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 March 31, 2004

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

               For the transition period from _______ to ________

                           Commission File No. 0-20632

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

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

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

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

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

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                             Yes    X         No
                                 --------        --------

         Indicate by check mark whether the registrant is an  accelerated  filer
(as defined in Rule 12b-2 of the Exchange Act).

                             Yes              No    X
                                 --------        --------

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


                                                    Shares Outstanding
                     Class                          at April 30, 2004
                     -----                          ------------------

         Common Stock, $250.00 par value                  23,661


<PAGE>


<TABLE>
<CAPTION>


                                FIRST BANKS, INC.

                                TABLE OF CONTENTS





                                                                                                       Page
                                                                                                       ----
PART I.    FINANCIAL INFORMATION

  ITEM 1.  FINANCIAL STATEMENTS - (UNAUDITED):

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

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

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

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

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

  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
               AND RESULTS OF OPERATIONS.............................................................   11

  ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK................................   26

  ITEM 4.  CONTROLS AND PROCEDURES...................................................................   27

PART II.   OTHER INFORMATION

  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K..........................................................   28

SIGNATURES...........................................................................................   29
</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                                                 PART I - FINANCIAL INFORMATION
                                                  ITEM 1 - FINANCIAL STATEMENTS

                                                       FIRST BANKS, INC.

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


                                                                                             March 31,  December 31,
                                                                                               2004         2003
                                                                                               ----         ----
                                                                                            (unaudited)
                                                     ASSETS
                                                     ------

Cash and cash equivalents:
<S>                                                                                        <C>            <C>
     Cash and due from banks.............................................................. $  167,391      179,802
     Short-term investments...............................................................     88,768       33,735
                                                                                           ----------    ---------
          Total cash and cash equivalents.................................................    256,159      213,537
                                                                                           ----------    ---------

Investment securities:
     Available for sale...................................................................  1,268,500    1,038,787
     Held to maturity (fair value of $10,437 and $11,341, respectively)...................     10,010       10,927
                                                                                           ----------    ---------
          Total investment securities.....................................................  1,278,510    1,049,714
                                                                                           ----------    ---------

Loans:
     Commercial, financial and agricultural...............................................  1,415,246    1,407,626
     Real estate construction and development.............................................  1,091,423    1,063,889
     Real estate mortgage.................................................................  2,600,360    2,582,264
     Lease financing......................................................................     48,905       67,282
     Consumer and installment.............................................................     69,987       71,652
     Loans held for sale..................................................................    127,150      145,746
                                                                                           ----------    ---------
          Total loans.....................................................................  5,353,071    5,338,459
     Unearned discount....................................................................    (10,179)     (10,384)
     Allowance for loan losses............................................................   (124,871)    (116,451)
                                                                                           ----------    ---------
          Net loans.......................................................................  5,218,021    5,211,624
                                                                                           ----------    ---------

Derivative instruments....................................................................     46,174       49,291
Bank premises and equipment, net of accumulated depreciation and amortization.............    136,422      136,739
Goodwill..................................................................................    145,513      145,548
Bank-owned life insurance.................................................................     98,732       97,521
Deferred income taxes.....................................................................    104,391      102,844
Other assets..............................................................................     84,431      100,122
                                                                                           ----------    ---------
          Total assets.................................................................... $7,368,353    7,106,940
                                                                                           ==========    =========

                                                   LIABILITIES
Deposits:                                          -----------
     Noninterest-bearing demand........................................................... $1,072,898    1,034,367
     Interest-bearing demand..............................................................    870,305      843,001
     Savings..............................................................................  2,164,492    2,128,683
     Time deposits of $100 or more........................................................    453,799      436,439
     Other time deposits..................................................................  1,491,822    1,519,125
                                                                                           ----------    ---------
          Total deposits..................................................................  6,053,316    5,961,615
Other borrowings..........................................................................    418,014      273,479
Note payable..............................................................................      4,500       17,000
Subordinated debentures...................................................................    213,222      209,320
Deferred income taxes.....................................................................     43,208       41,683
Accrued expenses and other liabilities....................................................     67,357       54,028
                                                                                           ----------    ---------
          Total liabilities...............................................................  6,799,617    6,557,125
                                                                                           ----------    ---------
<PAGE>

                                              STOCKHOLDERS' EQUITY
                                              --------------------
Preferred stock:
     $1.00 par value, 5,000,000 shares authorized, no shares issued and outstanding.......         --           --
     Class A convertible, adjustable rate, $20.00 par value, 750,000
       shares authorized, 641,082 shares issued and outstanding...........................     12,822       12,822
     Class B adjustable rate, $1.50 par value, 200,000 shares authorized,
       160,505 shares issued and outstanding..............................................        241          241
Common stock, $250.00 par value, 25,000 shares authorized,
     23,661 shares issued and outstanding.................................................      5,915        5,915
Additional paid-in capital................................................................      5,910        5,910
Retained earnings.........................................................................    513,787      495,714
Accumulated other comprehensive income....................................................     30,061       29,213
                                                                                           ----------    ---------
          Total stockholders' equity......................................................    568,736      549,815
                                                                                           ----------    ---------
          Total liabilities and stockholders' equity...................................... $7,368,353    7,106,940
                                                                                           ==========    =========

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


<PAGE>
<TABLE>
<CAPTION>



                                               FIRST BANKS, INC.

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


                                                                                               Three Months Ended
                                                                                                    March 31,
                                                                                             ---------------------
                                                                                               2004         2003
                                                                                               ----         ----
Interest income:
<S>                                                                                          <C>            <C>
     Interest and fees on loans.........................................................     $ 84,220       90,612
     Investment securities..............................................................       11,621        8,760
     Short-term investments.............................................................          286          442
                                                                                             --------     --------
          Total interest income.........................................................       96,127       99,814
                                                                                             --------     --------
Interest expense:
     Deposits:
       Interest-bearing demand..........................................................          967        1,673
       Savings..........................................................................        4,777        6,786
       Time deposits of $100 or more....................................................        2,956        3,685
       Other time deposits..............................................................        8,487       12,194
     Other borrowings...................................................................          644          602
     Note payable.......................................................................          105          136
     Subordinated debentures............................................................        3,538        5,575
                                                                                             --------     --------
          Total interest expense........................................................       21,474       30,651
                                                                                             --------     --------
          Net interest income...........................................................       74,653       69,163
Provision for loan losses...............................................................       12,750       11,000
                                                                                             --------     --------
          Net interest income after provision for loan losses...........................       61,903       58,163
                                                                                             --------     --------
Noninterest income:
     Service charges on deposit accounts and customer service fees......................        8,949        8,644
     Gain on mortgage loans sold and held for sale......................................        4,229        4,580
     Net gain on sales of available-for-sale investment securities......................           --        6,259
     Gain on sales of branches, net of expenses.........................................          390           --
     Bank-owned life insurance investment income........................................        1,343        1,271
     Other..............................................................................        5,648        4,793
                                                                                             --------     --------
          Total noninterest income......................................................       20,559       25,547
                                                                                             --------     --------
Noninterest expense:
     Salaries and employee benefits.....................................................       27,686       23,261
     Occupancy, net of rental income....................................................        4,637        4,934
     Furniture and equipment............................................................        4,413        4,569
     Postage, printing and supplies.....................................................        1,322        1,306
     Information technology fees........................................................        7,996        8,033
     Legal, examination and professional fees...........................................        1,563        1,606
     Amortization of intangibles associated with the purchase of subsidiaries...........          658          532
     Communications.....................................................................          465          605
     Advertising and business development...............................................        1,281        1,309
     Other..............................................................................        2,581        7,432
                                                                                             --------     --------
          Total noninterest expense.....................................................       52,602       53,587
                                                                                             --------     --------
          Income before provision for income taxes......................................       29,860       30,123
Provision for income taxes..............................................................       11,591       11,092
                                                                                             --------     --------
          Net income....................................................................       18,269       19,031
Preferred stock dividends...............................................................          196          196
                                                                                             --------     --------
          Net income available to common stockholders...................................     $ 18,073       18,835
                                                                                             ========     ========

Basic earnings per common share.........................................................     $ 763.81       796.04
                                                                                             ========     ========

Diluted earnings per common share.......................................................     $ 753.93       784.29
                                                                                             ========     ========

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

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


<PAGE>

<TABLE>
<CAPTION>


                                                        FIRST BANKS, INC.

                 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME - (UNAUDITED)
                         Three Months Ended March 31, 2004 and 2003 and Nine Months Ended December 31, 2003
                                      (dollars expressed in thousands, except per share data)



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

<S>                                                <C>          <C>    <C>       <C>    <C>       <C>       <C>      <C>
Consolidated balances, December 31, 2002.........  $12,822      241    5,915     5,910            433,689   60,464   519,041
Three months ended March 31, 2003:
    Comprehensive income:
      Net income.................................       --       --       --        --   19,031    19,031       --    19,031
      Other comprehensive loss, net of tax:
        Unrealized losses on securities, net of
          reclassification adjustment (1)........       --       --       --        --   (5,658)       --   (5,658)   (5,658)
        Derivative instruments:
          Current period transactions............       --       --       --        --   (3,624)       --   (3,624)   (3,624)
                                                                                        -------
      Comprehensive income.......................                                         9,749
                                                                                        =======
    Class A preferred stock dividends,
      $0.30 per share............................       --       --       --        --               (192)      --      (192)
    Class B preferred stock dividends,
      $0.03 per share............................       --       --       --        --                 (4)      --        (4)
                                                   -------     ----    -----     -----            -------  -------  --------

Consolidated balances, March 31, 2003............   12,822      241    5,915     5,910            452,524   51,182   528,594
Nine months ended December 31, 2003:
    Comprehensive income:
      Net income.................................       --       --       --        --   43,780    43,780       --    43,780
      Other comprehensive loss, net of tax:
        Unrealized losses on securities, net of
          reclassification adjustment (1)........       --       --       --        --   (4,328)       --   (4,328)   (4,328)
        Derivative instruments:
          Current period transactions............       --       --       --        --  (17,641)       --  (17,641)  (17,641)
                                                                                        -------
      Comprehensive income.......................                                        21,811
                                                                                        =======
    Class A preferred stock dividends,
      $0.90 per share............................       --       --       --        --               (577)      --      (577)
    Class B preferred stock dividends,
      $0.08 per share............................       --       --       --        --                (13)      --       (13)
                                                   -------     ----    -----     -----            -------  -------  --------

Consolidated balances, December 31, 2003.........   12,822      241    5,915     5,910            495,714   29,213   549,815
Three months ended March 31, 2004:
    Comprehensive income:
      Net income.................................       --       --       --        --   18,269    18,269       --    18,269
      Other comprehensive income, net of tax:
        Unrealized gains on securities, net of
          reclassification adjustment (1)........       --       --       --        --    5,491        --    5,491     5,491
        Derivative instruments:
          Current period transactions............       --       --       --        --   (4,643)       --   (4,643)   (4,643)
                                                                                        -------
      Comprehensive income.......................                                        19,117
                                                                                        =======
    Class A preferred stock dividends,
      $0.30 per share............................       --       --       --        --               (192)      --      (192)
    Class B preferred stock dividends,
      $0.03 per share............................       --       --       --        --                 (4)      --        (4)
                                                   -------     ----    -----     -----            -------  -------  --------

Consolidated balances, March 31, 2004............  $12,822      241    5,915     5,910            513,787   30,061   568,736
                                                   =======     ====    =====     =====            =======  =======  ========
<PAGE>

-------------------------
(1) Disclosure of reclassification adjustment:
</TABLE>

<TABLE>
<CAPTION>
                                                                        Three Months Ended          Nine Months Ended
                                                                             March 31,                December 31,
                                                                        ------------------          -----------------
                                                                          2004      2003                  2003
                                                                          ----      ----                  ----

     Unrealized gains (losses) on investment
<S>                                                                      <C>       <C>                   <C>
        securities arising during the period...........................  $ 5,491   (1,590)               (2,701)
     Less reclassification adjustment for gains
        included in net income.........................................       --    4,068                 1,627
                                                                         -------   ------                ------
     Unrealized gains (losses) on investment securities................  $ 5,491   (5,658)               (4,328)
                                                                         =======   ======                ======

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



<PAGE>


<TABLE>
<CAPTION>
                                                           FIRST BANKS, INC.

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

                                                                                                Three Months Ended
                                                                                                     March 31,
                                                                                            -------------------------
                                                                                               2004           2003
                                                                                               ----           ----


Cash flows from operating activities:
<S>                                                                                         <C>              <C>
     Net income.........................................................................    $  18,269        19,031
     Adjustments to reconcile net income to net cash provided by operating activities:
       Depreciation and amortization of bank premises and equipment.....................        4,810         4,781
       Amortization, net of accretion...................................................        4,566         5,350
       Originations and purchases of loans held for sale................................     (251,421)     (555,529)
       Proceeds from sales of loans held for sale.......................................      221,196       557,226
       Provision for loan losses........................................................       12,750        11,000
       Provision for income taxes.......................................................       11,591        11,092
       Payments of income taxes.........................................................          (63)          (57)
       Decrease in accrued interest receivable..........................................        2,891         4,668
       Interest accrued on liabilities..................................................       21,474        30,651
       Payments of interest on liabilities..............................................      (21,581)      (31,599)
       Gain on mortgage loans sold and held for sale....................................       (4,229)       (4,580)
       Net gain on sales of available-for-sale investment securities....................           --        (6,259)
       Gain on sales of branches, net of expenses.......................................         (390)           --
       Other operating activities, net..................................................        1,801        12,406
                                                                                            ---------     ---------
          Net cash provided by operating activities.....................................       21,664        58,181
                                                                                            ---------     ---------

Cash flows from investing activities:
     Cash received for acquired entities, net of cash
       and cash equivalents paid........................................................           --        14,870
     Maturities of investment securities available for sale.............................      115,532       442,399
     Maturities of investment securities held to maturity...............................        1,012         1,082
     Purchases of investment securities available for sale..............................     (318,293)     (193,957)
     Purchases of investment securities held to maturity................................         (100)         (102)
     Net (increase) decrease in loans...................................................      (15,460)       22,848
     Recoveries of loans previously charged-off.........................................        6,164         6,237
     Purchases of bank premises and equipment...........................................       (4,449)       (2,633)
     Other investing activities, net....................................................       11,255         2,604
                                                                                            ---------     ---------
          Net cash (used in) provided by investing activities...........................     (204,339)      293,348
                                                                                            ---------     ---------

Cash flows from financing activities:
     Increase (decrease) in demand and savings deposits.................................      105,784       (64,477)
     Decrease in time deposits..........................................................       (5,602)      (98,022)
     Decrease in federal funds purchased................................................           --       (55,000)
     Increase (decrease) in securities sold under agreements to repurchase..............      144,535       (29,301)
     Repayments of note payable.........................................................      (12,500)       (7,000)
     Proceeds from issuance of subordinated debentures..................................           --        25,208
     Sales of branches..................................................................       (6,724)           --
     Payment of preferred stock dividends...............................................         (196)         (196)
                                                                                            ---------     ---------
          Net cash provided by (used in) financing activities...........................      225,297      (228,788)
                                                                                            ---------     ---------
          Net increase in cash and cash equivalents.....................................       42,622       122,741
Cash and cash equivalents, beginning of period..........................................      213,537       203,251
                                                                                            ---------     ---------
Cash and cash equivalents, end of period................................................    $ 256,159       325,992
                                                                                            =========     =========

Noncash investing and financing activities:
     Loans transferred to other real estate.............................................    $   1,480        10,351
                                                                                            =========     =========

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


<PAGE>


                                FIRST BANKS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)      BASIS OF PRESENTATION

         The  consolidated   financial  statements  of  First  Banks,  Inc.  and
subsidiaries  (First Banks or the Company) are  unaudited  and should be read in
conjunction with the  consolidated  financial  statements  contained in the 2003
Annual Report on Form 10-K.  The  consolidated  financial  statements  have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America and conform to predominant practices within the banking
industry.  Management  of  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 accounting principles generally accepted
in the  United  States of  America.  Actual  results  could  differ  from  those
estimates. In the opinion of management,  all adjustments,  consisting of normal
recurring accruals  considered  necessary for a fair presentation of the results
of operations  for the interim  periods  presented  herein,  have been included.
Operating  results for the three months ended March 31, 2004 are not necessarily
indicative of the results that may be expected for the year ending  December 31,
2004.

         The  consolidated  financial  statements  include the accounts of First
Banks,  Inc. and its  subsidiaries.  All significant  intercompany  accounts and
transactions  have been eliminated.  Certain  reclassifications  of 2003 amounts
have been made to conform to the 2004 presentation.

         First Banks operates  through its wholly owned  subsidiary bank holding
company,  The San  Francisco  Company  (SFC),  headquartered  in San  Francisco,
California, and SFC's wholly owned subsidiary bank, First Bank, headquartered in
St. Louis County, Missouri.

(2)      ACQUISITIONS,  INTEGRATION COSTS AND OTHER CORPORATE TRANSACTIONS

         On March 26, 2004,  First Banks and Small  Business  Loan Source,  Inc.
(SBLS),  headquartered  in  Houston,  Texas,  entered  into  an  Asset  Purchase
Agreement  that  provides  for First Bank to purchase  substantially  all of the
assets and assume  certain  liabilities of SBLS in exchange for cash and certain
payments contingent on future valuations.  The transaction,  which is subject to
approval of the Small  Business  Administration  (SBA) and the expiration of the
waiting period under the Hart-Scott-Rodino  Antitrust  Improvements Act of 1976,
is expected to be  completed  during the second or third  quarter of 2004.  SBLS
reported assets of approximately  $52.9 million,  including $30.1 million of SBA
loans, at March 31, 2004.

         First Banks accrues certain costs  associated with its  acquisitions as
of the respective  consummation  dates.  Essentially  all of these accrued costs
relate either to adjustments to the staffing levels of the acquired  entities or
to the  anticipated  termination  of information  technology or item  processing
contracts of the acquired entities prior to their stated contractual  expiration
dates.  The most  significant  costs  incurred  relate  to  salary  continuation
agreements,  or other similar  agreements,  of executive  management and certain
other  employees  of the  acquired  entities  that  were in  place  prior to the
acquisition  dates.  These  agreements  provide for  payments  over various time
periods  generally ranging from two to 15 years and are triggered as a result of
the change in control of the  acquired  entity.  Other  severance  benefits  for
employees  that  are  terminated  in  conjunction  with the  integration  of the
acquired entities into First Banks' existing operations are normally paid to the
recipients  within 90 days of the  applicable  consummation  date.  The  accrued
severance balance of $1.2 million identified in the following table is comprised
of  contractual   obligations  under  salary   continuation   agreements  to  10
individuals  with  remaining  terms ranging from one month to  approximately  12
years.  As the obligation to make payments under these  agreements is accrued at
the consummation dates, such payments do not have any impact on the consolidated
statements of income.

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

                                                                  Severance
                                                                  ---------
                                                             (dollars expressed
                                                                in thousands)

         Balance at December 31, 2003..........................   $  1,412
         Three Months Ended March 31, 2004:
           Payments............................................       (173)
                                                                  --------
         Balance at March 31, 2004.............................   $  1,239
                                                                  ========


<PAGE>

         First Banks also incurs costs  associated  with  acquisitions  that are
expensed  in  the  consolidated   statements  of  income.   These  costs  relate
exclusively to additional costs incurred in conjunction with the data processing
conversions of the respective entities.

         On February 6, 2004, First Bank completed its divestiture of one branch
office in regional Missouri.  This branch divestiture resulted in a reduction of
the  deposit  base  of  approximately  $8.4  million,  and  a  pre-tax  gain  of
approximately $390,000, which is included in noninterest income.

 (3)     INTANGIBLE ASSETS ASSOCIATED WITH THE PURCHASE OF SUBSIDIARIES,  NET OF
         AMORTIZATION
<TABLE>
<CAPTION>

         Intangible assets associated with the purchase of subsidiaries,  net of
amortization, were comprised of the following at March 31, 2004 and December 31,
2003:

                                                       March 31, 2004                 December 31, 2003
                                                ----------------------------    ----------------------------
                                                   Gross                         Gross
                                                 Carrying       Accumulated     Carrying       Accumulated
                                                  Amount       Amortization      Amount       Amortization
                                                  ------       ------------      ------       ------------
                                                             (dollars expressed in thousands)
     Amortized intangible assets:
<S>                                              <C>               <C>            <C>              <C>
         Core deposit intangibles..............  $  17,391         (4,856)        17,391           (4,233)
         Goodwill associated with
           purchases of branch offices.........      2,210           (896)         2,210             (861)
                                                 ---------        -------        -------          -------
              Total............................  $  19,601         (5,752)        19,601           (5,094)
                                                 =========        =======        =======          =======

     Unamortized intangible assets:
         Goodwill associated with the
           purchase of subsidiaries............  $ 144,199                       144,199
                                                 =========                       =======
</TABLE>

         Amortization   of   intangibles   associated   with  the   purchase  of
subsidiaries  and branch  offices was  $658,000 for the three months ended March
31, 2004,  and  $532,000  for the  comparable  period in 2003.  Amortization  of
intangibles associated with the purchase of subsidiaries, including amortization
of core deposit  intangibles and branch  purchases,  has been estimated  through
2009 in the following table, and does not take into  consideration any potential
future acquisitions or branch purchases.

                                                (dollars expressed in thousands)

            Year ending December 31:
                2004 Remaining............................   $  1,974
                2005......................................      2,632
                2006......................................      2,632
                2007......................................      2,632
                2008......................................      2,632
                2009 .....................................        726
                                                             --------
                   Total..................................   $ 13,228
                                                             ========
<TABLE>
<CAPTION>
         Changes in the  carrying  amount of goodwill for the three months ended
March 31, 2004 and 2003 were as follows:

                                                                                               Three Months Ended
                                                                                                    March 31,
                                                                                            -----------------------
                                                                                               2004         2003
                                                                                        (dollars expressed in thousands)

<S>                                                                                          <C>            <C>
           Balance, beginning of period...................................................   $145,548       140,112
           Goodwill acquired during period................................................         --         1,026
           Amortization - purchases of branch offices.....................................        (35)          (36)
                                                                                             --------     ---------
           Balance, end of period.........................................................   $145,513       141,102
                                                                                             ========     =========
</TABLE>

 (4)     MORTGAGE BANKING ACTIVITIES

         At March 31, 2004 and December 31, 2003, First Banks serviced loans for
others  amounting to $1.17 billion and $1.22 billion,  respectively.  Borrowers'
escrow balances held by First Banks on such loans were $502,000 and $4.7 million
at March 31, 2004 and December 31, 2003, respectively.



<PAGE>
<TABLE>
<CAPTION>
         Changes in mortgage  servicing  rights,  net of  amortization,  for the
three months ended March 31, 2004 and 2003 were as follows:
                                                                                     Three Months Ended
                                                                                          March 31,
                                                                                ----------------------------
                                                                                  2004                2003
                                                                                  ----                ----
                                                                              (dollars expressed in thousands)

<S>                                                                             <C>                  <C>
           Balance, beginning of period......................................   $ 15,408             14,882
           Originated mortgage servicing rights..............................        354              1,973
           Amortization......................................................     (1,802)            (1,177)
                                                                                --------           --------
           Balance, end of period............................................   $ 13,960             15,678
                                                                                ========           ========
</TABLE>

         The fair value of mortgage  servicing  rights was  approximately  $16.6
million and $17.1  million at March 31, 2004 and 2003,  respectively,  and $18.3
million at December 31, 2003. The excess of the fair value of mortgage servicing
rights over the carrying value was  approximately  $2.6 million and $1.4 million
at March 31, 2004 and 2003, respectively, and $2.9 million at December 31, 2003.

         Amortization of mortgage  servicing  rights has been estimated  through
2008 in the following table:

                                                (dollars expressed in thousands)

            Year ending December 31:
                2004 Remaining............................. $  3,365
                2005.......................................    4,179
                2006.......................................    3,577
                2007.......................................    2,167
                2008.......................................      672
                                                            --------
                     Total................................. $ 13,960
                                                            ========

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

         The following is a reconciliation of the basic and diluted earnings per
share computations for the periods indicated:
                                                                                                           Per Share
                                                                               Income         Shares         Amount
                                                                               ------         ------         ------
                                                                      (dollars in thousands, except share and per share data)

         Three months ended March 31, 2004:
<S>                                                                          <C>               <C>         <C>
              Basic EPS - income available to common stockholders........    $  18,073         23,661      $ 763.81
              Effect of dilutive securities:
                Class A convertible preferred stock......................          192            565         (9.88)
                                                                             ---------        -------      --------
              Diluted EPS - income available to common stockholders......    $  18,265         24,226      $ 753.93
                                                                             =========        =======      ========
         Three months ended March 31, 2003:
              Basic EPS - income available to common stockholders........    $  18,835         23,661      $ 796.04
              Effect of dilutive securities:
                Class A convertible preferred stock......................          192            599        (11.75)
                                                                             ---------        -------      --------
              Diluted EPS - income available to common stockholders......    $  19,027         24,260      $ 784.29
                                                                             =========        =======      ========
</TABLE>
<PAGE>

(6)      TRANSACTIONS WITH RELATED PARTIES

         First Services,  L.P., a limited partnership  indirectly owned by First
Banks'  Chairman  and  members of his  immediate  family,  provides  information
technology  and  various  related   services  to  First  Banks,   Inc.  and  its
subsidiaries.  Fees paid under  agreements with First  Services,  L.P. were $6.6
million  and $6.7  million for the three  months  ended March 31, 2004 and 2003,
respectively.  During the three  months  ended  March 31,  2004 and 2003,  First
Services, L.P. paid First Bank $1.1 million and $1.2 million,  respectively,  in
rental fees for the use of data  processing and other  equipment  owned by First
Banks.

         First Brokerage  America,  L.L.C., a limited liability company which is
indirectly  owned by First Banks' Chairman and members of his immediate  family,
received  approximately  $886,000  and $868,000 for the three months ended March
31, 2004 and 2003, respectively, in commissions paid by unaffiliated third-party
companies.  The commissions received were primarily in connection with the sales
of  annuities,  securities  and other  insurance  products to customers of First
Bank.

         First Title Guaranty LLC (First  Title),  a limited  liability  company
established and administered by and for the benefit of First Banks' Chairman and
members of his immediate family, received approximately $99,000 and $113,000 for
the three months ended March 31, 2004 and 2003, respectively, in commissions for
policies  purchased by First Banks or customers of First Bank from unaffiliated,
third-party  insurers.  The  insurance  premiums  on  which  the  aforementioned
commissions  were  earned  were  competitively  bid,  and First  Banks deems the
commissions  First Title earned from  unaffiliated  third-party  companies to be
comparable to those that would have been earned by an  unaffiliated  third-party
agent.

         First  Bank  has had in the  past,  and may  have in the  future,  loan
transactions   in  the  ordinary  course  of  business  with  its  directors  or
affiliates.  These  loan  transactions  have been on the same  terms,  including
interest rates and  collateral,  as those  prevailing at the time for comparable
transactions with unaffiliated  persons and did not involve more than the normal
risk  of  collectibility  or  present  other  unfavorable  features.   Loans  to
directors,  their  affiliates and executive  officers of First Banks,  Inc. were
approximately $24.1 million and $20.0 million at March 31, 2004 and December 31,
2003,  respectively.  First Bank does not extend  credit to its  officers  or to
officers  of First  Banks,  Inc.,  except for  extensions  of credit  secured by
mortgages on personal  residences,  loans to purchase  automobiles  and personal
credit card accounts.

(7)      REGULATORY CAPITAL

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

         Quantitative  measures  established  by  regulation  to ensure  capital
adequacy  require  First  Banks and First Bank to maintain  minimum  amounts and
ratios  of  total  and  Tier  I  capital  (as  defined  in the  regulations)  to
risk-weighted  assets,  and of Tier I  capital  to  average  assets.  Management
believes,  as of March 31,  2004,  First  Banks  and  First  Bank were each well
capitalized.

