.  First Banks owns all of the common
securities  of FPCT II. The gross  proceeds of the offering were used by FPCT II
to purchase $59.3 million of 10.24%  subordinated  debentures  from First Banks,
maturing on September 30, 2000. The maturity date of the subordinated debentures
may be  shortened  to a date not earlier than  September  30,  2005,  if certain
conditions are met. The  subordinated  debentures are the sole asset of FPCT II.
In connection with the issuance of the FPCT II preferred securities, First Banks
made certain  guarantees and  commitments  that, in the aggregate,  constitute a
full and  unconditional  guarantee by First Banks of the  obligations of FPCT II
under the FPCT II preferred securities.  First Banks' proceeds from the issuance
of the subordinated debentures to FPCT II, net of underwriting fees and offering
expenses,  were  approximately  $55.0  million.  Distributions  on the  FPCT  II
securities are payable quarterly on March 31, June 30, September 30 and December
31.

<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.  These  forward-looking  statements  are subject to certain  risks and
uncertainties,  not all of which can be predicted or  anticipated.  Factors that
may cause actual results to differ  materially  from those  contemplated  by the
forward-looking   statements   herein  include  market  conditions  as  well  as
conditions  affecting  the  banking  industry  generally  and  factors  having a
specific  impact on us,  including but not limited to  fluctuations  in interest
rates and in the economy;  the impact of laws and  regulations  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;
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
potential for higher than acceptable operating costs arising from the geographic
dispersion of our offices,  as compared  with  competitors  operating  solely in
contiguous  markets;  the competition of larger acquirers with greater resources
than  us,  fluctuations  in the  prices  at  which  acquisition  targets  may be
available for sale and in the market for our  securities;  and the potential for
difficulty  or  unanticipated  costs in  realizing  the  benefits of  particular
acquisition  transactions.  Readers of the Form 10-Q should  therefore not place
undue reliance on forward-looking statements.


                                     General

         We  are  a  bank   holding   company   incorporated   in  Missouri  and
headquartered  in St.  Louis  County,  Missouri.  Through the  operation  of our
subsidiaries,  we offer a broad array of  financial  services  to  consumer  and
commercial  customers.  We currently operate banking subsidiaries in California,
Illinois,  Missouri and Texas.  At September  30, 2000,  we had $5.23 billion in
total assets,  $4.36  billion in total loans,  net of unearned  discount,  $4.53
billion in total deposits and $337.9 million in total  stockholders'  equity. We
operate through five subsidiary  banks, a subsidiary bank holding  company,  and
through our subsidiary leasing company, as follows:
<TABLE>
<CAPTION>

                                                                                           Loans, net of
                                                           Number of         Total            unearned         Total
      Name                           Headquarters          locations         assets           discount        deposits
      ----                           ------------          ---------         ------           --------        --------
                                                                                 (dollars expressed in thousands)

<S>                            <C>                             <C>       <C>                <C>               <C>
First Bank                     St. Louis County, Missouri      86        $ 3,127,512        2,685,321         2,657,834
First Bank & Trust             Newport Beach, California       27          1,113,018          856,460           972,323
First Capital Group, Inc.      Albuquerque, New Mexico          1                344 (1)           --                --
First Banks America, Inc.,
   and its wholly-owned
   subsidiaries:
     First Bank of California  Sacramento, California          13            575,488          448,197           499,179
     First Bank Texas N.A.     Houston, Texas                   6            292,890          229,150           254,271
     Redwood Bank              San Francisco, California        4            193,393          140,858           166,992
                                                              ===        ===========         ========         =========
</TABLE>
-------------------------
(1)  First  Capital  Group,  Inc. was  purchased  on February  29,  2000.  As of
     September 30, 2000,  there were  approximately  $90.1 million of commercial
     leases.  The  commercial  leases are  recorded as assets of our  subsidiary
     banks.

         Our subsidiary banks and First Capital Group,  Inc., or FCG, are wholly
owned by their respective parent companies.  We owned 84.30% and 83.37% of First
Banks  America,  Inc.,  or FBA, at  September  30, 2000 and  December  31, 1999,
respectively.

         Through our subsidiary  banks, 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,

<PAGE>

asset-based  loans,  commercial  leasing and trade  financing.  Other  financial
services offered include  mortgage  banking,  credit and debit cards,  brokerage
services,   credit-related  insurance,   automated  teller  machines,  telephone
banking,  safe deposit boxes and trust,  private banking and institutional money
management services.

         We centralize overall corporate policies, procedural and administrative
functions,  and operational support functions for our subsidiary banks.  Primary
responsibility  for managing our subsidiary  banks remains with the officers and
directors.

                               Financial Condition

         Our total  assets  increased  by $360.0  million to $5.23  billion from
$4.87  billion at September  30, 2000 and December  31, 1999,  respectively.  As
discussed in Note 2 to our accompanying  consolidated financial statements,  the
acquisitions  of Bank of Ventura,  Lippo Bank and FCG  provided  assets of $63.8
million, $85.3 million and $64.6 million,  respectively.  Loans, net of unearned
discount,  excluding the loans from these acquired entities, increased by $218.4
million,  which is further  discussed  under  "--Loans  and  Allowance  for Loan
Losses."  Offsetting  the overall  increase  in total  assets and  providing  an
additional source of funds for continued internal loan growth was a reduction in
investment  securities of $86.1  million,  which was  partially  offset by $37.4
million and $15.5 million of investment  securities acquired from Lippo Bank and
Bank of Ventura,  respectively,  to $418.5 million at September 30, 2000.  Total
deposits,  excluding the $76.4 million and $57.3 million of deposits provided by
the acquisitions of Lippo Bank and Bank of Ventura,  respectively,  increased by
$145.5 million to $4.53 billion at September 30, 2000. The funds  generated from
the deposit growth were primarily  utilized to fund internal loan growth and the
acquisition of the FCG leases. In addition,  short-term  borrowings increased by
$30.0 million to $103.5 million at September 30, 2000,  reflecting  increases of
$1.9 million and $28.1 million in federal funds  purchased and  securities  sold
under agreements to repurchase, respectively.

                              Results of Operations

Net Income

         Net income was $14.1  million and $43.3  million for the three and nine
months  ended  September  30, 2000,  in  comparison  to $11.0  million and $32.9
million for the comparable  periods in 1999. The earnings progress was primarily
driven by increased net interest income  generated from the acquisitions of Bank
of Ventura, Lippo Bank and FCG, which were acquired during the nine months ended
September 30, 2000,  and Century Bank and Redwood  Bank,  which were acquired in
1999; the continued  change in the composition of our loan portfolio;  increased
yields on earning  assets and internal loan growth.  Our overall loan growth was
primarily funded through internal deposit growth.

