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


                                    FORM 10-Q


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

                  For the quarterly period ended March 31, 2001

[ ] 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            (I.R.S. Employer Identification No.)
  of 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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date.


                                                  Shares outstanding
          Class                                    at April 30, 2001
          -----                                    -----------------

Common Stock, $250.00 par value                          23,661


<PAGE>


                                FIRST BANKS, INC.

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>




                                                                                                              Page
                                                                                                              ----

     PART I.  FINANCIAL INFORMATION

          ITEM 1.  FINANCIAL STATEMENTS - (UNAUDITED):

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

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

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

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

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

          ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS..........................................................        12

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

     PART II. OTHER INFORMATION

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

     SIGNATURES   .....................................................................................        26
</TABLE>


<PAGE>


                         PART I - FINANCIAL INFORMATION
                          ITEM 1 - FINANCIAL STATEMENTS

                                FIRST BANKS, INC.

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

<TABLE>
<CAPTION>

                                                                                        March 31,     December 31,
                                                                                          2001            2000
                                                                                          ----            ----


                                      ASSETS
                                      ------


Cash and cash equivalents:
<S>                                                                                   <C>                  <C>
     Cash and due from banks.......................................................   $    145,878         167,474
     Interest-bearing deposits with other financial institutions
       with maturities of three months or less.....................................          1,720           4,005
     Federal funds sold............................................................         51,410          26,800
                                                                                      ------------     -----------
               Total cash and cash equivalents.....................................        199,008         198,279
                                                                                      ------------     -----------

Investment securities:
     Available for sale, at fair value.............................................        389,293         539,386
     Held to maturity, at amortized cost (fair value of $24,412 and $24,507
       at March 31, 2001 and December 31, 2000, respectively)......................         23,642          24,148
                                                                                      ------------     -----------
               Total investment securities.........................................        412,935         563,534
                                                                                      ------------     -----------

Loans:
     Commercial, financial and agricultural........................................      1,508,509       1,496,284
     Real estate construction and development......................................        811,761         809,682
     Real estate mortgage..........................................................      2,208,218       2,202,857
     Consumer and installment......................................................        130,799         181,602
     Loans held for sale...........................................................        183,413          69,105
                                                                                      ------------     -----------
               Total loans.........................................................      4,842,700       4,759,530
     Unearned discount.............................................................         (7,623)         (7,265)
     Allowance for loan losses.....................................................        (77,996)        (81,592)
                                                                                      ------------     -----------
               Net loans...........................................................      4,757,081       4,670,673
                                                                                      ------------     -----------

Bank premises and equipment, net of depreciation and amortization..................        118,921         114,771
Intangibles associated with the purchase of subsidiaries, net of amortization......         82,935          85,021
Accrued interest receivable........................................................         39,717          45,226
Deferred income taxes..............................................................         71,138          75,699
Derivative instruments.............................................................         41,945              --
Other assets.......................................................................        120,395         123,488
                                                                                      ------------     -----------
               Total assets........................................................   $  5,844,075       5,876,691
                                                                                      ============     ===========

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

<PAGE>
                                FIRST BANKS, INC.

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


                                                                                        March 31,     December 31,
                                                                                          2001            2000
                                                                                          ----            ----
                                   LIABILITIES
                                   -----------
Deposits:
     Demand:
<S>                                                                                   <C>                  <C>
       Non-interest-bearing........................................................   $    779,123         808,251
       Interest-bearing............................................................        450,586         448,146
     Savings.......................................................................      1,422,970       1,447,898
     Time:
       Time deposits of $100 or more...............................................        524,463         499,956
       Other time deposits.........................................................      1,792,718       1,808,164
                                                                                      ------------     -----------
          Total deposits...........................................................      4,969,860       5,012,415
Short-term borrowings..............................................................        150,978         140,569
Note payable.......................................................................         43,000          83,000
Accrued interest payable...........................................................         26,105          23,227
Deferred income taxes..............................................................         25,864          12,774
Accrued expenses and other liabilities.............................................         38,295          54,944
Minority interest in subsidiary....................................................         14,879          14,067
                                                                                      ------------     -----------
          Total liabilities........................................................      5,268,981       5,340,996
                                                                                      ------------     -----------

Guaranteed preferred beneficial interests in:
     First Banks, Inc. subordinated debentures.....................................        138,523         138,569
     First Banks America, Inc. subordinated debentures.............................         44,295          44,280
                                                                                      ------------     -----------
          Total guaranteed preferred beneficial interests in
              subordinated debentures..............................................        182,818         182,849
                                                                                      ------------     -----------

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

Preferred stock:
     $1.00 par value, 5,000,000 shares authorized, no shares issued
       and outstanding at March 31, 2001 and December 31, 2000.....................             --              --
     Class A convertible, adjustable rate, $20.00 par value, 750,000
       shares authorized, 641,082 shares issued and outstanding....................         12,822          12,822
     Class B adjustable rate, $1.50 par value, 200,000 shares authorized,
       160,505 shares issued and outstanding.......................................            241             241
Common stock, $250.00 par value, 25,000 shares authorized,
     23,661 shares issued and outstanding..........................................          5,915           5,915
Capital surplus....................................................................          2,595           2,267
Retained earnings..................................................................        337,736         325,580
Accumulated other comprehensive income.............................................         32,967           6,021
                                                                                      ------------     -----------
          Total stockholders' equity...............................................        392,276         352,846
                                                                                      ------------     -----------
          Total liabilities and stockholders' equity...............................   $  5,844,075       5,876,691
                                                                                      ============     ===========
</TABLE>


<PAGE>
                                FIRST BANKS, INC.

                 CONSOLIDATED STATEMENTS OF INCOME - (UNAUDITED)
             (dollars expressed in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                                               Three months ended
                                                                                                    March 31,
                                                                                              -------------------
                                                                                                2001        2000
                                                                                                ----        ----
Interest income:
<S>                                                                                           <C>           <C>
     Interest and fees on loans.............................................................. $ 107,062     89,678
     Investment securities...................................................................     8,480      6,870
     Federal funds sold and other............................................................       495      1,169
                                                                                              ---------   --------
         Total interest income...............................................................   116,037     97,717
                                                                                              ---------   --------
Interest expense:
     Deposits:
       Interest-bearing demand...............................................................     1,673      1,465
       Savings...............................................................................    14,183     11,636
       Time deposits of $100 or more.........................................................     7,876      3,015
       Other time deposits...................................................................    27,189     23,907
     Short-term borrowings...................................................................     1,989      1,109
     Note payable............................................................................     1,230      1,155
                                                                                              ---------   --------
         Total interest expense..............................................................    54,140     42,287
                                                                                              ---------   --------
         Net interest income.................................................................    61,897     55,430
Provision for loan losses....................................................................     3,390      3,582
                                                                                              ---------   --------
         Net interest income after provision for loan losses.................................    58,507     51,848
                                                                                              ---------   --------
Noninterest income:
     Service charges on deposit accounts and customer service fees...........................     5,225      4,592
     Gain on mortgage loans sold and held for sale...........................................     3,468      1,392
     Gain on sale of credit card portfolio...................................................     2,275         --
     Net (loss) gain on sales of available-for-sale securities...............................      (174)       379
     Gain on derivative instruments, net.....................................................       497         --
     Other...................................................................................     5,183      3,201
                                                                                              ---------   --------
         Total noninterest income............................................................    16,474      9,564
                                                                                              ---------   --------
Noninterest expense:
     Salaries and employee benefits..........................................................    22,452     16,891
     Occupancy, net of rental income.........................................................     4,116      3,222
     Furniture and equipment.................................................................     3,211      2,675
     Postage, printing and supplies..........................................................     1,155      1,108
     Data processing fees....................................................................     6,499      5,189
     Legal, examination and professional fees................................................     1,690        989
     Amortization of intangibles associated with the purchase of subsidiaries................     1,850      1,171
     Guaranteed preferred debentures.........................................................     4,489      3,014
     Other...................................................................................     6,156      3,534
                                                                                              ---------   --------
         Total noninterest expense...........................................................    51,618     37,793
                                                                                              ---------   --------
         Income before provision for income taxes, minority interest in income
           of subsidiary and cumulative effect of change in accounting principle.............    23,363     23,619
Provision for income taxes...................................................................     9,124      8,544
                                                                                              ---------   --------
         Income before minority interest in income of subsidiary and cumulative
           effect of change in accounting principle .........................................    14,239     15,075
Minority interest in income of subsidiary....................................................       511        488
                                                                                              ---------   --------
         Income before cumulative effect of change in accounting principle...................    13,728     14,587
Cumulative effect of change in accounting principle, net of tax..............................     1,376         --
                                                                                              ---------   --------
         Net income..........................................................................    12,352     14,587
Preferred stock dividends....................................................................       196        196
                                                                                              ---------   --------
         Net income available to common stockholders......................................... $  12,156     14,391
                                                                                              =========   ========
Earnings per common share:
    Basic:
       Income before cumulative effect of change in accounting principle..................... $  571.94     608.21
       Cumulative effect of change in accounting principle, net of tax.......................    (58.16)        --
                                                                                              ---------   --------
       Basic.................................................................................    513.78     608.21
                                                                                              =========   ========
    Diluted:
       Income before cumulative effect of change in accounting principle..................... $  561.09     589.52
       Cumulative effect of change in accounting principle, net of tax.......................    (58.16)        --
                                                                                              ---------   --------
       Diluted...............................................................................    502.93     589.52
                                                                                              =========   ========
Weighted average common stock outstanding....................................................    23,661     23,661
                                                                                              =========   ========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>




                                         FIRST BANKS, INC.

