SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549



                                    FORM 10-Q

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

             SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1996

                                       OR

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

For the transition period from                          to

Commission file number 0-20632
                       -------

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

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

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

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

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

                                                     Yes __X_ No ____



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

                                                    Outstanding at
              Class                                 October 31,  1996
              -----                                 -----------------

Common Stock, $250.00 par value                         23,660.86





<PAGE>










                                First Banks, Inc.

                                      INDEX

                                                                            Page

PART I        FINANCIAL INFORMATION


     Item 1.  Financial Statements:
              Consolidated Balance Sheets as of September 30, 1996
                and December 31, 1995                                        -2-
              Consolidated Statements of Income for the three
                 and nine month periods ended September 30, 1996 and 1995    -4-
              Consolidated Statements of Cash Flows for the nine month
                periods ended September 30, 1996 and 1995                    -5-
              Notes to Consolidated Financial Statements                     -6-

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



PART II.     OTHER INFORMATION

     Item 6     Exhibits and Reports on Form 8-K                            -18-

Signatures                                                                  -19-



























<PAGE>






                         PART I - FINANCIAL INFORMATION
                          Item 1. Financial Statements

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


<TABLE>
<CAPTION>




                                                                                September 30,      December 31,
                                                                                    1996               1995
                                                                                    ----               ----
                                   ASSETS
                                   ------
Cash and cash equivalents:
<S>                                                                           <C>                    <C>    
    Cash and due from banks .........................................         $    121,788           128,553
    Interest-bearing deposits with other financial institutions-
       with maturities of three months or less ......................                9,436            16,860
    Federal funds sold ..............................................               51,200            53,800
                                                                                   -------           -------
          Total cash and cash equivalents ...........................              182,424           199,213
                                                                                   -------           -------

Investment securities:
   Available for sale, at fair value ................................              473,275           471,791
   Held to maturity, at amortized cost (estimated fair
      value of $25,839 and $37,021 at September 30, 1996
      and December 31,1995, respectively) ...........................               25,510            36,532
                                                                                  --------           -------
          Total investment securities ...............................              498,785           508,323
                                                                                  --------           -------
Loans:
   Commercial........................................................              443,750           364,018
   Real estate construction and development .........................              259,607           209,802
   Real estate mortgage:
      Residential....................................................            1,082,705         1,191,236
      Commercial.....................................................              579,902           523,816
   Consumer and installment .........................................              351,853           419,894
   Residential mortgage loans held for sale..........................               23,687            45,035
                                                                                 ---------         ---------
          Total loans ...............................................            2,741,504         2,753,801
  Unearned discount .................................................               (8,478)           (9,582)
  Allowance for possible loan losses ................................              (45,365)          (52,665)
                                                                                 ---------         --------- 
          Net loans .................................................            2,687,661         2,691,554
                                                                                 ---------         ---------

Bank premises and equipment, net of accumulated depreciation ........               48,521            50,278
Intangibles associated with the purchase of subsidiaries ............               20,882            23,841
Purchased mortgage servicing rights, net of amortization ............               10,678            12,122
Accrued interest receivable .........................................               22,851            22,027
Receivable from sales of investment securities.......................                    -            41,265
Other real estate owned .............................................               10,298             7,753
Deferred income taxes ...............................................               41,898            41,576
Other assets ........................................................               22,156            25,010
                                                                                 ---------         ---------
          Total assets ..............................................           $3,546,154         3,622,962
                                                                                 =========         =========
</TABLE>


<PAGE>





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

<TABLE>
<CAPTION>

                                                                              September 30,        December 31,
                                                                                  1996                 1995
                                                                                  ----                 ----
                                LIABILITIES
                                -----------
Deposits:
     Demand:
<S>                                                                            <C>                     <C>    
       Non-interest bearing ..........................................         $ 393,401               389,658
       Interest bearing ..............................................           289,535               307,584
     Savings .........................................................           664,142               690,902
     Time:
       Time deposits of $100 or more .................................           149,695               201,025
       Other time deposits ...........................................         1,557,968             1,594,522
                                                                               ---------             ---------
          Total deposits .............................................         3,054,741             3,183,691
Federal Home Loan Bank advances.......................................            71,576                49,883
Federal funds purchased ..............................................            15,000                 3,000
Securities sold under agreements to repurchase .......................            41,745                17,180
Notes payable ........................................................            66,840                88,135
Accrued interest payable .............................................             9,641                10,726
Deferred income taxes ................................................             9,991                 6,517
Accrued and other liabilities ........................................            19,172                16,788
Minority interest in subsidiaries ....................................            13,856                12,437
                                                                               ---------           -----------
          Total liabilities ..........................................         3,302,562             3,388,357
                                                                               ---------             ---------

                                  STOCKHOLDERS' EQUITY
Preferred stock:
      Class C 9.00% increasing rate,  redeemable,  cumulative, 
      $1.00 par value,  $25.00 stated value;  5,000,000 shares
      authorized;  2,191,000 shares and 2,200,000  shares  issued
      and outstanding at September  30, 1996 and December 31, 1995,
        respectively..................................................            54,775                55,000
      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 ......................................................             4,237                 4,307
Retained earnings ....................................................           163,894               156,692
Net fair value adjustment for securities available for sale ..........             1,708                  (372)
                                                                               ---------             ---------  
          Total stockholders' equity .................................           243,592               234,605
                                                                               ---------             ---------
          Total liabilities and stockholders' equity .................        $3,546,154             3,622,962
                                                                               =========             =========
</TABLE>





           See accompanying notes to consolidated financial statements

<PAGE>
                       FIRST BANKS, INC. AND SUBSIDIARIES
                  Consolidated Statements of Income (unaudited)
             (dollars expressed in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                     Three  months  ended                Nine months ended
                                                                           September 30,                   September 30,
                                                                           -------------                   -------------

