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



                                    FORM 10-Q


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

                For the quarterly period ended September 30, 2003

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

               For the transition period from _______ to ________

                           Commission File No. 0-20632

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

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

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

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

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

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

         Indicate by check mark whether the registrant is an  accelerated  filer
(as defined in Rule 12b-2 of the Exchange Act).

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

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


                                                      Shares  Outstanding
                     Class                            at October 31, 2003
                     -----                            -------------------

       Common Stock, $250.00  par value                      23,661


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                                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.......................................................      14

   ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..........................      29

   ITEM 4.  CONTROLS AND PROCEDURES.............................................................      30

PART II.    OTHER INFORMATION

   ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K....................................................      31

SIGNATURES......................................................................................      32

</TABLE>

<PAGE>


                         PART I - FINANCIAL INFORMATION
                          ITEM 1 - FINANCIAL STATEMENTS

                                FIRST BANKS, INC.

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

<TABLE>
<CAPTION>

                                                                                      September 30,    December 31,
                                                                                          2003             2002
                                                                                          ----             ----
                                                                                       (unaudited)

                                                ASSETS
                                                ------


Cash and cash equivalents:
<S>                                                                                   <C>                  <C>
     Cash and due from banks.......................................................   $    176,090         194,519
     Interest-bearing deposits with other financial institutions
       with maturities of three months or less.....................................          5,367             832
     Federal funds sold............................................................        141,200           7,900
                                                                                      ------------     -----------
          Total cash and cash equivalents..........................................        322,657         203,251
                                                                                      ------------     -----------

Investment securities:
     Available for sale, at fair value.............................................        871,281       1,120,894
     Held to maturity, at amortized cost (fair value of $12,813 and $16,978
       at September 30, 2003 and December 31, 2002, respectively)..................         12,363          16,426
                                                                                      ------------     -----------
          Total investment securities..............................................        883,644       1,137,320
                                                                                      ------------     -----------

Loans:
     Commercial, financial and agricultural........................................      1,435,756       1,443,016
     Real estate construction and development......................................      1,081,576         989,650
     Real estate mortgage..........................................................      2,490,255       2,444,122
     Lease financing...............................................................         79,334         126,738
     Consumer and installment......................................................         78,879          86,763
     Loans held for sale...........................................................        280,830         349,965
                                                                                      ------------     -----------
          Total loans..............................................................      5,446,630       5,440,254
     Unearned discount.............................................................         (8,967)         (7,666)
     Allowance for loan losses.....................................................       (110,734)        (99,439)
                                                                                      ------------     -----------
          Net loans................................................................      5,326,929       5,333,149
                                                                                      ------------     -----------

Derivative instruments.............................................................         68,399          97,887
Bank premises and equipment, net of accumulated
     depreciation and amortization.................................................        143,317         152,418
Goodwill...........................................................................        143,368         140,112
Bank-owned life insurance..........................................................         96,266          92,616
Accrued interest receivable........................................................         31,302          35,638
Deferred income taxes..............................................................         88,409          92,157
Other assets.......................................................................         64,630          58,252
                                                                                      ------------     -----------
          Total assets.............................................................   $  7,168,921       7,342,800
                                                                                      ============     ===========

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


<PAGE>





                                FIRST BANKS, INC.

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

<TABLE>
<CAPTION>

                                                                                      September 30,    December 31,
                                                                                          2003             2002
                                                                                          ----             ----
                                                                                       (unaudited)

                                             LIABILITIES
                                             -----------
Deposits:
     Demand:
<S>                                                                                   <C>                  <C>
       Non-interest-bearing........................................................   $  1,041,154         986,674
       Interest-bearing............................................................        841,960         819,429
     Savings.......................................................................      2,179,305       2,176,616
     Time:
       Time deposits of $100 or more...............................................        413,786         469,904
       Other time deposits.........................................................      1,546,014       1,720,197
                                                                                      ------------     -----------
          Total deposits...........................................................      6,022,219       6,172,820
Other borrowings...................................................................        270,716         265,644
Note payable.......................................................................         31,000           7,000
Guaranteed preferred beneficial interests in
     subordinated debentures.......................................................        205,380         270,039
Accrued interest payable...........................................................          9,329          11,751
Deferred income taxes..............................................................         43,685          61,204
Accrued expenses and other liabilities.............................................         44,135          35,301
                                                                                      ------------     -----------
          Total liabilities........................................................      6,626,464       6,823,759
                                                                                      ------------     -----------

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

Preferred stock:
     $1.00 par value, 5,000,000 shares authorized, no shares issued
       and outstanding.............................................................             --              --
     Class A convertible, adjustable rate, $20.00 par value, 750,000
       shares authorized, 641,082 shares issued and outstanding....................         12,822          12,822
     Class B adjustable rate, $1.50 par value, 200,000 shares authorized,
       160,505 shares issued and outstanding.......................................            241             241
Common stock, $250.00 par value, 25,000 shares authorized,
     23,661 shares issued and outstanding..........................................          5,915           5,915
Additional paid-in capital.........................................................          5,910           5,910
Retained earnings..................................................................        480,596         433,689
Accumulated other comprehensive income.............................................         36,973          60,464
                                                                                      ------------     -----------
          Total stockholders' equity...............................................        542,457         519,041
                                                                                      ------------     -----------
          Total liabilities and stockholders' equity...............................   $  7,168,921       7,342,800
                                                                                      ============     ===========

</TABLE>

<PAGE>
                                FIRST BANKS, INC.

                 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,
                                                                            ------------------    -----------------
                                                                               2003       2002     2003      2002
                                                                               ----       ----     ----      ----
Interest income:
<S>                                                                         <C>         <C>       <C>       <C>
     Interest and fees on loans............................................ $ 88,504    96,080    268,796   293,904
     Investment securities.................................................    7,176     9,219     24,007    24,368
     Federal funds sold and other..........................................      345       512      1,099     1,454
                                                                            --------  --------   --------  --------
          Total interest income............................................   96,025   105,811    293,902   319,726
                                                                            --------  --------   --------  --------
Interest expense:
     Deposits:
       Interest-bearing demand.............................................    1,195     1,786      4,346     5,739
       Savings.............................................................    5,520     8,819     18,091    27,253
       Time deposits of $100 or more.......................................    3,028     4,624     10,049    14,803
       Other time deposits.................................................    8,865    15,986     32,147    51,837
     Other borrowings......................................................      550       806      1,671     2,635
     Note payable..........................................................      388       309        574       839
     Guaranteed preferred debentures.......................................    3,399     5,300     13,768    18,629
                                                                            --------  --------   --------  --------
          Total interest expense...........................................   22,945    37,630     80,646   121,735
                                                                            --------  --------   --------  --------
          Net interest income..............................................   73,080    68,181    213,256   197,991
Provision for loan losses..................................................   15,000    13,700     36,000    38,700
                                                                            --------  --------   --------  --------
          Net interest income after provision for loan losses..............   58,080    54,481    177,256   159,291
                                                                            --------  --------   --------  --------
Noninterest income:
     Service charges on deposit accounts and customer service fees.........    9,175     8,491     26,824    21,985
     Gain on mortgage loans sold and held for sale.........................   12,425     7,857     33,161    20,316
     Net gain (loss) on sales of available-for-sale investment securities..      266        (2)     6,832        90
     Bank-owned life insurance investment income...........................    1,325     1,505      4,029     4,318
     Net (loss) gain on derivative instruments.............................     (383)    1,963         43     1,714
     Other.................................................................    3,375     5,662     12,370    16,417
                                                                            --------  --------   --------  --------
          Total noninterest income.........................................   26,183    25,476     83,259    64,840
                                                                            --------  --------   --------  --------
Noninterest expense:
     Salaries and employee benefits........................................   29,422    28,350     90,281    84,506
     Occupancy, net of rental income.......................................    4,916     6,302     15,399    15,938
     Furniture and equipment...............................................    4,610     4,191     13,714    12,730
     Postage, printing and supplies........................................    1,311     1,346      3,909     4,205
     Information technology fees...........................................    8,126     7,814     24,568    24,411
     Legal, examination and professional fees..............................    1,781     2,866      5,552     6,463
     Amortization of intangibles associated with
       the purchase of subsidiaries........................................      658       516      1,848     1,480
     Communications........................................................      677       671      1,950     2,375
     Advertising and business development..................................      762     1,181      2,996     4,132
     Other.................................................................    8,208     5,917     23,990    18,992
                                                                            --------  --------   --------  --------
          Total noninterest expense........................................   60,471    59,154    184,207   175,232
                                                                            --------  --------   --------  --------
          Income before provision for income taxes and
              minority interest in income of subsidiary....................   23,792    20,803     76,308    48,899
Provision for income taxes.................................................   10,092     7,372     28,877    17,471
                                                                            --------  --------   --------  --------
          Income before minority interest in income of subsidiary .........   13,700    13,431     47,431    31,428
Minority interest in income of subsidiary..................................       --       437         --     1,066
                                                                            --------  --------   --------  --------
          Net income.......................................................   13,700    12,994     47,431    30,362
Preferred stock dividends..................................................      196       196        524       524
                                                                            --------  --------   --------  --------
          Net income available to common stockholders...................... $ 13,504    12,798     46,907    29,838
                                                                            ========  ========   ========  ========

Basic earnings per common share............................................ $ 570.75    540.87   1,982.48  1,261.05
                                                                            ========  ========   ========  ========

Diluted earnings per common share.......................................... $ 565.09    534.32   1,954.63  1,246.05
                                                                            ========  ========   ========  ========

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

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


<PAGE>


<TABLE>
<CAPTION>




                                                    FIRST BANKS, INC.

             CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME - (UNAUDITED)
                   Nine Months Ended September 30, 2003 and 2002 and Three Months Ended December 31, 2002
                                    (dollars expressed in thousands, except per share data)


                                                     Adjustable Rate                                           Accu-
                                                     Preferred Stock                                          mulated
                                                   ------------------                                          Other     Total
                                                   Class A                     Additional Compre-             Compre-    Stock-
                                                   Conver-             Common   Paid-In   hensive  Retained   hensive   holders'
                                                    tible     Class B   Stock   Capital   Income   Earnings   Income     Equity
                                                    -----     -------   -----   -------   ------   --------   ------     ------

<S>                                                <C>          <C>    <C>       <C>     <C>        <C>        <C>      <C>
Consolidated balances, December 31, 2001.........  $12,822      241    5,915     6,074              389,308    34,297   448,657
Nine months ended September 30, 2002:
    Comprehensive income:
      Net income.................................       --       --       --        --   30,362      30,362        --    30,362
      Other comprehensive income, net of tax:
        Unrealized gains on securities, net of
          reclassification adjustment (1)........       --       --       --        --    7,121          --     7,121     7,121
        Derivative instruments:
          Current period transactions............       --       --       --        --   20,702          --    20,702    20,702
                                                                                        -------
      Comprehensive income.......................                                        58,185
                                                                                        =======
    Class A preferred stock dividends,
      $0.80 per share............................       --       --       --        --                 (513)       --      (513)
    Class B preferred stock dividends,
      $0.07 per share............................       --       --       --        --                  (11)       --       (11)
    Effect of capital stock transactions of
      majority-owned subsidiary..................       --       --       --      (124)                  --        --      (124)
                                                   -------      ---    -----     -----              -------   -------   -------
Consolidated balances, September 30, 2002........   12,822      241    5,915     5,950              419,146    62,120   506,194
Three months ended December 31, 2002:
    Comprehensive income:
      Net income.................................       --       --       --        --   14,805      14,805        --    14,805
      Other comprehensive income, net of tax:
        Unrealized gains on securities, net of
          reclassification adjustment (1)........       --       --       --        --    1,788          --     1,788     1,788
        Derivative instruments:
          Current period transactions............       --       --       --        --   (3,444)         --    (3,444)   (3,444)
                                                                                        -------
      Comprehensive income.......................       --       --       --        --   13,149
                                                                                        =======
    Class A preferred stock dividends,
      $0.40 per share............................       --       --       --        --                 (256)       --      (256)
    Class B preferred stock dividends,
      $0.04 per share............................       --       --       --        --                   (6)       --        (6)
    Effect of capital stock transactions of
      majority-owned subsidiary..................       --       --       --       (40)                  --        --       (40)
                                                   -------      ---    -----     -----              -------   -------   -------
Consolidated balances, December 31, 2002.........   12,822      241    5,915     5,910              433,689    60,464   519,041
Nine months ended September 30, 2003:
    Comprehensive income:
      Net income.................................       --       --       --        --   47,431      47,431        --    47,431
      Other comprehensive income, net of tax:
        Unrealized losses on securities, net of
          reclassification adjustment (1)........       --       --       --        --   (9,335)         --    (9,335)   (9,335)
        Derivative instruments:
          Current period transactions............       --       --       --        --  (14,156)         --   (14,156)  (14,156)
                                                                                        -------
      Comprehensive income.......................                                        23,940
                                                                                        =======
    Class A preferred stock dividends,
      $0.80 per share............................       --       --       --        --                 (513)       --      (513)
    Class B preferred stock dividends,
      $0.07 per share............................       --       --       --        --                  (11)       --       (11)
                                                   -------      ---     ----     -----              -------   -------   -------

Consolidated balances, September 30, 2003........  $12,822      241    5,915     5,910              480,596    36,973   542,457
                                                   =======      ===    =====     =====              =======   =======   =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

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

                                                                         Three Months Ended    Nine Months Ended  Three Months Ended
                                                                            September 30,        September 30,        December 31,
                                                                        -------------------    -----------------
                                                                          2003      2002         2003      2002           2002
                                                                          ----      ----         ----      ----           ----

     Unrealized (losses) gains on investment securities
<S>                                                                      <C>        <C>        <C>        <C>            <C>
         arising during the period.....................................  $(2,874)   (500)      (4,894)    7,180          1,788
     Less reclassification adjustment for gains (losses)
         included in net income........................................      173      (1)       4,441        59             --
                                                                         -------    ----       ------     -----          -----
     Unrealized (losses) gains on investment securities................  $(3,047)   (499)      (9,335)    7,121          1,788
                                                                         =======    ====       ======     =====          =====

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



<PAGE>

<TABLE>
<CAPTION>


                                                          FIRST BANKS, INC.

