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 June 30, 2000

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

               For the transition period from _______ to ________

                           Commission File No. 0-20632

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

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

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

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

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

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


         Indicate  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 July 31, 2000
                -----                              ------------------

   Common Stock, $250.00 par value                        23,661


<PAGE>


                                FIRST BANKS, INC.

                                TABLE OF CONTENTS



<TABLE>
<CAPTION>


                                                                                                           Page
                                                                                                           ----
PART I.  FINANCIAL INFORMATION

     ITEM 1.  FINANCIAL STATEMENTS - (UNAUDITED):

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

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

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

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

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

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

     ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..........................          23

PART II. OTHER INFORMATION

     ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.....................................................         24

SIGNATURES   ......................................................................................         25

</TABLE>

<PAGE>


                         PART I - FINANCIAL INFORMATION
                          ITEM 1 - FINANCIAL STATEMENTS

                                FIRST BANKS, INC.

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

<TABLE>
<CAPTION>

                                                                                        June 30,      December 31,
                                                                                          2000            1999
                                                                                          ----            ----


                                             ASSETS
                                             ------


Cash and cash equivalents:
<S>                                                                                   <C>                  <C>
     Cash and due from banks.......................................................   $    137,265         126,720
     Interest-bearing deposits with other financial institutions
       with maturities of three months or less.....................................          3,424           1,674
     Federal funds sold............................................................         19,100          42,500
                                                                                      ------------     -----------
               Total cash and cash equivalents.....................................        159,789         170,894
                                                                                      ------------     -----------

Investment securities:
     Available for sale, at fair value.............................................        414,978         430,093
     Held to maturity, at amortized cost (fair value of $21,302 and
       $21,476 at June 30, 2000 and December 31, 1999, respectively)...............         21,342          21,554
                                                                                      ------------     -----------
               Total investment securities.........................................        436,320         451,647
                                                                                      ------------     -----------

Loans:
     Commercial, financial and agricultural........................................      1,284,606       1,086,919
     Real estate construction and development......................................        816,687         795,081
     Real estate mortgage..........................................................      1,996,265       1,851,569
     Consumer and installment......................................................        195,930         233,374
     Loans held for sale...........................................................         40,067          37,412
                                                                                      ------------     -----------
               Total loans.........................................................      4,333,555       4,004,355
     Unearned discount.............................................................         (7,162)         (8,031)
     Allowance for loan losses.....................................................        (77,822)        (68,611)
                                                                                      ------------     -----------
               Net loans...........................................................      4,248,571       3,927,713
                                                                                      ------------     -----------

Bank premises and equipment, net of accumulated
     depreciation and amortization.................................................         80,922          75,647
Intangibles associated with the purchase of subsidiaries...........................         47,995          46,085
Accrued interest receivable........................................................         37,331          33,491
Deferred income taxes..............................................................         63,930          51,972
Other assets.......................................................................        105,614         110,298
                                                                                      ------------     -----------
               Total assets........................................................   $  5,180,472       4,867,747
                                                                                      ============     ===========


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 per share data)
<TABLE>
<CAPTION>


                                                                                        June 30,      December 31,
                                                                                          2000            1999
                                                                                          ----            ----


                                           LIABILITIES
                                           -----------
Deposits:
     Demand:
<S>                                                                                   <C>                  <C>
       Non-interest-bearing........................................................   $    649,606         606,064
       Interest-bearing............................................................        396,400         415,113
     Savings.......................................................................      1,269,595       1,198,314
     Time:
       Time deposits of $100 or more...............................................        353,839         339,214
       Other time deposits.........................................................      1,787,013       1,693,109
                                                                                      ------------     -----------
          Total deposits...........................................................      4,456,453       4,251,814
Short-term borrowings..............................................................        150,812          73,554
Note payable.......................................................................         58,500          64,000
Accrued interest payable...........................................................         13,067          11,607
Deferred income taxes..............................................................         10,639           6,582
Accrued expenses and other liabilities.............................................         29,124          25,616
Minority interest in subsidiary....................................................         12,142          12,058
                                                                                      ------------     -----------
          Total liabilities........................................................      4,730,737       4,445,231
                                                                                      ------------     -----------

Guaranteed preferred beneficial interests in:
     First Banks, Inc. subordinated debentures.....................................         83,446           83,394
     First Banks America, Inc. subordinated debentures.............................         44,249           44,217
                                                                                      ------------     ------------
          Total guaranteed preferred beneficial interests in
              subordinated debentures..............................................        127,695          127,611
                                                                                      ------------     ------------

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

Preferred stock:
     $1.00 par value, 5,000,000 shares authorized, no shares issued
       and outstanding at June 30, 2000 and December 31, 1999......................             --              --
     Class A convertible, adjustable rate, $20.00 par value, 750,000
       shares authorized, 641,082 shares issued and outstanding....................         12,822          12,822
     Class B adjustable rate, $1.50 par value, 200,000 shares authorized,
       160,505 shares issued and outstanding.......................................            241             241
Common stock, $250.00 par value, 25,000 shares authorized,
     23,661 shares issued and outstanding..........................................          5,915           5,915
Capital surplus....................................................................          2,989           3,318
Retained earnings..................................................................        299,190         270,259
Accumulated other comprehensive income.............................................            883           2,350
                                                                                      ------------     -----------
          Total stockholders' equity...............................................        322,040         294,905
                                                                                      ------------     -----------
          Total liabilities and stockholders' equity...............................   $  5,180,472       4,867,747
                                                                                      ============     ===========
</TABLE>


<PAGE>





                                FIRST BANKS, INC.

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


                                                                         Three months ended       Six months ended
                                                                               June 30,               June 30,
                                                                         ------------------    -------------------
                                                                            2000     1999        2000       1999
                                                                            ----     ----        ----       ----
Interest income:
<S>                                                                     <C>         <C>         <C>        <C>
     Interest and fees on loans.......................................  $ 96,148    78,964      185,826    153,639
     Investment securities............................................     7,149     6,445       14,019     14,107
     Federal funds sold and other.....................................       864       232        2,033        455
                                                                        --------    ------     --------   --------
         Total interest income........................................   104,161    85,641      201,878    168,201
                                                                        --------    ------     --------   --------
Interest expense:
     Deposits:
       Interest-bearing demand........................................     1,420     1,182        2,885      2,296
       Savings........................................................    12,434    11,085       24,070     22,014
       Time deposits of $100 or more..................................     2,840     2,691        5,855      5,466
       Other time deposits............................................    26,315    19,831       50,222     40,961
     Interest rate exchange agreements, net...........................        --     1,305           --      2,588
     Short-term borrowings............................................     1,406     1,420        2,515      2,259
     Note payable.....................................................     1,356       636        2,511      1,532
                                                                        --------    ------     --------   --------
         Total interest expense.......................................    45,771    38,150       88,058     77,116
                                                                        --------    ------     --------   --------
         Net interest income..........................................    58,390    47,491      113,820     91,085
Provision for loan losses.............................................     3,620     3,373        7,202      5,863
                                                                        --------    ------     --------   --------
         Net interest income after provision for loan losses..........    54,770    44,118      106,618     85,222
                                                                        --------    ------     --------   --------
Noninterest income:
     Service charges on deposit accounts and customer service fees....     4,872     4,475        9,464      8,357
     Gain on mortgage loans sold and held for sale....................     1,876     1,502        3,268      3,834
     Net gain on sales of available-for-sale securities...............        --       115          379        792
     Net loss on trading securities...................................        --        --           --       (303)
     Other............................................................     4,723     7,423        7,924     10,438
                                                                        --------    ------     --------   --------
         Total noninterest income.....................................    11,471    13,515       21,035     23,118
                                                                        --------    ------     --------   --------
Noninterest expense:
     Salaries and employee benefits...................................    18,346    15,569       35,237     30,071
     Occupancy, net of rental income..................................     3,433     2,959        6,655      5,842
     Furniture and equipment..........................................     2,998     2,098        5,673      3,999
     Postage, printing and supplies...................................     1,075     1,011        2,183      2,153
     Data processing fees.............................................     5,474     4,687       10,663      9,223
     Legal, examination and professional fees.........................     1,014     1,922        2,003      3,242
     (Gain) loss on sales of other real estate, net of expenses.......       (45)       39         (224)       (14)
     Guaranteed preferred debentures..................................     2,998     3,014        6,012      6,028
     Other............................................................     6,624     5,949       11,508     12,191
                                                                        --------    ------     --------   --------
         Total noninterest expense....................................    41,917    37,248       79,710     72,735
                                                                        --------    ------     --------   --------
         Income before provision for income taxes and minority
           interest in income of subsidiary...........................    24,324    20,385       47,943     35,605
Provision for income taxes............................................     9,197     7,465       17,741     13,103
                                                                        --------    ------     --------   --------
         Income before minority interest in income of subsidiary......    15,127    12,920       30,202     22,502
Minority interest in income of subsidiary.............................       455       361          943        672
                                                                        --------    ------     --------   --------
         Net income...................................................    14,672    12,559       29,259     21,830
Preferred stock dividends.............................................       132       132          328        328
                                                                        --------    ------     --------   --------
         Net income available to common stockholders..................  $ 14,540    12,427       28,931     21,502
                                                                        ========    ======     ========   ========
Earnings per common share:
     Basic............................................................  $ 614.51    525.23     1,222.71     908.75
     Diluted..........................................................    594.12    505.15     1,182.47     877.36
                                                                        ========    ======     ========   ========

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

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


<PAGE>





                                FIRST BANKS, INC.