                                                                      1996          1995               1996          1995
                                                                      ----          ----               ----          ----
Interest income:
<S>                                                                <C>             <C>               <C>          <C>    
    Interest and fees on loans.................................    $ 59,199        56,807            175,260      161,912
    Investment securities......................................       4,742         7,856             17,966       27,562
    Federal funds sold and other...............................         958         1,380              3,782        2,577
                                                                    -------      --------          ---------     --------
          Total interest income................................      64,899        66,043            197,008      192,051
                                                                     ------        ------            -------      -------
Interest expense:
   Deposits:
       Interest-bearing demand.................................       1,117         1,466              3,530        4,238
       Savings.................................................       5,578         6,414             16,953       16,675
       Time deposits of $100 or more...........................       2,113         2,646              6,960        6,381
       Other time deposits.....................................      21,721        20,462             66,060       55,718
   Federal Home Loan Bank advances.............................         711         2,323              1,954       10,699
   Securities sold under agreements to repurchase..............         323           379                762        2,190
   Interest rate exchange agreements, net .....................       1,838         1,791              6,035        5,168
   Notes payable and other.....................................       1,311         1,551              4,326        5,281
                                                                    -------       -------            -------     --------
          Total interest expense...............................      34,712        37,032            106,580      106,350
                                                                    -------        ------            -------      -------
          Net interest income..................................      30,187        29,011             90,428       85,701
Provision for possible loan losses.............................       2,570         5,439              8,774        8,449
                                                                    -------       -------            -------      -------
          Net interest income after provision for possible
            loan losses........................................      27,617        23,572             81,654       77,252
                                                                    -------        ------            -------      -------
Noninterest income:
       Service charges on deposit accounts and customer
           service fees........................................       3,154         2,766              9,411        7,634
       Credit card fees........................................         663           570              1,897        1,615
       Loan servicing fees, net................................         749           510              2,027        2,286
       Gain (loss) on mortgage loans sold and held for sale....        (119)          (78)                (7)        (622)
       Gain (loss) on sale of securities, net..................        (625)          886               (421)       2,765
       Gain on sale of mortgage loan servicing rights..........           -             -                  -        3,843
       Loss on cancellation of interest rate exchange agreement           -             -                  -       (3,342)
       Other income............................................       1,688           714              2,891        3,463
                                                                    -------         -----            -------       ------ 
          Total noninterest income.............................       5,510         5,368             15,798       17,642
                                                                    -------         -----            -------       ------
Noninterest expenses:
       Salaries and employee benefits..........................       9,724        10,157             30,085       27,938
       Occupancy, net of rental income.........................       2,310         2,398              7,245        6,244
       Furniture and equipment.................................       1,734         1,814              5,404        4,982
       Federal Deposit Insurance Corporation premiums..........       9,479           582             11,355        3,810
       Postage, printing and supplies..........................         985           900              3,660        3,360
       Data processing fees....................................       1,130         1,216              3,479        3,560
       Legal, examination and professional fees................       1,098         1,502              3,620        3,975
       Credit card expenses....................................         713           620              2,149        1,762
       Communications..........................................         712           554              1,992        1,744
       Advertising.............................................         299           389              1,253        1,473
       Losses and expenses on foreclosed real estate, net of gains      460           236                951          539
       Other expenses..........................................       3,513         1,074             10,044        7,314
                                                                     ------        ------            -------       ------
          Total noninterest expenses...........................      32,157        21,442             81,237       66,701
                                                                     ------        ------            -------       ------
          Income before provision (benefit) for income taxes and
           minority interest in income of subsidiaries.........         970         7,498             16,215       28,193
Provision (benefit) for income taxes...........................        (814)        2,523              4,304        9,414
                                                                     ------         -----             ------       ------
          Income before minority interest in (income) loss
            of subsidiaries ...................................       1,784         4,975             11,911       18,779
Minority interest in (income) loss of subsidiaries.............        (252)          972              ( 472)         816
                                                                     ------         -----             ------       ------
          Net income...........................................       1,532         5,947             11,439       19,595
Preferred stock dividends......................................       1,434         1,434              4,237        4,237
                                                                     ------         -----             ------       ------
          Net income available to common shareholders..........    $     98         4,513              7,202       15,358
                                                                    =======         =====             ======       ======
Earnings per share:
   Primary.....................................................    $   4.12        190.72             304.39       649.08
   Fully Diluted...............................................       11.37        183.03             302.68       617.39
                                                                   ========        ======             ======       ======
Weighted average shares of common stock outstanding............      23,661        23,661             23,661       23,661
                                                                   ========        ======             ======       ======
</TABLE>
           See accompanying notes to consolidated financial statements

<PAGE>


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

<TABLE>
<CAPTION>



                                                                                Nine months ended September 30,
                                                                                -------------------------------
                                                                                   1996                1995
                                                                                   ----                ----
Cash flows from operating activities:
<S>                                                                             <C>                   <C>   
   Net income ..............................................................    $ 11,439              19,595
   Adjustments to reconcile net income to net cash:
      Depreciation and amortization of bank premises and equipment .........       4,314               3,997
      Amortization, net of accretion .......................................       3,360               3,107
      Originations and purchases of loans held for sale ....................    (104,923)            (33,434)
      Proceeds from sales of loans held for sale ...........................      91,336             173,873
      Provisions for possible loan losses ..................................       8,774               8,449
      Provisions for income taxes currently payable ........................       4,304               9,414
      Payments of income taxes .............................................      (5,018)               (385)
      (Increase) decrease in accrued interest receivable ...................        (824)                568
      Interest accrued on liabilities ......................................     106,579             106,450
      Payments of interest on liabilities ..................................    (107,665)           (106,350)
      Other ................................................................       7,028              (2,545)
      Minority interest in income of subsidiaries ..........................         453                (815)
                                                                                --------           ---------
          Net cash provided by (used in) operating activities ..............      19,157             181,924
                                                                                --------             -------
Cash flows from investing activities:
    Cash paid for acquired entities, net of cash and cash equivalents 
     received...............................................................           -              51,275
    Sales of securities of acquired entities ...............................           -              86,723
    Other sales of investment securities ...................................      83,616             170,270
    Maturities of investment securities ....................................     308,411             142,350
    Purchases of investment securities .....................................    (338,575)           (177,357)
    Purchases of mortgage servicing rights .................................         (56)                  -
    Net (increase) decrease in loans .......................................      (4,566)           (103,938)
    Recoveries of loans previously charged-off .............................       5,229               3,247
    Purchases of bank premises and equipment ...............................      (2,550)             (4,056)
    Other investing activities .............................................      10,476             (32,042)
                                                                                --------            --------
          Net cash provided by (used in) investing activities ..............      61,985             136,472
                                                                                --------             -------
Cash flows from financing activities:
    Other increases (decreases) in deposits:
        Demand and savings deposits ........................................     (41,067)            (82,306)
        Time deposits ......................................................     (87,883)             51,862
    Increase (decrease) in Federal funds purchased .........................      12,000             (70,300)
    Increase (decrease) in Federal Home Loan Bank advances .................      21,693             (84,157)
    Increase (decrease)  in securities sold under agreements to repurchase .      24,565             (55,496)
    Increase (decrease) in notes payable and other borrowings ..............     (22,772)             17,639
    Retirement of preferred stock...........................................        (230)                -
    Payment of preferred stock dividends ...................................      (4,237)             (4,237)
                                                                                --------            --------
          Net cash provided by (used in) financing activities ..............     (97,931)           (226,995)
                                                                                --------            --------
          Net increase (decrease) in cash and cash equivalents .............     (16,789)             91,401
Cash and cash equivalents, beginning of period .............................     199,213             131,296
                                                                                --------             -------
Cash and cash equivalents, end of period ...................................  $  182,424             222,697
                                                                                ========              =======
Noncash investing and financing activities:.................................
    Loans transferred to foreclosed real estate ............................  $    7,332               1,893
    Loans to facilitate sale of foreclosed real estate .....................         168                 213
    Loans transferred to held for sale......................................           -             146,991
                                                                                ========             =======

</TABLE>



           See accompanying notes to 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) are unaudited and should be read in conjunction
with the consolidated  financial  statements contained in the 1995 annual report
on Form 10-K.  In the opinion of  management,  all  adjustments,  consisting  of
normal recurring  accruals  considered  necessary for a fair presentation of the
results of  operations  for the  interim  periods  presented  herein,  have been
included. Operating results for the three and nine month periods ended September
30, 1996 are not necessarily  indicative of the results that may be expected for
any other interim period or for the year ending December 31, 1996.

