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



                                    FORM 10-Q


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

                For the quarterly period ended September 30, 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 October 31, 2004
               -----                                   -------------------

  Common Stock, $250.00 par value                            23,661


<PAGE>




                                                           FIRST BANKS, INC.

                                                           TABLE OF CONTENTS


<TABLE>
<CAPTION>



                                                                                                             Page
                                                                                                             ----
PART I.         FINANCIAL INFORMATION

    ITEM 1.     FINANCIAL STATEMENTS:

<S>             <C>                                                                                            <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.............................................................    15

    ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK................................    34

    ITEM 4.     CONTROLS AND PROCEDURES...................................................................    35

PART II.        OTHER INFORMATION

    ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K..........................................................    36

SIGNATURES................................................................................................    37
</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)

                                                                                          September 30, December 31,
                                                                                              2004          2003
                                                                                              ----          ----
                                                                                           (unaudited)

                                                                ASSETS
                                                                ------

Cash and cash equivalents:
<S>                                                                                          <C>           <C>
     Cash and due from banks.............................................................. $  152,184      179,802
     Short-term investments...............................................................    115,736       33,735
                                                                                           ----------    ---------
          Total cash and cash equivalents.................................................    267,920      213,537
                                                                                           ----------    ---------

Investment securities:
     Available for sale...................................................................  1,246,595    1,038,787
     Held to maturity (fair value of $26,724 and $11,341, respectively)...................     26,273       10,927
                                                                                           ----------    ---------
          Total investment securities.....................................................  1,272,868    1,049,714
                                                                                           ----------    ---------

Loans:
     Commercial, financial and agricultural...............................................  1,438,183    1,407,626
     Real estate construction and development.............................................  1,227,553    1,063,889
     Real estate mortgage.................................................................  2,715,869    2,582,264
     Lease financing......................................................................      7,541       67,282
     Consumer and installment.............................................................     53,912       71,652
     Loans held for sale..................................................................    128,801      145,746
                                                                                           ----------    ---------
          Total loans.....................................................................  5,571,859    5,338,459
     Unearned discount....................................................................    (10,236)     (10,384)
     Allowance for loan losses............................................................   (127,970)    (116,451)
                                                                                           ----------    ---------
          Net loans.......................................................................  5,433,653    5,211,624
                                                                                           ----------    ---------

Derivative instruments....................................................................     12,159       49,291
Bank premises and equipment, net of accumulated depreciation and amortization.............    133,580      136,739
Goodwill..................................................................................    151,783      145,548
Bank-owned life insurance.................................................................    101,041       97,521
Deferred income taxes.....................................................................     97,469      102,844
Other assets..............................................................................    103,484      100,122
                                                                                           ----------    ---------
          Total assets.................................................................... $7,573,957    7,106,940
                                                                                           ==========    =========

                                                              LIABILITIES
                                                              -----------
Deposits:
     Noninterest-bearing demand........................................................... $1,120,630    1,034,367
     Interest-bearing demand..............................................................    842,913      843,001
     Savings..............................................................................  2,174,209    2,128,683
     Time deposits of $100 or more........................................................    515,780      436,439
     Other time deposits..................................................................  1,474,274    1,519,125
                                                                                           ----------    ---------
          Total deposits..................................................................  6,127,806    5,961,615
Other borrowings..........................................................................    550,262      273,479
Note payable..............................................................................         --       17,000
Subordinated debentures...................................................................    232,311      209,320
Deferred income taxes.....................................................................     23,824       41,683
Accrued expenses and other liabilities....................................................     50,403       54,028
                                                                                           ----------    ---------
          Total liabilities...............................................................  6,984,606    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.........................................................................    559,210      495,714
Accumulated other comprehensive income....................................................      5,253       29,213
                                                                                           ----------    ---------
          Total stockholders' equity......................................................    589,351      549,815
                                                                                           ----------    ---------
          Total liabilities and stockholders' equity...................................... $7,573,957    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    Nine Months Ended
                                                                               September 30,        September 30,
                                                                            ------------------    -----------------
                                                                              2004      2003       2004     2003
                                                                              ----      ----       ----     ----
Interest income:
<S>                                                                         <C>         <C>       <C>       <C>
     Interest and fees on loans............................................ $ 86,201    88,504    254,176   268,796
     Investment securities.................................................   12,784     7,315     37,098    24,564
     Short-term investments................................................      476       345        899     1,099
                                                                            --------  --------   --------  --------
          Total interest income............................................   99,461    96,164    292,173   294,459
                                                                            --------  --------   --------  --------
Interest expense:
     Deposits:
       Interest-bearing demand.............................................      801     1,195      2,592     4,346
       Savings.............................................................    5,116     5,520     14,486    18,091
       Time deposits of $100 or more.......................................    3,358     3,028      9,353    10,049
       Other time deposits.................................................    8,636     8,865     25,296    32,147
     Other borrowings......................................................    1,982       550      3,383     1,671
     Note payable..........................................................      229       388        398       574
     Subordinated debentures...............................................    3,731     3,538     10,798    14,325
                                                                            --------  --------   --------  --------
          Total interest expense...........................................   23,853    23,084     66,306    81,203
                                                                            --------  --------   --------  --------
          Net interest income..............................................   75,608    73,080    225,867   213,256
Provision for loan losses..................................................    7,500    15,000     23,250    36,000
                                                                            --------  --------   --------  --------
          Net interest income after provision for loan losses..............   68,108    58,080    202,617   177,256
                                                                            --------  --------   --------  --------
Noninterest income:
     Service charges on deposit accounts and customer service fees.........    9,837     9,175     28,578    26,824
     Gain on mortgage loans sold and held for sale.........................    4,676     6,484     12,866    14,616
     Net gain on sales of available-for-sale investment securities.........      257       266        257     6,832
     (Loss) gain on sales of branches, net of expenses.....................      (20)       --      1,000        --
     Bank-owned life insurance investment income...........................    1,255     1,325      3,874     4,029
     Other.................................................................    5,977     2,992     16,070    12,413
                                                                            --------  --------   --------  --------
          Total noninterest income.........................................   21,982    20,242     62,645    64,714
                                                                            --------  --------   --------  --------
Noninterest expense:
     Salaries and employee benefits........................................   29,936    23,481     85,825    71,736
     Occupancy, net of rental income.......................................    4,674     4,916     13,744    15,399
     Furniture and equipment...............................................    4,099     4,610     12,802    13,714
     Postage, printing and supplies........................................    1,222     1,311      3,765     3,909
     Information technology fees...........................................    7,977     8,126     23,965    24,568
     Legal, examination and professional fees..............................    1,644     1,781      4,895     5,552
     Amortization of intangibles associated with
          the purchase of subsidiaries.....................................      733       658      2,049     1,848
     Communications........................................................      469       677      1,333     1,950
     Advertising and business development..................................    1,297       762      3,902     2,996
     Other.................................................................    6,340     8,208     14,118    23,990
                                                                            --------  --------   --------  --------
          Total noninterest expense........................................   58,391    54,530    166,398   165,662
                                                                            --------  --------   --------  --------
          Income before provision for income taxes.........................   31,699    23,792     98,864    76,308
Provision for income taxes.................................................   11,951    10,092     34,844    28,877
                                                                            --------  --------   --------  --------
          Net income.......................................................   19,748    13,700     64,020    47,431
Preferred stock dividends..................................................      196       196        524       524
                                                                            --------  --------   --------  --------
          Net income available to common stockholders...................... $ 19,552    13,504     63,496    46,907
                                                                            ========  ========   ========  ========

Basic earnings per common share............................................ $ 826.33    570.75   2,683.56  1,982.48
                                                                            ========  ========   ========  ========

Diluted earnings per common share.......................................... $ 815.20    565.09   2,642.12  1,954.63
                                                                            ========  ========   ========  ========

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

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

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<TABLE>
<CAPTION>


                                                        FIRST BANKS, INC.

                CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME - (UNAUDITED)
                      Nine Months Ended September 30, 2004 and 2003 and Three 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>
Consolidated balances, December 31, 2002.........  $12,822      241    5,915      5,910             433,689    60,464   519,041
Nine months ended September 30, 2003:
    Comprehensive income:
      Net income.................................       --       --       --         --    47,431    47,431        --    47,431
      Other comprehensive loss, net of tax:
        Unrealized losses on securities, net of
          reclassification adjustment (1)........       --       --       --         --    (9,335)       --    (9,335)   (9,335)
        Derivative instruments:
          Current period transactions............       --       --       --         --   (14,156)       --   (14,156)  (14,156)
                                                                                          -------
      Comprehensive income.......................                                          23,940
                                                                                          =======
    Class A preferred stock dividends,
        $0.80 per share..........................       --       --       --         --                (513)       --      (513)
    Class B preferred stock dividends,
        $0.07 per share..........................       --       --       --         --                 (11)       --       (11)
                                                   -------    -----    -----      -----             -------   -------   -------
Consolidated balances September 30, 2003.........   12,822      241    5,915      5,910             480,596    36,973   542,457
Three months ended December 31, 2003:
    Comprehensive income:
      Net income.................................       --       --       --         --    15,380    15,380        --    15,380
      Other comprehensive loss, net of tax:
        Unrealized losses on securities, net of
          reclassification adjustment (1)........       --       --       --         --      (651)       --      (651)     (651)
        Derivative instruments:
          Current period transactions............       --       --       --         --    (7,109)       --    (7,109)   (7,109)
                                                                                          -------
      Comprehensive income.......................                                           7,620
                                                                                          =======
    Class A preferred stock dividends,
        $0.40 per share..........................       --       --       --         --                (256)       --      (256)
    Class B preferred stock dividends,
        $0.04 per share..........................       --       --       --         --                  (6)       --        (6)
                                                   -------    -----    -----      -----             -------   -------   -------

Consolidated balances, December 31, 2003.........   12,822      241    5,915      5,910             495,714    29,213   549,815
Nine months ended September 30, 2004:
    Comprehensive income:
      Net income.................................       --       --       --         --    64,020    64,020        --    64,020
      Other comprehensive loss, net of tax:
        Unrealized losses on securities, net of
          reclassification adjustment (1)........       --       --       --         --    (1,886)       --    (1,886)   (1,886)
        Derivative instruments:
          Current period transactions............       --       --       --         --   (22,074)       --   (22,074)  (22,074)
                                                                                          -------
      Comprehensive income.......................                                          40,060
                                                                                          =======
    Class A preferred stock dividends,
        $0.80 per share..........................       --       --       --         --                (513)       --      (513)
    Class B preferred stock dividends,
        $0.07 per share..........................       --       --       --         --                 (11)       --       (11)
                                                   -------    -----    -----      -----             -------   -------   -------

Consolidated balances, September 30, 2004........  $12,822      241    5,915      5,910             559,210     5,253   589,351
                                                   =======    =====    =====      =====             =======   =======   =======
<PAGE>

-------------------------
(1) Disclosure of reclassification adjustment:

                                                                       Three Months Ended   Nine Months Ended  Three Months Ended
                                                                          September 30,       September 30,       December 31,
                                                                       ------------------   -----------------
                                                                         2004     2003       2004       2003         2003
                                                                         ----     ----       ----       ----         ----

     Unrealized gains (losses) on investment securities
         arising during the period...................................  $17,397  (2,874)    (1,719)     (4,894)         603
     Less reclassification adjustment for gains
        included in net income.......................................      167     173        167       4,441        1,254
                                                                       -------  ------     ------     -------       ------
     Unrealized gains (losses) on investment securities..............  $17,230  (3,047)    (1,886)     (9,335)        (651)
                                                                       =======  ======     ======     =======       ======

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)

                                                                                                Nine Months Ended
                                                                                                   September 30,
                                                                                               2004           2003
                                                                                               ----           ----
Cash flows from operating activities:
<S>                                                                                         <C>              <C>
     Net income.........................................................................    $  64,020        47,431
     Adjustments to reconcile net income to net cash used in operating activities:
       Depreciation and amortization of bank premises and equipment.....................       13,921        14,596
       Amortization, net of accretion...................................................       12,602        20,599
       Originations and purchases of loans held for sale................................     (881,860)   (1,815,712)
       Proceeds from sales of loans held for sale.......................................      741,108     1,661,363
       Provision for loan losses........................................................       23,250        36,000
       Provision for income taxes.......................................................       34,844        28,877
       Payments of income taxes.........................................................      (35,480)      (27,441)
       Decrease in accrued interest receivable..........................................        1,814         5,032
       Interest accrued on liabilities..................................................       66,306        81,203
       Payments of interest on liabilities..............................................      (65,603)      (83,778)
       Gain on mortgage loans sold and held for sale....................................      (12,866)      (14,616)
       Net gain on sales of available-for-sale investment securities....................         (257)       (6,832)
       Gain on sales of branches, net of expenses.......................................       (1,000)           --
       Other operating activities, net..................................................       (5,483)          950
                                                                                            ---------    ----------
          Net cash used in operating activities.........................................      (44,684)      (52,328)
                                                                                            ---------    ----------

Cash flows from investing activities:
     Cash (paid) received for acquired entities, net of cash
       and cash equivalents received (paid).............................................      (35,348)       14,870
     Proceeds from sales of investment securities available for sale....................       26,340         6,009
     Maturities of investment securities available for sale.............................      364,312     1,152,354
     Maturities of investment securities held to maturity...............................        3,149         4,143
     Purchases of investment securities available for sale..............................     (503,776)     (746,511)
     Purchases of investment securities held to maturity................................      (18,524)         (103)
     Net increase in loans..............................................................      (81,606)       (3,863)
     Recoveries of loans previously charged-off.........................................       18,129        17,024
     Purchases of bank premises and equipment...........................................       (4,585)       (4,213)
     Other investing activities, net....................................................       12,078        11,165
                                                                                            ---------    ----------
          Net cash (used in) provided by investing activities...........................     (219,831)      450,875
                                                                                            ---------    ----------

Cash flows from financing activities:
     Increase in demand and savings deposits............................................      101,615        28,967
     Decrease in time deposits..........................................................      (13,078)     (269,674)
     Decrease in federal funds purchased................................................           --       (55,000)
     Decrease in Federal Home Loan Bank advances........................................       (2,000)       (3,548)
     Increase in securities sold under agreements to repurchase.........................      248,619        62,072
     Advances drawn on note payable.....................................................           --        34,500
     Repayments of note payable.........................................................      (17,000)      (10,500)
     Proceeds from issuance of subordinated debentures..................................       20,619        70,907
     Payments for redemptions of subordinated debentures................................           --      (136,341)
     Cash paid for sales of branches, net of cash
       and cash equivalents sold........................................................      (19,353)           --
     Payment of preferred stock dividends...............................................         (524)         (524)
                                                                                            ---------    ----------
          Net cash provided by (used in) financing activities...........................      318,898      (279,141)
                                                                                            ---------    ----------
          Net increase in cash and cash equivalents.....................................       54,383       119,406
Cash and cash equivalents, beginning of period..........................................      213,537       203,251
                                                                                            ---------    ----------
Cash and cash equivalents, end of period................................................    $ 267,920       322,657
                                                                                            =========    ==========

Noncash investing and financing activities:
     Loans transferred to other real estate.............................................    $   4,246        11,999
                                                                                            =========    ==========

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 U.S.  generally  accepted  accounting  principles and conform to
predominant practices within the banking industry. Management of First Banks has
made a number of estimates and  assumptions  relating to the reporting of assets
and  liabilities  and the  disclosure of contingent  assets and  liabilities  to
prepare the consolidated  financial statements in conformity with U.S. generally
accepted  accounting   principles.   Actual  results  could  differ  from  those
estimates. In the opinion of management,  all adjustments,  consisting of normal
recurring accruals  considered  necessary for a fair presentation of the results
of operations  for the interim  periods  presented  herein,  have been included.
Operating results for the three and nine months ended September 30, 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 July 30, 2004,  First Banks  completed its  acquisition  of  Continental
Mortgage  Corporation - Delaware (CMC), and its wholly owned banking subsidiary,
Continental  Community  Bank  and  Trust  Company  (CCB),  acquiring  all of the
outstanding  common  stock of CMC in  exchange  for  $4.2  million  in cash.  In
addition,  First  Banks  redeemed  in full all of the  outstanding  subordinated
promissory  notes of CMC,  including  accumulated  accrued and unpaid  interest,
totaling  $4.5  million  in  aggregate.   The  transaction  was  funded  through
internally  generated funds.  CMC, through CCB,  operated two banking offices in
the Chicago  suburban  communities  of Aurora and Villa Park. At the time of the
transaction,  CMC had total  assets of $140.7  million,  loans,  net of unearned
discount,  of $73.6 million and total  deposits of $104.6  million.  Preliminary
goodwill,  which  is  not  expected  to be  deductible  for  tax  purposes,  was
approximately  $1.8  million and the core deposit  intangibles,  which are being
amortized   over  seven  years   utilizing  the   straight-line   method,   were
approximately $2.0 million.  CMC was merged with and into SFC and CCB was merged
with and into First Bank.

