SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549



                                    FORM 10-Q

[X]          QUARTERLY REPORT PURSUANT TO SECTION  13  OR 15(d)  OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1997

                                       OR

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

For the transition period from                  to
Commission file number 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
         incorporation or organization)               identification No.)

                   135 NORTH MERAMEC, CLAYTON, MISSOURI 63105
                   ------------------------------------------
               (address of principal executive offices) (Zip Code)

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

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

                                Yes __X_ No ____



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

                                                     Outstanding at
              Class                                 October 31, 1997
              -----                                 ----------------

Common Stock, $250.00 par value                          23,661




<PAGE>




                                First Banks, Inc.

                                      INDEX






                                                                           Page

PART I            FINANCIAL INFORMATION


     Item 1.      Financial Statements:
                  Consolidated Balance Sheets as of September 30, 1997
                    and December 31, 1996                                   -1-
                  Consolidated Statements of Income for the three
                    and nine months ended September 30, 1997 and 1996       -3-
                  Consolidated Statements of Cash Flows for the nine
                    months ended September 30, 1997 and 1996                -4-
                  Notes to Consolidated Financial Statements                -5-

     Item 2.      Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                     -8-



PART II.      OTHER INFORMATION

     Item 6.      Exhibits and Reports on Form 8-K                         -17-


Signatures                                                                 -18-






<PAGE>


                         PART I - FINANCIAL INFORMATION
                          Item 1. Financial Statements

                       FIRST BANKS, INC. AND SUBSIDIARIES
                     Consolidated Balance Sheets (unaudited)
             (dollars expressed in thousands, except per share data)

<TABLE>
<CAPTION>



                                                                              September 30,       December 31,
                                   ASSETS                                         1997                1996
                                   ------                                         ----                ----

Cash and cash equivalents:
<S>                                                                           <C>                    <C>    
   Cash and due from banks ..............................................     $    126,420           147,804
   Interest-bearing deposits with other financial
    institutions-with maturities of three months
    or less .............................................................            6,525             6,050
   Federal funds sold ...................................................          104,300            74,100
                                                                              ------------        ----------
       Total cash and cash equivalents ..................................          237,245           227,954
                                                                              ------------        ----------

Investment securities:
   Available for sale, at fair value ....................................          674,580           532,605
    Held to maturity, at amortized cost (estimated fair value
      of $20,062 and $20,611 at September 30, 1997 and
      December 31,1996, respectively)....................................           19,507            20,196
   Trading securities....................................................            3,681              --
                                                                              ------------        ----------
       Total investment securities ......................................          697,768           552,801
                                                                              ------------        ----------

Loans:
   Commercial and industrial.............................................          576,528           457,186
   Real estate construction and development .............................          373,058           289,378
   Real estate mortgage:
     Residential.........................................................          949,626         1,059,769
     Other...............................................................          653,609           600,811
   Consumer and installment .............................................          297,515           341,154
   Loans held for sale-residential mortgage .............................           48,231            27,485
                                                                              ------------        ----------
       Total loans ......................................................        2,898,567         2,775,783
   Unearned discount ....................................................           (8,049)           (7,814)
   Allowance for possible loan losses ...................................          (50,740)          (46,781)
                                                                              -------------       ---------- 
       Net loans ........................................................        2,839,778         2,721,188
                                                                              ------------         ---------

Bank premises and equipment, net of
   accumulated depreciation .............................................           47,983            48,078
Intangibles associated with the purchase
   of subsidiaries ......................................................           22,857            23,303
Purchased mortgage servicing rights, net
   of amortization ......................................................            8,935            10,230
Accrued interest receivable .............................................           26,195            23,250
Other real estate owned .................................................            8,170            10,607
Deferred income taxes ...................................................           45,590            43,406
Other assets ............................................................           22,687            28,337
                                                                              ------------         ---------
       Total assets .....................................................     $  3,957,208         3,689,154
                                                                              ============         =========



</TABLE>


<PAGE>



                       FIRST BANKS, INC. AND SUBSIDIARIES

                     Consolidated Balance Sheets (unaudited)
             (dollars expressed in thousands, except per share data)
                                   (continued)
<TABLE>
<CAPTION>


                                                                          September 30,          December 31,
                                                                               1997                    1996
                                                                               ----                    ----
                             LIABILITIES
                             -----------

Deposits:
    Demand:
<S>                                                                        <C>                         <C>    
      Non-interest bearing ...........................................     $   436,514                 418,193
      Interest bearing ...............................................         323,766                 337,618
    Savings ..........................................................         846,091                 671,286
    Time:
      Time deposits of $100 or more ..................................         206,075                 169,057
      Other time deposits ............................................       1,690,540               1,642,413
                                                                           -----------             -----------
               Total deposits ........................................       3,502,986               3,238,567
Federal Home Loan Bank advances.......................................           2,346                  39,277
Other borrowings......................................................          47,548                  30,705
Notes payable ........................................................           5,155                  76,330
Accrued interest payable .............................................           9,274                  10,288
Deferred income taxes ................................................          12,184                   6,194
Accrued and other liabilities ........................................          12,016                  23,521
Minority interest in subsidiaries.....................................          13,083                  12,883
Guaranteed preferred beneficial interest in
   First Banks' subordinated debentures, net of
   issuance costs  ...................................................          83,156                    --
                                                                           -----------             ---------
               Total liabilities .....................................       3,687,748               3,437,765
                                                                           -----------             -----------

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

Preferred stock:
    Class C 9.00%  increasing  rate,  redeemable,  cumulative,
       $1.00 par value, $25.00 stated value;  5,000,000 shares 
       authorized;  1,884,500 shares and 2,155,500 shares issued
        and outstanding at September 30, 1997 and
        December 31, 1996, respectively...............................          47,113                  53,887
    Class A, convertible, adjustable rate, $20.00 par value; 750,000
       shares authorized; 641,082 shares issued and outstanding ......          12,821                  12,822
    Class B, adjustable rate, $1.50 par value; 200,000 shares
        authorized; 160,505 shares issued and outstanding ............             241                     241
Common stock, $250.00 par value; 25,000 shares
   authorized; 23,661 shares issued and outstanding ..................           5,915                   5,915
Capital surplus ......................................................           2,729                   3,289
Retained earnings ....................................................         191,678                 171,182
Net fair value adjustment for securities
   available for sale ................................................           8,963                   4,053
                                                                           -----------             -----------
               Total stockholders' equity ............................         269,460                 251,389
                                                                           -----------             -----------
               Total liabilities and stockholders' equity ............     $ 3,957,208               3,689,154
                                                                           ===========             ===========