         First Banks' primary subsidiaries (Subsidiary Banks) are:

                  First Bank, headquartered in St. Louis County, Missouri (First
                  Bank  (Missouri))
                  First  Bank,   headquartered in O'Fallon, Illinois (First Bank
                  (Illinois)) 
                  First Bank FSB, headquartered in St.  Louis  County,  Missouri
                  (First Bank FSB) 
                  First Banks America, Inc.,  headquartered  in  Houston,  Texas
                  (FBA) 
                  CCB Bancorp, Inc., headquartered in Irvine, California (CCB)
                  First Commercial   Bancorp,   Inc.,   headquartered  in
                  Sacramento, California (FCB) 
                  St.  Charles   Federal  Savings  and  Loan Association,
                  headquartered in St. Charles, Missouri (St. Charles Federal).

         CCB, a wholly owned bank holding company  subsidiary,  operates through
First Bank & Trust,  headquartered in Irvine,  California (FB&T). On January 16,
1996, La Cumbre Federal  Savings Bank F.S.B.,  previously  operating as a thrift
subsidiary of CCB, was merged into FB&T. In addition,  on April 15, 1996,  Queen
City Bank, N.A. was merged into FB&T. The mergers of these entities did not have
a significant impact on the consolidated operations of First Banks.

         FBA, a majority owned bank holding company subsidiary, operates through
BankTEXAS N.A., headquartered in Houston, Texas. First Banks' ownership interest
in FBA was  67.30% and 65.41% at  September  30,  1996 and  December  31,  1995,
respectively.

         FCB, a majority owned bank holding company subsidiary, operates through
First Commercial Bank,  headquartered  in Sacramento,  California.  First Banks'
ownership  interest  in FCB was  61.46%  and 93.29% at  September  30,  1996 and
December 31, 1995, respectively.

         The  consolidated  financial  statements  include the accounts of First
Banks, Inc. and its  subsidiaries,  net of minority  interests.  All significant
intercompany  accounts and transactions  have been eliminated in  consolidation.
Certain  reclassifications  of 1995  amounts  have been made to conform with the
1996 presentation.


(2)      Business Combinations

         On June 24, 1996, First Banks' majority owned subsidiary, FBA, executed
a  definitive  agreement  under which FBA will  acquire  Sunrise  Bancorp,  Inc.
(Sunrise), Roseville,  California, and its wholly owned subsidiary, Sunrise Bank
of  California,  in  an  all-cash  transaction.   Sunrise  is  headquartered  in
Roseville, California and operates two full-service banking offices in Roseville
and Citrus Heights,  California and one loan production office in San Francisco,
California.  At September 30, 1996,  Sunrise had total assets of $112.4 million,
consisting  primarily of cash and cash equivalents and investment  securities of
$48.2  million and loans of $61.1  million.  The  transaction  was  completed on
November 1, 1996.




(3)      Capital Stock of First Commercial Bancorp, Inc.

         During the second  quarter of 1996,  FCB  completed  an offering to its
shareholders  other than First Banks an  aggregate  of 59.69  million  shares of
newly-issued  FCB common stock at $.10 per share.  The common  stock  subscribed
under the offering  totaled 36.09 million  shares.  As a result of the offering,
First Banks  ownership  interest in FCB was reduced to 61.46% at  September  30,
1996 from 93.29% at December 31, 1995. This reduction in the ownership  interest
in FCB did not have a material  impact on the financial  condition or results of
operations of First Banks.


<PAGE>


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

                                     General

         First Banks is a  registered  bank  holding  company,  incorporated  in
Missouri in 1978 and headquartered in St. Louis County,  Missouri.  At September
30, 1996,  First Banks had $3.5 billion in total  assets;  $2.7 billion in total
loans,  net of  unearned  discount;  $3.1  billion in total  deposits;  and $244
million in total stockholders' equity.

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

         The following  table lists the  Subsidiary  Banks at September 30, 1996
ranked by asset size:
<TABLE>
<CAPTION>

                                                                                   Loans, net
                            Percent of       No. of                                 of unearned    Total
Subsidiary Banks            ownership       locations            Total Assets       discounts      deposits
----------------            ---------       ---------            ------------       ---------      --------
                                                                   (dollars expressed in thousands)
<S>                           <C>               <C>             <C>                  <C>            <C>    
First Bank FSB                100.00%           39              $ 1,013,966          841,206        817,133
First Bank (Missouri)         100.00%           29                  837,561          655,790        733,230
First Bank (Illinois)         100.00%           28                  832,082          595,856        763,945
CCB                           100.00%           13                  410,970          308,109        338,044
FBA                            67.30%            6                  271,700          172,737        229,418
FCB                            61.46%            6                  148,980           94,299        133,656
St. Charles Federal           100.00%            1                   76,313           65,069         60,320
</TABLE>

                               Financial Condition

         First  Banks' total  assets  decreased by $70 million to $3.55  billion
from $3.62  billion at September  30, 1996 and December 31, 1995,  respectively.
The  decrease is  primarily  attributable  to the  reduction in net loans of $11
million  and the  settlement  in  January  1996 of the  sale of $41  million  of
investment securities carried as a receivable at December 31, 1995. In addition,
cash and cash  equivalents  and  investment  decreased  by $17  million  and $10
million as of September 30, 1996 in  comparison to December 31, 1995.  The funds
generated   from  the   reduction  in  total  assets  were  utilized  to  reduce
rate-sensitive  deposits.  The  composition  of the  decrease  in loans,  net of
unearned discount,  is discussed in the "Lending and Credit Management"  section
of this Form 10-Q.

                              Results of Operations

Net Income

         Net income was $1.5 million for the three months  ended  September  30,
1996,  compared to $5.9 million for the same period in 1995.  Net income for the
nine months ended September 30, 1996 was $11.4 million compared to $19.6 million
for the same period in 1995.

         The results of operations for the three months ended September 30, 1996
were  adversely  affected by an $8.6  million  charge for the  one-time  special
deposit insurance  assessment passed by Congress and signed by President Clinton
on September 30, 1996. This special  assessment will be used to recapitalize the
Savings  Association  Insurance  Fund  (SAIF) of the Federal  Deposit  Insurance
Corporation (FDIC) in order to bring it into parity with the Bank Insurance Fund
(BIF) of the FDIC. As a result of this special assessment,  First Banks' cost of
deposit insurance is expected to decrease by approximately  $2.0 million for the

<PAGE>

year ended December 31, 1997 compared to its deposit insurance cost for the year
ended  December 31, 1996,  excluding the affect of the special  assessment.  The
expected  decrease  in the cost of  deposit  insurance  is  based on an  overall
assessment  rate for 1997 of 1.3  basis  points  and 6.4 basis  points  for each
$100.00  of  assessable  deposits  of BIF and SAIF  deposits,  respectively,  in
comparison to the current assessment rate,  applicable only to SAIF deposits, of
23 basis points.