         As of March 31, 2004,  the most recent  notification  from First Banks'
primary  regulator  categorized  First Banks and First Bank as well  capitalized
under the regulatory  framework for prompt corrective  action. To be categorized
as well  capitalized,  First Banks and First Bank must  maintain  minimum  total
risk-based,  Tier I  risk-based  and Tier I leverage  ratios as set forth in the
table below.
<PAGE>
<TABLE>
<CAPTION>

         At March 31, 2004 and December 31, 2003,  First Banks' and First Bank's
required and actual capital ratios were as follows:

                                                               Actual                                     To Be Well
                                                       ------------------------                        Capitalized Under
                                                       March 31,   December 31,      For Capital       Prompt Corrective
                                                        2004           2003       Adequacy Purposes    Action Provisions
                                                        ----           ----       -----------------    -----------------

     Total capital (to risk-weighted assets):
<S>                                                      <C>           <C>               <C>                 <C>
              First Banks.............................   10.50%        10.27%            8.0%                10.0%
              First Bank..............................   10.54         10.41             8.0                 10.0

     Tier 1 capital (to risk-weighted assets):
              First Banks.............................    8.79          8.46             4.0                  6.0
              First Bank..............................    9.28          9.15             4.0                  6.0

     Tier 1 capital (to average assets):
              First Banks.............................    7.88          7.62             3.0                  5.0
              First Bank..............................    8.32          8.22             3.0                  5.0

</TABLE>


(8)      BUSINESS SEGMENT RESULTS

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

         The business  segment results are consistent with First Banks' internal
reporting  system and, in all  material  respects,  with  accounting  principles
generally accepted in the United States of America and practices  predominant in
the banking industry.
<TABLE>
<CAPTION>

         The business segment results are summarized as follows:

                                                                           Corporate, Other
                                                                           and Intercompany
                                                 First Bank              Reclassifications (1)       Consolidated Totals
                                          ------------------------       ---------------------     -----------------------
                                           March 31,  December 31,       March 31, December 31,     March 31, December 31,
                                             2004         2003             2004        2003           2004         2003
                                             ----         ----             ----        ----           ----         ----
                                                                   (dollars expressed in thousands)

Balance sheet information:

<S>                                       <C>            <C>               <C>          <C>        <C>           <C>
Investment securities...................  $1,271,605     1,042,809         6,905        6,905      1,278,510     1,049,714
Loans, net of unearned discount.........   5,342,892     5,328,075            --           --      5,342,892     5,328,075
Goodwill................................     145,513       145,548            --           --        145,513       145,548
Total assets............................   7,355,910     7,097,635        12,443        9,305      7,368,353     7,106,940
Deposits................................   6,062,427     5,977,042        (9,111)     (15,427)     6,053,316     5,961,615
Note payable............................          --            --         4,500       17,000          4,500        17,000
Subordinated debentures.................          --            --       213,222      209,320        213,222       209,320
Stockholders' equity....................     778,594       766,397      (209,858)    (216,582)       568,736       549,815
                                          ==========     =========      ========     ========      =========     =========
<PAGE>

                                                                           Corporate, Other
                                                                           and Intercompany
                                                  First Bank             Reclassifications (1)       Consolidated Totals
                                          ------------------------      ---------------------      -----------------------
                                              Three Months Ended          Three Months Ended         Three Months Ended
                                                   March 31,                   March 31,                  March 31,
                                          ------------------------      ---------------------      -----------------------
                                             2004            2003        2004           2003         2004            2003
                                             ----            ----        ----           ----         ----            ----

Income statement information:

Interest income.........................    $ 95,987        99,528           140          286         96,127        99,814
Interest expense........................      17,847        25,004         3,627        5,647         21,474        30,651
                                          ----------     ---------      --------    ---------      ---------      --------
     Net interest income................      78,140        74,524        (3,487)      (5,361)        74,653        69,163
Provision for loan losses...............      12,750        11,000            --           --         12,750        11,000
                                          ----------     ---------      --------    ---------      ---------      --------
     Net interest income after provision
       for loan losses..................      65,390        63,524        (3,487)      (5,361)        61,903        58,163
                                          ----------     ---------      --------    ---------      ---------      --------
Noninterest income......................      20,719        19,529          (160)       6,018         20,559        25,547
Noninterest expense.....................      51,517        53,215         1,085          372         52,602        53,587
                                          ----------     ---------      --------    ---------      ---------      --------
     Income before provision for
       income taxes.....................      34,592        29,838        (4,732)         285         29,860        30,123
Provision for income taxes..............      13,244        10,483        (1,653)         609         11,591        11,092
                                          ----------     ---------      --------    ---------      ---------      --------
     Net income.........................  $   21,348        19,355        (3,079)        (324)        18,269        19,031
                                          ==========     =========      ========    =========      =========      ========
--------------------
(1)  Corporate and other includes $2.3 million and $3.6 million of interest expense on subordinated debentures, after
     applicable income tax benefits of $1.2 million and $2.0 million, for the three months ended  March 31, 2004  and
     2003, respectively.

</TABLE>

<PAGE>


 (9)     OTHER BORROWINGS

         Other  borrowings were comprised of the following at March 31, 2004 and
December 31, 2003:
<TABLE>
<CAPTION>

                                                                                     March 31,       December 31,
                                                                                       2004              2003
                                                                                  ---------------  ----------------
                                                                                  (dollars expressed in thousands)

         Securities sold under agreements to repurchase:
<S>                                                                                 <C>                 <C>
              Daily...............................................................  $ 161,014           166,479
              Term................................................................    250,000           100,000
         Federal Home Loan Bank borrowings........................................      7,000             7,000
                                                                                    ---------          --------
                  Total other borrowings..........................................  $ 418,014           273,479
                                                                                    =========          ========
</TABLE>

         Effective  January 12, 2004,  First Banks  consummated a $150.0 million
three-year  reverse  repurchase  agreement under a master repurchase  agreement.
Interest is paid quarterly and is equivalent to the three-month London Interbank
Offering  Rate minus  0.8350% plus a floating  amount equal to the  differential
between the three-month  London  Interbank  Offing Rate reset in arrears and the
strike price of 3.50%, if the three-month  London Interbank  Offering Rate reset
in arrears exceeds 3.50%. The underlying  securities associated with the reverse
repurchase agreement are callable U. S. Government agency securities and are not
under First Banks' physical control. In conjunction with this transaction, First
Banks purchased $150.0 million of callable U. S. Government agency securities.

(10)     CONTINGENT LIABILITIES

         In October  2000,  First Banks  entered  into two  continuing  guaranty
contracts.  For value  received,  and for the purpose of inducing a pension fund
and its  trustees  and a welfare  fund and its  trustees  (the Funds) to conduct
business with Missouri Valley Partners,  Inc. (MVP), First Bank's  institutional
investment  management  subsidiary,  First Banks irrevocably and unconditionally
guaranteed payment of and promised to pay to each of the Funds any amounts up to
the sum of $5.0 million to the extent MVP is liable to the Funds for a breach of
the Investment  Management Agreements (including the Investment Policy Statement
and  Investment  Guidelines),  by and  between  MVP and  the  Funds  and/or  any
violation of the Employee  Retirement  Income  Security Act by MVP  resulting in
liability  to  the  Funds.  The  guaranties  are  continuing  guaranties  of all
obligations  that may arise for  transactions  occurring prior to termination of
the Investment  Management  Agreements and are co-existent  with the term of the
Investment Management  Agreements.  The Investment Management Agreements have no
specified  term but may be  terminated  at any time upon  written  notice by the
Trustees or, at First  Banks'  option,  upon thirty days  written  notice to the
Trustees. In the event of termination of the Investment  Management  Agreements,
such  termination  shall  have no effect on the  liability  of First  Banks with
respect to obligations  incurred  before such  termination.  The  obligations of
First Banks are joint and several  with those of MVP.  First Banks does not have
any recourse  provisions  that would enable it to recover from third parties any
amounts  paid  under the  contracts  nor does  First  Banks  hold any  assets as
collateral that, upon occurrence of a required payment under the contract, could
be liquidated  to recover all or a portion of the  amount(s)  paid. At March 31,
2004 and  December 31,  2003,  First Banks had not recorded a liability  for the
obligations  associated  with these guaranty  contracts,  as the likelihood that
First Banks will be required to make payments under the contracts is remote.

 (11)    SUBSEQUENT EVENT

         On April 9, 2004,  First Banks and Continental  Mortgage  Corporation -
Delaware  (CMC),  entered  into an  Agreement  and Plan of  Reorganization  that
provides for First Banks to acquire CMC and its wholly-owned banking subsidiary,
Continental  Community Bank and Trust Company  (CCB).  CMC is  headquartered  in
Aurora,  Illinois,  and through CCB, operates two banking offices in the Chicago
suburban  communities  of Aurora and Villa Park.  CMC  reported  total assets of
approximately $149.9 million,  loans, net of unearned discount, of approximately
$78.1 million and total  deposits of  approximately  $110.6 million at March 31,
2004. The transaction,  which is subject to regulatory approvals, is expected to
be completed during the second or third quarter of 2004.


<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 our actual results to differ materially from those contemplated by the
forward-looking   statements   herein  include  market  conditions  as  well  as
conditions  affecting  the  banking  industry  generally  and  factors  having a
specific  impact on us,  including but not limited to:  fluctuations in interest
rates and in the economy,  including the threat of future terrorist  activities,
existing  and  potential  wars and/or  military  actions  related  thereto,  and
domestic responses to terrorism or threats of terrorism;  the impact of laws and
regulations  applicable  to us and  changes  therein;  the impact of  accounting
pronouncements  applicable to us and changes therein;  competitive conditions in
the  markets in which we conduct  our  operations,  including  competition  from
banking and non-banking  companies with substantially greater resources than us,
some of which may offer and develop products and services not offered by us; our
ability to control  the  composition  of our loan  portfolio  without  adversely
affecting interest income; the credit risk associated with consumers who may not
repay loans;  the geographic  dispersion of our offices;  the impact our hedging
activities may have on our operating results;  the highly regulated  environment
in which we operate;  and our ability to respond to changes in technology.  With
regard to our efforts to grow  through  acquisitions,  factors that could affect
the accuracy or  completeness of  forward-looking  statements  contained  herein
include the competition of larger acquirers with greater resources; fluctuations
in the prices at which acquisition targets may be available for sale; the impact
of making  acquisitions  without  using our common  stock;  and  possible  asset
quality issues,  unknown  liabilities or integration  issues with the businesses
that we have  acquired.  We do not  have a duty to and  will  not  update  these
forward-looking statements. Readers of this Quarterly Report on Form 10-Q should
therefore not place undue reliance on forward-looking statements.

                                     General

         We are a registered 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 operate  through  our wholly  owned  subsidiary  bank
holding  company,  The  San  Francisco  Company,  or SFC,  headquartered  in San
Francisco,  California,  and its  wholly  owned  subsidiary  bank,  First  Bank,
headquartered in St. Louis County,  Missouri.  First Bank currently operates 148
branch offices in California,  Illinois,  Missouri and Texas. At March 31, 2004,
we had total assets of $7.37 billion,  loans, net of unearned discount, of $5.34
billion,  total  deposits  of $6.05  billion and total  stockholders'  equity of
$568.7 million.

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

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

                               Financial Condition

         Total assets were $7.37 billion and $7.11 billion at March 31, 2004 and
December 31, 2003, respectively, an increase of 3.68%. The increase in assets is
primarily  attributable  to  increases  in  short-term  investments,  investment
securities and loans, net of unearned  discount,  which were primarily funded by
increased  deposits and other  borrowings.  Short-term  investments,  consisting
primarily  of  federal  funds  sold,  increased  by  $55.0  million  due  to the
investment  of excess  funds  resulting  from the deposit  growth and an overall
decline in average loan volumes. Investment securities increased $228.8 million,
or 21.80%, to $1.28 billion at March 31, 2004 from $1.05 billion at December 31,
2003,  reflecting  purchases of $318.4 million and maturities of $116.5 million.
Loans,  net of unearned  discount,  increased  $14.8 million to $5.34 billion at
March 31, 2004 from $5.33  billion at December 31, 2003,  and the  allowance for
loan losses increased to $124.9 million at March 31, 2004 from $116.5 million at

<PAGE>
December 31, 2003, as further  discussed  under  "--Loans and Allowance for Loan
Losses." The overall increase in assets was partially offset by a decline in our
derivative  instruments  to $46.2  million from $49.3 million  resulting  from a
decline in the fair value of certain  derivative  financial  instruments and the
maturity of $200.0 million notional amount of interest rate swap agreements,  as
further discussed under  "--Interest Rate Risk  Management." In addition,  other
assets  decreased  $15.7  million to $84.4 million at March 31, 2004 from $100.1
million at December  31,  2003.  This  decrease  primarily  results from an $8.2
million net decrease in other real estate as further  discussed  under  "--Loans
and  Allowance  for Loan  Losses," a $2.8 million  decrease in accrued  interest
receivable and a $1.4 million decrease in mortgage servicing rights.  During the
first quarter of 2004, we expanded our banking franchise with the opening of two
de novo  branch  offices,  one in West St.  Louis  County,  Missouri  and one in
Houston, Texas.

         Total deposits  increased by $91.7 million,  or 1.54%, to $6.05 billion
at March 31, 2004 from $5.96 billion at December 31, 2003. Our deposit marketing
efforts and efforts to further develop multiple account  relationships  with our
customers in addition to slightly higher deposit rates on certain  products have
contributed to the deposit  growth,  despite  continued  aggressive  competition
within our market areas and the  divestiture,  in February  2004,  of a Missouri
branch office with approximately $8.4 million in total deposits. The deposit mix
reflects our continued  efforts to  restructure  the  composition of our deposit
base as the majority of our deposit  development  programs  are directed  toward
increased transaction accounts, such as demand and savings accounts, rather than
higher-yielding time deposits.

         Other  borrowings  increased  $144.5 million to $418.0 million at March
31, 2004 from $273.5  million at December  31,  2003.  The increase is primarily
attributable  to $150.0  million  of term  securities  sold under  agreement  to
repurchase  that we entered  into during the first  quarter of 2004,  as further
discussed in Note 9 to our consolidated  financial statements.  Our note payable
was reduced by $12.5 million during the first quarter of 2004 through internally
generated  funds.  Subordinated  debentures  increased  $3.9  million  to $213.2
million  at March 31,  2004 from  $209.3  million at  December  31,  2003.  This
increase  is  primarily  attributable  to an  increase  in the fair value of our
interest  rate swap  agreements  that are  designated  as fair value  hedges and
utilized to hedge  certain of our  subordinated  debentures.  In  addition,  the
continued  amortization  of debt  issuance  costs  has also  contributed  to the
overall  increase in our  subordinated  debentures  during the first  quarter of
2004.

                              Results of Operations

Net Income

         Net income was $18.3  million and $19.0  million  for the three  months
ended March 31, 2004 and 2003, respectively.  Results for the three months ended
March 31, 2004 reflect increased net interest income, reduced noninterest income
and noninterest expense and increased  provisions for loan losses. Our return on
average assets and return on average stockholders' equity were 1.01% and 13.16%,
respectively,  for the three months ended March 31, 2004,  compared to 1.07% and
14.64%,  respectively,  for the comparable period in 2003. Included in the first
quarter of 2003 was a gain of $6.3  million,  before  applicable  income  taxes,
relating to the exchange of part of our investment in Allegiant  Bancorp,  Inc.,
or Allegiant, for a 100% ownership in Bank of Ste. Genevieve, or BSG, located in
Ste. Genevieve,  Missouri. Excluding this transaction, net of the related income
taxes,  net income for the first quarter of 2004 increased 22.09% over the first
quarter of 2003.  The  increase  in earnings  in 2004  continues  to reflect our
adaptation to the current interest rate environment and weak economic conditions
that have  prevailed  in recent  years.  Our  ongoing  efforts  to  maintain  an
acceptable  net interest  margin in the current low interest  rate  environment,
improve  our  noninterest  income,  address  asset  quality  issues and  control
operating  expenses are reflected in our financial  performance.  We experienced
continued growth of net interest income primarily resulting from the earnings on
our interest rate swap agreements that were entered into in conjunction with our
interest  rate risk  management  program to mitigate  the effects of  decreasing
interest  rates as well as a $63.1  million net  reduction  in our  subordinated
debentures during the second quarter of 2003.  However,  prevailing low interest
rates,  generally weak loan demand and overall economic  conditions  continue to
exert pressure on our net interest income. Due to economic conditions within our
markets, we experienced  higher-than-historical levels of loan charge-offs, loan
delinquencies  and  nonperforming  loans in 2003, which resulted in an increased
provision for loan losses.  These nonperforming trends remain at elevated levels
in  the   first   quarter   of   2004,   thus   contributing   to  a   continued
higher-than-normal  provision for loan losses. Other real estate owned decreased
$8.2 million  during the first  quarter of 2004  primarily  due to the sale of a
$9.2  million  residential  and  recreational   development  property  that  was
foreclosed on in January 2003.  However,  this decrease in nonperforming  assets
was offset by the  addition to  nonperforming  loans of a $13.9  million  credit
relationship  in the southern  California  region that was placed on  nonaccrual
status in March 2004. On April 29, 2004,  we recorded a $3.9 million  charge-off
on this  credit  relationship  as a  result  of  workout  negotiations  with the
borrower  and on May 7, 2004,  the  remaining  net balance of $10.0  million was
refinanced  by an  independent  third party,  resulting in our receipt of a cash
payment on the net remaining balance of this credit relationship. We continue to
monitor our loan and leasing  portfolios  and focus on asset quality and related
challenges stemming from the current economic  environment,  including weak loan
demand and lower prevailing interest rates.


<PAGE>


         Noninterest  income was $20.6  million and $25.5  million for the three
months  ended March 31, 2004 and 2003,  respectively.  The decrease is primarily
due to a $6.3 million gain recorded in the first quarter of 2003 on the exchange
of part of our  investment in the common stock of Allegiant for a 100% ownership
interest in Bank of Ste.  Genevieve.  Excluding  this  transaction,  noninterest
income for the first quarter of 2004  increased $1.3 million over the comparable
period in 2003. The increase is  attributable  to increased  service  charges on
deposit  accounts,  increased  portfolio  management  fees  associated  with our
institutional  money  management  subsidiary and decreased losses on the sale of
certain  assets.  This was partially  offset by reduced loan  servicing fees and
reduced gains on mortgage  loans sold relating to the continued  slowdown in the
volume of mortgage  loans  originated  that we began to experience in the fourth
quarter of 2003. The increase also reflects a $390,000 gain, net of expenses, on
the sale of a Missouri branch banking office in February 2004.

         Noninterest  expense was $52.6  million and $53.6 million for the three
months ended March 31, 2004 and 2003, respectively.  Our efficiency ratio, which
is defined as the ratio of noninterest expense to the sum of net interest income
and  noninterest  income,  improved to 55.25% for the first three months of 2004
from 56.58% for the comparable period in 2003. Noninterest expense for the three
months ended March 31, 2004  reflects a $2.7  million gain  recorded in February
2004 on the sale of a residential and recreational development property that was
foreclosed on in January 2003, as further discussed under "--Loans and Allowance
for Loan Losses." The decrease in noninterest  expense is partially  offset by a
$4.4  million  increase in salary and employee  benefit  costs  associated  with
generally higher salary and employee benefit costs associated with employing and
retaining qualified personnel,  offset by a decrease in the allocation of direct
loan origination costs from salaries and benefits expense to gains on loans sold
and held for sale due to the slowdown in the volume of mortgage loans originated
and sold. Noninterest expense for the three months ended March 31, 2003 includes
a $1.1 million  write-down on an operating lease  associated with our commercial
leasing business.

Net Interest Income

         Net interest  income  (expressed on a tax equivalent  basis)  increased
7.83% to $75.0  million  for the three  months  ended  March 31, 2004 from $69.5
million for the comparable period in 2003. Net interest margin improved 20 basis
points to 4.56% for the three months  ended March 31,  2004,  from 4.36% for the
comparable  period in 2003.  We  credit  the  increase  in net  interest  income
primarily to lower rates on deposits and other  borrowings,  the earnings on our
interest rate swap  agreements  that were entered into in  conjunction  with our
interest  rate risk  management  program to mitigate  the effects of  decreasing
interest rates, increased average investment securities with higher yields and a
$63.1 million net reduction in our outstanding  subordinated debentures in 2003.
As further  discussed under  "--Interest  Rate Risk  Management," our derivative
financial  instruments  used to hedge our interest rate risk  contributed  $16.2
million and $15.0  million to net  interest  income for the three  months  ended
March 31, 2004 and 2003, respectively. Average interest-earning assets increased
$138.4  million to $6.61  billion for the three months ended March 31, 2004 from
$6.47  billion for the  comparable  period in 2003.  The  increase is  primarily
attributable to our acquisition of BSG on March 31, 2003,  which provided assets
of $115.1 million. In addition,  the decline in prevailing interest rates led to
the early redemption of $136.3 million of subordinated  debentures in the second
quarter  of 2003 that  were  issued  during  1997 and 1998 and the  issuance  of
additional  subordinated  debentures at lower interest  rates,  while  providing
replacement regulatory capital through the associated trust preferred securities
issued by our financing  business and statutory trusts. In March 2003, we issued
$25.8 million of subordinated  debentures to First Bank Statutory  Trust, and in
April  2003,  we  issued  $47.4  million  of  subordinated  debentures  to First
Preferred  Capital  Trust  IV.  These  transactions  coupled  with  the  use  of
additional  derivative  financial  instruments,  have  allowed  us to reduce our
overall expense associated with our subordinated debentures. However, prevailing
low interest  rates,  generally  weak loan  demand,  increased  competition  and
overall  economic  conditions  continue to exert  pressure  on our net  interest
margin.

         Average  investment  securities were $1.15 billion for the three months
ended March 31, 2004, in comparison to $968.9 million for the three months ended
March 31,  2003,  an increase  of $185.8  million,  or 19.17%.  The yield on our
investment  portfolio  increased  to 4.12% for the three  months ended March 31,
2004,  compared to 3.77% for the comparable period in 2003. Funds available from
maturities of investment  securities in addition to funds available from deposit
growth were used to purchase additional  investment  securities during the first
quarter of 2004.  Investment  security  purchases  for the first quarter of 2004
included  the  purchase of $150.0  million of callable  U.S.  Government  agency
securities.  These securities  represented the underlying  securities associated
with a $150.0 million  three-year  reverse  repurchase  agreement under a master
repurchase  agreement  that we  consummated  in the first  quarter  of 2004,  as
further described in Note 9 to our consolidated financial statements.

         Average  loans,  net of unearned  discount,  were $5.33 billion for the
three  months  ended March 31,  2004,  in  comparison  to $5.36  billion for the
comparable period in 2003,  reflecting a decrease of $26.6 million. The yield on
our loan portfolio decreased to 6.36% for the three months ended March 31, 2004,
in  comparison  to 6.87% for the  comparable  period in 2003.  We attribute  the
decline in the average balance and yields primarily to increased competition and
general economic  conditions within our market areas resulting in continued weak

<PAGE>

loan demand and decreases in  prevailing  interest  rates.  The reduced level of
interest  income earned on our loan  portfolio  was  partially  mitigated by the
earnings  associated with our interest rate swap  agreements.  In addition,  the
decrease in average loans is also  attributable  to a  significant  reduction in
average  loans  held for sale,  which  declined  approximately  $168.6  million,
resulting  from a slowdown  in  overall  loan  volumes  that began in the fourth
quarter of 2003 as well as management's  business  strategy decision in mid-2003
to retain a portion of new residential mortgage loan production in our portfolio
to offset continued weak loan demand in other sectors of our loan portfolio.  As
a result of this decision, average real estate mortgage loan volumes retained in
our portfolio increased approximately $155.6 million during the first quarter of
2004 compared to the comparable period in 2003.

         Average  deposits  decreased $89.2 million,  or 1.47%, to $5.99 billion
for the three months ended March 31, 2004 from $6.08 billion for the  comparable
period in 2003.  For the  three  months  ended  March 31,  2004,  the  aggregate
weighted average rate paid on our deposit portfolio decreased 52 basis points to
1.39%, from 1.91% for the comparable period in 2003. We attribute the decline in
rates paid for the three months ended March 31, 2004  primarily to rates paid on
our savings and time  deposits,  which have  continued to decline in conjunction
with the interest rate reductions previously discussed.  The earnings associated
with  certain of our  interest  rate swap  agreements  designated  as fair value
hedges  also  contributed  to the  reduction  in deposit  rates paid on our time
deposits.  However, the continued  competitive  pressures on our deposit pricing
within our market areas precluded us from fully  reflecting the general interest
rate decreases in our deposit pricing while still providing an adequate  funding
source for our loan  portfolio.  The change in average  deposit mix reflects our
continued  efforts to  restructure  the  composition  of our deposit base as the
majority of our deposit  development  programs  are  directed  toward  increased
transactional  accounts,  such as demand and savings accounts,  rather than time
deposits,  and  emphasize  attracting  more than one account  relationship  with
customers. Average demand and savings deposits increased $117.3 million to $4.05
billion,  or 67.60% of total average deposits,  for the three months ended March
31, 2004, up from $3.94 billion,  or 64.68% of total average  deposits,  for the
comparable period in 2003.  Average total time deposits decreased $206.5 million
to $1.94  billion for the three months ended March 31, 2004,  from $2.15 billion
for the comparable period in 2003.

         Average other borrowings increased $207.4 million to $388.8 million for
the three  months  ended  March 31,  2004  compared  to $181.4  million  for the
comparable period in 2003. The aggregate weighted average rate paid on our other
borrowings  was 0.67% for the three  months  ended March 31,  2004,  compared to
1.35% for the comparable  period in 2003,  reflecting  reductions in the current
interest rate environment. The increase in average other borrowings is primarily
attributable  to $150.0  million  of term  securities  sold under  agreement  to
repurchase  that we  consummated  during  the first  quarter  of 2004 as further
described in Note 9 to our consolidated financial statements.

         The aggregate  weighted average rate paid on our note payable was 5.06%
for the three months ended March 31, 2004, compared to 14.07% for the comparable
period in 2003. The overall  changes in the weighted  average rates paid reflect
changing market interest rates during the periods  reflected.  In addition,  the
higher  weighted  average  rate paid for the three  months  ended March 31, 2003
primarily  reflects  increased  commitment,  arrangement  and other fees paid to
amend our secured credit agreement during this time period.  Amounts outstanding
under our $60.0 million  revolving  line of credit with a group of  unaffiliated
financial  institutions bear interest at the lead bank's corporate base rate or,
at our option, at the London Interbank Offering Rate plus a margin determined by
the outstanding  balance and our  profitability  for the preceding four calendar
quarters.  Thus,  our revolving  credit line  represents a relatively  high-cost
funding source as increased  advances have the effect of increasing the weighted
average rate of non-deposit liabilities.  However, the borrowing level for these
periods has been minimal.

         Average  subordinated  debentures  were  $210.9  million  for the three
months  ended March 31, 2004  compared  to $281.9  million for the three  months
ended  March  31,  2003.  The  aggregate  weighted  average  rate  paid  on  our
subordinated debentures was 6.75% and 8.02% for the three months ended March 31,
2004 and 2003, respectively. Interest expense on our subordinated debentures was
$3.5 million for the three months ended March 31, 2004, compared to $5.6 million
for the  comparable  period in 2003. As previously  discussed,  the decrease for
2004  primarily  reflects  the  redemption  of $136.3  million  of  subordinated
debentures and the issuance of $73.2 million of subordinated debentures at lower
interest  rates,  as well as the  earnings  impact  of our  interest  rate  swap
agreements as further discussed under "--Interest Rate Risk Management."