 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME - (UNAUDITED)
       Three months ended March 31, 2001 and 2000 and nine months ended December 31, 2000
                   (dollars expressed in thousands, except per share data)



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

<S>                                                     <C>     <C>    <C>       <C>     <C>      <C>         <C>     <C>
Consolidated balances, December 31, 1999.........  $12,822      241    5,915     3,318            270,259     2,350   294,905
Three months ended March 31, 2000:
    Comprehensive income:
      Net income.................................       --       --       --        --   14,587    14,587       --     14,587
      Other comprehensive income, net of tax
        Unrealized losses on securities, net of
          reclassification adjustment (1)........       --       --       --        --     (854)       --      (854)     (854)
                                                                                         ------
      Comprehensive income.......................                                        13,733
                                                                                         ======
    Class A preferred stock dividends,
      $0.30 per share............................       --       --       --        --               (192)       --      (192)
    Class B preferred stock dividends,
      $0.03 per share............................       --       --       --        --                 (4)       --        (4)
    Effect of capital stock transactions of
       majority-owned subsidiary.................       --       --       --      (201)                --        --      (201)
                                                   -------    -----    -----     -----            -------    ------   -------
Consolidated balances, March 31, 2000............   12,822      241    5,915     3,117            284,650     1,496   308,241
Nine months ended December 31, 2000:
    Comprehensive income:
      Net income.................................       --       --       --        --   41,520    41,520        --    41,520
      Other comprehensive income, net of tax
        Unrealized gains on securities, net of
          reclassification adjustment (1)........       --       --       --        --    4,525        --     4,525     4,525
                                                                                         ------
      Comprehensive income.......................                                        46,045
                                                                                         ======
    Class A preferred stock dividends,
      $0.90 per share............................       --       --       --        --               (577)       --      (577)
    Class B preferred stock dividends,
      $0.08 per share............................       --       --       --        --                (13)       --       (13)
    Effect of capital stock transactions of
       majority-owned subsidiary.................       --       --       --      (850)                --        --      (850)
                                                   -------    -----    -----     -----            -------    ------   -------
Consolidated balances, December 31, 2000.........   12,822      241    5,915     2,267            325,580     6,021   352,846
Three months ended March 31, 2001:
    Comprehensive income:
      Net income.................................       --       --       --        --   12,352    12,352        --    12,352
      Other comprehensive income, net of tax:
        Unrealized gains on securities, net of
          reclassification adjustment (1)........       --       --       --        --    5,471        --     5,471     5,471
        Derivative instruments:
          Cumulative effect of change in
             accounting principle, net...........       --       --       --        --    9,069        --     9,069     9,069
          Current period transactions............       --       --       --        --   12,406        --    12,406    12,406
          Reclassification to earnings...........       --       --       --        --       --        --        --        --
                                                                                         ------
      Comprehensive income.......................                                        39,298
                                                                                         ======
    Class A preferred stock dividends,
      $0.30 per share............................       --       --       --        --               (192)       --      (192)
    Class B preferred stock dividends,
      $0.03 per share............................       --       --       --        --                 (4)       --        (4)
    Effect of capital stock transactions of
       majority-owned subsidiary.................       --       --       --       328                 --        --       328
                                                   -------    -----    -----     -----            -------    ------   -------
Consolidated balances, March 31, 2001............  $12,822      241    5,915     2,595            337,736    32,967   392,276
                                                   =======    =====    =====     =====            =======    ======   =======

</TABLE>

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

                                                                                   Three months ended       Nine months ended
                                                                                        March 31,              December 31,
                                                                                        --------               ------------
                                                                                   2001         2000               2000
                                                                                   ----         ----               ----

     Unrealized gains (losses) on investment securities
<S>                                                                               <C>            <C>               <C>
        arising during the period.............................................    $5,358         (608)             4,388
     Less reclassification adjustment for (losses) gains
        included in net income................................................      (113)         246               (137)
                                                                                  ------       ------             ------
     Unrealized gains (losses) on investment securities.......................    $5,471         (854)             4,525
                                                                                  ======       ======             ======

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

<PAGE>





                                FIRST BANKS, INC.

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

<TABLE>
<CAPTION>
                                                                                                Three months ended
                                                                                                     March 31,
                                                                                              ---------------------
                                                                                               2001           2000
                                                                                               ----           ----

Cash flows from operating activities:
<S>                                                                                          <C>             <C>
     Net income...........................................................................   $ 12,352        14,587
     Adjustments to reconcile net income to net cash used in operating activities:
     Cumulative effect of change in accounting principle, net of tax......................      1,376            --
       Depreciation and amortization of bank premises and equipment.......................      3,219         2,220
       Amortization, net of accretion.....................................................      1,783         1,841
       Originations and purchases of loans held for sale..................................   (331,761)      (94,450)
       Proceeds from the sale of loans held for sale......................................    187,174        62,671
       Provision for loan losses..........................................................      3,390         3,582
       Provision for income taxes.........................................................      9,124         8,544
       (Payments) refunds of income taxes.................................................    (16,990)           75
       Decrease in accrued interest receivable............................................      5,509         2,499
       Interest accrued on liabilities....................................................     54,140        42,287
       Payments of interest on liabilities................................................    (51,262)      (42,203)
       Gain on sale of credit card portfolio..............................................     (2,275)           --
       Other operating activities, net....................................................    (10,363)       (5,711)
       Minority interest in income of subsidiary..........................................        511           488
                                                                                             --------     ---------
         Net cash used in operating activities............................................   (134,073)       (3,570)
                                                                                             --------     ---------

Cash flows from investing activities:
     Cash paid for acquired entities, net of cash and cash equivalents received...........         --        (2,709)
     Proceeds from sales of investment securities available for sale......................     67,918         8,148
     Maturities of investment securities available for sale...............................    121,101       135,151
     Maturities of investment securities held to maturity.................................        500           670
     Purchases of investment securities available for sale................................    (18,991)     (109,481)
     Purchases of investment securities held to maturity..................................         --          (489)
     Net decrease (increase) in loans.....................................................     42,612      (155,830)
     Recoveries of loans previously charged-off...........................................      1,917         4,081
     Purchases of bank premises and equipment.............................................     (7,411)       (5,247)
     Other investing activities, net......................................................        519         1,316
                                                                                             --------     ---------
         Net cash provided by (used in) investing activities..............................    208,165      (124,390)
                                                                                             --------     ---------

Cash flows from financing activities:
     (Decrease) increase in demand and savings deposits...................................    (51,616)       42,873
     Increase in time deposits............................................................      8,134        89,177
     Increase in securities sold under agreements to repurchase...........................     10,409        25,058
     Advances drawn on note payable.......................................................         --        10,000
     Repayments of note payable...........................................................    (40,000)           --
     Payment of preferred stock dividends.................................................       (196)         (196)
     Other financing activities, net......................................................        (94)           --
                                                                                             --------     ---------
         Net cash (used in) provided by financing activities..............................    (73,363)      166,912
                                                                                             --------     ---------
         Net increase in cash and cash equivalents........................................        729        38,952
Cash and cash equivalents, beginning of period............................................    198,279       170,894
                                                                                             --------     ---------
Cash and cash equivalents, end of period..................................................   $199,008       209,846
                                                                                             ========     =========

Noncash investing and financing activities:
     Loans transferred to other real estate...............................................   $    451           558
     Reductions of deferred tax asset valuation reserve...................................        541            --
     Loans held for sale transferred to mortgage-backed securities........................     10,522            --
     Loans held for sale transferred to loans.............................................     18,195        21,568
                                                                                             ========     =========

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 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 2000 Annual Report
on Form 10-K.  The  consolidated  financial  statements  have been  prepared  in
accordance with accounting principles generally accepted in the United States of
America  and  conform to  predominant  practices  within the  banking  industry.
Management  of First  Banks  has  made a number  of  estimates  and  assumptions
relating  to the  reporting  of assets and  liabilities  and the  disclosure  of
contingent  assets  and  liabilities  to  prepare  the  consolidated   financial
statements in conformity with accounting  principles  generally  accepted in the
United  States of  America.  In the  opinion  of  management,  all  adjustments,
consisting  of  normal  recurring  accruals  considered  necessary  for  a  fair
presentation  of the results of  operations  for the interim  periods  presented
herein,  have been included.  Operating results for the three months ended March
31, 2001 are not necessarily  indicative of the results that may be expected for
the year ending December 31, 2001.

         The  consolidated  financial  statements  include the accounts of First
Banks,  Inc.  and its  subsidiaries,  net of  minority  interest,  as more fully
described below.  All significant  intercompany  accounts and transactions  have
been  eliminated.  Certain  reclassifications  of 2000 amounts have been made to
conform to the 2001 presentation.

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

      First Bank, headquartered in St. Louis County, Missouri;
      First Capital Group, Inc., headquartered in Albuquerque, New Mexico (FCG);
      First Banks America,  Inc.,  headquartered  in St. Louis County,  Missouri
        (FBA),  and its wholly owned subsidiary:
           The San Francisco Company, headquartered in San Francisco, California
              (SFC),  and  its  wholly-owned  subsidiary:
                 First  Bank & Trust, headquartered in San Francisco, California
                 (FB&T).

         The  Subsidiary  Banks  and FCG are  wholly  owned by their  respective
parent companies except FBA, which was 93.15% and 92.86% owned by First Banks at
March 31, 2001 and December 31, 2000, respectively.