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

                                                                                                 Nine Months Ended
                                                                                                   September 30,
                                                                                           --------------------------
                                                                                               2003           2002
                                                                                               ----           ----

Cash flows from operating activities:
<S>                                                                                         <C>              <C>
     Net income........................................................................... $   47,431        30,362
     Adjustments to reconcile net income to net cash used in operating activities:
       Depreciation and amortization of bank premises and equipment.......................     14,596        13,857
       Amortization, net of accretion.....................................................     20,599        11,869
       Originations and purchases of loans held for sale.................................. (1,815,712)   (1,299,522)
       Proceeds from the sale of loans held for sale......................................  1,679,908     1,092,359
       Provision for loan losses..........................................................     36,000        38,700
       Provision for income taxes.........................................................     28,877        17,471
       Payments of income taxes...........................................................    (27,441)      (18,096)
       Decrease in accrued interest receivable............................................      5,023         3,891
       Interest accrued on liabilities....................................................     80,646       121,735
       Payments of interest on liabilities................................................    (83,212)     (125,303)
       Gain on mortgage loans sold and held for sale......................................    (33,161)      (20,316)
       Net gain on sales of available-for-sale investment securities......................     (6,832)          (90)
       Net gain on derivative instruments.................................................        (43)       (1,714)
       Other operating activities, net....................................................        993        13,381
       Minority interest in income of subsidiary..........................................         --         1,066
                                                                                           ----------    ----------
          Net cash used in operating activities...........................................    (52,328)     (120,350)
                                                                                           ----------    ----------

Cash flows from investing activities:
     Cash received for acquired entities, net of cash
       and cash equivalents...............................................................     14,870        44,097
     Proceeds from sales of investment securities available for sale......................    152,776        55,130
     Maturities of investment securities available for sale...............................  1,001,496       855,121
     Maturities of investment securities held to maturity.................................      4,143         3,456
     Purchases of investment securities available for sale................................   (744,314)     (957,312)
     Purchases of investment securities held to maturity..................................       (103)       (2,260)
     Net (increase) decrease in loans.....................................................     (3,863)      114,333
     Recoveries of loans previously charged-off...........................................     17,024        11,692
     Purchases of bank premises and equipment.............................................     (4,213)      (13,576)
     Other investing activities, net......................................................     11,165         8,622
                                                                                           ----------    ----------
          Net cash provided by investing activities.......................................    448,981       119,303
                                                                                           ----------    ----------

Cash flows from financing activities:
     Increase in demand and savings deposits..............................................     28,967       213,963
     Decrease in time deposits............................................................   (269,674)     (157,154)
     Decrease in federal funds purchased..................................................    (55,000)      (81,000)
     Decrease in Federal Home Loan Bank advances..........................................     (3,548)      (10,600)
     (Decrease) increase in daily securities sold under agreements to repurchase..........    (37,928)       44,399
     Increase in term securities sold under agreements to repurchase......................    100,000            --
     Advances drawn on note payable.......................................................     34,500        36,500
     Repayments of note payable...........................................................    (10,500)      (64,000)
     Proceeds from issuance of guaranteed preferred beneficial interests
       in subordinated debentures.........................................................     68,710        24,233
     Payments for redemption of guaranteed preferred beneficial
       interests in subordinated debentures...............................................   (132,250)           --
     Payments of preferred stock dividends................................................       (524)         (524)
                                                                                           ----------    ----------
          Net cash (used in) provided by financing activities.............................   (277,247)        5,817
                                                                                           ----------    ----------
          Net increase in cash and cash equivalents.......................................    119,406         4,770
Cash and cash equivalents, beginning of period............................................    203,251       241,874
                                                                                           ----------    ----------
Cash and cash equivalents, end of period.................................................. $  322,657       246,644
                                                                                           ==========    ==========

Noncash investing and financing activities:
     Loans transferred to other real estate............................................... $   11,999         3,584
     Loans held for sale transferred to loans.............................................     66,482         2,923
                                                                                           ==========    ==========

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


<PAGE>


                                FIRST BANKS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 (1)     BASIS OF PRESENTATION

         The  consolidated   financial  statements  of  First  Banks,  Inc.  and
subsidiaries  (First Banks or the Company) are  unaudited  and should be read in
conjunction with the  consolidated  financial  statements  contained in the 2002
Annual Report on Form 10-K.  The  consolidated  financial  statements  have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America and conform to predominant practices within the banking
industry.  Management  of  First  Banks  has  made a  number  of  estimates  and
assumptions  relating  to the  reporting  of  assets  and  liabilities  and  the
disclosure  of contingent  assets and  liabilities  to prepare the  consolidated
financial statements in conformity with accounting principles generally accepted
in the  United  States of  America.  Actual  results  could  differ  from  those
estimates. In the opinion of management,  all adjustments,  consisting of normal
recurring accruals  considered  necessary for a fair presentation of the results
of operations  for the interim  periods  presented  herein,  have been included.
Operating results for the three and nine months ended September 30, 2003 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2003.

         The  consolidated  financial  statements  include the accounts of First
Banks,  Inc. and its  subsidiaries.  All significant  intercompany  accounts and
transactions  have been eliminated.  Certain  reclassifications  of 2002 amounts
have been made to conform to the 2003 presentation.

         First Banks operates  through its wholly owned  subsidiary bank holding
company,  The San  Francisco  Company  (SFC),  headquartered  in San  Francisco,
California, and SFC's wholly owned subsidiary bank, First Bank, headquartered in
St. Louis County, Missouri.

  (2)    ACQUISITIONS, ACQUISITION AND INTEGRATION COSTS AND OTHER CORPORATE
         TRANSACTIONS

         On March 31, 2003,  First Banks  completed its  acquisition  of Bank of
Ste.  Genevieve,   Ste.  Genevieve,   Missouri,  from  Allegiant  Bancorp,  Inc.
(Allegiant) in exchange for  approximately  974,150  shares of Allegiant  common
stock that were previously  held by First Banks.  The purpose of the acquisition
was to further  expand the  Company's  Midwest  banking  franchise.  First Banks
continued to own  approximately  232,000 shares,  or approximately  1.52% of the
issued and  outstanding  shares of  Allegiant  common  stock  subsequent  to the
acquisition. On October 27, 2003, First Banks contributed all of these shares to
a charitable  foundation  as further  described  in Note 13 to the  consolidated
financial statements. At the time of the acquisition, Bank of Ste. Genevieve had
$115.1  million  in total  assets,  $42.9  million  in  loans,  net of  unearned
discount,  $797,000 in  investment  securities,  $93.7  million in deposits  and
operated two banking  locations.  The  transaction  was  accounted for using the
purchase  method of  accounting.  First Banks recorded a gain of $6.3 million on
the  exchange of the common stock and goodwill of  approximately  $3.4  million,
which is not  expected  to be  deductible  for tax  purposes.  The core  deposit
intangibles,  which  are  expected  to be  deductible  for  tax  purposes,  were
approximately  $3.5 million and are being  amortized over seven years  utilizing
the straight-line  method. Bank of Ste. Genevieve was merged with and into First
Bank. Due to the immaterial effect on previously reported financial information,
pro  forma   disclosures   have  not  been  presented  for  the   aforementioned
transaction.

         On  March  31,  2003,  First  Banks  completed  the  merger  of its two
wholly-owned  bank  subsidiaries,  First Bank and First  Bank & Trust,  to allow
certain  administrative  and  operational  economies not available while the two
banks maintained separate charters.

         First Banks accrues certain costs  associated with its  acquisitions as
of the respective  consummation  dates.  Essentially  all of these accrued costs
relate either to adjustments to the staffing levels of the acquired  entities or
to the  anticipated  termination  of information  technology or item  processing
contracts of the acquired entities prior to their stated contractual  expiration
dates.  The most  significant  costs  incurred  relate  to  salary  continuation
agreements,  or other similar  agreements,  of executive  management and certain
other  employees  of the  acquired  entities  that  were in  place  prior to the
acquisition  dates.  These  agreements  provide for  payments  over various time
periods  generally ranging from two to 15 years and are triggered as a result of
the change in control of the  acquired  entity.  Other  severance  benefits  for
employees  that  are  terminated  in  conjunction  with the  integration  of the
acquired entities into First Banks' existing operations are normally paid to the
recipients  within 90 days of the  applicable  consummation  date.  The  accrued
severance balance of $1.6 million identified in the following table is comprised
of  contractual   obligations  under  salary   continuation   agreements  to  11
individuals  with remaining terms ranging from three months to  approximately 13
years.  As the obligation to make payments under these  agreements is accrued at
the consummation dates, such payments do not have any impact on the consolidated
statements of income.
<PAGE>

         A  summary  of  the  cumulative   acquisition  and  integration   costs
attributable  to  the  Company's  acquisitions,  which  were  accrued  as of the
consummation  dates of the  respective  acquisitions,  is  listed  below.  These
acquisition and integration costs are reflected in accrued and other liabilities
in the consolidated financial statements.
<TABLE>
<CAPTION>

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

<S>                                                                <C>                       <C>              <C>
         Balance at December 31, 2002............................  $  2,351                  28               2,379
         Nine Months Ended September 30, 2003:
           Amounts accrued at acquisition date...................       100                 350                 450
           Reversal to goodwill..................................       (39)               (108)               (147)
           Payments..............................................      (781)               (270)             (1,051)
                                                                   --------              ------             -------
         Balance at September 30, 2003...........................  $  1,631                  --               1,631
                                                                   ========              ======             =======
</TABLE>
         First Banks also incurs costs  associated  with  acquisitions  that are
expensed  in  the  consolidated   statements  of  income.   These  costs  relate
exclusively to additional costs incurred in conjunction with the data processing
conversions of the respective entities.

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

         Intangible assets associated with the purchase of subsidiaries,  net of
amortization, were comprised of the following at September 30, 2003 and December
31, 2002:
<TABLE>
<CAPTION>

                                                     September 30, 2003              December 31, 2002
                                                ----------------------------  ----------------------------
                                                   Gross                          Gross
                                                 Carrying       Accumulated     Carrying      Accumulated
                                                  Amount       Amortization      Amount      Amortization
                                                  ------       ------------      ------      ------------
                                                             (dollars expressed in thousands)

     Amortized intangible assets:
<S>                                              <C>               <C>            <C>              <C>
         Core deposit intangibles..............  $  17,391         (3,611)        13,871           (1,869)
         Goodwill associated with
           purchases of branch offices.........      2,210           (826)         2,210             (718)
                                                 ---------        -------        -------          -------
              Total............................  $  19,601         (4,437)        16,081           (2,587)
                                                 =========        =======        =======          =======

     Unamortized intangible assets:
         Goodwill associated with the
           purchase of subsidiaries............  $ 141,984                       138,620
                                                 =========                       =======
</TABLE>
         Amortization   of   intangibles   associated   with  the   purchase  of
subsidiaries  and branch offices was $658,000 and $1.8 million for the three and
nine months  ended  September  30,  2003,  respectively,  and  $516,000 and $1.5
million  for  the  comparable  periods  in  2002.  Amortization  of  intangibles
associated  with the purchase of  subsidiaries,  including  amortization of core
deposit intangibles and branch purchases, has been estimated through 2008 in the
following  table,  and does not take into  consideration  any  potential  future
acquisitions or branch purchases.
<TABLE>
<CAPTION>

                                                        (dollars expressed in thousands)

         Year ending December 31:
<S>                                                               <C>
             2003 (1)...........................................  $   2,504
             2004...............................................      2,632
             2005...............................................      2,632
             2006...............................................      2,632
             2007...............................................      2,632
             2008...............................................      2,632
                                                                  ---------
                Total...........................................  $  15,664
                                                                  =========
         --------------------
         (1)Includes $1.8 million of amortization for the nine months ended September 30, 2003.

</TABLE>

<PAGE>


         Changes  in the  carrying  amount  of  goodwill  for the three and nine
months ended September 30, 2003 and 2002 were as follows:
<TABLE>
<CAPTION>

                                                                           Three Months Ended         Nine Months Ended
                                                                              September 30,             September 30,
                                                                         ----------------------      -------------------
                                                                          2003            2002         2003        2002
                                                                          ----            ----         ----        ----
                                                                                 (dollars expressed in thousands)

<S>                                                                     <C>             <C>          <C>          <C>
           Balance, beginning of period..............................   $ 142,167       127,796      140,112      115,860
           Goodwill acquired during period...........................          --            --        1,026       12,577
           Acquisition-related adjustments...........................       1,237            --        2,338         (569)
           Amortization - purchases of branch offices................         (36)          (36)        (108)        (108)
                                                                        ---------      --------     --------     --------
           Balance, end of period....................................   $ 143,368       127,760      143,368      127,760
                                                                        =========      ========     ========     ========
</TABLE>

(4)      MORTGAGE BANKING ACTIVITIES

         At September 30, 2003 and December 31, 2002, First Banks serviced loans
for  others  amounting  to  $1.20  billion  and  $1.29  billion,   respectively.
Borrowers'  escrow  balances held by First Banks on such loans were $2.4 million
and $517,000 at September 30, 2003 and December 31, 2002, respectively. Mortgage
servicing  rights are  amortized  in  proportion  to the related  estimated  net
servicing  income on a basis that  approximates  the  disaggregated,  discounted
basis over the estimated lives of the related mortgages considering the level of
current and  anticipated  repayments,  which  range from five to ten years.  The
weighted  average  amortization  period  of the  mortgage  servicing  rights  is
approximately five years.

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

                                                                           Three Months Ended         Nine Months Ended
                                                                              September 30,             September 30,
                                                                        ----------------------       -------------------
                                                                          2003          2002          2003        2002
                                                                          ----          ----          ----        ----
                                                                                 (dollars expressed in thousands)

<S>                                                                     <C>             <C>          <C>         <C>
           Balance, beginning of period................................ $ 16,979        12,354       14,882      10,125
           Originated mortgage servicing rights........................    3,125         1,998        7,619       5,958
           Amortization................................................   (3,278)         (984)      (5,675)     (2,715)
           Impairment valuation allowance..............................     (800)           --         (800)         --
           Reversal of impairment valuation allowance..................      166            --          166          --
                                                                        --------       -------      -------     -------
           Balance, end of period...................................... $ 16,192        13,368       16,192      13,368
                                                                        ========       =======      =======     =======
</TABLE>

         The fair value of mortgage  servicing  rights was  approximately  $18.3
million and $19.5  million at  September  30, 2003 and 2002,  respectively,  and
$17.2  million at December  31,  2002.  The excess of the fair value of mortgage
servicing rights over the carrying value was approximately $2.1 million and $6.1
million  at  September  30,  2003 and 2002,  respectively,  and $2.3  million at
December  31,  2002.  The  decline in the  excess of the fair value of  mortgage
servicing  rights over the carrying  value  represents  the  declining  mortgage
interest  rate  environment  in 2002 and 2003  that  resulted  in a  significant
increase in the number of  mortgages  being  prepaid or  refinanced.  During the
three  and  nine  months  ended  September  30,  2003,  First  Banks  recognized
impairment of $800,000 through a valuation  allowance  associated with a decline
in the fair value of an individual  mortgage  servicing rights stratum below its
carrying value.  Subsequently,  First Banks reversed  $166,000 of this valuation
allowance  based upon an  increase in the fair value of the  mortgage  servicing
rights  stratum above the carrying  value,  net of the valuation  allowance.  At
September 30, 2003, the fair value of mortgage servicing rights exceeded the net
carrying value by approximately $2.1 million.
<PAGE>

         Amortization of mortgage servicing rights, as it relates to the balance
at September 30, 2003 of $16.2 million,  has been estimated  through 2008 in the
following table:
<TABLE>
<CAPTION>

                                                                 (dollars expressed in thousands)


                  Year ending December 31:
<S>                                                                        <C>
                      2003 (1)...........................................  $  1,301
                      2004...............................................     4,716
                      2005...............................................     4,365
                      2006...............................................     3,730
                      2007...............................................     2,186
                      2008...............................................       528
                                                                           --------
                         Total (2).......................................  $ 16,826
                                                                           ========
</TABLE>
                  ----------------------------
                  (1) Excludes  $5.7 million of amortization for the nine months
                      ended September 30, 2003.
                  (2) The total mortgage  servicing rights to  be  amortized  to
                      expense excludes the impairment valuation allowance, which
                      was $634,000 at September 30, 2003.