<PAGE>

<TABLE>
<CAPTION>

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


                                                                            Three Months Ended March 31,
                                                               -------------------------------------------------------
                                                                          2004                         2003
                                                               --------------------------   --------------------------
                                                                         Interest                      Interest
                                                               Average   Income/  Yield/    Average    Income/  Yield/
                                                               Balance   Expense   Rate     Balance    Expense   Rate
                                                               -------   -------   ----     -------    -------   ----
                                                                         (dollars expressed in thousands)
                 ASSETS
                 ------

Interest-earning assets:
<S>                                                          <C>           <C>     <C>    <C>           <C>      <C>
    Loans (1) (2) (3) (4) ................................   $5,333,353    84,328  6.36%  $5,359,976    90,737   6.87%
    Investment securities (4) ............................    1,154,663    11,831  4.12      968,899     8,998   3.77
    Federal funds sold and other..........................      122,757       286  0.94      143,470       442   1.25
                                                             ----------   -------         ----------   -------
           Total interest-earning assets..................    6,610,773    96,445  5.87    6,472,345   100,177   6.28
                                                                          -------                      -------
Nonearning assets.........................................      652,521                      722,465
                                                             ----------                   ----------
           Total assets...................................   $7,263,294                   $7,194,810
                                                             ==========                   ==========

             LIABILITIES AND
          STOCKHOLDERS' EQUITY
          --------------------

Interest-bearing liabilities:
    Interest-bearing deposits:
       Interest-bearing demand deposits...................   $  868,712       967  0.45%  $  840,434     1,673   0.81%
       Savings deposits...................................    2,161,910     4,777  0.89    2,167,440     6,786   1.27
       Time deposits of $100 or more......................      438,418     2,956  2.71      457,368     3,685   3.27
       Other time deposits (3)............................    1,503,636     8,487  2.27    1,691,225    12,194   2.92
                                                             ----------   -------         ----------   -------
           Total interest-bearing deposits................    4,972,676    17,187  1.39    5,156,467    24,338   1.91
    Other borrowings......................................      388,793       644  0.67      181,427       602   1.35
    Note payable (5)......................................        8,346       105  5.06        3,919       136  14.07
    Subordinated debentures (3)...........................      210,890     3,538  6.75      281,915     5,575   8.02
                                                             ----------   -------         ----------   -------
           Total interest-bearing liabilities.............    5,580,705    21,474  1.55    5,623,728    30,651   2.21
                                                                          -------                      -------
Noninterest-bearing liabilities:
    Demand deposits.......................................    1,021,744                      927,147
    Other liabilities.....................................      102,323                      116,890
                                                             ----------                   ----------
           Total liabilities..............................    6,704,772                    6,667,765
Stockholders' equity......................................      558,522                      527,045
                                                             ----------                   ----------
           Total liabilities and stockholders' equity.....   $7,263,294                   $7,194,810
                                                             ==========                   ==========
Net interest income.......................................                 74,971                       69,526
                                                                          =======                      =======
Interest rate spread......................................                         4.32                          4.07
Net interest margin (6)...................................                         4.56%                         4.36%
                                                                                  =====                        ======
--------------------
(1)  For purposes of these computations, nonaccrual loans are included in the average loan amounts.
(2)  Interest income on loans includes loan fees.
(3)  Interest income and interest expense include the effects of interest rate swap agreements.
(4)  Information is presented on a tax-equivalent basis assuming a tax rate of 35%. The tax-equivalent adjustments were
     approximately $318,000 and $363,000 for the three months ended March 31, 2004 and 2003, respectively.
(5)  Interest expense on the note payable includes commitment, arrangement and renewal fees.
(6)  Net interest margin is the ratio of net interest income (expressed on a tax-equivalent basis) to average interest-
     earning assets.
</TABLE>
<PAGE>

Provision for Loan Losses

         The  provision  for loan losses was $12.8 million and $11.0 million for
the  three  months  ended  March  31,  2004  and  2003,  respectively.  Net loan
charge-offs  were $5.3 million and $2.5 million for the three months ended March
31, 2004 and 2003, respectively.  In 2003, we continued to experience the higher
level of problem loans and related loan  charge-offs  and past due loans that we
began to  experience  in early 2002.  This was a result of  economic  conditions
within our markets,  additional  problems  identified  in certain  acquired loan
portfolios and continuing  deterioration  in our commercial  leasing  portfolio,
particularly  the segment of the  portfolio  relating  to the airline  industry.
These  factors  necessitated  higher  provisions  for loan  losses than in prior
periods.  Nonperforming assets at March 31, 2004 increased to $90.2 million from
$86.5 million at December 31, 2003 and $86.9 million at March 31, 2003.  The net
increase  in  nonperforming  assets  for the  first  quarter  of 2004  primarily
reflects two significant  changes:  the sale of a residential  and  recreational
development  property  that was  foreclosed  on in January  2003 with a carrying
value of $9.2  million,  representing  approximately  83.0% of total  other real
estate assets at the time of sale;  partially  offset by the addition of a $13.9
million  credit  relationship  in the southern  California  region to nonaccrual
status. In recognition of this and other factors,  our allowance for loan losses
increased  to $124.9  million at March 31, 2004,  compared to $116.5  million at
December 31, 2003 and $108.7  million at March 31, 2003.  On April 29, 2004,  we
recorded a $3.9 million charge-off on the $13.9 million credit relationship that
had been  placed on  nonaccrual  status  during  the first  quarter of 2004 as a
result of  workout  negotiations  with the  borrower,  and on May 7,  2004,  the
remaining net balance of $10.0 million was  refinanced by an  independent  third
party,  resulting in the receipt of a cash payment on the  remaining net balance
of this credit  relationship.  However,  management expects the higher levels of
nonperforming  assets to remain at elevated  levels  throughout most of 2004 and
considers this trend in its overall  assessment of the adequacy of the allowance
for loan losses.

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

Noninterest Income

         Noninterest  income was $20.6  million and $25.5  million for the three
months ended March 31, 2004 and 2003, respectively.  Noninterest income consists
primarily of service  charges on deposit  accounts and  customer  service  fees,
mortgage-banking  revenues, net gains on sales of available-for-sale  investment
securities, investment income on bank owned life insurance and other income. The
reduction experienced in the first quarter of 2004 is primarily  attributable to
a $6.3  million  gain  recorded in March 2003 on the exchange of common stock of
Allegiant, as further discussed below.  Noninterest income for the first quarter
of 2004 increased $1.3 million,  or 6.59%,  from the comparable  period in 2003,
after excluding this nonrecurring transaction.

         Service charges on deposit accounts and customer service fees were $8.9
million  and $8.6  million for the three  months  ended March 31, 2004 and 2003,
respectively.  The  increase in service  charges and  customer  service  fees is
primarily  attributable  to our  acquisition  of BSG  completed  in March  2003,
additional  products  and  services  available  and  utilized  by our retail and
commercial  customers,  and increases in non-sufficient  fund and returned check
fee rates that became effective in December 2003.

         The gain on mortgage  loans sold and held for sale was $4.2 million and
$4.6 million for the three  months ended March 31, 2004 and 2003,  respectively.
The decrease  primarily  reflects  continued  slowdown in the volume of mortgage
loans  originated and sold that was initially  experienced in the fourth quarter
of 2003 and continued into the first quarter of 2004.

         In March  2003,  we  recorded a $6.3  million  gain on the  exchange of
974,150 shares of our Allegiant  common stock for a 100%  ownership  interest in
BSG.  There  were  no  net  gains  on  sales  of  available-for-sale  investment
securities for the three months ended March 31, 2004.

         On  February  6,  2004,  we sold  one of our  Missouri  branch  banking
offices,  resulting in a $390,000 gain, net of expenses,  upon  consummation  of
this transaction.

         Other  income was $5.6  million and $4.8  million for the three  months
ended March 31, 2004 and 2003, respectively. We attribute the primary components
of the increase in 2004 to:

         >>    increased portfolio  management fee income of $452,000 associated
               with our Institutional Money Management division;

         >>    a decrease in net losses of $454,000  associated with the sale of
               certain assets,  primarily  related to equipment  associated with
               our commercial leasing business;
<PAGE>
         >>    an increase in income  associated  with standby letters of credit
               of $177,000;

         >>    an increase in fees from fiduciary activities; and

         >>    our acquisition completed during 2003; partially offset by

         >>    a decline  of  $222,000  in  rental  income  associated  with our
               reduced commercial leasing activities;

         >>    a decline of $208,000 in loan servicing fees. The net decrease is
               attributable  to  increased  amortization  of mortgage  servicing
               rights and a higher  level of  interest  shortfall,  offset by an
               increase  in  fees  from  loans  serviced  for  others.  Interest
               shortfall is the difference between the interest collected from a
               loan-servicing  customer  upon  prepayment of the loan and a full
               month's  interest that is required to be remitted to the security
               owner;

         >>    a decline of $61,000 in brokerage  revenue  primarily  associated
               with overall market conditions and reduced customer demand; and

         >>    decreased  rental fees from First  Services,  L.P. of $38,000 for
               the use of data  processing  and other  equipment  owned by First
               Banks.

Noninterest Expense

         Noninterest  expense was $52.6  million and $53.6 million for the three
months ended March 31, 2004 and 2003,  respectively,  reflecting  improvement in
our efficiency  ratio to 55.25% for the three months ended March 31, 2004,  from
56.58% for the comparable  period in 2003.  The decrease in noninterest  expense
primarily reflects a decline in expenses and losses, net of gains, on other real
estate owned,  offset by an increase in salaries and employee  benefits expense.
These  expenses  and losses are  included in other  expense in our  consolidated
statements of income as further discussed below.

         Salaries and employee benefits were $27.7 million and $23.3 million for
the three months ended March 31, 2004 and 2003,  respectively.  We attribute the
overall increase to increased  salary and benefit  expenses  associated with our
acquisition  in 2003 and  generally  higher  salary and employee  benefit  costs
associated  with  employing  and  retaining  qualified  personnel.  Salaries and
employee benefits expense is reduced by an allocation of direct loan origination
costs from  salaries  and benefits  expense to gains on mortgage  loans sold and
held for sale. This allocation of direct loan origination costs decreased during
the first  quarter of 2004 due to a slowdown  in the  volume of  mortgage  loans
originated and sold,  management's  decision to retain a portion of new mortgage
loan production in our real estate  mortgage  portfolio in mid-2003 and a change
in  the  fallout   percentage   applied  to  the  allocation,   thereby  further
contributing to the increase in salaries and employee benefits expense.

         Occupancy,  net of rental income,  and furniture and equipment  expense
totaled  $9.1 million and $9.5 million for the three months ended March 31, 2004
and 2003, respectively. The decrease is partially attributable to decreased rent
expense  associated with various lease  terminations in 2003,  including a lease
buyout on a California  branch  facility  recorded in the first quarter of 2003.
However,  these  overall  expenses  remain at  relatively  higher levels and are
attributable to acquisitions,  technology expenditures for equipment,  continued
expansion  and  renovation  of  various  corporate  and branch  offices  and the
relocation of certain branches and operational areas.

         Information  technology  fees were $8.0  million  for the three  months
ended  March  31,  2004  and  2003.  As more  fully  described  in Note 6 to our
consolidated  financial  statements,  First Services,  L.P. provides information
technology  and  operational  support  services to our  subsidiaries  and us. We
attribute  the  consistently  higher  level of fees to growth and  technological
advancements  consistent  with our  product  and  service  offerings,  continued
expansion and upgrades to technological  equipment,  networks and  communication
channels,  partially  offset  by  expense  reductions  resulting  from  the data
processing conversion of BSG completed in 2003.

         Legal,  examination  and  professional  fees were $1.6  million for the
three months ended March 31, 2004 and 2003.  The continued  expansion of overall
corporate  activities,  the ongoing professional services utilized by certain of
our acquired entities,  and increased legal fees associated with commercial loan
documentation,  collection  efforts and certain defense litigation costs related
to acquired  entities have all contributed to the overall expense levels in 2003
and 2004.

         Amortization   of   intangibles   associated   with  the   purchase  of
subsidiaries was $658,000 and $532,000 for the three months ended March 31, 2004
and 2003,  respectively.  The  increase is solely  attributable  to core deposit
intangibles associated with our acquisition of BSG in March 2003.
<PAGE>
         Communications  and  advertising  and  business   development  expenses
decreased to $1.7  million for the three months ended March 31, 2004,  from $1.9
million for the comparable period in 2003. Our continued efforts to reduce these
expenses through  renegotiation of contracts,  enhanced focus on advertising and
promotional  activities  in markets  that  offer  greater  benefits,  as well as
ongoing cost containment  efforts have all contributed to the overall decline in
these expenditures.

         Other  expense was $2.6  million and $7.4  million for the three months
ended March 31, 2004 and 2003, respectively.  Other expense encompasses numerous
general and administrative  expenses including travel,  meals and entertainment,
insurance,   freight  and  courier   services,   correspondent   bank   charges,
miscellaneous  losses  and  recoveries,  expenses  on other real  estate  owned,
memberships and subscriptions, transfer agent fees and sales taxes. The decrease
is primarily attributable to:

         >>    a decrease of $3.6  million on  expenditures  and losses,  net of
               gains, on other real estate. In February 2004, we recorded a $2.7
               million  gain  on the  sale  of a  residential  and  recreational
               development property that was transferred to other real estate in
               January 2003, as further  discussed  under "--Loans and Allowance
               for Loan Losses." Net  expenditures  on other real estate for the
               first  quarter  of 2003  were  $822,000  and  primarily  included
               expenditures associated with the operation of the residential and
               recreational  development property that was sold in February 2004
               as well as a $200,000  expenditure  associated  with an unrelated
               residential   real  estate  property   located  in  the  northern
               California region;

         >>    write-downs of $1.1 million recorded in the first quarter of 2003
               on  various  operating  leases  associated  with  our  commercial
               leasing business,  which were primarily a result of reductions in
               estimated  residual values.  No similar  write-downs  occurred in
               2004;

         >>    a $200,000 reduction in expenditures  associated with ATM repairs
               and maintenance; and

         >>    decreased credit card expenses of $155,000  primarily  associated
               with the continued decline in this portfolio; partially offset by

         >>    expenses  associated with our acquisition  completed during 2003;
               and

         >>    continued growth and expansion of our banking franchise.

                          Interest Rate Risk Management

         We utilize derivative financial instruments to assist in our management
of interest rate  sensitivity  by modifying the  repricing,  maturity and option
characteristics of certain assets and liabilities. The derivative instruments we
held as of March 31, 2004 and December 31, 2003 are summarized as follows:
<TABLE>
<CAPTION>

                                                                     March 31, 2004             December 31, 2003
                                                                -----------------------      -----------------------
                                                                  Notional      Credit       Notional       Credit
                                                                   Amount      Exposure       Amount       Exposure
                                                                   ------      --------       ------       --------
                                                                            (dollars expressed in thousands)

<S>                                                             <C>              <C>        <C>               <C>
         Cash flow hedges.....................................  $1,100,000       2,683      1,250,000         2,857
         Fair value hedges....................................     276,200       9,394        326,200        12,614
         Interest rate cap agreements.........................     450,000          --        450,000            --
         Interest rate lock commitments.......................      25,900          --         15,500            --
         Forward commitments to sell
           mortgage-backed securities.........................      66,500          --         58,500            --
                                                                ==========      ======      =========       =======
</TABLE>

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

         During the three months ended March 31, 2004 and 2003,  we realized net
interest  income on our  derivative  financial  instruments of $16.2 million and
$15.0 million,  respectively. The increase is primarily attributable to interest
income  associated  with the  additional  swap  agreements  that we entered into
during March, April and July 2003 as well as the continued decline in prevailing
interest  rates in 2003.  In  addition,  we  recorded  net  gains on  derivative
instruments,  which are  included  in  noninterest  income  in our  consolidated
statements of income, of $32,000 and $7,000 for the three months ended March 31,
2004 and 2003,  respectively.  The increase in 2004 reflects changes in the fair
value of our interest rate cap agreements,  fair value hedges and the underlying
hedged liabilities.

Cash Flow Hedges

         During  September  2000,  March 2001,  April 2001,  March 2002 and July
2003, we entered into interest rate swap  agreements of $600.0  million,  $200.0
million,  $175.0  million,  $150.0 million and $200.0 million  notional  amount,
respectively,  to effectively lengthen the repricing  characteristics of certain
interest-earning  assets to correspond  more closely with their  funding  source
with the  objective of  stabilizing  cash flow,  and  accordingly,  net interest
income over time.  The  underlying  hedged  assets are certain  loans within our
commercial loan portfolio.  The swap  agreements,  which have been designated as
cash flow hedges,  provide for us to receive a fixed rate of interest and pay an
adjustable  rate of interest  equivalent  to the weighted  average prime lending
rate minus 2.70%, 2.82%, 2.82%, 2.80% and 2.85%, respectively.  The terms of the
swap agreements provide for us to pay and receive interest on a quarterly basis.
In November  2001,  we  terminated  $75.0  million  notional  amount of the swap
agreements  originally  entered into in April 2001,  which would have expired in
April  2006,  in order to  appropriately  modify our overall  hedge  position in
accordance  with our interest rate risk  management  program.  In addition,  the
$150.0 million notional amount swap agreement that we entered into in March 2002
matured on March 14, 2004. The amount receivable by us under the swap agreements
was $3.7  million and $3.9  million at March 31,  2004 and  December  31,  2003,
respectively,  and the  amount  payable  by us  under  the swap  agreements  was
$967,000 and $1.1 million at March 31, 2004 and December 31, 2003, respectively.

         The maturity dates, notional amounts,  interest rates paid and received
and fair value of our  interest  rate swap  agreements  designated  as cash flow
hedges as of March 31, 2004 and December 31, 2003 were as follows:

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

         March 31, 2004:
<S>                                                            <C>               <C>           <C>       <C>
             September 20, 2004..............................  $  600,000        1.30%         6.78%     $  15,268
             March 21, 2005..................................     200,000        1.18          5.24          7,378
             April 2, 2006...................................     100,000        1.18          5.45          6,887
             July 31, 2007...................................     200,000        1.15          3.08          3,541
                                                               ----------                                ---------
                                                               $1,100,000        1.24          5.71      $  33,074
                                                               ==========       =====         =====      =========

         December 31, 2003:
             March 14, 2004..................................  $  150,000        1.20%         3.93%     $     879
             September 20, 2004..............................     600,000        1.30          6.78         23,250
             March 21, 2005..................................     200,000        1.18          5.24          8,704
             April 2, 2006...................................     100,000        1.18          5.45          6,881
             July 31, 2007...................................     200,000        1.15          3.08            501
                                                               ----------                                ---------
                                                               $1,250,000        1.24          5.49      $  40,215
                                                               ==========       =====         =====      =========
</TABLE>
<PAGE>

Fair Value Hedges

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

         >>    During  January  2001,  we entered  into $50.0  million  notional
               amount of  three-year  interest rate swap  agreements  and $150.0
               million   notional   amount  of  five-year   interest  rate  swap
               agreements  that  provide  for us to  receive  a  fixed  rate  of
               interest and pay an adjustable rate of interest equivalent to the
               three-month London Interbank Offering Rate. The underlying hedged
               liabilities  are a portion of our other time deposits.  The terms
               of the  swap  agreements  provide  for us to  pay  interest  on a
               quarterly basis and receive  interest on a semiannual  basis. The
               amount  receivable  by us  under  the  swap  agreements  was $1.9
               million and $5.2 million at March 31, 2004 and December 31, 2003,
               respectively,  and  the  amount  payable  by us  under  the  swap
               agreements  was  $394,000  and  $537,000  at March  31,  2004 and
               December  31,  2003,   respectively.   In  September   2003,   we
               discontinued  hedge  accounting  treatment  on the $50.0  million
               notional  amount of three-year  swap  agreements  entered into in
               January  2001  due to the  loss of our  highly  correlated  hedge
               positions  between the swap agreements and the underlying  hedged
               liabilities.   Consequently,   the  related  $1.3  million  basis
               adjustment of the underlying hedged liabilities was recorded as a
               reduction of interest expense over the remaining weighted average
               maturity of the underlying  hedged  liabilities of  approximately
               three months.

         >>    During May 2002, we entered into $55.2 million notional amount of
               interest  rate swap  agreements  that provide for us to receive a
               fixed rate of  interest  and pay an  adjustable  rate of interest
               equivalent to the three-month London Interbank Offering Rate plus
               2.30%.  During June 2002, we entered into $86.3 million and $46.0
               million  notional  amount,  respectively,  of interest  rate swap
               agreements  that  provide  for us to  receive  a  fixed  rate  of
               interest and pay an adjustable rate of interest equivalent to the
               three-month  London Interbank Offering Rate plus 2.75% and 1.97%,
               respectively.  The underlying hedged liabilities are a portion of
               our  subordinated  debentures.  The terms of the swap  agreements
               provide for us to pay and receive  interest on a quarterly basis.
               There  were no amounts  receivable  or payable by us at March 31,
               2004 or December  31, 2003.  The $86.3  million  notional  amount
               interest rate swap  agreement was called by its  counterparty  in
               November  2002  resulting  in  final   settlement  of  this  swap
               agreement  in  December  2002.  In  addition,  the $46.0  million
               notional  amount  interest rate swap  agreement was called by its
               counterparty  on May 14, 2003  resulting in final  settlement  of
               this swap  agreement on June 30, 2003.  There was no gain or loss
               recorded as a result of these transactions.

         >>    During March 2003 and April 2003,  we entered into $25.0  million
               and $46.0 million notional amount, respectively, of interest rate
               swap  agreements  that  provide for us to receive a fixed rate of
               interest and pay an adjustable rate of interest equivalent to the
               three-month  London Interbank Offering Rate plus 2.55% and 2.58%,
               respectively.  The underlying hedged liabilities are a portion of
               our  subordinated  debentures.  The terms of the swap  agreements
               provide for us to pay and receive  interest on a quarterly basis.
               There  were no amounts  receivable  or payable by us at March 31,
               2004 or December 31, 2003.
<PAGE>

         The maturity dates, notional amounts,  interest rates paid and received
and fair value of our interest  rate swap  agreements  designated  as fair value
hedges as of March 31, 2004 and December 31, 2003 were as follows:
<TABLE>
<CAPTION>

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

         March 31, 2004:
<S>                                                             <C>              <C>           <C>        <C>
             January 9, 2006..................................  $ 150,000        1.14%         5.51%      $  9,838
             December 31, 2031................................     55,200        3.46          9.00          3,751
             March 20, 2033...................................     25,000        3.71          8.10           (413)
             June 30, 2033....................................     46,000        3.74          8.15           (663)
                                                                ---------                                 --------
                                                                $ 276,200        2.27          6.88       $ 12,513
                                                                =========       =====         =====       ========

         December 31, 2003:
             January 9, 2004 (1)..............................  $  50,000        1.15%         5.37%      $     --
             January 9, 2006..................................    150,000        1.15          5.51          9,932
             December 31, 2031................................     55,200        3.44          9.00          2,499
             March 20, 2033...................................     25,000        3.69          8.10         (1,270)
             June 30, 2033....................................     46,000        3.72          8.15         (2,008)
                                                                ---------                                 --------
                                                                $ 326,200        2.10          6.65       $  9,153
                                                                =========       =====         =====       ========
             ---------------
             (1)Hedge accounting treatment was discontinued in September 2003 as further discussed above.
</TABLE>

Interest Rate Cap Agreements

         In  conjunction  with our interest rate swap  agreements  designated as
cash flow hedges that mature in  September  2004,  we also  entered  into $450.0
million  notional amount of four-year  interest rate cap agreements to limit the
net interest  expense  associated  with our interest rate swap agreements in the
event of a rising rate scenario. The interest rate cap agreements provide for us
to  receive  a  quarterly   adjustable  rate  of  interest   equivalent  to  the
differential  between the  three-month  London  Interbank  Offering Rate and the
strike price of 7.50% should the  three-month  London  Interbank  Offering  Rate
exceed the strike price.  At March 31, 2004 and December 31, 2003,  the carrying
value of these  interest  rate cap  agreements,  which is included in derivative
instruments in the consolidated balance sheets was zero.

Pledged Collateral

         At March 31, 2004 and December 31, 2003,  we had a $5.0 million  letter
of credit issued on our behalf to the  counterparty  and had pledged  investment
securities  available  for sale with a carrying  value of $227,000 and $229,000,
respectively, in connection with our interest rate swap agreements. In addition,
at  December  31,  2003,  we had  pledged  cash of  $700,000  as  collateral  in
connection  with our  interest  rate  swap  agreements.  At March  31,  2004 and
December 31,  2003,  we had  accepted,  as  collateral  in  connection  with our
interest  rate  swap  agreements,  cash of  $48.3  million  and  $51.3  million,
respectively.

Interest Rate Lock  Commitments / Forward Commitments  to  Sell  Mortgage-Backed
Securities

         Derivative financial  instruments issued by us consist of interest rate
lock  commitments  to  originate  fixed-rate  loans.  Commitments  to  originate
fixed-rate loans consist  primarily of residential real estate loans.  These net
loan  commitments  and loans held for sale are hedged with forward  contracts to
sell mortgage-backed securities.
<PAGE>

                       Loans and Allowance for Loan Losses

         Interest earned on our loan portfolio  represents the principal  source
of income  for First  Bank.  Interest  and fees on loans were 87.6% and 90.8% of
total  interest  income  for the three  months  ended  March 31,  2004 and 2003,
respectively. Total loans, net of unearned discount, increased $14.8 million, or
0.3%, to $5.34 billion, or 72.5% of total assets, at March 31, 2004, compared to
$5.33 billion, or 75.0% of total assets, at December 31, 2003. The continued low
loan  demand from our  commercial  customers  during the first  quarter of 2004,
indicative  of  increased   competition  and  the  current  economic  conditions
prevalent within most of our markets,  contributed to a modest increase in total
loans.  The  increase in total  loans,  net of unearned  discount,  is primarily
attributable to:

         >>    an increase of $27.5 million in our real estate  construction and
               development portfolio resulting primarily from seasonal increases
               on existing and available credit lines;

         >>    an  increase  of  $18.1  million  in  our  real  estate  mortgage
               portfolio   primarily   associated  with  management's   business
               strategy decision in mid 2003 to retain a portion of our new loan
               production  in our  real  estate  mortgage  portfolio  to  offset
               continued   weak  loan  demand  in  other  sectors  of  our  loan
               portfolio; and

         >>    an  increase of $7.6  million in our  commercial,  financial  and
               agricultural portfolio; partially offset by

         >>    a decline of $18.6 million in loans held for sale  resulting from
               management's  business  strategy decision in mid-2003 to retain a
               portion of our new  residential  mortgage loan  production in our
               portfolio,  as  discussed  above,  combined  with a  slowdown  in
               overall loan  volumes  experienced  during the fourth  quarter of
               2003 and  continuing in the first quarter of 2004, and the timing
               of loan sales in the secondary mortgage market;

         >>    a  continued  decline  of $18.4  million  in our lease  financing
               portfolio  consistent with the  discontinuation of our New Mexico
               based  leasing   operation  during  2002,  the  transfer  of  all
               responsibilities  for the  existing  portfolio  to a new  leasing
               staff in St. Louis, Missouri and a change in our overall business
               strategy resulting in reduced commercial leasing activities; and

         >>    continued reductions in new consumer and installment loan volumes
               and  the  repayment  of  principal  on  our  existing   portfolio
               consistent with our objectives of de-emphasizing consumer lending
               and expanding commercial lending.



<PAGE>

<TABLE>
<CAPTION>

         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 March 31, 2004 and December 31, 2003:

                                                                                   March 31,       December 31,
                                                                                     2004              2003
                                                                                     ----              ----
                                                                                (dollars expressed in thousands)

         Commercial, financial and agricultural:
<S>                                                                              <C>                  <C>
              Nonaccrual.....................................................    $    43,768          26,876
         Real estate construction and development:
              Nonaccrual.....................................................          8,052           6,402
         Real estate mortgage:
           One-to-four family residential:
              Nonaccrual.....................................................         17,626          21,611
              Restructured...................................................             13              13
           Multi-family residential loans:
              Nonaccrual.....................................................            207             804
           Commercial real estate loans:
              Nonaccrual.....................................................         14,365          13,994
         Lease financing:
              Nonaccrual.....................................................          3,064           5,328
         Consumer and installment:
              Nonaccrual.....................................................            266             336
                                                                                 -----------      ----------
                  Total nonperforming loans..................................         87,361          75,364
         Other real estate...................................................          2,888          11,130
                                                                                 -----------      ----------
                  Total nonperforming assets.................................    $    90,249          86,494
                                                                                 ===========      ==========

         Loans, net of unearned discount.....................................    $ 5,342,892       5,328,075
                                                                                 ===========      ==========

         Loans past due 90 days or more and still accruing...................    $     2,211           2,776
                                                                                 ===========      ==========

         Ratio of:
              Allowance for loan losses to loans.............................          2.34%            2.19%
              Nonperforming loans to loans...................................          1.64             1.41
              Allowance for loan losses to nonperforming loans...............        142.94           154.52
              Nonperforming assets to loans and other real estate............          1.69             1.62
                                                                                 ==========       ==========
</TABLE>

         Nonperforming  loans,  consisting  of loans on  nonaccrual  status  and
certain  restructured loans, were $87.4 million at March 31, 2004, in comparison
to $75.4 million at December 31, 2003. Loan  charge-offs  were $11.5 million and
$8.7 million for the three  months ended March 31, 2004 and 2003,  respectively.
Loan charge-offs,  net of recoveries, were $5.3 million and $2.5 million for the
three  months  ended  March 31, 2004 and 2003,  respectively.  Other real estate
owned was $2.9  million,  $11.1  million and $15.9  million at March,  31, 2004,
December  31,  2003 and  March 31,  2003,  respectively.  Nonperforming  assets,
consisting of nonperforming loans and other real estate owned were $90.2 million
at March 31, 2004,  compared to $86.5  million and $86.9 million at December 31,
2003 and March 31, 2003, respectively.  The net increase in nonperforming assets
in the first three months of 2004,  as compared to December  31, 2003,  reflects
two significant changes as follows:

         >>    On  February  9, 2004,  we sold a  residential  and  recreational
               development  property  that had been  held as other  real  estate
               since  January  2003.  Prior  to  foreclosure,  the  real  estate
               construction and development  loan had been on nonaccrual  status
               due to significant  financial  difficulties,  inadequate  project
               financing,  project  delays and weak project  management.  At the
               time of sale,  the property had a carrying value of $9.2 million,
               representing  approximately  83.0% of our total other real estate
               assets.  We recorded a gain,  before  applicable income taxes, of
               approximately $2.7 million on the sale of this property.
<PAGE>

         >>    In March 2004, we downgraded a $13.9  million  commercial  credit
               relationship  in the  southern  California  region to  nonaccrual
               status,  representing  approximately 15.9% of nonperforming loans
               at March 31,  2004.  As  previously  discussed in  "--Results  of
               Operations - Provision  for Loan  Losses," on April 29, 2004,  we
               recorded a $3.9 million charge-off on this credit relationship as
               a result of workout  negotiations with the borrower and on May 7,
               2004,  the remaining net balance of $10.0 million was  refinanced
               by an independent third party, resulting in our receipt of a cash
               payment on the remaining net balance of this credit relationship.