         The increase in net interest income was partially offset by an increase
in the  provision  for loan  losses,  as further  discussed  under  "--Loans and
Allowance for Loan Losses," and increased operating expenses of $5.3 million and
$12.2  million  for the three and nine  months  ended  September  30,  2000,  in
comparison  to the  comparable  periods  in 1999,  respectively.  The  increased
operating  expenses  reflect the  operating  expenses of Bank of Ventura,  Lippo
Bank,  FCG,  Century  Bank and  Redwood  Bank  subsequent  to  their  respective
acquisition dates;  increased salaries and employee benefit expenses;  increased
data processing fees and increased  amortization of intangibles  associated with
the purchase of subsidiaries.  This increase was partially offset by a reduction
in legal, examination and professional fees.

Net Interest Income

         Net interest income  (expressed on a tax equivalent  basis) improved to
$59.7 million, or 4.99% of  interest-earning  assets, for the three months ended
September 30, 2000, from $49.7 million, or 4.53% of interest-earning assets, for
the comparable  period in 1999. For the nine months ended September 30, 2000 and
1999,  net interest  income  (expressed  on a  tax-equivalent  basis) was $173.9
million,  or 4.93%,  and $141.1 million,  or 4.44% of  interest-earning  assets,
respectively.   We  credit  the  improved   net  interest   income  to  the  net
interest-earning  assets provided by our aforementioned  acquisitions,  internal
loan  growth and  increases  in the  prime-lending  rate which have resulted  in
increased yields on interest-earning assets. For the three and nine months ended
September  30,  2000,  average  loans  increased  by $471.3  million  and $471.7
million, respectively.  During the period from October 1, 1999 through September
30, 2000,  the Board of Governors of the Federal  Reserve  System  increased the
discount rate several  times,  resulting in four  increases in the prime rate of
interest from 8.25% to 9.50%. This is reflected not only in the rate of interest
earned on loans that are indexed to the prime rate, but also in other assets and
liabilities  which either have variable or adjustable rates, or which matured or
repriced during this period.  Although the cost of interest-bearing  liabilities
has  also   increased,   it  has  been  less   dramatic  than  the  earnings  on
interest-earning assets, contributing to an improvement in net interest margins.
This is further discussed under "--Interest Rate Risk Management."


<PAGE>
         The improved yield earned on our interest-earning  assets was partially
offset by an increased rate paid on our  interest-bearing  liabilities.  For the
three and nine months ended September 30, 2000, the aggregate  weighted  average
rate paid on the deposit portfolio  increased to 4.72% and 4.52%,  respectively,
from 4.25% and 4.29% for the comparable  periods in 1999,  reflecting  increased
rates  paid by us to provide a funding  source for  continued  loan  growth.  In
addition,  the aggregate  weighted average rate on the note payable increased to
8.56%  and  7.85%  for the  three and nine  months  ended  September  30,  2000,
respectively,  from  6.19%  and  6.22%  for  the  comparable  periods  in  1999,
reflecting  an  increase in market  rates on these  financial  instruments.  Our
$120.0 million revolving line of credit with a group of unaffiliated banks bears
interest  at the lead  bank's  corporate  base  rate or, at our  option,  at the
Eurodollar  Rate plus a margin  determined  by the  outstanding  balance and our
profitability.

         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  our   interest-earning   assets,  the  average  cost  of  our
interest-bearing  liabilities  and our  resulting  net  interest  income for the
periods indicated.
<TABLE>
<CAPTION>
                                            Three months ended September 30,                 Nine months ended September 30,
                                    ----------------------------------------------   ----------------------------------------------
                                              2000                    1999                      2000                    1999
                                    ----------------------   ---------------------   ----------------------   ---------------------
                                            Interest                 Interest                 Interest                 Interest
                                     Average income/Yield/   Average  income/Yield/   Average  income/Yield/    Averageincome/Yield/
                                     balance expenserate     balance  expense rate    balance expense  rate     balanceexpenserate
                                     ------- -----------     ----------------------   ------- -------  ----     --------------------
                                                                   (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)......... $4,317,762  99,858  9.20%  $3,846,498 81,972 8.45% $4,226,438 285,845  9.03% $3,754,770 235,724 8.39%
   Investment securities (4)..    412,501   7,214  6.96      435,931  6,446 5.87     431,104  21,493  6.66     460,355  20,831 6.05
   Federal funds sold.........     24,304     685 11.21       59,807    744 4.94      49,926   2,628  7.03      29,266   1,154 5.27
   Other......................      3,020      54  7.11        2,424     35 5.73       2,662     144  7.23       1,747      80 6.12
                               ---------- -------         ---------- ------       ---------- -------        ---------- -------
        Total interest-earning
         assets...............  4,757,587 107,811  9.02    4,344,660 89,197 8.15   4,710,130  310,110 8.79   4,246,138 257,789 8.12
                                          -------                    ------                   -------                  -------
Nonearning assets.............    365,919                    347,829                 354,327                   342,858
                               ----------                 ----------              ----------                ----------
        Total assets.......... $5,123,506                 $4,692,489              $5,064,457                $4,588,996
                               ==========                 ==========              ==========                ==========