(5)      EARNINGS PER COMMON SHARE

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

                                                                               Income         Shares        Per Share
                                                                             (numerator)   (denominator)     Amount
                                                                             -----------   -------------     ------
                                                                           (dollars in thousands, except per share data)
     Three months ended September 30, 2003:
<S>                                                                          <C>               <C>         <C>
         Basic EPS - income available to common stockholders.............    $  13,504         23,661      $   570.75
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          192            577           (5.66)
                                                                             ---------        -------      ----------
         Diluted EPS - income available to common stockholders...........    $  13,696         24,238      $   565.09
                                                                             =========        =======      ==========

     Three months ended September 30, 2002:
         Basic EPS - income available to common stockholders.............    $  12,798         23,661      $   540.87
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          192            650           (6.55)
                                                                             ---------        -------      ----------
         Diluted EPS - income available to common stockholders...........    $  12,990         24,311      $   534.32
                                                                             =========        =======      ==========

     Nine months ended September 30, 2003:
         Basic EPS - income available to common stockholders.............    $  46,907         23,661      $ 1,982.48
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          513            600          (27.85)
                                                                             ---------        -------      ----------
         Diluted EPS - income available to common stockholders...........    $  47,420         24,261      $ 1,954.63
                                                                             =========        =======      ==========

     Nine months ended September 30, 2002:
         Basic EPS - income available to common stockholders.............    $  29,838         23,661      $ 1,261.05
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          513            696          (15.00)
                                                                             ---------        -------      ----------
         Diluted EPS - income available to common stockholders...........    $  30,351         24,357      $ 1,246.05
                                                                             =========        =======      ==========
</TABLE>
<PAGE>

(6)      TRANSACTIONS WITH RELATED PARTIES

         First Title Guarantee LLC (First Title), a corporation  established and
administered  by and for the benefit of First Banks' Chairman and members of his
immediate family, received approximately $128,000 and $379,000 for the three and
nine months  ended  September  30,  2003,  and  $116,000  and  $284,000  for the
comparable periods in 2002, respectively,  in commissions for policies purchased
by First  Banks  or  customers  of First  Bank  from  unaffiliated,  third-party
insurors.  The insurance premiums on which the  aforementioned  commissions were
earned were competitively bid, and First Banks deems the commissions First Title
earned from  unaffiliated  third-party  companies to be comparable to those that
would have been earned by an unaffiliated third-party agent.

         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 $795,000 and $2.3 million for the three and nine
months  ended  September  30,  2003,  and  $918,000  and  $2.7  million  for the
comparable  periods in 2002,  respectively,  in commissions paid by unaffiliated
third-party  companies.  The  commissions  received were primarily in connection
with the  sales  of  annuities,  securities  and  other  insurance  products  to
customers of First Bank.

         First Services,  L.P., a limited partnership  indirectly owned by First
Banks'  Chairman  and  members of his  immediate  family,  provides  information
technology  and various  related  services to First Banks,  Inc. and First Bank.
Fees paid under agreements with First Services, L.P. were $6.9 million and $20.6
million for the three and nine months ended September 30, 2003, and $6.6 million
and $20.3 million for the comparable periods in 2002,  respectively.  During the
three months ended September 30, 2003 and 2002, First Services,  L.P. paid First
Banks  $985,000  and  $993,000,  respectively,  and during the nine months ended
September 30, 2003 and 2002, First Services,  L.P. paid First Banks $3.2 million
and $2.9 million,  respectively,  in rental fees for the use of data  processing
and other equipment owned by First Banks.

         During 2002, First Capital America,  Inc., a corporation owned by First
Banks' Chairman and members of his immediate family, received approximately $1.0
million of origination  and servicing fees  associated  with  commercial  leases
originated  and  serviced  for  First  Bank by the  employees  of First  Capital
America, Inc. Effective January 1, 2003, this relationship was discontinued.

         First  Bank  has had in the  past,  and may  have in the  future,  loan
transactions  in the  ordinary  course of business  with its  directors or their
affiliates.  These  loan  transactions  have been on the same  terms,  including
interest rates and  collateral,  as those  prevailing at the time for comparable
transactions with unaffiliated  persons and did not involve more than the normal
risk  of  collectibility  or  present  other  unfavorable  features.   Loans  to
directors,  their  affiliates and executive  officers of First Banks,  Inc. were
approximately $17.8 million and $12.8 million at September 30, 2003 and December
31, 2002, respectively.  First Bank does not extend credit to its officers or to
officers  of First  Banks,  Inc.,  except for  extensions  of credit  secured by
mortgages  on  personal  residences,  loans to purchase  automobiles,  overdraft
protection lines and personal credit card accounts.
<PAGE>

(7)      REGULATORY CAPITAL

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

         Quantitative  measures  established  by  regulation  to ensure  capital
adequacy require First Banks and its subsidiary bank to maintain minimum amounts
and  ratios of total and Tier I  capital  (as  defined  in the  regulations)  to
risk-weighted  assets,  and of Tier I  capital  to  average  assets.  Management
believes,  as of September 30, 2003,  First Banks and its  subsidiary  bank were
each well capitalized under the applicable regulations.

         As of  September  30,  2003,  the most recent  notification  from First
Banks' primary regulator categorized First Banks and its subsidiary bank as well
capitalized under the regulatory  framework for prompt corrective  action. To be
categorized  as well  capitalized,  First  Banks  and its  subsidiary  bank must
maintain minimum total risk-based,  Tier I risk-based and Tier I leverage ratios
as set forth in the table below.  At  September  30, 2003 and December 31, 2002,
First Banks' and its subsidiary  bank's  required and actual capital ratios were
as follows:
<TABLE>
<CAPTION>


                                                              Actual                                     To Be Well
                                                     ---------------------------                      Capitalized Under
                                                     September 30,  December 31,     For Capital      Prompt Corrective
                                                        2003           2002       Adequacy Purposes   Action Provisions
                                                        ----           ----       -----------------   -----------------

     Total capital (to risk-weighted assets):
<S>                                                      <C>           <C>               <C>                <C>
              First Banks.............................   10.24%        10.68%            8.0%               10.0%
              First Bank..............................   10.69         10.75             8.0                10.0
              First Bank & Trust (1)..................      --         10.18             8.0                10.0

     Tier 1 capital (to risk-weighted assets):
              First Banks.............................    8.33          7.47             4.0                 6.0
              First Bank..............................    9.43          9.49             4.0                 6.0
              First Bank & Trust (1)..................      --          8.93             4.0                 6.0

     Tier 1 capital (to average assets):
              First Banks.............................    7.36          6.45             3.0                 5.0
              First Bank..............................    8.31          7.79             3.0                 5.0
              First Bank & Trust (1) .................      --          8.26             3.0                 5.0

     ---------------------------
     (1) First Bank & Trust was merged with and into First Bank on March 31, 2003.
</TABLE>

(8)      BUSINESS SEGMENT RESULTS

         First Banks'  business  segment is its subsidiary  bank. The reportable
business segment is consistent with the management structure of First Banks, the
subsidiary bank and the internal reporting system that monitors performance.

         Through its branch network,  First Bank provides  similar  products and
services in its defined  geographic  areas.  The products  and services  offered
include a broad range of commercial  and personal  deposit  products,  including
demand, savings, money market and time deposit accounts. In addition, First Bank
markets combined basic services for various customer groups,  including packaged
accounts for more affluent customers, and sweep accounts,  lock-box deposits and
cash management products for commercial  customers.  First Bank also offers both
consumer and  commercial  loans.  Consumer  lending  includes  residential  real
estate,  home  equity  and  installment  lending.  Commercial  lending  includes
commercial,  financial and  agricultural  loans,  real estate  construction  and
development  loans,  commercial real estate loans,  asset-based  loans and trade
financing.  Other financial  services  include  mortgage  banking,  debit cards,
brokerage services, credit-related insurance, internet banking, automated teller
machines,  telephone banking,  safe deposit boxes and trust, private banking and

<PAGE>

institutional  money management  services.  The revenues generated by First Bank
consist  primarily of interest  income,  generated  from the loan and investment
security  portfolios,  and service charges and fees,  generated from the deposit
products and services. The geographic areas include eastern Missouri,  Illinois,
southern  and northern  California  and Houston,  Dallas,  Irving,  McKinney and
Denton,  Texas.  The products  and  services are offered to customers  primarily
within First Bank's respective geographic areas.

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

<TABLE>
<CAPTION>

         The business segment results are summarized as follows:

                                                                             Corporate, Other
                                                                             and Intercompany
                                                  First Bank               Reclassifications (1)           Consolidated Totals
                                         -----------------------------   ---------------------------    ----------------------------
                                         September 30,   December 31,    September 30,  December 31,    September 30,   December 31,
                                              2003          2002 (2)         2003           2002            2003           2002
                                              ----          --------         ----           ----            ----           ----
                                                                   (dollars expressed in thousands)

Balance sheet information:

<S>                                      <C>             <C>                 <C>            <C>             <C>         <C>
Investment securities................... $   878,535     1,114,479           5,109          22,841          883,644     1,137,320
Loans, net of unearned discount.........   5,437,663     5,432,589              --              (1)       5,437,663     5,432,588
Goodwill................................     143,368       140,112              --              --          143,368       140,112
Total assets............................   7,159,679     7,357,155           9,242         (14,355)       7,168,921     7,342,800
Deposits................................   6,029,052     6,189,928          (6,833)        (17,108)       6,022,219     6,172,820
Note payable............................          --            --          31,000           7,000           31,000         7,000
Guaranteed preferred beneficial
  interests in subordinated debentures..          --            --         205,380         270,039          205,380       270,039
Stockholders' equity....................     779,864       777,548        (237,407)       (258,507)         542,457       519,041
                                         ===========     =========        ========        ========        =========     =========

                                                                             Corporate, Other
                                                                             and Intercompany
                                                  First Bank               Reclassifications (1)           Consolidated Totals
                                         ----------------------------    --------------------------    ----------------------------
                                              Three Months Ended            Three Months Ended              Three Months Ended
                                                 September 30,                 September 30,                   September 30,
                                         ----------------------------    --------------------------    ----------------------------
                                              2003          2002 (2)        2003            2002             2003           2002
                                              ----          --------        ----            ----             ----           ----

Income statement information:

Interest income......................... $    96,053       105,699             (28)            112           96,025       105,811
Interest expense........................      19,166        32,078           3,779           5,552           22,945        37,630
                                         -----------     ---------        --------        --------        ---------     ---------
     Net interest income................      76,887        73,621          (3,807)         (5,440)          73,080        68,181
Provision for loan losses...............      15,000        13,700              --              --           15,000        13,700
                                         -----------     ---------        --------        --------        ---------     ---------
     Net interest income after provision
       for loan losses..................      61,887        59,921          (3,807)         (5,440)          58,080        54,481
Noninterest income......................      26,133        25,926              50            (450)          26,183        25,476
Noninterest expense.....................      58,612        57,979           1,859           1,175           60,471        59,154
                                         -----------     ---------        --------        --------        ---------     ---------
     Income before provision for income
       taxes and minority interest
       in income of subsidiary..........      29,408        27,868          (5,616)         (7,065)          23,792        20,803
Provision for income taxes..............      12,040         9,662          (1,948)         (2,290)          10,092         7,372
                                         -----------     ---------        --------        --------        ---------     ---------
     Income before minority interest in
       income of subsidiary.............      17,368        18,206          (3,668)         (4,775)          13,700        13,431
Minority interest in income
       of subsidiary....................          --            --              --             437               --           437
                                         -----------     ---------        --------        --------        ---------     ---------
     Net income......................... $    17,368        18,206          (3,668)         (5,212)          13,700        12,994
                                         ===========     =========        ========        ========        =========     =========


<PAGE>

                                                                             Corporate, Other
                                                                             and Intercompany
                                                  First Bank               Reclassifications (1)            Consolidated Totals
                                         ----------------------------    --------------------------    ----------------------------
                                               Nine Months Ended           Nine Months Ended                 Nine Months Ended
                                                 September 30,               September 30,                     September 30,
                                         ----------------------------    --------------------------    ----------------------------
                                              2003          2002 (2)         2003           2002             2003           2002
                                              ----          --------         ----           ----             ----           ----

Income statement information:

Interest income......................... $   293,749       319,469             153             257          293,902       319,726
Interest expense........................      66,448       102,521          14,198          19,214           80,646       121,735
                                         -----------     ---------        --------        --------        ---------     ---------
     Net interest income................     227,301       216,948         (14,045)        (18,957)         213,256       197,991
Provision for loan losses...............      36,000        38,700              --              --           36,000        38,700
                                         -----------     --------         --------        --------        ---------     ---------
     Net interest income after
       provision for loan losses........     191,301       178,248         (14,045)        (18,957)         177,256       159,291
Noninterest income......................      77,122        66,412           6,137          (1,572)          83,259        64,840
Noninterest expense.....................     180,422       172,245           3,785           2,987          184,207       175,232
                                         -----------     ---------        --------        --------        ---------     ---------
     Income before provision
       for income taxes
       and minority interest in
       income of subsidiary.............      88,001        72,415         (11,693)        (23,516)          76,308        48,899
Provision for income taxes..............      32,933        25,217          (4,056)         (7,746)          28,877        17,471
                                            --------     ---------        --------        --------        ---------     ---------
     Income before minority interest
       in income of subsidiary..........      55,068        47,198          (7,637)        (15,770)          47,431        31,428
Minority interest in income
     of subsidiary......................          --            --              --           1,066               --         1,066
                                         -----------     ---------        --------        --------        ---------     ---------
     Net income......................... $    55,068        47,198          (7,637)        (16,836)          47,431        30,362
                                         ===========     =========        ========        ========        =========     =========
----------------
(1)  Corporate and other includes $3.4 million and $5.3 million of guaranteed preferred debentures expense for the  three months
     ended September 30, 2003 and 2002, respectively. The applicable income tax benefit associated with the guaranteed preferred
     debentures expense was $1.2 million and $1.9 million for the three months  ended September 30, 2003 and 2002, respectively.
     For  the  nine  months  ended  September 30, 2003 and 2002, corporate and other includes $13.8 million and $18.6 million of
     guaranteed preferred debenture expense, respectively. The applicable income tax  benefit  associated  with  the  guaranteed
     preferred  debentures  expense  was  $4.8 million  and $6.5  million for the nine months ended September 30, 2003 and 2002,
     respectively. In addition, corporate and other includes holdingcompany expenses.
(2)  First Bank & Trust was merged with and into First Bank on March 31, 2003 as further described in Note 2 to the accompanying
     consolidated financial statements. Accordingly, the 2002 amounts have been restated to reflect this combination of entities
     under common control.
</TABLE>



<PAGE>

(9)      GUARANTEED PREFERRED BENEFICIAL INTERESTS IN SUBORDINATED DEBENTURES

         On March 20, 2003,  First Bank Statutory  Trust (FBST),  a newly formed
Connecticut  statutory trust subsidiary of First Banks,  issued 25,000 shares of
8.10%  cumulative  trust  preferred  securities at $1,000 per share in a private
placement,  and issued 774 shares of common  securities to First Banks at $1,000
per share.  First  Banks owns all of the common  securities  of FBST.  The gross
proceeds of the offering  were used by FBST to purchase  $25.0  million of 8.10%
junior subordinated debentures from First Banks, maturing on March 20, 2033. The
maturity  date of the  subordinated  debentures  may be  shortened to a date not
earlier than March 20, 2008,  if certain  conditions  are met. The  subordinated
debentures  are the sole asset of FBST. In  connection  with the issuance of the
FBST preferred  securities,  First Banks made certain guarantees and commitments
that, in the aggregate,  constitute a full and unconditional  guarantee by First
Banks of the  obligations  of FBST under the FBST  preferred  securities.  First
Banks' proceeds from the issuance of the subordinated debentures to FBST, net of
offering  expenses,  were  $24.5  million.  Distributions  on  FBST's  preferred
securities are payable  quarterly in arrears,  beginning March 31, 2003, and are
included  in  interest  expense  in  the  consolidated   statements  of  income.
Distributions on FBST's preferred  securities were $518,000 and $1.1 million for
the three and nine months ended September 30, 2003, respectively.