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

<TABLE>
<CAPTION>


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

<S>                                                <C>          <C>    <C>         <C>   <C>      <C>       <C>     <C>
Consolidated balances, December 31, 1998.........  $12,822      241    5,915       780            231,867   11,738  263,363
Six months ended June 30, 1999:
    Comprehensive income:
      Net income.................................       --       --       --        --   21,830    21,830       --   21,830
      Other comprehensive income, net of tax
        Unrealized losses on securities, net of
          reclassification adjustment (1)........       --       --       --        --   (4,916)       --   (4,916)  (4,916)
                                                                                         ------
      Comprehensive income.......................                                        16,914
                                                                                         ======
    Class A preferred stock dividends,
      $0.50 per share............................       --       --       --        --               (321)      --     (321)
    Class B preferred stock dividends,
      $0.04 per share............................       --       --       --        --                 (7)      --       (7)
    Effect of capital stock transactions of
       majority-owned subsidiary.................       --       --       --    (3,040)                --       --   (3,040)
    Reclassification of retained earnings........       --       --       --     5,000             (5,000)      --       --
    Reduction of deferred tax asset
       valuation reserve........................        --       --       --       270                 --       --      270
                                                    ------     ----    -----    ------            -------    -----  -------
Consolidated balances, June 30, 1999.............   12,822      241    5,915     3,010            248,369    6,822  277,179
Six months ended December 31, 1999:
    Comprehensive income:
      Net income.................................       --       --       --        --   22,348    22,348       --   22,348
      Other comprehensive income, net of tax
        Unrealized losses on securities, net of
          reclassification adjustment (1)........       --       --       --        --   (4,472)       --   (4,472)  (4,472)
                                                                                         ------
      Comprehensive income.......................                                        17,876
                                                                                         ======
    Class A preferred stock dividends,
      $0.70 per share............................       --       --       --        --               (448)      --     (448)
    Class B preferred stock dividends,
      $0.07 per share............................       --       --       --        --                (10)      --      (10)
    Effect of capital stock transactions of
       majority-owned subsidiary.................       --       --       --      (233)                --       --     (233)
    Reduction of deferred tax asse
      valuation allowance........................       --       --       --       541                 --       --      541
                                                    ------     ----    -----     -----            -------    -----  -------
Consolidated balances, December 31, 1999.........   12,822      241    5,915     3,318            270,259    2,350  294,905
Six months ended June 30, 2000:
    Comprehensive income:
      Net income.................................       --       --       --        --   29,259    29,259       --   29,259
      Other comprehensive income, net of tax
        Unrealized losses on securities, net of
          reclassification adjustment (1)........       --       --       --        --   (1,467)       --   (1,467)  (1,467)
                                                                                         ------
      Comprehensive income.......................                                        27,792
                                                                                         ======
    Class A preferred stock dividends,
      $0.50 per share............................       --       --       --        --               (321)      --     (321)
    Class B preferred stock dividends,
      $0.04 per share............................       --       --       --        --                 (7)      --       (7)
    Effect of capital stock transactions of
       majority-owned subsidiary.................       --       --       --      (329)                --       --     (329)
                                                   -------    -----     ----     -----            -------   ------  -------
Consolidated balances, June 30, 2000.............  $12,822      241    5,915     2,989            299,190      883  322,040
                                                   =======    =====    =====     =====            =======   ======  =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

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

                                                                           Three months ended  Six months ended  Six months ended
                                                                               June 30,            June 30,        December 31,
                                                                           -----------------   ---------------     ------------
                                                                            2000      1999      2000      1999         1999
                                                                            ----      ----      ----      ----         ----

<S>                                                                        <C>        <C>     <C>       <C>          <C>
     Unrealized losses arising during the period.......................    $  (613)   (2,467) (1,221)   (4,401)      (4,473)
     Less reclassification adjustment for gains included in net income.         --        76     246       515           (1)
                                                                           -------   -------   -----     -----        -----
     Unrealized losses on securities...................................    $  (613)   (2,543) (1,467)   (4,916)      (4,472)
                                                                           =======   =======  ======    ======       ======
</TABLE>


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


<PAGE>





                                FIRST BANKS, INC.

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

                                                                                               Six months ended
                                                                                                    June 30,
                                                                                              ------------------
                                                                                               2000        1999

Cash flows from operating activities:
<S>                                                                                          <C>          <C>
     Net income...........................................................................   $ 29,259     21,830
     Adjustments to reconcile net income to net cash (used in) provided by
      operating activities:
       Depreciation and amortization of bank premises and equipment.......................      4,578      3,293
       Amortization, net of accretion.....................................................      3,801      6,379
       Originations and purchases of loans held for sale..................................   (238,508)  (297,565)
       Proceeds from the sale of loans held for sale......................................    185,316    352,434
       Provision for loan losses..........................................................      7,202      5,863
       Provision for income taxes.........................................................     17,741     13,103
       Payments of income taxes...........................................................     (5,382)   (11,547)
       Increase in accrued interest receivable............................................     (3,295)    (2,462)
       Net decrease in trading securities.................................................         --      3,425
       Interest accrued on liabilities....................................................     88,058     77,116
       Payments of interest on liabilities................................................    (87,088)   (73,901)
       Gain on sale of branch facility....................................................     (1,355)    (4,473)
       Net gain on sales of available-for-sale investment securities......................       (379)      (792)
       Other operating activities, net....................................................    (12,080)       874
       Minority interest in income of subsidiary..........................................        943        672
                                                                                             --------    -------
         Net cash (used in) provided by operating activities..............................    (11,189)    94,249
                                                                                             --------    -------

Cash flows from investing activities:
     Cash paid for acquired entities, net of cash and cash equivalents received...........     (2,709)   (17,245)
     Proceeds from sales of investment securities available for sale......................      8,148     88,714
     Maturities of investment securities available for sale...............................    191,276     85,650
     Maturities of investment securities held to maturity.................................        679      1,503
     Purchases of investment securities available for sale................................   (149,971)   (15,029)
     Purchases of investment securities held to maturity..................................       (489)    (1,982)
     Net increase in loans................................................................   (254,431)  (120,721)
     Recoveries of loans previously charged-off...........................................      6,180      4,206
     Purchases of bank premises and equipment.............................................    (10,039)    (8,904)
     Other investing activities...........................................................      2,183     (3,668)
                                                                                             --------    -------
         Net cash (used in) provided by investing activities..............................   (209,173)    12,524
                                                                                             --------    -------

Cash flows from financing activities:
     Increase (decrease) in demand and savings deposits...................................     55,340    (83,907)
     Increase in time deposits............................................................     81,595     26,221
     Increase in federal funds purchased..................................................     36,100         --
     Decrease in Federal Home Loan Bank advances..........................................         --    (50,000)
     Increase in securities sold under agreements to repurchase...........................     41,158      6,524
     Decrease in note payable.............................................................     (5,500)    (2,048)
     Payment of preferred stock dividends.................................................       (328)      (328)
     Sale of branch deposits..............................................................        892    (48,979)
                                                                                             --------   --------
         Net cash provided by (used in) financing activities..............................    209,257   (152,517)
                                                                                             --------   --------
         Net decrease in cash and cash equivalents........................................    (11,105)   (45,744)
Cash and cash equivalents, beginning of period............................................    170,894    214,762
                                                                                             --------   --------
Cash and cash equivalents, end of period..................................................   $159,789    169,018
                                                                                             ========   ========

Noncash investing and financing activities:
     Loans transferred to other real estate...............................................   $  1,081      1,189
     Loans held for sale transferred to available-for-sale investment securities..........      7,186         --
     Loans held for sale transferred to loans.............................................     46,153      9,206
                                                                                             ========   ========
</TABLE>

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

                                FIRST BANKS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  BASIS OF PRESENTATION

         The accompanying consolidated financial statements of First Banks, Inc.
and  subsidiaries  (First Banks or the Company) are unaudited and should be read
in conjunction with the consolidated  financial statements contained in the 1999
Annual Report on Form 10-K.  The  consolidated  financial  statements  have been
prepared in accordance with generally accepted accounting principles and conform
to practices prevalent among financial  institutions.  Management of First Banks
has made a number of  estimates  and  assumptions  relating to the  reporting of
assets and liabilities  and the disclosure of contingent  assets and liabilities
to prepare the  consolidated  financial  statements in conformity with generally
accepted accounting principles.  In the opinion of management,  all adjustments,
consisting  of  normal  recurring  accruals  considered  necessary  for  a  fair
presentation  of the results of  operations  for the interim  periods  presented
herein, have been included. Operating results for the three and six months ended
June 30, 2000 are not necessarily indicative of the results that may be expected
for the year ending December 31, 2000.

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

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

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

         The  Subsidiary  Banks  and FCG are  wholly  owned by their  respective
parent companies except FBA, which was 84.33% and 83.37% owned by First Banks at
June 30, 2000 and December 31, 1999, respectively.