         The  operating  results for 1996 also  reflect the  negative  effect on
earnings  of the  seven  acquisitions  completed  during  1995.  First  Banks is
restructuring  the  composition of acquired assets and  liabilities,  working to
improve the quality of the acquired loans,  building loan loss reserves to First
Banks' standards,  and integrating these entities into its systems and cultures.
First Banks expects this  restructuring  process to be  substantially  completed
during 1996.

         In  addition,  included in income for the three and nine month  periods
ended  September  30, 1995  included net  securities  gains of $866,000 and $2.8
million,  respectively,  compared  to net  securities  losses  of  $625,000  and
$421,000 for the same periods in 1996

Net Interest Income

         Net interest  income  (expressed on a  tax-equivalent  basis) was $30.5
million, or 3.73% of average interest earning assets, for the three months ended
September  30, 1996,  compared to $29.4  million,  or 3.54% of average  interest
earning assets, for the same period in 1995. Net interest income (expressed on a
tax-equivalent  basis) for the nine months  ended  September  30, 1996 was $91.3
million, or 3.69% of average interest earning assets, compared to $86.7 million,
or 3.58% of average interest earning assets, for the same period in 1995.

         The increased net interest income for 1996 is principally  attributable
to the  increase  in  average  interest-earning  assets  provided  primarily  by
acquisitions.  The increase was partially  offset by the interest expense on the
debt incurred in First Banks' acquisition  program and the costs associated with
the use of derivative  financial  instruments  in the management of First Banks'
interest  rate  risk  exposure.   The  expense  of  such  derivative   financial
instruments  was $3.4  million  and $8.8  million  for the three and nine  month
periods ended  September 30, 1996,  respectively,  in comparison to $2.6 million
and $6.2 million for the same periods in 1995.


<PAGE>



         The following  table sets forth,  on a  tax-equivalent  basis,  certain
information  relating to First Banks' average  balance  sheet,  and reflects the
average  yield  earned  on   interest-earning   assets,   the  average  cost  of
interest-bearing liabilities and the resulting net interest income for the three
and nine month periods ended September 30:


<PAGE>

<TABLE>
<CAPTION>


                                          Three months ended September 30,                   Nine months ended September 30,
                                           1996                   1995                        1996                    1995
                                      ------------------------------------------         ----------------------------------------- 
                                            Interest              Interest                    Interest                Interest
                                    Average income/ Yield/  Average  income/ Yield/  Average  income/ Yield/ Average  income/ Yield/
                                    balance  expense rate   balance  expense rate    balance  expense rate   balance  expense rate
                                    -------  ------------   -------  ------  -----   -------  ------- ----   -------  ------  -----
                                                                         (dollars expressed in thousands)
     Assets
     ------
Interest-earning assets:
<S>                              <C>         <C>     <C>   <C>        <C>    <C>   <C>        <C>     <C>   <C>          <C>   <C>  
   Loans                         $2,706,607  59,314  8.77% $2,653,321 56,948 8.59% $2,713,444 175,611 8.63% $2,551,896   2,325 8.48%
   Investment securities            491,325   4,908  4.00     577,172  8,063 5.59     494,470  18,483 4.98     620,063  28,163 6.06
   Federal funds sold and other      70,516     959  5.44      83,382  1,380 6.62      94,418   3,782 5.34      55,591   2,577 6.18
                                  ---------  ------         --------- ------        ---------  ------         --------  ------   
         Total interest-earning 
            assets                3,268,448  65,181  7.98   3,313,875 66,391 8.01   3,302,332 197,876 7.99   3,227,550 193,065 7.98
Nonearning assets                   222,544                   223,909                 222,692                  210,314
                                    -------                 ---------               ---------                ---------
         Total assets            $3,490,992               $ 3,537,784              $3,525,024               $3,437,864
                                  =========                 =========               =========                =========

     Liabilities and Stockholders' Equity Interest-bearing liabilities:
     ------------------------------------------------------------------
   Interest-bearing demand
      deposits                    $ 292,153   1,117  1.53% $ 279,725  1,466  2.10% $  298,990   3,530  1.57% $275,788   4,238 2.05%
   Savings deposits                 676,200   5,578  3.30    695,101  6,414  3.69     684,640  16,953  3.30   645,951  16,675 3.44
   Time deposits of $100 
      or more(1)                    154,995  2,291   5.91    182,009  2,823  6.20     169,889   7,545  5.92   153,274   6,810 5.92
   Other time deposits (1)        1,575,117 23,327   5.92  1,466,057 21,887  5.97   1,590,836  71,332  5.98 1,398,234  59,630 5.69
                                  ---------  ------        --------- -------        ---------  ------       ---------  ------
        Total interest-bearing
           deposits               2,698,465  32,313   4.79  2,622,892  32,59  4.97   2,744,355  99,360  4.83 2,473,247  87,353 4.71

   Notes payable and other (1)      148,540   2,398   6.45    286,495  4,442  6.20     140,694   7,219  6.84   375,939  18,997 6.74
                                  --------- -------         ---------  -----         ---------  ------         -------  ------
         Total interest-bearing
                 liabilities      2,847,005  34,711   4.88  2,909,387 37,032  5.09   2,885,049 106,579  4.93 2,849,186 106,350 4.98
                                            -------                   ------                   -------                 -------
Noninterest-bearing liabilities:
   Demand deposits                  366,954                   361,754                  365,413                 331,067
   Other liabilities                 35,431                    36,978                   36,252                  32,585
                                  ---------                 ---------                ---------              ----------
         Total liabilities        3,249,390                 3,308,119                3,286,714               3,212,838
Stockholders' equity                241,602                   229,665                  238,310                 225,026
                                  ---------                 ---------                ---------              ----------
         Total liabilities and
            stockholders' equity $3,490,992                $3,537,784              $ 3,525,024             $ 3,437,864
                                  =========                 =========                =========              ==========

         Net interest income                30,470                   29,359                    91,297                   86,715
                                            ======                   ======                    ======                   ======
         Net interest margin                         3.73%                    3.54%                    3.69%                   3.58%
                                                     =====                    =====                    =====                   ====
</TABLE>

(1)  Includes the effects of interest rate exchange agreements



Provision for Possible Loan Losses

         The  provision  for possible  loan losses was $2.6 million  compared to
$5.4  million  for  the  three  months  ended   September  30,  1996  and  1995,
respectively.  For the nine  months  ended  September  30,  1996 and  1995,  the
provision   for  possible  loan  losses  was  $8.8  million  and  $8.4  million,
respectively.  Net loan  charge-offs were $3.1 million and $16.1 million for the
three  and nine  month  periods  ended  September  30,  1996,  respectively,  in
comparison to $7.0 million and $9.6 million for the three and nine month periods
ended September 30, 1995, respectively.


<PAGE>



         Several of the First Banks'  acquisitions in 1995 includes  significant
portfolios of problem assets. Following these acquisitions,  First Banks pursued
aggressive  problem  loan  work out  procedures  which  included  conservatively
re-valuing loans through  charge-offs.  While these adjustments were anticipated
prior  to the  acquisitions  and  adequate  reserves  for loan  losses  had been
established  to provide for them,  this has caused loan  charge-offs to increase
during 1995 and 1996.