See accompanying notes to consolidated financial statements

</TABLE>

<PAGE>
                       FIRST BANKS, INC. AND SUBSIDIARIES
                  Consolidated Statements of Income (unaudited)
             (dollars expressed in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                     Three months ended               Nine months ended
                                                                        September 30,                   September 30,
                                                                     ------------------              -------------------
                                                                      1997         1996              1997           1996
                                                                      ----         ----              ----           ----
Interest income:
<S>                                                               <C>              <C>               <C>          <C>    
     Interest and fees on loans.................................  $  64,334        59,414            187,431      175,941
     Investment securities......................................      8,508         4,742             24,988       17,966
     Federal funds sold and other...............................      1,898           958              4,400        3,782
                                                                  ---------      --------          ---------      -------
           Total interest income................................     74,740        65,114            216,819      197,689
                                                                  ---------      --------          ---------      -------
Interest expense:
     Deposits:
       Interest-bearing demand..................................      1,409         1,117              4,214        3,530
       Savings..................................................      7,221         5,578             18,260       16,953
       Time deposits of $100 or more............................      2,668         2,113              7,536        6,960
       Other time deposits......................................     23,881        21,721             70,910       66,060
     Federal Home Loan Bank advances............................         44           711                410        1,954
     Securities sold under agreements to repurchase.............        490           323              1,232          762
     Interest rate exchange agreements, net ....................      3,227         1,838              5,610        6,035
     Notes payable and other....................................         70         1,311                832        4,326
     First Banks' subordinated debentures.......................      2,083          --                5,462           --
                                                                  ---------      --------          ---------      -------
           Total interest expense...............................     41,093        34,712            114,466      106,580
                                                                  ---------      --------          ---------      -------
           Net interest income..................................     33,647        30,402            102,353       90,109
Provision for possible loan losses..............................      3,100         2,570              9,125        8,774
                                                                  ---------      --------          ---------      -------
           Net interest income after provision
             for possible loan losses...........................     30,547        27,832             93,228       82,335
                                                                  ---------      --------          ---------      -------
Noninterest income:
     Service charges on deposit accounts and
        customer service fees...................................      3,208         3,154              9,176        9,411
     Credit card fees...........................................        788           663              2,248        1,897
     Loan servicing fees, net...................................        398           534              1,262        1,346
     Gain (loss) on mortgage loans sold and held for sale.......        162          (119)               370           (7)
     Gain (loss) on sale of securities, net.....................      2,241          (625)             2,241         (421)
     Gain on trading securities, net............................         91            --                113           --
     Other income...............................................      1,941         1,688              4,335        2,891
                                                                  ---------      --------          ---------      -------
           Total noninterest income.............................      8,829         5,295             19,745       15,117
                                                                  ---------      --------          ---------      -------
Noninterest expenses:
     Salaries and employee benefits.............................     10,756         9,724             31,684       30,085
     Occupancy, net of rental income............................      2,711         2,310              7,924        7,245
     Furniture and equipment....................................      1,654         1,734              5,704        5,404
     Federal Deposit Insurance Corporation premiums.............        264         9,479                579       11,355
     Postage, printing and supplies.............................        803           985              3,044        3,660
     Data processing fees.......................................      2,323         1,130              5,844        3,479
     Legal, examination and professional fees...................        967         1,098              3,136        3,620
     Credit card expenses.......................................        863           713              2,503        2,149
     Communications.............................................        594           712              1,849        1,992
     Advertising and business development expense...............      1,098           299              2,711        1,253
     (Gain)loss on sales of foreclosed real estate, net of expenses    (273)          460               (180)         951
     Other expenses.............................................      4,080         3,513             10,598       10,044
                                                                  ---------      --------          ---------      -------
           Total noninterest expenses...........................     25,840        32,157             75,396       81,237
                                                                  ---------      --------          ---------      -------
           Income before provision (benefit) for income taxes and
              minority interest in income of subsidiaries.......     13,536           970             37,577       16,215
Provision (benefit) for income taxes............................      4,632          (814)            12,397        4,304
                                                                  ---------      ---------         ---------      -------
           Income before minority interest in income
              of subsidiaries...................................      8,904         1,784             25,180       11,911
Minority interest in income of subsidiaries.....................       (363)         (252)              (940)        (472)
                                                                  -----------    ---------         ----------     ------- 
           Net income...........................................      8,541         1,532             24,240       11,439
Preferred stock dividends.......................................      1,256         1,434              3,744        4,237
                                                                  ---------      --------          ---------      -------
           Net income available to common shareholders..........  $   7,285            98             20,496        7,202
                                                                  =========      ========          =========      =======
Earnings per share:
     Primary....................................................  $  307.89          4.12             866.22       304.39
     Fully Diluted..............................................     295.42         11.37             830.02       302.68
                                                                  =========      ========          =========      =======
Weighted average shares of common stock outstanding.............     23,661        23,661             23,661       23,661
                                                                  =========      ========          =========      =======
See accompanying notes to consolidated financial statements
</TABLE>






                       FIRST BANKS, INC. AND SUBSIDIARIES
                Consolidated Statements of Cash Flows (unaudited)
             (dollars expressed in thousands, except per share data)
<TABLE>
<CAPTION>



                                                                                      Nine months ended
                                                                                         September 30,
                                                                                     ---------------------
                                                                                     1997             1996
                                                                                     ----             ----
Cash flows from operating activities:
<S>                                                                               <C>                 <C>   
     Net income.............................................................      $ 24,240            11,439
     Adjustments to reconcile net income to net cash provided
       by (used in) operating activities:
         Depreciation and amortization of bank premises
          and equipment.....................................................         4,396             4,314
         Amortization, net of accretion.....................................         3,505             3,360
         Originations and purchases of loans held for sale..................      (121,137)         (104,923)
         Proceeds from sales of loans held for sale ........................        94,716            91,336
         Provision for possible loan losses.................................         9,125             8,774
         Provision for income taxes.........................................        12,397             4,304
         Payments of income taxes...........................................       (11,169)           (5,018)
         Increase in accrued interest receivable ...........................        (5,015)             (824)
         Net increase in trading securities.................................        (3,681)               --
         Interest accrued on liabilities....................................       114,230           106,579
         Payments of interest on liabilities................................      (115,480)         (107,665)
         Other, net.........................................................        (7,303)            9,938
         Minority interest in income of subsidiaries........................           940               472
                                                                                  --------         ---------
              Net cash provided by (used in) operating activities...........          (236)           22,086
                                                                                  --------         ---------
Cash flows from investing activities:
     Cash and cash equivalents received from acquisitions...................        82,234                --
     Other sales of investment securities...................................            --            83,616
     Maturities of investment securities....................................       261,934           308,411
     Purchases of investment securities.....................................      (394,448)         (338,631)
     Net increase in loans..................................................      (111,317)           (4,566)
     Recoveries of loans previously charged-off ............................         7,544             5,229
     Purchases of bank premises and equipment...............................        (4,062)           (2,550)
     Other investing activities.............................................         4,652             7,547
                                                                                  --------         ---------
              Net cash provided by (used in) investing activities...........      (153,463)           59,056
                                                                                  --------         ---------
Cash flows from financing activities:
     Other increases (decreases) in deposits:
         Demand and savings deposits........................................       166,754           (41,067)
         Time deposits......................................................        14,929           (87,883)
     Decrease in Federal funds purchased ...................................            --            12,000
     (Decrease) increase in Federal Home Loan Bank advances.................       (36,931)           21,693
     Increase in other borrowings...........................................        16,843            24,565
     Decrease in notes payable..............................................       (71,175)          (22,772)
     Purchase and retirement of Class C preferred stock.....................        (6,774)             (230)
     Proceeds from sale of cumulative preferred trust
        securities, net of issuance costs...................................        83,086              --
     Payment of preferred stock dividends...................................        (3,742)           (4,237)
                                                                                  ---------        --------- 
              Net cash provided by (used in) financing activities ..........       162,990           (97,931)
                                                                                  --------         --------- 
              Net increase (decrease) in cash and cash equivalents .........         9,291           (16,789)
Cash and cash equivalents, beginning of period .............................       227,954           199,213
                                                                                  --------         ---------
Cash and cash equivalents, end of period....................................      $237,245           182,424
                                                                                  ========         =========

Noncash investing and financing activities:
     Loans transferred to foreclosed real estate............................      $  3,062             7,332
                                                                                  ========         =========


See accompanying notes to consolidated financial statements

</TABLE>


<PAGE>


                                FIRST BANKS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  Basis of Presentation

         The accompanying consolidated financial statements of First Banks, Inc.
and  subsidiaries  (First Banks) are unaudited and should be read in conjunction
with the consolidated  financial  statements contained in the 1996 annual report
on Form 10-K.  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 month periods ended September
30, 1997 are not necessarily  indicative of the results that may be expected for
any other interim period or for the year ending December 31, 1997.