         On April 1, 2003,  First  Preferred  Capital Trust IV (First  Preferred
IV), a newly formed Delaware  business trust  subsidiary of First Banks,  issued
1.84 million shares of 8.15%  cumulative  trust preferred  securities at $25 per
share in an  underwritten  public  offering,  and issued 56,908 shares of common
securities  to  First  Banks at $25 per  share.  First  Banks  owns all of First
Preferred IV's common  securities.  The gross proceeds of the offering were used
by  First  Preferred  IV  to  purchase  approximately  $47.4  million  of  8.15%
subordinated  debentures  from  First  Banks,  maturing  on June 30,  2033.  The
maturity  date may be shortened  to a date not earlier  than June 30,  2008,  if
certain  conditions are met. The  subordinated  debentures are the sole asset of
First Preferred IV. In connection with the issuance of the preferred securities,
First Banks made certain  guarantees  and  commitments  that, in the  aggregate,
constitute a full and unconditional  guarantee by First Banks of the obligations
of First Preferred IV under the First Preferred IV preferred  securities.  First
Banks'  proceeds  from the  issuance  of the  subordinated  debentures  to First
Preferred IV, net of underwriting fees and offering expenses, were approximately
$44.2 million.  Distributions  on First Preferred IV's preferred  securities are
payable  quarterly in arrears,  beginning on June 30, 2003,  and are included in
interest  expense in the  consolidated  statements of income.  Distributions  on
First Preferred IV's preferred securities were $937,000 and $1.9 million for the
three and nine  months  ended  September  30,  2003,  respectively.  First Banks
utilized  the entire net  proceeds of the  offering to redeem  $88.9  million of
9.25% trust  preferred  securities  issued by First  Preferred  Capital Trust in
1997.  The  remaining  funds  necessary  for the  redemption  were provided from
available  cash of  approximately  $20.2  million and the net  proceeds of $24.5
million  from FBST's  issuance  of  additional  trust  preferred  securities  as
described above.

         On June 30, 2003,  First Banks  completed its redemption in full of the
$47.2  million  of 8.50%  trust  preferred  securities  issued by First  America
Capital  Trust  (FACT) in 1998.  The funds  necessary  for the  redemption  were
provided from available cash of $12.7 million and an advance of $34.5 million on
First  Banks'  revolving  credit  line  with a group of  unaffiliated  financial
institutions.

(10)     CONTINGENT LIABILITIES

         In October  2000,  First Banks  entered  into two  continuing  guaranty
contracts.  For value  received,  and for the purpose of inducing a pension fund
and its  trustees  and a welfare  fund and its  trustees  (the Funds) to conduct
business with Missouri Valley Partners,  Inc. (MVP), First Bank's  institutional
investment  management  subsidiary,  First Banks irrevocably and unconditionally
guaranteed payment of and promised to pay to each of the Funds any amounts up to
the sum of  $5,000,000  to the extent MVP is liable to the Funds for a breach of
the Investment  Management Agreements (including the Investment Policy Statement
and  Investment  Guidelines),  by and  between  MVP and  the  Funds  and/or  any
violation of the Employee  Retirement  Income  Security Act by MVP  resulting in
liability  to  the  Funds.  The  guaranties  are  continuing  guaranties  of all
obligations  that may arise for  transactions  occurring prior to termination of
the Investment  Management  Agreements and are co-existent  with the term of the
Investment Management  Agreements.  The Investment Management Agreements have no
specified  term but may be  terminated  at any time upon  written  notice by the
Trustees or, at First  Banks'  option,  upon thirty days  written  notice to the
Trustees. In the event of termination of the Investment  Management  Agreements,
such  termination  shall  have no effect on the  liability  of First  Banks with
respect to obligations  incurred  before such  termination.  The  obligations of
First Banks are joint and several  with those of MVP.  First Banks does not have
any recourse  provisions  that would enable it to recover from third parties any
amounts  paid  under the  contracts  nor does  First  Banks  hold any  assets as
collateral that, upon occurrence of a required payment under the contract, could
be liquidated  to recover all or a portion of the  amount(s)  paid. At September
30, 2003 and December 31, 2002, First Banks had not recorded a liability for the
obligations  associated  with these guaranty  contracts,  as the likelihood that
First Banks will be required to make payments under the contracts is remote.


<PAGE>


(11)     OTHER BORROWINGS

         Other  borrowings were comprised of the following at September 30, 2003
and December 31, 2002:
<TABLE>
<CAPTION>

                                                                            September 30,           December 31,
                                                                                2003                    2002
                                                                          ---------------          --------------
                                                                              (dollars expressed in thousands)

<S>                                                                        <C>                          <C>
         Federal funds purchased.......................................    $        --                  55,000
         Securities sold under agreements to repurchase:
             Daily.....................................................        158,716                 196,644
             Term......................................................        100,000                      --
         Federal Home Loan Bank borrowings.............................         12,000                  14,000
                                                                           -----------               ---------
               Total other borrowings..................................    $   270,716                 265,644
                                                                           ===========               =========
</TABLE>

         In the third quarter of 2003,  First Banks entered into $100.0  million
of term securities sold under agreements to repurchase.  On July 30, 2003, First
Banks entered into a $50 million five-year reverse repurchase  agreement under a
master repurchase agreement. Interest is paid quarterly and is equivalent to the
three-month  London  Interbank  Offering Rate minus 0.68% plus a floating amount
equal to the differential between the three-month London Interbank Offering Rate
and the strike price of 3.50%, if the three-month London Interbank Offering Rate
exceeds  3.50%.  On August 13, 2003,  First Banks entered into an additional $50
million  five-year  reverse  repurchase  agreement  under  a  master  repurchase
agreement.  Interest is paid  quarterly  and is  equivalent  to the  three-month
London Interbank  Offering Rate minus 0.565% plus a floating amount equal to the
differential  between the  three-month  London  Interbank  Offering Rate and the
strike price of 3.00%, if the three-month London Interbank Offering Rate exceeds
3.00%.  The  underlying   securities  associated  with  the  reverse  repurchase
agreements  are  mortgage-backed  securities  and are  not  under  First  Banks'
physical control.

(12)     NOTE PAYABLE

         On August 14, 2003,  First Banks  entered into a revolving  credit line
with a group of unaffiliated  financial  institutions  (Credit  Agreement).  The
Credit  Agreement,  dated August 14, 2003,  replaced a similar  revolving credit
agreement dated August 22, 2002. The Credit  Agreement  provides a $60.0 million
revolving credit line and a $20.0 million letter of credit facility. Interest is
payable on  outstanding  principal  loan  balances  at a floating  rate equal to
either the lender's prime rate or, at First Banks' option,  the London Interbank
Offering  Rate plus a margin  determined  by the  outstanding  loan balances and
First Banks' net income for the preceding  four calendar  quarters.  If the loan
balances  outstanding  under the revolving credit line are accruing at the prime
rate,  interest is paid  monthly.  If the loan  balances  outstanding  under the
revolving  credit  line are  accruing  at the London  Interbank  Offering  Rate,
interest is payable based on the one, two, three or six-month  London  Interbank
Offering  Rate,  as selected by First Banks.  Amounts may be borrowed  under the
Credit Agreement until August 12, 2004, at which time the principal and interest
outstanding is due and payable.  There were  outstanding loan balances under the
Credit  Agreement  at  September  30, 2003 of $31.0  million.  Outstanding  loan
balances under the previous  credit  agreement were $7.0 million at December 31,
2002.

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

(13)     SUBSEQUENT EVENT

         On  October  27,  2003,  First  Banks  contributed  231,779  shares  of
Allegiant  common  stock  with a fair  value  of $5.1  million  to The  Dierberg
Foundation,  a charitable  trust  created by and for the benefit of First Banks'
Chairman  and  members  of  his  immediate  family.  In  conjunction  with  this
transaction,  First  Banks  recorded  charitable  contribution  expense  of $5.1
million,  which  was  partially  offset by a gain on the  contribution  of these
available-for-sale  investment  securities  of $2.3  million,  representing  the
difference  between the cost basis and the fair value of the common stock on the
date of the  contribution.  In addition,  First Banks  recorded a tax benefit of
$2.5 million  associated with this  transaction.  The contribution of this stock
eliminated First Banks' investment in Allegiant.


<PAGE>


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

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

                                     General

         We are a registered bank holding  company  incorporated in Missouri and
headquartered  in St.  Louis  County,  Missouri.  Through the  operation  of our
subsidiaries,  we offer a broad array of  financial  services  to  consumer  and
commercial  customers.  We operate  through  our wholly  owned  subsidiary  bank
holding  company,  The  San  Francisco  Company,  or SFC,  headquartered  in San
Francisco,  California,  and its  wholly  owned  subsidiary  bank,  First  Bank,
headquartered in St. Louis County,  Missouri.  First Bank currently operates 151
branch offices throughout California, Illinois, Missouri and Texas. At September
30, 2003, we had total assets of $7.17 billion, loans, net of unearned discount,
of $5.44 billion, total deposits of $6.02 billion and total stockholders' equity
of $542.5 million.

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

         Primary  responsibility  for managing our subsidiary banking unit rests
with its  officers  and  directors.  However,  in keeping  with our  policy,  we
centralize overall corporate policies,  procedures and administrative  functions
and provide operational support functions for our subsidiary bank. This practice
allows  us  to  achieve  various  operating   efficiencies  while  allowing  our
subsidiary bank officers and directors to focus on customer service.
<PAGE>

                               Financial Condition

         Our total assets were $7.17  billion and $7.34 billion at September 30,
2003 and  December  31,  2002,  respectively.  The  decrease in total  assets is
primarily attributable to weak loan demand and an anticipated level of attrition
associated  with low deposit  rates  offset by our  acquisition  of Bank of Ste.
Genevieve on March 31, 2003,  which provided assets of $115.1  million.  Federal
funds sold  increased by $133.3  million due to the  investment  of excess funds
resulting  from reduced loan demand and  maturities  of  investment  securities.
Investment  securities  decreased  $253.7 million to $883.6 million at September
30, 2003 from $1.14 billion at December 31, 2002  primarily due to $1.01 billion
of   maturities   of  investment   securities,   $152.8   million  of  sales  of
available-for-sale  investment  securities  and $17.9  million  relating  to the
exchange of  Allegiant  Bancorp,  Inc.,  or  Allegiant,  common stock for a 100%
ownership interest in Bank of Ste. Genevieve,  offset by purchases of investment
securities of $744.4 million and $797,000 in investment securities acquired with
Bank  of Ste.  Genevieve.  The net  proceeds  associated  with  the  decline  in
investment  securities  were  utilized  primarily to fund our reduction in total
deposits as further  discussed  below.  The decrease in our assets was partially
offset by an increase in loans, net of unearned discount, of $5.1 million, which
is  further  discussed  under  "--Loans  and  Allowance  for Loan  Losses."  Our
derivative  financial  instruments declined to $68.4 million from $97.9 million,
consistent  with a decline  in the fair value of  certain  derivative  financial
instruments and the call of a $46.0 million  interest rate swap agreement by the
counterparty,   offset  by  three  additional   interest  rate  swap  agreements
aggregating  $271.0  million that we entered  into in 2003 as further  discussed
under  "--Interest  Rate Risk  Management." In addition,  other assets increased
$6.4  million  to $64.6  million at  September  30,  2003 from $58.3  million at
December  31,  2002.  This  increase  primarily  results from a $2.9 million net
increase in other real estate as further  discussed under "--Loans and Allowance
for Loan Losses," and a $1.3 million increase in mortgage servicing rights.

         Total  deposits  decreased  by  $150.6  million  to  $6.02  billion  at
September  30,  2003 from $6.17  billion at  December  31,  2002.  The  decrease
primarily reflects an anticipated level of attrition associated with low deposit
rates and continued aggressive competition within our market areas offset by the
$93.7 million of deposits that we acquired  from Bank of Ste.  Genevieve.  Other
borrowings  increased  $5.1 million to $270.7 million at September 30, 2003 from
$265.6  million at December  31,  2002.  We  attribute  this  increase to $100.0
million of term securities  sold under  agreements to repurchase that we entered
into during the third  quarter of 2003,  as further  discussed in Note 11 to our
consolidated  financial  statements,  offset  by a $55.0  million  reduction  in
federal funds purchased and a $37.9 million  reduction in daily  securities sold
under  agreements to  repurchase.  Our note payable was fully repaid in February
2003 through  dividends  from our  subsidiaries.  However,  on June 30, 2003, we
obtained a $34.5  million  advance to  partially  fund the  redemption  of $46.0
million of trust preferred securities.

         Guaranteed preferred  beneficial  interests in subordinated  debentures
decreased  $64.7  million  primarily  due to the  redemption of $86.3 million of
trust preferred  securities  issued by First  Preferred  Capital Trust and $46.0
million of trust  preferred  securities  issued by First America  Capital Trust,
partially  offset by the additional trust preferred  securities  issued by First
Bank Statutory Trust on March 20, 2003 and First  Preferred  Capital Trust IV on
April 1, 2003, as more fully described in Note 9 to our  consolidated  financial
statements and under  "--Interest Rate Risk  Management."  Deferred income taxes
payable  decreased by $17.5  million to $43.7 million at September 30, 2003 from
$61.2 million at December 31, 2002. We attribute  this decrease to reductions in
unrealized   gains/losses  on   available-for-sale   investment  securities  and
derivative  financial  instruments.  Furthermore,  accrued  expenses  and  other
liabilities  increased  $8.8  million to $44.1  million at  September  30,  2003
compared to $35.3 million at December 31, 2002. The increase  primarily reflects
an  increase  in accrued  real  estate and  income  taxes and lease  termination
obligations  as  well as the  timing  of  certain  payments.  Accumulated  other
comprehensive  income  decreased $23.5 million to $37.0 million at September 30,
2003 from $60.5 million at December 31, 2002. This decrease is comprised of $9.3
million  associated  with the change in unrealized  gains on  available-for-sale
investment  securities  as  accounted  for under SFAS No. 115,  including a $6.3
million  reversal of the  unrealized  gain  attributable  to the exchange of the
Allegiant  common  stock  as  further  discussed  in Note 2 to our  consolidated
financial statements and a $14.2 million decrease associated with our derivative
financial instruments as accounted for under SFAS No. 133.
<PAGE>

                              Results of Operations

Net Income

         Net income was $13.7  million and $47.4  million for the three and nine
months ended  September  30, 2003,  respectively,  compared to $13.0 million and
$30.4 million for the comparable  periods in 2002.  Results for the three months
ended  September 30, 2003 reflect  increased net interest income and noninterest
income, offset by slightly higher operating expenses, an increased provision for
loan losses and an increase in the effective tax rate. The increase for the nine
months ended September 30, 2003 over the comparable  period in 2002 is primarily
attributable  to increased net interest  income  resulting from reduced  deposit
rates and earnings on interest  rate swap  agreements  in  association  with our
interest rate risk  management  program,  increased gains on mortgage loans sold
and held for sale, a gain relating to the partial  exchange of our investment in
Allegiant  for a 100%  ownership  interest in Bank of Ste.  Genevieve as further
described in Note 2 to our consolidated financial statements partially offset by
increased  provisions  for state income  taxes  attributable  to higher  taxable
income and the 2003 merger of our two bank charters, which resulted in increased
taxable  income  allocations in states where we file separate state tax returns.
The  increase in earnings in 2003  continues  to reflect our  adaptation  to the
current  interest  rate  environment  and weak  economic  conditions  that  have
prevailed over the last two years. Our ongoing efforts to maintain an acceptable
net interest  margin in the current low interest rate  environment,  improve our
noninterest  income,  address credit losses and control  operating  expenses are
reflected in our financial  performance.  Higher-than-historical  levels of loan
charge-offs,  loan  delinquencies  and  nonperforming  loans  led  to  increased
provisions  for loan losses during 2002.  These  nonperforming  trends remain at
elevated  levels in 2003,  thus  contributing  to  continued  higher-than-normal
provisions for loan losses,  primarily attributable to charge-offs  concentrated
within our  commercial  leasing  portfolio.  We continue to monitor our loan and
leasing  portfolios and focus on asset quality and related  challenges  stemming
from the  current  economic  environment,  including  weak loan demand and lower
prevailing interest rates.