     On August 12, 2004,  First Banks  entered into a Stock  Purchase  Agreement
(the Agreement) by and among First Banks,  SFC, CIB Marine  Bancshares,  Inc., a
Wisconsin  corporation,   Hillside  Investors,   Ltd.  (Hillside),  an  Illinois
corporation,  and CIB Bank (CIB), an Illinois banking corporation. The Agreement
provides  for  the   acquisition  of  Hillside  and  its  wholly  owned  banking
subsidiary,  CIB, for  approximately  $62.0  million in cash and the  subsequent
mergers of Hillside with and into SFC, and of CIB with and into First Bank.  The
acquisition  will be funded  through  the  issuance of  subordinated  debentures
associated  with two private  placements  of $60.0 million in aggregate of trust
preferred  securities,  of which $20.0  million was issued on September 20, 2004
through  First  Banks'  newly  formed  affiliated  statutory  trust,  First Bank
Statutory Trust II (FBST II). CIB is  headquartered in Hillside,  Illinois,  and
operates 16 banking offices in the Chicago,  Illinois  metropolitan  area. As of
September 30, 2004,  CIB reported total assets of  approximately  $1.24 billion,
loans,  net of unearned  discount,  of  approximately  $724.7  million and total
deposits of approximately $1.14 billion. The transaction,  which was approved by
the Board of Governors of the Federal  Reserve System (the Board) on November 1,
2004 and is still subject to the receipt of certain state regulatory  approvals,
is expected to be completed during the fourth quarter of 2004.
<PAGE>

     On August 31,  2004,  Small  Business  Loan Source LLC (SBLS LLC),  a newly
formed  Nevada-based  limited  liability  company and  subsidiary of First Bank,
purchased  substantially  all of the assets and assumed  certain  liabilities of
Small Business Loan Source,  Inc. (SBLS),  headquartered  in Houston,  Texas, in
exchange  for cash and  certain  payments  contingent  on future  valuations  of
specifically   identified  assets,   including  servicing  assets  and  retained
interests  in   securitizations,   as  further  described  in  Note  12  to  the
Consolidated Financial Statements. The transaction was funded through internally
generated  funds. At the time of the  transaction,  SBLS LLC purchased from SBLS
assets of $47.1 million, including $24.0 million of United States Small Business
Administration  (SBA) loans, net of unearned discount,  and $15.1 million of SBA
servicing  rights and assumed  $1.5 million of  liabilities,  resulting in a net
cash  payment of $45.6  million.  Preliminary  goodwill was  approximately  $4.8
million and is expected to be deductible for tax purposes.  In conjunction  with
this  transaction,  on August  30,  2004,  First Bank  granted to First  Capital
America, Inc. (FCA), a corporation owned by First Banks' Chairman and members of
his immediate  family, an option to purchase  Membership  Interests of SBLS LLC.
Upon exercise of this option, SBLS LLC will become 51.0% owned by First Bank and
49.0% owned by FCA, as further discussed in Note 6 to the Consolidated Financial
Statements.

     The  aforementioned  acquisitions  of CMC and SBLS were accounted for using
the purchase method of accounting and, accordingly,  the consolidated  financial
statements  include the  financial  position and results of  operations  for the
periods subsequent to the respective  acquisition dates, and the assets acquired
and  liabilities  assumed were recorded at their  estimated fair value as of the
acquisition dates. These fair value adjustments  represent current estimates and
are subject to further adjustments as the valuation data,  including the receipt
of certain third party valuation data, is finalized.

     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 and are expensed in the consolidated statements of
income as incurred.  The accrued severance balance of $921,000 identified in the
following   table  is  comprised  of   contractual   obligations   under  salary
continuation  agreements to nine  individuals  and have remaining  terms ranging
from approximately  three months to 12 years. As the obligation to make payments
under these agreements is accrued at the consummation date, such payments do not
have any  impact on the  consolidated  statements  of income.  First  Banks also
incurs costs associated with  acquisitions that are expensed in the consolidated
statements  of income.  These  costs  relate  principally  to  additional  costs
incurred in conjunction  with the data processing  conversions of the respective
entities.
<PAGE>

     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.
<TABLE>
<CAPTION>

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

<S>                                                               <C>                    <C>                   <C>
         Balance at December 31, 2003.......................      $ 1,412                    --               1,412
         Nine Months Ended September 30, 2004:
           Amounts accrued at acquisition date..............          180                   496                 676
           Payments.........................................         (671)                 (496)             (1,167)
                                                                  -------                ------             -------
         Balance at September 30, 2004......................      $   921                    --                 921
                                                                  =======                ======             =======
</TABLE>

     During the nine months  ended  September  30,  2004,  First Bank opened the
following four de novo branch offices:

                Branch Office Location               Date Opened
                ----------------------               -----------
                    Houston, Texas                February 9, 2004
                  Wildwood, Missouri              February 20, 2004
                   McKinney, Texas                  July 19, 2004
                San Diego, California              August 16, 2004

     On February 6, 2004,  First Bank  completed its  divestiture  of one branch
office in rural Missouri. This branch divestiture resulted in a reduction of the
deposit base of approximately $8.4 million,  and a pre-tax gain of approximately
$392,000, which is included in noninterest income. On April 16, 2004, First Bank
completed its divestiture of one branch office in southern Illinois. This branch
divestiture  resulted in a reduction of the deposit base of approximately  $15.0
million,  and a pre-tax  gain of  approximately  $630,000,  which is included in
noninterest income.

     On June 30, 2004, First Bank completed the sale of a significant portion of
the leases in its commercial leasing  portfolio.  The sale reduced the Company's
commercial  leasing portfolio by approximately  $33.1 million to $9.6 million at
June 30, 2004. No gain or loss was recorded on the  transaction.  In conjunction
with the transaction, First Bank established a $2.0 million liability associated
with related recourse  obligations for certain leases sold, as further discussed
in Note 12 to the  Consolidated  Financial  Statements.  The commercial  leasing
portfolio has further declined to $7.5 million at September 30, 2004, reflecting
the  Company's  overall  business  strategy  to reduce  its  commercial  leasing
activities.



<PAGE>

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

     Intangible  assets  associated  with the purchase of  subsidiaries,  net of
amortization, were comprised of the following at September 30, 2004 and December
31, 2003:
<TABLE>
<CAPTION>

                                                     September 30, 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..............  $  19,428         (6,149)        17,391           (4,233)
         Goodwill associated with
           purchases of branch offices.........      2,210           (968)         2,210             (861)
                                                 ---------        -------       --------          -------
              Total............................  $  21,638         (7,117)        19,601           (5,094)
                                                 =========        =======       ========          =======

     Unamortized intangible assets:
         Goodwill associated with the
           purchase of subsidiaries............  $ 150,541                       144,199
                                                 =========                      ========
</TABLE>

     Amortization  of intangibles  associated  with the purchase of subsidiaries
and branch  offices was  $733,000 and $2.0 million for the three and nine months
ended  September 30, 2004,  respectively,  and $658,000 and $1.8 million for the
comparable  periods in 2003.  Amortization  of intangibles  associated  with the
purchase of subsidiaries, including amortization of core deposit intangibles and
goodwill associated with purchases of branch offices, has been estimated through
2009 in the following table, and does not take into consideration any pending or
potential future acquisitions or branch purchases.
<TABLE>
<CAPTION>

                                                                                 (dollars expressed in thousands)
                  Year ending December 31:
<S>                                                                                           <C>
                      Remaining 2004......................................................    $   731
                      2005................................................................      2,922
                      2006................................................................      2,922
                      2007................................................................      2,922
                      2008................................................................      2,922
                      2009 ...............................................................      1,021
                                                                                              -------
                         Total............................................................    $13,440
                                                                                              =======
</TABLE>

     Changes in the  carrying  amount of goodwill  for the three and nine months
ended September 30, 2004 and 2003 were as follows:
<TABLE>
<CAPTION>

                                                                    Three Months Ended                Nine Months Ended
                                                                       September 30,                    September 30,
                                                                 ------------------------           ---------------------
                                                                    2004            2003             2004           2003
                                                                    ----            ----             ----           ----
                                                                               (dollars expressed in thousands)

<S>                                                              <C>              <C>               <C>           <C>
           Balance, beginning of period......................... $ 145,255        142,167           145,548       140,112
           Goodwill acquired during period......................     6,564             --             6,564         1,026
           Acquisition-related adjustments......................        --          1,237              (222)        2,338
           Amortization - purchases of branch offices...........       (36)           (36)             (107)         (108)
                                                                 ---------        -------           -------       -------
           Balance, end of period............................... $ 151,783        143,368           151,783       143,368
                                                                 =========        =======           =======       =======
</TABLE>
<PAGE>

(4)  SERVICING RIGHTS

     Mortgage Banking Activities:
     ---------------------------

     At September 30, 2004 and December 31, 2003, First Banks serviced  mortgage
loans for others  amounting to $1.11  billion and $1.22  billion,  respectively.
Borrowers'  escrow  balances held by First Banks on such loans were $7.5 million
and $4.7 million at September 30, 2004 and December 31, 2003, respectively.

     Changes in mortgage servicing rights, net of amortization,  for the periods
indicated were as follows:
<TABLE>
<CAPTION>

                                                                    Three Months Ended                Nine Months Ended
                                                                       September 30,                    September 30,
                                                                    -------------------             -------------------
                                                                     2004         2003               2004          2003
                                                                     ----         ----               ----          ----
                                                                              (dollars expressed in thousands)

<S>                                                               <C>            <C>                <C>           <C>
           Balance, beginning of period........................   $ 12,533       16,979             15,408        14,882
           Originated mortgage servicing rights................        345        3,125              1,164         7,619
           Amortization........................................     (1,498)      (3,278)            (5,192)       (5,675)
           Impairment valuation allowance......................         --         (800)                --          (800)
           Reversal of impairment valuation allowance..........         --          166                 --           166
                                                                  --------       ------             ------        ------
           Balance, end of period..............................   $ 11,380       16,192             11,380        16,192
                                                                  ========       ======             ======        ======
</TABLE>

     The fair value of mortgage servicing rights was approximately $16.8 million
and $18.3  million  at  September  30,  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  $5.4 million and $2.1 million
at September 30, 2004 and 2003,  respectively,  and $2.9 million at December 31,
2003.

     Amortization of mortgage  servicing rights has been estimated  through 2009
in the following table:
<TABLE>
<CAPTION>

                                                                                 (dollars expressed in thousands)

                  Year ending December 31:
<S>                             <C>                                                          <C>
                      Remaining 2004......................................................   $  1,028
                      2005................................................................      3,983
                      2006................................................................      3,392
                      2007................................................................      2,050
                      2008................................................................        732
                      2009................................................................        195
                                                                                             --------
                           Total..........................................................   $ 11,380
                                                                                             ========
</TABLE>

     Other Servicing Activities:
     --------------------------

     At September 30, 2004,  First Banks serviced SBA loans for others amounting
to $204.8 million. Changes in SBA servicing rights, net of amortization, for the
periods indicated were as follows:
<TABLE>
<CAPTION>

                                                              Three Months Ended          Nine Months Ended
                                                              September 30, 2004         September 30, 2004
                                                              ------------------         ------------------
                                                                      (dollars expressed in thousands)

<S>                                                               <C>
           Balance, beginning of period........................   $     --                         --
           SBA servicing rights acquired during period.........     15,076                     15,076
           Amortization .......................................       (163)                      (163)
                                                                  --------                     ------
           Balance, end of period..............................   $ 14,913                     14,913
                                                                  ========                     ======
</TABLE>
<PAGE>

     The fair value of SBA servicing  rights has been estimated by management to
be  approximately  $14.9 million at September 30, 2004. As further  discussed in
Note 2 to the  Consolidated  Financial  Statements,  the fair value  adjustments
represent  current  estimates  and are  subject  to further  adjustments  as the
valuation data,  including the receipt of certain third party valuation data, is
finalized.

     Amortization of SBA servicing rights has been estimated through 2009 in the
following table:
<TABLE>
<CAPTION>

                                                                                 (dollars expressed in thousands)

                  Year ending December 31:
<S>                                                                                          <C>
                      Remaining 2004......................................................   $    479
                      2005................................................................      1,789
                      2006................................................................      1,627
                      2007................................................................      1,475
                      2008................................................................      1,334
                      2009................................................................      1,203
                                                                                             --------
                           Total..........................................................   $  7,907
                                                                                             ========
</TABLE>

(5)  EARNINGS PER COMMON SHARE

     The  following is a  reconciliation  of the basic and diluted  earnings per
share computations for the periods indicated:
<TABLE>
<CAPTION>


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

     Three months ended September 30, 2004:
<S>                                                                          <C>               <C>         <C>
         Basic EPS - income available to common stockholders.............    $  19,552         23,661      $   826.33
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          192            559          (11.13)
                                                                             ---------        -------      ----------
         Diluted EPS - income available to common stockholders...........    $  19,744         24,220      $   815.20
                                                                             =========        =======      ==========

     Three months ended September 30, 2003:
         Basic EPS - income available to common stockholders.............    $  13,504         23,661      $   570.75
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          192            577           (5.66)
                                                                             ---------        -------      ----------
         Diluted EPS - income available to common stockholders...........    $  13,696         24,238      $   565.09
                                                                             =========        =======      ==========

     Nine months ended September 30, 2004:
         Basic EPS - income available to common stockholders.............    $  63,496         23,661      $ 2,683.56
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          513            565          (41.44)
                                                                             ---------        -------      ----------
         Diluted EPS - income available to common stockholders...........    $  64,009         24,226      $ 2,642.12
                                                                             =========        =======      ==========

     Nine months ended September 30, 2003:
         Basic EPS - income available to common stockholders.............    $  46,907         23,661      $ 1,982.48
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          513            600          (27.85)
                                                                             ---------        -------      ----------
         Diluted EPS - income available to common stockholders...........    $  47,420         24,261      $ 1,954.63
                                                                             =========        =======      ==========
</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. decreased to
$6.7 million and $19.9 million for the three and nine months ended September 30,
2004,  respectively,  from $6.9  million and $20.6  million  for the  comparable
periods in 2003. First Services,  L.P. recorded reduced  information  technology
costs as a result of the  renegotiation  of vendor service  contracts and passed
the cost  reduction  through to First Banks,  Inc. and its  subsidiaries.  First
Services,  L.P.  leases  information  technology and other  equipment from First
Bank. During the three months ended September 30, 2004 and 2003, First Services,
L.P.  paid First Bank $1.0 million and  $985,000,  respectively,  and during the
nine months ended September 30, 2004 and 2003,  First Services,  L.P. paid First
Bank $3.2 million in rental fees for the use of that equipment.

     First Brokerage  America,  L.L.C., a limited liability  company  indirectly
owned by First Banks'  Chairman and members of his  immediate  family,  received
approximately  $870,000  and $2.6  million for the three and nine  months  ended
September  30,  2004,  respectively,  and  $795,000  and  $2.3  million  for the
comparable  periods  in 2003 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  $100,000 and $304,000
for the three and nine  months  ended  September  30,  2004,  respectively,  and
$128,000 and  $379,000 for the  comparable  periods in 2003 in  commissions  for
policies  purchased by First Banks or customers of First Bank from unaffiliated,
third-party insurers.

     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 $30.7 million and $20.0 million at September 30, 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.

     On August 30, 2004, First Bank granted to FCA, a corporation owned by First
Banks'  Chairman  and  members  of his  immediate  family,  a written  option to
purchase  735  Membership  Interests of SBLS LLC, a newly  organized  and wholly
owned  limited  liability  company  of First  Bank,  at a price of  $10,000  per
Membership Interest, or $7.35 million in aggregate.  The option may be exercised
by FCA at any time prior to December 31, 2004 by written notice to First Bank of
the intention to exercise the option and payment to First Bank of $7.35 million.
First Bank  anticipates  that FCA will exercise its option,  upon which SBLS LLC
will become 51.0% owned by First Bank and 49.0% owned by FCA.
<PAGE>

(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
September 30, 2004, First Banks and First Bank were each well capitalized.

     As of September 30, 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.

     At September 30, 2004 and December 31, 2003,  First Banks' and First Bank's
required and actual capital ratios were as follows:
<TABLE>
<CAPTION>


                                                             Actual                                       To Be Well
                                                    ---------------------------                        Capitalized Under
                                                    September 30,  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..................................   11.06%        10.27%            8.0%                10.0%
         First Bank...................................   10.51         10.41             8.0                 10.0

     Tier 1 capital (to risk-weighted assets):
         First Banks..................................    9.28          8.46             4.0                  6.0
         First Bank...................................    9.25          9.15             4.0                  6.0

     Tier 1 capital (to average assets):
         First Banks..................................    8.35          7.62             3.0                  5.0
         First Bank...................................    8.31          8.22             3.0                  5.0
</TABLE>

     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
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 elements would be limited to
25% of Tier 1 capital, net of goodwill. Additionally, qualifying trust preferred
securities  and Class C minority  interests  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 ended
on July 11,  2004.  First  Banks is  awaiting  further  guidance  from the Board
pending the outcome of the newly proposed  rules,  and is continuing to evaluate
the  proposed  changes  and  their  overall  impact on the  Company's  financial
condition and results of operations.  Management expects that  implementation of
the Board's  proposed  rules,  as currently  stated,  would reduce the Company's
regulatory Tier 1 capital ratios.  However,  management  believes its 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.
<PAGE>

     In  conjunction  with  the  pending  acquisition  of  Hillside  and  CIB as
described in Note 2 to the Consolidated  Financial Statements,  First Banks, SFC
and  First  Bank  committed  to the Board  that each  entity  will  remain  well
capitalized  before and after  consummation of the transaction.  This commitment
was made in response to a condition  imposed by the Board in connection with its
findings and decision to approve the regulatory  applications submitted by First
Banks.

(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.