(2)      DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

         In June 1998, the Financial  Accounting  Standards  Board (FASB) issued
Statement of Financial  Accounting  Standards  (SFAS) No. 133 -- Accounting  for
Derivative  Instruments and Hedging Activities (SFAS 133). In June 1999 and June
2000, the FASB issued SFAS No. 137 - Accounting for Derivative  Instruments  and
Hedging  Activities - Deferral of the Effective  Date of FASB Statement No. 133,
an  Amendment  of FASB  Statement  No. 133,  and SFAS No. 138 -  Accounting  for
Derivative  Instruments and Hedging  Activities,  an Amendment of FASB Statement
No.  133,  respectively.  SFAS  133,  as  amended,  establishes  accounting  and
reporting  standards for derivative  instruments,  including certain  derivative
instruments embedded in other contracts,  and for hedging activities.  SFAS 133,
as amended,  requires an entity to recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value.  If certain  conditions are met, a derivative may be specifically
designated as a hedge in one of three categories.  The accounting for changes in
the fair  value of a  derivative  (that is,  gains and  losses)  depends  on the
intended use of the derivative and the resulting designation. Under SFAS 133, as
amended,  an entity  that  elects  to apply  hedge  accounting  is  required  to
establish,  at the inception of the hedge,  the method it will use for assessing
the  effectiveness  of the hedging  derivative and the measurement  approach for
determining  the  ineffective  aspect  of  the  hedge.  Those  methods  must  be
consistent with the entity's approach to managing risk.
<PAGE>

         First Banks utilizes  derivative  instruments and hedging activities to
assist  in the  management  of  interest  rate  sensitivity  and to  modify  the
repricing,   maturity  and  option   characteristics   of  certain   assets  and
liabilities.  First Banks uses such derivative  instruments solely to reduce its
interest rate  exposure.  The following is a summary of First Banks'  accounting
policies for derivative  instruments and hedging  activities  under SFAS 133, as
amended:

         Interest  Rate Swap  Agreements - Cash Flow Hedges.  Interest rate swap
agreements  designated as cash flow hedges are accounted for at fair value.  The
effective  portion  of the  change  in the  cash  flow  hedge's  gain or loss is
initially reported as a component of other comprehensive income and subsequently
reclassified  into noninterest  income when the underlying  transaction  affects
earnings. The ineffective portion of the change in the cash flow hedge's gain or
loss is  recorded  in  earnings on each  quarterly  measurement  date.  The swap
agreements  are  accounted  for  on an  accrual  basis  with  the  net  interest
differential  being  recognized as an adjustment to interest  income or interest
expense of the related asset or liability.
<PAGE>

         Interest Rate Swap  Agreements - Fair Value Hedges.  Interest rate swap
agreements  designated  as fair value  hedges are  accounted  for at fair value.
Changes in the fair value of the swap  agreements  are  recognized  currently in
noninterest  income.  The change in the fair value on the underlying hedged item
(liabilities) attributable to the hedged risk adjusts the carrying amount of the
underlying hedged item and is also recognized  currently in noninterest  income.
All changes in fair value are measured on a quarterly basis. The swap agreements
are accounted for on an accrual basis with the net interest  differential  being
recognized  as an  adjustment  to  interest  income or  interest  expense of the
related asset or liability.

         Interest  Rate Cap and Floor  Agreements.  Interest  rate cap and floor
agreements  are  accounted  for at fair  value.  Changes  in the  fair  value of
interest  rate cap and floor  agreements  are  recognized  in  earnings  on each
quarterly measurement date.

         Interest  Rate  Lock   Commitments.   Commitments  to  originate  loans
(interest  rate lock  commitments),  which  primarily  consist of commitments to
originate fixed rate  residential  mortgage  loans,  are recorded at fair value.
Changes  in the fair value are  recognized  in  noninterest  income on a monthly
basis.

         Forward Contracts to Sell Mortgage-Backed Securities. Forward contracts
to sell  mortgage-backed  securities are recorded at fair value.  Changes in the
fair  value  of  forward  contracts  to  sell  mortgage-backed   securities  are
recognized in noninterest income on a monthly basis.

         On January 1, 2001, First Banks  implemented SFAS 133, as amended.  The
implementation  of SFAS 133, as amended,  resulted in an increase in  derivative
instruments  of $12.5 million,  an increase in deferred tax  liabilities of $5.1
million  and an  increase  in other  comprehensive  income of $9.1  million.  In
addition,  First  Banks  recorded a  cumulative  effect of change in  accounting
principle  of $1.4  million,  net of taxes of  $741,000,  as a reduction  of net
income.

(3)      EARNINGS PER SHARE

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

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

     Three months ended March 31, 2001:
<S>                                                                          <C>               <C>         <C>
         Basic EPS - income before cumulative effect.....................    $  13,532         23,661      $   571.94
         Cumulative effect of change in accounting principle, net of tax.       (1,376)            --          (58.16)
                                                                             ---------        -------      ----------
         Basic EPS - income available to common stockholders.............       12,156         23,661          513.78
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          192            893             --
                                                                             ---------        -------      ----------
         Diluted EPS - income available to common stockholders...........    $  12,348         24,554      $   502.93
                                                                             =========        =======      ==========

     Three months ended March 31, 2000:
         Basic EPS - income available to common stockholders.............    $  14,391         23,661      $   608.21
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          192          1,076             --
                                                                             ---------        -------      ---------
         Diluted EPS - income available to common stockholders...........    $  14,583         24,737      $   589.52
                                                                             =========        =======      ==========
</TABLE>
<PAGE>

(4)      TRANSACTIONS WITH RELATED PARTIES

         First Brokerage America,  L.L.C., a limited liability corporation which
is  indirectly  owned by First  Banks'  Chairman  and  members of his  immediate
family,  received approximately $731,000 and $535,000 for the three months ended
March 31, 2001,  and 2000,  respectively,  in commissions  paid by  unaffiliated
third-party  companies.  The  commissions  received were primarily in connection
with sales of annuities, securities and other insurance products to customers of
the Subsidiary Banks.

         First Services,  L.P., a limited partnership  indirectly owned by First
Banks'  Chairman and his adult children,  provides data processing  services and
operational  support for First Banks,  Inc. and its Subsidiary  Banks. Fees paid
under  agreements with First  Services,  L.P. were $5.3 million and $4.5 million
for the three  months  ended March 31, 2001 and 2000,  respectively.  During the
three  months ended March 31, 2001 and 2000,  First  Services,  L.P.  paid First
Banks  $486,000 and $454,000,  respectively,  in rental fees for the use of data
processing  and other  equipment  owned by First  Banks.  The fees paid by First
Banks for data  processing  services  and the rental fees charged by First Banks
are at least as favorable as could have been  obtained from  unaffiliated  third
parties.

(5)      REGULATORY CAPITAL

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

         Quantitative  measures  established  by  regulation  to ensure  capital
adequacy  require  First  Banks and the  Subsidiary  Banks to  maintain  minimum
amounts and ratios of total and Tier I capital  (as defined in the  regulations)
to  risk-weighted  assets,  and of Tier I capital to average assets.  Management
believes,  as of March 31, 2001,  First Banks and the Subsidiary Banks were each
well capitalized.

         As of March 31, 2001,  the most recent  notification  from First Banks'
primary  regulator  categorized  First  Banks and the  Subsidiary  Banks as well
capitalized under the regulatory  framework for prompt corrective  action. To be
categorized  as well  capitalized,  First  Banks and the  Subsidiary  Banks must
maintain minimum total risk-based,  Tier I risk-based and Tier I leverage ratios
as set forth in the table below.

         At  March  31,  2001  and  December  31,  2000,  First  Banks'  and the
Subsidiary Banks' required and actual capital ratios were as follows:
<TABLE>
<CAPTION>

                                                                                                         To be well
                                                               Actual                                 capitalized under
                                                               ------
                                                        March 31,  December 31,      For capital      prompt corrective
                                                          2001         2000       adequacy purposes   action provisions
                                                          ----         ----       -----------------   -----------------

         Total capital (to risk-weighted assets):
<S>                                                       <C>          <C>               <C>                <C>
              First Banks.............................    10.46%       10.21%            8.0%               10.0%
              First Bank..............................    10.45        10.71             8.0                10.0
              FB&T....................................    10.59        10.58             8.0                10.0
              BSF (1).................................      --         22.38             8.0                10.0

         Tier 1 capital (to risk-weighted assets):
              First Banks.............................     7.87%        7.56             4.0                 6.0
              First Bank..............................     9.20         9.46             4.0                 6.0
              FB&T................................9.34     9.32         4.0              6.0
              BSF (1)                                       --         21.42             4.0                 6.0

         Tier 1 capital (to average assets):
              First Banks.............................     7.27%        7.45             3.0                 5.0
              First Bank..............................     8.32         8.49             3.0                 5.0
              FB&T....................................     8.89         9.27             3.0                 5.0
              BSF (1).................................      --         22.00             3.0                 5.0
              ---------------------
              (1) BSF was acquired by FBA on December 31, 2000. FB&T was merged
                  with and into BSF on March 29, 2001, and was renamed FB&T.

</TABLE>

<PAGE>


(6)      BUSINESS SEGMENT RESULTS

         First Banks' business segments are its Subsidiary Banks. The reportable
business  segments are consistent with the management  structure of First Banks,
the  Subsidiary   Banks  and  the  internal   reporting   system  that  monitors
performance.

         Through the respective  branch  networks,  the Subsidiary Banks provide
similar  products and services in their defined  geographic  areas. The products
and services  offered  include a broad range of commercial and personal  deposit
products,  including demand, savings, money market and time deposit accounts. In
addition,  the  Subsidiary  Banks  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.  The Subsidiary Banks 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, commercial leasing and trade financing.

         Other financial  services  include mortgage  banking,  credit and debit
cards, brokerage services,  credit-related insurance, automated teller machines,
telephone   banking,   safe  deposit  boxes  and  trust,   private  banking  and
institutional money management services. The revenues generated by each business
segment  consist  primarily  of  interest  income,  generated  from the loan and
investment security portfolios, and service charges and fees, generated from the
deposit products and services. The geographic areas include Missouri,  Illinois,
southern  and northern  California  and Houston,  Dallas,  Irving and  McKinney,
Texas. The products and services are offered to customers primarily within their
respective geographic areas, with the exception of loan participations  executed
between the Subsidiary Banks.