         First Banks' primary subsidiaries (Subsidiary Banks) are:

                First Bank, headquartered  in St. Louis  County, Missouri (First
                     Bank Missouri)
                First Bank,  headquartered in  O'Fallon,  Illinois  (First  Bank
                     Illinois)
                First  Bank  FSB, headquartered  in St.  Louis  County, Missouri
                     (First Bank FSB)
                First Banks America, Inc., headquartered  in  St. Louis  County,
                     Missouri (FBA)
                CCB Bancorp, Inc., headquartered in Irvine, California (CCB)
                First Commercial  Bancorp, Inc.,  headquartered  in  Sacramento,
                     California (FCB)

         First Bank  Missouri and First Bank  Illinois are wholly owned  banking
subsidiaries.  First Bank FSB is a wholly owned thrift subsidiary. CCB, a wholly
owned bank holding  company  subsidiary,  operates  through  First Bank & Trust,
headquartered in Irvine,  California (FB&T).  FBA, a majority-owned bank holding
company subsidiary,  operates through two banking subsidiaries,  BankTEXAS N.A.,
headquartered   in  Houston,   Texas  (BTX)  and  Sunrise  Bank  of  California,
headquartered  in Roseville,  California  (Sunrise Bank).  FCB, a majority-owned
bank  holding  company  subsidiary,  operates  through  First  Commercial  Bank,
headquartered in Sacramento, California (First Commercial).

         First  Banks'  ownership  interest  in FBA was  70.23%  and  68.82%  at
September 30, 1997 and December 31, 1996,  respectively.  First Banks' ownership
interest in FCB was 61.48% and 61.46% at  September  30, 1997 and  December  31,
1996, respectively.

         The  consolidated  financial  statements  include the accounts of First
Banks, Inc. and its  subsidiaries,  net of minority  interests.  All significant
intercompany  accounts and transactions  have been eliminated in  consolidation.
Certain  reclassifications  of 1996  amounts  have been made to conform with the
1997 presentation.

(2)  Mergers and Acquisitions

         On March 27, 1997, First Banks completed its assumption of the deposits
and purchase of selected assets of two Long Beach,  California banking locations
of Highland  Federal Bank, FSB. The  transaction  resulted in the acquisition of
$40.4  million in  deposits  and two offices  which will  operate as branches of
FB&T.

         On September  25, 1997,  First Banks  completed  its  assumption of the
deposits  and  purchase of selected  assets of the  Woodland  Hills,  California
banking location of Highland Federal Bank, FSB. The transaction  resulted in the
acquisition  of $42.4 million in deposits and one office which will operate as a
branch of FB&T.

         On July 28, 1997,  FBA and Surety Bank  entered  into an Agreement  and
Plan of  Reorganization  (Surety  Agreement)  providing for the  acquisition  of

<PAGE>

Surety  Bank  by  FBA.  Under  the  terms  of the  Surety  Agreement,  which  is
conditioned  upon  receipt of  regulatory  approvals  and the approval of Surety
shareholders  Surety Bank  shareholders  will  receive FBA common stock and cash
valued at  approximately  $8.31 million as of September  30, 1997.  Surety Bank,
along with  Sunrise  Bank,  will be merged into a newly formed  commercial  bank
charter of FBA (the Northern  California  Bank).  Surety Bank  operates  banking
offices in Vallejo and Fairfield, California. At September 30, 1997, Surety Bank
had total assets of $75.21 million,  and reported net income of $239,000 for the
nine month period then ended.  The  transaction  will be accounted for using the
purchase  method of  accounting  and is expected to be completed by December 31,
1997.

         On September 22, 1997, FBA and Pacific Bay Bank, San Pablo,  California
(Pacific  Bay),  announced  the signing of a  Definitive  Agreement  and Plan of
Merger  (Pacific Bay Agreement)  providing for the acquisition of Pacific Bay by
FBA. Under the terms of the Pacific Bay Agreement, Pacific Bay shareholders will
receive $14.00 per share in cash for their stock,  an aggregate of $4.2 million.
Pacific  Bay  operates  a banking  office in San  Pablo,  California  and a loan
production office in Lafayette,  California.  At September 30, 1997, Pacific Bay
had total  assets of $37.5  million,  and reported net income of $35,000 for the
nine  month  period  then  ended.  Pacific  Bay will  merge  into  the  Northern
California Bank. The transaction,  which is subject to regulatory  approvals and
the  approval of the  shareholders  of Pacific  Bay, is expected to be completed
during the first  quarter of 1998 and will be  accounted  for using the purchase
method of accounting.

          On October 3, 1997,  FBA and FCB  executed  an  Agreement  and Plan of
Merger  (Agreement)  providing  for the merger of the two  companies.  Under the
terms of the  Agreement,  FCB will be  merged  into FBA,  with FCB  shareholders
receiving  .8888 shares of FBA common stock for each share of FCB common  stock
held. As soon as practicable  thereafter,  First  Commercial will be merged into
the Northern California Bank. The transaction,  which is subject to the approval
of  regulatory  authorities  and the  shareholders  of both  FBA and  FCB,  also
provides  for First  Banks to  receive  804,000  shares of FBA  common  stock in
exchange for $10 million of FBA's note payable to First Banks,  and the exchange
of FCB convertible  debentures of $6.5 million,  which are owned by First Banks,
for  comparable  debentures of FBA. The agreement was negotiated and approved by
special committees of the Boards of Directors of FCB and FBA comprised solely of
independent directors of the two respective Boards of Directors. The transaction
is expected to be completed by December 31, 1997. The merger of FBA and FCB will
not have a significant impact on the financial condition or results of operation
of First Banks.

(3)  Cumulative Trust Preferred Securities of First Preferred Capital Trust

          On February 4, 1997, First Preferred Capital Trust (First Capital),  a
newly-formed  Delaware  business  trust  subsidiary of First Banks,  issued 3.45
million  shares  of  9.25%  Cumulative  Trust  Preferred  Securities  (Preferred
Securities)  at $25 per share in an  underwritten  public  offering,  and issued
106,702 shares of common securities to First Banks at $25 per share. First Banks
owns all of  First  Capital's  common  securities.  The  gross  proceeds  of the
offering  were  used by  First  Capital  to  purchase  $88.9  million  of  9.25%
Subordinated  Debentures   (Subordinated   Debentures)  from  First  Banks.  The
Subordinated  Debentures are the sole asset of First Capital. In connection with
the issuance of the 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 First Capital under the Preferred
Securities.  First  Banks'  proceeds  from  the  issuance  of  the  Subordinated
Debentures to First Capital,  net of  underwriting  fees and offering  expenses,
were $83.1 million.  Distributions payable on the Preferred Securities were $2.1
million and $5.5 million for the three and nine month  periods  ended  September
30, 1997 and are recorded as interest expense in the  accompanying  consolidated
financial statements.

         The  proceeds  from  the  offering  were  used  for  general  corporate
purposes,  including the reduction of borrowings under a credit agreement with a
group of  unaffiliated  banks (Credit  Agreement)  and the repurchase of 284,000
shares of Class C 9.00% Increasing Rate, Redeemable,  Cumulative Preferred Stock
(Class C Preferred  Stock) for $7.3 million.  The  remaining  proceeds have been
temporarily invested.