<PAGE>


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

     The business segment results are summarized as follows:

                                                                             Corporate, Other
                                                                             and Intercompany
                                                   First Bank              Reclassifications (1)          Consolidated Totals
                                          ---------------------------   --------------------------   ---------------------------
                                          September 30,  December 31,   September 30, December 31,   September 30,  December 31,
                                              2004          2003          2004           2003            2004            2003
                                              ----          ----          ----           ----            ----            ----
                                                                     (dollars expressed in thousands)

Balance sheet information:

<S>                                       <C>           <C>               <C>            <C>          <C>             <C>
Investment securities...................  $1,264,580    1,042,809         8,288          6,905        1,272,868       1,049,714
Loans, net of unearned discount.........   5,561,623    5,328,075            --             --        5,561,623       5,328,075
Goodwill................................     151,783      145,548            --             --          151,783         145,548
Total assets............................   7,562,558    7,097,635        11,399          9,305        7,573,957       7,106,940
Deposits................................   6,167,258    5,977,042       (39,452)       (15,427)       6,127,806       5,961,615
Note payable............................          --           --            --         17,000               --          17,000
Subordinated debentures.................          --           --       232,311        209,320          232,311         209,320
Stockholders' equity....................     780,462      766,397      (191,111)      (216,582)         589,351         549,815
                                          ==========    =========      ========       ========        =========       =========

                                                                           Corporate, Other
                                                                           and Intercompany
                                                  First Bank             Reclassifications (1)            Consolidated Totals
                                          -----------------------      -----------------------        -------------------------
                                              Three Months Ended          Three Months Ended              Three Months Ended
                                                 September 30,              September 30,                   September 30,
                                          -----------------------      -----------------------        -------------------------
                                              2004         2003           2004          2003             2004            2003
                                              ----         ----           ----          ----             ----            ----
                                                                   (dollars expressed in thousands)

Income statement information:

Interest income.........................  $   99,311       96,053           150            111           99,461          96,164
Interest expense........................      19,916       19,166         3,937          3,918           23,853          23,084
                                          ----------    ---------      --------       --------        ---------       ---------
     Net interest income................      79,395       76,887        (3,787)        (3,807)          75,608          73,080
Provision for loan losses...............       7,500       15,000            --             --            7,500          15,000
                                          ----------    ---------      --------       --------        ---------       ---------
     Net interest income after
       provision for loan losses........      71,895       61,887        (3,787)        (3,807)          68,108          58,080
                                          ----------    ---------      --------       --------        ---------       ---------
Noninterest income......................      22,133       20,192          (151)            50           21,982          20,242
Noninterest expense.....................      57,398       52,671           993          1,859           58,391          54,530
                                          ----------    ---------      --------       --------        ---------       ---------
     Income before provision for
       income taxes.....................      36,630       29,408        (4,931)        (5,616)          31,699          23,792
Provision for income taxes..............      13,663       12,040        (1,712)        (1,948)          11,951          10,092
                                          ----------    ---------      --------       --------        ---------       ---------
     Net income.........................  $   22,967       17,368        (3,219)        (3,668)          19,748          13,700
                                          ==========    =========      ========       ========        =========       =========
<PAGE>

                                                                           Corporate, Other
                                                                           and Intercompany
                                                  First Bank             Reclassifications (1)           Consolidated Totals
                                          -----------------------      -----------------------        -------------------------
                                               Nine Months Ended           Nine Months Ended              Nine Months Ended
                                                 September 30,                September 30,                 September 30,
                                          -----------------------      -----------------------        -------------------------
                                              2004          2003         2004           2003             2004          2003
                                              ----          ----         ----           ----             ----          ----
                                                                   (dollars expressed in thousands)

Income statement information:

Interest income.........................  $  291,744      293,749           429            710          292,173         294,459
Interest expense........................      55,162       66,448        11,144         14,755           66,306          81,203
                                          ----------    ---------      --------       --------        ---------       ---------
     Net interest income................     236,582      227,301       (10,715)       (14,045)         225,867         213,256
Provision for loan losses...............      23,250       36,000            --             --           23,250          36,000
                                          ----------    ---------      --------       --------        ---------       ---------
     Net interest income after
       provision for loan losses........     213,332      191,301       (10,715)       (14,045)         202,617         177,256
                                          ----------    ---------      --------       --------        ---------       ---------
Noninterest income......................      63,102       58,577          (457)         6,137           62,645          64,714
Noninterest expense.....................     163,303      161,877         3,095          3,785          166,398         165,662
                                          ----------    ---------      --------       --------        ---------       ---------
     Income before provision for
       income taxes.....................     113,131       88,001       (14,267)       (11,693)          98,864          76,308
Provision for income taxes..............      42,613       32,933        (7,769)        (4,056)          34,844          28,877
                                          ----------    ---------      --------       --------        ---------       ---------
     Net income.........................  $   70,518       55,068        (6,498)        (7,637)          64,020          47,431
                                          ==========    =========      ========       ========        =========       =========
------------------
(1)  Corporate  and other  includes  $2.4  million and $2.3  million of interest expense on subordinated debentures,  after
     applicable income tax benefit of $1.3 million and $1.2 million for the three months ended September 30, 2004 and 2003,
     respectively.  For the nine months ended  September 30, 2004 and  2003,  corporate  and other  includes  $7.0  million
     and $9.3  million of interest expense on subordinated debentures, after applicable income tax benefits of $3.8 million
     and $5.0 million, respectively.

</TABLE>

<PAGE>

 (9) OTHER BORROWINGS

     Other  borrowings were comprised of the following at September 30, 2004 and
December 31, 2003:
<TABLE>
<CAPTION>

                                                                                   September 30,     December 31,
                                                                                       2004              2003
                                                                                  ---------------  ----------------
                                                                                  (dollars expressed in thousands)

         Securities sold under agreements to repurchase:
<S>                                                                                  <C>                <C>
              Daily...............................................................   $ 165,098          166,479
              Term................................................................     350,000          100,000
         Federal Home Loan Bank borrowings........................................      35,164            7,000
                                                                                     ---------          -------
                  Total other borrowings..........................................   $ 550,262          273,479
                                                                                     =========          =======
</TABLE>

     In conjunction  with First Banks'  interest rate risk  management  program,
First Banks  entered  into the  following  transactions  with the  objective  of
stabilizing net interest income over time:

     >>   Effective  January 12, 2004, First Banks  consummated a $150.0 million
          three-year  reverse  repurchase  agreement  under a master  repurchase
          agreement  with a single  unaffiliated  third party.  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 held by other
          financial  institutions under safekeeping  agreements.  In conjunction
          with  this  transaction,  First  Banks  purchased  $150.0  million  of
          callable U.S. Government agency securities.

     >>   Effective  June 14, 2004,  First Banks  consummated  two $50.0 million
          three-year  reverse  repurchase  agreements under a master  repurchase
          agreement  with a single  unaffiliated  third party.  Interest is paid
          quarterly  and is  equivalent  to  the  three-month  London  Interbank
          Offering  Rate minus  0.60% and 0.61%,  respectively,  plus a floating
          amount  equal  to the  differential  between  the  three-month  London
          Interbank  Offing Rate reset in arrears and the strike price of 5.00%,
          if the  three-month  London  Interbank  Offering Rate reset in arrears
          exceeds 5.00%. The underlying  securities  associated with the reverse
          repurchase  agreements are callable U.S.  Government agency securities
          and  are  held  by  other  financial  institutions  under  safekeeping
          agreements.  In  conjunction  with  these  transactions,  First  Banks
          purchased   $100.0   million  of  callable  U.S.   Government   agency
          securities.

     At  September  30,  2004 and  December  31,  2003,  Federal  Home Loan Bank
borrowings  were $35.2  million and $7.0  million,  respectively.  The  increase
during the nine months ended  September 30, 2004 is attributable to First Banks'
acquisition  of CMC,  which  provided  $30.2  million of Federal  Home Loan Bank
borrowings.
<PAGE>

(10) NOTE PAYABLE

     On August 12,  2004,  First Banks  entered  into a first  amendment  to its
revolving credit line with a group of unaffiliated financial  institutions.  The
material  changes in the First  Amendment to Secured  Credit  Agreement  (Credit
Agreement)  are  amendments  to the  termination  date  and an  increase  in the
revolving  credit  line and  letter of credit  facility.  The  Credit  Agreement
provides a $75.0 million  revolving  credit line and a $25.0  million  letter of
credit facility. Interest is payable on outstanding principal loan balances at a
floating  rate  equal to either  the  lender's  prime  rate or, at First  Banks'
option,  the London  Interbank  Offering  Rate plus a margin  determined  by the
outstanding  loan  balances and First Banks' net income for the  preceding  four
calendar quarters.  If the loan balances  outstanding under the revolving credit
line are  accruing at the prime  rate,  interest  is paid  monthly.  If the loan
balances  outstanding under the revolving credit line are accruing at the London
Interbank  Offering  Rate,  interest is payable based on the one, two,  three or
six-month  London Interbank  Offering Rate, as selected by First Banks.  Amounts
may be borrowed under the Credit  Agreement until August 11, 2005, at which time
the  principal  and  interest  outstanding  is due and  payable.  There  were no
outstanding  loan  balances  under the Credit  Agreement at September  30, 2004.
Outstanding loan balances under the previous credit agreement were $17.0 million
at December 31, 2003.  Letters of credit issued to unaffiliated third parties on
behalf of First Banks under the letter of credit  facility were $6.3 million and
$5.4 million at September 30, 2004 and December 31, 2003, respectively,  and had
not been drawn on by the counterparties.

     The Credit Agreement requires maintenance of certain minimum capital ratios
for First Banks and First Bank, certain maximum  nonperforming assets ratios for
First Banks and First Bank and a minimum return on assets ratio for First Banks.
In addition,  it prohibits the payment of dividends on First Banks' common stock
and contains additional covenants.  Loans under the Credit Agreement are secured
by First Banks' ownership interest in the capital stock of its subsidiaries.

(11) SUBORDINATED DEBENTURES

     On  September  8,  2004,  First  Banks  entered  into a  commitment  letter
providing  for the issuance of $60.0  million in  aggregate  of trust  preferred
securities  through private  placement  transactions,  to be issued by two newly
formed  affiliated  statutory  trusts of First  Banks.  The gross  amount of the
proceeds from the private  placements  will be used by the affiliated  statutory
trusts to purchase variable rate subordinated debentures from First Banks. First
Banks will use the proceeds from the issuance of the subordinated  debentures to
the affiliated  statutory trusts to fund its pending acquisition of Hillside and
CIB, as further  described in Note 2 to the Consolidated  Financial  Statements.
The initial  private  placement was  completed on September  20, 2004,  with the
first newly formed  affiliated  statutory  trust  issuing $20.0 million of trust
preferred   securities,   as  further  discussed  below.  The  funds  have  been
temporarily  invested  until their use for the  acquisition of Hillside and CIB.
Under the terms of the commitment letter, the second private placement will take
place no later than December 17, 2004,  and will likely occur in November  2004.
In conjunction with that transaction,  First Banks will form a second affiliated
statutory  trust,  which will issue $40.0 million of additional  trust preferred
securities.

     On September 20, 2004,  FBST II, a newly formed Delaware  statutory  trust,
issued 20,000 shares of variable rate trust  preferred  securities at $1,000 per
share in a private  placement,  and issued 619  shares of common  securities  to
First Banks at $1,000 per share.  First Banks owns all of the common  securities
of FBST II. The gross  proceeds of the offering were used by FBST II to purchase
$20.6  million of  variable  rate  subordinated  debentures  from  First  Banks,
maturing on September 20, 2034. The maturity date of the subordinated debentures
may be  shortened  to a date not earlier than  September  20,  2009,  if certain
conditions are met. The  subordinated  debentures are the sole asset of FBST II.
In connection with the issuance of the FBST II preferred securities, First Banks
made certain  guarantees and  commitments  that, in the aggregate,  constitute a
full and  unconditional  guarantee by First Banks of the  obligations of FBST II
under  the FBST II  preferred  securities.  Proceeds  from the  issuance  of the
subordinated  debentures  to FBST  II,  net of  offering  expenses,  were  $20.6
million.  The  distribution  rate on the FBST II securities is equivalent to the
three-month  London  Interbank  Offering  Rate plus 205.0 basis  points,  and is
payable quarterly in arrears beginning December 20, 2004.
<PAGE>

(12) CONTINGENT LIABILITIES

     First  Banks is a party to 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  September  30,  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.

     On June  30,  2004,  as  further  discussed  in Note 2 to the  Consolidated
Financial  Statements,  First Bank  recorded a  liability  of $2.0  million  for
recourse  obligations  related to the completion of the sale of a portion of its
commercial  leasing  portfolio.  For value  received,  First  Bank,  as  seller,
indemnified  the buyer of certain  leases from any  liability or loss  resulting
from defaults  subsequent to the transaction sale. First Bank's  indemnification
for the recourse obligations is limited to a specified percentage,  ranging from
15% to 25%, of the aggregate  lease  purchase  price of specific pools of leases
sold.

     On August 31, 2004, SBLS LLC acquired  substantially  all of the assets and
assumed  certain  liabilities  of SBLS,  as further  discussed  in Note 2 to the
Consolidated  Financial  Statements.  The Amended and  Restated  Asset  Purchase
Agreement (Asset Purchase  Agreement)  governing this  transaction  provides for
certain payments to the seller  contingent on future  valuations of specifically
identified  assets,   including  servicing  assets  and  retained  interests  in
securitizations. As of September 30, 2004, SBLS LLC had not recorded a liability
for the obligations associated with these contingent payments, as the likelihood
that  SBLS LLC will be  required  to make  payments  under  the  Asset  Purchase
Agreement is not ascertainable at the present time.


<PAGE>


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

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

                                     General

     We are a registered bank holding  company  incorporated in Missouri in 1978
and  headquartered in St. Louis County,  Missouri.  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 151
branch banking offices in California, Illinois, Missouri and Texas. At September
30, 2004, we had total assets of $7.57 billion, loans, net of unearned discount,
of $5.56 billion, total deposits of $6.13 billion and total stockholders' equity
of $589.4 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 $7.57 billion and $7.11 billion at September 30, 2004 and
December  31,  2003,  respectively,  an  increase of 6.57%.  The $467.0  million
increase in total assets is primarily  attributable  to increases in  investment
securities and loans, net of unearned  discount,  which were primarily funded by

<PAGE>

increases in deposits and other  borrowings,  primarily term reverse  repurchase
agreements. Our acquisitions of Continental Community Bank and Trust Company, or
CCB, and Small Business Loan Source, Inc., or SBLS, in the third quarter of 2004
provided assets of $140.7 million and $47.1 million, respectively,  resulting in
an increase in total assets of $187.8 million.  Investment  securities increased
$223.2  million,  or 21.26%,  to $1.27  billion at September 30, 2004 from $1.05
billion at  December  31,  2003,  reflecting  purchases  of $522.3  million  and
maturities of $367.5 million. Loans, net of unearned discount,  increased $233.5
million to $5.56  billion at September  30, 2004 from $5.33  billion at December
31, 2003.  Our  acquisitions  of CCB and SBLS  provided  loans,  net of unearned
discount, of $73.6 million and $24.0 million, respectively, resulting in a total
increase in loans of $97.6 million.  The allowance for loan losses  increased to
$128.0  million at September 30, 2004 from $116.5  million at December 31, 2003,
as further  discussed under "--Loans and Allowance for Loan Losses." The overall
increase in total assets was partially  offset by a $37.1 million decline in our
derivative  instruments  to $12.2 million from $49.3 million due to a decline in
the fair value of certain derivative  financial  instruments and the maturity of
$800.0 million notional amount of interest rate swap agreements  during 2004, as
further discussed under  "--Interest Rate Risk  Management." In addition,  other
assets increased $3.4 million,  reflecting a $14.9 million increase attributable
to SBA servicing rights purchased from SBLS,  partially offset by a $7.8 million
net  decrease in other real  estate,  as further  discussed  under  "--Loans and
Allowance  for Loan Losses," and a $4.0 million  decrease in mortgage  servicing
rights, as further discussed in Note 4 to our Consolidated Financial Statements.

     Total deposits  increased  $166.2  million,  or 2.79%,  to $6.13 billion at
September  30, 2004 from $5.96  billion at December  31,  2003.  The increase is
primarily  attributable to our acquisition of CCB, which provided total deposits
of $104.6  million.  The  increase is also due to the  expansion  of our banking
franchise  with the opening of four de novo branch  offices in 2004, in West St.
Louis  County,  Missouri,   Houston,  Texas,  McKinney,  Texas  and  San  Diego,
California.  The increase was partially offset by the divestiture of two Midwest
branch offices during the first and second quarters of 2004, which resulted in a
reduction of our deposit base of  approximately  $23.4  million.  Our  continued
deposit  marketing  efforts  and  efforts to further  develop  multiple  account
relationships  with our customers,  in addition to slightly higher deposit rates
on certain  products,  have  contributed  to deposit  growth  despite  continued
aggressive  competition  within our  market  areas and an  anticipated  level of
attrition  associated  with ongoing low deposit rates.  The deposit mix reflects
our continued  efforts to restructure the composition of our deposit base as the
majority of our deposit  development  programs  are  directed  toward  increased
transaction  accounts,  such  as  demand  and  savings  accounts,   rather  than
higher-cost time deposits.

     Other  borrowings  increased  $276.8 million to $550.3 million at September
30, 2004 from $273.5  million at December  31,  2003.  The increase is primarily
attributable  to $250.0 million of term reverse  repurchase  agreements  that we
entered into in  conjunction  with our  interest  rate risk  management  program
during  the first and  second  quarters  of 2004,  as  further  discussed  under
"--Interest Rate Risk  Management" and in Note 9 to our  Consolidated  Financial
Statements.  Our note payable was fully  repaid in April 2004 through  dividends
from our  subsidiary  bank,  resulting  in a  decrease  of $17.0  million  since
December 31, 2003. Our subordinated debentures increased $23.0 million to $232.3
million at September  30, 2004 from $209.3  million at December  31, 2003.  This
increase  is  primarily  attributable  to  the  issuance  of  $20.6  million  of
subordinated  debentures to First Bank  Statutory  Trust II, or FBST II, a newly
formed  affiliated  statutory trust, on September 20, 2004, as further discussed
in Note 11 to our Consolidated Financial Statements,  to fund our acquisition of
Hillside and CIB. The increase is also  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 issues of our subordinated  debentures,  as
well as the continued  amortization of debt issuance costs during the first nine
months of 2004.

     Our deferred  income tax liability  decreased to $23.8 million at September
30, 2004 from $41.7  million at December  31,  2003.  The  decrease is primarily
attributable to taxes  associated  with  reductions in our derivative  financial
instruments  and changes in  unrealized  gains and losses on  available-for-sale
investment securities.