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


<PAGE>
<TABLE>

<CAPTION>


         The business segment results are summarized as follows:



                                                                             First Bank                First Bank & Trust (1)
                                                                     --------------------------      -------------------------
                                                                       March 31,   December 31,         March 31, December 31,
                                                                         2001          2000               2001        2000
                                                                         ----          ----               ----        ----
                                                                                   (dollars expressed in thousands)

Balance sheet information:

<S>                                                                  <C>                 <C>            <C>            <C>
Investment securities...........................................     $   175,361         214,005        217,295        330,478
Loans, net of unearned discount.................................       2,813,757       2,694,005      2,021,737      2,058,628
Total assets....................................................       3,260,105       3,152,885      2,660,924      2,733,545
Deposits........................................................       2,743,906       2,729,489      2,241,177      2,306,469
Stockholders' equity............................................         284,821         273,848        321,343        333,186
                                                                     ===========       =========       ========     ==========





                                                                              First Bank                First Bank & Trust (1)
                                                                           Three months end               Three months ended
                                                                               March 31,                       March 31,
                                                                      --------------------------        ---------------------
                                                                       2001                2000           2001        2000
                                                                       ----                ----           ----        ----

Income statement information:

Interest income.................................................     $    61,595          58,758         54,739      38,807
Interest expense................................................          31,176          26,252         22,340      15,098
                                                                     -----------       ---------        -------     -------
     Net interest income........................................          30,419          32,506         32,399      23,709
Provision for loan losses.......................................           3,300           2,600             90         982
                                                                     -----------       ---------        -------     -------
     Net interest income after
       provision for loan losses................................          27,119          29,906         32,309      22,727
Noninterest income..............................................          12,432           6,994          4,510       3,046
Noninterest expense.............................................          24,306          19,806         20,792      14,682
                                                                     -----------       ---------        -------     -------
     Income (loss) before provision (benefit)
       for income taxes, minority
       interest in income of subsidiary and cumulative
       of change in accounting principle.......................           15,245          17,094         16,027      11,091
Provision (benefit) for income taxes...........................            5,327           5,833          6,284       4,396
                                                                     -----------       ---------        -------     -------
     Income (loss) before minority interest in income of
       subsidiary and cumulative effect of change in
       accounting principle.....................................           9,918          11,261          9,743       6,695
Minority interest in income of subsidiary.......................              --              --             --          --
                                                                     -----------       ---------        -------     -------
     Income before cumulative effect of change in
       accounting principle.....................................           9,918          11,261          9,743       6,695
Cumulative effect of change in accounting principle,
  net of tax....................................................             917              --            459          --
                                                                     -----------       ---------        -------     -------
     Net income.................................................           9,001          11,261          9,284       6,695
                                                                     ===========       =========        =======     =======
</TABLE>

---------------------------
(1)  Includes  BSF,  which was acquired by FBA on December  31,  2000.  FB&T was
     merged with and into BSF on March 29, 2001, and was renamed FB&T.
(2)  Corporate  and other  includes  $2.9 million and $2.0 million of guaranteed
     preferred  debenture  expense,  after applicable income tax benefit of $1.6
     million  and $1.0  million  for the three  months  ended March 31, 2001 and
     2000, respectively. In addition, corporate and other includes FCG and
     holding company expenses.



<PAGE>

<TABLE>
<CAPTION>



                                     Corporate and other
                              intercompany reclassifications (2)                      Consolidated totals
                              ----------------------------------                  ------------------------------
                               March 31,          December 31,                    March 31,         December 31,
                                 2001                 2000                          2001                2000
                                 ----                 ----                          ----                ----
                                                          (dollars expressed in thousands)



<S>                             <C>                   <C>                          <C>                 <C>
                                20,279                19,051                       412,935             563,534
                                  (417)                 (368)                    4,835,077           4,752,265
                               (76,954)               (9,739)                    5,844,075           5,876,691
                               (15,223)              (23,543)                    4,969,860           5,012,415
                              (213,888)             (254,188)                      392,276             352,846
                             =========              ========                      ========           =========




                                 Corporate, other and (2)
                             intercompany reclassifications                           Consolidated totals
                             ------------------------------                           -------------------
                                   Three months ended                                 Three months ended
                                        March 31,                                          March 31,
                             -------------------------------                    --------------------------------
                               2001                   2000                       2001                     2000
                               ----                   ----                       ----                     ----



                                  (297)                 152                      116,037                 97,717
                                   624                  937                       54,140                 42,287
                             ---------              -------                     --------                -------
                                  (921)                (785)                      61,897                 55,430
                                    --                   --                        3,390                  3,582
                             ---------              -------                     --------                -------

                                  (921)                (785)                      58,507                 51,848
                                  (468)                (476)                      16,474                  9,564
                                 6,520                3,305                       51,618                 37,793
                             ---------              -------                     --------                -------


                                (7,909)              (4,566)                      23,363                 23,619
                                (2,487)              (1,685)                       9,124                  8,544
                             ---------              -------                     --------                -------


                                (5,422)              (2,881)                      14,239                 15,075
                                   511                  488                          511                    488
                             ---------              -------                     --------                -------

                                (5,933)              (3,369)                      13,728                 14,587
                                    --                   --                        1,376                     --
                             ---------              -------                     --------                -------
                                (5,933)              (3,369)                      12,352                 14,587
                             =========              =======                     ========                =======

</TABLE>

<PAGE>



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

         The  discussion  set forth in  Management's  Discussion and Analysis of
Financial Condition and Results of Operations  contains certain  forward-looking
statements  with respect to our financial  condition,  results of operations and
business.  These  forward-looking  statements  are subject to certain  risks and
uncertainties,  not all of which can be predicted or  anticipated.  Factors that
may cause actual results to differ  materially  from those  contemplated  by the
forward-looking   statements   herein  include  market  conditions  as  well  as
conditions  affecting  the  banking  industry  generally  and  factors  having a
specific  impact on us,  including but not limited to  fluctuations  in interest
rates and in the economy;  the impact of laws and  regulations  applicable to us
and changes therein;  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;
and our ability to respond to changes in technology.  With regard to our efforts
to grow  through  acquisitions,  factors  that  could  affect  the  accuracy  or
completeness  of  forward-looking   statements   contained  herein  include  the
potential for higher than acceptable operating costs arising from the geographic
dispersion of our offices,  as compared  with  competitors  operating  solely in
contiguous  markets;  the competition of larger acquirers with greater resources
than  us,  fluctuations  in the  prices  at  which  acquisition  targets  may be
available for sale and in the market for our  securities;  and the potential for
difficulty  or  unanticipated  costs in  realizing  the  benefits of  particular
acquisition  transactions.  Readers of the Form 10-Q should  therefore not place
undue reliance on forward-looking statements.

                                     General

         We are a registered bank holding  company  incorporated in Missouri and
headquartered  in St.  Louis  County,  Missouri.  Through the  operation  of our
subsidiaries,  we offer a broad array of  financial  services  to  consumer  and
commercial customers.  We currently operate banking subsidiaries with 138 branch
offices throughout California,  Illinois, Missouri and Texas. At March 31, 2001,
we had total assets of $5.84 billion,  loans, net of unearned discount, of $4.84
billion,  total  deposits  of $4.97  billion and total  stockholders'  equity of
$392.3 million.

         We operate  through two subsidiary  banks,  two subsidiary bank holding
companies, and through our subsidiary leasing company, as follows:

         First Bank, headquartered in St. Louis County, Missouri;
         First  Capital  Group,  Inc.,  or  FCG,  headquartered  in Albuquerque,
           New Mexico;
         First Banks America,  Inc., or FBA,  headquartered in St. Louis County,
            Missouri,  and its wholly owned subsidiary:
                The   San   Francisco   Company,  or  SFC,  headquartered in San
                Francisco, California, and its wholly-owned subsidiary:
                    First Bank & Trust, or FB&T, headquartered in San Francisco,
                    California.

         Our  subsidiary  banks  and FCG are  wholly  owned by their  respective
parent  companies.  We owned  93.15%  and  92.86% of FBA at March  31,  2001 and
December 31, 2000, respectively.

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

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




<PAGE>


                               Financial Condition

         Our total assets were $5.84 billion and $5.88 billion at March 31, 2001
and December 31, 2000,  respectively.  The decrease in total assets is primarily
attributable  to  an  anticipated   level  of  attrition   associated  with  our
acquisitions  of Commercial  Bank of San Francisco,  Millennium Bank and Bank of
San Francisco,  which were completed  during the fourth quarter of 2000.  Loans,
net of unearned discount, increased by $82.8 million, which is further discussed
under "--Loans and Allowance for Loan Losses." Investment  securities  decreased
by $150.6  million to $412.9  million at March 31, 2001 from  $563.5  million at
December 31, 2000. We attribute the decrease in investment  securities primarily
to the liquidation of certain investment securities acquired through acquisition
that did not meet our  investment  objectives  and a higher than normal level of
investment  security calls  experienced  during the three months ended March 31,
2001.  The funds  generated  from the  reduction of investment  securities  were
utilized to fund loan growth,  with the remaining  funds being  utilized to fund
the deposit  attrition.  Offsetting the overall reduction in total assets was an
increase in derivative  instruments of $41.9 million,  resulting solely from the
implementation of Statement of Financial Accounting Standards, or SFAS, No. 133,
Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS
No. 137 -  Accounting  for  Derivative  Instruments  and  Hedging  Activities  -
Deferral of the Effective  Date of FASB  Statement No. 133, an Amendment of FASB
Statement No. 133, and SFAS No. 138 - Accounting for Derivative  Instruments and
Hedging  Activities,  an Amendment of FASB  Statement  No. 133.  Total  deposits
decreased by $40.0 million to $4.97 billion at March 31, 2001 from $5.01 billion
at  December  31,  2000,  which  reflects  an  anticipated  level  of  attrition
associated  with our  fourth  quarter  acquisitions  as well as normal  cyclical
trends  typically  experienced  during the first quarter of each calendar  year.
Short-term  borrowings increased by $10.4 million to $151.0 million at March 31,
2001,  reflecting an increase in securities sold under agreements to repurchase.
Our note payable  decreased by $40.0  million to $43.0 million at March 31, 2001
from $83.0  million at December 31, 2000.  The reduction of our note payable was
funded with dividends  from our  subsidiaries  and a capital  reduction of $23.0
million  that  was  recorded  in  conjunction  with  the  merger  of our  former
subsidiary,  First Bank & Trust, with and into Bank of San Francisco,  effective
March 29, 2001.  In  conjunction  with this merger,  Bank of San  Francisco  was
renamed FB&T. In addition,  accrued expenses and other liabilities  decreased by
$16.6  million to $38.3 million at March 31, 2001 from $54.9 million at December
31, 2000.  We attribute  the majority of this  decrease to our first quarter tax
payments.