<PAGE>




(4)   Redemption of the Class C 9.00% Preferred Stock

          On October 17, 1997,  First Banks  announced  its intent to redeem the
remaining  outstanding  Class C Preferred  Stock at its  aggregate  par value of
$47.1  million,  effective  December 1, 1997.  The Class C  Preferred  Stock was
issued and sold in a public offering in September,  1992.  First Banks will fund
the redemption through an advance under its Credit Agreement.

(5)  Regulatory Capital

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

         Quantitative  measures  established  by  regulations  to ensure capital
adequacy require the Subsidiary  Banks to maintain  certain minimum ratios.  The
Subsidiary  Banks are  required  to  maintain  a minimum  risk-based  capital to
risk-weighted  assets  ratio of 8.0%,  with at least 4.0% being "Tier 1" capital
(as defined in the  regulations) and a minimum leverage ratio (Tier 1 capital to
total  assets) of 3.0%.  An  additional  cushion  of 100 to 200 basis  points is
required to be considered well  capitalized.  As of September 30, 1997, the date
of the most recent notification from First Banks' primary regulator,  First Bank
Missouri was categorized as well capitalized under the regulatory  framework for
prompt  corrective  action.  There have been no  conditions or events since that
notification  that  management  believes  have  changed the First Bank  Missouri
category.  Management  believes  that,  as of  September  30,  1997,  all of the
Subsidiary  Banks  are  well  capitalized  as  defined  by the  Federal  Deposit
Insurance Corporation Improvement Act of 1991.

         At  September  30, 1997 and  December  31,  1996,  First Banks' and the
subsidiary depository institutions' capital ratios were as follows:
<TABLE>
<CAPTION>

                                                      Risk based capital ratios
                                                      -------------------------
                                                   Total                     Tier 1                 Leverage Ratio
                                                   -----                     ------                 --------------
                                              1997       1996           1997      1996              1997    1996
                                              ----       ----           ----      ----              ----    ----

<S>                                          <C>         <C>            <C>       <C>              <C>      <C>  
         First Banks                         12.28%      9.23%          8.52%     7.92%            6.56%    5.99%
         First Bank FSB                      10.77      11.00           9.66      9.75             7.08     6.45
         First Bank Missouri                 10.29      10.47           9.04      9.21             7.36     7.25
         First Bank Illinois                 11.58      11.06          10.33      9.88             7.73     7.17
         FB&T                                14.96      16.45          13.69     15.18             9.50    11.43
         BTX                                 12.21      10.29          10.95      9.04             8.76     7.53
         Sunrise Bank                        14.85      17.67          13.58     16.39            12.49    10.88
         First Commercial                    12.80      13.13          11.52     11.84             8.90     8.87

</TABLE>

<PAGE>


                 Item 2: Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

                                     General

         First Banks is a  registered  bank  holding  company,  incorporated  in
Missouri in 1978 and headquartered in St. Louis County,  Missouri.  At September
30, 1997, First Banks had $3.96 billion in total assets;  $2.89 billion in total
loans, net of unearned  discount;  $3.50 billion in total deposits;  and $269.46
million in total stockholders' equity.

          Through the  Subsidiary  Banks,  First  Banks  offers a broad range of
commercial  and  personal  banking  services  including  certificate  of deposit
accounts,  individual  retirement and other time deposit accounts,  checking and
other demand deposit accounts,  interest checking accounts, savings accounts and
money market accounts. Loans include commercial,  financial,  agricultural, real
estate construction and development,  commercial and residential real estate and
consumer and  installment  loans.  Other  financial  services  include  mortgage
banking,  discount  brokerage,   credit-related   insurance,   automatic  teller
machines,  safe  deposit  boxes, cash  management,  lockbox  and trust  services
offered by certain Subsidiary Banks.
<TABLE>
<CAPTION>

         The following table lists the Subsidiary Banks at September 30, 1997:

                                                                               Loans, net
                             Percent of        No. of                           of unearned       Total
Subsidiary Banks             ownership       locations    Total assets          discount        deposits
----------------             ---------       ---------    ------------          --------        --------
                                                                    (dollars expressed in thousands)

<S>                            <C>              <C>        <C>                    <C>             <C>    
First Bank FSB                 100.00%          40         $ 1,032,910            881,917         932,751
First Bank Missouri            100.00%          31             901,359            689,309         805,230
First Bank Illinois            100.00%          27             848,910            630,299         774,317
CCB                            100.00%          17             615,379            334,397         541,767
FBA                             70.23%           8             376,547            248,462         311,848
FCB                             61.48%           6             178,861            106,133         161,372
</TABLE>

                               Financial Condition

         First Banks' total  assets  increased by $270 million to $3.96  billion
from $3.69  billion at September  30, 1997 and December 31, 1996,  respectively.
The increase is primarily attributable to the increase in loans, net of unearned
discount,  of $123 million and the  increase in  investment  securities  of $145
million.  The  composition  of the  increase  in net  loans is  discussed  under
"--Lending  and Credit  Management"  of this Form 10-Q.  The  increase  in total
assets was funded by deposits,  which increased by $260 million to $3.50 billion
and $3.24 billion at September 30, 1997 and December 31, 1996, respectively.

                              Results of Operations

Net Income

         Net income  for the three  months  ended  September  30,  1997 was $8.5
million,  compared to $1.5  million for the same period in 1996,  an increase of
466.7%.  Net income  for the nine  months  ended  September  30,  1997 was $24.2
million  compared to $11.4  million for the same period in 1996.  The results of
operations for the three and nine months ended September 30, 1996 were adversely
affected by the $8.6 million  charge ($5.6 million after the  applicable  income
tax benefit)  assessed against all deposits  insured by the Savings  Association
Insurance Fund (SAIF) of the Federal Deposit  Insurance  Corporation  (FDIC). As
more fully  described  below,  the  improvement in net income is attributable to
increases  in net  interest  income and  noninterest  income  and a decrease  in
noninterest expense, as compared to the same periods in 1996.

Net Interest Income

         Net interest income  (expressed on a tax-equivalent  basis) improved to
$33.8 million, or 3.74% of average interest earning assets, for the three months
ended  September  30, 1997,  from $30.5  million,  or 3.71% of average  interest
earning assets, for the same period in 1996. Net interest income (expressed on a
tax-equivalent  basis) improved to $103.0 million,  or 3.94% of average interest
earning  assets,  for the nine  months  ended  September  30,  1997,  from $91.3
million,  or 3.69% of average  interest  earning assets,  for the same period in
1996.
<PAGE>

         The  increased  net  interest  income for 1997 is  attributable  to the
increase in average interest earning assets of $322.7 million and $194.7 million
for the three and nine month  periods ended  September  30, 1997,  respectively,
compared to the same  periods in 1996.  The  increase is  attributable  to loans
which  increased on average by $163.5  million and $109.3  million for the three
and nine month periods ended  September  30, 1997,  respectively,  over the same
periods in 1996. Contributing further to the improved net interest income is the
increase  in the  yield of the loan  portfolio  to 8.89%  for the three and nine
month periods ended  September 30, 1997,  from 8.72% and 8.64% for the three and
nine month periods ended  September  30,1996,  respectively.  The improved yield
reflects the continual process of realigning the loan portfolio from residential
real estate loans to other types of loans,  such as commercial and  construction
loans, which generally provide a higher level of net interest income.