(2)  ACQUISITIONS

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

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


<PAGE>


         On  March  21,  2000,  First  Banks  executed  a  definitive  agreement
providing  for the  acquisition  of Bank of Ventura,  headquartered  in Ventura,
California,  by First Banks. Under the terms of the agreement,  the shareholders
of Bank of Ventura  will receive  $25.52 per share,  subject to  adjustment  for
earnings  from March 1, 2000  through the month  prior to  closing.  At June 30,
2000, Bank of Ventura had $65.5 million in total assets, $38.6 million in loans,
net of unearned  discount,  $16.7  million in  investment  securities  and $59.3
million in deposits.  First Banks expects this transaction,  which is subject to
the approval of Bank of Ventura shareholders, will be completed during the third
quarter of 2000.

         On June 27, 2000, FBA and Commercial Bank of San Francisco  (Commercial
Bank)  executed  a  definitive   agreement  providing  for  the  acquisition  of
Commercial  Bank,  San  Francisco,  California,  by FBA.  Under the terms of the
agreement,  the shareholders of Commercial Bank will receive $17.75 per share in
cash, or a total of  approximately  $29.5 million.  Commercial Bank operates one
branch  office  in the San  Francisco  financial  district.  At June  30,  2000,
Commercial Bank had $178.4 million in total assets,  $97.4 million in loans, net
of unearned discount,  $63.8 million in investment securities and $132.7 million
in  deposits.  FBA  expects  this  transaction,  which is subject to  regulatory
approvals and the approval of Commercial  Bank  shareholders,  will be completed
during the first quarter of 2001.

         On June 29, 2000,  First Banks and FBA executed a definitive  agreement
providing for the acquisition of First Banks' wholly owned subsidiary,  FB&T, by
FBA.  Under the terms of the  agreement,  First Banks will  exchange  all of the
outstanding  stock of FB&T for  approximately 6.5 million shares of common stock
of  FBA,  which  will  increase  First  Banks'  ownership  percentage  of FBA to
approximately 93.0%. This transaction and related internal  reorganizations will
allow First Banks and FBA to merge their Texas and  California  interests.  FB&T
operates 26 banking  locations in the counties of Los Angeles,  Orange,  Ventura
and Santa Barbara,  California as well as branches in San Jose and Walnut Creek,
in Northern California.  First Banks expects this transaction,  which is subject
to regulatory and  shareholder  approvals,  will be completed  during the fourth
quarter of 2000.

(3)      EARNINGS PER SHARE

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

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

     Three months ended June 30, 2000:
<S>                                                                          <C>               <C>         <C>
         Basic EPS - income available to common stockholders.............    $  14,540         23,661      $   614.51
                                                                                                           ==========
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          128          1,028
                                                                             ---------        -------
         Diluted EPS - income available to common stockholders...........    $  14,668         24,689      $   594.12
                                                                             =========        =======      ==========

     Three months ended June 30, 1999:
         Basic EPS - income available to common stockholders.............    $  12,427         23,661      $   525.23
                                                                                                           ==========
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          128          1,194
                                                                             ---------        -------
         Diluted EPS - income available to common stockholders...........    $  12,555         24,855      $   505.15
                                                                             =========        =======      ==========

     Six months ended June 30, 2000:
         Basic EPS - income available to common stockholders.............    $  28,931         23,661      $ 1,222.71
                                                                                                           ==========
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          321          1,076
                                                                             ---------        -------
         Diluted EPS - income available to common stockholders...........    $  29,252         24,737      $ 1,182.47
                                                                             =========        =======      ==========

     Six months ended June 30, 1999:
         Basic EPS - income available to common stockholders.............    $  21,502         23,661      $   908.75
                                                                                                           ==========
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          321          1,212
                                                                             ---------        -------
         Diluted EPS - income available to common stockholders...........    $  21,823         24,873      $   877.36
                                                                             =========        =======      ==========
</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 $565,000 and $1.1 million for the three and six
months ended June 30, 2000, and $507,000 and $924,000 for the comparable periods
in  1999,   respectively,   in  commissions  paid  by  unaffiliated  third-party
companies.  The commissions received were primarily in connection with the sales
of  annuities  and  securities  and other  insurance  products  to  individuals,
including customers of the Subsidiary Banks.

         First Services,  L.P., a limited partnership  indirectly owned by First
Banks'  Chairman and his adult children,  provides data processing  services and
operational  support for First Banks,  Inc. and its Subsidiary  Banks. Fees paid
under  agreements with First  Services,  L.P. were $4.7 million and $9.2 million
for the three and six months  ended June 30,  2000,  and $4.1  million  and $8.2
million  for the  comparable  periods  in 1999,  respectively.  During the three
months ended June, 2000 and 1999, First Services, L.P. paid First Banks $435,000
and  $269,000,  respectively,  and during the six months ended June 30, 2000 and
1999, First Services, L.P. paid First Banks $889,000 and $484,000, 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 June 30, 2000,  First Banks and the Subsidiary  Banks were each
well capitalized under the applicable regulations.

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

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

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

         Total capital (to risk-weighted assets):
<S>                                                       <C>          <C>               <C>                <C>
              First Banks.............................    10.26%       10.05%            8.0%               10.0%
              First Bank..............................    10.69        10.60             8.0                10.0
              FB&T....................................    10.96        10.96             8.0                10.0
              FB California...........................    11.72        10.81             8.0                10.0
              FB Texas................................    12.04        12.42             8.0                10.0
              Redwood Bank............................    11.55        11.17             8.0                10.0

         Tier 1 capital (to risk-weighted assets):
              First Banks.............................     8.49%        8.00%            4.0%                6.0%
              First Bank..............................     9.44         9.35             4.0                 6.0
              FB&T....................................     9.70         9.70             4.0                 6.0
              FB California...........................    10.46         9.56             4.0                 6.0
              FB Texas................................    10.78        11.17             4.0                 6.0
              Redwood Bank............................    10.34        10.15             4.0                 6.0

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


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

         Tier 1 capital (to average assets):
<S>                                                        <C>          <C>              <C>                 <C>
              First Banks.............................     7.80%        7.14%            3.0%                5.0%
              First Bank..............................     8.50         8.10             3.0                 5.0
              FB&T....................................     8.97         8.57             3.0                 5.0
              FB California...........................     9.72         9.95             3.0                 5.0
              FB Texas................................    10.32        10.39             3.0                 5.0
              Redwood Bank............................     9.17         8.48             3.0                 5.0
</TABLE>

(6)      BUSINESS SEGMENT RESULTS

         First Banks' business  segments are First Bank, FB California,  Redwood
Bank, FB Texas and FB&T. The reportable  business  segments are consistent  with
the management  structure of First Banks and the Subsidiary  Banks, the internal
reporting  system  that  monitors  performance  and, in all  material  respects,
generally  accepted  accounting  principles  and  practices  predominant  in the
banking industry.

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

         The business segment results are summarized as follows:





<PAGE>
<TABLE>
<CAPTION>
                                                           First Bank            FB California (1)         Redwood Bank (2)
                                                    -----------------------   ----------------------    ----------------------
                                                      June 30,  December 31,  June 30,  December 31,    June 30,  December 31,
                                                        2000        1999        2000        1999          2000        1999
                                                        ----        ----        ----        ----          ----        ----
                                                                   (dollars expressed in thousands)

Balance sheet information:

<S>                                                 <C>           <C>          <C>         <C>           <C>         <C>
Investment securities............................   $ 215,426     241,624      54,250      20,743        21,242      37,539
Loans, net of unearned discount..................   2,714,862   2,527,649     445,681     379,632       143,866     138,902
Total assets.....................................   3,150,764   3,028,046     566,314     431,838       199,256     199,988
Deposits.........................................   2,675,427   2,689,671     488,729     367,563       172,369     173,703
Stockholders' equity.............................     274,267     263,466      66,373      47,990        24,893      24,275
                                                    =========    ========    ========     =======       =======     =======


                                                          First Bank             FB California (1)        Redwood Bank (2)
                                                    ---------------------     ---------------------     --------------------
                                                      Three months ended        Three months ended       Three months ended
                                                           June 30,                  June 30,                  June 30,
                                                    ---------------------     ---------------------     --------------------
                                                     2000          1999          2000        1999         2000        1999
                                                     ----          ----          ----        ----         ----        ----

Income statement information:

Interest income..................................   $  61,869      54,418      12,329       8,132         3,951       3,750
Interest expense.................................      28,268      25,645       4,622       2,996         1,534       1,393
                                                    ---------    --------    --------     -------       -------     -------
     Net interest income.........................      33,601      28,773       7,707       5,136         2,417       2,357
Provision for loan losses........................       3,150       2,600          45          20           150          73
                                                    ---------    --------    --------     -------       -------     -------
     Net interest income after
       provision for loan losses.................      30,451      26,173       7,662       5,116         2,267       2,284
                                                    ---------    --------    --------     -------       -------     -------
Noninterest income...............................       8,971      11,207         931         815            69         177
Noninterest expense..............................      22,120      19,102       5,225       3,926         1,433       1,469
                                                    ---------    --------    --------     -------       -------     -------
     Income (loss) before provision
       (benefit) for income taxes and
       minority interest in income of
       subsidiary................................      17,302      18,278       3,368       2,005           903         992
Provision (benefit) for income taxes.............       6,097       6,019       1,314         866           477         480
                                                    ---------    --------    --------     -------       -------     -------
     Income (loss) before minority
       interest in income of subsidiary..........      11,205      12,259       2,054       1,139           426         512
Minority interest in income of subsidiary........          --          --          --          --            --          --
                                                    ---------    --------    --------     -------       -------     -------
     Net income..................................   $  11,205      12,259       2,054       1,139           426         512
                                                    =========    ========    ========     =======       =======     =======