                              Results of Operations

Net Income

         Net income was $12.4  million for the three months ended March 31, 2001
compared to $14.6  million for the  comparable  period in 2000,  representing  a
decrease of 15.1%. The implementation of SFAS No. 133, as amended, on January 1,
2001, resulted in the recognition of a cumulative effect of change in accounting
principle of $1.4 million, net of tax, which reduced net income.  Excluding this
item,  net income was $13.7  million for the three  months ended March 31, 2001.
The primary factors that led to the decline in our earnings for the three months
ended March 31, 2001 were the recent  reductions  in the prime  lending rate and
higher operating expenses. Net interest income improved primarily as a result of
increased  earning assets generated  through internal loan growth as well as our
acquisitions of Lippo Bank,  certain assets of FCG, Bank of Ventura,  Commercial
Bank of San  Francisco,  Millennium  Bank and Bank of San  Francisco,  completed
during 2000.  However,  the  improvement  in net interest  income was  partially
mitigated by several  reductions in the prime lending rate that occurred  during
the first  quarter of 2001.  During the three  months  ended  March 31, 2001 and
2000,   noninterest   income  improved  to  $16.5  million  from  $9.6  million,
respectively, as further discussed under "--Noninterest Income."

         The  improvement  in net  interest  income and  noninterest  income was
slightly more offset by increased  operating  expenses of $13.8 million to $51.6
million  from $37.8  million for the three months ended March 31, 2001 and 2000,
respectively. The increased operating expenses are primarily attributable to the
operating  expenses  of the  aforementioned  acquisitions  subsequent  to  their
respective  acquisition dates, increased salaries and employee benefit expenses,
increased data processing fees,  increased  legal,  examination and professional
fees and increased  amortization of intangibles  associated with the purchase of
the  aforementioned  entities.  Additionally,  guaranteed  preferred  debentures
expense  of $1.5  million  on the  trust  preferred  securities  issued by First
Preferred  Capital Trust II in October 2000 further  contributed  to the overall
increase in operating  expenses.  These higher operating expenses are reflective
of significant investments that we have made in personnel,  technology,  capital
expenditures  and new business lines in conjunction  with our overall  strategic
growth plan. The payback on these investments is expected to occur over a longer
period of time through higher and more diversified revenue streams.



<PAGE>


Net Interest Income

         Net interest income  (expressed on a tax equivalent  basis) improved to
$62.1 million, or 4.75% of  interest-earning  assets, for the three months ended
March 31, 2001, from $55.6 million, or 4.85% of interest-earning assets, for the
comparable  period in 2000. We credit the improved net interest income primarily
to the net interest-earning  assets provided by our aforementioned  acquisitions
completed   during   2000,   internal   loan   growth,   increased   yields   on
interest-earning  assets and earnings on our interest rate swap  agreements that
we entered into in conjunction with our risk management program.

         Average loans, net of unearned discount, increased by $710.0 million to
$4.80  billion for the three months ended March 31, 2001 from $4.09  billion for
the  comparable  period in 2000.  The yield on our loan  portfolio  increased to
9.06% for the three months ended March 31, 2001,  in comparison to 8.83% for the
comparable period in 2000. Although yields on our  interest-earning  assets have
improved for the three months ended March 31, 2001, our net interest rate margin
declined 10 basis  points.  We attribute  the decline in our net  interest  rate
margin  primarily to the recent  declines in the prime  lending  rate,  which we
anticipate will continue to occur in the upcoming months. During the period from
January 1, 2001 through  March 31,  2001,  the Board of Governors of the Federal
Reserve System decreased the targeted federal funds rate three times,  resulting
in three  decreases  in the prime rate of  interest  from 9.5% to 8.0%.  This is
reflected  not only in the rate of interest  earned on loans that are indexed to
the prime  rate,  but also in other  assets and  liabilities  which  either have
variable or adjustable  rates,  or which matured or repriced during this period.
As further  discussed under "--Interest Rate Risk Management," the reduced level
of interest  income earned on our loan portfolio as a result of declining  rates
was partially  mitigated by the earnings  associated with our interest rate swap
agreements. For the three months ended March 31, 2001, these agreements provided
income of  $973,000,  in  comparison  to expense of  $652,000  incurred  for the
comparable period in 2000.

         The improved yield earned on our interest-earning  assets was partially
offset by an increased rate paid on our  interest-bearing  liabilities.  For the
three months ended March 31, 2001, the aggregate  weighted  average rate paid on
our deposit portfolio increased to 4.90% from 4.31% for the comparable period in
2000,  reflecting increased rates paid by us to attract and retain deposits as a
result of the high level of  competition  within our market areas.  In addition,
the  aggregate  weighted  average  rate  paid on our  notes  payable  and  other
borrowings  increased  to 7.25% for the three  months  ended March 31, 2001 from
7.13% for the comparable  period in 2000.  Amounts  outstanding under our $120.0
million line of credit with a group of  unaffiliated  banks bear interest at the
lead bank's corporate base rate or, at our option, at the Eurodollar rate plus a
margin determined by the outstanding  balance and our  profitability.  Thus, our
revolving credit line represents a relatively  high-cost funding source, so that
increased  advances  under  the  revolving  note  payable  have  the  effect  of
increasing the weighted average rate of non-deposit liabilities. During 2000, we
utilized the note payable to fund our  acquisitions  of  Commercial  Bank of San
Francisco, Millennium Bank and Bank of San Francisco, thus resulting in a higher
level of borrowings occurring during the fourth quarter of 2000.



<PAGE>


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

                                                                         For the three months ended March 31,
                                                               -----------------------------------------------------
                                                                         2001                         2000
                                                               ------------------------     ------------------------
                                                                        Interest                     Interest
                                                               Average   income/ Yield/     Average  income/  Yield/
                                                               balance   expense  rate      balance  expense   rate
                                                               -------   -------  ----      -------  -------   ----
                                                                         (dollars expressed in thousands)
                            ASSETS
                            ------

Interest-earning assets:
<S>       <C> <C> <C>                                       <C>          <C>       <C>   <C>          <C>      <C>
    Loans (1) (2) (3)(4) .................................  $ 4,797,109  107,138   9.06% $4,086,591   89,753   8.83%
    Investment securities (4) ............................      469,178    8,606   7.44     440,803    7,002   6.39
    Federal funds sold....................................       29,257      428   5.93      81,320    1,126   5.57
    Other.................................................        3,133       67   8.67       2,231       43   7.75
                                                            ----------- --------         ----------  -------
         Total interest-earning assets....................    5,298,677  116,239   8.90   4,610,945   97,924   8.54
                                                                        --------                     -------
Nonearning assets.........................................      507,906                     368,737
                                                            -----------                  ----------
         Total assets.....................................  $ 5,806,583                  $4,979,682
                                                            ===========                  ==========

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

Interest-bearing liabilities:
    Interest-bearing deposits:
       Interest-bearing demand deposits...................  $   454,497    1,673   1.49% $  423,088    1,465   1.39%
       Savings deposits...................................    1,425,876   14,183   4.03   1,225,323   11,636   3.82
       Time deposits of $100 or more (3)..................      519,358    7,876   6.15     236,937    3,014   5.12
       Other time deposits (3)............................    1,812,460   27,189   6.08   1,847,003   23,908   5.21
                                                            ----------- --------         ----------  -------
         Total interest-bearing deposits..................    4,212,191   50,921   4.90   3,732,351   40,023   4.31
    Short-term borrowings.................................      158,773    1,989   5.08      87,183    1,109   5.12
    Notes payable and other...............................       68,806    1,230   7.25      65,126    1,155   7.13
                                                             ---------- --------         ----------  -------
         Total interest-bearing liabilities...............    4,439,770   54,140   4.95   3,884,660   42,287   4.38
                                                                        --------                     -------
Noninterest-bearing liabilities:
    Demand deposits.......................................      711,523                     587,417
    Other liabilities.....................................      294,761                     212,342
                                                            -----------                  ----------
         Total liabilities................................    5,446,054                   4,684,419
Stockholders' equity......................................      360,529                     295,263
                                                            -----------                  ----------
         Total liabilities and stockholders' equity.......  $ 5,806,583                  $4,979,682
                                                            ===========                  ==========
Net interest income.......................................                62,099                     55,637
                                                                        ========                     ======
Interest rate spread......................................                         3.95%                       4.16%
Net interest margin.......................................                         4.75                        4.85
                                                                                   ====                        ====
</TABLE>

     ------------------------
(1)   Nonaccrual loans are included in the average loan amounts.
(2)   Interest income on loans includes loan fees.
(3)   Includes the effects of interest rate exchange agreements.
(4)   Information is presented on a tax-equivalent basis assuming a tax  rate of
      35%.  The  tax-equivalent  adjustments  were  approximately  $202,000  and
      $207,000 for the three months ended March 31, 2001 and 2000, respectively.
<PAGE>

Provision for Loan Losses

         The provision for loan losses was $3.4 million and $3.6 million for the
three  months  ended March 31, 2001 and 2000,  respectively.  We  attribute  the
slight  decrease in the  provision  for loan losses  primarily  to  management's
overall  assessment  of the  adequacy of the  allowance  for loan  losses.  Loan
charge-offs  were $8.9 million for the three  months  ended March 31,  2001,  in
comparison to $3.2 million for the comparable  period in 2000.  Included in 2001
loan  charge-offs  is a  single  loan in the  amount  of $4.5  million  that was
charged-off  due to suspected  fraud on the part of the borrower.  Excluding the
large  individual  charge-off,  we attribute  the  increase in loan  charge-offs
primarily to the recent  general slow down in economic  conditions  prevalent in
our markets,  which we  anticipate  will continue in the upcoming  months.  Loan
recoveries  were $1.9  million for the three  months  ended March 31,  2001,  in
comparison to $4.1 million for the comparable  period in 2000.  Loan  recoveries
for the three months ended March 31, 2000 included a recovery of $1.3 million on
a single  credit  relationship.  Nonperforming  assets and  past-due  loans have
increased  during the three months ended March 31, 2001, and we anticipate these
trends will  continue  in the near  future.  However,  we believe  these  trends
represent normal cyclical trends  experienced within the banking industry during
times of economic slow down.  Management  considered these trends in its overall
assessment of the adequacy of the  allowance for loan losses and concluded  that
no additional provision for loan losses was necessary.