          Offsetting the increase in net interest income is the amortization and
periodic  costs of hedging the interest rate risk  position of First Banks.  The
cost of hedging  totaled  $3.2  million and $5.6  million for the three and nine
month periods ended September 30, 1997, respectively,  compared $3.4 million and
$8.8 million for the same  periods in 1996.  As more fully  discussed  under "--
Interest Rate Risk  Management,"  the cost of hedging for the three months ended
September 30, 1997 includes $2.1 million of additional  amortization of deferred
losses. The decrease in the cost of hedging for the nine months of 1997 compared
with the same period in 1996 is  attributable  to the reduced  level of interest
rate risk resulting from the realignment of the loan portfolio combined with the
gradual changes in the composition of the investment securities portfolios, from
mortgage-backed securities to U.S. Treasury and generic U.S. government agencies
securities, and the distribution of interest-bearing liabilities.



<PAGE>




         The following  table sets forth,  on a  tax-equivalent  basis,  certain
information  relating to First Banks' average  balance  sheet,  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 three
and nine month periods ended September 30:

<TABLE>
<CAPTION>

                                             Three months ended September 30,                 Nine months ended September 30,
                                     ---------------------------------------------        -----------------------------------------

                                              1997                    1996                     1997                     1996
                                    ----------------------  ----------------------        -------------------  -------------------
                                            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                         $2,870,094  64,418 8.90%  $2,706,607 59,314 8.72% $2,822,754 187,695 8.89% $2,713,444 175,611 8.64%
   Investment securities            583,551   8,619 5.86      491,325  4,908 3.97     567,645  25,371 5.98     494,470  18,483 4.99
   Federal funds sold and other     137,474   1,898 5.48       70,516    959 5.41     106,678   4,400 5.51      94,418   3,782 5.35
                                 ---------- -------        ---------- ------       ---------- ------       ---------- ---------    
       Total interest-earning
           assets                 3,591,119  74,935 8.28    3,268,448 65,181 7.93   3,497,077 217,466 8.31   3,302,332 197,876 8.00
                                             ------                   ------                  -------                  -------  
Nonearning assets                   201,766                   222,544                  218,238                 222,692
                                 ----------                ----------               ----------              ----------
       Total assets              $3,792,885                $3,490,992               $3,715,315              $3,525,024
                                 ==========                ==========               ==========              ==========

   Liabilities and Stockholders' Equity
   ------------------------------------
 Interest-bearing liabilities:
   Interest-bearing 
     demand deposits              $ 327,616   1,409  1.71%    292,153  1,117  1.52%  $330,529   4,214 1.70% $  298,990   3,530 1.58%
   Savings deposits                 779,690   7,221  3.68     676,200  5,578  3.28    715,656  18,260 3.41     684,640  16,953 3.31
   Time deposits of $100 or more (1)186,424   2,987  6.36     154,995  2,291  5.88    178,194   8,063 6.05     169,889   7,545 5.93
   Other time deposits (1)        1,660,059  26,720  6.40   1,575,117 23,327  5.89  1,677,714  75,858 6.05   1,590,836  71,332 5.99
                                 ---------- -------        ---------- ------        ---------- ------       ---------  -------     
       Total interest-bearing
           deposits               2,953,789  38,328  5.16   2,698,465 32,313  4.76  2,902,093 106,395 4.90   2,744,355  99,360 4.84
   Notes payable and other (1)      137,927   2,765  7.98     148,540  2,398  6.42    138,571   8,071 7.79     140,694   7,219 6.85
                                 ---------- -------        ----------  -----       ---------- -------       ---------- -------     
       Total interest-bearing
         liabilities              3,091,716  41,093  5.27   2,847,005 34,711  4.85  3,040,664 114,466 5.03   2,885,049 106,579 4.93
                                            -------                   ------                  -------                 -------     
Noninterest-bearing liabilities:
   Demand deposits                  399,745                   366,954                 381,784                  365,413
   Other liabilities                 37,610                    35,431                  37,300                   36,252
                                 ----------                ----------               ----------              ----------
       Total liabilities          3,529,071                 3,249,390               3,459,748                3,286,714
Stockholders' equity                263,814                   241,602                 255,567                  238,310
                                 ----------                ----------              ----------               ----------
       Total liabilities and
         stockholders' equity    $3,792,885                $3,490,992              $3,715,315               $3,525,024
                                 ==========                ==========              ==========               ==========

Net interest income                          33,842                   30,470                 103,000                   91,297
                                            =======                   ======                 =======                  =======
Net interest margin                                 3.74%                   3.71%                     3.94%                    3.69%
                                                    =====                   =====                     =====                    =====

(1)  Includes the effects of interest rate exchange agreements.

</TABLE>


<PAGE>





Provision for Possible Loan Losses

         The  provision  for possible  loan losses was $3.1 million  compared to
$2.6  million  for  the  three  months  ended   September  30,  1997  and  1996,
respectively.  For the nine  months  ended  September  30,  1997 and  1996,  the
provisions  for  possible  loan  losses were  $9.1  million  and  $8.8  million,
respectively.  The provision in 1997 reflects the overall growth and realignment
of the loan portfolio. While the provision for possible loan losses for the 1997
periods was not  substantially  different from those of the preceding  year, the
adequacy of the allowance  for possible loan losses  improved as a result of the
lower level of net  charge-offs in 1997. Net loan  charge-offs  were $67,000 and
$5.2  million for the three and nine month  periods  ended  September  30, 1997,
respectively,  compared to $3.1 million and $16.1 million for the three and nine
month periods ended September 30, 1996, respectively.

         Following  various  acquisitions  during  1994 and  1995,  First  Banks
pursued   aggressive   problem   loan  work  out   procedures   which   included
conservatively  re-valuing loans through  charge-offs.  While these  adjustments
were anticipated prior to the acquisitions and adequate reserves for loan losses
had been  established to provide for them, loan  charge-offs  increased in 1996.
However,  as this work-out  program  progressed,  loan charge-offs have declined
while recoveries of loans previously charged-off have increased.

         Tables summarizing  nonperforming assets, past due loans and charge-off
experience are presented  under  "--Lending and Credit  Management" of this Form
10-Q.

Noninterest Income

          Noninterest  income was $8.8  million and $19.7  million for the three
and nine month periods ended September 30, 1997, respectively,  in comparison to
$5.3 million and $15.1 million for the same periods in 1996.  Noninterest income
consists  primarily of service  charges on deposit  accounts and other non-yield
customer service fees. In addition, noninterest income includes gains and losses
upon  sales  of  assets.   The  increase  in  noninterest  income  is  primarily
attributable to a $2.24 million net gain on sale of securities for the three and
nine month periods ended September 30, 1997,  compared to net losses of $625,000
and  $421,000 for the three and nine month  periods  ended  September  30, 1996,
respectively.

         Service charges on deposit accounts and customer service fees were $3.2
million and $9.2 million for the three and nine month  periods  ended  September
30, 1997,  respectively,  compared to $3.2 and $9.4 million for the same periods
in 1996.  The decrease for the nine month  period  ended  September  30, 1997 is
attributable  to the  development  of First Banks'  "aggregate  balance  pricing
structure" whereby customers maintaining specified deposit balances,  determined
on an aggregate basis of any deposit  relationship  with First Banks,  may avoid
certain service charges. For the three month period ended September 30, 1997, as
compared to the same period in 1996, the decrease has been offset by an increase
in the demand deposit accounts subject to such service charges.