                                                          First Bank             FB California (1)        Redwood Bank (2)
                                                    ---------------------     ---------------------     -------------------
                                                       Six months ended          Six months ended         Six months ended
                                                           June 30,                  June 30,                  June 30,
                                                    ---------------------     ---------------------     -------------------
                                                     2000          1999         2000        1999          2000       1999
                                                     ----          ----         ----        ----          ----       ----

Income statement information:

Interest income..................................   $ 120,627     107,591     22,621       16,132         7,884       4,930
Interest expense.................................      54,520      52,176      8,349        6,075         3,108       1,835
                                                    ---------     -------    -------      -------       -------     -------
     Net interest income.........................      66,107      55,415     14,272       10,057         4,776       3,095
Provision for loan losses........................       5,750       4,700        135           80           282          73
                                                    ---------     -------    -------      -------       -------     -------
     Net interest income after
       provision for loan losses.................      60,357      50,715     14,137        9,977         4,494       3,022
                                                    ---------     -------    -------      -------       -------      ------
Noninterest income...............................      15,965      18,795      1,723        1,424           (49)        203
Noninterest expense..............................      41,926      38,122      9,282        7,625         2,933       1,907
                                                    ---------     -------    -------      -------       -------     -------
     Income (loss) before provision
       (benefit) for income taxes and
       minority interest in income of
       subsidiary................................      34,396      31,388      6,578        3,776         1,512       1,318
Provision (benefit) for income taxes.............      11,930      10,517      2,577        1,653           801         644
                                                    ---------     -------    -------      -------       -------      ------
     Income (loss) before minority
       interest in income of subsidiary..........      22,466      20,871      4,001        2,123           711         674
Minority interest in income of subsidiary........          --          --         --           --            --          --
                                                    ---------     -------    -------      -------       -------      ------
     Net income..................................   $  22,466      20,871      4,001        2,123           711         674
                                                    =========     =======    =======      =======       =======      ======
</TABLE>
----------------
(1)  Lippo Bank was  acquired  by FBA on  February  29,  2000 and merged into FB
     California  on May 31, 2000.
(2)  Redwood  Bank was acquired by FBA on March 4, 1999.
(3)  Corporate  and other  includes  $2.0 million and $3.9 million of guaranteed
     preferred  debenture  expense,  after applicable income tax benefit of $1.0
     million and $2.1  million for the three and six months  ended June 30, 2000
     and 1999. In addition, corporate and other includes FCG and holding company
     expenses.


<PAGE>
<TABLE>
<CAPTION>

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


<S>            <C>             <C>           <C>          <C>             <C>           <C>           <C>           <C>
               31,605          30,439        97,214       103,636         16,583        17,666        436,320       451,647
              222,995         213,731       799,226       736,828           (237)         (418)     4,326,393     3,996,324
              303,570         278,988     1,000,541       944,013        (39,973)      (15,126)     5,180,472     4,867,747
              257,542         244,248       875,048       804,976        (12,662)      (28,347)     4,456,453     4,251,814
               30,111          30,338       101,581       102,014       (175,185)     (173,178)       322,040       294,905
               ======         =======      ========       =======       ========      ========       ========       =======

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


                5,990           5,481        20,391        14,014           (369)         (154)       104,161        85,641
                2,431           2,163         8,356         5,790            560           163         45,771        38,150
               ------         -------      --------        ------       --------      --------       --------       -------
                3,559           3,318        12,035         8,224           (929)         (317)        58,390        47,491
                  175              30           100           650             --            --          3,620         3,373
               ------         -------      --------        ------       --------      --------       --------       -------

                3,384           3,288        11,935         7,574           (929)         (317)        54,770        44,118
               ------         -------      --------        ------       --------      --------       --------       -------
                  495             513         1,302         1,121           (297)         (318)        11,471        13,515
                2,196           2,231         7,582         6,673          3,361         3,847         41,917        37,248
               ------         -------      --------        ------       --------      --------       --------       -------



                1,683           1,570         5,655         2,022         (4,587)       (4,482)        24,324        20,385
                  570             541         2,270           937         (1,531)       (1,378)         9,197         7,465
               ------         -------      --------        ------       --------      --------       --------       -------

                1,113           1,029         3,385         1,085         (3,056)       (3,104)        15,127        12,920
                   --              --            --            --            455           361            455           361
               ------         -------      --------        ------       --------      --------       --------       -------
                1,113           1,029         3,385         1,085         (3,511)       (3,465)        14,672        12,559
               ======         =======      ========        ======       ========      ========       ========       =======

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

               11,658          11,023        39,305        28,355           (217)          170        201,878       168,201
                4,720           4,325        15,864        11,989          1,497           716         88,058        77,116
               ------         -------      --------        ------       --------      --------       --------       -------
                6,938           6,698        23,441        16,366         (1,714)         (546)       113,820        91,085
                  295              60           740           950             --            --          7,202         5,863
               ------         -------      --------        ------       --------      --------       --------       -------

                6,643           6,638        22,701        15,416         (1,714)         (546)       106,618        85,222
               ------         -------      --------        ------       --------      --------       --------       -------
                  986           1,056         3,183         2,364           (773)         (724)        21,035        23,118
                4,305           4,510        14,598        13,225          6,666         7,346         79,710        72,735
               ------         -------      --------        ------       --------      --------       --------       -------



                3,324           3,184        11,286         4,555         (9,153)       (8,616)        47,943        35,605
                1,157           1,096         4,492         2,060         (3,216)       (2,867)        17,741        13,103
               ------         -------      --------        ------       --------      --------       --------       -------

                2,167           2,088         6,794         2,495         (5,937)       (5,749)        30,202        22,502
                   --              --            --            --            943           672            943           672
               ------         -------      --------        ------       --------      --------       --------       -------
                2,167           2,088         6,794         2,495         (6,880)       (6,421)        29,259        21,830
               ======         =======      ========        ======       ========      ========       ========       =======
</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 the financial  condition,  results of operations and
business of First Banks. 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  First  Banks,  including  but  not  limited  to
fluctuations  in  interest  rates  and in the  economy;  the  impact of laws and
regulations   applicable  to  First  Banks  and  changes  therein;   competitive
conditions  in the  markets  in  which  First  Banks  conducts  its  operations,
including  competition from banking and non-banking companies with substantially
greater resources than First Banks, some of which may offer and develop products
and services  not offered by First Banks;  the ability of First Banks to control
the  composition  of the loan portfolio  without  adversely  affecting  interest
income; and the ability of First Banks to respond to changes in technology. With
regard to First Banks' 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 the offices of First Banks,  as compared with
competitors  operating solely in contiguous  markets;  the competition of larger
acquirers with greater resources than First Banks, fluctuations in the prices at
which acquisition  targets may be available for sale and in the market for First
Banks'  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

         First  Banks is a  registered  bank  holding  company  incorporated  in
Missouri and  headquartered  in St. Louis  County,  Missouri.  At June 30, 2000,
First Banks had $5.18 billion in total assets, $4.33 billion in total loans, net
of unearned  discount,  $4.46  billion in total  deposits and $322.0  million in
total  stockholders'  equity.  First Banks operates  through its subsidiary bank
holding companies and financial  institutions  (collectively  referred to as the
Subsidiary Banks) and through its non-banking  subsidiary,  First Capital Group,
Inc., as follows:

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

         The  Subsidiary  Banks  and FCG are  wholly  owned by their  respective
parent companies except FBA, which was 84.33% and 83.37% owned by First Banks at
June 30, 2000 and December 31, 1999, respectively.

         Through  the  Subsidiary  Banks,  First  Banks  offers a broad range of
commercial  and  personal  banking  services  including  certificate  of deposit
accounts,  individual  retirement and other time deposit accounts,  checking and
other demand deposit accounts,  interest checking accounts, savings accounts and
money market accounts.  Loans include  commercial,  financial and  agricultural,
real estate  construction  and  development,  commercial  and  residential  real
estate, commercial leasing, trade finance, consumer and installment, student and
Small Business  Administration  loans. Other financial services include mortgage
banking, credit and debit cards, brokerage services,  credit-related  insurance,
automatic  teller machines,  telephone  banking,  safe deposit boxes,  trust and
private banking services and cash management services.

         First Banks  centralizes  overall  corporate  policies,  procedural and
administrative  functions,  and operational support functions for the Subsidiary
Banks. Primary responsibility for managing the Subsidiary Banks remains with the
officers and directors.