         The reduction in the provision for possible loan losses to $2.8 million
for the three months ended September 30, 1996, compared to $5.4 million the same
period in 1995, reflects a special provision of $3.7 million recorded during the
three month period ended September 30, 1995. This special  provision  related to
FBA's portfolio of automobile  loans which had experienced  increased  levels of
loan charge-offs and loans past due 30 days or more within that portfolio.

         The  provision for possible loan losses for the nine month period ended
September 30, 1996, reflects the additional provision  requirement  attributable
to a single  commercial  loan of  approximately  $3.7  million  which  was fully
charged-off.  The loan  was  identified  in 1995 as  having  potential  problems
creating  uncertainty  as to its  collectibility.  During the nine months  ended
September  30,  1996,  the  borrower  failed to meet  certain  previously-agreed
financial measures and principal reductions. As a result, it became apparent the
loan  could  not  be  collected  in  the  normal  course  of  business  and  was
charged-off.

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

Noninterest Income

         Noninterest income was $5.5 million and $15.8 million for the three and
nine month periods ended September 30, 1996, respectively, in comparison to $5.4
million and $17.6  million for the same  periods in 1995.  The  decrease for the
nine months ended  September 30, 1996 is primarily  attributable to net security
losses of  $625,000  and  $421,000  for the three and nine month  periods  ended
September 30, 1996 in comparison  to net  securities  gains of $886,000 and $2.8
million  for the  same  periods  in 1995,  partially  offset  by the  additional
noninterest  income generated from the seven acquisitions  completed  throughout
1995.

         An increase of $481,000 and $2.1 million in service  charges,  customer
service  fees and credit  card fees for the three and nine month  periods  ended
September 30, 1996,  compared to the same periods in 1995,  relates primarily to
the aforementioned acquisitions completed during 1995.

         Loan  servicing  fees,  net  increased  by $239,000 for the three month
period ended  September  30,  1996,  in  comparison  to the same period in 1995,
primarily from  additional  loan  servicing  revenues  provided by  acquisitions
completed  during 1995.  For the nine months  ended  September  30,  1996,  loan
servicing  fees, net decreased by $259,000,  in comparison to the same period in
1995, due to the sale of $427 million of mortgage loan  servicing  rights during
July 1995.

         During the three months ended  September 30, 1995,  First Banks decided
to sell $427  million of  mortgage  servicing  rights due to  favorable  pricing
available in the  marketplace at that time. This sale resulted in a gain of $3.8
million.

         In  addition,  First Banks sold $147  million of  residential  mortgage
loans during the nine months ended  September  30, 1995,  resulting in a loss of
$284,000.  In connection with the sale of these loans, First Banks terminated an
interest  rate exchange  agreement,  resulting in a loss of $3.3 million for the
nine months ended September 30, 1995.


<PAGE>



         Noninterest  income also  includes net security  losses of $625,000 and
$421,000 for the three and nine months ended  September 30, 1996,  respectively,
in  comparison  to net security  gains of $886,000 and $2.8 million for the same
periods in 1995.  The  securities  sold were  classified  as available  for sale
within the investment security  portfolio.  Gross gains and losses were $450,000
and $166,000,  respectively,  for the nine months ended  September 30, 1996. For
the nine months ended  September 30, 1995,  the gross gains and losses were $8.0
million and $1.2  million,  respectively.  The net security  losses  include the
recognition of $700,000 and $4.0 million of realized hedging losses for the nine
month periods ended September 30, 1996 and 1995, respectively

         The increase in other income for the three months ended  September  30,
1996 relates  primarily to a  non-recurring  gain of $795,000  realized from the
termination of leveraged lease and related sale of the underlying leased assets.
Included  in other  income for the nine  months  ended  September  30,  1995 was
$802,000 from the termination of a self-insurance trust.

Noninterest Expenses

         Noninterest expenses were $32.2 million and $21.4 million for the three
month  periods  ended  September  30, 1996 and 1995,  respectively.  Noninterest
expenses  for the three  months  ended  September  30, 1996  include the special
assessment to recapitalize the SAIF of $8.6 million as further  described below.
Excluding this special  assessment,  noninterest  expenses totaled $23.6 million
for the  three  months  ended  September  30,  1996 in  comparison  to the prior
quarters  ended  June 30,  1996 and March 31,  1996 of $24.0  million  and $25.0
million,  respectively.  These  decreases are  consistent  with the cost savings
expected upon the  integration  of the entities  acquired  throughout  1995 into
existing systems and cultures of First Banks.

         Noninterest  expense was $81.2  million and $66.7  million for the nine
months ended  September 30, 1996 and 1995,  respectively.  The increase of $14.5
million is primarily  attributable to the one-time special assessment  discussed
below and incremental  operating  expenses of the seven  acquisitions  completed
throughout 1995. In particular, salaries and employee benefits increased by $2.2
million to $30.1  million from $27.9  million for the nine month  periods  ended
September 30, 1996 and 1995, respectively.  In addition, occupancy and furniture
and  equipment  expenses  increased by $1.4 million to $12.6  million from $11.2
million  for  the  nine  month  periods  ended  September  30,  1996  and  1995,
respectively.

         FDIC expense for the three and nine month periods  ended  September 30,
1996 includes an $8.6 million charge for the one-time special deposit  insurance
assessment  passed by Congress and signed by President  Clinton on September 30,
1996. This special  assessment will be used to recapitalize the SAIF of the FDIC
and bring it into parity with the BIF of the FDIC.  As a result of this  special
assessment,  First Banks' cost of deposit insurance for SAIF insured deposits is
expected to decrease by  approximately  $2.0 million for the year ended December
31, 1997 in comparison to December 31, 1996.  The expected  decrease in the cost
of  deposit  insurance  is based on an overall  assessment  rate for 1997 of 6.4
basis points for each $100.00 of assessable SAIF deposits,  in comparison to the
current  assessment  rate of 23 basis  points.  First Banks  currently  has $1.2
billion of SAIF insured deposits.


                          Lending and Credit Management

         Interest  earned on the loan  portfolio is the primary source of income
of First Banks.  Total loans, net of unearned  discount,  represented  77.1% and
75.7%  of  total  assets  as of  September  30,  1996  and  December  31,  1995,
respectively.  Total  loans,  excluding  loans held for sale and net of unearned
discount, increased by $10.0 million to $2.71 billion at September 30, 1996 from
$2.70  billion at December 31,  1995.  The increase  reflects  continued  growth
within corporate lending of $135.8 million, substantially offset by the decrease
of the  residential  mortgage and consumer and  installment  loan  portfolios of
$108.5  million  and $68.0  million,  respectively,  at  September  30,  1996 in
comparison to December 31, 1995.  These changes reflect a  restructuring  of the

<PAGE>

loan portfolio  which was initiated in early 1995. In accordance with than plan,
First Banks has sold  substantially all of its conforming  residential  mortgage
production in the secondary  mortgage market and has  significantly  reduced its
origination of indirect automobile loans.