          The gain on sale of securities, net of $2.24 million for the three and
nine month periods  ended  September  30, 1997 is  attributable  to the sales of
certain  residual  securities  which had been acquired by First Banks through an
acquisition  completed in 1995. These residuals,  which had been written-down to
diminimous  values  at the  date of  acquisition,  entitled  First  Banks to the
remaining cash flows of certain collateralized mortgage-backed securities (CMOs)
available upon  redemption of the CMOs.  However,  the combination of the unique
structure of the CMOs and changes in interest rate and mortgage markets operated
to  significantly  enhance  their value in 1997.  This compares to net losses of
$625,000 and $421,000  for the three and nine months ended  September  30, 1996,
respectively.  The securities  sold were classified as available for sale within
the investment security portfolio.

Noninterest Expenses

         Noninterest expenses were $25.8 million and $32.2 million for the three
month periods  ended  September  30, 1997 and 1996,  respectively.  For the nine

<PAGE>

month periods ended September 30, 1997 and 1996, noninterest expenses were $75.4
million and $81.2 million,  respectively.  The decrease is  attributable  to the
1996 special  assessment to recapitalize  the SAIF and the overall  reduction in
the  deposit  insurance  assessment  rate for 1997.  Partially  offsetting  this
decrease are the  noninterest  expenses of Sunrise  Bank,  which was acquired by
First  Banks on  November 1, 1996,  of $1.02  million and $3.31  million for the
three and nine  month  periods  ended  September  30,  1997,  respectively,  and
increased advertising and business development expenses.

         Advertising  and  business  development  expense  was $1.1  million and
$299,000 for the three months ended  September 30, 1997 and 1996,  respectively.
For the nine months ended September 30, 1997 and 1996,  advertising and business
development  expense was $2.71  million  and $1.25  million,  respectively.  The
increase is primarily  attributable  to media  advertising  campaigns which were
instituted beginning in the third quarter of 1996.

         FDIC  premiums  decreased by $9.21  million and $10.78  million for the
three and nine month periods ended September 30, 1997 and 1996, respectively, as
a result of the reduction in the assessment rate charged on deposits  insured by
the SAIF of the FDIC.  The reduction in the  assessment  rate was effective upon
the  recapitalization  of the SAIF,  accomplished by a one-time  special deposit
insurance charge assessed to all financial institutions with deposits insured by
the SAIF. First Banks' one-time charge totaled $8.6 million and was reflected in
the operating results during the third quarter of 1996.

                          Lending and Credit Management

         Interest  earned on the loan  portfolio is the primary source of income
of First Banks.  Total loans, net of unearned  discount,  represented  73.0% and
75.0%  of  total  assets  as of  September  30,  1997  and  December  31,  1996,
respectively.  Total  loans,  excluding  loans held for sale and net of unearned
discount,  increased by $100 million to $2.84 billion at September 30, 1997 from
$2.74  billion at December 31,  1996.  The increase  reflects  continued  growth
within  corporate  lending  of  $256  million,  offset  by the  decrease  of the
residential  mortgage and  consumer  and  installment  loan  portfolios  of $110
million and $44 million,  respectively,  at September  30, 1997 in comparison to
December 31, 1996.  These  decreases are  attributable  to the reductions of new
loan  origination  volumes  that  are  held  for  investment  and the  continued
repayment of principal on the existing portfolios.
<TABLE>
<CAPTION>

         The following is a summary of nonperforming assets by category:

                                                              September 30,       December 31,
                                                                  1997                 1996
                                                                  ----                 ----
                                                               (dollars expressed in thousands)

<S>                                                           <C>                   <C>  
Commercial, financial and agricultural                        $     5,237                4,243
Real estate construction and development                            2,942                  817
Real estate mortgage                                               19,147               24,764
Consumer and installment                                              104                  445
                                                              -----------          -----------
         Total nonperforming loans                                 27,430               30,269
Other real estate                                                   8,170               10,607
                                                              -----------          -----------
         Total nonperforming assets                           $    35,600               40,876
                                                              ===========          ===========

Loans, net of unearned discount                               $ 2,890,518            2,767,969
                                                              ===========          ===========

Loans past due 90 days or more
   and still accruing                                         $     2,018                3,779
                                                              ===========          ===========

Asset Quality Ratios:
   Allowance for possible loan losses to loans                      1.76%                 1.69%
   Nonperforming loans to loans                                      .95                  1.09
   Allowance for possible loan losses
      to nonperforming loans                                      184.98                154.55
   Nonperforming assets to loans and other real estate              1.23                  1.47
                                                                  ======                ======
</TABLE>
<PAGE>

     Impaired  loans,  consisting  of nonaccrual  loans,  were $27.4 million and
$30.3 million at September 30, 1997 and December 31, 1996, respectively.

     The following is a summary of loan loss  experience  for the three and nine
month periods ended September 30:

<TABLE>
<CAPTION>
                                                                    Three months ended        Nine months ended
                                                                       September 30,             September 30,
                                                                       -------------             -------------
                                                                    1997           1996       1997         1996
                                                                    ----           ----       ----         ----
                                                                          (dollars expressed in thousands)
Allowance for possible loan losses,
<S>                                                            <C>               <C>          <C>         <C>   
   beginning of period                                         $  47,708         45,921       46,781      52,665
                                                               ---------         ------       ------     -------
Loans charged-off                                                (2,062)         (4,869)     (12,710)    (21,303)
Recoveries of loans previously charged-off                         1,994          1,743        7,544       5,229
                                                               ---------         ------     --------     -------
     Net loan (charge-offs) recoveries                               (68)        (3,126)      (5,166)    (16,074)
                                                               ---------         ------     --------     ------- 
Provision for possible loan losses                                 3,100          2,570        9,125       8,774
                                                               ---------         ------     --------     -------
Allowance for possible loan losses, end of period              $  50,740         45,365       50,740      45,365
                                                               =========         ======     ========     =======
</TABLE>

         The  allowance  for  possible  loan  losses  is based on past loan loss
experience,  on  management's  evaluation  of the  quality  of the  loans in the
portfolio  and  on  the  anticipated  effect  of  national  and  local  economic
conditions  relative to the ability of loan customers to repay.  Each month, the
allowance for possible loan losses is revised  relative to First Banks' internal
watch list and other data utilized to determine its adequacy.  The provision for
possible  loan  losses is  management's  estimate  of the  amount  necessary  to
maintain  the  allowance  at  a  level  consistent  with  this  evaluation.   As
adjustments to the allowance for possible loan losses are considered  necessary,
they are reflected in the results of operations.

                          Interest Rate Risk Management

         Derivative  financial  instruments  held by First Banks for purposes of
managing interest rate risk are summarized as follows:
<TABLE>
<CAPTION>

                                                       September 30, 1997           December 31, 1996
                                                     ----------------------      --------------------
                                                      Notional      Credit       Notional     Credit
                                                       amount      exposure       amount      exposure
                                                       ------      --------       ------      --------
                                                             (dollars expressed in thousands)

<S>                                                <C>               <C>         <C>             <C> 
   Interest rate swap agreements                   $       --         --          70,000         --
   Interest rate floor agreements                      70,000         19         105,000         141
   Interest rate cap agreements                        10,000        262          10,000         335
   Forward commitments to sell
     mortgage-backed securities                        53,000         --          35,000         308
</TABLE>

         The  notional  amounts  of  derivative  financial  instruments  do  not
represent amounts exchanged by the parties and, therefore,  are not a measure of
First  Banks'  credit   exposure   through  its  use  of  derivative   financial
instruments.  The amounts  exchanged are determined by reference to the notional
amounts and the other terms of the derivatives.