   Liabilities and Stockholders' Equity
   ------------------------------------
Interest-bearing liabilities:
   Interest-bearing deposits:
     Interest-bearing demand
       deposits............... $  416,302   1,480  1.41%  $  388,880  1,269 1.29% $  420,442   4,365  1.39% $  382,790   3,565 1.25%
     Savings deposits.........  1,277,167  13,176  4.10    1,217,845 10,962 3.57   1,253,312  37,246  3.97   1,221,226  32,976 3.61
     Time deposits (3)........  2,120,397  30,623  5.75    1,922,841 25,537 5.27   2,118,313  86,700  5.47   1,854,886  74,419 5.36
                               ---------- -------         ---------- ------       ----------  ------        ---------- -------
         Total interest-bearing
         deposits.............  3,813,866  45,279  4.72    3,529,566 37,768 4.25   3,792,067 128,311  4.52   3,458,902 110,960 4.29
   Short-term borrowings......     97,407   1,641  6.70       77,188    903 4.64      93,208   4,156  5.96      91,188   3,294 4.83
   Note payable...............     56,708   1,220  8.56       55,995    873 6.19      63,482   3,731  7.85      51,683   2,406 6.22
                               ---------- -------         ---------- ------       ---------- -------        ---------- -------
        Total interest-bearing
         liabilities..........  3,967,981  48,140  4.83    3,662,749 39,544 4.28   3,948,757 136,198  4.61   3,601,773 116,660 4.33
                                          -------                    ------                  -------                   -------
Noninterest-bearing liabilities:
   Demand deposits............    644,158                    569,074                 616,359                   537,332
   Other liabilities..........    180,376                    177,165                 185,084                   174,410
                               ----------                 ----------              ----------                ----------
        Total liabilities.....  4,792,515                  4,408,988               4,750,200                 4,313,515
Stockholders' equity..........    330,991                    283,501                 314,257                   275,481
                               ----------                 ----------              -----------               ----------
        Total liabilities and
         stockholders' equity. $5,123,506                 $4,692,489              $5,064,457                $4,588,996
                               ==========                 ==========              ===========               ==========

Net interest income...........             59,671                    49,653                  173,912                   141,129
                                          =======                    ======                  =======                   =======
Interest rate spread..........                     4.19                     3.87                      4.18                     3.79
Net interest margin...........                     4.99%                    4.53%                     4.93%                    4.44%
                                                   ====                     ====                      ====                     ====
     ------------------------
(1)   For purposes of these computations, nonaccrual loans are included  in  the
      average loan amounts.
(2)   Interest income on loans includes loan fees.
(3)   Includes the effects of interest rate exchange agreements.
(4)   Information  is   presented   on  a  tax-equivalent  basis assuming a tax rate of 35%.  The  tax-equivalent  adjustments  were
      approximately  $229,000  and $650,000  for the three and nine months  ended  September  30,  2000,  and  $152,000 and $543,000
      for the comparable periods in 1999, respectively.
</TABLE>

<PAGE>



Provision for Loan Losses

         The  provision  for loan losses was $3.9 million and $11.1  million for
the three and nine months  ended  September  30,  2000,  in  comparison  to $2.9
million and $8.7 million for the comparable  periods in 1999,  respectively.  We
attribute the increase in the  provision for loan losses to continued  growth in
the loan  portfolio,  both  internal and through  acquisitions;  increased  risk
associated with the continued changing composition of our loan portfolio; and an
increase in  nonperforming  assets.  Loan charge-offs were $3.7 million and $8.7
million for the three and nine months ended September 30, 2000, respectively, in
comparison to $3.6 million and $11.2 million for the comparable periods in 1999.
The decrease in loan  charge-offs is indicative of the generally strong economic
conditions  prevalent in our markets, as well as management's  continued efforts
to effectively monitor and manage our loan portfolio.  For the nine months ended
September 30, 2000, loan  charge-offs  include a charge-off of $1.6 million on a
single loan. Loan recoveries  increased to $1.8 million and $8.0 million for the
three and nine months ended September 30, 2000, respectively,  from $2.7 million
and $6.9  million  for the  comparable  periods  in 1999,  reflecting  continued
aggressive collection efforts. The acquisitions of Bank of Ventura,  Lippo Bank,
Century Bank and Redwood Bank provided $547,000, $799,000, $1.5 million and $1.5
million, respectively, in additional 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 $10.8  million and $31.8  million for the three
and nine months ended  September  30, 2000,  in  comparison  to $9.0 million and
$32.1 million for the comparable  periods in 1999.  Noninterest  income consists
primarily of service  charges on deposit  accounts and  customer  service  fees,
mortgage banking revenues and other income.

         Service charges on deposit accounts and customer service fees were $5.2
million  and $14.6  million for the three and nine months  ended  September  30,
2000, in comparison to $4.4 million and $12.8 million for the comparable periods
in 1999, respectively. The increase in service charges and customer service fees
is attributable to (a) increased  deposit balances  provided by internal growth;
(b) the  acquisitions of Bank of Ventura,  Lippo Bank,  Century Bank and Redwood
Bank;  (c)  additional  products  and  services  available  and  utilized by our
expanding  base of retail and  commercial  customers;  (d)  increased fee income
resulting from revisions of customer  service charge rates,  effective  April 1,
1999 and June 1, 2000,  and enhanced  control of fee waivers;  and (e) increased
income  associated with automatic  teller machine  services and debit and credit
cards.

         The gain on mortgage  loans sold and held for sale was $1.9 million and
$5.2  million  for the  three and nine  months  ended  September  30,  2000,  in
comparison to $1.6 million and $5.4 million for the comparable  periods in 1999,
respectively.  The overall decrease for the nine months ended September 30, 2000
is  primarily  attributable  to a reduced  volume of loans  originated  and sold
commensurate  with the  increases in mortgage loan rates  experienced  in recent
months.

         The net loss on sales of available-for-sale securities was $180,000 for
the three months ended September 30, 2000, in comparison to a net gain of $1,000
for the comparable  period in 1999. For the nine months ended September 30, 2000
and 1999,  the net gain on sales of  available-for-sale  securities was $199,000
and  $793,000,  respectively.  These  gains  primarily  resulted  from  sales of
securities  necessary  to fund our loan  growth.  The  decrease in the net gains
reflects the sales,  at a loss, of certain  investment  securities  that did not
meet our overall investment objectives.

         The net loss on trading  securities  of  $303,000  for the nine  months
ended September 30, 1999 resulted from the termination of our trading  division,
effective  December  31, 1998,  and the  liquidation  of all trading  securities
during the first quarter of 1999.

         Other income was $3.8 million and $11.8  million for the three and nine
months ended September 30, 2000, in comparison to $3.0 million and $13.4 million
for the  comparable  periods in 1999. We attribute the reduction in other income
primarily to non-recurring gains on branch divestitures.  During the nine months
ended  September  30, 2000,  we divested one of our branch  locations in central
Illinois,  resulting in a pre-tax gain of $1.4 million, net of related expenses.
In the same  period in 1999,  we  divested  six branch  offices  in central  and
northern Illinois,  resulting in a pre-tax gain of $4.4 million,  net of related

<PAGE>

expenses. The reduction in these gains were partially offset by increased income
earned on our investment in bank-owned life insurance;  rental income associated
with FCG's leasing  activities;  and,  increased rental fees received from First
Services,  L.P. for the use of data  processing and other equipment owned by us.
The increase in rental fees is  commensurate  with the replacement of our teller
system and certain other technological  upgrades,  including local and wide area
network-based systems,  networks,  core processors and item processing equipment
that were replaced in 1999 in conjunction with Year 2000 compliance preparations
and to improve system capabilities and performance.