     Stockholders' equity was $589.4 million and $549.8 million at September 30,
2004 and  December  31,  2003,  respectively,  reflecting  an  increase of $39.5
million. The increase is primarily  attributable to net income of $64.0 million,
partially offset by a $24.0 million decrease in accumulated other  comprehensive
income. The decrease in accumulated other  comprehensive  income is comprised of
$22.1 million  associated with changes in our derivative  financial  instruments
and $1.9 million  associated with the change in our unrealized  gains and losses
on  available-for-sale  investment  securities.  The decrease is  reflective  of
changes  in  prevailing  interest  rates,  a  decline  in the fair  value of our
derivative  financial  instruments,  and the maturity of $750.0 million notional
amount  of our  interest  rate  swap  agreements  throughout  2004,  as  further
discussed under "--Interest Rate Risk Management."



<PAGE>


                              Results of Operations

Net Income

     Net  income  was $19.7  million  and $64.0  million  for the three and nine
months ended  September  30, 2004,  respectively,  compared to $13.7 million and
$47.4 million for the comparable  periods in 2003.  Results for the three months
ended September 30, 2004 reflect increased net interest and noninterest  income,
and  a  reduced  provision  for  loan  losses,  partially  offset  by  increased
noninterest expense and an increased provision for income taxes. Results for the
nine months ended September 30, 2004 over the comparable  period in 2003 reflect
increased net interest income and a reduced provision for loan losses, partially
offset by decreased noninterest income,  slightly increased noninterest expenses
and an increased  provision for income taxes.  Our return on average  assets was
1.04%  and  1.16%  for the  three and nine  months  ended  September  30,  2004,
respectively,  compared to 0.76% and 0.88% for the  comparable  periods in 2003.
Our return on average  stockholders'  equity was 13.89% and 15.11% for the three
and nine months ended September 30, 2004,  respectively,  compared to 10.01% and
11.86% for the  comparable  periods in 2003. Net income for 2004 includes a gain
of $2.7  million,  before  applicable  income  taxes,  recorded in February 2004
relating to the sale of a residential and recreational development property that
was  foreclosed on in January 2003,  and gains,  net of expenses,  totaling $1.0
million,  before applicable income taxes, recorded in February and April 2004 on
the sale of two Midwest branch banking  offices.  Net income for 2003 includes a
nonrecurring gain of $6.3 million,  before applicable income taxes,  recorded in
the  first  quarter  relating  to the  exchange  of  part of our  investment  in
Allegiant Bancorp, Inc., or Allegiant,  for a 100% ownership interest in Bank of
Ste. Genevieve, or BSG, located in Ste. Genevieve, Missouri.

     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 improve  asset  quality,
maintain an  acceptable  net interest  margin in the current low  interest  rate
environment,  improve our noninterest  income and control operating expenses are
reflected in our  financial  performance.  We  continued to maintain  strong net
interest  income,  partially  attributable  to 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.
However,  the benefits of the swap  agreements  have  declined  during the third
quarter of 2004 due to rising  interest rates and the maturity of $600.0 million
notional amount of interest rate swap agreements on September 20, 2004. Although
the  Company  is  implementing  other  methods to offset  the  reduction  in net
interest income,  including the funding of investment security purchases through
the issuance of term  reverse  repurchase  agreements,  the maturity of the swap
agreements  will  result in a sizeable  decline in future net  interest  income,
which may be further adversely  affected if prevailing  interest rates decrease.
In addition,  the Company reduced its  subordinated  debentures by $63.1 million
during the second quarter of 2003,  further  contributing  to the improvement in
net interest  income.  However,  in addition to the impact of the interest  rate
swap agreements that matured in the third quarter of 2004, the current  interest
rate  environment,  generally weak loan demand and overall  economic  conditions
continue to exert pressure on our net interest income.

     Our overall asset quality levels have  substantially  improved during 2004,
resulting in a $19.9 million  reduction in  nonperforming  assets since December
31, 2003. The reduction in nonperforming  assets was attributable to significant
loan  payoffs,  the  liquidation  of  foreclosed  property  and  the  sale  of a
significant  portion of our commercial  leasing  portfolio,  partially offset by
additions to  nonperforming  assets  associated with our acquisitions of CCB and
SBLS. We also sold a majority of the leases in our commercial  leasing portfolio
on June 30, 2004 to further reduce our outstanding  balances within this segment
of our portfolio,  consistent with our business strategy  initiated in late 2002
to reduce our  commercial  leasing  activities.  Residual  problems  in our loan
portfolio that primarily  resulted from weak economic  conditions in our markets
remain a primary  focus of  management  as we continue  our  ongoing  efforts to
further reduce our nonperforming asset levels. 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.  Although we have  realized a substantial
reduction in  nonperforming  assets in 2004, 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 low
prevailing interest rates.
<PAGE>

     Noninterest  income was $22.0  million and $62.6  million for the three and
nine months ended  September  30, 2004,  respectively,  in  comparison  to $20.2
million and $64.7 million for the  comparable  periods in 2003. The decrease for
the  nine  months  ended  September  30,  2004 is  primarily  attributable  to a
nonrecurring  $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 BSG.  Excluding this transaction,  noninterest income for
the three and nine months ended  September 30, 2004 increased  $1.7 million,  or
8.60%, and $4.2 million, or 7.17%,  respectively,  over the comparable period in
2003.  The increase for 2004 is  attributable  to increased  service  charges on
deposit  accounts and customer  service fees,  increased  loan  servicing  fees,
increased  portfolio  management fees associated  with our  institutional  money
management  subsidiary,  gains,  net of expenses,  recognized on the sale of two
Midwest branch banking offices and a decrease in losses on the valuation or sale
of certain assets related to our commercial leasing portfolio. This increase was
partially offset by reduced gains on mortgage loans sold and held for sale and a
decline  in  rental  income  associated  with  our  reduced  commercial  leasing
activities.

     Noninterest  expense was $58.4 million and $166.4 million for the three and
nine months ended  September  30, 2004,  respectively,  in  comparison  to $54.5
million and $165.7  million for the  comparable  periods in 2003. Our efficiency
ratio,  which is defined as the ratio of  noninterest  expense to the sum of net
interest income and noninterest  income, was 59.83% and 57.67% for the three and
nine months ended September 30, 2004, respectively,  in comparison to 58.43% and
59.60% for the comparable  periods in 2003. The increase in noninterest  expense
in 2004  reflects an increase in salary and employee  benefit  costs  associated
with  generally  higher costs of employing  and retaining  qualified  personnel,
additions to staff to enhance  senior  management  expertise and expand  product
lines, and recent  acquisitions.  This increase is also  attributable to a lower
allocation of direct loan  origination  costs from salaries and employee benefit
expense to gain on  mortgage  loans sold and held for sale due to a slowdown  in
the volume of mortgage  loans  originated and sold, an increase in the volume of
mortgage loans  originated  that we retained in our loan  portfolio,  as further
discussed  under  "--Loans and  Allowance  for Loan Losses," and a change in the
fallout  percentage  associated  with the  allocation.  The overall  increase in
noninterest  expense  was  partially  offset by a  decrease  in  write-downs  on
commercial  operating  leases  resulting from  reductions in estimated  residual
values realized during 2003, as well as a reduction in expenses and losses,  net
of gains,  on other  real  estate,  primarily  related  to 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  also
reflects a decrease in occupancy and  furniture  and  equipment  expenses due to
various lease termination obligations incurred in 2003.

Net Interest Income

     Net interest  income  (expressed on a  tax-equivalent  basis)  increased to
$75.9 million and $226.8  million for the three and nine months ended  September
30, 2004,  respectively,  compared to $73.4  million and $214.3  million for the
comparable   periods  in  2003,   reflecting   increases  of  3.42%  and  5.83%,
respectively.  Net  interest  margin  was 4.37% and 4.50% for the three and nine
months ended September 30, 2004, respectively,  in comparison to 4.49% and 4.43%
for the  comparable  periods  in 2003.  Net  interest  income is the  difference
between  interest  earned  on our  interest-earning  assets,  such as loans  and
securities,  and  interest  paid on our  interest-bearing  liabilities,  such as
deposits  and  borrowings.  Net  interest  income is  affected  by the level and
composition of assets,  liabilities  and  stockholders'  equity,  as well as the
general level of interest rates and changes in interest  rates.  Interest income
on a tax-equivalent basis includes the additional amount of interest income that
would have been earned if our investment in certain tax-exempt  interest earning
assets had been made in assets subject to federal,  state and local income taxes
yielding  the same  after-tax  income.  Net  interest  margin is  determined  by
dividing   net   interest   income  on  a   tax-equivalent   basis  by   average
interest-earning  assets. The interest rate spread is the difference between the
average equivalent yield earned on interest-earning  assets and the average rate
paid on  interest-bearing  liabilities.  We credit the  increase in net interest
income  primarily  to lower rates on deposits  and other  borrowings,  increased
average  investment  securities  with  higher  yields,  increased  average  loan
balances  associated  with our  acquisitions  and internal  growth,  and a $63.1
million net reduction in our  outstanding  subordinated  debentures in 2003. 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 also contributed to the maintenance of our

<PAGE>

net interest  margin for the nine months ended  September  30, 2004.  As further
discussed under  "--Interest  Rate Risk  Management,"  our derivative  financial
instruments used to hedge our interest rate risk  contributed  $13.0 million and
$44.7  million  to net  interest  income  for the  three and nine  months  ended
September  30, 2004,  respectively,  compared to $17.3 million and $48.1 million
for the comparable periods in 2003. However, the benefits of the swap agreements
declined  during the third quarter of 2004 due to rising  interest rates and the
maturity of $600.0 million  notional  amount of interest rate swap agreements in
late  September  2004.  These swap  agreements  provided net interest  income of
approximately  $6.7 million and $23.0  million  during the three and nine months
ended September 30, 2004,  respectively,  and $8.2 million and $23.8 million for
the  comparable  periods in 2003.  Although  the Company is  implementing  other
methods to offset the reduction in net interest income, including the funding of
investment  security  purchases through the issuance of term reverse  repurchase
agreements,  the  maturity  of the swap  agreements  will  result in a  sizeable
reduction of future net interest income, which may be further adversely affected
if prevailing interest rates decrease.

     Average  interest-earning  assets  increased  to $6.90  billion  and  $6.74
billion for the three and nine months ended  September  30, 2004,  respectively,
compared to $6.49  billion and $6.47 billion for the three and nine months ended
September 30, 2003. The increase is primarily  attributable to our  acquisitions
of CCB and SBLS in the third quarter of 2004,  which  provided  assets of $187.8
million in aggregate and our  acquisition  of BSG in March 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, issued
during  1997  and  1998,  and  the  issuance  of  $73.2  million  of  additional
subordinated  debentures at lower  interest rates in the second quarter of 2003.
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.  Furthermore,  on  September  20,  2004,  we  issued  $20.6  million  of
additional subordinated debentures to FBST II to fund our pending acquisition of
Hillside and CIB, as further discussed in Note 11 to our Consolidated  Financial
Statements.

     Average investment  securities were $1.25 billion and $1.22 billion for the
three and nine months ended September 30, 2004,  respectively,  in comparison to
$926.7 million and $948.8 million for the comparable periods in 2003, reflecting
increases of $321.1 million and $273.2 million,  respectively.  The yield on our
investment  portfolio increased to 4.14% and 4.12% for the three and nine months
ended  September  30,  2004,  respectively,  compared to 3.23% and 3.56% for the
comparable  periods in 2003.  Funds  available  from  maturities  of  investment
securities were used to purchase  additional  investment  securities  during the
first nine months of 2004,  including  purchases  of $250.0  million of callable
U.S.  Government agency  securities.  These securities  represent the underlying
securities  associated with $250.0 million, in aggregate,  of three-year reverse
repurchase  agreements under master repurchase agreements that we consummated in
the first and second  quarters of 2004,  as further  described  in Note 9 to our
Consolidated Financial Statements.

     Average  loans,  net of  unearned  discount,  were $5.52  billion and $5.41
billion for the three and nine months ended  September  30, 2004,  respectively,
compared to $5.42 billion and $5.39 billion for the comparable  periods in 2003,
reflecting increases of $98.6 million and $17.9 million, respectively. The yield
on our loan portfolio decreased to 6.22% and 6.28% for the three and nine months
ended  September  30,  2004,  respectively,  compared to 6.48% and 6.67% for the
comparable periods in 2003. We attribute the increase in the average balance for
2004  primarily to internal  growth and our  acquisitions  completed  during the
third quarter of 2004, partially offset by reductions in our loans held for sale
and lease financing portfolios.  In addition,  increased competition and general
economic  conditions  within our market areas have contributed to continued weak
loan demand and  generally low  prevailing  interest  rates,  despite the recent
increases in the prime  lending rate  experienced  in the third quarter of 2004.
Average real estate  construction and development loans increased  approximately
$93.7  million in 2004  primarily as a result of seasonal  increases on existing
and  available  credit lines as well as new loan  production.  Average  mortgage
loans held for sale declined  approximately  $162.8  million for the nine months
ended September 30, 2004 due to 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.  This  decision  contributed  to the  increase in average real estate
mortgage  loans  of  approximately  $176.9  million  for the nine  months  ended
September 30, 2004.  Average lease  financing  volumes  decreased  approximately
$70.4 million in 2004 primarily  resulting from our business strategy  initiated
in late 2002 to  reduce  our  commercial  leasing  activities  and the sale of a
significant  portion of the remaining leases in our commercial leasing portfolio
in June  2004,  as further  discussed  under  "--Loans  and  Allowance  for Loan
Losses."
<PAGE>

     Average  deposits  were $6.12  billion and $6.04  billion for the three and
nine months ended September 30, 2004, respectively,  and $6.05 billion and $6.06
billion for the comparable  periods in 2003. For the three and nine months ended
September  30, 2004,  the  aggregate  weighted  average rate paid on our deposit
portfolio decreased to 1.42% and 1.39%,  respectively,  from 1.48% and 1.71% for
the comparable periods in 2003. We attribute the decline in rates paid 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 to $4.14 billion
and $4.09  billion  for the three and nine  months  ended  September  30,  2004,
respectively, from $4.06 billion and $3.99 billion for the comparable periods in
2003.  Average total time deposits  decreased to $1.98 billion and $1.95 billion
for the three and nine months ended September 30, 2004, respectively, from $1.99
billion and $2.07 billion for the comparable periods in 2003.

     Average other borrowings increased to $541.1 million and $456.6 million for
the three and nine months ended  September 30, 2004,  respectively,  compared to
$246.8  million  and $200.4  million  for the  comparable  periods in 2003.  The
aggregate weighted average rate paid on our other borrowings was 1.46% and 0.99%
for the three and nine months ended September 30, 2004,  respectively,  compared
to 0.88%  and  1.11% for the  comparable  periods  in 2003.  This  reflects  the
increased  short-term interest rate environment that began in the second quarter
of 2004. The increase in average other  borrowings is primarily  attributable to
$250.0 million of term reverse repurchase  agreements that we consummated during
2004 as further described in Note 9 to our Consolidated Financial Statements.

     The aggregate weighted average rate paid on our note payable was 16.97% for
the nine months ended  September  30, 2004,  compared to 4.80% and 6.33% for the
three and nine months ended  September  30,  2003.  Our note payable was paid in
full in April  2004.  The  unusually  high  weighted  average  rate paid in 2004
reflects  commitment,  arrangement  and other fees paid on the annual renewal of
our secured credit  agreement.  Amounts  outstanding under our revolving line of
credit with a group of unaffiliated  financial institutions bear interest at the
lead  bank's  corporate  base rate or, at our  option,  at the London  Interbank
Offering  Rate  plus a margin  determined  by the  outstanding  balance  and our
profitability  for the preceding  four calendar  quarters.  Thus,  our revolving
credit line  represents  a  relatively  high-cost  funding  source as  increased
advances have the effect of increasing the weighted  average rate of non-deposit
liabilities. However, the borrowing level for these periods has been minimal.