<PAGE>


         The following table summarizes selected data about the Subsidiary Banks
at June 30, 2000:
<TABLE>
<CAPTION>

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

<S>                                                           <C>     <C>                <C>              <C>
         First Bank..................................         87      $ 3,150,764        2,714,862        2,675,427
         FB&T .......................................         26        1,000,541          799,226          875,048
         FBA:
              FB California..........................         13          566,314          445,681          488,729
              FB Texas...............................          6          303,570          222,995          257,542
              Redwood Bank...........................          4          199,256          143,866          172,369

</TABLE>
                               Financial Condition

         First Banks' total assets  increased by $310.0 million to $5.18 billion
from $4.87  billion at June 30, 2000 and  December 31,  1999,  respectively.  As
discussed in Note 2 to the accompanying  consolidated financial statements,  the
acquisitions  of Lippo Bank and FCG provided  assets of $85.3  million and $64.6
million,  respectively.  Loans,  net of unearned  discount,  excluding the loans
acquired from Lippo Bank and FCG, increased by $180.2 million,  which is further
discussed under "--Loans and Allowance for Loan Losses."  Offsetting the overall
increase  in total  assets  and  providing  an  additional  source  of funds for
continued internal loan growth was a reduction in investment securities of $52.7
million,  which was partially  offset by $37.4 million of investment  securities
acquired from Lippo Bank, to $436.3  million at June 30, 2000.  Total  deposits,
excluding the $76.4  million of deposits  provided by the  acquisition  of Lippo
Bank,  increased by $128.2  million to $4.46 billion at June 30, 2000. The funds
generated from the deposit growth were primarily  utilized to fund internal loan
growth and the acquisition of the FCG leases. In addition, short-term borrowings
increased  by $77.3  million  to $150.8  million  at June 30,  2000,  reflecting
increases of $36.1  million and $36.9  million in federal  funds  purchased  and
retail repurchase agreements, respectively.


                              Results of Operations

Net Income

         Net income was $14.7  million  and $29.3  million for the three and six
months ended June 30, 2000, in comparison to $12.6 million and $21.8 million for
the comparable  periods in 1999. A significant  element in the earnings progress
was increased net interest income generated from the acquisitions of Lippo Bank,
FCG,  Century Bank and Redwood Bank, the continued  change in the composition of
the loan portfolio, increased yields on earning assets and internal loan growth.
The overall loan growth was primarily funded through internal deposit growth.

         The increase in net income was  partially  offset by a reduced level of
noninterest  income, an increased  provision for loan losses, as discussed under
"--Loans and Allowance  for Loan Losses," and an increase in operating  expenses
of $4.7  million and $7.0  million  for the three and six months  ended June 30,
2000 in comparison to the comparable periods in 1999, respectively.  The reduced
level of noninterest income resulted primarily from a reduction in non-recurring
gains on sales of branch  facilities.  The increased  operating expenses reflect
the  operating  expenses  of Lippo Bank,  FCG,  Century  Bank and  Redwood  Bank
subsequent  to  their  respective  acquisition  dates,  increased  salaries  and
employee  benefits  expenses,  increased  data  processing  fees  and  increased
amortization of intangibles  associated with the purchase of subsidiaries.  This
increase  was  partially  offset  by  a  reduction  in  legal,  examination  and
professional fees.

Net Interest Income

         Net interest income  (expressed on a tax equivalent  basis) improved to
$58.6 million, or 4.94% of  interest-earning  assets, for the three months ended
June 30, 2000, from $47.7 million, or 4.51% of interest-earning  assets, for the
comparable  period in 1999. For the six months ended June 30, 2000 and 1999, net
interest income  (expressed on a  tax-equivalent  basis) was $114.2 million,  or
4.90%, and $91.5 million, or 4.40% of interest-earning assets, respectively. The
improved   net   interest   income  is   primarily   attributable   to  the  net
interest-earning  assets provided by the aforementioned  acquisitions,  internal
loan  growth and  increases  in the  prime-lending  rate.  For the three and six
months ended June 30, 2000, average loans increased by $482.7 million and $471.9

<PAGE>

million,  respectively.  During the period  from July 1, 1999  through  June 30,
2000,  the Board of  Governors  of the  Federal  Reserve  System  increased  the
discount rate three times,  resulting in multiple increases in the prime rate of
interest from 8.00% to 9.50%. This is reflected not only in the rate of interest
earned on loans that are indexed to the prime rate, but also in other assets and
liabilities  which either have variable or adjustable rates, or which matured or
repriced during this period.  Although the cost of interest-bearing  liabilities
has  also   increased,   it  has  been  less   dramatic  than  the  earnings  on
interest-earning assets, contributing to an improvement in net interest margins.
This is further discussed under "--Interest Rate Risk Management."

         For the  three  and six  months  ended  June 30,  2000,  the  aggregate
weighted  average  rate paid on the  deposit  portfolio  increased  to 4.52% and
4.42%,  respectively,  from 4.21% and 4.31% for the comparable  periods in 1999,
reflecting  First Banks'  increased  rates paid to provide a funding  source for
continued loan growth. In addition,  the aggregate  weighted average rate on the
note  payable  increased  to 7.95% and 7.55% for the three and six months  ended
June 30, 2000, respectively,  from 6.05% and 6.24% for the comparable periods in
1999,  reflecting  an increase in market rates on these  financial  instruments.
First  Banks'  $100.0  million   revolving  line  of  credit  with  a  group  of
unaffiliated  banks (Note Payable)  bears interest at the lead bank's  corporate
base rate or, at the option of First Banks, at the Eurodollar Rate plus a margin
determined by the outstanding balance and First Banks' profitability.  Thus, the
Note Payable represents a relatively high-cost funding source, so that increased
advances  under the Note  Payable  have the effect of  increasing  the  weighted
average rate of non-deposit liabilities.


<PAGE>


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

                                               Three months ended June 30,                      Six months ended June 30,
                                    ----------------------------------------------   -----------------------------------------------
                                              2000                    1999                      2000                    1999
                                    ----------------------   ---------------------   ----------------------   ----------------------
                                            Interest                 Interest                 Interest               Interest
                                     Average income/ Yield/   Average income/ Yield/   Average income/ Yield/ Average income/ Yield/
                                     balance expense  rate    balance expense  rate    balance expense  rate  balance expense  rate
                                     ------- -------  ----   -------- ------ ------    ------- -------  ----  ------- ------- ------
                                                                   (dollars expressed in thousands)

             Assets
             ------

Interest-earning assets:
<S>                              <C>         <C>    <C>    <C>        <C>    <C>    <C>               <C>   <C>        <C>     <C>
   Loans (1)(2)(3)(4)..........  $4,274,961  96,234 9.05%  $3,792,234 78,991 8.35% $4,180,776 185,987 8.95% $3,708,908 153,752 8.36%
   Investment securities (4)...     440,008   7,277 6.65      434,288  6,578 6.08     440,405  14,279 6.52     472,566  14,385 6.14
   Federal funds sold..........      54,152     817 6.07       13,137    217 6.63      67,737   1,943 5.77      13,995     410 5.91
   Other.......................       2,739      47 6.90        1,743     15 3.45       2,485      90 7.28       1,408      45 6.45
                                 ---------- -------        ---------- ------       ----------  ------       ---------- -------
        Total interest-earning
         assets................   4,771,860 104,375 8.80    4,241,402 85,801 8.11   4,691,403 202,299 8.67   4,196,877 168,592 8.10
                                            -------                   ------                  -------                  -------
Nonearning assets..............     345,751                   337,342                 348,529                  340,373
                                 ----------                ----------               ----------              ----------
        Total assets...........  $5,117,611                $4,578,744              $5,039,932               $4,537,250
                                 ==========                ==========              ==========               ==========

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

Interest-bearing liabilities:
   Interest-bearing deposits:
     Interest-bearing demand
       deposits................  $  421,937   1,420 1.35%  $  388,317  1,182 1.22%    422,512   2,885 1.37%  $ 379,746   2,296 1.22%
     Savings deposits..........   1,257,448  12,434 3.98    1,233,559 11,085 3.60   1,241,385  24,070 3.90   1,222,916  22,014 3.63
     Time deposits of $100
       or more (3).............     210,945   2,841 5.42      211,042  2,834 5.39     223,941   5,855 5.26     212,252   5,752 5.46
     Other time deposits (3)...   1,939,657  26,314 5.46    1,598,543 20,916 5.25   1,893,330  50,222 5.33   1,608,657  43,130 5.41
                                 ---------- -------        ---------- ------       ----------  ------       ---------- -------
        Total interest-bearing
         deposits..............   3,829,987  43,009 4.52    3,431,461 36,017 4.21   3,781,168  83,032 4.42   3,423,571  73,192 4.31
   Short-term borrowings (3)...     105,033   1,406 5.38      113,120  1,393 4.94      96,109   2,515 5.26      98,188   2,391 4.91
   Note payable................      68,611   1,356 7.95       49,054    740 6.05      66,869   2,511 7.55      49,527   1,533 6.24
                                 ---------- -------        ---------- ------       ----------  ------       ---------- -------
        Total interest-bearing
         liabilities...........   4,003,631  45,771 4.60    3,593,635 38,150 4.26   3,944,146  88,058 4.49  3,571,286  77,116 4.35
                                            -------                   ------                   ------                  -------
Noninterest-bearing liabilities:
   Demand deposits.............     617,501                   534,472                 602,459                  521,461
   Other liabilities...........     179,961                   174,456                 187,437                  173,033
                                 ----------                ----------              ----------               ----------
        Total liabilities......   4,801,093                 4,302,563               4,734,042                4,265,780
Stockholders' equity...........     316,518                   276,181                 305,890                  271,470
                                 ----------                ----------              ----------               ----------
        Total liabilities and
         stockholders' equity..  $5,117,611                $4,578,744              $5,039,932               $4,537,250
                                 ==========                ==========              ==========               ==========

Net interest income............              58,604                   47,651                  114,241                   91,476
                                            =======                   ======                  =======                  =======
Interest rate spread...........                     4.20                     3.85                     4.18                     3.75
Net interest margin............                     4.94%                    4.51%                    4.90%                    4.40%
                                                    ====                     ====                     ====                     ====
</TABLE>

    ------------------------
(1)   For purposes  of  these computations, nonaccrual loans are included in the
      average loan amounts.
(2)   Interest income on loans includes loan fees.
(3)   Includes the effects of interest rate exchange agreements.
(4)   Information is presented on a tax-equivalent  basis assuming a tax rate of
      35%.  The  tax-equivalent  adjustments  were  approximately  $214,000  and
      $421,000 for the three and six months  ended June 30,  2000,  and $160,000
      and $391,000 for the comparable periods in 1999, respectively.