         Although  the   deterioration  of  our  commercial   leasing  portfolio
experienced in 2002 and 2003 remains a continued focus of management,  the level
of nonperforming loans related to this portfolio has declined to $3.1 million at
March 31, 2004  compared to $5.3 million and $13.3  million at December 31, 2003
and March 31, 2003, respectively.  Our allowance for loan losses as a percentage
of loans,  net of unearned  discount,  increased to 2.34% at March 31, 2004 from
2.19% at December 31, 2003, and our allowance for loan losses as a percentage of
nonperforming  loans  decreased  to  142.94% at March 31,  2004 from  154.52% at
December 31, 2003.  The allowance for loan losses was $124.9  million and $116.5
million at March 31, 2004 and December 31, 2003,  respectively.  As reflected in
the table below,  a $1.0 million  specific  reserve was  established in December
2003 for the estimated loss  associated  with a $5.3 million  unfunded letter of
credit.  The  letter of credit was  subsequently  funded as a loan on January 5,
2004,  and the related  $1.0 million  specific  reserve was  transferred  to the
allowance for loan losses.  We continue to closely  monitor our loan and leasing
portfolios  and  address the ongoing  challenges  posed by the current  economic
environment,  including  reduced  loan  demand  within  our  markets  and  lower
prevailing  interest rates. We anticipate the level of  nonperforming  assets to
remain at elevated levels throughout most of 2004 and consider this trend in our
overall assessment of the adequacy of the allowance for loan losses.

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

<TABLE>
<CAPTION>
         The following  table is a summary of our loan loss  experience  for the
three months ended March 31, 2004 and 2003:
                                                                                            Three Months Ended
                                                                                                 March 31,
                                                                                          -----------------------
                                                                                            2004            2003
                                                                                            ----            ----
                                                                                     (dollars expressed in thousands)

<S>                                                                                       <C>             <C>
         Allowance for loan losses, beginning of period...............................    $ 116,451       99,439
         Acquired allowance for loan losses and other adjustments (1).................        1,000          757
                                                                                          ---------     --------
                                                                                            117,451      100,196
                                                                                          ---------     --------
         Loans charged-off............................................................      (11,494)      (8,737)
         Recoveries of loans previously charged-off...................................        6,164        6,237
                                                                                          ---------     --------
         Net loan charge-offs.........................................................       (5,330)      (2,500)
                                                                                          ---------     --------
         Provision for loan losses....................................................       12,750       11,000
                                                                                          ---------     --------
         Allowance for loan losses, end of period ....................................    $ 124,871      108,696
                                                                                          ==========    ========
         ---------------
         (1)  In December 2003, we established a $1.0 million specific reserve for estimated losses on a $5.3 million
              letter of credit that was recorded in accrued and other liabilities in our consolidated  balance sheets.
              On January 5, 2004, the letter of credit was fully funded  as  a  loan.  Consequently, the related $1.0
              million specific reserve was reclassified from accrued and other liabilities  to the allowance for loan
              losses.

</TABLE>

                                    Liquidity

         Our  liquidity  is the ability to maintain a cash flow that is adequate
to fund  operations,  service debt  obligations and meet other  commitments on a
timely basis.  First Bank receives funds for liquidity  from customer  deposits,
loan payments,  maturities of loans and  investments,  sales of investments  and
earnings.  In  addition,  we may avail  ourselves  of other  sources of funds by
issuing  certificates of deposit in denominations of $100,000 or more, borrowing
federal funds,  selling  securities under agreements to repurchase and utilizing
borrowings from the Federal Home Loan Bank and other  borrowings,  including our
revolving  credit line.  The  aggregate  funds  acquired from these sources were
$876.3  million and $726.9  million at March 31,  2004 and  December  31,  2003,
respectively.

<TABLE>
<CAPTION>


         The  following  table  presents the  maturity  structure of these other
sources of funds, which consists of certificates of deposit of $100,000 or more,
other borrowings and our note payable, at March 31, 2004:

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

<S>                                                                  <C>                  <C>               <C>
         Three months or less.....................................   $   120,793          161,014           281,807
         Over three months through six months.....................       111,614            4,500           116,114
         Over six months through twelve months....................        69,163               --            69,163
         Over twelve months.......................................       152,229          257,000           409,229
                                                                     -----------         --------          --------
              Total...............................................   $   453,799          422,514           876,313
                                                                     ===========         ========          ========
</TABLE>

<PAGE>

         In addition to these  sources of funds,  First Bank has  established  a
borrowing   relationship   with  the  Federal   Reserve  Bank.   This  borrowing
relationship,  which is secured by  commercial  loans,  provides  an  additional
liquidity facility that may be utilized for contingency  purposes.  At March 31,
2004 and December 31, 2003, First Bank's borrowing  capacity under the agreement
was approximately $848.2 million and $909.3 million,  respectively. In addition,
First Bank's borrowing  capacity through its relationship  with the Federal Home
Loan Bank was approximately  $443.4 million and $449.5 million at March 31, 2004
and  December 31,  2003,  respectively.  Exclusive of the Federal Home Loan Bank
advances  outstanding  of $7.0  million at March 31, 2004 and December 31, 2003,
First  Bank  had  no  amounts   outstanding  under  either  of  these  borrowing
arrangements at March 31, 2004 and December 31, 2003.

         In addition  to our owned  banking  facilities,  we have  entered  into
long-term leasing  arrangements to support our ongoing activities.  The required
payments under such  commitments and other  obligations at March 31, 2004 are as
follows:
<TABLE>
<CAPTION>

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

<S>                                                          <C>                <C>          <C>          <C>
         Operating leases..................................  $    6,423         17,848       20,975       45,246
         Certificates of deposit...........................   1,211,956        733,389          276    1,945,621
         Other borrowings..................................     161,014        256,000        1,000      418,014
         Note payable......................................       4,500             --           --        4,500
         Subordinated debentures...........................          --             --      213,222      213,222
         Other contractual obligations.....................       6,019            706           33        6,758
                                                             ----------     ----------    ---------    ---------
              Total........................................  $1,389,912      1,007,943      235,506    2,633,361
                                                             ==========     ==========    =========    =========
</TABLE>

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

                       Effects of New Accounting Standards

         In December 2003, the Financial  Accounting  Standards  Board, or FASB,
issued FASB Interpretation No. 46,  Consolidation of Variable Interest Entities,
an  interpretation  of ARB No. 51, a  revision  to FASB  Interpretation  No. 46,
Consolidation  of  Variable  Interest  Entities  issued in  January  2003.  This
Interpretation   is  intended  to  achieve  more   consistent   application   of
consolidation  policies  to  variable  interest  entities  and,  thus to improve
comparability  between enterprises engaged in similar activities even if some of
those  activities  are  conducted  through  variable  interest   entities.   The
provisions of this Interpretation are effective for financial  statements issued
for fiscal years ending after  December 15, 2003. We have several  statutory and
business trusts that were formed for the sole purpose of issuing trust preferred
securities.  On December 31, 2003, we implemented FASB Interpretation No. 46, as
amended,  which  resulted  in the  deconsolidation  of our  five  statutory  and
business  trusts.  The  implementation  of this  Interpretation  had no material
effect  on  our  consolidated  financial  position  or  results  of  operations.
Furthermore, in July 2003, the Board of Governors of the Federal Reserve System,
or Board,  issued a supervisory  letter  instructing  bank holding  companies to
continue to include the trust  preferred  securities in their Tier I capital for
regulatory capital purposes, subject to applicable limits, until notice is given
to the contrary.  On May 6, 2004,  the Board  requested  public comment on newly
proposed rules that would allow bank holding companies to retain trust preferred
securities  in their  Tier 1  capital,  subject  to  stricter  quantitative  and
qualitative  standards.  The proposed rules would implement several  significant
changes  to the  current  regulatory  capital  rules.  Under the  proposal,  the
aggregate  amount of trust  preferred  securities and certain other core capital

<PAGE>

elements  would  be  limited  to  25%  of  Tier  1  capital,  net  of  goodwill.
Additionally,  qualifying  trust  preferred  securities  and  Class  C  minority
interest in excess of the 25% limit would be  allowable  in Tier 2 capital,  but
limited,  together with subordinated  debt and limited-life  preferred stock, to
50% of Tier 1 capital.  The  proposed  rules also  provide that in the last five
years before maturity of the underlying  subordinated note, the associated trust
preferred  securities  would be  treated as  limited-life  preferred  stock,  at
one-fifth  amortization  per year, and would be excluded from Tier 1 capital and
included in Tier 2 capital,  subject,  together with subordinated debt and other
limited-life  preferred  stock, to a limit of 50% of Tier 1 capital.  The public
comment  period  on the  newly  proposed  rules  ends on July 11,  2004.  We are
awaiting  further  guidance  from the Board  pending  the  outcome  of the newly
proposed  rules,  and are continuing to evaluate the proposed  changes and their
overall impact on our financial condition and results of operations.  Management
expects that  implementation of the Board's proposed rules, as currently stated,
would reduce our regulatory  capital ratios.  However,  management  believes our
regulatory capital levels will continue to meet the well capitalized  thresholds
under the  regulatory  framework for prompt  corrective  action if the rules are
adopted in the form proposed.

         In January 2004,  the FASB's  Derivatives  Implementation  Group issued
preliminary  guidance on Statement of Financial Accounting  Standards,  or SFAS,
No. 133 Implementation  Issue No. G25, or DIG Issue G25. DIG Issue G25 clarifies
the FASB's  position  on the ability of  entities  to hedge the  variability  in
interest  receipts  or overall  changes  in cash flows on a group of  prime-rate
based  loans.  DIG  Issue  G25  indicates  that an  entity  is  unable  to hedge
variability  in  interest  receipts  on a group of prime rate based loans as the
prime rate is not  considered  a benchmark  interest  rate and that an entity is
unable to hedge overall  changes in cash flows as credit risk is not  considered
in the hedging  interest rate swap.  The effective  date of DIG Issue G25 is the
first day of the first fiscal quarter  beginning  after the cleared  guidance is
posted to the FASB's website, and should be applied to all hedging relationships
as of the effective date. If a pre-existing  cash flow hedging  relationship has
identified the hedged transactions in a manner inconsistent with the guidance in
DIG Issue G25, the hedging  relationship  must be de-designated at the effective
date and any derivative gains or losses in other comprehensive income related to
the de-designated hedging relationships should be accounted for under paragraphs
31 and 32 under SFAS No. 133. Presently,  we have pre-existing cash flow hedging
relationships  that are  inconsistent  with the guidance in DIG Issue G25. As of
March 31, 2004,  our other  comprehensive  income  included a $21.5 million gain
attributable to these pre-existing cash flow hedging relationships.  Pending the
outcome of DIG Issue G25,  we may be  required to  de-designate  these  specific
hedging  relationships  and accrete this gain into  noninterest  income over the
remaining  lives of the  respective  hedging  relationships.  The public comment
period on DIG Issue G25 ended on March 25, 2004.  The FASB met on May 5, 2004 to
further  discuss  DIG Issue G25,  including  the  public  comment  letters,  and
continued these  discussion at a subsequent  meeting held on May 12, 2004. While
no final  conclusions  were  reached at the May 12, 2004  meeting,  the FASB has
instructed  its staff to  redraft  DIG Issue G25 to  clarify  its  intent and to
circulate  the  revision  to DIG members  for  comment.  The FASB is expected to
discuss the comments received on the revised DIG Issue G25 and possibly conclude
at its next weekly meeting.  Consequently,  we are currently awaiting additional
guidance  from the FASB on DIG Issue G25 and are  presently  unable to determine
its  overall  impact on our  consolidated  financial  statements  or  results of
operations.

         In March 2004, the Securities and Exchange  Commission,  or SEC, issued
Staff  Accounting  Bulletin No. 105 -- Application  of Accounting  Principles to
Loan Commitments,  or SAB 105, which provides guidance regarding the application
of generally accepted accounting principles to loan commitments accounted for as
derivative instruments. Through specific guidance on valuation-recognition model
inputs to measure loan  commitments  accounted  for at fair value,  SAB 105 will
limit the  opportunity  for  recognition  of an asset related to a commitment to
originate a mortgage  loan that will be held for sale prior to funding.  SAB 105
requires that the measurement of fair value include only differences between the
guaranteed  interest rate in the loan  commitment  and a market  interest  rate,
excluding any expected future cash flows related to the customer relationship or
loan servicing.  SAB 105 is effective for all mortgage loan commitments that are
accounted  for as derivative  instruments  that are entered into after March 31,
2004, and permits  continued use of previously  applied  accounting  policies to
loan commitments entered into on or before March 31, 2004. We have evaluated the
requirements  of SAB 105  and do not  believe  its  implementation  will  have a
material  impact  on  our  consolidated   financial  statements  or  results  of
operations.


<PAGE>


       ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         At December 31, 2003, our risk management  program's  simulation  model
indicated a loss of projected  net interest  income in the event of a decline in
interest  rates.  We are  "asset-sensitive,"  indicating  that our assets  would
generally reprice with changes in rates more rapidly than our liabilities. While
a decline in interest  rates of less than 100 basis points was projected to have
a  relatively  minimal  impact on our net  interest  income,  an  instantaneous,
parallel  decline in the interest  yield curve of 100 basis  points  indicated a
pre-tax  projected loss of approximately  7.9% of net interest income,  based on
assets and  liabilities at December 31, 2003. At March 31, 2004, we remain in an
"asset-sensitive" position and thus, remain subject to a higher level of risk in
a  declining  interest  rate  environment.  Although we do not  anticipate  that
instantaneous shifts in the yield curve as projected in our simulation model are
likely,  these are  indications  of the effects that  changes in interest  rates
would  have  over  time.  Our  asset-sensitive  position,  coupled  with  income
associated  with our  interest  rate swap  agreements  offset by  reductions  in
prevailing  interest  rates  throughout  2002 and 2003,  is reflected in our net
interest  margin for the three  months  ended  March 31, 2004 as compared to the
comparable period in 2003 and further discussed under "--Results of Operations."
During the three months ended March 31, 2004, our  asset-sensitive  position and
overall susceptibility to market risks have not changed materially.




<PAGE>


                        ITEM 4 - CONTROLS AND PROCEDURES

         Within the 90-day  period prior to the filing date of this report,  our
Chief Executive Officer evaluated the effectiveness of our "disclosure  controls
and  procedures"  (as  defined  in  rules  13a-14(c)  and  15d-14(c)  under  the
Securities  Exchange Act of 1934) and  concluded on the basis of the  evaluation
that, as of the date of such evaluation,  our disclosure controls and procedures
were effective.  There have been no significant  changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of that evaluation.




<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.

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

                  10.1       AFS Customer  Agreement by and between First Banks,
                             Inc. and Advanced  Financial  Solutions,  Inc.,
                             dated January 29, 2004 - filed herewith.

                  10.2       Management  Services Agreement by and between First
                             Banks, Inc. and First Bank, dated February 28, 2004
                             - filed herewith.

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

                  32         Section 1350 Certifications - filed herewith.

(b)      We filed a Current  Report on Form 8-K on January 26, 2004.  Item 12 of
         the report referenced a press release announcing First  Banks,   Inc.'s
         financial results for the three  months  and  year ended  December  31,
         2003. A copy of the press release was included as Exhibit 99.1.


<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.



May 14, 2004                     By: /s/ Allen H. Blake
                                    --------------------------------------------
                                         Allen H. Blake
                                         President, Chief Executive  Officer and
                                         Chief Financial Officer
                                         (Principal Executive Officer and
                                         Principal Financial and
                                         Accounting Officer)


<PAGE>
                                                                    Exhibit 10.1
                             AFS CUSTOMER AGREEMENT

     THIS AGREEMENT is made and entered into by and between  Advanced  Financial
Solutions,   Inc.,  4344  Charter  Avenue,   Oklahoma  City,  Oklahoma,   73108,
(hereinafter referred to as "AFS"), and the CUSTOMER as identified on Schedule A
hereto.

                                    Recitals
--------------------------------------------------------------------------------
     1. CUSTOMER wishes to obtain from AFS the right to use certain software and
documentation and may purchase associated equipment which comprise an integrated
transaction processing system (" the System") as listed on Schedule A hereto.

     2. AFS is  willing  to provide  the  System  upon the terms and  conditions
provided herein.

     3. Subsequent  transactions may be consummated pursuant to the terms hereof
by the execution of additional  Schedule A's (Schedule  A-1, A-2, etc.) in which
case references to Schedule A herein will refer to all such additional schedules
as appropriate.

     In consideration of the mutual covenants  contained herein, it is agreed as
follows:

<TABLE>
<CAPTION>


                                Table of Contents

------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
Section                     Title                   Page       Section                    Title                    Page
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
<C>                                                   <C>      <C>        <C>                                        <C>
1            General............................      2        1.15       Limitations of Liability.............      5
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
1.1          Definitions........................      2        2          Warranties...........................      5
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
1.2          Fees...............................      2        2.1        Warranties...........................      5
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
1.3          Payment............................      2        2.2        Extent of Warranties.................      6
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
1.4          Taxes..............................      2        3          License..............................      6
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
1.5          Term and Termination...............      3        3.1        License of Software..................      6
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
1.6          Confidential Information...........      3        3.2        Documentation........................      7
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
1.7          Patent and Copyright Indemnity.....      3        3.3        Training.............................      7
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
1.8          Assignment.........................      4        3.4        Implementation and Testing...........      7
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
1.9          Entire Agreement...................      4        3.5        Proprietary Rights...................      7
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
1.10         Modification, Amendment............      4        3.6        Source Code Escrow...................      7
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
1.11         Severability.......................      4        4          Support Services.....................      8
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
1.12         Governing Law......................      4        4.1        Software Support.....................      8
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
1.13         Attorney's Fees....................      4        4.2        Customer Obligations.................      8
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------
1.14         Notices............................      4                             Schedule A
------------ ------------------------------------- -------- -- ---------- --------------------------------------- -------

</TABLE>


<PAGE>


Section 1 - General

1.1       Definitions.

     The  capitalized  terms set forth  below  shall have the  meanings  set out
herein  when used in the  Agreement  unless  the  context  clearly  indicates  a
different meaning:

     Equipment  -- means any  equipment  described  in  Schedule  A hereto.
     AFS Software  -- means the AFS  software  products  described  in  Schedule
     A.
     Software or  Licensed  Software  -- means the AFS  Software  along with any
     third  party   software   described  in  Schedule  A  plus  any  subsequent
     enhancements  and/or  corrections  supplied  by AFS.
     System -- means any Equipment, Software and third party software  described
     in Schedule A and documentation, which together  constitute  an  integrated
     transaction processing system.

1.2       Fees.

     (a) Fees for the  products and services  hereunder  and for any  associated
equipment shall be as previously agreed with AFS' authorized  software marketers
or as set forth on Schedule A.

     (b) The annual fee for the AFS Software  support  services  shall be as set
forth on Schedule A. It is agreed that the cost of telephone  calls  pursuant to
Section  4 is the  responsibility  of the  calling  party.  Support  fees may be
changed upon ninety (90) days written  notice,  but in no event  increased  more
than once in any twelve (12)-month period and no more than five percent (5%) for
any one increase.

     (c)  CUSTOMER  agrees to reimburse  AFS for all  reasonable  out-of  pocket
expenses,  including, but not limited to, supplies, lodging,  transportation and
meals for each AFS  representative,  incurred by AFS  personnel in the course of
any travel necessary to their  performance of any services to the benefit of and
as approved by CUSTOMER.

     (d)  Any  services  not  described  herein  that  are  performed  by AFS at
CUSTOMER'S request will be charged to CUSTOMER at AFS' hourly software servicing
rates then in effect.

1.3       Payment.

     (a)  Payment  for  the  Licensed  Software  and any  associated  Equipment,
implementation  of the  System  and  initial  training  shall be made  either as
previously  agreed with AFS' authorized  reseller or as follows:  Thirty percent
(30%) upon  execution of this  Agreement;  thirty  percent (30%) upon  shipment;
thirty  percent (30%) upon  installation,  which shall occur when the System has
the ability to correctly run all diagnostic tests; and the remaining ten percent
(10%) upon CUSTOMER'S acceptance of the System.

     (b) AFS shall invoice  CUSTOMER for the AFS Software yearly support service
fee as per Schedule A.

     (c) Payment to AFS for all invoices submitted  hereunder shall be due on or
before the  thirtieth  (30th) day after  receipt  of invoice by  CUSTOMER.  Late
charges  at the rate of  eighteen  percent  (18%)  per annum  will  apply to all
amounts unpaid after said date until they are fully paid.

     (d) The System  shall be deemed  accepted  and all  remaining  fees paid by
CUSTOMER no later than the  twenty-second  (22nd)  business day after the System
has begun successfully capturing items in a live production environment.

1.4       Taxes.

     CUSTOMER will pay all taxes  (including,  but not limited to any sales tax,
duties,  use  tax  or  assessments)  levied  against  CUSTOMER  or AFS by a duly
constituted  taxing  authority  against or upon the Equipment,  Software  and/or
Services.  CUSTOMER agrees to pay any tax for which it is responsible  hereunder
or which may be levied on or assessed against CUSTOMER directly. If any such tax
is  paid  by  AFS,   CUSTOMER  shall  promptly   reimburse  AFS  therefore  upon
presentation  to CUSTOMER of  reasonable  proof of payment by AFS. This does not
include  any taxes  based on the  income or  capital  value of AFS for which AFS
shall be solely responsible.


<PAGE>

1.5       Term and Termination.

     (a) The Term of the Agreement  shall  commence on the latter of the date of
execution  by AFS hereof and the date of receipt by AFS of any  initial  payment
hereunder  (Commencement  date)  and shall  continue  in full  force and  effect
thereafter  as long as there is any  portion  of the  System in use by  CUSTOMER
unless sooner terminated in accordance with the provisions of this Agreement.

     (b) In the event of any material  breach of this  Agreement by either party
hereto,  the other party may  (reserving  cumulatively  all other  remedies  and
rights under this Agreement and in law and in equity)  terminate this Agreement,
if the party in breach has not cured the breach  within a reasonable  time after
receiving  written  notice of the  specific  nature of the breach.  In addition,
CUSTOMER  may,  at any time  after two (2)  years  from the  Commencement  Date,
terminate this  Agreement upon thirty (30) days written notice to AFS,  provided
however that CUSTOMER  shall receive no refund for any annual  support fees paid
or incurred before the termination date.

     (c)   Termination  of  this  Agreement   shall  not  affect  rights  and/or
obligations  of the parties  which arose prior to any such  termination  (unless
otherwise  provided herein) and such rights and/or obligations shall survive any
such  termination.  Upon termination for any reason,  CUSTOMER shall immediately
return all AFS Software, documentation and all related materials to AFS.

1.6       Confidential Information.

     (a) Each party will regard and  preserve as  confidential  all  information
related to the  business of the other party and its  customers  and  information
concerning  the  System,  the  Software  and any  documentation,  modifications,
enhancements,  updates,  changes and error  corrections to the Licensed Software
provided for hereunder that may be obtained or provided in connection  with this
Agreement ("Confidential Information"). In no event however, shall the following
be  considered   "Confidential   Information:"  (i)  information  previously  or
subsequently  filed with any government  agency and available to the public,  or
(ii) information  previously or subsequently  published in any public medium, or
publicly  available,  (iii) information  legally obtained from a third party who
legally obtained or developed  "Confidential  Information." Each party will not,
without  first  obtaining  the other  party's  written  consent,  disclose  such
information to any person, firm or enterprise other than (a) to employees, legal
counsel, accountants and other professional advisors as necessary hereunder; (b)
to regulatory officials (including,  without limitation, bank examiners), having
jurisdiction over the party; and (c) as may be required by law or legal process.

     (b) The provisions of  confidentiality  herein are substantial and material
conditions  to  the  Agreement.  All  provisions  of  confidentiality  regarding
information disclosed herein to either party shall survive this Agreement or any
License granted herein.

1.7       Patent and Copyright Indemnity.

     (a) AFS shall defend any suit or proceeding brought against CUSTOMER so far
as such suit or proceeding is based on a claim that any Software used within the
scope of the license  hereunder  constitutes  an  infringement  or misuse of any
patent, copyright,  trademark or other proprietary right effective in the United
States,  provided  that AFS is  notified  promptly  in  writing  of such suit or
proceeding and given full and complete authority, information and assistance (at
AFS'  expense)  for the defense of the same.  AFS shall pay all expenses of such
suit,  including  attorney's  fees,  and all damages and costs  finally  awarded
therein  against  CUSTOMER,  except  that AFS shall not be  responsible  for any
compromise or expense made or incurred by CUSTOMER without AFS' prior consent.

     (b) In the event any Software  supplied by AFS is in AFS' opinion likely to
or does become the subject of such a suit or claim, AFS may procure for CUSTOMER
the right to continue using such item, replace or modify such item with items of
equal or superior  functionality  so that it becomes  non-infringing,  or remove
such item from  CUSTOMER'S  site. In the event any item is held to constitute an
infringement in such a suit or proceeding or its use is enjoined, AFS shall take
one of the foregoing actions. In the event of the removal of Software, AFS shall
refund to CUSTOMER an amount equal to the purchase  price and/or the license fee
paid to AFS for the  Software  removed,  less a use fee.  For  purposes  of this
paragraph,  the monthly use fee shall be computed by dividing the purchase price
and/or the license fee by 60.

     (c) AFS shall not have any  liability  to CUSTOMER  under any  provision of
this article for any claim which is based upon: (1) the  interconnection  and/or
use of  Equipment  or  Software  in  combination  with  software  or devices not
supplied  to  CUSTOMER or  expressly  approved  by AFS;  (2) use of other than a
current, unaltered release of a Software program if infringement would have been
avoided by use of such release;  (3) use of any item of Equipment or Software in
any manner for which the item was not  designed;  or (4)  Software  modified  by
CUSTOMER or others without the consent of AFS.

     (d) THE  FOREGOING  STATES AFS'  LIABILITY  AND  CUSTOMER'S  ENTIRE  REMEDY
ARISING FROM INFRINGEMENT.
<PAGE>

1.8       Assignment.

         The rights granted  herein shall not be assigned,  in whole or in part,
by  CUSTOMER  without  the  written  consent  of  AFS,  except  in the  case  of
acquisition,  merger or in connection with the sale of a substantial  portion of
CUSTOMER'S  assets and if the  successor  or  assignee  accepts  in writing  the
CUSTOMER'S obligations hereunder.

1.9       Entire Agreement.

     The terms and  conditions of any and all Schedules and agreed change orders
to this  Agreement are  incorporated  herein by this  reference and constitute a
part of this Agreement as if fully set forth herein.  This  Agreement,  together
with all Schedules and agreed change orders,  constitutes  the entire  Agreement
between  the  parties and  supersedes  all  previous  agreements,  promises  and
representations,  whether  written or oral,  between the parties with respect to
the subject matter hereof.  The terms and conditions of this Agreement  shall be
binding upon any permitted successors and/or assigns of the parties.

1.10      Modification, Amendment, Supplement or Waiver.

     (a) No modification,  amendment,  supplement to or waiver of this Agreement
or any of its provisions shall be binding upon the parties hereto unless made in
writing and duly signed by the party against whom it is to be enforced.

     (b) A failure or delay of either party to this  Agreement to enforce at any
time any of the provisions of this Agreement, or to exercise any option which is
herein provided,  or to require at any time performance of any of the provisions
hereof,  shall  not be  construed  to be a  waiver  of  such  provision  of this
Agreement.