     Average subordinated  debentures were $211.8 million and $210.6 million for
the three and nine months ended  September 30, 2004,  respectively,  compared to
$209.3  million  and $262.3  million  for the  comparable  periods in 2003.  The
aggregate  weighted average rate paid on our  subordinated  debentures was 7.01%
and 6.85% for the three and nine months ended September 30, 2004,  respectively,
and 6.71% and 7.30% for the comparable periods in 2003.  Interest expense on our
subordinated  debentures  was $3.7  million and $10.8  million for the three and
nine months ended September 30, 2004, respectively, compared to $3.5 million and
$14.3 million for the comparable periods in 2003. As previously  discussed,  the
decrease for the nine months ended  September  30, 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 in 2003,
partially  offset by the issuance of $20.6  million of  additional  subordinated
debentures  in September  2004,  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 September 30,                    Nine Months Ended September 30,
                                 ------------------------------------------------- -------------------------------------------------
                                           2004                      2003                     2004                     2003
                                 -------------------------  ---------------------- ------------------------  -----------------------
                                           Interest                 Interest                Interest                 Interest
                                  Average  Income/ Yield/  Average  Income/ Yield/ Average  Income/ Yield/  Average  Income/ Yield/
                                  Balance  Expense Rate    Balance  Expense Rate   Balance  Expense Rate    Balance  Expense Rate
                                  -------  ------- ------  -------  ------- ------ -------  ------- ------  -------  ------- ------
                                                                   (dollars expressed in thousands)

             Assets
             ------

Interest-earning assets:
<S>                              <C>        <C>     <C>   <C>        <C>    <C>   <C>        <C>      <C>   <C>        <C>     <C>
   Loans (1)(2)(3)(4)........... $5,518,978 86,315  6.22% $5,420,342 88,588 6.48% $5,409,545 254,504  6.28% $5,391,656 269,128 6.67%
   Investment securities (4)....  1,247,820 12,972  4.14     926,698  7,548 3.23   1,221,985  37,697  4.12     948,757  25,280 3.56
   Federal funds sold and other.    135,987    476  1.39     145,589    345 0.94     105,748     899  1.14     133,474   1,099 1.10
                                 ---------- ------        ---------- ------       ---------- -------        ---------- -------
        Total interest-earning
          assets................  6,902,785 99,763  5.75   6,492,629 96,481 5.90   6,737,278 293,100  5.81   6,473,887 295,507 6.10
                                            ------                   ------                  -------                   -------
Nonearning assets...............    618,644                  692,494                 634,085                   709,270
                                 ----------               ----------              ----------                ----------
        Total assets............ $7,521,429               $7,185,123              $7,371,363                $7,183,157
                                 ==========               ==========              ==========                ==========

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

Interest-bearing liabilities:
   Interest-bearing deposits:
     Interest-bearing demand
       deposits................. $  842,855    801  0.38% $  851,014  1,195 0.56% $  855,434   2,592  0.40% $  852,663   4,346 0.68%
     Savings deposits...........  2,180,594  5,116  0.93   2,152,529  5,520 1.02   2,162,174  14,486  0.89   2,145,089  18,091 1.13
     Time deposits of $100
       or more..................    501,660  3,358  2.66     413,724  3,028 2.90     466,543   9,353  2.68     429,995  10,049 3.12
     Other time deposits (3)....  1,480,167  8,636  2.32   1,575,197  8,865 2.23   1,486,212  25,296  2.27   1,640,299  32,147 2.62
                                 ---------- ------        ---------- ------       ---------- -------        ---------- -------
        Total interest-bearing
          deposits..............  5,005,276 17,911  1.42   4,992,464 18,608 1.48   4,970,363  51,727  1.39   5,068,046  64,633 1.71
   Other borrowings.............    541,073  1,982  1.46     246,790    550 0.88     456,621   3,383  0.99     200,428   1,671 1.11
   Note payable (5).............         --    229    --      32,091    388 4.80       3,133     398 16.97      12,131     574 6.33
   Subordinated debentures (3)..    211,773  3,731  7.01     209,264  3,538 6.71     210,570  10,798  6.85     262,322  14,325 7.30
                                 ---------- ------        ---------- ------       ---------- -------        ---------- -------
        Total interest-bearing
          liabilities...........  5,758,122 23,853  1.65   5,480,609 23,084 1.67   5,640,687  66,306  1.57   5,542,927  81,203 1.96
                                            ------                   ------                  -------                   -------
Noninterest-bearing liabilities:
   Demand deposits..............  1,114,587                1,054,587               1,070,269                   992,043
   Other liabilities............     83,109                  106,914                  94,299                   113,386
                                 ----------               ----------              ----------                ----------
        Total liabilities.......  6,955,818                6,642,110               6,805,255                 6,648,356
Stockholders' equity............    565,611                  543,013                 566,108                   534,801
                                 ----------               ----------              ----------                ----------
        Total liabilities and
          stockholders' equity.. $7,521,429               $7,185,123              $7,371,363                $7,183,157
                                 ==========               ==========              ==========                ==========

Net interest income.............            75,910                   73,397                  226,794                   214,304
                                            ======                   ======                  =======                   =======
Interest rate spread............                    4.10                    4.23                      4.24                     4.14
Net interest margin (6).........                    4.37%                   4.49%                     4.50%                    4.43%
                                                    ====                    ====                     =====                     ====
--------------------
(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 $302,000 and $927,000  for the three and nine months ended September 30, 2004, and $317,000 and $1.0
     million for the comparable periods in 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 $7.5 million and $23.3  million for the
three and nine months ended September 30, 2004, respectively,  compared to $15.0
million  and  $36.0  million  for the  comparable  periods  in  2003.  Net  loan
charge-offs  were $7.9  million and $18.6  million for the three and nine months
ended  September  30, 2004,  respectively,  compared to $12.1  million and $25.5
million for the comparable  periods in 2003. 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.  The reduced  provision during the third quarter of 2004 resulted
from an overall  improvement  in asset quality and a reduction in  nonperforming
loans,  primarily resulting from significant loan payoffs.  Nonperforming assets
were $66.6  million at  September  30, 2004 and $67.4  million at June 30, 2004,
reflecting a  substantial  decline from $90.2  million at March 31, 2004,  $86.5
million at December  31,  2003 and $81.3  million at  September  30,  2003.  The
decrease in  nonperforming  assets during 2004 primarily  reflects  transactions
associated  with three  significant  customer  relationships:  (a) 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; (b) a $13.9 million
commercial credit  relationship in the southern  California region that had been
placed on nonaccrual  status in March 2004, for which a $3.9 million  charge-off
and a $10.0  million cash payment were  recorded in the second  quarter of 2004;
and  (c)  the  sale  of a  $7.3  million  St.  Louis  region  commercial  credit
relationship  in the second quarter of 2004 that had been on nonaccrual  status,
as further  discussed  under  "--Loans and  Allowance  for Loan  Losses."  These
reductions were partially offset by $8.3 million of  nonperforming  assets as of
September  30,  2004  associated  with the  acquisitions  of CCB and  SBLS.  Our
allowance for loan losses was $128.0 million at September 30, 2004,  compared to
$121.0  million  at June 30,  2004,  $124.9  million at March 31,  2004,  $116.5
million  at  December  31,  2003 and  $110.7  million  at  September  30,  2003.
Management  continues to closely  monitor its  operations to address the ongoing
challenges posed by the current economic  environment and expects  nonperforming
loans to remain at somewhat  elevated  levels  throughout the remainder of 2004.
Management  considers these trends in its overall  assessment of the adequacy of
the  allowance  for  loan  losses.   Additionally,   management   anticipates  a
significant   increase  in  nonperforming  loans  associated  with  the  pending
acquisition of Hillside and CIB.

     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 $22.0  million and $62.6  million for the three and
nine months ended  September  30, 2004,  respectively,  in  comparison  to $20.2
million and $64.7 million for the comparable periods in 2003. 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,  gain on sales of  branches,  investment  income on bank
owned life insurance and other miscellaneous  income. The reduction  experienced
in the first nine months 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.  Excluding this  nonrecurring  transaction in the first
quarter  of  2003,  noninterest  income  for the  three  and nine  months  ended
September 30, 2004 increased $1.7 million, or 8.60%, and $4.2 million, or 7.17%,
respectively, from the comparable periods in 2003.

     Service  charges on deposit  accounts and  customer  service fees were $9.8
million  and $28.6  million for the three and nine months  ended  September  30,
2004,  respectively,  in  comparison  to $9.2 million and $26.8  million for the
comparable periods in 2003. The increase in service charges and customer service
fees is primarily attributable to increased demand deposit account balances, our
acquisitions of CCB and BSG completed in July 2004 and March 2003, respectively,
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 $4.7  million  and
$12.9  million  for  the  three  and  nine  months  ended  September  30,  2004,
respectively, in comparison to $6.5 million and $14.6 million for the comparable
periods in 2003. We attribute the decrease to the continued  slowdown in 2004 in
the volume of mortgage loans originated and sold that was initially  experienced
in the fourth quarter of 2003,  management's decision to retain a portion of new
mortgage loan production in the real estate mortgage portfolio in mid-2003 and a
decrease in the  allocation of direct loan  origination  costs from salaries and
employee  benefits expense to gain on mortgage loans sold and held for sale as a
result of a change in the fallout percentage associated with the allocation. The
fallout percentage  represents the percentage of the number of loan applications
that do not result in the  ultimate  origination  of a loan divided by the total
number of loan applications received.
<PAGE>

     Net  gains  on  sales  of  available-for-sale  investment  securities  were
$257,000  for the three and nine months ended  September  30, 2004 and relate to
sales of certain  available-for-sale  investment securities held by CCB that did
not meet our  investment  objectives.  Net gains on sales of  available-for-sale
investment  securities  were  $266,000  and $6.8  million for the three and nine
months ended  September,  30, 2003. As previously  discussed,  in March 2003, we
recorded a $6.3 million  nonrecurring  gain on the exchange of 974,150 shares of
our Allegiant common stock for a 100% ownership interest in BSG.

     Gains,  net of expenses,  on the sale of two Midwest branch banking offices
in 2004 totaled $1.0 million for the nine months ended  September 30, 2004.  The
adjustment to gains,  net of expenses,  for the three months ended September 30,
2004,  primarily  relates  to an  adjustment  to the  fourth  quarter  2003 gain
recorded on the divestiture of three banking offices  associated with an expense
incurred by First Bank to correct certain environmental issues related to one of
the banking  offices.  There were no sales of branch banking  offices during the
nine months ended  September  30, 2003.  On February 6, 2004, we sold one of our
Missouri branch banking offices,  resulting in a $392,000 gain, net of expenses.
Additionally,  on April 16, 2004, we sold one of our Illinois  banking  offices,
resulting in a $630,000 gain, net of expenses.

     Other  income was $6.0  million  and $16.1  million  for the three and nine
months ended September 30, 2004, respectively, in comparison to $3.0 million and
$12.4  million for the  comparable  periods in 2003.  We  attribute  the primary
components of the nine-month fluctuations in 2004 to:

     >>   an increase of $3.0 million in loan  servicing  fees. The net increase
          is primarily  attributable  to increased  fees from loans serviced for
          others,  including  fees from the SBA servicing  asset  purchased from
          SBLS, decreased  amortization of mortgage servicing rights and a lower
          level of interest  shortfall.  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.  Loan servicing fees for 2003 also
          included  impairment on mortgage  servicing  rights.  No impairment on
          mortgage servicing rights was recognized in 2004;

     >>   increased  portfolio  management fee income of $1.7 million associated
          with our Institutional Money Management division;

     >>   an increase in income  associated  with  standby  letters of credit of
          $575,000;

     >>   an increase of $408,000 in fees from fiduciary activities; and

     >>   our  acquisitions  of CCB and BSG  completed  during  2004  and  2003,
          respectively; partially offset by

     >>   a decline of $943,000  in rental  income  associated  with our reduced
          commercial leasing activities;

     >>   net losses on derivative  instruments in 2004 compared to net gains on
          derivative  instruments  in 2003  resulting  from  changes in the fair
          value of our  interest  rate cap  agreements,  fair  value  hedges and
          underlying hedged  liabilities.  Net losses on derivative  instruments
          were  $401,000  and  $856,000  for the  three  and nine  months  ended
          September 30, 2004,  respectively,  compared to net losses of $383,000
          and net gains of $43,000  for the three  months  ended  September  30,
          2003, respectively;

     >>   a decline of $263,000 in brokerage revenue  primarily  associated with
          overall market conditions and reduced customer demand; and

     >>   a net increase in losses on the sale or  reductions  in  valuations of
          certain assets, primarily related to the commercial leasing portfolio.
          Net losses for 2004 were  $277,000 and included a $750,000  write-down
          on  repossessed  aircraft  equipment,  partially  offset  by  gains of
          $510,000  on the sale other  repossessed  aircraft  equipment,  all of
          which were  associated  with our  commercial  leasing  portfolio.  Net
          losses for 2003 were $237,000 and primarily  consisted of $1.1 million
          related to the  disposition of fixed assets,  including  approximately
          $419,000 in losses on the disposal of certain leasing equipment.

Noninterest Expense

     Noninterest  expense was $58.4 million and $166.4 million for the three and
nine months ended  September  30, 2004,  respectively,  in  comparison  to $54.5
million and $165.7  million for the  comparable  periods in 2003. Our efficiency
ratio was 59.83% and 57.67% for the three and nine months  ended  September  30,
2004, respectively,  compared to 58.43% and 59.60% for the comparable periods in
2003. The efficiency ratio is used by the financial services industry to measure
an  organization's  operating  efficiency.  The efficiency  ratio represents the

<PAGE>

ratio of noninterest  expense to net interest income and noninterest income. The
increase in  noninterest  expense  primarily  reflects an increase in salary and
employee benefit expense,  partially offset by a decline in expenses and losses,
net of gains,  on other real estate owned,  a decrease in write-downs on various
operating leases associated with our commercial  leasing business and a decrease
in occupancy, net of rental income, and furniture and equipment expense.

     Salaries and employee  benefits expense was $29.9 million and $85.8 million
for the three  and nine  months  ended  September  30,  2004,  respectively,  in
comparison  to $23.5  million and $71.7  million for the  comparable  periods in
2003.  We  attribute  the overall  increase to  increased  salaries and employee
benefits expenses associated with our acquisitions in 2003 and 2004, in addition
to generally  higher salary and employee benefit costs associated with employing
and  retaining  qualified  personnel  and  additions to staff to enhance  senior
management expertise and expand product lines. The increase is also attributable
to a lower  allocation  of direct  loan  origination  costs  from  salaries  and
employee  benefits  expense to gain on mortgage loans sold and held for sale 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 associated
with the allocation.

     Occupancy,  net of rental  income,  and  furniture  and  equipment  expense
totaled  $8.8  million and $26.5  million  for the three and nine  months  ended
September  30,  2004,  respectively,  in  comparison  to $9.5  million and $29.1
million  for  the  comparable   periods  in  2003.  The  decrease  is  partially
attributable   to  decreased   rent  expense   associated   with  various  lease
terminations  in 2003,  including a $1.0 million  lease  termination  obligation
recorded in the second quarter of 2003 associated with the relocation of our San
Francisco-based  loan  administration  department to southern  California  and a
$200,000  lease buyout on a  California  branch  facility  recorded in the first
quarter of 2003.  However,  these overall expenses remain relatively high due 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 and $24.0  million for the
three and nine months ended September 30, 2004,  respectively,  in comparison to
$8.1 million and $24.6 million for the comparable periods in 2003. As more fully
described in Note 6 to our Consolidated  Financial  Statements,  First Services,
L.P., a limited partnership  indirectly owned by our Chairman and members of his
immediate  family,  provides  information  technology  and  operational  support
services to our  subsidiaries  and us. We attribute  the level of fees to growth
and  technological   advancements   consistent  with  our  product  and  service
offerings, continued expansion and upgrades to technological equipment, networks
and  communication  channels,  offset by expense  reductions  resulting from the
information  technology  conversion  of BSG  completed  in 2003,  as well as the
achievement  of  certain  efficiencies  associated  with the  implementation  of
various technology projects.  The information  technology  conversion of CCB was
completed in September 2004.

     Legal, examination and professional fees were $1.6 million and $4.9 million
for the three  and nine  months  ended  September  30,  2004,  respectively,  in
comparison to $1.8 million and $5.6 million for the comparable  periods in 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.  The overall
decrease in these fees in 2004 is  primarily  associated  with higher legal fees
paid in 2003 related to an ongoing lawsuit that reached final  resolution in the
second quarter of 2004.

     Amortization  of intangibles  associated  with the purchase of subsidiaries
was $733,000 and $2.0 million for the three and nine months ended  September 30,
2004,  respectively,  in  comparison  to  $658,000  and  $1.8  million  for  the
comparable  periods in 2003.  The  increase for the first nine months of 2004 is
primarily   attributable  to  core  deposit  intangibles   associated  with  our
acquisitions of CCB on July 30, 2004 and BSG in March 2003.

     Communications and advertising and business  development expenses increased
to $1.8 million and $5.2  million for the three and nine months ended  September
30, 2004,  respectively,  from $1.4 million and $4.9 million for the  comparable
periods in 2003. The expansion of our sales, marketing and product group in 2004
and broadened  advertising campaigns have contributed to higher expenditures and
are consistent with our continued  focus on expanding our banking  franchise and
the products and services available to our customers. We continue our efforts to
manage these  expenses  through  renegotiation  of contracts,  enhanced focus on
advertising and promotional  activities in markets that offer greater  benefits,
as well as ongoing cost containment efforts.

     Other  expense was $6.3  million  and $14.1  million for the three and nine
months ended September 30, 2004, respectively, in comparison to $8.2 million and
$24.0 million for the  comparable  periods in 2003.  Other  expense  encompasses
numerous general and administrative  expenses including  insurance,  freight and

<PAGE>

courier  services,   correspondent  bank  charges,   miscellaneous   losses  and
recoveries,  expenses on other real estate owned, memberships and subscriptions,
transfer  agent  fees,  sales  taxes and travel,  meals and  entertainment.  The
decrease is primarily attributable to:

     >>   a decrease of $4.9 million on expenditures  and losses,  net of gains,
          on other real estate.  Expenditures and losses, net of gains, on other
          real  estate  reflected  net gains of $3.2  million for the first nine
          months of 2004,  in  comparison  to net  expenses  and  losses of $1.7
          million for the comparable period in 2003. Net gains on sales of other
          real  estate  in 2004  include  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," and approximately $390,000 in
          gains  recorded on the sale of two  additional  holdings of other real
          estate.  Net  expenditures  on other  real  estate  for the first nine
          months of 2003 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; and

     >>   a $4.9 million  decrease in  write-downs on various  operating  leases
          associated with our commercial leasing business, primarily as a result
          of reductions in estimated  residual values. For the first nine months
          of 2004, we recorded write-downs of $302,000, compared to $5.2 million
          for the comparable period in 2003; partially offset by

     >>   expenses  associated with our  acquisitions  completed during 2003 and
          2004; and

     >>   continued growth and expansion of our banking franchise.

Provision for Income Taxes

     The  provision for income taxes was $12.0 million and $34.8 million for the
three and nine months ended September 30, 2004,  respectively,  in comparison to
$10.1  million  and  $28.9  million  for the  comparable  periods  in 2003.  The
effective  tax rate was 37.7% and  35.2%  for the  three and nine  months  ended
September  30,  2004,  respectively,  in  comparison  to 42.4% and 37.8% for the
comparable  periods in 2003. The decrease in the effective tax rate is primarily
attributable to the reversal of a $2.8 million tax reserve in the second quarter
of 2004 that was no longer deemed  necessary as a result of the  resolution of a
potential tax liability.  Excluding this transaction, the effective tax rate was
38.1% for the nine months ended  September 30, 2004,  reflecting  higher taxable
income  and the merger of our two bank  charters  on March 31,  2003,  which has
resulted in higher taxable  income  allocations in states where we file separate
state tax returns.