Noninterest Expense

         Noninterest  expense was $42.8 million and $122.5 million for the three
and nine months ended  September  30, 2000,  in  comparison to $37.5 million and
$110.3 million for the comparable  periods in 1999. The increase  reflects:  (a)
the noninterest  expense of Bank of Ventura,  Lippo Bank, FCG,  Century Bank and
Redwood Bank subsequent to their respective acquisition dates, including certain
nonrecurring expenses associated with those acquisitions; (b) increased salaries
and employee benefit expenses; (c) increased data processing fees; (d) increased
amortization of intangibles  associated with the purchase of  subsidiaries;  and
(e) increased expenses associated with our internal  restructuring  process. The
overall  increase in noninterest  expense was partially  offset by a decrease in
legal, examination and professional fees.

         During 1999,  we began an internal  restructuring  process  designed to
better  position  us for future  growth  and  opportunities  expected  to become
available  as  consolidation  and changes  continue in the delivery of financial
services.  The magnitude of this project was extensive and covered  almost every
area within First Banks.  The primary  objectives of the  restructuring  process
were: (a) to redesign our corporate  organization  to provide lines of authority
which are more conducive to the effective delivery of services to customers; (b)
to enhance  our  technological  strength  to enable us to more  effectively  and
efficiently  provide the products,  services and delivery channels  necessary to
remain  competitive  in the financial  services  industry of the future;  (c) to
establish the  infrastructure  necessary to better support our service  delivery
and business development efforts, and to provide more efficient,  better quality
services to customers;  (d) to increase the depth and abilities of all levels of
management  and  supervision  to lead the efforts to  accomplish  our  corporate
objectives;  and (e) to improve internal  monitoring  systems in order to better
assess the progress of all areas in achieving our corporate objectives. Although
these  efforts  have  primarily  led  to  increased  capital   expenditures  and
noninterest expenses in the short-term as further discussed below, we anticipate
they will lead to more effective internal growth, more efficient  operations and
improved profitability over the long term.

         Salaries and employee benefits were $18.2 million and $53.4 million for
the three and nine months ended  September  30,  2000,  in  comparison  to $15.6
million and $45.6 million for the comparable periods in 1999,  respectively.  We
attribute the increase to the  aforementioned  acquisitions  and the competitive
environment  in the  employment  market that has resulted in a higher demand for
limited  resources,  thus escalating  industry salary and employee benefit costs
necessary to employ and retain qualified  personnel.  In addition,  the increase
includes various  additions to staff to enhance  executive and senior management
expertise,  improve technological support and strengthen centralized operational
functions.

         Occupancy,  net of rental income,  and furniture and equipment  expense
totaled  $6.6  million and $18.9  million  for the three and nine  months  ended
September  30, 2000,  in  comparison  to $5.7 million and $15.5  million for the
comparable  periods in 1999,  respectively.  We  attribute  the  increase to the
aforementioned  acquisitions,  the  relocation of certain  California  and Texas
branches and increased  depreciation  expense  associated with numerous  capital
expenditures  made  throughout  1999,  including the  implementation  of our new
teller system. This increase has been partially offset by selective  elimination
of 15 branch offices by sales, mergers or closures during 1999 and 2000.

         Data  processing fees were $5.7 million and $16.4 million for the three
and nine months ended  September  30, 2000,  in  comparison  to $4.7 million and
$13.9 million for the comparable periods in 1999, respectively. We attribute the
increased  data  processing  fees  to  growth  and  technological   advancements
consistent with our product and service  offerings and upgrades to technological
equipment, networks and communication channels.

         Legal,  examination  and  professional  fees were $1.1 million and $3.1
million for the three and nine months ended September 30, 2000, in comparison to
$1.7 million and $4.9 million for the comparable periods in 1999,  respectively.
We  attribute  the  decrease  in these fees to a decline in our  utilization  of
external consultants who provided assistance throughout 1999 associated with the
development and expansion of selected  business  initiatives.  In addition,  the
decrease is also reflective of the settlement of certain litigation completed in
1999.



<PAGE>


                          Interest Rate Risk Management

         We utilize off-balance-sheet derivative financial instruments to assist
in our  management of interest  rate  sensitivity  and to modify the  repricing,
maturity and option characteristics of on-balance-sheet  assets and liabilities.
We limit the use of such derivative financial instruments to reduce our interest
rate  exposure.  The derivative  financial  instruments we hold, for purposes of
managing interest rate risk, are summarized as follows:
<TABLE>
<CAPTION>

                                                                  September 30, 2000           December 31, 1999
                                                                ----------------------      ----------------------
                                                                Notional       Credit       Notional       Credit
                                                                amount        exposure       amount       exposure
                                                                ------        --------       ------       --------
                                                                         (dollars expressed in thousands)

     Interest rate swap agreements - pay
<S>                                                           <C>             <C>           <C>            <C>
         adjustable rate, receive adjustable rate...........  $       --          --        500,000           --
     Interest rate swap agreements - pay
         adjustable rate, receive fixed rate................   1,105,000          92        455,000        3,349
     Interest rate floor agreements.........................      35,000           8         35,000           13
     Interest rate cap agreements...........................     450,000       4,009         10,000           26
     Forward commitments to sell
         mortgage-backed securities.........................      35,000          20         33,000           --
                                                              ==========      ======        =======       ======
</TABLE>

         The  notional  amounts  of  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 accounting  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 1998, we entered into $280.0 million  notional  amount  interest
rate swap  agreements.  The swap agreements  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 swap  agreements  initially
provided for us to receive a fixed rate of interest and pay an  adjustable  rate
equivalent  to the 90-day London  Interbank  Offering  Rate. In March 2000,  the
terms of the  swap  agreements  were  modified  such  that we  currently  pay an
adjustable  rate of interest  equivalent  to the daily  weighted  average  prime
lending rate minus 2.705%.  The terms of the swap  agreements  provide for us to
pay  quarterly and receive  payment  semiannually.  The amount  receivable by us
under the swap  agreements  was $790,000 and $4.1 million at September  30, 2000
and December 31, 1999, respectively, and the amount payable by us under the swap
agreements  was $691,000  and  $770,000 at  September  30, 2000 and December 31,
1999, respectively.