         The following is a summary of nonperforming assets by category:

<TABLE>
<CAPTION>
                                                                      September 30,       December 31,
                                                                          1996                1995
                                                                          ----                ----
                                                                      (dollars expressed in thousands)

<S>                                                                  <C>                        <C>  
Commercial                                                           $     5,009                9,930
Real estate construction and development                                   2,093                2,002
Real estate mortgage:
   Residential                                                            12,437               11,143
   Commercial                                                             13,338               16,016
Consumer and installment                                                     515                  300
                                                                      ----------            ---------
         Total nonperforming loans                                        33,392               39,391
Other real estate                                                         10,298                7,753
                                                                      ----------            ---------
         Total nonperforming assets                                  $    43,690               47,144
                                                                       =========            =========
Loans, net of unearned discount                                      $ 2,733,026            2,744,219
                                                                       =========            =========
Loans past due 90 days or more and still accruing                    $     5,988                8,474
                                                                       =========            =========

Allowance for possible loan losses to loans                                1.66%                 1.92%
Nonperforming loans to loans                                                1.22                 1.44
Allowance for possible loan losses to nonperforming loans                 135.86               133.70
Nonperforming assets to loans and foreclosed assets                         1.59                 1.71
                                                                    ============          ============
</TABLE>

         Impaired loans, consisting of certain nonaccrual loans and consumer and
installment loans 60 days or more past due, were $19.0 million and $31.5 million
at September 30, 1996 and December 31, 1995, respectively.

     The  following is a summary of the loan loss  experience  for the three and
nine month periods ended September 30:       
<TABLE>
<CAPTION>
                                                                Three months ended           Nine months ended
                                                                  September 30,                 September 30,
                                                                 1996        1995              1996       1995
                                                                 ----        ----              ----       ----
                                                                         (dollars expressed in thousands)
<S>                                                            <C>          <C>               <C>        <C>   
Allowance for possible loan losses, beginning of period        $ 45,921     45,540            52,665     28,410
Acquired allowances for possible loan losses                          -      7,059                 -     23,761
                                                                 ------     ------            ------     ------
                                                                 45,921     52,599            52,665     52,171
Loans charged-off                                                (4,869)    (8,010)          (21,303)   (12,856)
Recoveries of loans previously charged-off                        1,743        983             5,229      3,247
                                                                 ------     ------            ------     ------ 
   Net loan (charge-offs) recoveries                             (3,126)    (7,027)          (16,074)    (9,609)
                                                                 ------     ------            ------     ------
Provision for possible loan losses                                2,570      5,439             8,774      8,449
                                                                 ------     ------            ------      -----
Allowance for possible loan losses, end of period              $ 45,365     51,011            45,365     51,011
                                                                 ======     ======            ======     ======
</TABLE>

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

<PAGE>

                          Interest Rate Risk Management

             For financial institutions, the maintenance of a satisfactory level
of net  interest  income is a  primary  factor in  achieving  acceptable  income
levels. However, the maturity and repricing characteristics of the institution's
loan and investment portfolios,  relative to those within its deposit structure,
may differ significantly.  Furthermore,  the ability of borrowers to repay loans
and  depositors  to withdraw  funds prior to stated  maturity  dates  introduces
divergent  option  characteristics  which  operate  primarily as interest  rates
change. This causes various elements of the institution's balance sheet to react
in  different  manners and at  different  times  relative to changes in interest
rates,  thereby  leading to increases  or decreases in net interest  income over
time.  Depending  upon the amount and velocity of interest  rate  movements  and
their effect on the specific components of the institution's  balance sheet, the
effects on net interest income can be substantial.  Consequently,  a fundamental
requirement  in  managing a  financial  institution  is  establishing  effective
control of the exposure of the institution to changes in interest rates.

          First Banks  manages its  interest  rate risk by: (1)  maintaining  an
Asset Liability  Committee (ALCO) responsible to First Banks' Board of Directors
to review the overall interest rate risk management activity and approve actions
taken to reduce  risk;  (2)  maintaining  an effective  monitoring  mechanism to
determine First Banks' exposure to changes in interest rates;  (3)  coordinating
the  lending,   investing  and  deposit-generating   functions  to  control  the
assumption of interest rate risk; and (4) employing  various  off-balance  sheet
financial  instruments  to offset  inherent  interest  rate risk when it becomes
excessive.  The  objective of these  procedures  is to limit the adverse  impact
which changes in interest rates may have on net interest income.

         The ALCO has overall  responsibility  for the  effective  management of
interest rate risk and the approval of policy guidelines.  The ALCO includes the
Chairman and Chief  Executive  Officer,  the senior  executives of  investments,
credit,  retail  banking and finance,  and certain other  officers.  The ALCO is
supported by the Asset Liability  Management Group which monitors  interest rate
risk,  prepares analyses for review by the ALCO and implements actions which are
either specifically directed by the ALCO or established by policy guidelines. To
measure the effect of interest  rate  changes,  First Banks  calculates  its net
income  over  one  and  two  year  horizons  on  a  pro  forma  basis   assuming
instantaneous, permanent parallel and non-parallel shifts in the yield curve, in
varying amounts both upward and downward.

         Derivative  financial  instruments  held by First Banks for purposes of
managing interest rate risk are summarized as follows:
<TABLE>
<CAPTION>
                                                       September 30, 1996         December 31,1995
                                                       ------------------         ----------------
                                                     Notional       Credit      Notional      Credit
                                                     amount        exposure      amount      exposure
                                                     ------        --------      ------      --------
                                                              (dollars expressed in thousands)

<S>                                                  <C>                         <C>               
   Interest rate swap agreements                     $ 145,000          -        145,000          -
   Interest rate floor agreements                      105,000        131        105,000        608
   Interest rate cap agreements                         20,000        437         30,000        292
   Forward commitments to sell
       mortgage-backed  securities                      31,000          -         42,000          -
</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  exchanged are determined by reference to the notional
amounts and the other terms of the derivatives.

         Prior to 1996,  First Banks sold  interest  rate futures  contracts and
purchased  options on interest rate futures contracts to hedge the interest rate
risk of its available for sale securities portfolio.  The unamortized balance of
net deferred losses on interest rate futures  contracts of $1.2 million and $4.6
million at September 30, 1996 and December 31, 1995,  respectively,  was applied
to the carrying value of the available for sale securities  portfolio as part of
the mark-to-market valuation.
<PAGE>

         Interest  rate swap  agreements  are  utilized to extend the  repricing
characteristics  of certain  interest-bearing  liabilities  to  correspond  more
closely with the assets of First Banks,  with the objective of  stabilizing  net
interest  income over time.  The net interest  expense for these  agreements was
$1.7  million  and $5.8  million  for the three  and nine  month  periods  ended
September 30, 1996, respectively, in comparison to $1.5 million and $4.9 million
for the same periods in 1995. The maturity  dates,  notional  amounts,  interest
rates  paid and  received,  and fair  values of  interest  rate swap  agreements
outstanding as of the dates indicated are summarized as follows:
<TABLE>
<CAPTION>