         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 $16.5  million  and $9.6  million for the three
months ended March 31, 2001 and 2000, respectively.  Noninterest income consists
primarily of service  charges on deposit  accounts and  customer  service  fees,
mortgage banking  revenues,  a gain on the sale of our credit card portfolio and
other income.

         Service charges on deposit accounts and customer service fees were $5.2
million  and $4.6  million for the three  months  ended March 31, 2001 and 2000,
respectively.  We attribute the increase in service charges and customer service
fees to:

     >>   increased deposit balances provided by internal growth;

     >>   our acquisitions completed during 2000;

     >>   additional   products  and  services  available  and utilized  by  our
          expanding  base of retail and  commercial customers;

     >>   increased  fee  income  resulting  from  revisions of customer service
          charge  rates,  effective  June 1, 2000,  and  enhanced control of fee
          waivers; and

     >>   increased income associated with automatic teller machine services and
          debit and credit cards.

         The gain on mortgage  loans sold and held for sale was $3.5 million and
$1.4 million for the three  months ended March 31, 2001 and 2000,  respectively.
The overall  increase  for the three  months  ended March 31, 2001 is  primarily
attributable  to a significant  increase in the volume of loans  originated  and
sold resulting from loan  refinancings  due to reductions in mortgage loan rates
experienced  in recent  months.  We also attribute the increase to the continued
expansion of our mortgage banking activities into new and existing markets.
<PAGE>

         During  the three  months  ended  March 31,  2001,  we  recorded a $2.3
million  pre-tax  gain on the sale of our credit  card  portfolio.  This gain is
solely  attributable  to the sale of our credit card  portfolio as a result of a
strategic   decision  to  exit  this  product  line  and  enter  into  an  agent
relationship with a larger credit card service provider.

         Noninterest  income  for the three  months  ended  March 31,  2001 also
included a net loss on the sale of  available-for-sale  investment securities of
$174,000,  in  comparison  to a net  gain  on  the  sale  of  available-for-sale
investment  securities of $379,000 for the  comparable  period in 2000.  The net
loss  for 2001  resulted  primarily  from  the  liquidation  of  certain  equity
investment  securities held by FBA that resulted in a loss of $134,000,  whereas
the net  gain in 2000  resulted  primarily  from  sales  of  certain  investment
securities  held  by  acquired  institutions  that  did  not  meet  our  overall
investment objectives.

         The net  gain on  derivative  instruments  is  solely  attributable  to
changes in the fair value of our interest rate cap  agreements and interest rate
floor  agreements,  and  results  from the  implementation  of SFAS No.  133, as
amended,  on  January  1,  2001.  See  Note 2 to our  accompanying  consolidated
financial statements.

         Other  income was $5.2  million and $3.2  million for the three  months
ended March 31, 2001 and 2000, respectively. We attribute the primary components
of the increase to:

     >>   our acquisitions completed during 2000;

     >>   increased portfolio management fee income of $667,000 associated  with
          with our Institutional Money Management Division, which  was formed in
          in August 2000;

     >>   increased  brokerage  revenue, which  is primarily associated with the
          the stock option services acquired in conjunction with our acquisition
          of Bank of San Francisco;

     >>   increased  rental  income  of  $413,000 associated with our commercial
          leasing   activities  that  were  acquired  in  conjunction  with  our
          acquisition of FCG in February 2000.
<PAGE>

     >>   increased earnings associated with our international banking products,
          which were initially offered in March 2000; and

     >>   income  of  approximately  $300,000  associated with equipment leasing
          activities that were acquired in conjunction  with  our acquisition of
          of Bank of San Francisco in December 2000.

Noninterest Expense

         Noninterest expense was $51.6 million for the three months ended March
31, 2001, in comparison to $37.8 million for the comparable period in 2000. The
increase reflects:

     >>   the  noninterest  expense  of  our  acquisitions completed during 2000
          subsequent  to  the  respective  acquisition  dates, including certain
          nonrecurring expenses associated with those acquisitions;

     >>   increased salaries and employee benefit expenses;

     >>   increased data processing fees;

     >>   increased legal, examination and professional fees;

     >>   increased  amortization of intangibles associated with the purchase of
          subsidiaries; and

     >>   increased guaranteed preferred debentures expense.

         Salaries and employee benefits were $22.5 million and $16.9 million for
the three  months  ended March 31,  2001 and 2000,  respectively.  We  primarily
associate the increase with our 2000  acquisitions.  However,  the increase also
reflects the competitive  environment in the employment market that has resulted
in a higher demand for limited  resources,  thus escalating  industry salary and
employee  benefit  costs  associated  with  employing  and  retaining  qualified
personnel.  In  addition,  the  increase  includes  various  additions  to staff
throughout 2000 to enhance  executive and senior management  expertise,  improve
technological support,  strengthen centralized  operational functions and expand
our product lines.

         Occupancy,  net of rental income,  and furniture and equipment  expense
totaled  $7.3 million and $5.9 million for the three months ended March 31, 2001
and  2000,   respectively.   We   primarily   attribute   the  increase  to  our
aforementioned acquisitions,  the relocation of certain branches and operational
areas and  increased  depreciation  expense  associated  with  numerous  capital
expenditures.

         Data  processing  fees were $6.5 million and $5.2 million for the three
months ended March 31, 2001 and 2000,  respectively.  As more fully described in
Note 4 to our accompanying  consolidated  financial statements,  First Services,
L.P.  provides data processing and various related  services to our subsidiaries
and  us.  We  attribute  the  increased  data  processing  fees  to  growth  and
technological  advancements  consistent with our product and service  offerings,
continued  upgrades  to  technological  equipment,  networks  and  communication
channels,  and certain nonrecurring expenses associated with the data processing
conversions of Redwood Bank and Commercial  Bank of San Francisco,  completed in
February 2001 and March 2001, respectively.

         Legal, examination and professional fees were $1.7 million and $989,000
for the three months ended March 31, 2001 and 2000,  respectively.  We primarily
attribute  the  increase  in these  fees to the  ongoing  professional  services
utilized  by certain  of our  acquired  entities,  increased  professional  fees
associated with our Institutional Money Management Division, which was formed in
August  2000,  and  increased   legal  fees   associated  with  commercial  loan
documentation,  collection  efforts and  certain  defense  litigation,  which we
expect to continue in the near future.

         Amortization   of   intangibles   associated   with  the   purchase  of
subsidiaries  was $1.9 million and $1.2 million for the three months ended March
31,  2001 and 2000,  respectively.  The  increase  for 2001 is  attributable  to
amortization  of the cost in excess of the fair value of the net assets acquired
of the six acquisitions that we completed during 2000.

         Guaranteed  preferred  debentures  expense increased by $1.5 million to
$4.5  million  from $3.0  million for the three  months ended March 31, 2001 and
2000, respectively. The increase for 2001 is solely attributable to the issuance
of trust preferred securities in October 2000 by our financing subsidiary, First
Preferred Capital Trust II.
<PAGE>

         Other  expense was $6.2  million and $3.5  million for the three months
ended March 31, 2001 and 2000, respectively.  Other expense encompasses numerous
general and administrative  expenses including but not limited to travel,  meals
and entertainment,  insurance, freight and courier services,  correspondent bank
charges,   advertising  and  business  development,   miscellaneous  losses  and
recoveries, memberships and subscriptions,  transfer agent fees and sales taxes.
We attribute the majority of the increase in other expense to:

     >>  our acquisitions completed during 2000;

     >>  increased advertising and business development expenses associated with
         various  product  and  service initiatives and enhancements;

     >>  increased   travel   expenses   primarily   associated   with  business
         evelopment  efforts  and   the  ongoing  integration  of  the  recently
         acquired entities into our corporate culture and systems; and

     >>  overall continued growth and expansion of our banking franchise.

Provision for Income Taxes

         The  provision  for income  taxes was $9.1 million and $8.5 million for
the three months ended March 31, 2001 and 2000, representing an effective income
tax rate of 39.1% and 36.2%, respectively.  The increase in the effective income
tax rate for the three months ended March 31, 2001 is primarily attributable to

     >>  the  increase  in  amortization  of  intangibles  associated  with  the
         purchase of subsidiaries; and

     >>  a reduction of the deferred tax  asset valuation  reserve  of  $404,000
         related  to  the utilization of net operating losses  associated with a
         previously acquired entity, which was recorded in March 2000.


                          Interest Rate Risk Management

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

                                                                    March 31, 2001             December 31, 2000
                                                                ----------------------      ----------------------
                                                                Notional       Credit       Notional       Credit
                                                                amount        exposure       amount       exposure
                                                                ------        --------       ------       --------
                                                                         (dollars expressed in thousands)

<S>                                                           <C>                <C>      <C>              <C>
     Cash flow hedges.......................................  $1,255,000         291      1,055,000        3,449
     Fair value hedges......................................     250,000         873         50,000          758
     Interest rate floor agreements.........................     310,000       5,453         35,000            6
     Interest rate cap agreements...........................     450,000       1,352        450,000        3,753
     Interest rate lock commitments.........................      30,100          --          4,100           --
     Forward commitments to sell mortgage-backed securities.      98,000          --         32,000           --
                                                              ==========      ======        =======       ======

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

         During 1998, we entered into $280.0 million  notional  amount  interest
rate swap agreements to effectively  lengthen the repricing  characteristics  of
certain  interest-earning  assets to correspond  more closely with their funding
source  with the  objective  of  stabilizing  cash flow,  and  accordingly,  net
interest income,  over time. The swap agreements,  which have been designated as
cash flow hedges,  initially provided for us to receive a fixed rate of interest
and pay an adjustable rate of interest equivalent to the 90-day London Interbank
Offering  Rate. In March 2000,  the terms of the swap  agreements  were modified
such that we currently  pay an  adjustable  rate of interest  equivalent  to the
daily  weighted  average prime lending rate minus 2.705%.  The terms of the swap
agreements provide for us to pay quarterly and receive payment semiannually. The
amount  receivable by us under the swap agreements was $845,000 and $4.1 million
at March 31, 2001 and December 31, 2000, respectively, and the amount payable by
us under the swap  agreements  was  $654,000  and $744,000 at March 31, 2001 and
December 31, 2000, respectively.