<PAGE>



Provision for Loan Losses

         The provision for loan losses was $3.6 million and $7.2 million for the
three and six months ended June 30, 2000, in comparison to $3.4 million and $5.9
million for the comparable  periods in 1999,  respectively.  The increase in the
provision for loan losses is primarily  attributable to the overall growth, both
internal  and through  acquisitions,  and  increased  risk  associated  with the
continued changing composition of the loan portfolio. Loan charge-offs were $1.8
million  and $5.0  million  for the three and six months  ended  June 30,  2000,
respectively,  in comparison to $5.6 million and $7.5 million for the comparable
periods in 1999. The decrease in loan charge-offs is indicative of the generally
strong  economic  conditions  prevalent  in First Banks'  markets,  as well as a
decline  in  nonperforming   assets  and  management's   continued   efforts  to
effectively monitor and manage its loan portfolio. For the six months ended June
30, 2000,  loan  charge-offs  include a  charge-off  of $1.6 million on a single
loan. Loan  recoveries  increased to $2.1 million and $6.2 million for the three
and six months  ended June 30,  2000,  respectively,  from $2.0 million and $4.2
million  for the  comparable  periods in 1999  reflecting  continued  aggressive
collection  efforts.  The acquisitions of Lippo Bank,  completed on February 29,
2000, and Redwood Bank,  completed on March 4, 1999,  provided $799,000 and $1.5
million, respectively, in additional allowance for loan losses.

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

Noninterest Income

         Noninterest  income was $11.5  million and $21.0  million for the three
and six months ended June 30, 2000,  in  comparison  to $13.5  million and $23.1
million  for  the  comparable  periods  in  1999.  Noninterest  income  consists
primarily of service  charges on deposit  accounts and  customer  service  fees,
mortgage banking revenues and other income.

         Service charges on deposit accounts and customer service fees were $4.9
million and $9.5 million for the three and six months  ended June 30,  2000,  in
comparison to $4.5 million and $8.4 million for the comparable  periods in 1999,
respectively.  The  increase in service  charges and  customer  service  fees is
attributable to (a) increased deposit balances provided by internal growth;  (b)
the  acquisitions  of Lippo Bank,  Century Bank and Redwood Bank; (c) additional
products and services  available and utilized by First Banks'  expanding base of
retail  and  commercial  customers;  (d)  increased  fee income  resulting  from
revisions of customer  service charge rates effective April 1, 1999 and enhanced
control of fee waivers;  and (e)  increased  income  associated  with  automatic
teller machine services and debit and credit cards.

         The gain on mortgage  loans sold and held for sale was $1.9 million and
$3.3 million for the three and six months ended June 30, 2000,  in comparison to
$1.5 million and $3.8 million for the comparable periods in 1999,  respectively.
The  overall  decrease  for the six  months  ended  June 30,  2000 is  primarily
attributable to a reduced volume of loans originated and sold  commensurate with
the increases in mortgage loan rates experienced in recent months.

         The net gain on sales of available-for-sale securities was $379,000 for
the six months  ended June 30,  2000,  compared  with net gains of $115,000  and
$792,000 for the three and six months ended June 30, 1999,  respectively.  These
gains primarily resulted from sales of  available-for-sale  securities necessary
to facilitate  the funding of First Banks' loan growth.  The decrease in the net
gains reflects the sales, at a loss, of certain  investment  securities that did
not meet First Banks' overall investment objectives.

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

         Other  income was $4.7  million and $7.9  million for the three and six
months ended June 30, 2000,  in comparison to $7.4 million and $10.4 million for
the  comparable  periods in 1999. The reduction in other income is almost solely
attributable to  non-recurring  gains on branch  divestitures.  During the three
months ended June 30, 2000,  First Banks divested one of its branch locations in
central  Illinois,  resulting in a pre-tax gain of $1.4 million,  net of related
expenses. In the same period in 1999, six branch offices in central and northern
Illinois  were  divested,  resulting in a pre-tax gain of $4.4  million,  net of
related  expenses.  The  reduction  in these  gains  were  partially  offset  by
increased income earned on First Banks' investment in bank-owned life insurance,
rental income associated with FCG's leasing activities and increased rental fees
received  from First  Services,  L.P. for the use of data  processing  and other
equipment owned by First Banks.  The increase in such fees is commensurate  with
the  replacement  of First Banks' teller system and certain other  technological
upgrades,  including local and wide area network-based systems,  networks,  core
processors  and  item  processing  equipment  that  were  replaced  in  1999  in
conjunction  with  Year  2000  compliance  preparations.   See  Note  4  to  the
accompanying consolidated financial statements for further information regarding
transactions with related parties.


<PAGE>


Noninterest Expense

         Noninterest  expense was $41.9  million and $79.7 million for the three
and six months ended June 30, 2000,  in  comparison  to $37.2  million and $72.7
million for the  comparable  periods in 1999.  The  increase  reflects:  (a) the
noninterest expense of Lippo Bank, FCG, Century Bank and Redwood Bank subsequent
to their respective  acquisition dates,  including certain nonrecurring expenses
associated with those acquisitions; (b) increased salaries and employee benefits
expenses;  (c) increased data  processing  fees; (d) increased  amortization  of
intangibles  associated  with the purchase of  subsidiaries;  and (e)  increased
expenses  associated  with First  Banks'  internal  restructuring  process.  The
overall  increase in noninterest  expense was partially  offset by a decrease in
legal, examination and professional fees.

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

         Salaries and employee benefits were $18.3 million and $35.2 million for
the three and six months ended June 30, 2000, in comparison to $15.6 million and
$30.1 million for the comparable periods in 1999, respectively.  The increase is
attributable to the  aforementioned  acquisitions  and is also reflective of 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 to enhance executive
and senior management  expertise,  improve  technological support and strengthen
centralized operational functions.

         Occupancy,  net of rental income,  and furniture and equipment  expense
totaled $6.4  million and $12.3  million for the three and six months ended June
30, 2000,  in  comparison  to $5.1  million and $9.8 million for the  comparable
periods in 1999,  respectively.  The increase is primarily  attributable  to the
aforementioned  acquisitions,  the  relocation of certain  California  and Texas
branches and increased  depreciation  expense  associated with numerous  capital
expenditures made throughout 1999,  including the implementation of First Banks'
new  teller  system.  This  increase  has been  partially  offset  by  selective
elimination of 15 branch offices by sales,  mergers or closures  during 1999 and
2000.

         Data  processing fees were $5.5 million and $10.7 million for the three
and six months  ended June 30,  2000,  in  comparison  to $4.7  million and $9.2
million for the  comparable  periods in 1999,  respectively.  The increased data
processing  fees are  attributable  to  growth  and  technological  advancements
consistent  with First  Banks'  product and service  offerings  and  upgrades to
technological equipment, networks and communication channels.

         Legal,  examination  and  professional  fees were $1.1 million and $2.0
million for the three and six months ended June 30, 2000,  in comparison to $1.9
million and $3.2 million for the comparable periods in 1999,  respectively.  The
decrease in these fees is  primarily  attributable  to a decline in First Banks'
utilization of external  consultants  who provided  assistance  throughout  1999
associated with the development and expansion of selected business  initiatives.
In  addition,  the  decrease is also  reflective  of the  settlement  of certain
litigation completed in 1999.

         Other  expense was $6.6 million and $11.5 million for the three and six
months ended June 30, 2000,  in comparison to $5.9 million and $12.2 million for
the  comparable  periods in 1999,  respectively.  Other  expense is comprised of
numerous general  administrative  expenses  including but not limited to travel,
meals and entertainment,  insurance, FDIC premiums, communications,  advertising
and  business  development,  freight and courier  services,  correspondent  bank
charges,   amortization   of  intangibles   associated   with  the  purchase  of
subsidiaries,  miscellaneous  losses and recoveries and sales taxes. The overall
decrease  in such  expenditures  for the six  months  ended  June 30,  2000 is a
function of: (a) recoveries from loans of acquired  entities that had been fully
charged-off prior to the acquisition  dates; (b) management's  continued efforts

<PAGE>

to control these costs;  and (c) reduced fraud  losses.  Offsetting  the overall
decrease in other  expenses in 2000 was an increase of $285,000 in  amortization
of intangibles  associated with the purchase of subsidiaries,  which is directly
associated with the completion of the aforementioned acquisitions;  increases in
freight and courier services;  and a $300,000 provision for an estimated loss on
leasing equipment associated with a previously acquired entity.