         Interest  rate swap  agreements  were  utilized to extend the repricing
characteristics  of certain  interest-bearing  liabilities  to  correspond  more
closely with the assets of First Banks,  with the objective of  stabilizing  net
interest  income over time.  The net interest  expense for these  agreements was
$3.2  million  and $5.6  million  for the three  and nine  month  periods  ended
September 30, 1997, respectively, in comparison to $1.7 million and $5.8 million
for the same period in 1996. The maturity dates, notional

<PAGE>


amounts, interest rates paid and received, and fair values of interest rate swap
agreements outstanding as of December 31, 1996 are summarized as follows:

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

   September 30, 1997        $  35,000     7.04%     5.59%         $  (417)
   September 30, 1999           35,000     7.32      5.59           (1,160)
                             ---------                              -------
                             $  70,000     7.18      5.59          $(1,577)
                             =========     =====    =====          ======== 

          First Banks shortened the effective  maturity of its  interest-bearing
liabilities  through the  termination  of interest rate swap  agreements of $225
million  during July 1995,  $75  million  during  November  1996 and $35 million
during  August 1997 at losses of $13.5  million,  $5.3 million and $1.4 million,
respectively.  These  losses  were  deferred  and are being  amortized  over the
remaining lives of the swap agreements.  If all or any portion of the underlying
liabilities  are  repaid,  the  related  deferred  losses  will  be  charged  to
operations. At September 30, 1997 and December 31, 1996, the unamortized balance
of these  losses was $10.3  million  and $13.4  million,  respectively,  and was
included in other assets.  The  amortization  of the deferred losses included in
interest  expense was $2.9 million and $4.4 million for the three and nine month
periods  ended  September  30, 1997  including  $2.1  million  resulting  from a
reduction in the underlying  liabilities.  This compares to interest  expense of
$1.0 million and $3.3 million for the same periods in 1996.

         First Banks also has interest  rate cap and floor  agreements  to limit
the interest expense  associated with certain  interest-bearing  liabilities and
the net interest expense of certain interest rate swap agreements, respectively.
At September  30, 1997 and December 31, 1996,  the  unamortized  costs for these
agreements were $322,000 and $433,000,  respectively, and were included in other
assets.  The net interest  expense of the interest rate cap and floor agreements
was $37,000 and $111,000 for the three and nine month  periods  ended  September
30,  1997,  respectively,  in  comparison  to $72,000 and  $215,000 for the same
periods in 1996. There are no amounts receivable under these agreements.

         Derivative  financial  instruments  issued by First  Banks  consist  of
commitments to originate  fixed-rate loans.  Commitments to originate fixed-rate
loans  consist   primarily  of  residential   real  estate  loans.   These  loan
commitments,  net of estimated underwriting fallout, and loans held for sale are
hedged with forward contracts to sell mortgage-backed securities.

                                    Liquidity

         The liquidity of First Banks and its Subsidiary Banks is the ability to
maintain  a cash  flow  which  is  adequate  to fund  operations,  service  debt
obligations and meet other commitments on a timely basis. The primary sources of
funds  for  liquidity  are  derived  from  customer  deposits,   loan  payments,
maturities, sales of investments and earnings.

         In addition,  First Banks and its Subsidiary Banks may avail themselves
of more volatile sources of funds through issuance of certificates of deposit in
denominations of $100,000 or more, federal funds borrowed, securities sold under
agreements to repurchase, borrowings from the Federal Home Loan Bank (FHLB), and
other  borrowings,  including  First Banks' $90 million credit  agreement with a
group of unaffiliated financial institutions.  The aggregate funds acquired from
those sources were $261.1  million at September  30, 1997 and $315.4  million at
December 31, 1996.  The decrease is primarily  attributable  to the reduction in
notes  payable  from  the  proceeds  received  from  the  sale of the  Preferred
Securities. See note 3 to the accompanying consolidated financial statements.


<PAGE>


         At September  30, 1997,  First  Banks' more  volatile  sources of funds
mature as follows:

                                                (dollars expressed in thousands)

         Three months or less                             $ 125,698
         Over three months through six months                43,152
         Over six months through twelve months               55,446
         Over twelve months                                  36,828
                                                          ---------
           Total                                          $ 261,124
                                                          =========

         Management believes the future earnings of its Subsidiary Banks will be
sufficient  to  provide  funds for  growth  and to permit  the  distribution  of
dividends  to First Banks  sufficient  to meet First Banks'  operating  and debt
service  requirements  both on a short-term  and long-term  basis and to pay the
dividends on the Class C Preferred Stock and the Preferred Securities.

                       Effects of New Accounting Standards

         First  Banks  adopted  the  provisions  of  SFAS  125,  Accounting  for
Transfers and Servicing of Financial  Assets and  Extinguishment  of Liabilities
(SFAS 125) prospectively on January 1, 1997. SFAS 125 established accounting and
reporting  standards  for  transfers  and  servicing  of  financial  assets  and
extinguishment of liabilities.

         The  standards   established  by  SFAS  125  are  based  on  consistent
application of a  financial-components  approach that focuses on control.  Under
that approach,  after a transfer of financial  assets,  an entity recognizes the
financial and servicing  assets it controls and the liabilities it has incurred,
derecognizes   financial   assets  when  control  has  been   surrendered,   and
derecognizes  liabilities  when  extinguished.   SFAS  125  provides  consistent
standards for  distinguishing  transfers of financial assets that are sales from
transfers that are secured borrowings.

           The  implementation of SFAS 125 did not have a material effect on the
consolidated financial position or results of operation of First Banks.

          In February 1997,  the FASB issued SFAS 128,  Earnings Per Share (SFAS
128). SFAS 128 supersedes  Accounting  Principles Board Opinion No. 15, Earnings
Per Share (APB 15) and specifies the computation,  presentation,  and disclosure
requirements for earnings per share (EPS) for entities with publicly held common
stock or potential common stock. SFAS 128 was issued to simplify the computation
of EPS and to make the U.S.  standard more  compatible with the EPS standards of
other countries and that of the International Accounting Standards Committee. It
replaces the  presentation  of primary EPS with a presentation  of basic EPS and
replaces  fully  diluted  EPS with  diluted  EPS.  SFAS 128 also  requires  dual
presentation  of basic and diluted EPS on the face of the income  statement  for
all entities with complex capital  structures,  and requires a reconciliation of
the numerator and  denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation.

           Basic EPS, unlike primary EPS,  excludes  dilution and is computed by
dividing income available to common  stockholders by the weighted average number
of common shares outstanding for the period.  Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were  exercised and  converted  into common stock or resulted in the issuance of
common  stock that then shared in the  earnings  of the  entity.  Diluted EPS is
computed similarly to fully diluted EPS under APB 15.
<PAGE>

           SFAS 128 is effective for financial  statements  for both interim and
annual  periods  ending  after  December 15, 1997.  Earlier  application  is not
permitted. After adoption, all prior-period EPS data presented shall be restated
to conform with SFAS 128.

           First Banks does not believe the implementation of SFAS 128 will have
a material effect on its computation of earnings per share.