<PAGE>


         During  September 1999, we entered into $175.0 million  notional amount
interest   rate  swap   agreements   to   effectively   lengthen  the  repricing
characteristics  of certain  interest-earning  assets to correspond more closely
with their  funding  source with the  objective of  stabilizing  cash flow,  and
accordingly, net interest income, over time. The swap agreements, which had been
designated  as cash flow  hedges,  provided  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%.  The  terms of the swap  agreements
provided for us to pay and receive interest on a quarterly basis. In April 2001,
we terminated these swap agreements, which would have expired in September 2001,
in order to lengthen the period covered by the swaps.  In  conjunction  with the
termination  of these swap  agreements,  we recorded a pre-tax gain of $985,000.
The amount  receivable by us under the swap  agreements was $119,000 at December
31, 2000, and the amount payable by us under the swap agreements was $165,000 at
December 31, 2000.

         During  September 2000, we entered into $600.0 million  notional amount
of  interest  rate  swap  agreements  to  effectively   lengthen  the  repricing
characteristics  of certain  interest-earning  assets to correspond more closely
with their  funding  source with the  objective of  stabilizing  cash flow,  and
accordingly,  net interest income,  over time. The swap  agreements,  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%. The terms of the swap agreements provide
for us to pay and receive interest on a quarterly  basis. The amount  receivable
by us under the swap  agreements was $1.2 million at March 31, 2001 and December
31,  2000,  and the  amount  payable  by us under the swap  agreements  was $1.1
million and $1.2 million at March 31, 2001 and December 31, 2000,  respectively.
In conjunction  with these interest rate swap  agreements,  we also entered into
$450.0 million  notional amount of interest rate cap agreements to limit the net
interest expense associated with the interest rate swap agreements. The interest
rate cap agreements have maturity dates of September 20, 2004 and provide for us
to  receive  a  quarterly   adjustable  rate  of  interest   equivalent  to  the
differential  between the  three-month  London  Interbank  Offering Rate and the
strike price of 7.50% should the  three-month  London  Interbank  Offering  Rate
exceed  7.50%.  At March 31, 2001 and December 31, 2000,  the carrying  value of
these interest rate cap agreements,  which is included in derivative instruments
in the  accompanying  consolidated  balance  sheet,  was $1.4  million  and $3.8
million, respectively.

         During September 2000, we entered into $25.0 million notional amount of
one-year  interest rate swap  agreements  and $25.0 million of five and one-half
year  interest  rate  swap  agreements  to  effectively  shorten  the  repricing
characteristics  of certain  interest-bearing  liabilities with the objective of
stabilizing net interest income over time. The swap agreements,  which have been
designated  as fair  value  hedges,  provide  for us to receive  fixed  rates of
interest  ranging from 6.60% to 7.25% and pay an adjustable  rate  equivalent to
the three-month London Interbank Offering Rate minus rates ranging from 0.02% to
0.11%.  The terms of the swap  agreements  provide  for us to pay  interest on a
quarterly basis and receive  interest either on a semiannual  basis or an annual
basis.  The amount  receivable by us under the swap  agreements was $967,000 and
$1.0  million at March 31, 2001 and December  31,  2000,  respectively,  and the
amount payable by us under the swap agreements was $94,000 and $119,000 at March
31, 2001 and December 31, 2000, respectively.

         During January 2001, we entered into $200.0 million  notional amount of
interest   rate  swap   agreements   to   effectively   shorten  the   repricing
characteristics  of certain  interest-bearing  liabilities with the objective of
stabilizing net interest income over time. The swap agreements,  which have been
designated  as fair  value  hedges,  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 terms of the swap agreements provide for us
to pay and receive interest on a quarterly  basis.  The amount  receivable by us
under the swap  agreements  was $2.5 million at March 31,  2001,  and the amount
payable by us under the swap agreements was $2.6 million at March 31, 2001.

         During  January  2001,  we also  entered into $200.0  million  notional
amount of an  interest  rate  floor  agreements  to  further  stabilize  our net
interest income in the event of a falling rate scenario. The interest rate floor
agreements have maturity dates of January 9, 2004, and provide for us to receive
a quarterly  adjustable rate of interest equivalent to the differential  between
the  three-month  London  Interbank  Offering Rate and the strike price of 5.50%
should the three-month London Interbank Offering Rate fall below 5.50%. At March
31, 2001, the carrying value of these interest rate floor  agreements,  which is
included in derivative  instruments  in the  accompanying  consolidated  balance
sheet, was $4.5 million.



<PAGE>


         During March 2001, we entered into $200.0  million  notional  amount of
interest   rate  swap   agreements   to   effectively   lengthen  the  repricing
characteristics  of certain  interest-earning  assets to correspond more closely
with their  funding  source with the  objective of  stabilizing  cash flow,  and
accordingly,  net interest income,  over time. The swap  agreements,  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 2.82%. The terms of the swap agreements provide
for us to pay and receive interest on a quarterly  basis. The amount  receivable
by us under the swap  agreements  was $291,000 at March 31, 2001, and the amount
payable by us under the swap agreements was $317,000 at March 31, 2001.

         During March 2001, we also entered into $75.0 million  notional  amount
of an interest rate floor agreement to further stabilize our net interest income
in the event of a falling rate scenario. The interest rate floor agreement has a
maturity  date of March 21,  2004,  and  provides  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 5.00% should
the three-month  London  Interbank  Offering Rate fall below 5.00%. At March 31,
2001,  the  carrying  value of this  interest  rate  floor  agreement,  which is
included in derivative  instruments  in the  accompanying  consolidated  balance
sheet, was $1.0 million.

         During the three months ended March 31, 2001,  the net interest  income
realized on our derivative financial  instruments was $973,000, in comparison to
net  interest  expense  of  $652,000   realized  on  our  derivative   financial
instruments for the comparable period in 2000.

         At March 31, 2001, we had pledged investment  securities  available for
sale with a carrying value of $9.6 million in connection  with our interest rate
swap  agreements.  In addition,  at March 31, 2001,  we had accepted  investment
securities  with a fair value of $31.4 million as collateral in connection  with
the  interest  rate swap  agreements.  We are  permitted  by contract to sell or
repledge the collateral accepted from our counterparties,  however, at March 31,
2001, we had not sold or repledged any of this collateral.

         The maturity dates, notional amounts,  interest rates paid and received
and fair value of interest rate swap agreements outstanding as of March 31, 2001
and December 31, 2000 were as follows:
<TABLE>
<CAPTION>

                                                                  Notional   Interest rate  Interest rate    Fair
                          Maturity date                            amount        paid         received       value
                          -------------                            ------        ----         --------       -----
                                                                         (dollars expressed in thousands)

         March 31, 2001:
<S>                                                            <C>               <C>           <C>       <C>
             September 13, 2001..............................  $   12,500        5.02%         6.80%     $     103
             September 21, 2001..............................      12,500        4.83          6.60            109
             September 27, 2001..............................     175,000        5.30          6.14          1,164
             June 11, 2002...................................      15,000        5.30          6.00            219
             September 16, 2002..............................     195,000        5.30          5.36          1,619
             September 18, 2002..............................      70,000        5.30          5.33            549
             January 9, 2004.................................      50,000        5.70          5.37            397
             September 20, 2004..............................     600,000        5.30          6.78         30,630
             March 21, 2005..................................     200,000        5.18          5.24             33
             January 9, 2006.................................     150,000        5.70          5.51            648
             March 13, 2006..................................      12,500        4.93          7.25           (171)
             March 22, 2006..................................      12,500        4.78          7.20           (160)
                                                               ----------                                ---------
                                                               $1,505,000        5.32          6.07      $  35,140
                                                               ==========       =====         =====      =========

         December 31, 2000:
             September 13, 2001..............................  $   12,500        6.56%         6.80%            42
             September 21, 2001..............................      12,500        6.47          6.60             43
             September 27, 2001..............................     175,000        6.80          6.14             65
             June 11, 2002...................................      15,000        6.80          6.00              7
             September 16, 2002..............................     195,000        6.80          5.36         (1,776)
             September 18, 2002..............................      70,000        6.80          5.33           (690)
             September 20, 2004..............................     600,000        6.80          6.78         16,869
             March 13, 2006..................................      12,500        6.47          7.25              5
             March 22, 2006..................................      12,500        6.39          7.20              6
                                                               ----------                                ---------
                                                               $1,105,000        6.70          6.43      $  14,571
                                                               ==========       =====         =====      =========

</TABLE>

<PAGE>


                       Loans and Allowance for Loan Losses

         Interest earned on our loan portfolio  represents the principal  source
of income for our  subsidiary  banks.  Interest and fees on loans were 92.3% and
91.8% of total  interest  income for the three  months  ended March 31, 2001 and
2000,  respectively.  Total loans,  net of unearned  discount,  increased  $90.0
million to $4.84 billion,  or 82.7% of total assets, at March 31, 2001, compared
to $4.75 billion,  or 80.9% of total assets,  at December 31, 2000. The increase
in loans,  as  summarized  on our  consolidated  balance  sheets,  is  primarily
attributable  to an  increase  of  $114.3  million  in our  loans  held for sale
portfolio to $183.4 million at March 31, 2001 from $69.1 million at December 31,
2000.  We attribute  this  increase to be the direct  result of a  significantly
higher volume of  residential  mortgage  loans  originated,  including  both new
fundings  as well as  refinancings,  as a result  of  declining  interest  rates
experienced during the first quarter of 2001. This increase was partially offset
by a  decline  in our  consumer  and  installment  portfolio,  net  of  unearned
discount,  to $123.2  million at March 31, 2001 from $174.3  million at December
31, 2000. This decrease  reflects  reductions in new loan volumes,  repayment of
principal on the existing  portfolio and the sale of our credit card  portfolio,
and is also consistent with our objectives of de-emphasizing indirect automobile
lending and expanding  commercial lending. In addition,  the overall increase in
loans, net of unearned discount,  was further offset by an anticipated amount of
attrition  associated with our acquisitions  completed during the fourth quarter
of 2000.  While we  anticipate  some  additional  run-off of the loan  portfolio
associated with our recent acquisitions, we do not expect this trend to continue
this year.