1.11      Severability.

     In the event one or more of the provisions of this Agreement  shall for any
reason be held to be invalid, illegal or unenforceable, the remaining provisions
of the Agreement shall be unimpaired,  and the invalid, illegal or unenforceable
provision shall be replaced by a mutually  acceptable  provision,  which,  being
valid,  legal and  enforceable,  comes  closest to the  intention of the parties
underlying  the invalid,  illegal or  unenforceable  provisions.  If no mutually
acceptable  provision  can be  agreed,  then  the  remaining  provisions  of the
contract shall be construed  consistent with the remaining  expressed  intent of
the parties.

1.12      Governing Law.

     This  Agreement  shall be governed by,  construed and enforced  under,  and
subject to, the laws of the State of Oklahoma.

1.13      Attorney's Fees.

     In the event that any suit or action is brought to enforce  the  provisions
of this Agreement,  the prevailing party shall be entitled to expenses and court
costs  related to the  litigation  including,  but not limited to, a  reasonable
attorney's fee.

1.14     Notices.

     Any notices or other  communications  required or  permitted to be given or
delivered  under  this  Agreement   shall  be  in  writing   (unless   otherwise
specifically  provided  herein) and shall be deemed  sufficient  when  delivered
personally or three (3) days after it is mailed by certified or registered mail,
postage  prepaid,  return  receipt  requested  to the  addresses as set forth on
Schedule A hereto,  or to such other  address or  addressee  as either party may
from time to time  designate  to the other by written  notice in the  fashion as
provided herein.

1.15     Limitations of Liability.

     (a) Circumstances may arise where,  because of a default or other liability
of AFS,  CUSTOMER is entitled to recover  damages  from AFS.  Regardless  of the
basis on which CUSTOMER is entitled to claim damages, AFS is liable only for:

          (1)  Payments  referred to in the patent and copyright terms described
               above in Section 1.7; or
          (2)  The  amount  of any  other  actual  losses  or  damages,  up to a
               cumulative  maximum  of the  greater  of  (i)  the  sum of  Fifty
               Thousand  Dollars  ($50,000.00)  and  (ii)  the sum  paid for AFS
               Software  hereunder,  regardless  of the  number  or basis of any
               claim or claims.
<PAGE>

     (b) Items for Which We Are Not Liable.

               Under no circumstances is AFS liable for any of the following:

               (1)  Third party  claims  against  CUSTOMER for losses or damages
                    (other  than  under the first  two items  listed in  Section
                    1.15(a)  above);
               (2)  Loss of, or damage to records or data; or
               (3)  Punitive, exemplary, indirect, consequential (including lost
                    profits or savings) or  incidental  damages,  even if AFS is
                    informed of their possibility.

               No action,  regardless of form, arising out of this Agreement may
be  brought  more than one (1) year  after  the  cause of  action  has arisen.

Section 2 - Warranties

2.1      Warranties.

     AFS hereby represents and warrants as follows:

     (a) The Licensed  Software is free from material defects in workmanship and
design for a period of one (1) year following installation.

     (b) AFS has full  authority to enter this  Agreement and to consummate  the
transaction  contemplated  herein.  This  Agreement is not in conflict  with any
other Agreement to which AFS is a party or by which it may be bound.

     (c) AFS shall furnish the System,  the  documentation  and other  materials
hereunder free of all liens,  claims,  encumbrances and other  restrictions that
would  interfere  with  CUSTOMER'S  intended  licensed  use  of the  System  and
Software.   CUSTOMER   shall   quietly  and   peacefully   possess  the  System,
documentation  and  other  materials   provided  hereunder  subject  to  and  in
accordance with the provisions of this Agreement.

     (d) All Support  Services  provided by AFS hereunder will be performed in a
timely and professional manner.

     (e) No portion of the  Software,  the Software as a whole,  the Software as
used in combination with other elements of the System or any use or operation of
the  foregoing  infringes  directly or  contributorily  upon any other patent or
copyright, trade secret or other intellectual property rights of third parties.

     (f) Upon full payment for the AFS Software, Equipment and License, CUSTOMER
shall  acquire  good and  marketable  title to the  Equipment  and quiet use and
possession  of the AFS  Software,  free and  clear of any lien,  encumbrance  or
security  interest.  CUSTOMER  claims no ownership of title to the Software and,
upon AFS' request, agrees to execute an acknowledgment of such fact.

     (g) All changes, enhancements, updates, modifications and error corrections
made to the  Licensed  Software  by AFS  will  run on and  with  the  CUSTOMER'S
equipment,  provided that CUSTOMER has  installed  all  previously  provided AFS
changes,  enhancements,  updates,  modifications  and error  corrections  in the
manner instructed by AFS.  CUSTOMER'S sole remedy under this warranty is limited
to the correction by AFS of any program or documentation errors at no additional
charge to CUSTOMER.

     (h) All AFS Software  listed herein is specified as "Year 2000  Compliant",
meaning that it is capable of correctly  recognizing,  receiving,  interpreting,
processing and exchanging data before,  on and after January 1, 2000. AFS is not
providing  any Year 2000  testing,  conversion  or  assessment  pursuant to this
Agreement other than as specifically set forth herein.  AFS does not warrant the
compliance or connectability of any other software or hardware.

2.2       Extent of Warranty.

     THE WARRANTIES GIVEN HEREIN ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED,  INCLUDING IMPLIED  WARRANTIES OF  MERCHANTABILITY  OR OF FITNESS FOR A
PARTICULAR PURPOSE.

     (a) Misuse, accident,  unauthorized  modification,  improper maintenance by
CUSTOMER,  or failure caused by a product for which AFS is not responsible,  may
void the warranties.

     (b) AFS does not warrant uninterrupted or error-free operation of a Product
or Service.

Section 3 - License

3.1       License of Software.

     Subject to the provisions hereof AFS grants to CUSTOMER a personal,
non-transferable and non-exclusive right to use the Software in accordance with
the following license provisions:
<PAGE>

     (a)  The  AFS   Software   is  licensed   solely  for  use  on   identified
reader/sorter(s).  The AFS  Software is licensed  and priced on the basis of the
number of  reader/sorters  installed  per site and the document per minute (DPM)
speed of the reader/sorters to which the computers are connected.  If the number
of reader/sorters  and/or the document per minute speed of the reader/sorters is
upgraded, an upgraded license must be ordered. This License is expressly limited
to use by CUSTOMER and entities  directly  owned or controlled by CUSTOMER.  Use
for  any  other  entities  or  purposes  requires   additional   license(s)  and
alternative pricing.

     (b) The AFS Software  contains  proprietary and  confidential  trade secret
information  of AFS.  AFS retains all title to the AFS  Software  and all copies
thereof,  and no title to the AFS Software or any  intellectual  property in the
AFS  Software  is being  transferred.  In the  event  that  CUSTOMER  sells  the
Equipment on which the AFS Software was originally  installed,  CUSTOMER may not
transfer or assign the license to the AFS Software  unless the purchaser signs a
written assignment with AFS and pays AFS its then current standard transfer fee.

     (c) Except for  backup or  archival  purposes,  the  Software  shall not be
copied.  All permitted copies shall contain all copyright and other  proprietary
notices or legends contained in the Software when delivered.  The Software shall
not be modified, reverse assembled or decompiled and no attempt shall be made to
derive source code from the Software.

     (d) AFS, acting for itself and/or its Licensors,  or its Licensors,  in the
event AFS does not so act, may seek to (1) enforce any provision of the Software
License granted hereunder (2) enjoin uses by CUSTOMER which are beyond the scope
of the Software  License  granted  hereunder and (3) enforce any other right and
seek any remedy available at law or in equity. In the event of a material breach
by CUSTOMER that has not been cured as provided in Section 1.5, AFS shall be, in
addition to any other  available  remedies,  entitled to terminate  the Software
license.  Upon  termination  of the license under this Agreement for any reason,
CUSTOMER shall  promptly  return all copies of the Software,  documentation  and
related materials to AFS at the sole cost and expense of CUSTOMER.

     (e) In the event that the  Software is being  licensed to the U.S.  Federal
Government,  the Software is licensed in  accordance  with the  applicable  U.S.
federal procurement regulations covering commercial/restricted rights software.

     (f) CUSTOMER  shall comply with all export and re-export  restrictions  and
regulations of the U.S.  Department of Commerce or other applicable U.S. agency.
The Software shall not be  transferred  to a prohibited  country or otherwise in
violation of any such restrictions or regulations.

3.2       Documentation.

     (a) Upon delivery of the Equipment and AFS Software to CUSTOMER,  AFS shall
also deliver its standard operational instructions and documentation, sufficient
to enable  CUSTOMER'S  personnel  and employees to use and operate the Equipment
and Software supplied by AFS involved at each site.

     (b) AFS shall not charge  CUSTOMER  any  additional  amount for the initial
documentation provided herein other than the fees described in Section 1.2.

     (c) It is further  acknowledged  herein by CUSTOMER that all  documentation
referenced  herein is  Confidential  Information  subject to the  exclusions  of
Section 1.6,  unless  designated  otherwise in writing by AFS and CUSTOMER shall
maintain  the  confidential  nature of the  documentation  as  provided  in said
section.

3.3       Training.

     If indicated on Schedule A,  training  shall be conducted  pursuant to this
Section.  AFS shall  provide  sufficient  initial  training to two of CUSTOMER'S
personnel  and  employees  for the purpose of enabling  them to  understand  and
properly operate the System. Additionally,  AFS shall provide sufficient initial
training to one of CUSTOMER'S personnel designated as the System  Administrator.
The System  Administrator  training  shall  include but not be limited to system
security,  adding,  deleting,  authorizing users,  communications,  and hardware
failure  contingency  processing.  Initial training shall be provided at the AFS
Academy or other agreed  location,  at the sole option of AFS,  with CUSTOMER to
pay all its own travel  expenses and training fees, if applicable.  The dates of
such training  shall  coincide  with  installation  of the AFS Software.  If the
training is conducted at a location other than the AFS Academy,  CUSTOMER agrees
to reimburse AFS for all reasonable  out-of-pocket expenses,  including, but not
limited  to,  supplies,  lodging,  transportation  and  meals  incurred  by  AFS
personnel in the course of any travel  necessary  for their  performance  of the
above training as approved by CUSTOMER.
<PAGE>

3.4       Implementation and Testing.

     (a) If  indicated  on  Schedule  A,  Implementation  and  Testing  shall be
performed  pursuant  to  this  section.   AFS  shall  have   responsibility  for
implementing the Software so that it is fully operational.  The responsibilities
of AFS shall  include  installing  the  Equipment  supplied by AFS and  Software
(described  in Schedule A),  performing  the initial  testing of the System as a
whole,   and   providing   documentation   and  initial   training.   CUSTOMER'S
responsibilities  for  implementation  shall be those necessary to enable AFS to
perform its responsibilities under this Agreement.

     (b)  CUSTOMER  agrees to  reimburse  AFS for all  reasonable  out-of-pocket
expenses including,  but not limited to, supplies,  lodging,  transportation and
meals incurred by AFS personnel in the course of any travel  necessary for their
performance  of the above  Implementation  and  testing  services as approved by
CUSTOMER.

3.5       Proprietary Rights.

     CUSTOMER  understands  that  all  modifications,   enhancements,   updates,
changes,  and error corrections to the Licensed Software provided  hereunder are
and shall  remain the property of AFS.  CUSTOMER  further  understands  that all
described changes,  modifications,  enhancements,  updates and error corrections
provided hereunder are "Licensed Software."

3.6       Source Code Escrow.

     If indicated on Schedule A, AFS shall, after installation, enroll CUSTOMER,
at CUSTOMER'S  sole cost, in it's Source Code Escrow  Program  whereby a copy of
the Source Code for the AFS  Software  shall be held for the benefit of CUSTOMER
should  CUSTOMER  have a current,  fully  paid  support  agreement  with AFS and
should:

     (a) AFS  cease  doing  business  with no  successor  entity  assuming  AFS'
obligations, or

     (b) Cease  support  services  for the  Software  with no  successor  entity
assuming AFS' obligations.

     A copy of the  confirmation of CUSTOMER'S  enrollment shall be furnished to
CUSTOMER within twenty (20) days after CUSTOMER'S payment of the escrow charges.

Section 4 - Support Services

4.1       Software Support.

     If indicated on Schedule A:

     (a) AFS  agrees to  correct,  as soon as  reasonably  possible  after it is
notified thereof by telephone or in writing by CUSTOMER,  any material defect in
the Licensed Software.

     (b) AFS agrees to provide, at no additional cost to CUSTOMER and as soon as
reasonably  possible,  software  changes  and  documentation  necessary  to make
functions performed by the Licensed Software conform to changes in the legal and
regulatory requirements governing performance of those functions.

     (c) AFS agrees to provide telephone assistance to CUSTOMER'S personnel from
8:00 a.m. to 5:00 p.m.,  CST,  Monday through Friday (except for Federal Reserve
banking  holidays) for routine  calls and twenty four hours a day,  seven days a
week for emergency calls and/or for problems  preventing  production  running of
the System.

     (d) AFS will not provide  any support  services  for  CUSTOMER'S  Equipment
and/or Computers under this Agreement.

     (e) AFS will provide CUSTOMER with the latest  enhancements and corrections
to the Software at no charge, as they become generally available. CUSTOMER shall
be responsible  for any additional  third-party  software and/or hardware costs,
onsite AFS support fees and any associated  travel  expenses with respect to any
such enhancements and corrections and their installation.

4.2       CUSTOMER Obligations.

     (a) CUSTOMER  agrees to add all  AFS-provided  enhancements to the Licensed
Software in the manner  instructed  by AFS within thirty (30) days from the date
of receipt from AFS and to add all error corrections to the Licensed Software in
the manner  instructed by AFS within fourteen (14) days from the date of receipt
from AFS.

     (b)  CUSTOMER   agrees   promptly  to  provide  to  AFS  whatever   written
documentation  AFS may  reasonably  request for the purpose of  identifying  and
resolving problems associated with CUSTOMER'S use of the Licensed Software.
<PAGE>

     (c)  CUSTOMER   agrees  not  to   materially   modify  the  System  or  its
configuration without the express, written approval of AFS.

     (d)  CUSTOMER'S  failure to  fulfill  any of the  obligations  set forth in
paragraphs  4.2(a),  (b) and (c) above may, at AFS'  option,  relieve AFS of all
support liability regarding the accuracy or performance of the Licensed Software
caused by such failure or failures.

     IN WITNESS  WHEREOF,  the Parties hereto,  each acting under due and proper
authority, have executed Schedule A hereto as of the date thereupon written.


<PAGE>
<TABLE>
<CAPTION>



                                   SCHEDULE A
                            TO AFS CUSTOMER AGREEMENT

                                  ImageVisionTM
Item Name                                                                                                   Total Cost
----------------------------------------------------------------------------------------------------------------------

AFS Software (includes any manuals, specifications and documentation)  (X)Yes   ( ) No

                                                                              QTY

<S>                    <C>                                                              <C>            <C>
St. Louis - Attachment 1                                                                $ 1,747,500.00
-----------------------------------------------                                         --------------

Santa Ana - Attachment 2                                                                $   25,000.00
-----------------------------------------------                                         -------------

Chicago - Attachment 3                                                                  $   20,000.00
-----------------------------------------------                                         -------------

Peoria - Attachment 4                                                                   $           -
-----------------------------------------------                                         -------------

Vallejo - Attachment 5                                                                  $           -
-----------------------------------------------                                         -------------

Houston - Attachment 6                                                                  $   20,000.00
-----------------------------------------------                                         -------------

                                                                                AFS Software Subtotal   $ 1,812,500.00
                                                                                                        --------------
Third Party Software
                                               (X) Yes                   ( ) No

St. Louis - Attachment 1                                                                                $   650,000.00
-----------------------------------------------                                                         --------------


Equipment & Associated Software                (X) Yes                   ( ) No

St. Louis - Exhibit 1                                                                   $1,255,681.00
-----------------------------------------------                                         -------------

Santa Ana - Exhibit 2                                                                   $  448,466.00
-----------------------------------------------                                         -------------

Chicago - Exhibit 3                                                                     $  137,127.00
-----------------------------------------------                                         -------------

Peoria - Exhibit 4                                                                      $  190,288.00
-----------------------------------------------                                         -------------

Vallejo - Exhibit 5                                                                     $  191,759.00
-----------------------------------------------                                         -------------

Houston - Exhibit 6                                                                     $  205,630.00
-----------------------------------------------                                         -------------

                                                                   Equipment & Associated SW Subtotal   $ 2,428,951.00
                                                                                                        --------------

Other                                          ( ) Yes                   (X) No

*Training                                      (X) Yes, see section 3.3  ( ) No

</TABLE>



<PAGE>
<TABLE>
<CAPTION>


                                   SCHEDULE A
                            TO AFS CUSTOMER AGREEMENT

Item Name                                                                                           Total Cost
--------------------------------------------------------------------------------------------------------------

*Implementation/Testing                     (X) Yes, see section 3.4   ( ) No

<S>                                                                             <C>             <C>
St. Louis - Attachment 1                                                        $ 534,400.00
-------------------------------------------------                               ------------

Santa Ana - Attachment 2                                                        $  37,700.00
-------------------------------------------------                               ------------

Chicago - Attachment 3                                                          $  32,700.00
-------------------------------------------------                               ------------

Peoria - Attachment 4                                                           $   7,700.00
-------------------------------------------------                               ------------

Vallejo - Attachment 5                                                          $   7,700.00
-------------------------------------------------                               ------------

Houston - Attachment 6                                                          $  33,700.00
-------------------------------------------------                               ------------

                                                                           Services Subtotal   $    653,900.00
                                                                                               ---------------
                                                                           Contract Subtotal   $  5,545,351.00
                                                                                               ---------------
                                                                                    Discount   $ (1,930,222.00)
                                                                                               ---------------
                                                                             *Contract Total   $  3,615,129.00
                                                                                               ---------------

*This contract price does not include travel & living  expenses,  transportation and any  applicable  taxes.
These expenses will be billed at actual cost unless otherwise agreed.

**Shipping:  All risk of loss passes to CUSTOMER  when goods are FOB at point of shipping. AFS shall advance
all  shipping  and  associated  costs and CUSTOMER agrees to  reimburse AFS  for  same. If CUSTOMER  desires
insurance  coverage on the goods while in transit,  it must notify AFS in writing of  the amount of coverage
required and agree to reimburse AFS for the costs or make arrangements  directly with the carrier.

***In order to minimize  costs,  AFS often  books  non-refundable  reservations.  CUSTOMER agrees to pay for
the  cost  of any  reservations  lost or any rescheduling fees incurred due to a delay that is the result of
CUSTOMER'S request or fault.

Support                             (X) Yes, see section 4    ( ) No

St. Louis - Attachment 1                                                        $ 402,522.00
-------------------------------------------------                               ------------

Santa Ana - Attachment 2                                                        $   4,500.00
-------------------------------------------------                               ------------

Chicago - Attachment 3                                                          $   3,600.00
-------------------------------------------------                               ------------

Peoria - Attachment 4                                                           $          -
-------------------------------------------------                               ------------

Vallejo - Attachment 5                                                          $          -
-------------------------------------------------                               ------------

Houston - Attachment 6                                                          $   3,600.00
-------------------------------------------------                               ------------

                                                                        Annual Support Total    $   414,222.00
                                                                                                --------------
</TABLE>


<PAGE>


                                   SCHEDULE A
                            TO AFS CUSTOMER AGREEMENT

                        Additional Terms and Conditions
--------------------------------------------------------------------------------

The following terms and conditions  supersede any conflicting  provisions in the
AFS Customer Agreement with respect to the transactions described herein:

1.  Section  4.1(e) of the  Agreement  is  revised  to read as  follows  and the
following new 4.1(f) is added to read as follows:

"(e) AFS will provide  CUSTOMER with the latest  enhancements and corrections to
the Software at a charge of Ten Dollars  ($10.00) plus shipping,  as they become
generally   available.   CUSTOMER  shall  be  responsible   for  any  additional
third-party  software  and/or  hardware  costs,  onsite AFS support fees and any
associated travel expenses with respect to any such enhancements and corrections
and their installation. With respect to any additional third-party software that
is  recommended  by AFS and is installed as part of the CUSTOMER  solution,  AFS
will advise CUSTOMER when third-party software enhancements, corrections, or new
releases are recommended or required for the AFS Software Solution.

(f) Provided CUSTOMER has a current support agreement in effect AFS will provide
Thin Client and .Net to CUSTOMER,  and the latest  enhancements  for Thin Client
and .Net to the Software  for the  products  the CUSTOMER has  purchased as they
become generally available pursuant to subsection (e) above."

2. Section 1.3 is deleted and replaced by the following:

"(a)  Payment  for  the  Licensed   Software  and  any   associated   Equipment,
implementation  of the System and  initial  training  shall be made as  follows:
Thirty  percent  (30%) of all sites upon  execution  of this  Agreement;  thirty
percent  (30%) of each sites  individual  total upon  shipment for that specific
site;  thirty percent (30%) of each sites individual total upon installation for
that  specfic  site,  which  shall  occur  when the  System  has the  ability to
correctly run all  diagnostic  tests at the site;  and the remaining ten percent
(10%) for each upon CUSTOMER'S acceptance of the System at that site. Acceptance
shall occur when the item is capable of substantially performing in all material
respects  according  to the  requirements  of any  Statement  of Work  or  other
mutually agreed acceptance criteria.  Provided that the payments during calendar
year 2004  shall in no event  exceed  the sum of $1.8  million  dollars  and any
amount in excess  thereof for calendar  year 2004 shall be fully paid in January
2005.

(b) AFS shall invoice  CUSTOMER for the AFS Software Support Service fees as per
Schedule A. Support  fees shall  commence  for each  software  product when that
product  is  accepted.  Acceptance  shall  occur  when  the item is  capable  of
substantially  performing in all material respects according to the requirements
of any Statement of Work or other mutually agreed acceptance criteria.

(c) Any invoices for amounts due upon execution of this  Agreement  shall be due
upon receipt.  This  Agreement is not effective  until it is accepted by AFS and
the amounts due upon execution of this Agreement are received by AFS. Payment to
AFS for all other invoices submitted hereunder shall be due within 45 days after
receipt of invoice.

(d) Pricing  stated on Schedule A, unless  expressly  stated  thereon,  does not
include charges for permitted  taxes,  shipping;  nor does it include,  CUSTOMER
approved travel and living expenses or additional services.  These charges shall
be invoiced and paid in full within 45 days of receipt.

(e) Any  additional  services  not covered by this  Agreement  must be agreed in
writing by an officer of the CUSTOMER.

3. Section 1.2 (b), (c), (d) are deleted and replaced by the following:

"(b) The annual fee for the AFS Software  support services shall be as set forth
on Schedule A. It is agreed that the cost of telephone calls pursuant to Section
4 is the  responsibility of the calling party.  Support fees may be changed upon
ninety (90) days written notice, but in no event increased more than once in any
twelve  (12)-month period and no more than five percent (5%) of the then current
annual Support Services fee for any one increase.



<PAGE>


                                   SCHEDULE A
                            TO AFS CUSTOMER AGREEMENT

                        Additional Terms and Conditions
--------------------------------------------------------------------------------

(c) CUSTOMER  agrees to reimburse AFS for all  reasonable  and necessary  actual
out-of  pocket  expenses,  including,  but not  limited to,  supplies,  lodging,
transportation and meals for each AFS representative,  incurred by AFS personnel
in the course of any travel  necessary to their  performance  of any services to
the benefit of and as approved by the Senior Vice  President of  Operations,  or
their designee, of the CUSTOMER.

(d) Any services not  described  herein that are  performed by AFS at CUSTOMER'S
written  request will be charged to CUSTOMER at AFS' hourly  software  servicing
rates then in effect.

4. Section 1.7 (b) is deleted and replaced by the following:

"(b) In the event any software  supplied by AFS is in AFS' opinion  likely to or
does  become the subject of such a suit or claim,  AFS may procure for  CUSTOMER
the right to continue using such item, replace or modify such item with items of
equal or superior  functionality  so that it becomes  non-infringing,  or remove
such item from  CUSTOMER'S  site. In the event any item is held to constitute an
infringement in such a suit or proceeding or its use is enjoined, AFS shall take
one of the foregoing actions. In the event of the removal of Software, AFS shall
refund to CUSTOMER all  payments for the license or use of the software  removed
received from the CUSTOMER."

5. Section 1.12, is deleted and replaced by the following: "This Agreement shall
be governed by,  construed and enforced  under,  and subject to, the laws of the
State of Missouri."

6. The  last  sentence  of  Section  1.15(b)  is  deleted  and  replaced  by the
following: "(b) No action, regardless of form, arising out of this Agreement may
be  brought  more than two (2)  calendar  years  after  the cause of action  has
arisen."

7. Section 2.1 (g) is deleted and replaced by the following:

"(g) All changes,  enhancements,  updates,  modifications  and error corrections
made to the  Licensed  Software  by AFS  will  run on and  with  the  CUSTOMER'S
equipment,  provided that CUSTOMER has  installed  all  previously  provided AFS
changes,  enhancements,  updates,  modifications  and error  corrections  in the
manner instructed by AFS.  CUSTOMER'S sole remedy under this warranty is limited
to the prompt  correction  by AFS of any program or  documentation  errors at no
additional charge to CUSTOMER."

8.  Notwithstanding any other terms herein, the licenses granted hereunder shall
be on the basis of the  volumes  tiers  attached  hereto as  Exhibit  A,  unless
otherwise stated on this Schedule A.

9. The first sentence of Section 3.1(c) is modified as follows:  "(c) Except for
backup  or  archival  purposes  and 1 test  system,  the  Software  shall not be
copied."

10. Section 3.2 (b) is deleted and replaced with the  following:  "(b) AFS shall
not charge  CUSTOMER  any  additional  amount for the initial 6 paper copies and
unlimited  use of an  electronic  copy  of the  documentation  provided  herein.
Updates will be provided at no additional cost."

11. Section 3.3 is deleted and replaced with the following:

"If  indicated  on  Schedule A,  training  shall be  conducted  pursuant to this
Section.  AFS  shall  provide  sufficient  initial  training  of the  CUSTOMER'S
personnel  and  employees at up to six sites for the purpose of enabling them to
understand  and properly  operate the System.  Additionally,  AFS shall  provide
sufficient  initial  training  of two  of  CUSTOMER'S  personnel,  concurrently,
designated as the System Administrator.  The System Administrator training shall
include but not be limited to system  security,  adding,  deleting,  authorizing
users,  communications,  and hardware failure  contingency  processing.  Initial
training shall be provided at the AFS Academy or other agreed  location,  at the
sole option of the CUSTOMER,  with  CUSTOMER to pay all its own travel  expenses
and training fees, if applicable. The dates of such training shall coincide with
installation  of the AFS  software.  If the  training is conducted at a location
other than the AFS Academy, CUSTOMER agrees to reimburse AFS for all reasonable,
necessary  actual  out-of-pocket  expenses,   including,  but  not  limited  to,



<PAGE>


                                   SCHEDULE A
                            TO AFS CUSTOMER AGREEMENT

                         Additional Terms and Conditions
--------------------------------------------------------------------------------

supplies,  lodging,  transportation  and meals  incurred by AFS personnel in the
course of any travel  necessary for their  performance  of the above training as
approved by CUSTOMER."

12. Section 3.4 (b) is modified as  follows:  "(b) CUSTOMER  agrees to reimburse
AFS for all reasonable and necessary actual out-of-pocket . . . "

13. Section 4.2 (a) is deleted and replaced with the following:

(a)  "The  parties   recognize  that  AFS  recommends   that  all   AFS-provided
enhancements,  updates and  modifications  to Licensed  Software be installed by
CUSTOMER in the manner instructed by AFS within sixty (60) days from the date of
receipt  from AFS and that all error  corrections  to the  Licensed  Software be
installed in the manner  instructed  by AFS within  fourteen  (14) days from the
date of receipt from AFS.  CUSTOMER has requested longer periods of time to take
such  actions.  The  parties  agree  that  Section  4.2(a) be amended to read as
follows:  "CUSTOMER  agrees to add all  AFS-provided  enhancements,  updates and
modifications to Licensed  Software in the manner instructed by AFS within sixty
(60) days from the date of receipt from AFS and to add all error  corrections to
the Licensed  Software in the manner instructed by AFS within fourteen (14) days
from the date of  receipt  from  AFS.  CUSTOMER  waives  and  agrees to hold AFS
harmless  from any  damages,  costs,  fees or  expenses  arising  from  CUSTOMER
electing to take a longer  period of time to take any such  actions  than stated
above."