         During  May 1999,  we  entered  into  $500.0  million  notional  amount
interest rate swap agreements with the objective of stabilizing the net interest
margin  during the  nine-month  period  surrounding  the Year 2000  century date
change.  The swap  agreements  provided for us to receive an adjustable  rate of
interest  equivalent  to the daily  weighted  average  30-day  London  Interbank
Offering  Rate and pay an  adjustable  rate of interest  equivalent to the daily
weighted  average  prime  lending  rate  minus  2.665%.  The  terms  of the swap
agreements,  which had an effective  date of October 1, 1999 and a maturity date
of March 31,  2000,  provided  for us to pay and  receive  interest on a monthly
basis.  In January  2000,  we determined  these swap  agreements  were no longer
necessary  based upon the  results of the Year 2000  transition  and  terminated
these agreements at a cost of $150,000.

         During  September 1999, we entered into $175.0 million  notional amount
interest   rate  swap   agreements   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 swap agreements provide for us
to receive a fixed rate of interest and pay an adjustable rate equivalent to the
weighted  average  prime  lending  rate  minus  2.70%.  The  terms  of the  swap
agreements  provide for us to pay and receive interest on a quarterly basis. The
amount  receivable by us under the swap agreements was $119,000 at September 30,
2000 and  December  31,  1999,  and the  amount  payable  by us  under  the swap
agreements  was $132,000  and  $141,000 at  September  30, 2000 and December 31,
1999, respectively.



<PAGE>


         During  September 2000, we entered into $600.0 million  notional amount
of four-year interest rate swap agreements 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 swap agreements provide for us
to  receive a fixed  rate of  interest  of 6.7750%  and pay an  adjustable  rate
equivalent to the weighted  average prime lending rate minus 2.70%. The terms of
the swap  agreements  provide for us to pay and receive  interest on a quarterly
basis.  The amount  receivable  and payable by us under the swap  agreements was
$1.2 million at September 30, 2000. In conjunction with these interest rate swap
agreements, we also entered into $450.0 million notional amount of interest rate
cap agreements to limit the net interest  expense  associated  with the interest
rate swap agreements. The interest rate cap agreements provide for us to receive
a quarterly  adjustable rate of interest  equivalent to the  three-month  London
Interbank Offering Rate should such rate exceed the predetermined  interest rate
of 7.50%, and have a maturity date of September 20, 2004. At September 30, 2000,
the  unamortized  costs of these interest rate cap agreements were $4.0 million,
and were included in other assets

         During September 2000, we entered into $12.5 million notional amount of
one-year  interest  rate swap  agreements to  effectively  shorten the repricing
characteristics  of certain  interest-bearing  liabilities with the objective of
stabilizing cash flow, and accordingly, net interest income, over time. The swap
agreements  provide  for us to  receive  a  fixed  rate of  interest  and pay an
adjustable  rate equivalent to the three-month  London  Interbank  Offering Rate
minus 0.02%. The terms of the swap agreements  provide for us to pay interest on
a quarterly basis and receive interest on an annual basis. The amount receivable
and payable by us under the swap agreements was $42,000 at September 30, 2000.

         During September 2000, we entered into $12.5 million notional amount of
one-year  interest  rate swap  agreements to  effectively  shorten the repricing
characteristics  of certain  interest-bearing  liabilities with the objective of
stabilizing cash flow, and accordingly, net interest income, over time. The swap
agreements  provide  for us to  receive  a  fixed  rate of  interest  and pay an
adjustable  rate equivalent to the three-month  London  Interbank  Offering Rate
minus 0.05%. The terms of the swap agreements  provide for us to pay interest on
a quarterly basis and receive interest on an annual basis. The amount receivable
and payable by us under the swap agreements was $23,000 at September 30, 2000.

         During September 2000, we entered into $25.0 million notional amount of
five and one-half year interest rate swap agreements to effectively  shorten the
repricing  characteristics  of  certain  interest-bearing  liabilities  with the
objective of stabilizing cash flow, and accordingly,  net interest income,  over
time. The swap agreements provide for us to receive a fixed rate of interest and
pay an adjustable rate equivalent to the three-month  London Interbank  Offering
Rate  minus  0.11%.  The  terms of the  swap  agreements  provide  for us to pay
interest on a quarterly basis and receive  interest on a semi-annual  basis. The
amount  receivable by us under the swap  agreements was $67,000 at September 30,
2000 and the  amount  payable  by us under the swap  agreements  was  $61,000 at
September 30, 2000.

         The maturity dates, notional amounts, interest rates paid and received,
and fair values of interest rate swap agreements outstanding as of September 30,
2000 and December 31, 1999 were as follows:
<TABLE>
<CAPTION>

                                                                  Notional   Interest rate Interest rate  Fair value
                   Maturity date as of September 30, 2000          amount        paid        received     gain (loss)
                   --------------------------------------          ------        ----        --------     -----------
                                                                         (dollars expressed in thousands)

<S>                                                            <C>               <C>           <C>       <C>
             September 13, 2001..............................  $   12,500        6.61%         6.60%     $      (8)
             September 21, 2001..............................      12,500        6.64          6.80            (13)
             September 27, 2001..............................      75,000        6.80          6.14           (393)
             September 27, 2001..............................      45,000        6.80          6.14           (236)
             September 27, 2001..............................      40,000        6.80          6.14           (210)
             September 27, 2001..............................      15,000        6.80          6.14            (79)
             June 11, 2002...................................      15,000        6.80          6.00           (173)
             September 16, 2002..............................     175,000        6.80          5.36         (4,204)
             September 16, 2002..............................      20,000        6.80          5.36           (486)
             September 18, 2002..............................      40,000        6.80          5.33         (1,001)
             September 18, 2002..............................      30,000        6.80          5.33           (750)
             September 20, 2004..............................     300,000        6.78          6.80            777
             September 20, 2004..............................     300,000        6.78          6.80            777
             March 13, 2006..................................      12,500        6.55          7.20           (220)
             March 22, 2006..................................      12,500        6.55          7.25           (219)
                                                               ----------                                ---------
                                                               $1,105,000        6.77          6.34      $  (6,438)
                                                               ==========       =====         =====      =========

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                                  Notional  Interest rate  Interest rate  Fair value
                   Maturity date as of December 31, 1999           amount       paid         received     gain (loss)
                   -------------------------------------           ------       ----         --------     -----------
                                                                         (dollars expressed in thousands)