   September 30, 1996:
                                                                Notional      Interest Rate   Fair Value
                                                                              -------------   ----------
                  Maturity date                                  Amount    Paid     Received  Gain (loss)
                  -------------                                  ------    ----     --------  -----------
                                                                     (dollars expressed in thousands)
<S>                                                           <C>          <C>        <C>    <C>       
   September 30, 1997                                         $ 35,000     7.04%      5.55%   $   (364)
   December 8, 1997                                             15,000      7.90      5.66        (333)
   September 30, 1999                                           35,000     7.32       5.55        (744)
   September 30, 2001                                           35,000     7.65       5.55      (1,250)
   January 30, 2005                                             25,000     8.13       5.63      (1,753)
                                                               -------                          ------
                                                              $145,000     7.53       5.58    $ (4,444)
                                                               =======     ====       ====      ======

   December  31, 1995:
                                                                Notional      Interest Rate   Fair Value
                  Maturity date                                  Amount    Paid     Received  Gain (loss)
                  -------------                                  ------    ----     --------  -----------
                                                                        (dollars expressed in thousands)
   September 30, 1997                                         $ 35,000     7.04%      5.69%  $    (932)
   December 8, 1997                                             15,000     7.90       5.81        (711)
   September 30, 1999                                           35,000     7.32       5.69      (2,073)
   September 30, 2001                                           35,000     7.65       5.69      (3,207)
   January 30, 2005                                             25,000     8.13       5.94      (3,703)
                                                               -------                        ---------
                                                              $145,000     7.53       5.74    $(10,626)
                                                               =======     ====       ====     ========
</TABLE>

         During July 1995,  First Banks shortened the effective  maturity of its
interest-bearing liabilities through the termination of $225 million of interest
rate swap agreements at a loss of $13.5 million. This loss has been deferred and
is being amortized over the remaining lives of the swap agreements. At September
30, 1996 and December 31, 1995,  the  unamortized  balance of this loss was $8.4
million and $11.6 million,  respectively,  and was included in other assets. The
amortization of the deferred loss included in interest  expense was $1.0 million
and $3.3 million for the three and nine month periods ended  September 30, 1996,
in  comparison  to $923,000  for the three and nine months ended  September  30,
1995.

         First Banks also has interest  rate cap and floor  agreements  to limit
the interest expense associated with certain of its interest-bearing liabilities
and  the  net  interest  expense  of  certain  interest  rate  swap  agreements,
respectively. At September 30, 1996 and December 31, 1995, the unamortized costs
for these agreements were $470,000 and $685,000, respectively, and were included
in other  assets.  The net interest  expense of the interest  rate cap and floor
agreements  was $72,000 and $215,000 for the three and nine month  periods ended
September 30, 1996, respectively, in comparison to $127,000 and $233,000 for the
same periods in 1995. There are no amounts receivable under these agreements.

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

                                    Liquidity

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

         In addition,  First Banks and its Subsidiary Banks may avail themselves
of more volatile sources of funds through issuance of certificates of deposit in
denominations of $100,000 or more, federal funds borrowed, securities sold under
agreements to repurchase, borrowings from the Federal Home Loan Bank (FHLB), and
other  borrowings,  including  First Banks' $90 million credit  agreement with a
group of unaffiliated financial institutions.  The aggregate funds acquired from
those  sources  were $345  million at  September  30,  1996 and $359  million at
December 31, 1995.  The decrease is primarily  attributable  to the reduction in
certificates of deposit in  denominations  of $100,000 or more of $51.3 million,
substantially  offset  by  increases  in FHLB  advances  of  $21.7  million  and
securities sold under agreements to repurchase of $24.6 million.

         At September  30, 1996,  First  Banks' more  volatile  sources of funds
mature as follows:

                                               (dollars expressed in thousands)
    Three months or less                                      $ 178,871
    Over three months through six months                         35,839
    Over six months through twelve months                       100,904
    Over twelve months                                           29,242
                                                               --------
      Total                                                   $ 344,856
                                                                =======

         Management believes the future earnings of its Subsidiary Banks will be
sufficient  to  provide  funds for  growth  and to permit  the  distribution  of
dividends  to First Banks  sufficient  to meet First Banks'  operating  and debt
service  requirements  both on a short-term  and long-term  basis and to pay the
dividends on the Class C 9% Increasing Rate,  Redeemable,  Cumulative  Preferred
Stock (Class C Shares).

                                     Capital

         Risk-based capital  guidelines for financial  institutions are designed
to relate regulatory  capital  requirements to the risk profiles of the specific
institutions  and  to  provide  more  uniform  requirements  among  the  various
regulators.  First  Banks and the  Subsidiary  Banks are  required to maintain a
minimum risk-based capital to risk-weighted assets ratio of 8.00%, with at least
4.00% being "Tier 1" capital. Tier 1 capital is composed of common stockholders'
equity,  qualifying  perpetual  preferred stock and minority interests in equity
accounts of  consolidated  subsidiaries,  less  intangibles  associated with the
purchase of subsidiaries, net losses on financial futures contracts deferred for
financial  reporting  purposes,  and the excess of net deferred  tax assets,  as
defined by regulation. Consistent with regulatory reporting, Tier 1 capital also
excludes the fair value adjustment for available for sale investment securities.
In addition,  a minimum leverage ratio (Tier 1 capital to total assets) of 3.00%
plus an additional  cushion of 100 to 200 basis points is expected.  All classes
of First Banks'  preferred  stock qualify as Tier 1 capital under the risk-based
guidelines.

          At September  30, 1996 and  December  31,  1995,  First Banks' and the
Subsidiary Banks' capital ratios were as follows:
<TABLE>
<CAPTION>

                                              Risk based capital ratios
                                              -------------------------
                                             Total                Tier 1              Leverage Ratio
                                             -----                ------              --------------
                                         1996       1995       1996      1995         1996       1995
                                         ----       ----       ----      ----         ----       ----

<S>                                      <C>        <C>        <C>       <C>          <C>        <C>  
         First Banks                     9.56%      9.34%      8.23%     7.77%        6.13%      5.32%
         First Bank FSB                 10.15      11.90       8.90     10.80         6.00       6.74
         First Bank (Illinois)          11.40      12.91      10.15     11.66         7.15       7.22
         First Bank (Missouri)          10.26      10.03       9.01      8.78         7.22       7.01
         FBA                            13.99      11.69      12.73     10.43         9.64       8.38
         CCB                            18.86      15.25      17.58     13.96        11.96       9.58
         FCB                             6.61       4.99       5.33      3.68         3.95       2.14
         St. Charles Federal            14.80      18.95      14.17     18.46         7.69       8.73
</TABLE>
<PAGE>

         FCB's capital has improved to  "undercapitalized" at September 30, 1996
from  "significantly  undercapitalized"  at  December  31,  1995 for  regulatory
purposes as a result of the offering of newly-issued  common stock as more fully
described in note 3 to the accompanying  consolidated financial statements.  The
risk  based  total  and Tier 1  capital  ratios  and  leverage  ratio  for First
Commercial Bank were 12.65%,  11.37% and 8.41%,  respectively,  at September 30,
1996 and is considered "adequately capitalized" for regulatory purposes.