14. Section 2(i) is an added as follows: "(i) Survival of Warranties:  The terms
contained in this  Agreement  shall survive the  termination  of this  Agreement
where the context implies that such was the intent of the parties."

15. Section 5 is added as follows:

"Section 5 - Miscellaneous

5.1 Advertising.
(a) AFS may not use the  CUSTOMER'S  name or refer to the  CUSTOMER  directly or
indirectly in any advertisement, news release or release to any professional or
trade publications without the CUSTOMER'S prior written approval."

5.2 Risk of Loss.
(b) CUSTOMER shall be  responsible  for protecting the System from risk of loss.
In the event of such loss,  the  portion  of the  Software  program(s)  so lost,
damaged or destroyed,  shall be replaced by AFS upon written  request at no cost
to CUSTOMER. If CUSTOMER so desires  re-installation  support, this support will
be chargeable at AFS' hourly software servicing rates then in effect.

5.3 AFS hereby represents,  covenants and warrants that no payments,  whether in
the form of money, property, services, or any other forms of consideration,  has
been  made or will be made by AFS or on behalf  of AFS for  direct  or  indirect
benefit  of any  employee,  officer,  director  or  agent of the  CUSTOMER,  any
subsidiaries  or affiliates  thereof the CUSTOMER  whether in  connection  with,
arising out of or in any way relating to the execution of this  Agreement by the
CUSTOMER or any instruments relating there to by the CUSTOMER.

5.4 Informal Dispute Resolution.

Any  controversy  or claim  arising out of or relating  to this  Agreement,  the
breach  thereof  or the  relationship  of the  parties  ("Dispute")  under  this
Agreement shall be resolved as follows:

(a) Upon  written  request  of  either  party,  both  parties  shall  appoint  a
designated  representative  whose  task it will be to meet  for the  purpose  of
endeavoring to resolve such Dispute.

(b) The designated representatives shall meet as often as the parties reasonably
deem  necessary  to discuss  the  problem in an effort to  resolve  the  Dispute
without the necessity of any formal proceeding.
<PAGE>

                                   SCHEDULE A
                            TO AFS CUSTOMER AGREEMENT

                        Additional Terms and Conditions
--------------------------------------------------------------------------------

(c) Formal  proceedings  for the  resolution  of a Dispute may not be  commenced
until the earlier of:
a.  The  designated  representatives  concluding  in good  faith  that  amicable
resolution  through continued  negotiation of the matter does not appear likely;
or
b. The expiration of the 21 day period immediately following the initial request
to negotiate the Dispute.

(d) Pending the  outcome of the  informal  dispute  process  described  in  this
Section,  CUSTOMER shall hold in escrow any payments that are the subject matter
of the Dispute in an interest  bearing  account,  providing  that all undisputed
amounts  shall be paid in full when due.  Said  amount(s)  shall be  released by
CUSTOMER upon resolution of the Dispute in accordance with this Section.  If the
Dispute is  submitted  to  arbitration,  CUSTOMER  shall  continue to escrow any
payments that are the subject  matter of the Dispute and amounts that may become
due  and  payable  to AFS  pending  the  arbitrators  decision  in  the  Dispute
Resolution section herein.

5.5 Dispute Resolution.

AFS and  CUSTOMER  agree that if any  dispute or  controversy  relating  to this
Agreement  arises between them, they will exert all possible  efforts to resolve
and settle the dispute in  accordance  with  Section  5.4.  If AFS and  CUSTOMER
cannot reach a mutually agreeable  settlement through  conciliation or mediation
within the time frame set forth in Section 5.4, they agree that any  controversy
or claim arising out of or relating to this  Agreement,  or the breach  thereof,
shall be settled by arbitration in accordance with the then existing Arbitration
Rules of the American Arbitration Association (AAA), as modified herein.

Each demand for arbitration shall describe the claim and relief sought. Disputes
will be heard and determined by a panel of three  arbitrators  chosen by AAA who
each are experienced and  knowledgeable  in the practices  generally of the data
processing  industry,  and at least one of the arbitrators  will be an attorney.
The place of arbitration shall be St. Louis, Missouri or such other place as the
parties may agree if AFS initiates  arbitration  and Oklahoma City,  Oklahoma if
CUSTOMER initiates arbitration.

Except as set  forth  below,  judgment  upon any  award of the  majority  of the
arbitrators  shall be final,  binding and conclusive and may be entered upon the
motion  of either  party in any  court  having  jurisdiction  thereof  or having
jurisdiction  over one or more of the parties or their assets.  The award of the
arbitrators  may grant any relief that might be granted by a court of  competent
jurisdiction  and shall be rendered  within twenty (20) days from  completion of
the Hearing,  which shall commence  within 60 days from the initial  request for
arbitration. At the Hearing each party shall be afforded up to five (5) hours to
present its case.. Either party, before or during any arbitration,  may apply to
a court of  competent  jurisdiction  for  equitable  relief where such relief is
necessary to protect its interests pending completion of the arbitration.

The costs and expenses of each  arbitration  hereunder  and their  apportionment
between the parties  will be  determined  by the  arbitrators  in their award or
decision.

5.6 Non-Interference

AFS hereby warrants that it will not include any computer  instructions or other
items in any software whose purpose is to (1) permit  unauthorized  access;  (2)
disable hardware; (3) improperly disable or erase software; (4) improperly erase
or alter data;  or (5) perform any other action  deleterious  to the CUSTOMER or
its customers.

5.7 Software Escrow Currency

The Software  source code that is changed will be sent for update to the "Source
Code Escrow Program" promptly with general release.

5.8 Software Availability and Frequency of Updates

AFS agrees to support the Software,  including  enhancements,  new releases, and
corrections, for at least 6 years. AFS agrees to provide updates to the Software
at least 3 times during this period.

5.9 Customer Acceptance
<PAGE>

                                   SCHEDULE A
                            TO AFS CUSTOMER AGREEMENT

                         Additional Terms and Conditions
--------------------------------------------------------------------------------

Customer  Acceptance  of the AFS  Software  installation  will be in writing and
approved by the Executive Vice President and Director of Operations,  the Senior
Vice President of Operations or their designee.


16. The Project  Management  Team,  including  the PM,  assigned to this project
shall be  sufficiently  competent and capable of successfully  performing  their
assignment  hereunder  and shall  have this  project as a first  priority  until
completion.

17.  Acceptance  shall occur, on a per site basis,  when the System at a site is
capable of performing  substantially in accordance with the requirements for the
site of the  mutually  agreed  Statement  of Work (SOW).  The SOW,  when finally
agreed, shall become a part of this Agreement.

18.  AFS  agrees  to  fully  comply  with  the  requirements  of the  Escalation
Procedures as attached hereto as Exhibit B.

19.  Parties  agree to use their best  efforts to develop and execute a mutually
agreed  statement of work on or before March 31, 2004 unless otherwise agreed by
the parties. If the statement of work is not completed by such date, the parties
agree that this agreement  shall terminate and the parties shall have no further
obligation  to one another  hereunder  and all monies paid by CUSTOMER  shall be
returned.

20. Notwithstanding any other provisions herein, either party may terminate this
Agreement by giving written notice of termination received by the other party on
or before  February  28, 2004.  If the  Agreement  is so  terminated,  AFS shall
promptly  refund any funds  received from CUSTOMER and the parties shall have no
further obligations hereunder.



<PAGE>



                                   SCHEDULE A
                            TO AFS CUSTOMER AGREEMENT

                                     Notices
--------------------------------------------------------------------------------


TO AFS:                                          TO LICENSEE:

Attn: Rod Kroutil, CFO                           Attn: Allen H. Blake
Advanced Financial Solutions, Inc.               First Banks, Inc.
1200 Sovereign Row                               600 James S. McDonnell Blvd.
Oklahoma City, OK 73108                          Hazelwood. MO  63042
Phone (405) 787-1800                             Phone: (314) 592-6601
Fax:  (405) 787-8833                             Fax:

                                     Escrow
--------------------------------------------------------------------------------

Escrow     [ ] Yes, we wish to enroll as a  Preferred Beneficiary in  the Source

               Code Escrow Program provided by DSI as  described in Section 3.6.

               We acknowledge the cost to our institution  is currently $650 per

               year  and  will  be  invoiced  by  and paid  directly to DSI.  By

               checking the box, we request AFS to forward an enrollment form to

               the person listed directly above.


           [ ] No, we do not wish to enroll in the Source Code Escrow Program at
               this time.


                     Tax Information and Signatures Required
--------------------------------------------------------------------------------

County and State where goods and/or services are to be provided:

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

If CUSTOMER is non-taxable,  please provide  certificate  number and state below
and include copy of permit upon return of the contract:

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

             "AFS"                                      "CUSTOMER"
ADVANCED FINANCIAL SOLUTIONS, INC.                  FIRST BANKS, INC.
-----------------------------------          -----------------------------------


By: /s/ Rodney L. Kroutil                    By:/s/ Terrance M. McCarthy
-----------------------------------          -----------------------------------
Print Name: Rodney L. Kroutil                Print Name: Terrance M. McCarthy
-----------------------------------          -----------------------------------
Title: Chief Financial Officer               Title: Chief Operating Officer
-----------------------------------          -----------------------------------
Date Accepted:  1-30-04                      Date: January 29, 2004
-----------------------------------          -----------------------------------



<PAGE>
<TABLE>
<CAPTION>
                           ATTACHMENT 1 TO SCHEDULE A
                               ST. LOUIS LOCATION
Item Name                                                                                                        Total Cost
---------------------------------------------------------------------------------------------------------------------------

AFS Software (includes any manuals, specifications and documentation)  (X)Yes           ( ) No

                                                                                      QTY
ImageVision 1, 2 and 3 Enterprise Volume License- up to
<S>                                                                                    <C>      <C>
monthly volume of 8mm- $740,000 (per Exhibit A0                                        1        $ 520,000.00
------------------------------------------------------------------                  ------      ------------
ImageVision DREAM- 6-8million items per month (per Exhibit A)                          1        $  75,000.00
------------------------------------------------------------------                  ------      ------------

Fraud Control and Positve Pay Package (Fraud control includes
the following filters: High Dollar, Special Watch, New Account
Large Deposit, Non-MICR, Serial Variance, Amount Variance,
Multiple Deposits, Kiting, NSF Screening)                                              1        $  85,000.00
------------------------------------------------------------------                  ------      ------------
TellerVision API                                                                       1        $  75,000.00
------------------------------------------------------------------                  ------      ------------
IV Signature Verification                                                              1        $  35,000.00
------------------------------------------------------------------                  ------       -----------
CMS Adjustments                                                                        1        $  75,000.00
------------------------------------------------------------------                  ------      ------------
Incoming Returns                                                                       1        $  90,000.00
------------------------------------------------------------------                  ------      ------------
Outgoing Returns                                                                       1        $  30,000.00
------------------------------------------------------------------                  ------      ------------
USDP-(Includes custom statement formatter, ad-hoc reprinting
from Depot, E-Statements)                                                              1        $ 100,000.00
------------------------------------------------------------------                  ------      ------------
CD/DVD Vision - CD Publishing, Up to 4 Writers                                         1        $  25,000.00
------------------------------------------------------------------                  ------      ------------
ImageVision Courier (enables Image Exchange directly from
IP system)                                                                             1        $  25,000.00
------------------------------------------------------------------                  ------      ------------
ImageVision Branch Capture                                                            150       $ 225,000.00
------------------------------------------------------------------                  ------      ------------
iBox (1-499 boxes)                                                                     1        $  30,000.00
------------------------------------------------------------------                  ------      ------------
ImageVision/Remittance - Dual Page Scanners All Types <100DPM                          2        $  10,000.00
------------------------------------------------------------------                  ------      ------------
ImageDepot, 50 Client License                                                          1        $  50,000.00
------------------------------------------------------------------                  ------      ------------
eVision, Check, 200 client license                                                     1        $  37,500.00
------------------------------------------------------------------                  ------      ------------
eVision Admin, 25 client license                                                       1        $  15,000.00
------------------------------------------------------------------                  ------      ------------
Home Banking API, 50 client license                                                    1        $  25,000.00
------------------------------------------------------------------                  ------      ------------
Audit Service, 250-500K average items per day                                          1        $  20,000.00
------------------------------------------------------------------                  ------      ------------
Depot Express, End User is Consumer/Corporation
(Unlimited client licenses)                                                            1        $   5,000.00
------------------------------------------------------------------                  ------      ------------
ScanStation, Per Scanner License - Scanner 41-80 ppm,
includes 15 indexing Station License                                                   2        $  30,000.00
------------------------------------------------------------------                  ------      ------------
Image Depot, file folder, 50 client licenses                                           1        $  50,000.00
------------------------------------------------------------------                  ------      ------------
eVision, Document, 100 client licenses                                                 1        $  50,000.00
------------------------------------------------------------------                  ------      ------------
COLD                                                                                   1        $  65,000.00
------------------------------------------------------------------                  ------      ------------

                                                                                       AFS Software Subtotal $ 1,747,500.00
                                                                                                             --------------

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                           ATTACHMENT 1 TO SCHEDULE A
                               ST. LOUIS LOCATION

Item Name                                                                                                        Total Cost
---------------------------------------------------------------------------------------------------------------------------

Third Party Software                        (X)Yes            ( ) No

<S>                                                                                 <C>         <C>            <C>
Mitek- 700 DPM Car License                                                             6        $ 640,000.00
----------------------------------------------------------------                    ------      ------------
CheckClear Endpoint Exchange Client Software                                           1        $  10,000.00
----------------------------------------------------------------                    ------      ------------

                                                                           Third Party Software Subtotal      $  650,000.00
                                                                                                              -------------

Equipment & Associated Software             (X) Yes see exhibit 1      ( ) No                                 $1,255,681.00
                                                                                                              -------------
Other                                       ( ) Yes                    (X) No

*Training                                   (X) Yes, see section 3.3   ( ) No

*Implementation/Testing                     (X) Yes, see section 3.4   ( ) No

AFS CAR/LAR Installation Fee                                                                    $  20,000.00
----------------------------------------------------------------                                ------------
ImageVision Beginning System Administrator: 3 days required,
1/2 day optional                                                                                $   3,200.00
----------------------------------------------------------------                                ------------
ImageDepot Administrator: 2 days required                                                       $   7,200.00
----------------------------------------------------------------                                ------------
ImageVision Operator Training (per day)                                                         $   2,000.00
----------------------------------------------------------------                                ------------
ImageDepot Client training (per day)                                                            $  12,000.00
----------------------------------------------------------------                                ------------
AFS Staging Services (Qty 40)                                                                   $  20,000.00
----------------------------------------------------------------                                ------------
ImageVision Installation and Training                                                           $ 125,000.00
----------------------------------------------------------------                                ------------
ImageDepot Installation and Training                                                            $  25,000.00
----------------------------------------------------------------                                ------------
eVision Installation and Training                                                               $  25,000.00
----------------------------------------------------------------                                ------------
Project Management Services                                                                     $ 100,000.00
----------------------------------------------------------------                                ------------
Fraud Prevention Implementation                                                                 $  15,000.00
----------------------------------------------------------------                                ------------
Adjustments Implementation                                                                      $  15,000.00
----------------------------------------------------------------                                ------------
Returns Implementation                                                                          $  30,000.00
----------------------------------------------------------------                                ------------
Statements Implementation                                                                       $  25,000.00
----------------------------------------------------------------                                ------------
ImageExchange Implementation                                                                    $   5,000.00
----------------------------------------------------------------                                ------------
Branch Capture Initial Implementation                                                           $  35,000.00
----------------------------------------------------------------                                ------------
Remittance Implementation                                                                       $  25,000.00
----------------------------------------------------------------                                ------------
Document/COLD Archive Implementation                                                            $  20,000.00
----------------------------------------------------------------                                ------------
Remittance Set-Up Services: includes Single Application
Set-Up,4 Extract, Standard Reports, Testing, On-Site
Installation                                                                                    $   7,500.00
----------------------------------------------------------------                                ------------
</TABLE>


<PAGE>

<TABLE>
<CAPTION>


                           ATTACHMENT 1 TO SCHEDULE A
                               ST. LOUIS LOCATION

Item Name                                                                                                        Total Cost
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>               <C>
On-Site Operations Training - 1 Weeks                                                           $   7,500.00
----------------------------------------------------------------                                ------------
Remittance System Project Management Services                                                   $  10,000.00
----------------------------------------------------------------                                ------------

                                                                                           Services Subtotal  $  534,400.00
                                                                                                              -------------

                                                                                       Contract Subtotal     $ 4,187,581.00
                                                                                                             --------------

                                                                                                 Discount    $(1,402,335.00)
                                                                                                             --------------

                                                                                          *Contract Total    $ 2,785,246.00
                                                                                                             --------------

*This contract price does not include travel & living  expenses,  transportation and any  applicable  taxes.
These expenses will be billed at actual cost unless otherwise agreed.

**Shipping:  All risk of loss passes to CUSTOMER  when goods are FOB at point of shipping. AFS shall advance
all  shipping  and  associated  costs and CUSTOMER agrees to reimburse AFS  for  same.  If  CUSTOMER desires
insurance  coverage on the goods while in transit,  it  must notify AFS in writing of the amount of coverage
required and agree to reimburse AFS for the costs or make arrangements directly with the carrier.

***In order to minimize  costs,  AFS often  books  non-refundable  reservations.  CUSTOMER agrees to pay for
the  cost  of  any  reservations lost or any rescheduling fees incurred due to a delay that is the result of
 CUSTOMER'S request or fault.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                           ATTACHMENT 1 TO SCHEDULE A
                               ST. LOUIS LOCATION

Item Name                                                                                                        Total Cost
---------------------------------------------------------------------------------------------------------------------------

Support                                     (X) Yes, see section 4     ( ) No

ImageVision 1, 2 and 3 Enterprise Volume License- up to
<S>                                                                                               <C>        <C>
monthly volume of 8mm- $740,000                                                                  $ 93,600.00
-----------------------------------------------------------                                      -----------

ImageVision DREAM- 6-8million items per month                                                    $ 13,500.00
-----------------------------------------------------------                                      -----------
Fraud Control and Positve Pay Package (Fraud control
includes the following filters: High Dollar, Special
Watch, New Account Large Deposit, Non-MICR, Serial
Variance, Amount Variance, Multiple Deposits, Kiting,
NSF Screening)                                                                                   $ 15,300.00
-----------------------------------------------------------                                      -----------
TellerVision API                                                                                 $ 13,500.00
-----------------------------------------------------------                                      -----------
IV Signature Verification                                                                        $  6,300.00
-----------------------------------------------------------                                      -----------
CMS Adjustments                                                                                  $ 13,500.00
-----------------------------------------------------------                                      -----------
Incoming Returns                                                                                 $ 16,200.00
-----------------------------------------------------------                                      -----------
Outgoing Returns                                                                                 $  5,400.00
-----------------------------------------------------------                                      -----------
USDP-(Includes custom statement formatter, ad-hoc
reprinting from Depot, E-Statements)                                                             $ 18,000.00
-----------------------------------------------------------                                      -----------
CD/DVD Vision - CD Publishing, Up to 4 Writers                                                   $  4,500.00
-----------------------------------------------------------                                      -----------
ImageVision Courier (enables Image Exchange directly from
IP system)                                                                                       $  4,500.00
-----------------------------------------------------------                                      -----------
ImageVision Branch Capture                                                                       $ 40,500.00
-----------------------------------------------------------                                      -----------
iBox (1-499 boxes)                                                                               $  5,400.00
-----------------------------------------------------------                                      -----------
ImageVision/Remittance - Dual Page Scanners
All Types <100DPM                                                                                $  1,800.00
-----------------------------------------------------------                                      -----------
ImageDepot, 50 Client License                                                                    $  9,000.00
-----------------------------------------------------------                                      -----------
eVision, Check, 200 client license                                                               $  6,750.00
-----------------------------------------------------------                                      -----------
eVision Admin, 25 client license                                                                 $  2,700.00
-----------------------------------------------------------                                      -----------
Home Banking API, 50 client license                                                              $  4,500.00
-----------------------------------------------------------                                      -----------
Audit Service, 250-500K average items per day                                                    $  3,600.00
-----------------------------------------------------------                                      -----------
ScanStation, Per Scanner License - Scanner 41-80 ppm,
includes 15 indexing Station License                                                             $  5,400.00
-----------------------------------------------------------                                      -----------
Image Depot, file folder, 50 client licenses                                                     $  9,000.00
-----------------------------------------------------------                                      -----------
eVision, Document, 100 client licenses                                                           $  9,000.00
-----------------------------------------------------------                                      -----------
COLD                                                                                             $ 11,700.00
-----------------------------------------------------------                                      -----------
Mitek- 700 DPM Car License                                                                       $ 87,072.00
-----------------------------------------------------------                                      -----------
CheckClear Endpoint Exchange Client Software                                                     $  1,800.00
-----------------------------------------------------------                                      -----------

                                                                                        Annual Support Total $   402,522.00
                                                                                                             --------------
</TABLE>
<PAGE>

<TABLE>
<CAPTION>

                                      Exhibit 1 - St. Louis

                                        Description                                    Qty          Price
-------------------------------------------------------------------------------------------------------------------
                                     PC's and Servers
--------------------------------------------------------------------------------

Sorter Controller, Dell Optiplex GX-260 (Desktop), Pentium 4 2.4GHz Processor,
<S>                                                                                      <C>   <C>
256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor                   3     Customer Furnished
Speedfirst Interface Hardware kit, 2 X 10/100 Network Cards, 2 X 25
foot Crossover Cable                                                                     3                   $474
Workstation, Dell Optiplex GX-260 (Mini Tower), Pentium 4 2.4GHz
Processor, 256MB RAM, 40GB Hard Drive, Windows 2000 Professional,
17 inch Monitor, Headset                                                                 8      Customer Furnished
Application Server, Dell PowerEdge 2650 Server (Rack Mount), Dual
Xeon 2.4GHz Processors, 1GB RAM, 2X18GB Hard Drives Mirrored, Windows
2000 Server                                                                              1      Customer Furnished
DMZ Server,Dell PowerEdge 2650 Server (Rack Mount), Single Xeon 2.4GHz
Processor, 1GB RAM, 2X18GB Hard Drives Mirrored, Windows 2000 Server                     1      Customer Furnished
Vision Storage Unit, Dell Poweredge 2600 Server (Rack), Dual Xeon 2.4GHz
Processors, 2GB RAM, 2X18GB Hard Drives Mirrored, Windows 2000 Server                    1      Customer Furnished
Vision Storage Unit, Dell Poweredge 2600 Server (Rack), Dual Xeon 2.4GHz
Processors, 2GB RAM, 2X18GB Hard Drives Mirrored, Windows 2000 Server
(test server)                                                                            1      Customer Furnished
Image Capture Unit, Dell Optiplex GX-260 (Desktop), Pentium 4 2.4GHz Processor,
256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor, Rack
w/ 8-Port Power Strip, 4-Port KVM Switchbox and cables                                   3      Customer Furnished
Database Server, Dell PowerEdge 2600 Server (Rack), Dual Xeon 2.4GHz processors,
2GB RAM, 2X18GB Hard Drives (Mirrored), 3X73GB Hard Drives (RAID 5), Windows
2000 Server                                                                              1      Customer Furnished
Dell Poweredge 4210, 7' Equipment Rack w/ side panel kit, keyboard/
mouse drawer w/ keyboard, stabilizing feet, monitor/utility shelf w/17"Monitor,
Switchbox & Cables, Power Strip                                                          2      Customer Furnished
Dell PC Anywhere Gateway PC: Optiplex GX-260 (Small Desktop) Pentium 4 2.4GHz
Processor, 256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch
Monitor, Multitech modem, modem cable, (1) PC Anywhere host/remote license               1      Customer Furnished

Fraud
-----
Fraud Filter Server, Dell Poweredge 2600 Server (Rack Mount), Dual Xeon 2.4GHz
processors, 2GB RAM, 18GB OS Drives, 36GB Cache Drive, Windows 2000 Server, DDS4
Tape Drive, SQL Server Software                                                          1      Customer Furnished

Branch Capture
--------------
Unisys Scanner: Unisys SourceNDP, MICR E13B, front & rear image, 2 output
pockets, power supply, PCMCIA card, API software, rear ink jet endorse, CCITT/
JPEG dual image, 3COM adapter card                                                     150                $606,600
Branch Capture PC, Dell Optiplex GX-260 (Mini Tower), Pentium 4 2.4GHz Processor,
256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor                 150      Customer Furnished

ImageExchange
-------------
Dell Poweredge 2600 rack mount server, Xeon 2.4GHZ single processor, 1GB, 2 x
73GB drives mirrored (RAID 1), Windows Server 2003, Dual on-board NIC's, no
keyboard/mouse, 3 year on-site warranty                                                  1      Customer Furnished
Dell GX270 mini-tower, Xeon-2.4GHZ , 256MB, 40GB hard drive, Windows 200
Professional, 10/100 NIC keyboard, mouse, 3 year on-site warranty                        1      Customer Furnished

Statements
----------
Network Print Server - 1 to 3 Printers, Dell Optiplex GX-260 (Mini Tower),
Pentium 4 2.4GHz Processor, 512MB RAM, 40GB Hard Drive, Windows 2000
Professional, 17 inch Monitor, 18GB Cache Drive, SCSI Card & Cable                       1      Customer Furnished
Reprint Server - Dell Poweredge 1750 Server (Rack Mount), Xeon 2.4GHz
Processor, 1GB RAM, 2X73GB Hard Drives (Mirrored), 73GB Cache Drive, Windows
2000 Server                                                                              1      Customer Furnished

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                              Exhibit 1 - St. Louis


                                   Description                                          Qty            Price
------------------------------------------------------------------------------------------------------------------
                                     Storage
--------------------------------------------------------------------------------

Storage and back-up solution provided by customer

Rimage Perfect Image Producer Autostar II DVD/CD Publishing System w/4 Writers,
<S>                                                                                      <C>               <C>
includes Control Center and Printer                                                      1                 $36,995

                              Additional Components
--------------------------------------------------------------------------------

PC Anywhere Remote License version 10.5 - need 1 license per PC / server                26      Customer Furnished

Catalyst 2950G 48-port 10/100 Switch with 2 Gigabit Ports                                1      Customer Furnished

Microsoft SQL Server 2000 - Open License - Per Processor                                 2      Customer Furnished
Microsoft SQL Server 2000 - Open License - Media Pack                                    1      Customer Furnished

                              AFS Support Services
--------------------------------------------------------------------------------

Support services: Zetafax single line - 5 user fax software, (1) 56K external
modem, Norton Ghost back-up software (25 user), 80 GB Snap Server                        1                  $1,692

                                    Scanners
--------------------------------------------------------------------------------
Check
Unisys Scanner: Unisys SourceNDP, MICR E13B, front & rear image, 2 output
pockets, power supply, PCMCIA card, API software, rear ink jet endorse,
CCITT/JPEG dual image, 3COM adapter card                                                 2                  $8,088

Remittance Check and Coupon scanners
Unisys Scanner: Unisys SourceNDP, MICR E13B, front & rear image, 2 output
pockets, power supply, PCMCIA card, API software, rear ink jet endorse,
CCITT/JPEG dual image, OCR Reader, 3COM adapter card                                     3                 $12,918

Remittance Document scanners
Bell & Howell 2020 duplex flatbed scanner: 76PPM, up to 400dpi, Kofax
adrenaline video accel board, Kofax SCSI cable                                           2                 $22,072


                                Document Scanners
--------------------------------------------------------------------------------

Scan Station PC, Dell Optiplex GX-260 (Mini Tower), Pentium 4 2.4GHz Processor,
256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor, Headset          2      Customer Furnished

Bell & Howell 8080D duplex scanner: 80PPM, 200/400dpi scaleable, Kofax
adrenaline video processing accelerator board, Kofax 8000 series video cable             2                 $43,232


                           E-Series Transport 1150 DPM
--------------------------------------------------------------------------------

Dual image w/IQA - mixed bitonal/grayscale                                               3                $337,050
700 DPM encoder - E13B                                                                   2                $162,920
Speedfirst - Windows NT Field Upgrade                                                    3                 $23,640

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                              Exhibit 1 - St. Louis

                                  Description                                          Qty                Price
------------------------------------------------------------------------------------------------------------------
                           Courtesy Amount Recognition
--------------------------------------------------------------------------------

Dell Dual Processor CAR PC, Dell Precision 450 (Desktop), Dual Xeon 2.4GHz
<S>                                                                                      <C>    <C>
w/512 MB, 100TX, Windows 2000 Professional, 40GB Hard Drive                              8      Customer Furnished
Dell Rackshelf                                                                           4      Customer Furnished
Dell Poweredge 4210, 7' Equipment Rack w/ side
panel kit, keyboard/mouse drawer w/ keyboard, stabilizing feet, monitor/utility
shelf w/17"Monitor, Switchbox & Cables, Power Strip                                      2      Customer Furnished
                                                                                                ------------------
                                                                  Exhibit 1 - St. Louis Total           $1,255,681
</TABLE>

Plus applicable freight, taxes and transport installation.