                          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 September 30, 2004 and December 31, 2003 are summarized as follows:
<TABLE>
<CAPTION>

                                                                   September 30, 2004           December 31, 2003
                                                                ------------------------    ------------------------
                                                                  Notional      Credit       Notional       Credit
                                                                   Amount      Exposure       Amount       Exposure
                                                                   ------      --------       ------       --------
                                                                            (dollars expressed in thousands)

<S>                                                             <C>              <C>        <C>               <C>
         Cash flow hedges.....................................  $  500,000       1,655      1,250,000         2,857
         Fair value hedges....................................     276,200       8,290        326,200        12,614
         Interest rate cap agreements.........................          --          --        450,000            --
         Term reverse repurchase agreements...................     350,000          --        100,000            --
         Interest rate lock commitments.......................      11,500          --         15,500            --
         Forward commitments to sell
           mortgage-backed securities.........................      42,000          --         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 and nine months ended  September 30, 2004, we realized net
interest  income on our  derivative  financial  instruments of $13.0 million and
$44.7  million,  respectively,  in comparison to $17.3 million and $48.1 million
for the comparable periods in 2003. The decrease is primarily attributable to an
increase in prevailing  interest  rates in 2004,  the maturity of $800.0 million
notional  amount of  interest  rate  swap  agreements  in 2004 and the  interest
expense associated with the term reverse repurchase agreements, partially offset
by an increase in interest income associated with the additional swap agreements
that we entered  into  during  March,  April and July 2003.  The $600.0  million
notional  amount of interest rate swaps,  designated  as cash flow hedges,  that
matured on September  20, 2004,  provided net interest  income of  approximately
$6.7 million and $23.0 million during the three and nine months ended  September
30, 2004,  respectively,  and $8.2 million and $23.8 million for the  comparable
periods in 2003.  Although the Company is  implementing  other methods to offset
the reduction in net interest income as further discussed below, the maturity of
the swap  agreements  will result in a sizeable  decline in future net  interest
income,  which may be further  adversely  affected if prevailing  interest rates
decrease. We recorded net losses on derivative  instruments,  which are included
in noninterest income in our consolidated  statements of income, of $401,000 and
$856,000 for the three and nine months ended  September 30, 2004,  respectively,
in  comparison to a net loss of $383,000 and a net gain of $43,000 on derivative
instruments  for the  comparable  periods in 2003. The decrease 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 and the $600.0 million notional amount swap agreements
that we entered into in September 2000 matured on September 20, 2004. The amount
receivable by us under the swap  agreements was $2.7 million and $3.9 million at
September 30, 2004 and December 31, 2003,  respectively,  and the amount payable
by us under the swap  agreements  was $1.1  million at  September  30,  2004 and
December 31, 2003.

     As further  discussed  under  "--Effects of New  Accounting  Standards," on
October 1, 2004 we implemented the guidance required by the Financial Accounting
Standards  Board's  Derivatives  Implementation  Group on Statement of Financial
Accounting Standards No. 133 Implementation Issue No. G25. The implementation of
this new  accounting  guidance did not have a material  impact on our  financial
condition or results of operations.

     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 September 30, 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)

         September 30, 2004:
<S>                                                            <C>               <C>           <C>        <C>
             March 21, 2005..................................  $  200,000        1.93%         5.24%      $  2,855
             April 2, 2006...................................     100,000        1.93          5.45          3,954
             July 31, 2007...................................     200,000        1.90          3.08           (553)
                                                               ----------                                 --------
                                                               $  500,000        1.92          4.42       $  6,256
                                                               ==========       =====         =====       ========

         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 September  30, 2004 and December 31, 2003,
          respectively,  and the amount payable by us under the swap  agreements
          was $553,000 and $537,000 at September 30, 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.  This $50.0  million
          notional swap agreement matured in January 2004.

     >>   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 $46.0 million  notional  amount of interest rate
          swap  agreements  that  provided  for us to  receive  a fixed  rate of
          interest  and pay an  adjustable  rate of interest  equivalent  to the
          three-month  London Interbank Offering Rate plus 1.97%. 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 September  30, 2004 or December  31, 2003.  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 this transaction.

     >>   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  September  30, 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 September 30, 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)

         September 30, 2004:
<S>                                                             <C>              <C>           <C>        <C>
             January 9, 2006..................................  $ 150,000        1.58%         5.51%      $  5,445
             December 31, 2031................................     55,200        3.88          9.00          2,713
             March 20, 2033...................................     25,000        4.13          8.10           (898)
             June 30, 2033....................................     46,000        4.16          8.15         (1,565)
                                                                ---------                                 --------
                                                                $ 276,200        2.70          6.88       $  5,695
                                                                =========       =====         =====       ========

         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 matured on September  20, 2004, we had 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.  These interest rate cap agreements  matured on
September 20, 2004. The interest rate cap agreements  provided 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 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.
<PAGE>

Term Reverse Repurchase Agreements

     During July 2003, August 2003,  January 2004 and July 2004, we entered into
$50.0 million four-year, $50.0 million three-year, $150.0 million three-year and
$100.0 million  three-year reverse repurchase  agreements,  respectively,  under
master  repurchase  agreements with an unaffiliated  third party. The underlying
securities associated with the reverse repurchase agreements are mortgage-backed
securities and callable U.S.  Government agency securities.  We entered into the
term  reverse  repurchase  agreements  with the  objective  of  stabilizing  net
interest income over time and further protecting our net interest margin against
changes in interest rates. The interest rate cap agreements  included within the
term reverse repurchase  agreements  represent embedded derivative  instruments.
Consequently,  in  accordance  with  existing  accounting  literature  governing
derivative instruments,  the embedded derivative instruments are not required to
be separated  from the term reverse  repurchase  agreements  and  accounted  for
separately as a derivative financial  instrument.  As a result, the term reverse
repurchase  agreements  are reflected in other  borrowings  in the  consolidated
balance sheets and the related interest expense is reflected as interest expense
on other borrowings in the consolidated statements of income.

     The maturity  dates,  par  amounts,  interest  rate paid and interest  rate
spread on our term reverse  repurchase  agreements  as of September 30, 2004 and
December 31, 2003 were as follows:
<TABLE>
<CAPTION>

                                                                     Par        Interest Rate
                     Maturity Date                                 Amount      Minus Spread (1)   Strike Price (1)
                     -------------                                 ------      ----------------   ----------------
                                                                         (dollars expressed in thousands)

         September 30, 2004:
<S>                                                              <C>            <C>     <C>             <C>
              August 15, 2006.................................   $  50,000      LIBOR - 0.5650%         3.00%
              January 12, 2007................................     150,000      LIBOR - 0.8350%         3.50%
              June 14, 2007...................................      50,000      LIBOR - 0.6000%         5.00%
              June 14, 2007...................................      50,000      LIBOR - 0.6100%         5.00%
              August 1, 2007..................................      50,000      LIBOR - 0.6800%         3.50%
                                                                 ---------
                                                                 $ 350,000
                                                                 =========

         December 31, 2003:
              August 15, 2006.................................   $  50,000      LIBOR - 0.5650%         3.00%
              August 1, 2007..................................      50,000      LIBOR - 0.6800%         3.50%
                                                                 ---------
                                                                 $ 100,000
                                                                 =========
         -------------------------
          (1) The  interest rates paid on the term reverse repurchase  agreements are based on the three-month
              London Interbank Offering Rate reset in arrears minus the  spread  amount  shown  above  plus  a
              floating amount equal to the differential between the three-month London Interbank Offering Rate
              reset in arrears and the strike price shown above,  if the three-month London Interbank Offering
              Rate reset in arrears exceeds the strike price.
</TABLE>

Pledged Collateral

     At September 30, 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 $229,000 in connection
with our interest  rate swap  agreements.  At December 31, 2003,  we had pledged
cash of $700,000,  as  collateral  in  connection  with our  interest  rate swap
agreements. At September 30, 2004 and December 31, 2003, we had accepted cash of
$11.3 million and $51.3 million,  respectively, as collateral in connection with
our interest rate swap agreements.

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

     Derivative financial instruments issued by us consist of interest rate lock
commitments to originate  fixed-rate loans.  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 86.7% and 87.0% of total
interest  income  for the  three  and nine  months  ended  September  30,  2004,
respectively,  in  comparison to 92.0% and 91.3% for the  comparable  periods in
2003. Total loans, net of unearned discount, increased $233.5 million, or 4.38%,
to $5.56 billion,  or 73.4% of total assets, at September 30, 2004,  compared to
$5.33  billion,  or 75.0% of total  assets,  at December  31,  2003.  Our recent
acquisitions of CCB and SBLS contributed  $97.6 million to the increase in total
loans,  net of  unearned  discount.  The  continued  low  loan  demand  from our
commercial  customers during 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 overall increase in loans, net of unearned
discount, in 2004 is primarily attributable to:

     >>   an increase  of $163.7  million in our real  estate  construction  and
          development  portfolio  resulting primarily from seasonal increases on
          existing and available credit lines;

     >>   an increase of $133.6  million in our real estate  mortgage  portfolio
          primarily  associated with management's  business strategy decision in
          mid 2003 to retain a portion  of the new loan  production  in our real
          estate  mortgage  portfolio  to offset  continued  weak loan demand in
          other sectors of our loan  portfolio,  and a home equity  product line
          campaign that we held in mid-2004; and

     >>   an  increase  of  $30.6  million  in  our  commercial,  financial  and
          agricultural  portfolio,  due partially to our  acquisitions  in 2004,
          partially offset by

     >>   a decrease of $59.7 million in our lease financing portfolio primarily
          resulting  from the sale of a  significant  portion of our  commercial
          leasing  portfolio,  reducing  the  portfolio by  approximately  $33.1
          million to $9.6 million on June 30, 2004; the remaining decline in the
          portfolio was 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;

     >>   a  decrease  of $17.6  million  in  consumer  and  installment  loans,
          reflecting  the  continued  decline of new  non-real  estate  consumer
          lending and the repayment of principal on our existing portfolio; and

     >>   a decrease of $16.9 million in loans held for sale  resulting from the
          timing of loan sales in the secondary  mortgage market,  combined with
          management's  business  strategy  decision  in  mid-2003  to  retain a
          portion  of  the  new  residential  mortgage  loan  production  in our
          portfolio,  as  discussed  above,  and an  overall  slowdown  in  loan
          origination volumes initially experienced during the fourth quarter of
          2003 and continuing through 2004.
<PAGE>

     Nonperforming assets include nonaccrual loans, restructured loans and other
real estate. The following table presents the categories of nonperforming assets
and certain ratios as of September 30, 2004 and December 31, 2003:
<TABLE>
<CAPTION>

                                                                                 September 30,     December 31,
                                                                                     2004              2003
                                                                                     ----              ----
                                                                                (dollars expressed in thousands)
         Commercial, financial and agricultural:
<S>                                                                              <C>                 <C>
              Nonaccrual.....................................................    $   14,923          26,876
         Real estate construction and development:
              Nonaccrual.....................................................        11,914           6,402
         Real estate mortgage:
           One-to-four family residential:
              Nonaccrual.....................................................        17,059          21,611
              Restructured...................................................            12              13
           Multi-family residential loans:
              Nonaccrual.....................................................           136             804
           Commercial real estate loans:
              Nonaccrual.....................................................        17,027          13,994
         Lease financing:
              Nonaccrual.....................................................         1,979           5,328
         Consumer and installment:
              Nonaccrual.....................................................           233             336
                                                                                 ----------       ---------
                  Total nonperforming loans..................................        63,283          75,364
         Other real estate...................................................         3,294          11,130
                                                                                 ----------       ---------
                  Total nonperforming assets.................................    $   66,577          86,494
                                                                                 ==========       =========


                                                                                 September 30,     December 31,
                                                                                     2004              2003
                                                                                     ----              ----
                                                                                (dollars expressed in thousands)

         Loans, net of unearned discount.....................................    $ 5,561,623       5,328,075
                                                                                 ===========      ==========

         Loans past due 90 days or more and still accruing...................    $     3,050           2,776
                                                                                 ===========      ==========

         Ratio of:
              Allowance for loan losses to loans.............................           2.30%           2.19%
              Nonperforming loans to loans...................................           1.14            1.41
              Allowance for loan losses to nonperforming loans...............         202.22          154.52
              Nonperforming assets to loans and other real estate............           1.20            1.62
                                                                                 ===========      ==========
</TABLE>
<PAGE>

     Nonperforming  loans,  consisting of loans on nonaccrual status and certain
restructured  loans,  were $63.3 million at September 30, 2004, in comparison to
$65.5 million at June 30, 2004,  $87.4 million at March 31, 2004,  $75.4 million
at December 31, 2003 and $70.8 million at September 30, 2003.  Other real estate
owned was $3.3  million,  $1.9 million,  $2.9  million,  $11.1 million and $10.5
million at September 30, 2004, June 30, 2004, March 31, 2004,  December 31, 2003
and  September  30, 2003,  respectively.  Nonperforming  assets,  consisting  of
nonperforming loans and other real estate owned, were $66.6 million at September
30, 2004, compared to $67.4 million at June 30, 2004, $90.2 million at March 31,
2004,  $86.5  million at December 31, 2003 and $81.3  million at  September  30,
2003.  The 23.03% net  decrease in  nonperforming  assets  during the first nine
months of 2004 reflects the following significant changes:

     >>   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;

     >>   In  March  2004,   we  placed  a  $13.9  million   commercial   credit
          relationship in the southern  California region on nonaccrual  status,
          representing  approximately  15.9% of nonperforming loans at March 31,
          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 repaid in cash;

     >>   On  January  5,  2004,  we  funded a $5.3  million  letter  of  credit
          associated  with a  commercial  credit  relationship  in the St. Louis
          region.  Additionally,   in  January  2004,  we  recorded  a  $750,000
          charge-off  on this  credit  relationship  and  placed  the  remaining
          balance on nonaccrual  status,  bringing the total  commercial  credit
          relationship on nonaccrual  status to approximately  $7.3 million.  On
          April 30,  2004,  we sold the entire $7.3  million  commercial  credit
          relationship  to an  independent  third  party  for $9.6  million  and
          recorded a $2.3 million recovery of previously  recorded  charge-offs;
          and

     >>   On June 30, 2004, we completed  the sale of a  significant  portion of
          our  commercial  leasing  portfolio,  reducing the  portfolio by $33.1
          million to $9.6 million.  The level of nonperforming  loans related to
          the remaining  lease portfolio was $2.0 million at September 30, 2004,
          compared to $3.2 million, $3.1 million, $5.3 million and $13.1 million
          at June 30, 2004, March 31, 2004,  December 31, 2003 and September 30,
          2003, respectively; partially offset by

     >>   Our recent acquisitions of CCB and SBLS, which resulted in an increase
          of approximately $8.3 million in nonperforming assets at September 30,
          2004. SBLS has a significant  concentration of assets  associated with
          the shrimping vessels industry,  which are reflected in both loans and
          other  repossessed  assets.  Although we adjusted  our asset  purchase
          price to reflect this concentration,  asset quality issues will likely
          continue in the near future as a result of this industry concentration
          and its currently depressed status.

     Loan  charge-offs  were $12.5  million and $36.8  million for the three and
nine months ended  September  30, 2004,  respectively,  in  comparison  to $18.8
million and $42.5 million for the comparable  periods in 2003. Loan charge-offs,
net of  recoveries,  were $7.9 million and $18.6  million for the three and nine
months ended  September 30, 2004,  respectively,  in comparison to $12.1 million
and $25.5  million for the  comparable  periods in 2003.  Our allowance for loan
losses  as a  percentage  of  loans,  net of  unearned  discount,  was  2.30% at
September 30, 2004,  2.24% at June 30, 2004,  2.34% at March 31, 2004,  2.19% at
December 31, 2003 and 2.04% at September 30, 2003. Our allowance for loan losses
as a percentage  of  nonperforming  loans  increased to 202.22% at September 30,
2004,  from  184.62% at June 30,  2004,  142.94% at March 31,  2004,  154.52% at

<PAGE>

December 31, 2003 and 156.32% at  September  30, 2003.  The  allowance  for loan
losses was $128.0  million at September 30, 2004,  compared to $121.0 million at
June 30, 2004,  $124.9 million at March 31, 2004, $116.5 million at December 31,
2003 and $110.7  million at September 30, 2003. As reflected in the table below,
a $1.0  million  specific  reserve  was  established  in  December  2003 for the
estimated loss  associated with the $5.3 million  unfunded letter of credit.  As
discussed  above,  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. In addition,  on June 30, 2004, we transferred
approximately  $1.5 million from the  allowance  for loan losses to a contingent
liability  related to recourse  obligations  associated with the sale of certain
leases in our commercial leasing  portfolio,  as further described in Note 2 and
Note 12 to our Consolidated Financial Statements. 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 generally low  prevailing  interest  rates.  We consider this in our overall
assessment  of the  adequacy  of the  allowance  for loan  losses.  Despite  the
improvement in nonperforming  assets during 2004,  nonperforming assets continue
to remain at somewhat elevated levels that initially began in late 2001 with the
decline in economic conditions.  We anticipate the level of nonperforming assets
to  remain  at  these  elevated  levels  throughout  the  remainder  of 2004 and
anticipate a significant  increase in  nonperforming  loans  associated with our
pending acquisition of Hillside and CIB.