           In February 1997, the FASB issued SFAS 129, Disclosure of Information
about  Capital  Structure  (SFAS  129).  SFAS  129  establishes   standards  for
disclosing  information  about an entity's capital  structure and applies to all
entities.  SFAS 129  continues  the previous  requirements  to disclose  certain
information  about  an  entity's  capital  structure  found  in APB 10,  Omnibus
Opinion-1966,  APB 15 and SFAS 47,  Disclosure  of  Long-Term  Obligations,  for
entities  that were subject to the  requirements  of those  standards.  SFAS 129
eliminates  the  exemption  of  nonpublic   entities  from  certain   disclosure
requirements  of APB 15 as provided by SFAS 21,  Suspension  of the Reporting of
Earnings  Per  Share  and  Segment  Information  by  Nonpublic  Enterprises.  It
supersedes  specific  disclosure  requirements of APB 10, APB 15 and SFAS 47 and
consolidates  them in SFAS 129 for ease of retrieval and for greater  visibility
to nonpublic entities.


         SFAS 129 is effective for financial statements for periods ending after
December 15, 1997.  It contains no change in disclosure  requirements  for First
Banks as it was previously subject to the requirements of APB 10 and 15 and SFAS
47.

          In June  1997,  the FASB  issued  SFAS  130,  Reporting  Comprehensive
Income. (SFAS 130). SFAS 130 establishes  standards for reporting and display of
comprehensive  income  and  its  components  in a full  set  of  general-purpose
financial  statements.  Comprehensive income is defined as "the change in equity
(net  assets) of a business  enterprise  during a period from  transactions  and
other events and circumstances from nonowner sources. It includes all changes in
equity during a period except those  resulting  from  investments  by owners and
distributions to owners."

          SFAS 130 requires all items recognized  under accounting  standards as
components of comprehensive  income to be reported in a financial statement that
is displayed with the same  prominence as other  financial  statements.  It also
requires publicly traded companies to report a total for comprehensive income in
condensed financial  statements of interim periods issued to shareholders.  SFAS
130 requires an entity to: (1) classify items of other  comprehensive  income by
their  nature in a  statement  of  financial  performance  and (2)  display  the
accumulated  balances of items of other  comprehensive  income  separately  from
retained  earnings and  additional  paid-in  capital in the equity  section of a
statement of financial position.

          SFAS 130 is effective for fiscal years  beginning  after  December 15,
1997.  Reclassification of financial statements for earlier periods provided for
comparative  purposes is required.  First Banks' management is in the process of
analyzing SFAS 130 and its impact on First Banks' financial position and results
of operations.

          In June 1997, the FASB issued SFAS 131,  Disclosures about Segments of
an Enterprise and Related Information (SFAS 131). SFAS 131 establishes standards
for the way that public business  enterprises report information about operating
segments in annual  financial  statements  and requires  that those  enterprises
report  selected  information  about  operating  segments  in interim  financial
reports to shareholders.  It also establishes  standards for related disclosures
about products and services, geographic areas, and major customers.

          SFAS 131 requires that a public business  enterprise  report financial
and descriptive  information about its reportable operating segments.  Operating
segments  are  components  of  an  enterprise  about  which  separate  financial

<PAGE>

information  is  available  that is evaluated  regularly by the chief  operating
decision  maker  in  deciding  how  to  allocate   resources  and  in  assessing
performance.  Generally, financial information is required to be reported on the
basis that it is used internally for evaluating segment performance and deciding
how to allocate resources to segments.

          SFAS 131 is effective for financial  statements for periods  beginning
after  December  15,  1997.  In the  initial  year of  application,  comparative
information for earlier years is to be restated. SFAS 131 need not be applied to
interim financial statements in the initial year of application, but comparative
information  for interim  periods in the initial  year of  application  is to be
reported  in  financial  statements  for  interim  periods in the second year of
application. First Banks' management is in the process of analyzing SFAS 131 and
its impact on First Banks' financial position and results of operations.



                           Part II- OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

   (a) These Exhibits are numbered in accordance  with the Exhibit Table of Item
601 of Regulation S-K.

              Exhibit
              Number       Description

                  11       Calculation of Earnings per Share.

                  27       Financial Data Schedule (EDGAR only).

   (b) First Banks  filed no reports on Form 8-K during the three  month  period
ended September 30, 1997.



<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.
                                      Registrant


Date:  November 12, 1997               By: /s/ James F. Dierberg
                                           ---------------------
                                               James F. Dierberg
                                               Chairman, President and
                                               Chief Executive Officer



Date:  November 12, 1997               By: /s/ Allen H. Blake
                                           ------------------
                                               Allen H. Blake
                                               Executive Vice President
                                               and Chief Financial Officer
                                               (Principal Financial Officer)


<PAGE>









                                   Exhibit 11




<PAGE>


                                                                     Exhibit 11

                                FIRST BANKS, INC.
                        Calculation of Earnings per Share



<TABLE>
<CAPTION>


                                                For the three months ended               For the nine months ended
                                                       September 30,                             September 30,
                                             ------------------------------             ----------------------
                                                 1997                1996                 1997             1996
                                                 ----                ----                 ----             ----
Average shares outstanding:
<S>                                         <C>                 <C>                   <C>               <C>      
  Class C preferred stock                     1,885,543           2,200,000             1,927,101         2,200,000
  Class A preferred stock                       641,082             641,082               641,082           641,082
  Class B preferred stock                       160,505             160,505               160,505           160,505
  Common Stock                                   23,661              23,661                23,661            23,661
                                            ===========         ===========           ===========        ==========

Net income                                  $ 8,541,574           1,531,434            24,240,374        11,438,682
Preferred stock dividends:
  Class C preferred stock                    (1,060,032)         (1,237,500)           (3,220,594)       (3,712,501)
  Class A preferred stock                      (192,325)           (192,325)             (512,866)         (512,866)
  Class B preferred stock                        (4,214)             (4,213)              (11,235)          (11,235)
                                            -----------         -----------           ------------       ---------- 
  Income available to common
     stockholders                           $ 7,285,004              97,396            20,495,679         7,202,080
                                            ===========              ======            ==========         =========

Primary earnings per share                  $    307.89                4.12                866.22            304.39
                                            ===========         ===========           ===========        ==========

Fully diluted earnings per share:
Dividends per share:
  Class C preferred stock                   $    0.5622              0.5625                1.6712            1.6875
  Class A preferred stock                        0.3000              0.3000                0.8000            0.8000
  Class B preferred stock                        0.0263              0.0263                0.0700            0.0700
                                            ===========         ===========           ===========        ==========

Class A preferred stock outstanding             641,082             641,082               641,082           641,082
Book value/share of common stock,
  beginning of year                         $  7,795.06            7,038.67              7,795.06          7,038.67
Dilution of common equity upon
  exercise of options and
  warrants of subsidiary bank                    (26.29)             (24.88)               (26.29)           (24.88)
                                            -----------         -----------           -----------        ---------- 
                                               7,768.77            7,013.79              7,768.77          7,013.79
                                            ===========         ===========           ===========        ==========

Common stock issuable upon conversion             1,650               1,828                 1,650             1,828
Shares of common stock outstanding               23,661              23,661                23,661            23,661
                                            -----------         -----------           -----------        ----------
                                                 25,311              25,489                25,311            25,489
                                            ===========         ===========           ===========        ==========

Net income                                  $ 8,541,574           1,531,434            24,240,374        11,438,682
Class C preferred dividends                  (1,060,032)         (1,237,500)           (3,220,594)       (3,712,501)
Class B preferred dividends                      (4,213)             (4,213)              (11,235)          (11,235)
                                            -----------         -----------           -----------       ----------- 
  Fully-diluted net income                  $ 7,477,329             289,721            21,008,545         7,714,946
                                            ===========         ===========           ===========       ===========


Fully-diluted earnings per share            $    295.42               11.37                830.02            302.68
                                            ===========         ===========           ===========       ===========

</TABLE>