         Noninterest  income was $26.2  million and $83.3  million for the three
and nine months ended September 30, 2003,  respectively,  in comparison to $25.5
million and $64.8 million for the  comparable  periods in 2002.  The increase in
noninterest  income is  primarily  due to a $6.3 million gain on the exchange of
common stock of Allegiant  held by us for a 100%  ownership  interest in Bank of
Ste.  Genevieve,  as further  described in Note 2 to our consolidated  financial
statements.  The increase also reflects  increased  gains on mortgage loans sold
and held for sale,  resulting from growth of our mortgage banking  activities as
well as high volumes of new  originations  and  refinancings  related to overall
reductions in mortgage  loan rates,  and  increased  service  charges on deposit
accounts and customer service fees.

         Operating  expenses were $60.5 million and $184.2 million for the three
and nine  months  ended  September  30,  2003,  respectively,  compared to $59.2
million and $175.2  million for the  comparable  periods in 2002.  The increased
operating expenses in 2003 primarily result from increased salaries and employee
benefit  expenses  associated  with our 2002  and 2003  acquisitions,  increased
commissions  paid to  mortgage  loan  originators  due to  continued  high  loan
volumes,  and  write-downs on operating  leases  associated  with our commercial
leasing business.  These higher operating  expenses,  exclusive of the operating
leases,   are  reflective  of  recently   completed   acquisitions  and  ongoing
investments made in conjunction with the execution of our overall business plan.
<PAGE>

Net Interest Income

         Net interest income  (expressed on a tax equivalent basis) increased to
$73.4 million, or 4.49% of average interest-earning assets, for the three months
ended   September   30,  2003,   from  $68.6   million,   or  4.24%  of  average
interest-earning  assets, for the comparable period in 2002. For the nine months
ended  September  30, 2003 and 2002,  net interest  income  (expressed  on a tax
equivalent  basis) was  $214.3  million,  or 4.43% of  average  interest-earning
assets,  and  $199.1  million,  or 4.23%  of  average  interest-earning  assets,
respectively.  We credit the increased net interest income  primarily to reduced
deposit  rates,  earnings on our interest rate swap  agreements  that we entered
into in  conjunction  with our  interest  rate risk  management  program,  which
mitigate  the effects of  decreasing  interest  rates,  and a $61.3  million net
reduction in our outstanding  trust preferred  securities.  As further discussed
under  "--Interest Rate Risk Management," our derivative  financial  instruments
used to hedge our interest rate risk contributed $17.3 million and $48.1 million
to net interest  income for the three and nine months ended  September 30, 2003,
respectively,  compared to $14.2  million and $38.0  million for the  comparable
periods  in 2002.  In  addition,  earning  assets  increased  as a result of our
acquisitions of Bank of Ste.  Genevieve in March 2003,  which provided assets of
$115.1 million,  and Plains Financial  Corporation in January 2002 and two Texas
branch purchases in June 2002, which provided assets of $256.3 million and $63.7
million,  respectively.  Furthermore,  during  the second  quarter  of 2003,  we
redeemed $132.3 million of our trust  preferred  securities that had been issued
during  1997 and 1998.  As more fully  described  in Note 9 to our  consolidated
financial  statements,  in March 2003,  First Bank Statutory  Trust issued $25.0
million of trust preferred  securities in a private placement and in April 2003,
First  Preferred  Capital  Trust IV  issued  $46.0  million  of trust  preferred
securities in an underwritten public offering. These transactions,  coupled with
the use of  additional  derivative  financial  instruments,  have  allowed us to
reduce our overall  expense  associated  with the utilization of trust preferred
securities,  thereby  improving  our  overall  financial  performance;  however,
prevailing low interest rates,  generally weak loan demand and overall  economic
conditions continue to exert pressure on our net interest margin.

         Average loans, net of unearned  discount,  were $5.42 billion and $5.39
billion for the three and nine months ended  September  30, 2003,  respectively,
compared to $5.36 billion and $5.42 billion for the comparable  periods in 2002.
Additionally,  the yield on our loan portfolio  decreased to 6.48% and 6.67% for
the three and nine months ended  September 30, 2003,  respectively,  compared to
7.12% and 7.26% for the comparable  periods in 2002. We attribute the decline in
the  average  balance  and  yields  primarily  to  general  economic  conditions
resulting in continued weak loan demand and lower prevailing interest rates. The
reduced  level of interest  income  earned on our loan  portfolio as a result of
declining  interest rates and increased  competition within our market areas was
partially  mitigated by the  earnings  associated  with our  interest  rate swap
agreements.

         Average  deposits  increased to $6.05 billion and $6.06 billion for the
three and nine months ended September 30, 2003, respectively, from $6.00 billion
and $5.90  billion for the  comparable  periods in 2002.  For the three and nine
months ended September 30, 2003, the aggregate weighted average rate paid on our
deposit  portfolio  decreased to 1.48% and 1.71%,  respectively,  from 2.44% and
2.67% for the comparable periods in 2002. We attribute the decline in rates paid
for the three and nine months ended  September 30, 2003  primarily to rates paid
on our savings and time deposits, which have continued to decline in conjunction
with the  interest  rate  reductions  previously  discussed.  The  decline  also
reflects our continued  efforts to  restructure  the  composition of our deposit
base as the majority of our deposit  development  programs  are directed  toward
increased transactional  accounts,  such as demand and savings accounts,  rather
than time deposits,  and emphasize attracting more than one account relationship
with customers. Demand and savings deposits increased to $4.06 billion and $3.99
billion for the three and nine months ended  September  30, 2003,  respectively,
from $3.69 billion and $3.59 billion for the comparable periods in 2002, whereas
time deposits declined to $1.99 billion and $2.07 billion for the three and nine
months  ended  September  30,  2003,  respectively,  from $2.31  billion for the
comparable periods in 2002.
<PAGE>

         The aggregate  weighted average rate paid on our note payable was 4.80%
and 6.33% for the three and nine months ended September 30, 2003,  respectively,
compared to 21.37% and 4.69% for the  comparable  periods in 2002.  Due to lower
average  balances  outstanding on our note payable during the three months ended
June 30, 2003 and September 30, 2002, the timing of commitment,  arrangement and
other renewal fees recognized  resulted in a  disproportionate  weighted average
rates paid for those  periods.  At December  31,  2002,  our note payable had an
outstanding balance of $7.0 million,  which was fully repaid from available cash
in February 2003. On June 30, 2003, we obtained a $34.5 million  advance to fund
the redemption of our trust preferred securities issued by First America Capital
Trust in 1998,  as further  described  in Note 9 to our  consolidated  financial
statements.  At September 30, 2003, our note payable had an outstanding  balance
of $31.0  million.  Amounts  outstanding  under our $60.0 million line of credit
with a group of unaffiliated  financial institutions bear interest at a floating
rate equal to either the  lender's  prime rate or, at First Banks'  option,  the
London Interbank  Offering Rate plus a margin determined by the outstanding loan
balances and our  profitability.  Thus, our revolving  credit line  represents a
relatively  high-cost  funding  source as increased  advances have the effect of
increasing  the weighted  average rate of non-deposit  liabilities.  The overall
cost of this funding source,  however,  has been significantly  mitigated by the
reductions in the prime lending rate and in the outstanding  balance of our note
payable.  The aggregate  weighted average rate paid on our other borrowings also
declined  for the three and nine  months  ended  September  30,  2003,  from the
comparable  periods in 2002,  reflecting the current interest rate  environment.
The aggregate  weighted  average rate paid on our other borrowings was 0.88% and
1.11% for the three and nine months  ended  September  30,  2003,  respectively,
compared to 1.64% and 1.88% for the comparable periods in 2002.

         Guaranteed  preferred  debentures  expense  was $3.4  million and $13.8
million for the three and nine months ended  September  30, 2003,  respectively,
compared to $5.3 million and $18.6 million for the  comparable  periods in 2002.
As  previously  discussed  and  as  more  fully  described  in  Note  9  to  our
consolidated financial statements,  the decrease for 2003 primarily reflects the
redemption of $132.3  million of outstanding  trust  preferred  securities,  the
issuance of $71.0 million of trust preferred  securities at lower interest rates
and earnings  associated with our interest rate swap agreements  entered into in
May and June of 2002 and in March and April of 2003 as further  discussed  under
"--Interest Rate Risk  Management." The aggregate  weighted average rate paid on
our guaranteed  preferred  debentures  declined to 6.65% and 7.24% for the three
and nine months ended September 30, 2003, respectively, from 7.88% and 9.80% for
the comparable periods in 2002.


<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 three
and nine months ended September 30, 2003 and 2002:
<TABLE>
<CAPTION>

                                          Three Months Ended September 30,                    Nine Months Ended September 30,
                                 -------------------------------------------------  -----------------------------------------------
                                           2003                      2002                     2003                     2002
                                 ------------------------  ----------------------  ----------------------  -----------------------
                                           Interest                 Interest                 Interest                Interest
                                  Average  Income/ Yield/  Average  Income/ Yield/  Average  Income/ Yield/  Average Income/ Yield/
                                  Balance  Expense Rate    Balance  Expense  Rate   Balance  Expense  Rate   Balance Expense  Rate
                                  -------  ------- ----    -------  -------  ----   -------  -------  ----   ------- -------  ----
                                                                         (dollars expressed in thousands)

             Assets
             ------

Interest-earning assets:
<S>                             <C>         <C>    <C>   <C>         <C>     <C>   <C>        <C>     <C>   <C>        <C>    <C>
  Loans (1)(2)(3)(4)........... $5,420,342  88,588 6.48% $5,361,625  96,236  7.12% $5,391,656 269,128 6.67% $5,415,946 294,274 7.26%
  Investment securities (4)....    920,242   7,409 3.19     938,971   9,479  4.01     940,835  24,723 3.51     766,146  25,123 4.38
  Federal funds sold and other.    145,589     345 0.94     115,703     512  1.76     133,474   1,099 1.10     115,477   1,454 1.68
                                ----------  ------       ---------- -------        ---------- -------       ---------- -------
       Total interest-earning
         assets................  6,486,173  96,342 5.89   6,416,299 106,227  6.57   6,465,965 294,950 6.10   6,297,569 320,851 6.81
                                            ------                  -------                   -------                  -------
Nonearning assets..............    692,415                  694,685                   709,182                  676,661
                                ----------               ----------                ----------               ----------
       Total assets............ $7,178,588               $7,110,984                $7,175,147               $6,974,230
                                ==========               ==========                ==========               ==========

       Liabilities and
    Stockholders' Equity
     --------------------
Interest-bearing liabilities:
  Interest-bearing deposits:
    Interest-bearing demand
      deposits................. $  851,014   1,195 0.56% $  774,144   1,786  0.92% $  852,663   4,346 0.68% $  721,982   5,739 1.06%
    Savings deposits...........  2,152,529   5,520 1.02   1,999,395   8,819  1.75   2,145,089  18,091 1.13   1,947,271  27,253 1.87
    Time deposits of $100
      or more..................    413,724   3,028 2.90     500,657   4,624  3.66     429,995  10,049 3.12     501,054  14,803 3.95
    Other time deposits (3)....  1,575,197   8,865 2.23   1,810,274  15,986  3.50   1,640,299  32,147 2.62   1,811,532  51,837 3.83
                                ----------  ------       ---------- -------        ---------- -------       ---------- -------
       Total interest-bearing
         deposits..............  4,992,464  18,608 1.48   5,084,470  31,215  2.44   5,068,046  64,633 1.71   4,981,839  99,632 2.67
  Other borrowings.............    246,790     550 0.88     195,465     806  1.64     200,428   1,671 1.11     187,634   2,635 1.88
  Note payable (5).............     32,091     388 4.80       5,738     309 21.37      12,131     574 6.33      23,904     839 4.69
  Guaranteed preferred
    debentures (3).............    202,808   3,399 6.65     266,817   5,300  7.88     254,400  13,768 7.24     254,044  18,629 9.80
                                ----------  ------       ---------- -------        ---------- -------       ---------- -------
       Total interest-bearing
         liabilities...........  5,474,153  22,945 1.66   5,552,490  37,630  2.69   5,535,005  80,646 1.95   5,447,421 121,735 2.99
                                            ------                  -------                   -------                  -------
Noninterest-bearing liabilities:
  Demand deposits..............  1,054,587                  912,807                   992,043                  916,822
  Other liabilities............    106,835                  152,086                   113,298                  141,769
                                ----------               ----------                ----------               ----------
       Total liabilities.......  6,635,575                6,617,383                 6,640,346                6,506,012
Stockholders' equity...........    543,013                  493,601                   534,801                  468,218
                                ----------               ----------                ----------               ----------
       Total liabilities and
         stockholders' equity.. $7,178,588               $7,110,984                $7,175,147               $6,974,230
                                ==========               ==========                ==========               ==========

Net interest income............             73,397                   68,597                   214,304                  199,116
                                            ======                  =======                   =======                  =======
Interest rate spread...........                     4.23                     3.88                     4.15                     3.82
Net interest margin (6)........                     4.49%                    4.24%                    4.43%                    4.23%
                                                    ====                    =====                     ====                     ====
--------------------
(1)  For purposes of these computations, nonaccrual loans are included in the average loan amounts.
(2)  Interest income on loans includes loan fees.
(3)  Interest income and interest expense include the effects of interest rate swap agreements.
(4)  Information is presented on a tax-equivalent basis assuming a tax rate of 35%. The tax-equivalent adjustments were
     approximately $317,000 and $1.0 million for the three and nine months ended September 30, 2003,  and $416,000  and
     $1.1 million for the comparable periods in 2002, respectively.
(5)  Interest expense on the note payable includes commitment, arrangement and renewal fees.
(6)  Net interest margin is the ratio of net interest income (expressed on a tax-equivalent basis) to average interest-
     earning assets.
</TABLE>