Note: AFS provides  support for AFS software  products only. Third party support
costs are estimates  only.  Actual support costs will be determined by the third
party provider(s) based on CUSTOMER's location and the coverage desired.


<PAGE>

<TABLE>
<CAPTION>

                           ATTACHMENT 2 TO SCHEDULE A
                               SANTA ANA LOCATION

                                  ImageVisionTM

Item Name                                                                                               Total Cost
------------------------------------------------------------------------------------------------------------------

AFS Software (includes any manuals, specifications and documentation)  (X) Yes  ( ) No

                                                                                QTY

<S>                                                                           <C>        <C>        <C>
iBox (1-499 boxes) additional site license                                       1       $15,000.00
-------------------------------------------------------------------           -----      ----------
ImageVision/Remittance - Additional Page Scanner All Types <100DPM               2       $10,000.00
-------------------------------------------------------------------           -----      ----------

                                                                             AFS Software Subtotal   $   25,000.00
                                                                                                     -------------
Third Party Software                         ( ) Yes                   (X) No

Equipment & Associated Software              (X) Yes, see exhibit 2    ( ) No                        $  448,466.00
                                                                                                     -------------
Other                                        ( ) Yes                   (X) No

*Training                                    (X) Yes, see section 3.3  ( ) No

*Implementation/Testing                      (X) Yes, see section 3.4  ( ) No

Remittance Set-Up Services: includes Single Application Set-Up,4
Extract, Standard Reports, Testing, On-Site Installation                                 $ 7,500.00
-------------------------------------------------------------------                      ----------
On-Site Operations Training - 1 Weeks                                                    $ 7,500.00
-------------------------------------------------------------------                      ----------
Remittance System Project Management Services                                            $10,000.00
-------------------------------------------------------------------                      ----------
AFS Staging Services (Qty 15)                                                            $ 7,500.00
-------------------------------------------------------------------                      ----------
ImageVision Beginning System Administrator: 3 days required,
1/2 day optional                                                                         $ 3,200.00
-------------------------------------------------------------------                      ----------
ImageVision Operator Training (per day)                                                  $ 2,000.00
-------------------------------------------------------------------                      ----------

                                                                                  Services Subtotal   $  37,700.00
                                                                                                      ------------
                                                                                  Contract Subtotal   $ 511,166.00
                                                                                                      ------------
                                                                                           Discount   $(206,669.00)
                                                                                                      ------------
                                                                                    *Contract Total   $ 304,497.00
                                                                                                      ------------

*This contract price does not include travel & living  expenses,  transportation and any  applicable  taxes.  These
 expenses will be billed at actual cost unless otherwise agreed.

**Shipping:  All risk of loss passes to CUSTOMER  when goods are FOB at point of shipping.  AFS shall  advance all
shipping  and  associated  costs and CUSTOMER agrees to  reimburse  AFS  for  same.  If CUSTOMER desires insurance
coverage on the goods while in transit,  it  must  notify  AFS  in  writing of the amount of coverage required and
agree to reimburse AFS for the costs or make arrangements  directly with the carrier.

***In order to minimize  costs,  AFS often  books non-refundable reservations. CUSTOMER agrees to pay for the cost
of any reservations lost or any rescheduling fees incurred due to a delay that is the result of CUSTOMER'S request
or fault.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                           ATTACHMENT 2 TO SCHEDULE A
                               SANTA ANA LOCATION

Item Name                                                                                               Total Cost
------------------------------------------------------------------------------------------------------------------

Support                             (X) Yes, see section 4     ( ) No

<S>                                                                                   <C>
iBox (1-499 boxes) additional site license                                               $ 2,700.00
-------------------------------------------------------------------                      ----------
ImageVision/Remittance - Additional Page Scanner All Types
<100DPM                                                                                  $ 1,800.00
-------------------------------------------------------------------                      ----------

                                                                               Annual Support Total    $  4,500.00
                                                                                                       -----------

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                              Exhibit 2 - Santa Ana

                                   Description                                         Qty           Price
------------------------------------------------------------------------------------------------------------------
                                PC's and Servers
--------------------------------------------------------------------------------

Sorter Controller, Dell Optiplex GX-260 (Desktop), Pentium 4 2.4GHz Processor,
<C>                                                                                     <C>     <C>
256MB RAM, 40GB Hard Drive,  Windows 2000 Professional, 17 inch Monitor                 2       Customer Furnished
Speedfirst Interface Hardware kit, 2 X 10/100 Network Cards, 2 X 25 foot
Crossover Cable                                                                         2                     $316
Workstation, Dell Optiplex GX-260 (Mini Tower), Pentium 4 2.4GHz Processor,
256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor, Headset         8       Customer Furnished
Vision Storage Unit, Dell Poweredge 2600 Server (Rack), Dual Xeon 2.4GHz
Processors, 2GB RAM, 2X18GB Hard Drives Mirrored, Windows 2000 Server
(Hot-Swappable Server and testing Server)                                               1       Customer Furnished
Image Capture Unit, Dell Optiplex GX-260 (Desktop), Pentium 4 2.4GHz Processor,
256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor, Rack w/
8-Port Power Strip, 4-Port KVM Switchbox and cables                                     2       Customer Furnished
Dell Poweredge 4210, 7' Equipment Rack w/ side panel kit, keyboard/mouse
drawer w/keyboard, stabilizing feet, monitor/utility shelf w/17"Monitor,
Switchbox & Cables, Power Strip                                                         1       Customer Furnished
Dell PC Anywhere Gateway PC: Optiplex GX-260 (Small Desktop) Pentium 4 2.4GHz
Processor,256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch
Monitor, Multitech modem, modem cable, (1) PC Anywhere host/remote license              1       Customer Furnished

Statements
----------
Network Print Server - 1 to 3 Printers, Dell Optiplex GX-260 (Mini Tower),
Pentium 4 2.4GHz Processor, 512MB RAM, 40GB Hard Drive, Windows 2000
Professional, 17 inch Monitor, 18GB Cache Drive, SCSI Card & Cable                      1       Customer Furnished

                                     Storage
--------------------------------------------------------------------------------

Storage and back-up solution provided by customer

                              Additional Components
--------------------------------------------------------------------------------

PC Anywhere Remote License version 10.5 - need 1 license per PC / server               16       Customer Furnished

Catalyst 2950G 48-port 10/100 Switch with 2 Gigabit Ports                               1       Customer Furnished

                               AFS Support Services
--------------------------------------------------------------------------------

Support services: Zetafax single line - 5 user fax software, (1) 56K external
modem, Norton Ghost back-up software (25 user), 80 GB Snap Server                       1                   $1,692

                                    Scanners
--------------------------------------------------------------------------------
Check
Unisys Scanner: Unisys SourceNDP, MICR E13B, front & rear image, 2 output
pockets, power supply, PCMCIA card, API software, rear ink jet endorse,
CCITT/JPEG dual image, 3COM adapter card                                                2                   $8,088

Remittance Check and Coupon scanners
Unisys Scanner: Unisys SourceNDP, MICR E13B, front & rear image, 2 output
pockets, power supply, PCMCIA card, API software, rear ink jet endorse,
CCITT/JPEG dual image, OCR Reader, 3COM adapter card                                    3                  $12,918

Remittance Document scanners
Bell & Howell 2020 duplex flatbed scanner: 76PPM, up to 400dpi, Kofax
adrenaline video accel board, Kofax SCSI cable                                          2                  $22,072

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                              Exhibit 2 - Santa Ana

                                  Description                                          Qty               Price
------------------------------------------------------------------------------------------------------------------

                           E-Series Transport 1150 DPM
--------------------------------------------------------------------------------
<S>                                                                                     <C>               <C>
Dual image w/IQA - mixed bitonal/grayscale                                              2                 $224,700
700 DPM encoder - E13B                                                                  2                 $162,920
Speedfirst - Windows NT Field Upgrade                                                   2                  $15,760

                                                                                                      ------------
                                                                  Exhibit 2 - Santa Ana Total             $448,466

Plus applicable freight, taxes and transport installation.

Note: AFS provides  support for AFS software  products only. Third party support costs are estimates  only.  Actual
support costs will be determined by the third party provider(s) based  on  CUSTOMER's  location  and  the  coverage
desired.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                           ATTACHMENT 3 TO SCHEDULE A
                                CHICAGO LOCATION

                                  ImageVisionTM
Item Name                                                                                                        Total Cost
---------------------------------------------------------------------------------------------------------------------------

A Software (includes any manuals, specifications and documentation)     (X) Yes    ( ) No

                                                                                     QTY
<S>                                                                                <C>     <C>                 <C>
iBox (1-499 boxes) additional site license                                            1       $15,000.00
-------------------------------------------------------------------                 -----     ----------
ImageVision/Remittance - Additional Page Scanner All Types <100DPM                    1       $ 5,000.00
-------------------------------------------------------------------                 -----     ----------
                                                                                    AFS Software Subtotal      $  20,000.00
                                                                                                               ------------

Third Party Software                         ( ) Yes                   (X) No

Equipment & Associated Software              (X) Yes, see exhibit 3    ( ) No                                  $ 137,127.00
                                                                                                               ------------
Other                                        ( ) Yes                   (X) No

*Training                                    (X) Yes, see section 3.3  ( ) No

*Implementation/Testing                      (X) Yes, see section 3.4  ( ) No

Remittance Set-Up Services: includes Single Application Set-Up,4
Extract, Standard Reports, Testing, On-Site Installation                                       $7,500.00
-------------------------------------------------------------------                          -----------
On-Site Operations Training - 1 Weeks                                                          $7,500.00
-------------------------------------------------------------------                          -----------
Remittance System Project Management Services                                                 $10,000.00
-------------------------------------------------------------------                          -----------
AFS Staging Services (Qty 5)                                                                   $2,500.00
-------------------------------------------------------------------                          -----------
ImageVision Beginning System Administrator: 3 days required,
1/2 day optional                                                                               $3,200.00
-------------------------------------------------------------------                          -----------
ImageVision Operator Training (per day)                                                        $2,000.00
-------------------------------------------------------------------                          -----------

                                                                                       Services Subtotal         $32,700.00
                                                                                                               ------------
                                                                                       Contract Subtotal        $189,827.00
                                                                                                               ------------
                                                                                                Discount        $(52,726.00)
                                                                                                               ------------
                                                                                         *Contract Total        $137,101.00
                                                                                                               ------------

*This contract price does not include travel & living  expenses,  transportation and any  applicable  taxes.  These expenses
will be billed at actual cost unless otherwise agreed.

**Shipping:  All risk of loss passes to CUSTOMER  when goods are FOB at point of shipping.  AFS shall  advance all  shipping
and  associated  costs and CUSTOMER agrees to reimburse AFS for same.  If CUSTOMER  desires insurance  coverage on the goods
while in transit,  it must notify AFS in writing of the amount of coverage required and agree to reimburse AFS for the costs
or make arrangements  directly with the carrier.

***In order to minimize  costs,  AFS often  books  non-refundable  reservations. CUSTOMER agrees to pay for the cost of any
reservations lost or any rescheduling fees incurred due to a delay that is the result of CUSTOMER'S request or fault.
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                               ATTACHMENT 3 TO SCHEDULE A
                                                    CHICAGO LOCATION

Item Name                                                                                                  Total Cost
---------------------------------------------------------------------------------------------------------------------

Support                             (X) Yes, see section 4    ( ) No

<S>                                                                                            <C>       <C>
iBox (1-499 boxes) additional site license                                                     $2,700.00
-------------------------------------------------------------------                           ----------
ImageVision/Remittance - Additional Page Scanner All Types <100DPM                               $900.00
-------------------------------------------------------------------                           ----------

                                                                                    Annual Support Total $   3,600.00
                                                                                                         ------------
</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                                              Exhibit 3 - Chicago

                                                  Description                        Qty             Price
------------------------------------------------------------------------------------------------------------------

                                PC's and Servers
--------------------------------------------------------------------------------

Workstation, Dell Optiplex GX-260 (Mini Tower), Pentium 4 2.4GHz Processor,
<S>                                                                                   <C>       <C>
256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor, Headset       3         Customer Furnished


Image Capture Unit/VSU, Dell Optiplex GX-260 (Desktop), Pentium 256MB RAM,
2 x 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor, Rack w/ 8-Port
Power Strip, 4-Port KVM Switchbox and cables                                          1         Customer Furnished

                              Additional Components
--------------------------------------------------------------------------------
PC Anywhere Remote License version 10.5 - need 1 license per PC / server              6         Customer Furnished

Catalyst 2950 24-Port 10/100 Switch                                                   1         Customer Furnished

                                     Storage
--------------------------------------------------------------------------------
Storage and back-up solution provided by customer

                              AFS Support Services
--------------------------------------------------------------------------------
Support services: Zetafax single line - 5 user fax software, (1) 56K external
modem, Norton Ghost back-up software (25 user), 80 GB Snap Server                     1                     $1,692

                                      Scanners
--------------------------------------------------------------------------------
Check
-----
Unisys Scanner: Unisys SourceNDP, MICR E13B, front & rear image, 2 output
pockets, power supply, PCMCIA card, API software, rear ink jet endorse, CCITT/
JPEG dual image, 3COM adapter card                                                    2                     $8,088

Remittance Check and Coupon scanners
------------------------------------
Unisys Scanner: Unisys SourceNDP, MICR E13B, front & rear image, 2 output
pockets, power supply, PCMCIA card, API software, rear ink jet endorse, CCITT/
JPEG dual image, OCR Reader, 3COM adapter card                                        1                     $4,306

Remittance Document scanners
----------------------------
Bell & Howell 2020 duplex flatbed scanner: 76PPM, up to 400dpi, Kofax
adrenaline video accel board, Kofax SCSI cable                                        1                    $11,036

                                   Unisys NDP 300
--------------------------------------------------------------------------------
NDP300-SSA addt'l 12 pocket stacker                                                   1                     $6,595
NDP300-IQM Image Quality Monitor software                                             1                       $995
NDP300-JPE 100DPI JPEG compression                                                    2                    $13,990
NDP300-PC3 Separate Track PC                                                          1                     $2,815
NDP300-IR Image Remittance Package, Includes: NDP300-B Console, NDP300-NPO No
Printer Option, NDP300-2FB Secondary Feeder, NDP300-RMN Rear MJE Endorser with
No Stamp, NDP300-EME E13B MICR Encoder, NDP300-SSE 12 Pockets Stacker;
NDP300-C20 Front Rear Camera, (2) NDP300-CCI CCITT Compression, NDP300-IML
Image Module with Cabinet, NDP300-FDA E13B & Dual Line OCR Reader, NDP17-MC1
17" monitor, NDP300-ICS ICS System Software, NDP300-SCH Standard Capacity
Feeder, NDP300-TCP TCP PCBA, NDP300-TNT Common API Software, NDP600-VHT
Medium Speed Video, NDP9999-IC5 Image Capture Workstation, NDP9999-INT Image
PC Interface, NDP9999-CP2 Windows 2000 Doc SW, NDP9999-TP2 Windows 2000 Doc
SW                                                                                    1                    $87,610
                                                                                                ------------------
                                                                  Exhibit 3 - Chicago Total               $137,127
</TABLE>

Plus applicable freight, taxes and transport installation.

Note: AFS provides  support for AFS software  products only. Third party support
costs are estimates  only.  Actual support costs will be determined by the third
party provider(s) based on CUSTOMER's location and the coverage desired.


<PAGE>
<TABLE>
<CAPTION>


                           ATTACHMENT 4 TO SCHEDULE A
                                 PEORIA LOCATION

                                  ImageVisionTM
Item Name                                                                                               Total Cost
------------------------------------------------------------------------------------------------------------------

AFS Software (includes any manuals, specifications and documentation)  ( ) Yes          (X) No

Third Party Software                             ( ) Yes                   (X) No

<S>                                                                                  <C>            <C>
Equipment & Associated Software                  (X) Yes, see exhibit 4    ( ) No                   $   190,288.00
                                                                                                    --------------

Other                                            ( ) Yes                   (X) No

*Training                                        (X)Yes, see section 3.3   ( ) No

*Implementation/Testing                          (X) Yes, see section 3.4  ( ) No

ImageVision Beginning System Administrator: 3 days required,
1/2 day optional                                                                      $   3,200.00
-------------------------------------------------------------                         ------------

ImageVision Operator Training (per day)                                               $   2,000.00
-------------------------------------------------------------                         ------------

AFS Staging Services (5)                                                              $   2,500.00
-------------------------------------------------------------                         ------------
                                                                                 Services Subtotal  $     7,700.00
                                                                                                      ------------

                                                                                 Contract Subtotal  $   197,988.00
                                                                                                    --------------

                                                                                          Discount  $   (82,730.00)
                                                                                                    --------------

                                                                                   *Contract Total  $   115,258.00
                                                                                                    --------------

*This contract price does not include travel & living  expenses,  transportation and any  applicable  taxes.  These
expenses will be billed at actual cost unless otherwise agreed.

**Shipping:  All risk of loss passes to CUSTOMER  when goods are FOB at point of shipping.  AFS shall  advance all
shipping  and  associated  costs and CUSTOMER agrees to  reimburse  AFS  for  same. If  CUSTOMER desires insurance
coverage on the goods while in transit, it must notify AFS in writing of the amount of coverage required and agree
to reimburse AFS for the costs or make arrangements  directly with the carrier.

***In order to minimize  costs,  AFS often  books non-refundable reservations. CUSTOMER agrees to pay for the cost
of any reservations lost or any rescheduling fees incurred due to a delay that is the result of CUSTOMER'S request
or fault.

Support                             ( ) Yes, see section 4    (X) No

</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                               Exhibit 4 - Peoria

                              Description                                            Qty              Price
==================================================================================================================

                                PC's and Servers
--------------------------------------------------------------------------------

Sorter Controller, Dell Optiplex GX-260 (Desktop), Pentium 4 2.4GHz Processor,
<S>                                                                                   <C>       <C>
256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor                1         Customer Furnished
Speedfirst Interface Hardware kit, 2 X 10/100 Network Cards, 2 X 25 foot
Crossover Cable                                                                       1                       $158
Workstation, Dell Optiplex GX-260 (Mini Tower), Pentium 4 2.4GHz Processor,
256MBRAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor, Headset        3         Customer Furnished
Image Capture Unit/VSU, Dell Optiplex GX-260 (Desktop), Pentium 4 2.4GHz
Processor, 256MB RAM, 2 x 40GB Hard Drive, Windows 2000 Professional, 17 inch
Monitor, Rack w/ 8-Port Power Strip, 4-Port KVM Switchbox and cables                  1         Customer Furnished

                                     Storage
--------------------------------------------------------------------------------

Storage and back-up solution provided by customer

                              Additional Components
--------------------------------------------------------------------------------

PC Anywhere Remote License version 10.5 - need 1 license per PC / server              6         Customer Furnished

Catalyst 2950 24-Port 10/100 Switch                                                   1         Customer Furnished

                              AFS Support Services
--------------------------------------------------------------------------------

Support services: Zetafax single line - 5 user fax software, (1) 56K external
modem, Norton Ghost back-up software (25 user), 80 GB Snap Server                     1                     $1,692

                                    Scanners
--------------------------------------------------------------------------------
Check
-----
Unisys Scanner: Unisys SourceNDP, MICR E13B, front & rear image, 2 output
pockets, power supply, PCMCIA card, API software, rear ink jet endorse, CCITT/
JPEG dual image, 3COM adapter card                                                    2                     $8,088

                           E-Series Transport 800 DPM
--------------------------------------------------------------------------------

Dual image w/IQA - mixed bitonal/grayscale                                            1                    $91,010
700 DPM encoder - E13B                                                                1                    $81,460
Speedfirst - Windows NT Field Upgrade                                                 1                     $7,880
                                                                                                ------------------
                                                                     Exhibit 4 - Peoria Total             $190,288

Plus applicable freight, taxes and transport installation.

Note: AFS provides  support for AFS software  products only. Third party support costs are estimates  only.
Actual support costs will be determined by the third party provider(s) based on CUSTOMER's location and the
coverage desired.
</TABLE>



<PAGE>
<TABLE>
<CAPTION>


                           ATTACHMENT 5 TO SCHEDULE A
                                VALLEJO LOCATION

                                  ImageVisionTM
Item Name                                                                                               Total Cost
------------------------------------------------------------------------------------------------------------------

AFS Software (includes any manuals, specifications and documentation)           (X) Yes ( ) No

Third Party Software                           ( ) Yes                  (X) No

<S>                                                                                    <C>             <C>
Equipment & Associated Software                (X) Yes, see exhibit 5   ( ) No                         $191,759.00
                                                                                                     -------------

Other                                          ( ) Yes                  (X) No

*Training                                      (X) Yes, see section 3.3 ( ) No

*Implementation/Testing                        (X) Yes, see section 3.4 ( ) No

ImageVision Beginning System Administrator: 3 days required,
1/2 day optional                                                                       $   3,200.00
------------------------------------------------------------                           ------------

ImageVision Operator Training (per day)                                                $   2,000.00
------------------------------------------------------------                           ------------

AFS Staging Services (Qty 5)                                                           $   2,500.00
------------------------------------------------------------                           ------------

                                                                                  Services Subtotal $     7,700.00
                                                                                                    --------------

                                                                                  Contract Subtotal $   199,459.00
                                                                                                    --------------

                                                                                           Discount $   (83,097.00)
                                                                                                    --------------

                                                                                    *Contract Total $   116,362.00
                                                                                                    --------------

*This contract price does not include travel & living  expenses,  transportation and any  applicable  taxes.
These expenses will be billed at actual cost unless otherwise agreed.

**Shipping:  All risk of loss passes to CUSTOMER  when goods are FOB at point of shipping. AFS shall advance
all  shipping  and  associated  costs and CUSTOMER agrees to reimburse AFS for  same.  If  CUSTOMER  desires
insurance  coverage on the goods while in transit,  it must  notify AFS in writing of the amount of coverage
required and agree to reimburse AFS for the costs or make arrangements  directly with the carrier.

***In order to minimize  costs,  AFS often  books  non-refundable  reservations. CUSTOMER agrees to  pay for
the cost of any reservations lost or any rescheduling fees incurred due to a delay  that is  the  result  of
CUSTOMER'S request or fault.

Support                                        ( ) Yes, see section 4  (X) No

</TABLE>



<PAGE>
<TABLE>
<CAPTION>


                               Exhibit 5 - Vallejo

                                  Description                                        Qty              Price
==================================================================================================================

                                PC's and Servers
--------------------------------------------------------------------------------
Sorter Controller, Dell Optiplex GX-260 (Desktop), Pentium 4 2.4GHz Processor,
<S>                                                                                   <C>       <C>
256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor                1         Customer furnished
Speedfirst Interface Hardware kit, 2 X 10/100 Network Cards, 2 X 25 foot
Crossover Cable                                                                       1                       $158
Workstation, Dell Optiplex GX-260 (Mini Tower), Pentium 4 2.4GHz Processor,
256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor, Headset       3         Customer furnished
Image Capture Unit/VSU, Dell OptiplexGX-260 (Desktop), Pentium 4 2.4GHz
Processor, 256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch
Monitor, Rack w/ 8-Port Power Strip, 4-Port KVM Switchbox and cables                  1         Customer furnished

                                     Storage
--------------------------------------------------------------------------------

Storage and back-up solution provided by customer

                              Additional Components
--------------------------------------------------------------------------------

PC Anywhere Remote License version 10.5 - need 1 license per PC / server              6                       $654

Catalyst 2950 24-Port 10/100 Switch                                                   1                       $817

                              AFS Support Services
--------------------------------------------------------------------------------

Support services: Zetafax single line - 5 user fax software, (1) 56K external
modem, Norton Ghost back-up software (25 user), 80 GB Snap Server                     1                     $1,692

                                    Scanners
--------------------------------------------------------------------------------
Check
-----
Unisys Scanner: Unisys SourceNDP, MICR E13B, front & rear image, 2 output
pockets, power supply, PCMCIA card, API software, rear ink jet endorse,
CCITT/JPEG dual image, 3COM adapter card                                              2                     $8,088

                           E-Series Transport 800 DPM
--------------------------------------------------------------------------------

Dual image w/IQA - mixed bitonal/grayscale                                            1                    $91,010
700 DPM encoder - E13B                                                                1                    $81,460
Speedfirst - Windows NT Field Upgrade                                                 1                     $7,880
                                                                                                ------------------
                                                                      Exhibit 5 - Vallejo Total           $191,759


Plus applicable freight, taxes and transport installation.

Note: AFS provides  support for AFS software  products only. Third party support costs are estimates only.  Actual
support  costs  will  be  determined by  the third party provider(s) based on CUSTOMER's location and the coverage
desired.
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                           ATTACHMENT 6 TO SCHEDULE A
                                HOUSTON LOCATION

                                  ImageVisionTM

Item Name                                                                                               Total Cost
------------------------------------------------------------------------------------------------------------------

AFS Software (includes any manuals, specifications and documentation)  (X) Yes   ( ) No

                                                                                QTY

<S>                                                                           <C>      <C>           <C>
iBox (1-499 boxes) additional site license                                       1     $  15,000.00
------------------------------------------------------------------            -----    ------------
ImageVision/Remittance - Additional Page Scanner All Types
<100DPM                                                                          1     $   5,000.00
------------------------------------------------------------------            -----    ------------

                                                                              AFS Software Subtotal  $   20,000.00
                                                                                                     -------------

Third Party Software                           ( ) Yes                  (X) No

Equipment & Associated Software                (X)Yes, see exhibit 6    ( ) No                       $  205,630.00
                                                                                                     -------------
Other                                          ( ) Yes                  (X) No

*Training                                      (X) Yes, see section 3.3 ( ) No

*Implementation/Testing                        (X) Yes, see section 3.4 ( ) No

Remittance Set-Up Services: includes Single Application Set-Up, 4
Extract, Standard Reports, Testing, On-Site Installation                               $   7,500.00
--------------------------------------------------------------------                   ------------

On-Site Operations Training - 1 Week                                                   $   7,500.00
--------------------------------------------------------------------                   ------------

Remittance System Project Management Services                                          $  10,000.00
--------------------------------------------------------------------                   ------------

ImageVision Beginning System Administrator: 3 days required,
1/2 day optional                                                                       $   3,200.00
--------------------------------------------------------------------                   ------------

ImageVision Operator Training (per day)                                                $   2,000.00
--------------------------------------------------------------------                   ------------

AFS Staging Services (Qty 7)                                                           $   3,500.00
--------------------------------------------------------------------                   ------------

                                                                                  Services Subtotal  $   33,700.00
                                                                                                     -------------

                                                                                  Contract Subtotal  $  259,330.00
                                                                                                     -------------

                                                                                           Discount  $ (102,665.00)
                                                                                                     -------------

                                                                                    *Contract Total  $  156,665.00
                                                                                                     -------------

*This contract price does not include travel & living expenses, transportation and any applicable taxes.  These
expenses will be billed at actual cost unless otherwise agreed.

**Shipping: All risk of loss passes to CUSTOMER when goods are FOB at point of shipping. AFS shall advance  all
shipping and associated costs and CUSTOMER agrees to reimburse AFS  for  same.  If CUSTOMER  desires  insurance
coverage on the goods while in transit, it must notify AFS in writing of the  amount  of  coverage required and
agree to reimburse AFS for the costs or make arrangements directly with the carrier.