<S>                                                            <C>               <C>           <C>       <C>
             March 31, 2000..................................  $  350,000        5.84%         6.45%     $      87
             March 31, 2000..................................      75,000        5.84          6.45             19
             March 31, 2000..................................      50,000        5.84          6.45             12
             March 31, 2000..................................      25,000        5.84          6.45              6
             September 27, 2001..............................      75,000        5.80          6.14           (685)
             September 27, 2001..............................      45,000        5.80          6.14           (411)
             September 27, 2001..............................      40,000        5.80          6.14           (365)
             September 27, 2001..............................      15,000        5.80          6.14           (137)
             June 11, 2002...................................      15,000        6.12          6.00           (291)
             September 16, 2002..............................     175,000        6.12          5.36         (6,574)
             September 16, 2002..............................      20,000        6.12          5.36           (751)
             September 18, 2002..............................      40,000        6.14          5.33         (1,543)
             September 18, 2002..............................      30,000        6.14          5.33         (1,157)
                                                               ----------                                ---------
                                                               $  955,000        5.91          6.08      $ (11,790)
                                                               ==========       =====         =====      =========
</TABLE>

         In the event of early termination of the interest rate swap agreements,
the net proceeds received or paid are deferred and amortized over the shorter of
the remaining  contract life or the maturity of the related asset.  If, however,
the  amount of the  underlying  asset is repaid,  then the fair  value  gains or
losses on the interest rate swap  agreements are  recognized  immediately in the
consolidated statements of income.

         We also utilize  interest  rate floor  agreements to limit the interest
expense  associated with the net interest  expense of certain interest rate swap
agreements.  At September 30, 2000 and December 31, 1999, the unamortized  costs
of these agreements were $8,000 and $32,000,  respectively, and were included in
other assets.

         Derivative financial instruments issued by us consist of commitments to
originate  fixed-rate loans.  Commitments to originate  fixed-rate loans consist
primarily of  residential  real estate  loans.  These loan  commitments,  net of
estimated  underwriting  fallout, and loans held for sale were $35.0 million and
$31.5 million at September 30, 2000 and December 31, 1999,  respectively.  These
net loan commitments and loans held for sale were hedged with forward  contracts
to sell  mortgage-backed  securities  of $35.0  million  and  $33.0  million  at
September  30, 2000 and  December  31,  1999,  respectively.  We defer gains and
losses from forward  contracts  and include them in the cost basis of loans held
for sale. At September 30, 2000 and December 31, 1999, the net unamortized gains
were  $90,000 and  $838,000,  respectively.  Such net gains were  applied to the
carrying value of the loans held for sale as part of our lower of cost or market
valuation.

                       Loans and Allowance for Loan Losses

         Interest earned on our loan portfolio  represents the principal  source
of income for First Banks and our subsidiary  banks.  Interest and fees on loans
were  92.7% and 92.3% of total  interest  income  for the three and nine  months
ended  September 30, 2000,  in comparison to 92.0% and 91.6% for the  comparable
periods in 1999, respectively.  Total loans, net of unearned discount, increased
$363.3  million to $4.36  billion,  or 83.3% of total  assets,  at September 30,
2000, compared to $4.00 billion, or 82.1% of total assets, at December 31, 1999.
The increase in loans,  as summarized on our  consolidated  balance  sheets,  is
primarily  attributable to the  acquisitions of Bank of Ventura,  Lippo Bank and
FCG, which provided loans,  net of unearned  discount,  of $39.4 million,  $40.9
million  and  $64.6  million,   respectively,   and  the  continued  growth  and
diversification  of our commercial,  financial and  agricultural  and commercial
real estate mortgage loan  portfolios.  This increase was partially  offset by a
decline in our consumer and installment portfolio to $176.7 million at September
30, 2000 from $225.3  million at  December  31,  1999.  Such  decrease  reflects
reductions  in new loan  volumes and the  repayment of principal on the existing
portfolio, and is also consistent with our objectives of de-emphasizing indirect
automobile lending and expanding commercial lending.



<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 the dates indicated:
<TABLE>
<CAPTION>

                                                                                  September 30,   December 31,
                                                                                      2000            1999
                                                                                      ----            ----
                                                                                 (dollars expressed in thousands)

         Commercial, financial and agricultural:
<S>                                                                              <C>                  <C>
              Nonaccrual.....................................................    $    20,167          18,397
              Restructured terms.............................................             22              29
         Real estate construction and development:
              Nonaccrual.....................................................         16,928           1,886
         Real estate mortgage:
              Nonaccrual.....................................................         16,564          16,414
              Restructured terms.............................................          2,962           2,979
         Consumer and installment:
              Nonaccrual.....................................................            184              32
              Restructured terms.............................................              9              --
                                                                                 -----------      ----------
                  Total nonperforming loans..................................         56,836          39,737
         Other real estate...................................................          1,566           2,129
                                                                                 -----------      ----------
                  Total nonperforming  assets................................    $    58,402          41,866
                                                                                 ===========      ==========

         Loans, net of unearned discount.....................................    $ 4,359,586       3,996,324
                                                                                 ===========      ==========

         Loans past due 90 days or more and still accruing...................    $     5,275           5,844
                                                                                 ===========       =========

         Allowance for loan losses to loans..................................           1.84%           1.72%
         Nonperforming loans to loans........................................           1.30            0.99
         Allowance for loan losses to nonperforming loans....................         141.30          172.66
         Nonperforming assets to loans and other real estate.................           1.34            1.05
                                                                                 ===========        ========
</TABLE>

         Nonperforming  loans (also considered  impaired  loans),  consisting of
loans on nonaccrual status and certain restructured loans, were $56.8 million at
September  30, 2000 in  comparison  to $39.7  million at December 31,  1999.  We
primarily  attribute  the increase in  nonperforming  loans to a small number of
credit  relationships  that were  placed  on  nonaccrual  status in 2000.  These
nonperforming  loans are symptomatic of circumstances that are specific to these
relationships,  and are not indicative of distress  across the broad spectrum of
our loan portfolio.  In addition,  the decline in the ratio of the allowance for
loan  losses  to  nonperforming   loans  is  attributable  to  the  increase  in
nonperforming  loans,  partially offset by an increase in the allowance for loan
losses.