                          Interest Rate Risk Management

         First Banks utilizes off-balance-sheet derivative financial instruments
to assist in the  management  of  interest  rate  sensitivity  and to modify the
repricing,  maturity and option  characteristics of on-balance-sheet  assets and
liabilities.  The use of  such  derivative  financial  instruments  is  strictly
limited to  reducing  the  interest  rate  exposure of First  Banks.  Derivative
financial instruments held by First Banks for purposes of managing interest rate
risk are summarized as follows:
<TABLE>
<CAPTION>
                                                                     June 30, 2000             December 31, 1999
                                                                ----------------------      ----------------------
                                                                Notional       Credit       Notional       Credit
                                                                amount        exposure       amount       exposure
                                                                ------        --------       ------       --------
                                                                         (dollars expressed in thousands)

     Interest rate swap agreements - pay
<S>                                                            <C>             <C>          <C>            <C>
         adjustable rate, receive adjustable rate............  $      --          --        500,000           --
     Interest rate swap agreements - pay
         adjustable rate, receive fixed rate.................    455,000       3,339        455,000        3,349
     Interest rate floor agreements..........................     35,000           9         35,000           13
     Interest rate cap agreements............................         --          --         10,000           26
     Forward commitments to sell
         mortgage-backed securities..........................     39,000          --         33,000           --
                                                               =========      ======        =======       ======
</TABLE>

         The  notional  amounts  of  derivative  financial  instruments  do  not
represent amounts exchanged by the parties and, therefore,  are not a measure of
First  Banks'  credit   exposure   through  its  use  of  derivative   financial
instruments.  The amounts and the other terms of the  derivatives are determined
by  reference to the notional  amounts and other terms of the  derivatives.  The
credit  exposure  represents the accounting  loss First Banks 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,  First Banks entered into $280.0 million  notional  amount
interest rate swap  agreements.  The swap  agreements  effectively  lengthen the
repricing  characteristics of certain interest-earning assets to correspond more
closely with its funding source with the objective of stabilizing cash flow, and
accordingly,  net interest  income,  over time.  The swap  agreements  initially
provided  for  First  Banks  to  receive  a fixed  rate of  interest  and pay an
adjustable rate equivalent to the 90-day London Interbank Offering Rate (LIBOR).
In March 2000,  the terms of the swap  agreements  were modified such that First
Banks  currently  pays 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  First  Banks  to pay  quarterly  and  receive  payment
semiannually. The amount receivable by First Banks under the swap agreements was
$4.1 million at June 30, 2000 and December 31, 1999,  and the amount  payable by
First Banks under the swap agreements was $748,000 and $770,000 at June 30, 2000
and December 31, 1999, respectively.

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

         During September 1999, First Banks 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 its  funding  source  with the  objective  of  stabilizing  cash flow,  and
accordingly,  net interest  income,  over time. The swap agreements  provide for
First  Banks to  receive a fixed rate of  interest  and pay an  adjustable  rate
equivalent to the weighted  average prime lending rate minus 2.70%. The terms of
the swap  agreements  provide for First  Banks to pay and receive  interest on a
quarterly basis. The amount  receivable by First Banks under the swap agreements
was $119,000 at June 30, 2000 and December 31, 1999,  and the amount  payable by
First Banks under the swap agreements was $132,000 and $141,000 at June 30, 2000
and December 31, 1999, respectively.


<PAGE>


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

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

         June 30, 2000:
<S>                    <C> <C>                                 <C>               <C>           <C>       <C>
             September 27, 2001..............................  $   75,000        6.80%         6.14%     $    (869)
             September 27, 2001..............................      45,000        6.80          6.14           (521)
             September 27, 2001..............................      40,000        6.80          6.14           (464)
             September 27, 2001..............................      15,000        6.80          6.14           (174)
             June 11, 2002...................................      15,000        6.80          6.00           (330)
             September 16, 2002..............................     175,000        6.80          5.36         (6,568)
             September 16, 2002..............................      20,000        6.80          5.36           (754)
             September 18, 2002..............................      40,000        6.80          5.33         (1,540)
             September 18, 2002..............................      30,000        6.80          5.33         (1,155)
                                                               ----------                                ---------
                                                               $  455,000        6.80          5.68      $ (12,375)
                                                               ==========       =====         =====      =========

         December 31, 1999:
             March 31, 2000..................................  $  350,000        5.84%         6.45%     $      87
             March 31, 2000..................................      75,000        5.84          6.45             19
             March 31, 2000..................................      50,000        5.84          6.45             12
             March 31, 2000..................................      25,000        5.84          6.45              6
             September 27, 2001..............................      75,000        5.80          6.14           (685)
             September 27, 2001..............................      45,000        5.80          6.14           (411)
             September 27, 2001..............................      40,000        5.80          6.14           (365)
             September 27, 2001..............................      15,000        5.80          6.14           (137)
             June 11, 2002...................................      15,000        6.12          6.00           (291)
             September 16, 2002..............................     175,000        6.12          5.36         (6,574)
             September 16, 2002..............................      20,000        6.12          5.36           (751)
             September 18, 2002..............................      40,000        6.14          5.33         (1,543)
             September 18, 2002..............................      30,000        6.14          5.33         (1,157)
                                                               ----------                                ---------
                                                               $  955,000        5.91          6.08      $ (11,790)
                                                               ==========       =====         =====      =========
</TABLE>

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

         First Banks also utilizes  interest rate floor  agreements to limit the
interest  expense  associated with the net interest  expense of certain interest
rate swap  agreements.  At June 30, 2000 and December 31, 1999, the  unamortized
costs of these  agreements  were  $9,000  and  $32,000,  respectively,  and were
included in other assets.

         Derivative  financial  instruments  issued by First  Banks  consist  of
commitments to originate  fixed-rate loans.  Commitments to originate fixed-rate
loans  consist   primarily  of  residential   real  estate  loans.   These  loan
commitments, net of estimated underwriting fallout, and loans held for sale were
$45.7  million  and  $31.5  million  at June 30,  2000 and  December  31,  1999,
respectively. These net loan commitments and loans held for sale are hedged with
forward contracts to sell mortgage-backed  securities of $39.0 million and $33.0
million at June 30, 2000 and December 31, 1999,  respectively.  Gains and losses
from forward contracts are deferred and included in the cost basis of loans held
for sale. At June 30, 2000 and December 31, 1999, the net unamortized gains were
$186,000  and  $838,000,  respectively.  Such gains were applied to the carrying
value  of the  loans  held  for  sale  as part of the  lower  of cost or  market
valuation.

                       Loans and Allowance for Loan Losses

         Interest earned on the loan portfolio  represents the principal  source
of income for First Banks and its Subsidiary  Banks.  Interest and fees on loans
were 92.3% and 92.0% of total interest income for the three and six months ended
June 30, 2000, in comparison  to 92.2% and 91.3% for the  comparable  periods in
1999,  respectively.  Total loans,  net of unearned  discount,  increased $330.0
million to $4.33 billion,  or 83.5% of total assets, at June 30, 2000,  compared
to $4.00 billion,  or 82.1% of total assets,  at December 31, 1999. The increase
in loans,  as  summarized  on the  consolidated  balance  sheets,  is  primarily
attributable  to the  acquisitions  of Lippo Bank and FCG, which provided loans,
net of unearned discount, of $40.9 million and $64.6 million,  respectively, and
the  continued  growth and  diversification  of the  commercial,  financial  and
agricultural and commercial real estate mortgage loan portfolios.  This increase
was partially  offset by a decline in the consumer and installment  portfolio of

<PAGE>
$37.4  million  reflecting  reductions  in new loan volumes and the repayment of
principal  on the  existing  portfolio.  This is  consistent  with First  Banks'
objectives  of  de-emphasizing   indirect   automobile   lending  and  expanding
commercial lending.

         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>
                                                                                    June 30,      December 31,
                                                                                      2000            1999
                                                                                      ----            ----
                                                                                 (dollars expressed in thousands)
         Commercial, financial and agricultural:
<S>                                                                              <C>                  <C>
              Nonaccrual.....................................................    $    14,824          18,397
              Restructured terms.............................................             22              29
         Real estate construction and development:
              Nonaccrual.....................................................          2,392           1,886
         Real estate mortgage:
              Nonaccrual.....................................................         16,398          16,414
              Restructured terms.............................................          2,971           2,979
         Consumer and installment:
              Nonaccrual.....................................................            208              32
                                                                                 -----------      ----------
                  Total nonperforming loans..................................         36,815          39,737
         Other real estate...................................................          1,903           2,129
                                                                                 -----------      ----------
                  Total nonperforming  assets................................    $    38,718          41,866
                                                                                 ===========      ==========

         Loans, net of unearned discount.....................................    $ 4,326,393       3,996,324
                                                                                 ===========      ==========

         Loans past due 90 days or more and still accruing...................    $     3,477           5,844
                                                                                 ===========      ==========

         Allowance for loan losses to loans..................................           1.80%           1.72%
         Nonperforming loans to loans........................................           0.85            0.99
         Allowance for loan losses to nonperforming loans....................         211.39          172.66
         Nonperforming assets to loans and other real estate.................           0.89            1.05
                                                                                 ===========      ==========
</TABLE>
         Nonperforming  loans (also considered  impaired  loans),  consisting of
loans on nonaccrual status and certain restructured loans, were $36.8 million at
June 30, 2000 in comparison to $39.7 million at December 31, 1999.  The decrease
in nonperforming loans is almost solely attributable to a decrease in nonaccrual
loans of $2.9 million,  continued aggressive collection efforts and management's
continued  efforts to  effectively  monitor  and manage the loan  portfolios  of
acquired entities.