     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,  geographic and credit  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>

     The following  table is a summary of our loan loss experience for the three
and nine months ended September 30, 2004 and 2003:
<TABLE>
<CAPTION>

                                                                Three Months Ended           Nine Months Ended
                                                                   September 30,               September 30,
                                                               --------------------         --------------------
                                                                2004          2003           2004          2003
                                                                ----          ----           ----          ----
                                                                       (dollars expressed in thousands)

<S>                                                           <C>           <C>             <C>           <C>
         Allowance for loan losses, beginning of period.....  $ 120,966     107,848         116,451       99,439
         Acquired allowances for loan losses................      7,379          --           7,379          757
         Other adjustments (1)(2)...........................         --          --            (479)          --
                                                              ---------    --------        --------     --------
                                                                128,345     107,848         123,351      100,196
                                                              ---------    --------        --------     --------
         Loans charged-off..................................    (12,465)    (18,821)        (36,760)     (42,486)
         Recoveries of loans previously charged-off.........      4,590       6,707          18,129       17,024
                                                              ---------    --------        --------     --------
         Net loan charge-offs...............................     (7,875)    (12,114)        (18,631)     (25,462)
                                                              ---------    --------        --------     --------
         Provision for loan losses..........................      7,500      15,000          23,250       36,000
                                                              ---------    --------        --------     --------
         Allowance for loan losses, end of period...........  $ 127,970     110,734         127,970      110,734
                                                              =========    ========        ========     ========
         ---------------
          (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.
          (2)  On June 30, 2004, we reclassified $1.5 million  from the  allowance  for  loan  losses to  accrued  and other
               liabilities to establish a specific reserve associated with the commercial leasing portfolio sale and related
               recourse obligations for certain leases sold.
</TABLE>

                                    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
$1.07  billion and $726.9  million at September  30, 2004 and December 31, 2003,
respectively.

     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 September 30, 2004:
<TABLE>
<CAPTION>

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

<S>                                                                   <C>                 <C>               <C>
         Three months or less.....................................    $148,693            167,118           315,811
         Over three months through six months.....................      62,551              6,000            68,551
         Over six months through twelve months....................     133,741                144           133,885
         Over twelve months.......................................     170,795            377,000           547,795
                                                                      --------           --------         ---------
              Total...............................................    $515,780            550,262         1,066,042
                                                                      ========           ========         =========
</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 September
30, 2004 and December  31,  2003,  First  Bank's  borrowing  capacity  under the
agreement was approximately $762.5 million and $909.3 million,  respectively. In
addition,  First Bank's borrowing  capacity  through its  relationship  with the
Federal Home Loan Bank was  approximately  $408.7  million and $449.5 million at
September 30, 2004 and December 31, 2003, respectively. Exclusive of the Federal
Home Loan Bank advances  outstanding  of $35.2 million at September 30, 2004 (of
which $28.2 million were acquired in  conjunction  with our  acquisition of CCB)
and $7.0  million at December 31,  2003,  First Bank had no amounts  outstanding
under either of these borrowing  arrangements at September 30, 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  September  30,  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..................................  $    2,245         21,774       22,168       46,187
         Certificates of deposit...........................   1,213,814        775,680          560    1,990,054
         Other borrowings..................................     173,262        366,000       11,000      550,262
         Subordinated debentures...........................          --             --      232,311      232,311
         Other contractual obligations.....................         640          2,691           26        3,357
                                                             ----------      ---------      -------    ---------
              Total........................................  $1,389,961      1,166,145      266,065    2,822,171
                                                             ==========      =========      =======    =========
</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 all of our  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.  As  discussed  in  Note  7  to  our  Consolidated  Financial
Statements,  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,
which would result in a reduction of our regulatory capital ratios.
<PAGE>

     On July 27,  2004,  the  FASB's  Derivatives  Implementation  Group  issued
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.
The new guidance permits the use of the  first-payments-received  technique in a
cash  flow  hedge  of  the   variable   prime-rate   based  or  other   variable
non-benchmark-rate-based interest payments for a rolling portfolio of prepayable
interest-bearing  loans,  provided  the  hedging  relationship  meets  all other
conditions in FASB Statement No. 133, Accounting for Derivative  Instruments and
Hedging Activities,  for cash flow hedge accounting. 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, as further  discussed  below,  and any
derivative gains or losses in accumulated other comprehensive  income related to
the de-designated hedging relationships should be accounted for under paragraphs
31 and 32 of SFAS No. 133. We had pre-existing  cash flow hedging  relationships
that were  inconsistent  with the guidance in DIG Issue G25. As of September 30,
2004, our  accumulated  other  comprehensive  income included a $4.1 million net
gain  attributable to these  pre-existing cash flow hedging  relationships.  DIG
Issue G25 is effective for the fiscal  quarter  beginning  after August 9, 2004,
and shall be applied to all hedging  relationships  as of the effective date. On
October 1,  2004,  we  implemented  DIG Issue G25 and  de-designated  all of our
specific  cash  flow  hedging  relationships  that  were  inconsistent  with the
guidance in DIG Issue G25.  Consequently,  the $4.1 million net gain  associated
with the  de-designated  cash flow  hedging  relationships  will be amortized to
interest   income  over  the   remaining   lives  of  the   respective   hedging
relationships,  which  range  from  approximately  6 months to three  years.  We
elected to prospectively  re-designate new cash flow hedging relationships based
upon minor revisions to the underlying  hedged items as required by the guidance
in DIG  Issue  G25.  The  implementation  of DIG  Issue  G25  did not and is not
expected to have a material  impact on our  consolidated  financial  statements,
results of operations or our interest rate risk management program.

     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 limits
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. On April 1, 2004, we
implemented  SAB 105, which did not 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 decline of approximately 7.9% in net interest income, based on
assets and liabilities at December 31, 2003. At September 30, 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 and nine  months  ended  September  30,  2004 as
compared  to  the  comparable  periods  in  2003  and  further  discussed  under
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations  -- Results of  Operations."  During the three and nine months  ended
September 30, 2004, our asset-sensitive  position and overall  susceptibility to
market risks have not changed  materially.  However,  prevailing  interest rates
have risen slightly during the three months ended September 30, 2004.




<PAGE>


                        ITEM 4 - CONTROLS AND PROCEDURES

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



<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     First  Amendment to  Secured Credit Agreement by  and  among
                    among  First  Banks,  Inc.  and  Wells Fargo Bank,  National
                    Association, as Agent, Bank One, N.A., LaSalle Bank National
                    Association,   The  Northern  Trust  Company, Union Bank  of
                    California,  N.A.,  Fifth Third Bank (Chicago) and U.S. Bank
                    National    Association,   dated   August 12, 2004  -  filed
                    herewith.

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

           32       Section 1350 Certifications - filed herewith.

(b)  Reports on Form 8-K.

     We filed a  Current  Report  on Form 8-K on July 23,  2004.  Item 12 of the
     report referenced a press release announcing First Banks,  Inc.'s financial
     results  for the three and six months  ended June 30,  2004.  A copy of the
     press release was included as Exhibit 99.3.

     We filed a Current  Report on Form 8-K on August  13,  2004.  Item 5 of the
     report  referenced the signing of a Stock Purchase  Agreement on August 12,
     2004 by and among  First  Banks,  Inc.,  a  Missouri  corporation,  The San
     Francisco Company, a Delaware corporation,  CIB Marine Bancshares,  Inc., a
     Wisconsin  corporation,  Hillside Investors,  Ltd., an Illinois corporation
     and CIB Bank, Hillside,  Illinois,  an Illinois banking  corporation,  that
     provides for First Banks Inc.'s acquisition of Hillside Investors, Ltd. and
     its wholly owned banking subsidiary, CIB Bank. A copy of the Stock Purchase
     Agreement  was  included  as  Exhibit  10.6.  Item  5 of  the  report  also
     referenced a press  release  announcing  the signing of the Stock  Purchase
     Agreement. A copy of the press release was included as Exhibit 99.4.


<PAGE>


                                   SIGNATURES


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



                                FIRST BANKS, INC.



November 15, 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
                                 FIRST AMENDMENT
                                       TO
                            SECURED CREDIT AGREEMENT


         This FIRST AMENDMENT TO SECURED CREDIT  AGREEMENT  (this  "Agreement"),
dated as of August 12, 2004,  is made and entered into by and among FIRST BANKS,
INC., a Missouri corporation ("Borrower"),  the financial institutions that have
executed  this   Agreement  as  lenders  (each   individually   a  "Lender"  and
collectively  the  "Lenders")  and WELLS FARGO  BANK,  NATIONAL  ASSOCIATION,  a
national banking association,  as agent ("Agent").  This Agreement is based upon
the following recitals which are made a material part of this Agreement:

         A.  Pursuant to the terms and  conditions of a certain  Secured  Credit
Agreement (the "Credit Agreement"), dated as of August 14, 2003, and made by and
between  Borrower,  Lenders  and  Agent,  Lenders  agreed to make  available  to
Borrower a  revolving  credit  facility in the amount of Sixty  Million  Dollars
($60,000,000.00)  and a  revolving  letter of credit  facility  in the amount of
Twenty Million Dollars ($20,000,000.00). Capitalized terms not otherwise defined
herein shall have the same meaning as in the Credit Agreement.

         B. To further evidence the indebtedness of Borrower to Lenders pursuant
to the Credit  Agreement,  Borrower executed and delivered to Lenders the Notes,
each dated August 19, 2003.

         C. The  obligations  of  Borrower  to  Lenders  pursuant  to the Credit
Agreement  and the Notes are further  evidenced,  secured and  guaranteed by the
Borrower  Pledge  Agreement,  the San  Francisco  Company  Guaranty  and the San
Francisco Company Security  Agreement (the foregoing,  with the Credit Agreement
and  the  Notes,  are  collectively  referred  to as the  "Loan  Documents"  and
individually as a "Loan Document").

         D.  Borrower  has  requested  that Lenders (i)  severally  increase the
revolving  credit facility  provided for in the Credit Agreement to Seventy-Five
Million  Dollars  ($75,000,000),  (ii) increase the  revolving  letter of credit
facility  provided for in the Credit  Agreement to Twenty-Five  Million  Dollars
($25,000,000), (iii) extend the term of the Credit Agreement, and (iv) amend the
Credit Agreement in certain respects.

         E. Lenders are willing to accede to Borrower's  requests upon the terms
and conditions herein set forth.

         NOW,  THEREFORE,  in  consideration  of the  recitals  and  the  mutual
covenants  and  agreements  contained  herein,  and for other good and  valuable
consideration,  the receipt and  sufficiency  of which are hereby  acknowledged,
Borrower and Lenders  hereby agree as follows,  notwithstanding  anything to the
contrary contained in the Loan Documents:

         1.  Affirmation  of  Recitals.  The  recitals  are true and correct and
             -------------------------
incorporated herein by this reference.

         2.  Outstanding   Principal  Balance.   As  of  August  12,  2004,  the
             --------------------------------
outstanding  principal  balance  of  Advances  due  under the  revolving  credit
facility  provided  for in the Credit  Agreement  was $0.00 and the  outstanding
Letters of Credit thereunder  (including matured but unsatisfied  Obligations of
Reimbursement) aggregated $6,280,000. Borrower hereby stipulates and agrees that
the  foregoing  balances  are true and correct and that such amounts are due and
owing in accordance  with the terms of the Loan Documents and are not subject to
any claim of offset or defense whatsoever.
<PAGE>

         3.  Amendments. Effective upon the date each of the conditions provided
             ----------
for in Section 7 hereof shall have either been satisfied or expressly  waived in
writing by Lenders and Agent (the  "Effective  Date"),  the Credit  Agreement is
amended in the following respects:

          (a)  Section 1.01 is amended as follows:

               (1) The  following  shall be inserted  as the first  definitional
               paragraph:

               " `Acquisition' shall mean any of (i) the acquisition by Borrower
               or any of its  Subsidiaries  of stock or other equity interest in
               any Person,  (ii) the acquisition by any Person of stock or other
               equity interest in Borrower or any of its Subsidiaries, (iii) the
               consolidation or merger of any Person into Borrower or any of its
               Subsidiaries, (iv) the consolidation or merger of Borrower or any
               of its  Subsidiaries  into  any  Person,  and (v)  the  transfer,
               outside of the ordinary course of business,  of any assets of any
               other  Person  to  Borrower  or any of  its  Subsidiaries,  or of
               Borrower or any of its Subsidiaries to any other Person."

               (2) The term  "Commitments"  shall be amended by substituting for
               the words and figures "Sixty Million Dollars  ($60,000,000)"  the
               words and figures "Seventy-Five Million Dollars ($75,000,000)."

               (3)  "Non-Performing  Assets" of any Person  means the sum of (i)
               all loans and leases  classified  as past due 90 days or more and
               still   accruing   interest;   (ii)  all  loans   classified   as
               `non-accrual'  and no longer accruing  interest;  (iii) all loans
               and leases  classified as `restructured  loans and leases';  (iv)
               without   duplication,   property  acquired  in  repossession  or
               foreclosure  and  property   acquired  pursuant  to  in-substance
               foreclosure;  and (v) if such  Person is a Bank  Subsidiary,  all
               other  Non-Performing  Assets as reported in the then most recent
               call report of such Person.

               (4) The definitional  paragraph "Permitted  Acquisition" shall be
               amended, in its entirety, to read as follows:

               "Permitted  Acquisition  means any Acquisition by Borrower or any
               of its Subsidiaries, in each case so long as:

                    (i)  no Default or Event of  Default  is  continuing  at the
                         time of such  Acquisition,  or would be  caused by such
                         Acquisition;

                    (ii) all authorizations of governmental agencies,  bodies or
                         authorities   which  are   necessary   to  approve  the
                         Acquisition  have been  obtained  and are in full force
                         and effect, or will be obtained  contemporaneously with
                         the earlier to occur of closing of such Acquisition and
                         the  making of any  Advance  for such  purpose,  and no
                         further approval, consent, order or authorization of or
                         designation,  registration,  declaration or filing with
                         any  governmental  authority is required in  connection
                         therewith;
<PAGE>

                   (iii) in the case of any Acquisition  that is a consolidation
                         or merger,  the  continuing  or  surviving  corporation
                         shall  be  controlled   by  the  Borrower   immediately
                         following the transaction;  provided, however, that (A)
                                                     --------  -------
                         a  Subsidiary  may merge with and into the  Borrower or
                         another Subsidiary,  but (B) under no circumstances may
                         the  Borrower  merge  into  or  consolidate   with  any
                         Subsidiary; and

                    (iv) any notice required in connection with such Acquisition
                         pursuant to Section 5.09 shall have been timely given."

               (5) The  term  "Revolving  Credit  Termination  Date,"  shall  be
               amended by  substituting  for the date "August 12, 2004" the date
               "August 11, 2005."

          (b)  Section 2.03 (a) shall be amended,  in its  entirety,  to read as
               follows:

               "(a)  Generally.  The  Margin  and  the L/C  Margin  through  and
                     ---------
               including the first adjustment occurring as specified below shall
               be 0.875% and 1.00%, respectively.  Beginning with the receipt by
               the  Lenders  of  the   financial   statements   and   Compliance
               Certificate for the period ending  September 30, 2004, the Margin
               and the L/C Margin shall be adjusted each quarter on the basis of
               the  Funded  Debt  Ratio  as at the  end of the  previous  fiscal
               quarter, in accordance with the following table:

<TABLE>
<CAPTION>

                Funded Debt Ratio                  Margin in Basis Points      L/C Margin in Basis Points
                -----------------                  ----------------------      --------------------------
<S>             <C>                                         <C>                          <C>
                1.75 to 1.00 or more                        112.5                        125.0
                1.00 to 1.00 or more, but                   100.0                        112.50
                less than 1.75 to 1.00
                Less than 1.00 to 1.00                       87.5                        100.0
</TABLE>

               Reductions  and  increases  in the Margin and L/C Margin  will be
               made  quarterly on the first day of the month  following the date
               the Borrower's  financial  statements and Compliance  Certificate
               required  under  Section  5.01  are  due.   Notwithstanding   the
               foregoing,  (i) if the  Borrower  fails to deliver any  financial
               statements or Compliance Certificates when required under Section
               5.01, the Agent may (and,  upon request of the Required  Lenders,
               shall),  by notice to the  Borrower,  increase the Margin and L/C
               Margin to the  highest  rates set forth  above until such time as
               the  Agent  has  received  all  such  financial   statements  and
               Compliance  Certificates,  and (ii) no reduction in the Margin or
               the L/C  Margin  will be made if a Default or an Event of Default
               has occurred and is  continuing  at the time that such  reduction
               would otherwise be made."

          (c)  Section  2.15 (a) shall be  amended by  substituting  for the sum
               "$20,000,000" the sum "$25,000,000."

          (d)  Section 2.19 (a) shall be amended by  substituting  for the words
               and figures "September 30, 2003" the words and figures "September
               30, 2004."
<PAGE>

          (e)  Section 2.19 (c) shall be amended by  substituting  for the words
               and figures "September 30, 2003" the words and figures "September
               30, 2004."

          (f)  Section  5.08  shall be amended  by  substituting  for the figure
               "$1,000,000"   in  the   last   sentence   thereof   the   figure
               "$2,000,000."

          (g)  Section  5.09  shall  be  amended,  in its  entirety,  to read as
               follows:

               "Section  5.09  Notice  of  Acquisition.  Within  five  (5)  days
                               -----------------------
               after the  Borrower  or a  Subsidiary  enters  into a  definitive
               agreement in connection with a Permitted Acquisition of an entity
               whose assets are equal to or in excess of $500,000,000 or that is
               subject to a regulatory  order or  agreement,  the Borrower  will
               notify  the Agent of such  acquisition  in  writing.  Any  notice
               required  by  the   immediately   preceding   sentence  shall  be
               accompanied  by a  Schedule  in  the  form  of  Exhibit  I,  duly
               completed and executed on behalf of the  Borrower,  demonstrating
               that the  subject  Permitted  Acquisition  will not  result in an
               Event of Default."