         Nonperforming  assets include nonaccrual loans,  restructured loans and
other real estate.  The following table presents the categories of nonperforming
assets and certain ratios as of the dates indicated:
<TABLE>
<CAPTION>

                                                                                    March 31,     December 31,
                                                                                      2001            2000
                                                                                      ----            ----
                                                                                 (dollars expressed in thousands)

         Commercial, financial and agricultural:
<S>                                                                               <C>                 <C>
              Nonaccrual.....................................................    $    28,643          22,437
              Restructured terms.............................................             --              22
         Real estate construction and development:
              Nonaccrual.....................................................         11,302          11,068
         Real estate mortgage:
              Nonaccrual.....................................................         24,272          16,524
              Restructured terms.............................................          2,944           2,952
         Consumer and installment:
              Nonaccrual.....................................................             34             155
              Restructured terms.............................................              8               8
                                                                                 -----------      ----------
                  Total nonperforming loans..................................         67,203          53,166
         Other real estate...................................................          2,558           2,487
                                                                                 -----------      ----------
                  Total nonperforming assets.................................    $    69,761          55,653
                                                                                 ===========      ==========

         Loans, net of unearned discount.....................................    $ 4,835,077       4,752,265
                                                                                 ===========      ==========

         Loans past due 90 days or more and still accruing...................    $     9,474           3,009
                                                                                 ===========      ==========

         Allowance for loan losses to loans..................................           1.61%           1.72%
         Nonperforming loans to loans........................................           1.39            1.12
         Allowance for loan losses to nonperforming loans....................         116.06          153.47
         Nonperforming assets to loans and other real estate.................           1.44            1.17
                                                                                 ===========      ==========
</TABLE>

         Nonperforming  loans (also considered  impaired  loans),  consisting of
loans on nonaccrual status and certain restructured loans, were $67.2 million at
March 31, 2001 in comparison to $53.2 million at December 31, 2000. We attribute
the increase in  nonperforming  loans and  past-due  loans to be  reflective  of
normal,  cyclical trends experienced within the banking industry during times of
economic  slow down.  Consistent  with the  recent  general  economic  slow down
experienced within our prevalent markets, we anticipate this trend will continue
in the upcoming  months and  therefore,  we expect our  nonperforming  loans and
past-due  loans to  remain at a higher  level in the near  future.  Despite  the
increase in  nonperforming  loans,  these loans represent only 1.39% of our loan
portfolio.


<PAGE>


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

                                                                                        Three months ended
                                                                                             March 31,
                                                                                      ----------------------
                                                                                      2001              2000
                                                                                      ----              ----
                                                                                (dollars expressed in thousands)

<S>                                                                                 <C>                 <C>
         Allowance for loan losses, beginning of period.........................    $  81,592           68,611
              Acquired allowances for loan losses...............................           --              799
                                                                                    ---------          -------
                                                                                       81,592           69,410
                                                                                    ---------          -------
              Loans charged-off.................................................       (8,903)          (3,214)
              Recoveries of loans previously charged-off........................        1,917            4,081
                                                                                    ---------          -------
              Net loan (charge-offs) recoveries.................................       (6,986)             867
                                                                                    ---------          -------
              Provision for loan losses.........................................        3,390            3,582
                                                                                    ---------          -------
         Allowance for loan losses, end of period...............................    $  77,996           73,859
                                                                                    =========          =======
</TABLE>

         The  allowance  for loan losses is monitored on a monthly  basis.  Each
month, the credit  administration  department  provides management with detailed
lists of loans on the watch list and  summaries of the entire loan  portfolio of
each subsidiary bank by risk rating.  These are coupled with analyses of changes
in the risk profiles of the  portfolios,  changes in past-due and  nonperforming
loans and changes in watch list and classified  loans over time. In this manner,
we continually  monitor the overall increases or decreases in the levels of risk
in the portfolios.  Factors are applied to the loan portfolios for each category
of loan risk to determine  acceptable  levels of allowance  for loan losses.  We
derive these factors from the actual loss experience of our subsidiary banks and
from  published  national  surveys  of norms  in the  industry.  The  calculated
allowances required for the portfolios are then compared to the actual allowance
balances to determine  the  provisions  necessary to maintain the  allowances at
appropriate  levels.  In  addition,  management  exercises  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 and the ratio of net loans to total assets,  and
the  economic  conditions  of the  regions  in which we  operate.  Based on this
quantitative and qualitative analysis,  provisions are made to the allowance for
loan losses.  Such  provisions are reflected in our  consolidated  statements of
income.

                                    Liquidity

         Our liquidity and the liquidity of our subsidiary  banks is the ability
to  maintain a cash flow which is  adequate  to fund  operations,  service  debt
obligations and meet  obligations and other  commitments on a timely basis.  Our
subsidiary  banks  receive  funds for liquidity  from  customer  deposits,  loan
payments,  maturities  of  loans  and  investments,  sales  of  investments  and
earnings.  In  addition,  we may avail  ourselves  of other  sources of funds by
issuing  certificates of deposit in denominations of $100,000 or more, borrowing
federal  funds,  selling  securities  sold under  agreements to  repurchase  and
utilizing  borrowings  from the  Federal  Home Loan Banks and other  borrowings,
including our revolving  credit line.  The aggregate  funds  acquired from these
sources  were $718.4  million and $723.5  million at March 31, 2001 and December
31, 2000, 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,
short-term borrowings and our revolving note payable, at March 31, 2001:

                                                            (dollars expressed
                                                               in thousands)

         Three months or less...............................     $ 320,010
         Over three months through six months...............       143,026
         Over six months through twelve months..............       113,087
         Over twelve months.................................       142,318
                                                                 ---------
                Total.......................................     $ 718,441
                                                                 =========
<PAGE>

         In  addition  to these  sources  of funds,  our  subsidiary  banks have
established  borrowing  relationships  with the Federal  Reserve  Banks in their
respective  districts.  These  borrowing  relationships,  which are  secured  by
commercial loans,  provide an additional liquidity facility that may be utilized
for contingency purposes. At March 31, 2001 and December 31, 2000, the borrowing
capacity of our subsidiary banks under these agreements was approximately $917.5
million and $1.24 billion,  respectively.  In addition,  our  subsidiary  banks'
borrowing capacity through their  relationships with the Federal Home Loan Banks
was  approximately  $330.3  million  and $262.1  million  at March 31,  2001 and
December 31, 2000, respectively.

         Management  believes the available  liquidity and operating  results of
our  subsidiary  banks will be  sufficient  to  provide  funds for growth and to
permit the  distribution of dividends to us sufficient to meet our operating and
debt service requirements,  both on a short-term and long-term basis, and to pay
the  dividends  on the  trust  preferred  securities  issued  by  our  financing
subsidiaries,  First Preferred Capital Trust I and First Preferred Capital Trust
II, and FBA's financing subsidiary, First America Capital Trust.

                       Effects of New Accounting Standards

         In  September  2000,  the FASB  issued SFAS No. 140 --  Accounting  for
Transfers and Servicing of Financial Assets and  Extinguishments of Liabilities,
a  replacement  of FASB  Statement  125.  SFAS 140  revises  the  standards  for
accounting  for  securitizations  and other  transfers of  financial  assets and
collateral and requires certain  disclosures.  SFAS 140 provides  accounting and
reporting  standards  for  transfers  and  servicing  of  financial  assets  and
extinguishments of liabilities which are based on the consistent  application of
a  financial-components  approach.  SFAS  140 is  effective  for  transfers  and
servicing of financial assets and extinguishments of liabilities occurring after
March 31,  2001,  and is  effective  for  recognition  and  reclassification  of
collateral  and for  disclosures  relating to  securitization  transactions  and
collateral  for fiscal  years ending  after  December 15, 2001.  On December 31,
2000, we implemented the disclosure requirements of SFAS 140, which did not have
a material effect on our consolidated  financial  statements.  We have evaluated
the additional  requirements of SFAS 140 to determine their potential  impact on
our  consolidated  financial  statements  and do not  believe  they  will have a
material effect on our consolidated financial statements.



<PAGE>


       ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         At December 31, 2000, our risk management  program's  simulation  model
indicated a loss of projected  net interest  income in the event of a decline in
interest rates.  While a decline in interest rates of less than 100 basis points
was projected to have a relatively minimal impact on our net interest income, an
instantaneous,  parallel decline in the interest yield curve of 100 basis points
indicated a pre-tax projected loss of approximately 5.2% of net interest income,
and an instantaneous,  parallel decline in the interest yield curve of 200 basis
points indicated a pre-tax projected loss of approximately  7.1% of net interest
income, based on assets and liabilities at December 31, 2000. At March 31, 2001,
we remain in an "asset-sensitive"  position and thus, remain subject to a higher
level of risk in a declining  interest-rate  environment,  as experienced during
the first  quarter of 2001.  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 rates would have over time. Our
asset-sensitive  position,  coupled with  reductions  in the prime  lending rate
throughout the last three months,  is reflected in our reduced net interest rate
margin for the three  months  ended  March 31, 2001 as further  discussed  under
"--Results  of  Operations."  During the three months ended March 31, 2001,  our
asset-sensitive  position  and overall  susceptibility  to market risks have not
changed materially.



<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
       --------------                                -----------
           None                                    Not Applicable

(b) We filed no reports on Form 8-K during the three months ended March 31,
    2001.




<PAGE>


                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                  FIRST BANKS, INC.



                                  By: /s/  James F. Dierberg
                                     ------------------------------------------
                                           James F. Dierberg
                                           Chairman of the Board of Directors
                                           and Chief Executive Officer
May 14, 2001                               (Principal Executive Officer)



                                  By: /s/  Frank H. Sanfilippo
                                      ------------------------------------------
                                           Frank H. Sanfilippo
                                           Executive Vice President and
                                           Chief Financial Officer
May 14, 2001                               (Principal Financial
                                           and Accounting Officer)