         The following  table presents a summary of loan loss experience for the
periods indicated:
<TABLE>
<CAPTION>
                                                                          Three months ended       Six months ended
                                                                               June 30,                June 30,
                                                                        ----------------------   --------------
                                                                           2000       1999         2000       1999
                                                                           ----       ----         ----       ----
                                                                                (dollars expressed in thousands)

<S>                                                                      <C>           <C>          <C>       <C>
         Allowance for loan losses, beginning of period..............    $  73,859     65,239       68,611    60,970
              Acquired allowances for loan losses....................           --         --          799     1,466
                                                                         ---------   --------     --------  --------
                                                                            73,859     65,239       69,410    62,436
                                                                         ---------   --------     --------  --------
              Loans charged-off......................................       (1,756)    (5,617)      (4,970)   (7,528)
              Recoveries of loans previously charged-off.............        2,099      1,982        6,180     4,206
                                                                         ---------   --------     --------  --------
              Net loan recoveries (charge-offs)......................          343     (3,635)       1,210    (3,322)
                                                                         ---------   --------     --------  --------
              Provision for loan losses..............................        3,620      3,373        7,202     5,863
                                                                         ---------   --------     --------  --------
         Allowance for loan losses, end of period....................    $  77,822     64,977       77,822    64,977
                                                                         =========   ========     ========  ========
</TABLE>

         The  allowance  for loan losses is monitored on a monthly  basis.  Each
month, the credit  administration  department  provides First Banks'  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  combined  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,  the overall  increases or decreases in the levels of risk
in the  portfolios  are monitored  continually.  Factors are applied to the loan
portfolios  for each  category of loan risk to  determine  acceptable  levels of
allowance for loan losses.  These factors are derived  primarily from the actual

<PAGE>

loss experience of the Subsidiary  Banks and from published  national surveys of
norms in the industry. The calculated allowances required for the portfolios are
then  compared to the actual  allowance  balances to  determine  the  provisions
necessary  to maintain  the  allowances  at  appropriate  levels.  In  addition,
management  exercises  judgment in its analysis of determining the overall level
of the allowance  for loan losses.  In its  analysis,  management  considers the
change in the  portfolio,  including  growth,  composition  and the ratio of net
loans to total assets, and the economic conditions of the regions in which First
Banks operates. Based on this quantitative and qualitative analysis,  provisions
are made to the allowance for loan losses.  Such provisions are reflected in the
consolidated statements of income.

                                    Liquidity

         The liquidity of First Banks and the Subsidiary Banks is the ability to
maintain  a cash  flow  which  is  adequate  to fund  operations,  service  debt
obligations and meet  obligations and other  commitments on a timely basis.  The
Subsidiary  Banks  receive  funds for liquidity  from  customer  deposits,  loan
payments,  maturities  of  loans  and  investments,  sales  of  investments  and
earnings. In addition, First Banks and the Subsidiary Banks may avail themselves
of more  volatile  sources of funds  through  the  issuance of  certificates  of
deposit in denominations of $100,000 or more, federal funds borrowed, securities
sold under agreements to repurchase, borrowings from the Federal Home Loan Banks
and other borrowings,  including the Note Payable.  The aggregate funds acquired
from these more volatile  sources were $563.2 million and $476.8 million at June
30, 2000 and December 31, 1999, respectively.

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

                                                                                 (dollars expressed in thousands)

<S>                                                                                         <C>
         Three months or less..........................................................     $ 344,648
         Over three months through six months..........................................        69,448
         Over six months through twelve months.........................................        85,925
         Over twelve months............................................................        63,130
                                                                                            ---------
                Total..................................................................     $ 563,151
                                                                                            =========
</TABLE>
         In addition to these more  volatile  sources of funds,  in 1999,  First
Bank, FB&T, FB California and FB Texas 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 June 30,
2000 and  December  31,  1999,  First  Banks'  borrowing  capacity  under  these
agreements was approximately $1.29 billion and $1.67 billion,  respectively.  In
addition,  the Subsidiary Banks' borrowing capacity through their  relationships
with the Federal Home Loan Banks was  approximately  $318.2  million at June 30,
2000 and $395.9 million at December 31, 1999.

         Management  believes the available  liquidity and operating  results of
the  Subsidiary  Banks will be  sufficient  to  provide  funds for growth and to
permit the  distribution  of  dividends  to First Banks  sufficient  to meet its
operating  and debt service  requirements,  both on a short-term  and  long-term
basis.

                             Year 2000 Compatibility

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

         First Banks successfully  completed all phases of its Year 2000 program
(Program)  within  the  appropriate  timeframes  established  by the  regulatory
agencies.  In addition,  First Banks did not encounter any significant  business
disruptions  or  processing  problems as a result of the Year 2000  century date
change.  Furthermore,  management is unaware of any Year 2000 issues encountered
by First Banks' more significant  borrowers and vendors that would inhibit their
ability to repay obligations or provide goods or services. The total cost of the
Program was $14.9 million,  comprised of capital  improvements  of $12.3 million
and direct expenses  reimbursable to First Services,  L.P. of $2.6 million.  The
capital  improvements  are being charged to expense in the form of  depreciation
expense or lease  expense,  generally  over a period of 60 months.  First  Banks
incurred direct  expenses  related to the Program of  approximately  $15,000 and
$195,000  for the three and six months  ended June 30,  2000,  and  $450,000 and
$900,000 for the comparable periods in 1999, respectively,  and $1.8 million for
the year ended December 31, 1999.


<PAGE>


                       Effects of New Accounting Standards

         In June 1998, the Financial  Accounting  Standards  Board (FASB) issued
Statement of Financial  Accounting  Standards  (SFAS) No. 133 -- Accounting  for
Derivative  Instruments and Hedging  Activities (SFAS 133). SFAS 133 establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts,  and for hedging activities.
SFAS 133 requires that an entity  recognize all  derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value.  If certain  conditions are met, a derivative may be specifically
designated as a hedge in one of three categories.  The accounting for changes in
the fair  value of a  derivative  (that is,  gains and  losses)  depends  on the
intended use of the derivative and the resulting designation. Under SFAS 133, an
entity that elects to apply hedge  accounting is required to  establish,  at the
inception of the hedge,  the method it will use for assessing the  effectiveness
of the hedging  derivative  and the  measurement  approach for  determining  the
ineffective  aspect of the hedge.  Those  methods  must be  consistent  with the
entity's approach to managing risk. SFAS 133 applies to all entities.
         In June 1999, the FASB issued SFAS No. 137 -- Accounting for Derivative
Instruments  and Hedging  Activities  - Deferral of the  Effective  Date of FASB
Statement  No. 133, an Amendment  of FASB  Statement  No. 133,  which defers the
effective  date of SFAS 133 from fiscal years  beginning  after June 15, 1999 to
fiscal years beginning after June 15, 2000. Initial  application should be as of
the beginning of an entity's fiscal quarter; on that date, hedging relationships
must be designated  and  documented  pursuant to the  provisions of SFAS 133, as
amended.  Earlier  application  of all of the  provisions is  encouraged  but is
permitted  only as of the beginning of any fiscal  quarter that begins after the
issuance  date of SFAS 133,  as  amended.  Additionally,  SFAS 133,  as amended,
should not be applied retroactively to financial statements of prior periods.
         In June 2000,  the FASB issued SFAS No. 138 - Accounting for Derivative
Instruments  and Hedging  Activities,  an Amendment of FASB  Statement  No. 133,
which addresses a limited number of issues causing  implementation  difficulties
for  numerous  entities  that apply SFAS 133,  as  amended.  SFAS 138 amends the
accounting  and  reporting  standards  of SFAS  133,  as  amended,  for  certain
derivative instruments, certain hedging activities and for decisions made by the
FASB relating to the Derivatives Implementation Group (DIG) process.
         First Banks is currently  evaluating the  requirements  of SFAS 133, as
amended,  to  determine  its  potential  impact  on the  consolidated  financial
statements.



<PAGE>


       ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         At December 31, 1999, First Banks' risk management program's simulation
model  indicated  a loss of  projected  net  interest  income  in the event of a
decline in interest  rates.  While a decline in interest  rates of less than 100
basis  points was  projected  to have a minimal  impact on the earnings of First
Banks,  a decline in interest  rates of 100 basis  points  indicated a projected
pre-tax loss  equivalent to  approximately  7.1% of net interest income based on
assets and  liabilities  at December  31, 1999.  At June 30,  2000,  First Banks
remains in an  "asset-sensitive"  position and thus, remains subject to a higher
level  of  risk  in  a  declining   interest-rate   environment.   First  Banks'
asset-sensitive  position,  coupled  with  increases  in the prime  lending rate
experienced  throughout  the last  six  months,  is  reflected  in First  Banks'
increased  net interest  income for the three and six months ended June 30, 2000
as further  discussed under "--Results of Operations."  During the three and six
months ended June 30, 2000,  First Banks'  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
      --------------                            -----------

           27                   Article 9 - Financial Data Schedule (EDGAR only)

(b) First Banks filed no reports on Form 8-K during the three  months ended June
    30, 2000.




<PAGE>


                                   SIGNATURES


         Pursuant  to  the  requirements  of  Section  of 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
August 8, 2000                              (Principal Executive Officer)



                                   By: /s/  Frank H. Sanfilippo
                                       ---------------------------------------
                                            Frank H. Sanfilippo
                                            Executive Vice President and
                                            Chief Financial Officer
August 8, 2000                              (Principal Financial and
                                            Accounting Officer)