         The following  table presents a summary of loan loss experience for the
periods indicated:
<TABLE>
<CAPTION>

                                                                          Three months ended       Nine months ended
                                                                            September 30,            September 30,
                                                                        ----------------------   --------------------
                                                                           2000       1999         2000       1999
                                                                           ----       ----         ----       ----
                                                                                (dollars expressed in thousands)

<S>                                                                      <C>           <C>          <C>       <C>
         Allowance for loan losses, beginning of period..............    $  77,822     64,977       68,611    60,970
              Acquired allowances for loan losses....................          547      1,542        1,346     3,008
                                                                         ---------   --------     --------  --------
                                                                            78,369     66,519       69,957    63,978
                                                                         ---------   --------     --------  --------
              Loans charged-off......................................       (3,697)    (3,626)      (8,667)  (11,154)
              Recoveries of loans previously charged-off.............        1,774      2,725        7,954     6,931
                                                                         ---------   --------     --------  --------
              Net loan charge-offs ..................................       (1,923)      (901)        (713)   (4,223)
                                                                         ---------   --------     --------  --------
              Provision for loan losses..............................        3,865      2,880       11,067     8,743
                                                                         ---------   --------     --------  --------
         Allowance for loan losses, end of period....................    $  80,311     68,498       80,311    68,498
                                                                         =========   ========     ========  ========
</TABLE>
<PAGE>

         The  allowance  for loan losses is monitored on a monthly  basis.  Each
month,  the  credit  administration  department  provides  our  management  with
detailed  lists of loans on the watch  list and  summaries  of the  entire  loan
portfolio  of each  subsidiary  bank by risk  rating.  These  are  coupled  with
analyses of changes in the risk profiles of the portfolios,  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  levels  of risk in the  portfolios.  Factors  are  applied  to the  loan
portfolios  for each  category of loan risk to  determine  acceptable  levels of
allowance  for loan losses.  We derive these factors  primarily  from the actual
loss experience of our subsidiary  banks and from published  national surveys of
norms in the industry. The calculated allowances required for the portfolios are
then  compared to the actual  allowance  balances to  determine  the  provisions
necessary  to maintain  the  allowances  at  appropriate  levels.  In  addition,
management  exercises  judgment in its analysis of determining the overall level
of the allowance  for loan losses.  In its  analysis,  management  considers the
change in the  portfolio,  including  growth,  composition  and 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,  provisions are
made to our  allowance  for loan losses.  Such  provisions  are reflected in our
consolidated statements of income.

                                    Liquidity

         The liquidity of First Banks and our subsidiary banks is the ability to
maintain  a cash  flow  which  is  adequate  to fund  operations,  service  debt
obligations and meet  obligations and other  commitments on a timely basis.  The
subsidiary  banks  receive  funds for liquidity  from  customer  deposits,  loan
payments,  maturities  of  loans  and  investments,  sales  of  investments  and
earnings. In addition, First Banks and the subsidiary banks may avail themselves
of more  volatile  sources of funds  through  the  issuance of  certificates  of
deposit in denominations of $100,000 or more, federal funds borrowed, securities
sold under agreements to repurchase, borrowings from the Federal Home Loan Banks
and other borrowings,  including our revolving note payable. The aggregate funds
acquired from these more volatile sources were $573.6 million and $476.8 million
at September 30, 2000 and December 31, 1999, respectively.

         The following table presents the maturity  structure of volatile funds,
which  consists  of  certificates  of deposit of  $100,000  or more,  short-term
borrowings and our revolving note payable, at September 30, 2000:
<TABLE>
<CAPTION>

                                                                                 (dollars expressed in thousands)

<S>                                                                                         <C>
         Three months or less..........................................................     $ 262,532
         Over three months through six months..........................................        67,546
         Over six months through twelve months.........................................       144,678
         Over twelve months............................................................        98,885
                                                                                            ---------
                Total..................................................................     $ 573,641
                                                                                            =========
</TABLE>

         In addition to these more  volatile  sources of funds,  in 1999,  First
Bank,  First Bank & Trust,  First Bank of  California  and First Bank Texas N.A.
established  borrowing  relationships  with the Federal  Reserve  Banks in their
respective  districts.  These  borrowing  relationships,  which are  secured  by
commercial loans,  provide an additional liquidity facility that may be utilized
for  contingency  purposes.  At September  30, 2000 and  December 31, 1999,  the
borrowing   capacity  of  our  subsidiary   banks  under  these  agreements  was
approximately $1.34 billion and $1.67 billion,  respectively.  In addition,  our
subsidiary  banks'  borrowing  capacity  through  their  relationships  with the
Federal Home Loan Banks was  approximately  $257.6 million at September 30, 2000
and $395.9 million at December 31, 1999.

         Management  believes the available  liquidity and operating  results of
the  subsidiary  banks 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
the dividends on the trust preferred securities issued by First Banks' and FBA's
financing subsidiaries.
<PAGE>

                             Year 2000 Compatibility

         First Banks and our subsidiary  banks were subject to risks  associated
with the "Year 2000" issue,  a term which  referred to  uncertainties  about the
ability of various data  processing  hardware and software  systems to interpret
dates  correctly   surrounding  the  beginning  of  the  Year  2000.   Financial
institutions were  particularly  vulnerable to Year 2000 issues because of heavy
reliance in the  industry  on  electronic  data  processing  and funds  transfer
systems.

         We  successfully  completed all phases of our Year 2000 program  within
the appropriate  timeframes established by the regulatory agencies. In addition,
we did not encounter any significant business disruptions or processing problems
as a result of the Year 2000 century date change. Furthermore, we are unaware of
any Year 2000 issues  encountered by our more significant  borrowers and vendors
that would  inhibit  their  ability  to repay  obligations  or provide  goods or
services. The total cost of our program was $14.9 million,  comprised of capital
improvements  of  $12.3  million  and  direct  expenses  reimbursable  to  First
Services,  L.P. of $2.6  million.  We are charging the capital  improvements  to
expense in the form of depreciation  expense or lease expense,  generally over a
period of 60 months.  We  incurred  direct  expenses  related to our  program of
approximately  $195,000 for the nine months ended  September 30, 2000,  $450,000
and $1.4  million  for the three  and nine  months  ended  September  30,  1999,
respectively, and $1.8 million for the year ended December 31, 1999.