<PAGE>


Provision for Loan Losses

         The  provision  for loan losses was $15.0 million and $36.0 million for
the three and nine months ended  September 30, 2003,  respectively,  compared to
$13.7 million and $38.7  million for the  comparable  periods in 2002.  Net loan
charge-offs  were $12.1  million and $25.5 million for the three and nine months
ended  September  30,  2003,  respectively,  compared to $7.6  million and $27.4
million  for  the  comparable  periods  in  2002.  Beginning  in late  2001,  we
experienced  a higher level of problem  loans and related loan  charge-offs  and
past due loans  resulting  from the  economic  conditions  within  our  markets,
additional  problems  identified in two acquired loan  portfolios and continuing
deterioration in our commercial leasing  portfolio,  particularly the segment of
the  portfolio  relating to the airline  industry.  These  factors  necessitated
higher provisions for loan losses than in prior periods.  We experienced further
deterioration  in our  commercial  leasing  portfolio in 2003,  contributing  to
continued   higher-than-historical   provisions   for  loan  losses.   Net  loan
charge-offs   for  the  nine  months  ended  September  30,  2003  included  net
charge-offs of $14.6 million  associated with our commercial  leasing  portfolio
and were  primarily  concentrated  in four  equipment  leases  aggregating  $8.5
million,  none of which were related to the airline  industry.  In addition,  we
recorded a charge-off of $4.1 million on one significant borrowing relationship.
Nonperforming  assets at September 30, 2003 decreased  slightly to $81.3 million
from $82.8  million at December  31, 2002 and $102.4  million at  September  30,
2002. In recognition  of these and other factors,  our allowance for loan losses
increased to $110.7 million at September 30, 2003,  compared to $99.4 million at
December 31, 2002 and $109.9 million at September 30, 2002.  Management  expects
nonperforming  assets to remain at the higher levels  recently  experienced  and
considers  these  trends  in  its  overall  assessment  of the  adequacy  of the
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 $26.2  million and $83.3  million for the three
and nine months ended September 30, 2003,  respectively,  in comparison to $25.5
million and $64.8 million for the comparable periods in 2002. Noninterest income
consists  primarily of service charges on deposit  accounts and customer service
fees,  mortgage-banking  revenues,  net  gains on  sales  of  available-for-sale
investment securities,  investment income on bank owned life insurance and other
income.

         Service charges on deposit accounts and customer service fees were $9.2
million  and $26.8  million for the three and nine months  ended  September  30,
2003,  respectively,  in  comparison  to $8.5 million and $22.0  million for the
comparable  periods in 2002.  We attribute  the increase in service  charges and
customer service fees to:

         >>    our acquisitions completed during 2002 and 2003;

         >>    additional products and services available and utilized by retail
               and commercial customers;

         >>    increased fee income resulting from revisions of customer service
               charge rates, effective July 1, 2002, and enhanced control of fee
               waivers; and

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

         The gain on mortgage loans sold and held for sale was $12.4 million and
$33.2  million  for  the  three  and  nine  months  ended  September  30,  2003,
respectively, in comparison to $7.9 million and $20.3 million for the comparable
periods in 2002. The increase reflects  continued growth of our mortgage banking
activities as well as overall  reductions in mortgage loan rates which  resulted
in higher volumes of new originations and refinancings.

         In the first  quarter of 2003,  we recorded a $6.3  million gain on the
exchange of 974,150  shares of our Allegiant  common stock for a 100%  ownership
interest  in  Bank of  Ste.  Genevieve  as  further  discussed  in Note 2 to our
consolidated financial statements.  The net gains on sales of available-for-sale
investment securities of $266,000 and $6.8 million for the three and nine months
ended September 30, 2003 also reflect sales of certain available-for-sale equity
securities.
<PAGE>

         We recorded a net loss on  derivative  instruments  of $383,000 for the
three  months  ended  September  30, 2003 and a net gain of $43,000 for the nine
months ended September 30, 2003,  compared to net gains of $2.0 million and $1.7
million for the three and nine months ended  September  30, 2002,  respectively,
reflecting  changes in the fair value of our interest  rate cap  agreements  and
fair value  hedges.  The net loss in 2003 also reflects the  discontinuation  of
hedge  accounting  treatment on two interest rate swap agreements that mature in
January 2004,  resulting from the loss of our highly  correlated hedge positions
between the swap  agreements  and the underlying  hedged  liabilities as further
discussed under "--Interest Rate Risk Management."

         Bank-owned life insurance  investment  income was $1.3 million and $4.0
million for the three and nine months ended September 30, 2003, respectively, in
comparison to $1.5 million and $4.3 million for the comparable  periods in 2002.
The  decrease  for 2003  reflects  a reduced  return on this  product  primarily
associated  with the  reduced  interest  rate  environment  and  overall  market
conditions.

         Other income was $3.4 million and $12.4  million for the three and nine
months ended September 30, 2003, respectively, in comparison to $5.7 million and
$16.4  million for the  comparable  periods in 2002.  We  attribute  the primary
components of the decrease in 2003 to:

         >>    a decline of  approximately  $4.4 million in loan  servicing fees
               that is  primarily  attributable  to  increased  amortization  of
               mortgage  servicing  rights,  impairment  on  mortgage  servicing
               rights and a higher level of interest shortfall, which equals the
               difference  between the interest  collected from a loan-servicing
               customer upon prepayment of the loan and a full month's  interest
               that is  required  to be remitted  to the  security  owner.  This
               decline  partially  offsets  continued  growth  of  our  mortgage
               banking  activities  due to overall  reductions  in mortgage loan
               rates and higher origination and refinancing volumes;

         >>    a gain of  approximately  $448,000  recorded in March 2002 on the
               sale  of  certain  operating  lease  equipment   associated  with
               equipment leasing activities that we acquired in conjunction with
               our acquisition of Bank of San Francisco in December 2000;

         >>    a  decline  of  approximately   $262,000  in  brokerage   revenue
               primarily  associated with overall market  conditions and reduced
               customer demand;

         >>    a decline of approximately  $345,000 in rental income  associated
               with our reduced commercial leasing activities;  partially offset
               by

         >>    a decrease  in net losses of  approximately  $291,000  associated
               with the sale of repossessed assets, primarily related to leasing
               equipment associated with our commercial leasing business;

         >>    increased rental fees from First Services,  L.P. of approximately
               $335,000 for the use of data processing and other equipment owned
               by First Banks;

         >>    increased  portfolio   management  fee  income  of  approximately
               $273,000  associated  with  our  Institutional  Money  Management
               division;

         >>    increased  earnings  associated  with our  international  banking
               products; and

         >>    our acquisitions completed during 2002 and 2003.
<PAGE>

Noninterest Expense

         Noninterest  expense was $60.5 million and $184.2 million for the three
and nine  months  ended  September  30,  2003,  respectively,  compared to $59.2
million and $175.2 million for the  comparable  periods in 2002. The increase in
2003 reflects the noninterest expense of our acquisitions  completed during 2002
as  well as  general  increases  in  salaries  and  employee  benefit  expenses,
occupancy  and furniture and  equipment  expenses and other  expense,  offset by
declines in legal,  examination and professional fees,  advertising and business
development and communications expenses.

         Salaries and employee benefits were $29.4 million and $90.3 million for
the three and nine months ended September 30, 2003, respectively,  in comparison
to $28.4  million  and $84.5  million  for the  comparable  periods in 2002.  We
attribute  the overall  increase to the increase in salary and benefit  expenses
associated with our acquisitions in 2002 and 2003 and increased commissions paid
to mortgage  loan  originators  due to continued  higher loan volumes which were
partially offset by staff realignments surrounding our core business strategies.
However, the increase also reflects generally higher salary and employee benefit
costs associated with employing and retaining qualified personnel.

         Occupancy,  net of rental income,  and furniture and equipment  expense
totaled  $9.5  million and $29.1  million  for the three and nine  months  ended
September  30, 2003,  respectively,  compared to $10.5 million and $28.7 million
for the comparable  periods in 2002.  These expenses remain at higher levels and
are  primarily  attributable  to  acquisitions,   technology   expenditures  for
equipment,  continued  expansion and renovation of various  corporate and branch
offices,  the relocation of certain branches and operational areas and increased
depreciation  expense  associated with capital  expenditures.  Included in these
expenses are a $1.0 million lease termination  obligation incurred in the second
quarter of 2003 associated with the relocation of our San  Francisco-based  loan
administration department to southern California and a $1.4 million lease buyout
obligation  incurred  in the  third  quarter  of 2002 on a  California  facility
acquired through a previous acquisition.

         Information technology fees were $8.1 million and $24.6 million for the
three and nine months ended September 30, 2003,  respectively,  in comparison to
$7.8 million and $24.4 million for the comparable periods in 2002. As more fully
described in Note 6 to our consolidated  financial  statements,  First Services,
L.P.  provides  information  technology and operational  support services to our
subsidiaries  and us. For 2003,  the slight  increase in fees is  attributed  to
growth and  technological  advancements  consistent with our product and service
offerings, continued expansion and upgrades to technological equipment, networks
and communication  channels,  partially offset by expense  reductions  resulting
from the data processing conversions of our acquisitions completed in 2002.

         Legal,  examination  and  professional  fees were $1.8 million and $5.6
million for the three and nine months ended  September  30, 2003,  respectively,
compared to $2.9  million and $6.5 million for the  comparable  periods in 2002.
Our professional fees decreased  approximately  $1.1 million for the nine months
ended  September 30, 2003 in comparison to the  comparable  period in 2002,  due
primarily  to  various  fees  paid in 2002  related  to our  commercial  leasing
portfolio.  This  decrease was  partially  offset by a slight  increase in other
legal,  examination and professional fees, due to continued expansion of overall
corporate  activities,  the ongoing professional services utilized by certain of
our acquired  entities and increased  legal fees associated with commercial loan
documentation,  collection  efforts,  expanded corporate  activities and certain
defense litigation particularly related to acquired entities.

         Amortization   of   intangibles   associated   with  the   purchase  of
subsidiaries  was  $658,000 and $1.8 million for the three and nine months ended
September 30, 2003, respectively, in comparison to $516,000 and $1.5 million for
the  comparable  periods in 2002.  The increase is solely  attributable  to core
deposit intangibles associated with our 2002 and 2003 acquisitions.

         Communications and advertising and business  development  expenses have
decreased  to $1.4  million and $4.9 million for the three and nine months ended
September  30,  2003,  respectively,  from $1.9 million and $6.5 million for the
comparable  periods in 2002.  Our  continued  efforts to reduce  these  expenses
through  renegotiation of contracts,  reductions in the level of advertising and
promotional activities and ongoing cost containment efforts have all contributed
to the overall decline in these expenditures in 2003.
<PAGE>

         Other expense was $8.2 million and $24.0 million for the three and nine
months ended September 30, 2003, respectively, in comparison to $5.9 million and
$19.0 million for the  comparable  periods in 2002.  Other  expense  encompasses
numerous  general  and  administrative  expenses  including  travel,  meals  and
entertainment,  insurance,  freight and  courier  services,  correspondent  bank
charges,  miscellaneous  losses and recoveries,  memberships and  subscriptions,
transfer  agent fees and sales taxes.  We attribute the majority of the increase
in other expense for the nine months ended  September 30, 2003,  compared to the
comparable period in 2002, to:

         >>    increased write-downs of $3.8 million on various operating leases
               associated  with our  commercial  leasing  business,  which  were
               primarily a result of  reductions in estimated  residual  values.
               These write-downs were $5.2 million and $1.4 million for the nine
               months ended September 30, 2003 and 2002, respectively;

         >>    increased other real estate  expenditures of  approximately  $1.5
               million, including gains and losses on sales of other real estate
               properties.  The  majority of these  increased  expenditures  are
               associated with the operation of a residential  and  recreational
               development  property transferred to other real estate in January
               2003;

         >>    expenses  associated with our acquisitions  completed during 2002
               and in 2003; and

         >>    continued   growth  and  expansion  of  our  banking   franchise;
               partially offset by

         >>    reductions in various expenses, primarily including travel, meals
               and  entertainment,  director's  fees,  and transfer  agent fees,
               associated  with  economies   achieved  from  completion  of  our
               purchase of the minority interest in First Banks America, Inc. on
               December  31,  2002,   resulting  in  the   elimination   of  the
               requirements  for  separate  public  financial  reporting of this
               subsidiary.

Provision for Income Taxes

         The  provision for income taxes was $10.1 million and $28.9 million for
the three and nine months ended  September 30, 2003,  representing  an effective
income tax rate of 42.4% and 37.8%, respectively.  This compares to $7.4 million
and $17.5  million  for the three and nine  months  ended  September  30,  2002,
representing an effective income tax rate of 35.4% and 35.7%,  respectively.  We
attribute  the  increase  in the  effective  tax rate in 2003 to higher  taxable
income and the merger of our two bank  charters,  which has  resulted  in higher
taxable income allocations in states where we file separate state tax returns.

                          Interest Rate Risk Management

         We utilize derivative financial instruments to assist in our management
of interest rate  sensitivity  by modifying the  repricing,  maturity and option
characteristics of certain assets and liabilities. The derivative instruments we
hold are summarized as follows:
<TABLE>
<CAPTION>

                                                                   September 30, 2003           December 31, 2002
                                                                -----------------------      ----------------------
                                                                  Notional      Credit       Notional       Credit
                                                                   Amount      Exposure       Amount       Exposure
                                                                   ------      --------       ------       --------
                                                                            (dollars expressed in thousands)

<S>                                                             <C>              <C>        <C>               <C>
         Cash flow hedges.....................................  $1,250,000       2,890      1,050,000         2,179
         Fair value hedges....................................     326,200       9,823        301,200        11,449
         Interest rate cap agreements.........................     450,000          --        450,000            94
         Interest rate lock commitments.......................      42,900          --         89,000            --
         Forward commitments to sell
           mortgage-backed securities.........................     133,500          --        235,000            --
                                                                ==========      ======      =========       =======
</TABLE>
<PAGE>

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

         During the three and nine months  ended  September  30,  2003,  the net
interest  income  realized on our  derivative  financial  instruments  was $17.3
million and $48.1  million,  respectively,  in  comparison  to $14.2 million and
$38.0 million for the comparable  periods in 2002. The increase is primarily due
to interest income  associated with the additional swap agreements  entered into
during March, April and July 2003 as well as the decline in prevailing  interest
rates. In addition, we realized a net loss on derivative  instruments,  which is
included in noninterest income, of $383,000 for the three months ended September
30, 2003 and a net gain of $43,000 for the nine months ended September 30, 2003,
compared to net gains of $2.0  million  and $1.7  million for the three and nine
months ended  September 30, 2002,  respectively,  which reflects  changes in the
fair  value of our  interest  rate cap  agreements,  fair  value  hedges and the
underlying hedged liabilities.