          (h)  Section  6.05  shall  be  amended,  in its  entirety,  to read as
               follows:

               "Section  6.05  Acquisitions. Neither the Borrower nor any of its
                               ------------
               Subsidiaries  will  engage  in an  Acquisition  with any  Person,
               whether  as  acquirer  or  acquiree,   or  engage  in  any  other
               transaction  analogous  in purpose  or effect to an  Acquisition,
               except  that the  foregoing  shall  not  prohibit  any  Permitted
               Acquisition."

          (i)  Section 7.05 shall be amended to read as follows:

               "Section  7.05  Maximum   Non-Performing  Assets.   The  Borrower
                               --------------------------------
               will maintain on a consolidated basis, its Non-Performing  Assets
               at an amount not greater than 20% of its Primary Equity  Capital,
               determined as of the end of each calendar quarter."

          (j)  Exhibit A shall be  amended,  in its  entirety,  by  substituting
               therefore Exhibit A hereto.

          (k)  Exhibit  G shall be  amended  by  substituting  for the words and
               figures  "August  19,  2003" the words and  figures  "August  12,
               2004."

          (l)  Exhibit I shall be  amended,  in its  entirety,  by  substituting
               Exhibit I hereto.

          (m)  Section 7.06 shall be amended to read as follows:

               "Section  7.06  Allowance   for  Loan and   Lease   Losses.   The
                               ------------------------------------------
               Borrower will maintain,  on a consolidated  basis,  its allowance
               for  loan  and  lease  losses  at  not  less  than  100%  of  its
               Non-Performing  Assets." The  allowance for loan and lease losses
               at any time  shall be the  amount  set  forth in the most  recent
               Quarterly Report on Form 10-Q or Annual Report on Form 10-K filed
               by the Borrower with the Securities  and Exchange  Commission (or
               any successor report).

         4.    Other Provisions of Loan Documents.  The  Loan  Documents are and
               -----------------------------------
(as modified and amended hereby) shall remain in full force and effect,  and all
of the terms and  provisions of the Loan  Documents (as so modified and amended)
are hereby ratified and reaffirmed in all respects.  As hereinafter used in this
Agreement,  "Loan  Documentation"  shall mean the Loan Documents as modified and
amended by this  Agreement.  All of the  Collateral  shall remain subject to the
liens,  charges  and  encumbrances  of the Loan  Documents  and  nothing  herein
contained, and nothing done pursuant hereto, shall affect the liens or

<PAGE>

encumbrances  of the Loan  Documents,  or the  priority  thereof with respect to
other liens or encumbrances,  or release or affect the liability of any party or
parties whomsoever who may now or hereafter be liable under or on account of the
Loan Documents.

         5.  Expenses.   Borrower  agrees  to  pay  all  of  Agent's  reasonable
             --------
out-of-pocket costs, expenses,  fees and charges incurred in connection with the
preparation,  negotiation,  and execution of this Agreement,  including, without
limitation, all of Agent's reasonable attorneys' fees and disbursements. Failure
by Borrower to pay any such  amounts  within five (5) Bank  Business  Days after
demand by Agent  shall  constitute  an Event of Default.  If  Borrower  fails to
timely  pay any such  expenses,  then  Agent  shall  have the  right to pay such
expenses and the same shall  constitute  additional  indebtedness of Borrower to
Agent evidenced, secured and guaranteed by the Loan Documents.

         6.  Borrower's   Representations   and   Warranties.   Borrower  hereby
             -----------------------------------------------
represents  and  warrants  to  Lenders,  as of the  date of this  Agreement,  as
follows:

               (a)  The security interests granted under the Loan Documents have
                    been, are, and shall remain valid first, prior and paramount
                    liens  on the  Collateral,  enjoying  the  same or  superior
                    priority with respect to other claims upon the Collateral as
                    prevailed prior to the execution of this Agreement;

               (b)  No  Default  or  Event  of  Default  has   occurred  and  is
                    continuing  on the  date of this  Agreement  or  shall  have
                    occurred and be continuing on the Effective Date; and

               (c)  All resolutions,  authorizations  or consents on the part of
                    Borrower  which are  necessary  for  Borrower to execute and
                    deliver  this  Agreement  and to be bound by the  provisions
                    hereof have been  obtained  and are in full force and effect
                    on the date  hereof,  and  this  Agreement  constitutes  the
                    legal,  valid and binding  obligation of the Borrower and is
                    enforceable in accordance with the terms hereof.

Borrower acknowledges that Lenders have relied on the foregoing  representations
and warranties in entering into this  Agreement.  In the event Borrower has made
any material  misrepresentation  to Lenders in connection  with this  Agreement,
such  misrepresentation  shall  constitute  an Event of  Default  under the Loan
Documents.

         7.  Conditions to  Effectiveness.  All of (i) the agreements of Lenders
             ----------------------------
herein, (ii) the obligation of Lenders to hereafter make any Advances, and (iii)
the  obligation of Agent to hereafter  issue any letter of credit are subject to
and conditioned upon the Agent having received on or before August 12, 2004, all
of the following, each dated (unless otherwise indicated) as of the date hereof,
and each in form and substance satisfactory to each Lender:

               (a)  The  full  execution  and  delivery  of  this  Agreement  by
                    Borrower.

               (b)  Execution  and  delivery  of  this  Agreement  by all of the
                    Lenders.

               (c)  San   Francisco   Company's   execution   and   delivery  of
                    Acknowledgement and Consent hereto.

               (d)  The  Notes,  in amounts  consistent  with those set forth in
                    Exhibit  A  hereto,  properly  executed  on  behalf  of  the
                    Borrower.
<PAGE>

               (e)  Current searches of appropriate  filing offices showing that
                    (i) no state or federal tax liens have been filed and remain
                    in effect  against  any of the  Borrower,  First Bank or San
                    Francisco  Company,  (ii) no financing  statements have been
                    filed  and  remain in effect  against  any of the  Borrower,
                    First  Bank  or  San  Francisco  Company,  except  financing
                    statements  perfecting  only Liens  permitted  under Section
                    6.01 of the Credit Agreement and (iii) no judgment liens are
                    in effect  against any of the  Borrower or First Bank or San
                    Francisco Company.

               (f)  Separate certificates of the secretaries of the Borrower and
                    San Francisco Company  certifying,  in the case of each such
                    corporation,   (i)  that   the   execution,   delivery   and
                    performance  of  this  Agreement  and  all  other  documents
                    contemplated  hereunder to which such corporation is a party
                    have been duly approved by all necessary action of the Board
                    of Directors of such  corporation,  and  attaching  true and
                    correct copies of the applicable  resolutions  granting such
                    approval,  (ii) that attached to such  certificate  are true
                    and  correct  copies of the  articles of  incorporation  and
                    bylaws of such corporation,  together with such copies,  and
                    (iii) the names of the officers of such  corporation who are
                    authorized to sign this  Agreement  and all other  documents
                    contemplated hereunder to which such corporation is a party,
                    including,  with  respect  to  the  Borrower,  requests  for
                    Advances  and  L/C  Applications,  together  with  the  true
                    signatures of such  officers.  The Agent and the Lenders may
                    conclusively  rely on each such certificate until they shall
                    receive a further  certificate of the Secretary or Assistant
                    Secretary  of  the  applicable   corporation   canceling  or
                    amending the prior certificate and submitting the signatures
                    of the officers named in such further certificate.

               (g)  Certificates  of good standing of each of the Borrower,  San
                    Francisco  Company and First Bank,  each dated not more than
                    twenty (20) days before the date of this Agreement.

               (h)  A signed copy of an opinion of counsel for the  Borrower and
                    San  Francisco  Company,  addressed  to  the  Lenders  as to
                    matters referred to in Sections 4.01, 4.02, 4.03 and 4.07 of
                    the  Credit  Agreement  as if the  representation  set forth
                    therein  were  made as of the  date  hereof,  and as to such
                    other matters as the Lenders may  reasonably  request,  with
                    that  opinion  being  subject to customary  assumptions  and
                    limitations  and  reasonably  acceptable  to  each  Lender's
                    counsel.  In the case of Section 4.07, the opinion may be to
                    the  best  knowledge  of such  counsel  and  subject  to the
                    matters disclosed in Schedule 4.07 hereto,  and, in the case
                    of Section  4.03,  insofar as it relates to  enforcement  of
                    remedies,  it  may  be  subject  to  applicable  bankruptcy,
                    insolvency,  reorganization  or similar laws  affecting  the
                    rights of  creditors  generally  from  time to time,  and to
                    usual equity principles.

               (i)  Agent shall have received Certificates representing,  in the
                    aggregate,  all of the issued and outstanding  capital stock
                    of San Francisco  Company and one blank stock power executed
                    by Borrower for each such certificate.

               (j)  Agent shall have received Certificates representing,  in the
                    aggregate,  all of the issued and outstanding  capital stock
                    of First  Bank and one blank  stock  power  executed  by San
                    Francisco Company for each such certificate.
<PAGE>

               (k)  Agent shall have  received  full payment of all fees owed by
                    Borrower to Agent pursuant to that certain letter  agreement
                    dated June 4, 2004, between Borrower and Agent.

         8.  Miscellaneous.  This  Agreement  shall be binding upon Borrower and
             -------------
Lenders, and their respective heirs,  personal  representatives,  successors and
assigns. This Agreement may be executed in several  counterparts,  each of which
shall be deemed an original and all of such counterparts,  taken together, shall
constitute one and the same agreement, even though all of the parties hereto may
not have executed the same  counterpart of this  Agreement.  If any provision of
this Agreement  shall be unlawful,  then such provision  shall be null and void,
but the remainder of this Agreement shall remain in full force and effect and be
binding on the parties.  This Agreement and the Loan Documents referenced herein
contain all of the  agreements of the parties  relative to the subject matter of
this Agreement.  Any prior agreements or commitments of Lenders, whether oral or
written,  relating to the subject  matter of this  Agreement  not  expressly set
forth herein or in the exhibits hereto (if any) are null and void and superseded
in their entirety by the provisions hereof. This Agreement shall be binding upon
the execution and delivery of this Agreement by the last party to sign.

         9.  No Oral Agreements.  This  notice is  provided  pursuant to Section
             -------------------
432.045, R.S.Mo. As used herein,  "Creditor" means Bank and "this writing" means
this Agreement and all the other Loan Documents.  ORAL AGREEMENTS OR COMMITMENTS
TO LOAN MONEY,  EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING  REPAYMENT OF A DEBT
INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE,  REGARDLESS
OF THE LEGAL  THEORY  UPON WHICH IT IS BASED  THAT IS IN ANY WAY  RELATED TO THE
CREDIT   AGREEMENT.   TO  PROTECT   YOU   (BORROWER)   AND  US   (LENDER)   FROM
MISUNDERSTANDING  OR  DISAPPOINTMENT,  ANY  AGREEMENTS  WE REACH  COVERING  SUCH
MATTERS ARE  CONTAINED IN THIS  WRITING,  WHICH IS THE  COMPLETE  AND  EXCLUSIVE
STATEMENT OF THE  AGREEMENT  BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.


         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                              "Borrower"

                               FIRST BANKS, INC., a Missouri corporation
(SEAL)
                               By: /s/ Allen H. Blake
                                   ---------------------------------------------
                               Printed Name: Allen H. Blake
                                            ------------------------------------
                               Title:  President and Chief Executive Officer
                                       -----------------------------------------

                              "Lenders"

                               WELLS FARGO BANK, NATIONAL
                               ASSOCIATION, as Agent and as Lender

                               By: /s/  Troy Rosenbrook
                                   --------------------------------------------
                                   Its: Senior Vice President
                                        ---------------------------------------



<PAGE>


                               BANK ONE, N.A.

                               By: /s/  Douglas Gallun
                                   --------------------------------------------
                                   Its: First Vice President
                                        ---------------------------------------


                               LASALLE BANK NATIONAL ASSOCIATION

                               By: /s/  Robert J. Mathias
                                        ----------------------------------------
                                   Its: First Vice President
                                        ----------------------------------------

                               THE NORTHERN TRUST COMPANY

                               By: /s/  Lisa M. McDermott
                                        ----------------------------------------
                                   Its: Vice President
                                        ----------------------------------------


                               UNION BANK OF CALIFORNIA, N.A.

                               By: /s/  Dennis A. Cattell
                                        ----------------------------------------
                                   Its: Vice President
                                        ----------------------------------------


                               FIFTH THIRD BANK (CHICAGO)

                               By: /s/  Patrick A. Horne
                                        ----------------------------------------
                                   Its: Vice President
                                        ----------------------------------------


                               U.S. BANK NATIONAL ASSOCIATION

                               By: /s/  David C. Buettner
                                        ----------------------------------------
                                   Its: Vice President
                                        ----------------------------------------


                           ACKNOWLEDGEMENT AND CONSENT

The San  Francisco  Company  hereby  acknowledges  and consents to the above and
foregoing First Amendment to Secured Credit Agreement dated August 12, 2004, and
agrees  that  any and all of its  obligations  under or on  account  of the Loan
Documents are and remain in full force and effect unaffected by or on account of
said First Amendment to Secured Credit Agreement, all as of August 12, 2004.

                                        THE SAN FRANCISCO COMPANY, a Delaware
                                        Corporation

                                        By:  /s/ Allen H. Blake
                                            ------------------------------------
                                        Printed Name: Allen H. Blake
                                                      --------------------------
(SEAL)                                  Title: Executive Vice President
                                               ---------------------------------

<PAGE>

<TABLE>
<CAPTION>

                                    EXHIBIT A


                        REVOLVING LOAN COMMITMENT AMOUNTS


-------------------------------------------------------------------------------------------------------------------------
                                              Commitment        Percentage
Name                                            Amount            Amount            Notice Address
-------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                      <C>           <C>
Wells Fargo Bank, National                   $18,750,000              25%           MAC N2650-140
     Association, as a Bank                                                         120 S. Central Avenue, 14th Floor
                                                                                    St. Louis, Missouri  63105-1705
                                                                                    Attention: Holly Heidtbrink
                                                                                    Telecopier:314-726-3173

-------------------------------------------------------------------------------------------------------------------------
Bank One, N.A.                               $11,250,000              15%           120 South LaSalle Street
                                                                                    Chicago, Illinois 60603-3400
                                                                                    Attention: Douglas Gallun
                                                                                    Telecopier: (312) 661-9511
-------------------------------------------------------------------------------------------------------------------------
LaSalle Bank National Association            $11,250,000              15%           One Metropolitan Square
                                                                                    211 North Broadway, Suite 4050
                                                                                    St. Louis, Missouri 63102
                                                                                    Attention: Robert J. Mathias
                                                                                    Telecopier: (314) 621-3947
-------------------------------------------------------------------------------------------------------------------------
The Northern Trust Company                   $7,500,000               10%           50 South LaSalle Street, L-8
                                                                                    Chicago, Illinois 60675
                                                                                    Attention: Thomas E. Bernhardt
                                                                                    Telecopier: (312) 444-4906
-------------------------------------------------------------------------------------------------------------------------
Union Bank of California, N.A.               $7,500,000               10%           445 South Figureroa Street
                                                                                    Los Angeles, California 90071
                                                                                    Attention: Dennis A. Cattell
                                                                                    Telecopier: (213) 236-5548
-------------------------------------------------------------------------------------------------------------------------
Fifth Third Bank (Chicago)                   $7,500,000               10%           1701 Golf Road
                                                                                    Tower One, Suite 700
                                                                                    Rolling Meadows, IL 60008
                                                                                    Attention: Patrick A. Horne
                                                                                    Telecopier: (847) 354-7130
-------------------------------------------------------------------------------------------------------------------------
U.S. Bank National Association               $11,250,000              15%           Correspondent Banking
                                                                                    SL-TW-11SI
                                                                                    7th & Washington
                                                                                    St. Louis, MO   63101
                                                                                    Attention:  David C. Buettner, VP
                                                                                    Telecopier:  (314) 418-8394
-------------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>




                                    EXHIBIT I
                         NOTICE OF PERMITTED ACQUISITION

         This  Notice is being  submitted  on this ___ day of  ________,  200__,
pursuant to Section 5.09 of the Secured Credit  Agreement dated as of August 14,
2003,  as amended  (the  "Credit  Agreement"),  by and among  Wells  Fargo Bank,
National  Association (the "Agent"),  the Lenders that are parties thereto,  and
First Banks,  Inc., as Borrower.  Capitalized  terms used but not defined herein
shall have the meanings set forth in the Credit Agreement.

         The  undersigned  officer of the Borrower  hereby  notifies the Lenders
that  [the  Borrower]  [_________  (name of  Subsidiary)]  has  entered  into an
agreement to purchase [______% of the voting common stock] [all of the assets of
the   business]    [all   of   the   assets   of   the   ____    branch(s)]   of
__________________________________  (name and organizational details of acquired
entity).  A brief  description  of the  transaction,  including  the form of the
acquisition,  amount  and  nature of the  consideration,  and  expected  date of
completion, is attached to this Notice as Annex A.

         The undersigned officer hereby certifies to the Lenders that:

          A.   The representations and warranties contained in Article IV of the
               Credit  Agreement  are  correct as of the date hereof and will be
               correct after giving effect to the proposed  acquisition,  except
               to the extent  that the same  relate  specifically  to an earlier
               date; and

          B.   No Default or Event of Default has occurred and is continuing, or
               will occur as a result of the proposed acquisition.

         This will  confirm that  promptly  upon request of Agent or any Lender,
First  Banks,  Inc.  will  provide to the Agent  copies of any  applications  to
regulatory agencies submitted in connection with the proposed acquisition.

         Signed as of the day and year first above written.

                                                   FIRST BANKS, INC.


                                                   By
                                                     ---------------------------
                                                       [name and office held]



<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:  November 15, 2004        By:  /s/ 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  September 30, 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:  November 15, 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)