                       Effects of New Accounting Standards

         In June 1998, the Financial  Accounting  Standards  Board (FASB) issued
Statement of Financial  Accounting  Standards  (SFAS) No. 133 -- Accounting  for
Derivative  Instruments and Hedging  Activities (SFAS 133). SFAS 133 establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts,  and for hedging activities.
SFAS 133 requires that an entity  recognize all  derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value.  If certain  conditions are met, a derivative may be specifically
designated as a hedge in one of three categories.  The accounting for changes in
the fair  value of a  derivative  (that is,  gains and  losses)  depends  on the
intended use of the derivative and the resulting designation. Under SFAS 133, an
entity that elects to apply hedge  accounting is required to  establish,  at the
inception of the hedge,  the method it will use for assessing the  effectiveness
of the hedging  derivative  and the  measurement  approach for  determining  the
ineffective  aspect of the hedge.  Those  methods  must be  consistent  with the
entity's approach to managing risk. SFAS 133 applies to all entities.

         In June 1999, the FASB issued SFAS No. 137 -- Accounting for Derivative
Instruments  and Hedging  Activities  - Deferral of the  Effective  Date of FASB
Statement  No. 133, an Amendment  of FASB  Statement  No. 133,  which defers the
effective  date of SFAS 133 from fiscal years  beginning  after June 15, 1999 to
fiscal years beginning after June 15, 2000. Initial  application should be as of
the beginning of an entity's fiscal quarter; on that date, hedging relationships
must be designated  and  documented  pursuant to the  provisions of SFAS 133, as
amended.  Earlier  application  of all of the  provisions is  encouraged  but is
permitted  only as of the beginning of any fiscal  quarter that begins after the
issuance  date of SFAS 133,  as  amended.  Additionally,  SFAS 133,  as amended,
should not be applied retroactively to financial statements of prior periods.

         In June 2000,  the FASB issued SFAS No. 138 - Accounting for Derivative
Instruments  and Hedging  Activities,  an Amendment of FASB  Statement  No. 133,
which addresses a limited number of issues causing  implementation  difficulties
for  numerous  entities  that apply SFAS 133,  as  amended.  SFAS 138 amends the
accounting  and  reporting  standards  of SFAS  133,  as  amended,  for  certain
derivative instruments, certain hedging activities and for decisions made by the
FASB relating to the  Derivatives  Implementation  Group (DIG) process.  The DIG
presently has additional  issues and questions  pending and continues to release
guidance  and  interpretations  as such  issues are  resolved.  We  continue  to
consider the actions and conclusions of the DIG as they are released in order to
determine their potential impact on our consolidated financial statements.

         We  currently  believe the  implementation  of SFAS 133 will not have a
material impact on our  consolidated  financial  statements as it relates to our
existing  derivative  financial  instruments.  However,  the  effect  of  future
derivative  transactions as well as further  guidance from the DIG may result in
modifications  of our current  assessment of SFAS 133 and its overall  impact on
our consolidated financial statements.



<PAGE>


       ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         At December 31, 1999, our risk management  program's  simulation  model
indicated a loss of projected  net interest  income in the event of a decline in
interest rates.  While a decline in interest rates of less than 100 basis points
was projected to have a minimal  impact on our  earnings,  a decline in interest
rates of 100 basis points  indicated a pre-tax  projected loss of  approximately
7.1% of net  interest  income  based on assets and  liabilities  at December 31,
1999.

         Our interest  sensitivity position has been modified as a result of the
derivative  instruments  entered into during September 2000. After consideration
of these derivative instruments,  we are still  "asset-sensitive,"  however, our
simulation  model  indicated a lost of  projected  net  interest  income  should
interest rates decline or should  interest rates increase up to a maximum of 100
basis  points.  While a decline or increase  in interest  rates of less than 100
basis  points  has a minimal  impact on our net  interest  income,  a decline in
interest  rates of 100  basis  points  indicates  a  pre-tax  projected  loss of
approximately  4.9% of net interest  income based on assets and  liabilities  at
June 30,  2000,  whereas  an  increase  in  interest  rates of 100 basis  points
indicates a pre-tax projected loss of approximately 0.3% of net interest income,
based on assets and liabilities at June 30, 2000.

         At September 30, 2000, we remain in an  "asset-sensitive"  position and
thus,  remain  subject to a higher  level of risk in a  declining  interest-rate
environment.  Our asset-sensitive position,  coupled with increases in the prime
lending rate  experienced  throughout the last nine months,  is reflected in our
increased net interest  income for the three and nine months ended September 30,
2000 as further discussed under "--Results of Operations."  During the three and
nine months ended September 30, 2000, our  asset-sensitive  position and overall
susceptibility  to market  risks  have not  changed  materially,  except for the
modifications  that  have  resulted  from our  additional  derivative  financial
instruments entered into during September 2000 as described above.



<PAGE>


                           Part II - OTHER INFORMATION


                    ITEM 6- EXHIBITS AND REPORTS ON FORM 8-K

(a) The exhibits are numbered in  accordance  with the Exhibit Table of Item 601
of Regulation S-K.
<TABLE>
<CAPTION>

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

<S>                      <C>                 <C>
                         10.6                $120,000,000  Second Amended and Restated Secured Credit  Agreement,  dated as of
                                             August 24,  2000,  among First  Banks,  Inc.  and Firstar  Bank,  N.A.,  American
                                             National  Bank and Trust  Company of  Chicago,  Harris  Trust and  Savings  Bank,
                                             Wells  Fargo  Bank  Minnesota,  N.A.,  The Frost  National  Bank,  Union  Bank of
                                             California,  N.A.  LaSalle Bank National  Association and Firstar Bank,  N.A., as
                                             Agent  (incorporated  herein  by  reference  to  Exhibit  10.6  to the  Company's
                                             Registration  Statement on Form S-2 (File Nos. 333-46270 and 333-46270-01)  dated
                                             September 20, 2000).

                          27                 Article 9 - Financial Data Schedule (EDGAR only)

(b) We filed no reports on Form 8-K during the three months ended  September 30,
2000.
</TABLE>




<PAGE>


                                   SIGNATURES


         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.

                           FIRST BANKS, INC.



                           By: /s/  James F. Dierberg
                              -------------------------------------------------
                                    James F. Dierberg
                                    Chairman of the Board of Directors
                                    and Chief Executive Officer
November 13, 2000                   (Principal Executive Officer)



                           By: /s/  Frank H. Sanfilippo
                               ------------------------------------------------
                                    Frank H. Sanfilippo
                                    Executive Vice President and
                                    Chief Financial Officer
November 13, 2000                   (Principal Financial and Accounting Officer)