Effects of New Accounting Standards

       First Banks adopted the  provisions of Statement of Financial  Accounting
Standards (SFAS) 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived  Assets to Be Disposed Of (SFAS  121),  on January 1, 1996.  SFAS 121
established  accounting  standards  for the  impairment  of  long-lived  assets,
certain  identifiable  intangibles,  and goodwill  related to those assets to be
held and used and for long-lived assets and certain identifiable  intangibles to
be disposed of.

       SFAS  121  requires  that  long-lived  assets  and  certain  identifiable
intangibles to be held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. In performing the review for recoverability,  the entity
should  estimate  the future  cash flows  expected to result from the use of the
asset and its eventual disposition. If the sum of the expected future cash flows
(undiscounted  and without interest charges) is less than the carrying amount of
the asset,  an impairment loss is recognized.  Otherwise,  an impairment loss is
not  recognized.  Measurement of an impairment  loss for  long-lived  assets and
identifiable  intangibles that an entity expects to hold and use should be based
on the fair value of the asset.

       First Banks adopted the  provisions of SFAS 122,  Accounting for Mortgage
Servicing  Rights  (SFAS  122),  on January 1,  1996.  SFAS 122 amends  SFAS 65,
Accounting for Certain  Mortgage  Banking  Activities.  SFAS 122 requires that a
mortgage  banking  enterprise  recognize  as separate  assets  rights to service
mortgage  loans  for  others,  regardless  of how  those  servicing  rights  are
acquired.

       A mortgage  banking  enterprise that acquires  mortgage  servicing rights
through  either the  purchase  or  origination  of  mortgage  loans and sells or
securitizes those loans with servicing rights retained should allocate the total
cost of the mortgage  loans to the servicing  rights and the loans  (without the
mortgage  servicing  rights),  based  on their  relative  fair  values  if it is
practicable to estimate those fair values.  If it is not practicable to estimate
the fair values of the mortgage servicing rights and the mortgage loans (without
the mortgage servicing rights), the entire cost of purchasing or originating the
loans should be allocated to the mortgage loans (without the mortgage  servicing
rights) and no cost should be allocated to the mortgage servicing rights.

       SFAS  122  requires  that  a  mortgage  banking   enterprise  assess  its
capitalized  mortgage servicing rights for impairment based on the fair value of
those rights.  The entity should stratify its mortgage servicing rights that are
capitalized  after the  adoption of this  statement  based on one or more of the
predominate risk  characteristics of the underlying loans.  Impairment should be
recognized through a valuation allowance for each impaired stratum.

          The  implementation  of SFAS 121 and SFAS 122 did not have a  material
effect on First Banks' consolidated financial statements.

         In June 1995,  the FASB issued SFAS 125,  Accounting  for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities (SFAS 125). SFAS
125 established  accounting and reporting  standards for transfers and servicing
of financial assets and extinguishment of liabilities.
<PAGE>

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

         SFAS 125 is effective for  transfers and servicing of financial  assets
and extinguishments of liabilities  occurring after December 31, 1996, and is to
be applied prospectively. Earlier or retroactive application is not permitted.

         First Banks does not believe the implementation of SFAS 125 will have a
material effect on its consolidated financial position or results of operation.





                           Part II- OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

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

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

                  11       Calculations of Earnings per Common Share

                  27       Financial Data Schedule (EDGAR only)

   (b)  First Banks, Inc. filed   no  reports on Form 8-K during the three month
        and nine month periods ended September 30, 1996.




<PAGE>







                                   SIGNATURES


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






                                          FIRST BANKS, INC.
                                          Registrant


Date:  November 12, 1996                  By: /s/ James F. Dierberg
                                              ---------------------
                                                  James F. Dierberg
                                                  Chairman, President and
                                                  Chief Executive Officer



Date:  November 12, 1996                  By:  /s/ Allen H. Blake
                                              -------------------
                                                   Allen H. Blake
                                                   Executive Vice President
                                                   and Chief Financial Officer
                                                   (Principal Financial Officer)





<PAGE>












                                   Exhibit 11




<PAGE>








                                                                    Exhibit 11


                                                     FIRST BANKS, INC.
                                             Calculation of Earnings per Share


<TABLE>
<CAPTION>


                                                 For the Three Months Ended            For the Nine months Ended
                                                        September 30,                          September 30,
                                            ------------------------------------       ---------------------
                                                   1996                 1995              1996             1995
                                                  -----                -----              ----             ----
<S>                                         <C>                       <C>              <C>            <C>  
Average shares outstanding:
   Class C preferred stock                    2,200,000                2,200,000        2,200,000         2,200,000
   Class A preferred stock                      641,082                  641,082          641,082           641,082
   Class B preferred stock                      160,505                  160,505          160,505           160,505
   Common Stock                                  23,661                   23,661           23,661            23,661
                                           ============             ============      ===========     =============

Net income                                  $ 1,531,434                5,946,692       11,438,682        19,594,539
Preferred stock dividends:
  Class C preferred stock                    (1,237,500)              (1,237,500)      (3,712,501)       (3,712,501)
  Class A preferred stock                      (192,325)                (192,325)        (512,866)         (512,866)
  Class B preferred stock                        (4,213)                  (4,213)         (11,235)          (11,235)
                                           -------------              -----------     ------------      -----------
  Income available to common
   stockholders                          $       97,396                4,512.654        7,202,080        15,357,937
                                          =============                =========        =========        ==========

Primary earnings per share                       $ 4.12                   190.72           304.39            649.08
                                                  =====                   ======           ======            ======

Fully diluted earnings per share:
Dividends per share:
  Class C preferred stock                    $   0.5625                   0.5625           1.6875            1.6875
  Class A preferred stock                        0.3000                   0.3000           0.8000            0.8000
  Class B preferred stock                        0.0263                   0.0262           0.0700            0.0700
                                               ========                 ========           ======            ======

Class A preferred stock outstanding             641,082                  641,082          641,082           641,082
Book value/share of common stock,
  beginning of year                          $ 7,038.74                 6,307.84         7,038.74          6,307.84
Dilution of common equity upon
  exercise of options and
  warrants of subsidiary bank                    (24.88)                  (39.42)          (24.88)          (39.42)
                                              ---------                 --------         --------         --------
                                             $ 7,013.86                 6,268.42         7,013.86          6,268.42
                                               ========                 ========         ========          ========

Common stock issuable upon conversion             1,828                    2,045            1,828             2,045
Shares of common stock outstanding               23,661                   23,661           23,661            23,661
                                              ---------              -----------        ---------         ---------
                                                 25,489                   25,706           25,489            25,706
                                               ========              ===========        =========          ========

Net income                                   $1,531,434                5,946,692       11,438,682        19,594,539
Class C preferred dividends                  (1,237,500)              (1,237,500)      (3,712,501)       (3,712,501)
Class B preferred dividends                      (4,213)                  (4,213)         (11,235)          (11,235)
                                             -----------             -----------       -----------       ----------
  Fully-diluted net income                  $   289,721                4,704,979        7,714,946        15,870,803
                                             ==========              ===========       ==========        ==========


Fully-diluted earnings per share                $ 11.37                   183.03           302.68            617.39
                                                 ======                   ======          =======            ======

</TABLE>