Cash Flow Hedges

         During  September  2000,  March 2001,  April 2001,  March 2002 and July
2003, we entered into $600.0  million,  $200.0 million,  $175.0 million,  $150.0
million and $200.0 million notional amount, respectively,  of interest rate swap
agreements  to  effectively  lengthen the repricing  characteristics  of certain
interest-earning  assets to correspond  more closely with their  funding  source
with the  objective of  stabilizing  cash flow,  and  accordingly,  net interest
income over time.  The  underlying  hedged  assets are certain  loans within our
commercial loan portfolio.  The swap  agreements,  which have been designated as
cash flow hedges,  provide for us to receive a fixed rate of interest and pay an
adjustable  rate of interest  equivalent  to the weighted  average prime lending
rate minus 2.70%, 2.82%, 2.82%, 2.80% and 2.85%, respectively.  The terms of the
swap agreements provide for us to pay and receive interest on a quarterly basis.
In November  2001, we terminated  $75.0  million  notional  amount of the $175.0
million swap agreements  originally entered into in April 2001, which would have
expired  in April  2006,  in order to  appropriately  modify our  overall  hedge
position in  accordance  with our interest  rate risk  management  program.  The
amount  receivable by us under the swap agreements was $3.9 million at September
30, 2003 and $3.1 million at December 31, 2002.  The amount  payable by us under
the swap  agreements  was $1.0  million at  September  30, 2003 and  $888,000 at
December 31, 2002.


<TABLE>
<CAPTION>

         The maturity dates, notional amounts,  interest rates paid and received
and fair value of our  interest  rate swap  agreements  designated  as cash flow
hedges as of September 30, 2003 and December 31, 2002 were as follows:

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

         September 30, 2003:
<S>                                                            <C>               <C>           <C>       <C>
             March 14, 2004..................................  $  150,000        1.20%         3.93%     $   1,913
             September 20, 2004..............................     600,000        1.30          6.78         30,821
             March 21, 2005..................................     200,000        1.18          5.24         10,680
             April 2, 2006...................................     100,000        1.18          5.45          8,176
             July 31, 2007...................................     200,000        1.15          3.08          2,535
                                                               ----------                                ---------
                                                               $1,250,000        1.24          5.49      $  54,125
                                                               ==========       =====         =====      =========

         December 31, 2002:
             March 14, 2004..................................  $  150,000        1.45%         3.93%     $   4,130
             September 20, 2004..............................     600,000        1.55          6.78         48,891
             March 21, 2005..................................     200,000        1.43          5.24         13,843
             April 2, 2006...................................     100,000        1.43          5.45          9,040
                                                               ----------                                ---------
                                                               $1,050,000        1.50          5.95      $  75,904
                                                               ==========       =====         =====      =========
</TABLE>
<PAGE>

Fair Value Hedges

         We entered into the following interest rate swap agreements, designated
as fair value hedges, to effectively  shorten the repricing  characteristics  of
certain  interest-bearing  liabilities  to  correspond  more  closely with their
funding source with the objective of stabilizing net interest income over time:

         >>    During  January  2001,  we entered  into $50.0  million  notional
               amount of  three-year  interest rate swap  agreements  and $150.0
               million   notional   amount  of  five-year   interest  rate  swap
               agreements  that  provide  for us to  receive  a  fixed  rate  of
               interest and pay an adjustable rate of interest equivalent to the
               three-month London Interbank Offering Rate. The underlying hedged
               liabilities  are a portion of our other time deposits.  The terms
               of the  swap  agreements  provide  for us to  pay  interest  on a
               quarterly basis and receive  interest on a semiannual  basis. The
               amount  receivable  by us  under  the  swap  agreements  was $2.5
               million at  September  30, 2003 and $5.2  million at December 31,
               2002.  The  amount  payable by us under the swap  agreements  was
               $518,000  and  $821,000 at  September  30, 2003 and  December 31,
               2002,  respectively.  In September  2003, we  discontinued  hedge
               accounting  treatment  on the $50.0  million  notional  amount of
               three-year  swap  agreements  entered into in January 2001 due to
               the loss of our highly  correlated  hedge  positions  between the
               swap   agreements   and  the   underlying   hedged   liabilities.
               Consequently,  the related  basis  adjustment  of the  underlying
               hedged liabilities in the amount of $1.3 million will be recorded
               as a reduction of interest  expense over the  remaining  weighted
               average maturity of the underlying hedged  liabilities,  which is
               approximately  three months.  For the three and nine months ended
               September  30,  2003,  we recorded  $670,000  as a  reduction  of
               interest  expense  associated with the  discontinuation  of hedge
               accounting treatment on these swap agreements.

         >>    During May 2002, we entered into $55.2 million notional amount of
               interest  rate swap  agreements  that provide for us to receive a
               fixed rate of  interest  and pay an  adjustable  rate of interest
               equivalent to the three-month London Interbank Offering Rate plus
               2.30%.  During June 2002, we entered into $86.3 million and $46.0
               million  notional  amount,  respectively,  of interest  rate swap
               agreements  that  provide  for us to  receive  a  fixed  rate  of
               interest and pay an adjustable rate of interest equivalent to the
               three-month  London Interbank Offering Rate plus 2.75% and 1.97%,
               respectively.  The underlying hedged liabilities are a portion of
               our guaranteed  preferred beneficial interest in our subordinated
               debentures.  The terms of the swap  agreements  provide for us to
               pay and  receive  interest on a  quarterly  basis.  There were no
               amounts  receivable  or payable by us at  September  30,  2003 or
               December 31, 2002.  The $86.3 million  notional  amount  interest
               rate swap  agreement was called by its  counterparty  in November
               2002  resulting  in final  settlement  of this swap  agreement in
               December  2002. In addition,  the $46.0 million  notional  amount
               interest rate swap  agreement was called by its  counterparty  on
               May 14, 2003 resulting in final settlement of this swap agreement
               on June 30, 2003.  There was no gain or loss recorded as a result
               of these transactions.

         >>    On March 31,  2003 and April 10,  2003,  we  entered  into  $25.0
               million  and $46.0  million  notional  amount,  respectively,  of
               interest  rate swap  agreements  that provide for us to receive a
               fixed rate of  interest  and pay an  adjustable  rate of interest
               equivalent to the three-month London Interbank Offering Rate plus
               2.55%.  The underlying  hedged  liabilities  are a portion of our
               guaranteed  preferred  beneficial  interests in our  subordinated
               debentures.  The terms of the swap  agreements  provide for us to
               pay and  receive  interest on a  quarterly  basis.  There were no
               amounts receivable or payable by us at September 30, 2003.
<PAGE>

<TABLE>
<CAPTION>

         The maturity dates, notional amounts,  interest rates paid and received
and fair value of our interest  rate swap  agreements  designated  as fair value
hedges as of September 30, 2003 and December 31, 2002 were as follows:

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

         September 30, 2003:
<S>                                                             <C>              <C>           <C>        <C>
             January 9, 2004..................................  $  50,000        1.11%         5.37%      $    578
             January 9, 2006..................................    150,000        1.11          5.51         12,050
             December 31, 2031................................     55,200        3.40          9.00          3,732
             March 20, 2033...................................     25,000        3.65          8.10           (667)
             June 30, 2033....................................     46,000        3.68          8.15           (881)
                                                                ---------                                 --------
                                                                $ 326,200        2.05          6.65       $ 14,812
                                                                =========       =====         =====       ========

         December 31, 2002:
             January 9, 2004..................................  $  50,000        1.76%         5.37%      $  1,972
             January 9, 2006..................................    150,000        1.76          5.51         13,476
             June 30, 2028....................................     46,000        3.77          8.50            495
             December 31, 2031................................     55,200        4.10          9.00          4,688
                                                                ---------                                 --------
                                                                $ 301,200        2.49          6.58       $ 20,631
                                                                =========       =====         =====       ========
</TABLE>

Interest Rate Cap Agreements

         In  conjunction  with the interest rate swap  agreements  designated as
cash flow hedges that mature on September  20, 2004, we also entered into $450.0
million  notional amount of four-year  interest rate cap agreements to limit the
net interest  expense  associated  with our interest rate swap agreements in the
event of a rising rate scenario. The interest rate cap agreements provide for us
to  receive  a  quarterly   adjustable  rate  of  interest   equivalent  to  the
differential  between the  three-month  London  Interbank  Offering Rate and the
strike price of 7.50% should the  three-month  London  Interbank  Offering  Rate
exceed the strike  price.  At September  30, 2003 and  December  31,  2002,  the
carrying  value of these  interest  rate cap  agreements,  which is  included in
derivative  instruments in the consolidated  balance sheets, was $0 and $94,000,
respectively.

Pledged Collateral

         At September 30, 2003 and December 31, 2002, we had pledged  investment
securities  available  for sale with a carrying  value of $5.2  million and $5.8
million,  respectively, in connection with our interest rate swap agreements. In
addition,  at September 30, 2003,  and December 31, 2002,  we had  accepted,  as
collateral in connection with our interest rate swap  agreements,  cash of $68.8
million and $99.1 million, respectively.

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

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

                       Loans and Allowance for Loan Losses

         Interest earned on our loan portfolio  represents the principal  source
of income for our  subsidiary  bank.  Interest  and fees on loans were 92.2% and
91.5% of total interest income for the three and nine months ended September 30,
2003, respectively,  in comparison to 90.8% and 91.9% for the comparable periods
in 2002. Total loans, net of unearned discount,  increased $5.1 million to $5.44
billion,  or 75.9% of total  assets,  at September  30, 2003,  compared to $5.43
billion,  or 74.0% of total  assets,  at December  31,  2002.  Exclusive  of our
acquisition of Bank of Ste.  Genevieve,  which provided  loans,  net of unearned
discount,  of $42.9 million,  loans, net of unearned  discount,  decreased $37.8
million at September  30, 2003  compared to December 31, 2002.  This decrease in
total loans, net of unearned discount, is primarily attributable to:

         >>    continued weak loan demand from our commercial  customers,  which
               is indicative of the current economic conditions prevalent within
               most of our markets;
<PAGE>


         >>    a  decline  of  $7.3  million   experienced  in  our  commercial,
               financial and agricultural portfolio due to an anticipated amount
               of attrition  associated with our  acquisitions  completed during
               2002 and general runoff of balances within this portfolio;

         >>    a  continued  decline of $ 47.4  million  in our lease  financing
               portfolio  consistent with the  discontinuation of our New Mexico
               based  leasing   operation  during  2002,  the  transfer  of  all
               responsibilities  for the  existing  portfolio  to a new  leasing
               staff in St. Louis, Missouri and a change in our overall business
               strategy with respect to leasing activities. Additionally, during
               the nine months ended  September  30, 2003,  we recorded net loan
               charge-offs  of $14.6  million  associated  with this  portfolio,
               which further contributed to the overall decline; and

         >>    a  decline  of $69.1  million  in loans  held for sale  resulting
               primarily from the timing of loan sales in the secondary mortgage
               market; partially offset by

         >>    an increase of $91.9 million in our real estate  construction and
               development portfolio resulting primarily from seasonal increases
               on existing and available credit lines; and

         >>    an  increase  of  $46.1  million  in  our  real  estate  mortgage
               portfolio   primarily   associated  with  management's   business
               strategy  decision to retain a portion of our new loan production
               in our real estate mortgage  portfolio due primarily to continued
               weak  loan  demand  in other  sectors  of our loan  portfolio  as
               previously discussed.
<TABLE>
<CAPTION>

         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:

                                                                                 September 30,     December 31,
                                                                                     2003              2002
                                                                                     ----              ----
                                                                                (dollars expressed in thousands)

         Commercial, financial and agricultural:
<S>                                                                              <C>                  <C>
              Nonaccrual.....................................................    $    22,190          15,787
         Real estate construction and development:
              Nonaccrual.....................................................          7,030          23,378
         Real estate mortgage:
           One-to-four family residential:
              Nonaccrual.....................................................         18,799          14,833
              Restructured...................................................             13              15
           Multi-family residential loans:
              Nonaccrual.....................................................            815             772
           Commercial real estate loans:
              Nonaccrual.....................................................         13,131           8,890
              Restructured...................................................             --           1,907
         Lease financing:
              Nonaccrual.....................................................          8,449           8,723
         Consumer and installment:
              Nonaccrual.....................................................            410             860
                                                                                 -----------      ----------
                  Total nonperforming loans..................................         70,837          75,165
         Other real estate...................................................         10,507           7,609
                                                                                 -----------      ----------
                  Total nonperforming assets.................................    $    81,344          82,774
                                                                                 ===========      ==========

         Loans, net of unearned discount.....................................    $ 5,437,663       5,432,588
                                                                                 ===========      ==========

         Loans past due 90 days or more and still accruing...................    $     7,407           4,635
                                                                                 ===========      ==========

         Ratio of:
              Allowance for loan losses to loans.............................          2.04%            1.83%
              Nonperforming loans to loans...................................          1.30             1.38
              Allowance for loan losses to nonperforming loans...............        156.32           132.29
              Nonperforming assets to loans and other real estate............          1.49             1.52
                                                                                 ==========       ==========
</TABLE>


<PAGE>


         Nonperforming  loans,  consisting  of loans on  nonaccrual  status  and
certain  restructured  loans,  were $70.8  million at  September  30,  2003,  in
comparison to $75.2 million at December 31, 2002.  Loan  charge-offs  were $18.8
million  and $42.5  million for the three and nine months  ended  September  30,
2003,  respectively,  compared  to  $11.0  million  and  $39.0  million  for the
comparable  periods in 2002.  As  previously  discussed,  during the nine months
ended  September  30, 2003,  we  experienced  further  deterioration  within our
commercial leasing portfolio which is reflected in net loan charge-offs of $14.6
million and  nonperforming  loans  associated with this portfolio  decreasing by
$274,000.  Additionally,  in January 2003,  we  foreclosed on a residential  and
recreational  development property that had previously been on nonaccrual status
due to significant financial difficulties, inadequate project financing, project
delays and weak project management. Consequently, other real estate increased to
$10.5 million at September 30, 2003 from $7.6 million at December 31, 2002,  and
nonperforming  real estate  construction  and development  loans declined,  down
$16.3  million  from  December  31,  2002.  Our  allowance  for loan losses as a
percentage of loans, net of unearned  discount,  increased to 2.04% at September
30, 2003 from 1.83% at December 31, 2002, and our allowance for loan losses as a
percentage  of  nonperforming  loans  increased to 156.32% at September 30, 2003
from  132.29% at  December  31,  2002.  While we believe we were  successful  in
addressing  the asset  quality  problems  experienced  in 2002,  we  continue to
closely monitor our loan and leasing portfolios. We anticipate the higher trends
in nonperforming and delinquent loans recently  experienced will continue in the
near future and  primarily  attribute  them to the current  economic  conditions
experienced in our primary market areas.