***In order to minimize costs, AFS often books non-refundable reservations. CUSTOMER agrees to pay for the cost
of any reservations lost or any rescheduling fees incurred due to a delay that is the result of CUSTOMER'S
request or fault.
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                         ATTACHMENT 6 TO SCHEDULE A
                                              HOUSTON LOCATION


Item Name                                                                                               Total Cost
------------------------------------------------------------------------------------------------------------------

Support                                        (X) Yes, see section 4  ( ) No

<S>                                                                                 <C>              <C>
iBox (1-499 boxes) additional site license                                             $   2,700.00
--------------------------------------------------------------                         ------------
ImageVision/Remittance - Additional Page Scanner All Types
<100DPM                                                                                $     900.00
--------------------------------------------------------------                         ------------

                                                                               Annual Support Total  $    3,600.00
                                                                                                     -------------
</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                                Exhibit 6 Houston

                                  Description                                            Qty            Price
==================================================================================================================

                                PC's and Servers
--------------------------------------------------------------------------------

Sorter Controller, Dell Optiplex GX-260 (Desktop), Pentium 4 2.4GHz Processor,
<S>                                                                                        <C>  <C>
256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor                     1    Customer Furnished
Speedfirst Interface Hardware kit, 2 X 10/100 Network Cards, 2 X 25 foot
Crossover Cable                                                                            1                  $158
Workstation, Dell Optiplex GX-260 (Mini Tower), Pentium 4 2.4GHz Processor,
256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor, Headset            3    Customer Furnished
Vision Storage Unit, Dell Poweredge 2600 Server (Rack), Dual Xeon 2.4GHz
Processors, 2GB RAM, 2X18GB Hard Drives Mirrored, Windows 2000 Server                      1    Customer Furnished

Image Capture Unit, Dell Optiplex GX-260 (Desktop), Pentium 4 2.4GHz Processor,
256MB RAM, 40GB Hard Drive, Windows 2000 Professional, 17 inch Monitor, Rack w/
8-Port Power Strip, 4-Port KVM Switchbox and cables                                        1    Customer Furnished

Network Print Server - 1 to 3 Printers, Dell Optiplex GX-260 (Mini Tower),
Pentium 4 2.4GHz Processor, 512MB RAM, 40GB Hard Drive, Windows 2000
Professional, 17 inch Monitor, 18GB Cache Drive, SCSI Card & Cable                         1    Customer Furnished

                                     Storage
--------------------------------------------------------------------------------

Storage and back-up solution provided by customer

                              Additional Components
--------------------------------------------------------------------------------

PC Anywhere Remote License version 10.5 - need 1 license per PC / server                   7    Customer Furnished

Catalyst 2950 24-Port 10/100 Switch                                                        1    Customer Furnished

                              AFS Support Services
--------------------------------------------------------------------------------

Support services: Zetafax single line - 5 user fax software, (1) 56K external
modem, NortonGhost back-up software (25 user), 80 GB Snap Server                           1                $1,692

                                    Scanners
--------------------------------------------------------------------------------
Check
Unisys Scanner: Unisys SourceNDP, MICR E13B, front & rear image, 2 output
pockets, power supply, PCMCIA card, API software, rear ink jet endorse, CCITT/
JPEG dual image, 3COM adapter card                                                         2                $8,088

Remittance Check and Coupon scanners
Unisys Scanner: Unisys SourceNDP, MICR E13B, front & rear image, 2 output
pockets, power supply, PCMCIA card, API software, rear ink jet endorse, CCITT/
JPEG dual image, OCR Reader, 3COM adapter card                                             1                $4,306

Remittance Document scanners
Bell & Howell 2020 duplex flatbed scanner: 76PPM, up to 400dpi, Kofax adrenaline
videoaccel board, Kofax SCSI cable                                                         1               $11,036

                           E-Series Transport 800 DPM
--------------------------------------------------------------------------------
Dual image w/IQA - mixed bitonal/grayscale                                                 1               $91,010
700 DPM encoder - E13B                                                                     1               $81,460
Speedfirst - Windows NT Field Upgrade                                                      1                $7,880
                                                                                                 -----------------
                                                       Exhibit 6 - Houston Total                          $205,630

Plus applicable freight, taxes and transport installation.

Note: AFS provides support for AFS software products only. Third party support costs are estimates only.
Actua support costs will be determined by the third party provider(s) based on CUSTOMER's location and
the coverage desired.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                           Exhibit A - Volume Pricing


                                                                 Average        Additional Cost         Additional Cost
                      ImageVision                            Monthly Volume         License           Monthly maintenance
--------------------------------------------------------------------------------------------------------------------------------

<S>                                                             <C>                <C>                      <C>
ImageVision 1, 2 and 3  -  Enterprise Volume License- Base      10 million         $520,000                 $7,800
                                                                12 million         $100,000                 $1,500
                                                                15 million         $100,000                 $1,500
                                                                20 million         $100,000                 $1,500
                                                                25 million         $100,000                 $1,500
                                                                30 million         $100,000                 $1,500
                                                           Each Add'l 5 million    $100,000                 $1,500

ImageVision DREAM  -  Enterprise Volume License- Base           10 million         $75,000                  $1,125
                                                                12 million         $10,000                    $150
                                                                15 million         $10,000                    $150
                                                                20 million         $10,000                    $150
                                                                25 million         $10,000                    $150
                                                                30 million         $10,000                    $150
                                                           Each Add'l 5 million    $10,000                    $150


</TABLE>

<PAGE>


                                    Exhibit B
                              Escalation Procedures



The  following  Escalation  Procedures  shall be  followed  with  respect to all
problems reported by the CUSTOMER.

The  Codes  listed  below  will  help AFS  identify  a  "problem"  situation  at
CUSTOMER's  site and will allow CUSTOMER to communicate  the needs of CUSTOMER's
Institution and the role AFS will play in assisting  CUSTOMER in recovering from
a "problem"  situation.  These Procedures apply to both Hardware  (regardless of
vendor) and Software problems.

CUSTOMER will assign each problem a Color Code when reporting the problem to AFS
according to the nature of the problem as determined by CUSTOMER.

o Code  Red -  Critical  Problem  -  Production  is  halted,  no  workaround  is
  available.

o Code Yellow - Major Problem - Production is substantially hindered, site has a
  mutually agreed upon workaround.

o Code  Green  -  Minor   Problem  -  Problem   discovered   causing  delays  in
  deliverables.
<TABLE>
<CAPTION>

Escalation Procedures for each type of problem are as follows:

  ------------------------- -------------------------- ---------------------------- ------------------------
<S>                         <C>                        <C>                          <C>
  Problem Type              Initial Escalation         Secondary Escalation         Tertiary Escalation
  ------------------------- -------------------------- ---------------------------- ------------------------
  Code Red                  Escalated to Director      Problem unresolved in        Problem unresolved
                            of Support or Call         60 minutes, escalated        after 2 hours,
                            Center Supervisor          Director of Support          escalated to Vice
                                                       and to Director of           President of
                                                       Systems Integrations.        Operations. Hourly
                                                                                    meetings after
                                                                                    escalation.
  ------------------------- -------------------------- ---------------------------- ------------------------
  Code Yellow               Escalated to Director      Problem unresolved           Problem unresolved
                            of Support or Call         after 5 hours, escalated     after 8 hours,
                            Center Supervisor if       to Director of Support       escalated to VPO.
                            unresolved after 3         and Director of              Meetings every 4
                            hours.                     Systems Integrations.        hours after
                                                                                    escalation.
                                                                                    Resolution initially
                                                                                    expected within 24
                                                                                    hours.
  ------------------------- -------------------------- ---------------------------- ------------------------
  Code Green                Escalated to Director      Problem unresolved           Director of Support,
                            of Support or Call         after 3 business days,       Director of Systems
                            Center Supervisor if       escalated to Director of     Integrations and
                            unresolved after 24        Support and Director of      VPO to review
                            hours.                     Systems Integrations.        Master Issues List.
                                                       Issue added to Master        Resolution initially
                                                       Issues List to be            expected within 5
                                                       reviewed twice weekly.       business days.
  ------------------------- -------------------------- ---------------------------- ------------------------
</TABLE>



<PAGE>



                          AFS After-Hours Pager Support
                              Escalation Procedures


o    Upon  receipt  of the page from the AFS  Answering  Service,  the  Customer
     Support  Representative  will call the  Answering  Service and confirm that
     they received the page

o    If the Service does not receive a confirmation  phone call from the Support
     Representative  within 15 minutes,  the  Service  will page the primary and
     secondary pager and call the Primary CSR's cell phone

o    If the  Service  does not  receive a  confirmation  phone call from the CSR
     within 5 minutes,  they will call the  Primary  and  Secondary  cell phones
     again

o    If the Service does not reach either CSR by cell phone and does not receive
     a  confirmation  phone call  within 5 minutes,  they will  contact the Call
     Center Manager

o    In the event the Call  Center  Manager  does not reply,  the  Service  will
     contact the  Director  of Support  Services.  In the event the  Director of
     Support  Services  is  unavailable,  the  Service  will  contact  the Chief
     Operating Officer

<PAGE>


                                                                    Exhibit 10.2



                          MANAGEMENT SERVICES AGREEMENT


         This  Management  Services  Agreement (the Agreement) is made this 28th
day of February 2004, by and between First Bank, a Missouri banking  corporation
(the "Bank") and First Banks, Inc., a Missouri corporation ("First Banks").

         WHEREAS  First Banks is a bank holding  company that  provides  certain
services to its subsidiary  financial  institution on a centralized basis and is
willing to provide such services to the Bank, and

         WHEREAS the Bank is currently operating as a commercial and retail bank
incorporated  in the State of  Missouri,  and  desires  to avail  itself of such
centralized services in connection with its operations,

         NOW THEREFORE, First Banks and the Bank agree as follows:

SERVICES TO BE PERFORMED:
------------------------

         First Banks shall undertake to perform certain services for the benefit
of the Bank, and any  affiliates  thereof,  including,  but not limited to those
enumerated  below.  These  services may be provided by employees of First Banks,
any subsidiary of First Banks,  or external  sources  retained by First Banks on
behalf of the Bank and/or its  affiliates.  First  Banks will  prepare a monthly
statement to the Bank  indicating  the nature of the services  performed and the
fees charged for such services.

         The services to be performed may be categorized as follows:

         Type A Services - Type A services performed by employees of First Banks
         ---------------
will be billed to the Bank on the basis of actual hours  required to perform the
services using standard hourly rates  established for each type of service.  The
hourly rates in effect as of the date of this Agreement are listed in Exhibit A.
These rates will be reviewed  periodically  and adjusted as necessary to reflect
First Banks' current costs in delivering the services,  but may only be adjusted
once during any  calendar  year.  The Bank will be provided at least ninety (90)
days  notice  prior to any change in the hourly  rates to be used.  The Bank may
terminate this Agreement at any time if any rate increase is deemed excessive by
the Bank's Board of Directors.

         Type B Services - Type B services performed by employees of First Banks
         ---------------
will be billed to the Bank on a pro-rata  basis of First  Banks'  total  costs -
(e.g., Human Resources services will be billed on a pro-rata basis by allocating
such costs based upon employee headcount). Similar to the Type A costs, the Bank
may  terminate  the  Agreement  at any time if the costs for these  services are
deemed excessive by the Bank's Board of Directors.

         Services  provided by external  sources  will be charged to the Bank at
First Banks' cost.  Services  which  benefit  more than one  subsidiary  will be
allocated  between  them  using  the  basis  deemed  most  appropriate  for  the
particular service and the charge for that service.



<PAGE>


         Included in the services to be provided will be the following:

Type A Services
---------------

   1.  Corporate audit:

      a.   Internal auditing
      b.   Assisting external auditors / regulators
      c.   Compliance and Community Reinvestment Act assistance
      d.   Assisting in examinations and replies to examination reports
      e.   Other audit activities

Type B Services
---------------

  1.  Accounting (for the Bank):

      a.   Regulatory  examinations  and  compliance
      b.   Income tax returns and tax audits
      c.   Estimated tax payments and tax accruals
      d.   State and local taxes
      e.   Fixed asset records and accounting
      f.   General accounting assistance
      g.   Regulatory reporting
      h.   SEC reporting and compliance
      i.   Systems and procedures
      j.   Other accounting activities

  2.  Asset / Liability management

  3.  Investments

  4.  Planning and budgeting

  5.  Branch administration:

      a.   Marketing and business development
      b.   Branch operations
      c.   Customer service and training
      d.   Product development
      e.   Other branch administration activities

  6.  Purchasing and accounts payable

  7.  Preparation for and participation in meetings

  8.  Human resources:

      a.   Human resources administration
      b.   Records and compliance
      c.   Employee recruiting and training
      d.   Payroll administration and benefits
      e.   Other human resources activities



<PAGE>



  9.  Lending:

      a.   Loan administration and support
      b.   Loan and business development
      c.   Loan servicing - See the separate Loan Servicing Addendum in
           Exhibit B
      d.   Loan collection and workout
      e.   Other lending activities

  10. Corporate loan review:

      a.   Internal loan review
      b.   Assisting external auditors / regulators
      c.   Assisting in examinations and replies to examination reports
      d.   Other internal loan review activities

         In  addition,  First Banks will  contract  for  certain  services to be
provided to the Bank and its affiliates, which may be charged through management
fees,  or  through  separate  direct  charges to the Bank.  These  will  include
advertising and promotional expenses, property and liability insurance,  certain
external  legal,  audit  and tax  assistance,  and  employee  benefit  programs.
Generally,  charges for  insurance  and employee  benefits  will be made through
separate  statements  outside the management  fee  structure.  Charges for other
items will usually be included in management fee statements.

         Travel expenses associated with performance of management services will
be charged to the Bank based on the expense reports received from the employees.
Travel time, or other non-productive time, will not be charged to the Bank.

Activities not includable in management fees:
--------------------------------------------

         Included in First Banks' expenses are various  activities which are not
to be included in the base for calculating  management fees. Among these are the
following:

  1.  Accounting

      a.   Parent company accounting, including:

           (1)  General ledger
           (2)  Accounts payable and bill paying
           (3)  Consolidations and financial reporting
           (4)  Regulatory reports and examinations
           (5)  SEC accounting and reporting

      b.   Accounting,  taxes  and  other  services  performed for entities  not
           paying   management  fees, such  as  second  tier holding  companies,
           inactive corporations and other affiliates.

  2.  Mergers and acquisitions:

      a.   Negotiations and contracts
      b.   Regulatory matters and applications
      c.   Due diligence and analysis
      d.   Operations and consolidations
      e.   Human resources and other activities
<PAGE>

  3.  Financing

      a.   Working with current or prospective lenders
      b.   Loan agreements and contracts
      c.   Due diligence and rating agencies

Expenses not includable in management fees:
------------------------------------------

         Included in First Banks'  expenses are various items that are not to be
included  in the base for  calculating  management  fees.  Among  these  are the
following:

  1.     Interest  expense  -  (including   the  dividends  on  trust  preferred
         securities)
  2.     Amortization of deferred intercompany gains and losses
  3.     Land leases for possible future bank sites
  4.     Legal, accounting and advertising expenses in excess of amounts charged
         to the Bank and other subsidiaries on a specific basis.
  5.     Political and Charitable Contributions
  6.     Amortization of purchase adjustments and excess cost
  7.     Provision for income taxes

         First Banks may identify other accounts or specific  expense items that
are  deemed  inappropriate  to include in the base for  management  fees.  These
expenses may be excluded at the discretion of First Banks as identified.

BILLING OF FEES:
---------------

         First  Banks shall  prepare  and submit to the Bank a monthly  bill for
services  rendered  in  sufficient  detail  to  provide  the  Bank a  basis  for
evaluating the cost / benefit of items charged.  It shall be the  responsibility
of First Banks to maintain time reports, worksheets and summaries supporting the
amounts billed.  These will be furnished to the Bank, examiners or auditors upon
request.

         Amounts billed will be payable to First Banks by a direct charge to the
Bank. Management fee statements will be provided to the Bank prior to payment.

GENERAL:
-------

         The Bank shall make  available to First Banks all  records,  facilities
and personnel  necessary to enable First Banks to perform the services required.
First Banks shall furnish the  necessary  forms and  instructions  to the Bank's
personnel.  The Bank shall  furnish  all data,  documents  or input  material as
required,  which  material  shall be returned to the Bank when the  services are
completed.

         First  Banks shall give the same care to the Bank's work as it gives to
its own work. However,  First Banks does not warrant the work free of error, and
shall  be  liable  only  for  First  Banks'  own  gross  negligence  of  willful
misconduct.

         The  services  performed  under this  Agreement  by First Banks will be
subject to the  regulations  and  examination  of the Federal or state  agencies
having supervisory jurisdiction over the Bank and its affiliates and First Banks
to the same extent as if such services were being  performed  solely by the Bank
on  its  own  premises.   The  provisions  of  this  Agreement  are  subject  to
modification,   regulation   or  ruling  of  any   governmental   agency  having
jurisdiction  over the Bank or its  affiliates  or First Banks.  Otherwise  this
Agreement  shall be  modifiable  only  upon  written  Agreement  of the  parties
thereto.
<PAGE>

         First Banks will hold in  confidence  all  information  relating to the
Bank's  assets,  liabilities,  business  or  affairs,  or  those  of  any of its
customers,  which is  received  by First  Banks in the course of  rendering  the
services  hereunder.  It will make the same effort to safeguard such information
as it does to protect its own proprietary data.

         The  term  of  the  Agreement  is  for  one  year,   but  it  shall  be
automatically  renewable for additional periods of one year each unless the Bank
shall give ninety (90) days written  notice of  termination  prior to the end of
any term.

         This Agreement  shall be binding upon the parties and their  successors
or assigns, and may only be amended by a writing executed by both parties.

         IN WITNESS  WHEREOF,  the parties hereto have, by their duly authorized
officers executed this Agreement this 28th day of February 2004.

FIRST BANK                                    FIRST BANKS, INC.


By:/s/ Terrance M. McCarthy                   By:/s/ Allen H. Blake
   ----------------------------                  -------------------------------
       Terrance M. McCarthy                          Allen H. Blake
       President and                                 President and
       Chief Executive Officer                       Chief Executive Officer

<PAGE>


                                                                       Exhibit A

                                FIRST BANKS, INC.
                 MANAGEMENT FEE BILLING RATES - TYPE A SERVICES
                                FEBRUARY 28, 2004



               Services Provided                       Rate Per Hour
               -----------------                       -------------

               Internal Audit:
                  Internal Audit                          $ 75.00
                  Assisting External Auditors               75.00
                  Compliance and CRA                        75.00
                  Examinations / Reports                    75.00
                  Other                                     75.00


<PAGE>





                                                                       Exhibit B


================================================================================

                             LOAN SERVICING ADDENDUM

================================================================================



This Loan  Servicing  Addendum  is by and among  First  Banks,  Inc.,  135 North
Meramec Avenue, St. Louis,  Missouri ("First Banks") and First Bank, 11901 Olive
Boulevard,  Creve Coeur,  Missouri (the "Bank") and is a part of the  Management
Services Agreement.


SECTION 1.                             DEFINITIONS
---------                              -----------

For purposes hereof, the following terms shall have the following meanings:

          Agreement        shall mean this Loan Servicing Addendum  as from time
          ---------
                           to time amended.

          Business Day     shall mean any day except a Saturday, Sunday or legal
          -------------
                           holiday observed by the Bank.

          Collateral       shall  mean any and all collateral and other security
          ----------
                           for the loans.

          Loans            shall mean the loans owned by the Bank.
          -----

          Loan Documents   shall mean any and all documents evidencing  any Loan
          --------------
                           or  any  Collateral, including  without limitation  a
                           note,   security    agreement,    application   form,
                           disclosure  and  settlement statements, vehicle title
                           certificate and insurance certificate and policy.

          Loan Obligor     shall mean the debtor(s) under any loan.
          ------------

          Person           shall mean any individual, partnership,  corporation,
          ------
                           banking     association,     trust,    unincorporated
                           organization or association, and  any  government  or
                           agency or political subdivision thereof.


SECTION 2.                    PURCHASE AND SERVICING LOANS
---------                     ----------------------------

          2.01. First  Banks  will  provide  the following loan services for the
Bank:

          (a) Record payments,

          (b) Establish and maintain  collateral  files,
<PAGE>

          (c) Establish and maintain credit files,

          (d) Forward duplicate credit files to the Bank,

          (e) Board the loans to the computer system for the Bank,

          (f) Provide follow-up on lien perfections,

          (g) Provide customer service to Loan Obligor,

          (h) Provide necessary loan administration reports, and

          (i) Provide other services  as  mutually  agreed to by First Banks and
              and the Bank.


SECTION 3.        INTERESTS OF FIRST BANKS AND THE BANK IN LOAN DOCUMENTS
---------         -------------------------------------------------------


          3.01     Legal and Equitable Title.   The  Bank shall hold legal title
                   -------------------------
title to the Loans.

          3.02     Custody of Loan Documents    First Banks shall  hold the Loan
                   -------------------------
Documents  as  custodian  for  the  benefit  of  the  Bank.   The  Bank  or  its
representatives,  including without limitation examiners and supervisory agents,
shall have the right (subject to limitations  imposed under  applicable  law) at
any reasonable  time during normal  business hours to request and have access to
and examine the Loan  Documents and any and all other books,  record,  documents
and  information  relating  to any Loan,  Loan  Obligor or to any of the matters
covered by this  Agreement and to receive copies thereof from the Bank on demand
therefore.

          3.03     No Partnership   First Banks and the Bank are not partners or
                   --------------
joint  venturers,  but in performing its duties hereunder First Banks is serving
as agent for the Bank.


SECTION 4.              ADMINISTRATION AND SERVICING OF THE LOANS
---------               -----------------------------------------

          4.01     In General   In undertaking responsibility for performance of
                   ----------
the services  specified in this  Agreement,  First Banks shall exercise the same
degree  of care  that  is  customary  in the  industry.  First  Banks  shall  be
responsible  for  administering  the  Loans  in  all  respects  consistent  with
applicable  laws  and  regulations,  and for  servicing  the  same  in a  manner
consistent  with good  servicing  practice.  The provisions of this Section 4.01
shall be subject to the provisions of Section 4.03(vi).

          4.02     First  Banks'  Servicing  Fee.  First Banks  shall  receive a
                   -----------------------------
monthly servicing fee as specified in the Management Services Agreement.

          4.03     Administration of Loans.   First   Banks   shall  manage  and
                   -----------------------
administer the Loans pursuant to this Agreement, but the Bank agrees that:


          (i)  First Banks shall in good faith make  all  determinations  as  to
               compliance with the terms and conditions of the Loan Documents;

<PAGE>

          (ii) First  Banks shall have full power and  authority  to exercise in
               good faith,  in the name of and on behalf of the Bank, all rights
               and  remedies  which said  parties  may have with  respect to the
               enforcement of the Loan Documents,  including without  limitation
               the rights to demand payment of any Loan and exercise, or refrain
               from exercising,  any and all other rights and remedies  afforded
               under the Loan  Documents,  or which Bank may have as a matter of
               law;

         (iii) The Bank  assumes  all risk of loss in connection with the Loans;

          (iv) If, from time to time,  any of the Loans are  endorsed,  assumed,
               guaranteed,  insured, or covered by repurchase obligations,  then
               it  is  agreed  that  First  Banks  shall,  and  First  Banks  is
               authorized  to,  act in good  faith for the Bank with  respect to
               such matters;

          (v)  Without limiting the generality of the foregoing,  First Banks is
               authorized to take any and all actions  deemed  necessary in good
               faith or  appropriate  in  connection  with any Loans,  including
               without  limitation  amending  Loan  Documents,   waiving  rights
               thereunder,  releasing  Collateral,  collecting  special  fees or
               charges, and agreeing to substitution of personal liability;

          (vi) First  Banks  shall  not be  liable  to the  Bank  in any  manner
               whatsoever  with  respect  to any  Loan,  or for  any  action  or
               inaction or failure to act in administering  any Loan, except for
               First Banks' own gross negligence or willful misconduct.


SECTION 5.             REPRESENTATION AND WARRANTIES OF FIRST BANKS
---------              --------------------------------------------


          5.01     Representations and Warranties. First Banks hereby represents
                   ------------------------------
and warrants to the Bank as follows:

          (a)  The  execution,  delivery and  performance by First Banks of this
               Agreement and the other documents  contemplated hereby are within
               the corporate powers of First Banks and have been duly authorized
               by all necessary corporate action of First Banks;

          (b)  First Banks has in its possession all Loan Documents with respect
               to each Loan and all other records required to be maintained with
               respect to each Loan under First  Banks and the Bank's  customary
               policies and procedures;

          5.02.    Exclusion from Representations and Warranties.    First Banks
                   ---------------------------------------------
does not make any representations or warranties to the Bank, express or implied,
with  respect  to  the  existing  or  future  solvency  or  financial  worth  or
responsibilities  of any Loan  Obligor or the payment or  collectibility  of any
Loan or the repayment to First Banks or the Bank of any interest or other monies
in connection  with First Banks' or the Bank's  interest in any Loan, or (except
to the extent  specifically  set forth to the contrary  herein) to the validity,
enforceability  or  legal  effect  of the Loan  Documents  or any  documents  or
instruments delivered in connection therewith.




<PAGE>


SECTION 6.              REPRESENTATIONS AND WARRANTIES OF THE BANK
---------               ------------------------------------------

             6.01  The Bank represents and warrants to First Banks as follows:
                   ----------------------------------------------------------

               (a)  The execution,  deliver and  performance by the Bank of this
                    Agreement and the other  documents  contemplated  hereby are
                    within the  corporate  powers of the Bank and have been duly
                    authorized by the appropriate credit committees of the Bank,
                    the Board of Directors of the Bank, and all other  necessary
                    corporate action of the Bank;

               (b)  The Bank is acquiring the Loans for its own account;  not as
                    nominee  or agent,  and not with a view to, or for resale in
                    connection with, any distribution thereof.

               (c)  The Bank has made its own diligent  analysis with respect to
                    the Loans and the Bank states  that it has relied  solely on
                    its independent investigation in extending credit.


SECTION 7.                     MISCELLANEOUS PROVISIONS
---------                      ------------------------


             7.01  Amendments and Waivers.   Any provision of this Agreement may
                   ----------------------
be amended or waived,  if, but only if, such  amendment  or waiver is in writing
and is signed by First Banks and the Bank.

             7.02  Notices.   Any Notice, request, demand, consent, confirmation
                   -------
or other communication  hereunder shall be in writing and delivered in person or
sent by telegram,  telefax,  telex or mail,  postage  prepaid,  at the following
addresses, for communications hereunder by notice so given:

     First Banks:
                                      FIRST BANKS, INC.
                                      135 North Meramec Avenue
                                      St. Louis, Missouri 63105

     Bank:
                                      FIRST BANK
                                      11901 Olive Boulevard
                                      Creve Coeur, Missouri 63141

             7.03  References; Headings for Convenience.     Unless    otherwise
                   ------------------------------------
specified  herein,  all  references  herein to Section  numbers refer to Section
numbers  of  this  Agreement.   The  Section  headings  are  furnished  for  the
convenience of the parties and are not to be considered in the  construction  or
interpretation of the Agreement.

             7.04  Binding  Agreement.  This Agreement shall be binding upon and
                   ------------------
inure to the benefit of First Banks, the Bank, and their  respective  successors
and permitted assignees.

             7.05  Severability.   In  case  any  one  or more of the provisions
                   ------------
contained in this Agreement should be invalid,  illegal, or unenforceable in any
respect, the validity,  legality, and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.

             7.06  Governing  Law.   This  Agreement  shall  be  governed by and
                   --------------
construed in  accordance  with the  internal  laws of the State of Missouri.




<PAGE>

                                                                      EXHIBIT 31

                           CERTIFICATIONS REQUIRED BY
                      RULE 13a-14(a) (17 CFR 240.13a-14(a))
                    OR RULE 15d-14(a) (17 CFR 240.15d-14(a))
                     OF THE SECURITIES EXCHANGE ACT OF 1934

I, Allen H. Blake, certify that:

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

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

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

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

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

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

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

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

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

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


Date:  May 14, 2004             By:  /s/ Allen H. Blake
                                    --------------------------------------------
                                         Allen H. Blake
                                         President, Chief Executive Officer and
                                         Chief Financial Officer
                                         (Principal Executive Officer and
                                         Principal Financial and Accounting
                                         Officer)


<PAGE>


                                                                      EXHIBIT 32


                           CERTIFICATIONS REQUIRED BY
                      RULE 13a-14(b) (17 CFR 240.13a-4(b))
                    OR RULE 15d-14(b) (17 CFR 240.15d-14(b))
                        AND SECTION 1350 OF CHAPTER 63 OF
               TITLE 18 OF THE UNITED STATES CODE (18 U.S.C. 1350)


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

         (1)   The  Quarterly  Report  on  Form  10-Q  of the  Company  for  the
               quarterly period ended March 31, 2004 (the Report) fully complies
               with  the   requirements  of  Sections  13(a)  or  15(d)  of  the
               Securities Exchange Act of 1934; and

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


Date:  May 14, 2004             By:  /s/ Allen H. Blake
                                   ---------------------------------------------
                                         Allen H. Blake
                                         President, Chief Executive Officer and
                                         Chief Financial Officer
                                         (Principal Executive Officer and
                                         Principal Financial and Accounting
                                         Officer)