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

         The following  table is a summary of our loan loss  experience  for the
periods indicated:

                                                                Three Months Ended           Nine Months Ended
                                                                   September 30,               September 30,
                                                              ---------------------        ----------------------
                                                                2003          2002           2003          2002
                                                                ----          ----           ----          ----
                                                                       (dollars expressed in thousands)

<S>                                                           <C>           <C>              <C>          <C>
         Allowance for loan losses, beginning of period.....  $ 107,848     103,794          99,439       97,164
         Acquired allowances for loan losses................         --          --             757        1,366
                                                              ---------    --------        --------      -------
                                                                107,848     103,794         100,196       98,530
                                                              ---------    --------        --------      -------
         Loans charged-off..................................    (18,821)    (11,014)        (42,486)     (39,047)
         Recoveries of loans previously charged-off.........      6,707       3,395          17,024       11,692
                                                              ---------    --------        --------      -------
         Net loan charge-offs...............................    (12,114)     (7,619)        (25,462)     (27,355)
                                                              ---------    --------        --------      -------
         Provision for loan losses..........................     15,000      13,700          36,000       38,700
                                                              ---------    --------        --------      -------
         Allowance for loan losses, end of period...........  $ 110,734     109,875         110,734      109,875
                                                              =========    ========        ========      =======
</TABLE>
<PAGE>

                                    Liquidity

         Our liquidity and the liquidity of our  subsidiary  bank is the ability
to  maintain  a cash flow that is  adequate  to fund  operations,  service  debt
obligations  and meet other  commitments on a timely basis.  Our subsidiary bank
receives funds for liquidity from customer deposits,  loan payments,  maturities
of loans and investments, sales of investments and earnings. In addition, we may
avail ourselves of other sources of funds by issuing  certificates of deposit in
denominations of $100,000 or more,  borrowing federal funds,  selling securities
under  agreements to repurchase and utilizing  borrowings  from the Federal Home
Loan Bank and  other  borrowings,  including  our  revolving  credit  line.  The
aggregate  funds  acquired  from these  sources  were $715.5  million and $742.5
million at September 30, 2003 and December 31, 2002, respectively.

         The  following  table  presents the  maturity  structure of these other
sources of funds,  which consists of certificates of deposit of $100,000 or more
and other borrowings, including our note payable, at September 30, 2003:
<TABLE>
<CAPTION>

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

<S>                                                                  <C>                   <C>              <C>
         Three months or less...................................     $114,091              163,716          277,807
         Over three months through six months...................       59,254                   --           59,254
         Over six months through twelve months..................      107,617               31,000          138,617
         Over twelve months.....................................      132,824              107,000          239,824
                                                                     --------             --------         --------
              Total.............................................     $413,786              301,716          715,502
                                                                     ========             ========         ========
</TABLE>

         In  addition  to  these  sources  of  funds,  our  subsidiary  bank has
established  a  borrowing  relationship  with the  Federal  Reserve  Bank.  This
borrowing  relationship,  which is  secured by  commercial  loans,  provides  an
additional liquidity facility that may be utilized for contingency  purposes. At
September  30,  2003 and  December  31,  2002,  the  borrowing  capacity  of our
subsidiary bank under the agreement was  approximately  $913.1 million and $1.22
billion,  respectively.  In addition,  our subsidiary bank's borrowing  capacity
through  its  relationship  with the  Federal  Home Loan Bank was  approximately
$417.8  million and $223.6  million at September 30, 2003 and December 31, 2002,
respectively.  Exclusive of the Federal Home Loan Bank advances  outstanding  of
$12.0  million and $14.0  million at  September  30, 2003 and December 31, 2002,
respectively,  our subsidiary  bank had no amounts  outstanding  under either of
these agreements at September 30, 2003 and December 31, 2002.

         In connection with our normal  operations,  we enter into various other
commitments and obligations such as long-term leasing arrangements, primarily of
bank premises,  and  certificates of deposit.  The required  payments under such
commitments and other obligations at September 30, 2003 were as follows:
<TABLE>
<CAPTION>

                                                                             Over 1 Year
                                                              Less than     But Less Than     Over
                                                               1 Year          5 Years       5 Years       Total
                                                               ------          -------       -------       -----
                                                                       (dollars expressed in thousands)

<S>                                                          <C>                <C>           <C>             <C>
         Operating leases.................................   $    2,609        24,782        23,493          50,884
         Certificates of deposit..........................    1,273,421       685,983           396       1,959,800
         Guaranteed preferred beneficial interest
              in subordinated debentures..................           --            --       205,380         205,380
         Federal Home Loan Bank borrowings................        5,000         6,000         1,000          12,000
                                                             ==========       =======       =======       =========
</TABLE>

         Management  believes the available  liquidity and operating  results of
our subsidiary bank will be sufficient to provide funds for growth and to permit
the  distribution  of dividends to us  sufficient to meet our operating and debt
service  requirements,  both on a short-term and long-term basis, and to pay the
dividends  on  the  trust   preferred   securities   issued  by  our   financing
subsidiaries,  First Preferred  Capital Trust II, First Preferred  Capital Trust
III, First  Preferred  Capital Trust IV, First Bank Capital Trust and First Bank
Statutory Trust.
<PAGE>

                       Effects of New Accounting Standards

         In June 2002, the Financial Accounting Standards Board, or FASB, issued
SFAS No. 146-- Accounting for Costs Associated with Exit or Disposal Activities.
SFAS No. 146 nullifies  Emerging  Issues Task Force,  or EITF,  Issue No. 94-3--
Liability  Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity  (including Certain Costs Incurred in a Restructuring).  The
provisions of SFAS No. 146 are effective  for exit or disposal  activities  that
are initiated after December 31, 2002,  with early  application  encouraged.  On
January 1, 2003,  we  implemented  SFAS No.  146,  which did not have a material
effect on our consolidated financial statements.

         In  November  2002,  the FASB  issued  FASB  Interpretation  No.  45 --
Guarantor's  Accounting and Disclosure  Requirements  for Guarantees,  Including
Indirect  Guarantees  of  Indebtedness  of  Others,  an  interpretation  of FASB
Statements No. 5, 57, and 107 and rescission of FASB Interpretation No. 34. This
interpretation  elaborates on the  disclosures  to be made by a guarantor in its
interim and annual  financial  statements  about its  obligations  under certain
guarantees that it has issued. It also clarifies that a guarantor is required to
recognize,  at the  inception of a guarantee,  a liability for the fair value of
the obligation undertaken in issuing the guarantee.  The initial recognition and
measurement  provisions of this  Interpretation  are applicable on a prospective
basis to guarantees issued or modified after December 31, 2002,  irrespective of
the guarantor's fiscal year-end.  The disclosure  requirements are effective for
financial  statements  of interim or annual  periods  ending after  December 15,
2002. On December 31, 2002, we implemented FASB Interpretation No. 45, which did
not have a material effect on our consolidated  financial  statements other than
the additional disclosure requirements.

         On April  30,  2003,  the FASB  issued  SFAS No.  149 --  Amendment  of
Statement 133 on Derivative  Instruments  and Hedging  Activities.  SFAS No. 149
amends  and  clarifies   financial   accounting  and  reporting  for  derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts,  and for  hedging  activities  under  SFAS No.  133.  SFAS No. 149 is
effective for contracts  entered into or modified after  September 30, 2003, and
for hedging relationships designated after June 30, 2003. All provisions of SFAS
No.  149  are  required  to be  applied  prospectively.  We have  evaluated  the
requirements  of SFAS No.  149 and  believe  such  requirements  will not have a
material effect on our consolidated financial statements.

         On May 15, 2003, the FASB issued SFAS No. 150 -- Accounting for Certain
Financial  Instruments with Characteristics of both Liabilities and Equity. SFAS
No. 150 improves the accounting for certain  financial  instruments  that, under
previous guidance, issuers could account for as equity as it requires that those
instruments be classified as  liabilities  in statements of financial  position.
Most of the guidance in SFAS No. 150 is effective for all financial  instruments
entered into or modified  after  May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003. For private
companies,  mandatorily  redeemable financial instruments were initially subject
to the provisions of SFAS No. 150 for the fiscal period beginning after December
15, 2003. However, on November 7, 2003, the FASB elected to defer this effective
date  of  mandatorily   redeemable  financial  instruments  of  certain  private
companies to fiscal periods beginning after December 15, 2004. Furthermore,  the
FASB elected to indefinitely  defer the effective date of the provisions of SFAS
No. 150 for certain  mandatoriy  redeemable  noncontrolling  interests.  We have
evaluated the  requirements of SFAS No. 150 and believe such  requirements  will
not have a material effect on our consolidated financial statements.

         In  January  2003,  the  FASB  issued  FASB  Interpretation  No.  46 --
Consolidation of Variable  Interest  Entities,  an interpretation of ARB No. 51.
This  Interpretation  is  intended to achieve  more  consistent  application  of
consolidation  policies  to  variable  interest  entities  and,  thus to improve
comparability  between enterprises engaged in similar activities even if some of
those activities are conducted through variable interest entities. Including the
assets, liabilities,  and results of activities of variable interest entities in
the  consolidated  financial  statements  of their  primary  beneficiaries  will
provide more complete  information about the resources,  obligations,  risks and
opportunities  of  the  consolidated  enterprise.  This  Interpretation  applies
immediately to variable interest entities created after January 31, 2003, and to
variable interest entities in which an enterprise obtains an interest after that
date. Initially, it applied in the first fiscal year or interim period beginning
after June 15, 2003, to variable  interest entities in which an enterprise holds
a variable  interest  that it  acquired  before  February 1, 2003;  however,  on
September 17, 2003,  the FASB deferred this  effective date until the end of the
first  interim  or  annual  period   ending  after   December  15,  2003.   This
Interpretation  applies  to  public  enterprises  as of  the  beginning  of  the
applicable interim or annual period, and it applies to nonpublic  enterprises as
of the end of the applicable annual period.  This  Interpretation may be applied
prospectively with a cumulative-effect  adjustment as of the date on which it is
first applied or by restating  previously issued financial statements for one or
more years with a cumulative-effect  adjustment as of the beginning of the first
year restated.
<PAGE>

         The Company has several  statutory and business  trusts,  some of which
were formed  subsequent  to January 31,  2003,  for the sole  purpose of issuing
trust preferred  securities as further  described in Note 9 to our  accompanying
consolidated   financial   statements.   We  currently   believe  the  continued
consolidation  of these  trusts is  appropriate  under  Interpretation  No.  46.
However, the application of Interpretation No. 46 to these types of trusts is an
emerging issue, and a possible  unintended  consequence of Interpretation No. 46
is the  deconsolidation  of these  types of trusts.  The  Company  is  currently
evaluating  the impact that  deconsolidation  of these  trusts would have on its
consolidated financial statements.

         In July 2003,  the Board of  Governors  of the Federal  Reserve  System
issued a supervisory  letter  instructing bank holding  companies to continue to
include the trust  preferred  securities in their Tier I capital for  regulatory
capital  purposes,  subject to applicable  limits,  until notice is given to the
contrary.  The Federal Reserve intends to review the regulatory  implications of
any accounting treatment changes and, if necessary or warranted, provide further
appropriate  guidance.  There can be no assurance that the Federal  Reserve will
continue to allow bank holding  companies to include trust preferred  securities
in their Tier I capital for regulatory capital purposes.


<PAGE>


       ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         At December 31, 2002, our risk management  program's  simulation  model
indicated a loss of projected  net interest  income in the event of a decline in
interest  rates.  We are  "asset-sensitive,"  indicating  that our assets  would
generally reprice with changes in rates more rapidly than our liabilities. While
a decline in interest  rates of less than 100 basis points was projected to have
a  relatively  minimal  impact on our net  interest  income,  an  instantaneous,
parallel  decline in the interest  yield curve of 100 basis  points  indicated a
pre-tax  projected loss of approximately  7.3% of net interest income,  based on
assets and liabilities at December 31, 2002. At September 30, 2003, we remain in
an "asset-sensitive" position and thus, remain subject to a higher level of risk
in a declining  interest rate  environment.  Although we do not anticipate  that
instantaneous shifts in the yield curve as projected in our simulation model are
likely,  these are  indications  of the effects that  changes in interest  rates
would  have  over  time.  Our  asset-sensitive  position,  coupled  with  income
associated  with our  interest  rate swap  agreements  offset by  reductions  in
prevailing  interest  rates  throughout  2002 and 2003,  is reflected in our net
interest  margin  for the three and nine  months  ended  September  30,  2003 as
compared  to  the  comparable  periods  in  2002  and  further  discussed  under
"--Results of Operations."  During the three and nine months ended September 30,
2003, our  asset-sensitive  position and overall  susceptibility to market risks
have not changed materially.




<PAGE>


                        ITEM 4 - CONTROLS AND PROCEDURES

         Within the 90-day  period prior to the filing date of this report,  our
Chief Executive  Officer and Chief Financial Officer evaluated the effectiveness
of our  "disclosure  controls and procedures" (as defined in rules 13a-14(c) and
15d-14(c) under the Securities  Exchange Act of 1934) and concluded on the basis
of the  evaluation  that,  as of the  date of such  evaluation,  our  disclosure
controls and procedures were effective.  There have been no significant  changes
in  internal  controls  or in other  factors  that  could  significantly  affect
internal controls subsequent to the date of that evaluation.




<PAGE>


                           PART II - OTHER INFORMATION

                    ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

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

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

                 10.27             Secured    Credit   Agreement    ($60,000,000
                                   Revolving   Loan  Facility   and  $20,000,000
                                   Letter  of  Credit  Facility),  dated  as  of
                                   August 14, 2003, among  First Banks, Inc. and
                                   Wells Fargo  Bank,  National  Association, as
                                   Agent,  Bank  One,  LaSalle   Bank   National
                                   Association,  The   Northern  Trust  Company,
                                   Union Bank  of California, N.A., Fifth  Third
                                   Bank   (Chicago)  and   U.S.  Bank   National
                                   Association - filed  herewith.

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

                    32             Section 1350 Certifications - filed herewith.

(b)      We filed a Current Report on Form 8-K on July 31, 2003.  Item 12 of the
         report  referenced  a  press  release  announcing  First  Banks, Inc.'s
         financial  results for  the three and six months ended June 30, 2003. A
         copy of the press release was included as Exhibit 99.4.


<PAGE>


                                   SIGNATURES


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



                                FIRST BANKS, INC.



November 13, 2003               By: /s/ Allen H. Blake
                                    --------------------------------------------
                                        Allen H. Blake
                                        President, Chief Executive Officer and
                                        Chief Financial Officer
                                        (Principal Executive Officer and
                                        Principal Financial and
                                        Accounting Officer)


<PAGE>


                                                                      EXHIBIT 31

                           CERTIFICATIONS REQUIRED BY
                      RULE 13a-14(a) (17 CFR 240.13a-14(a))
                    OR RULE 15d-14(a) (17 CFR 240.15d-14(a))
                     OF THE SECURITIES EXCHANGE ACT OF 1934

I, Allen H. Blake, certify that:

1.   I have reviewed this Quarterly  Report on Form 10-Q (the "Report") of First
     Banks, Inc. (the "Registrant");

2.   Based on my knowledge, this Report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     Report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  Report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the Registrant as of, and for, the periods presented in this Report;

4.   The  Registrant's  other  certifying  officer(s) and I are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

     a)   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          Registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this Report is being prepared;

     b)   Evaluated the  effectiveness of the Registrant's  disclosure  controls
          and procedures and presented in this Report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this Report based on such evaluation; and

     c)   Disclosed  in this  Report  any  change in the  Registrant's  internal
          control over financial reporting that occurred during the Registrant's
          most  recent  fiscal  quarter  that  has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  Registrant's  internal
          control over financial reporting; and

5.   The Registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the Registrant's auditors and the audit committee of the Registrant's board
     of directors (or persons performing the equivalent functions):

     a)   All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  Registrant's  ability to
          record, process, summarize and report financial information; and

     b)   Any fraud, whether or not material, that  involves management or other
          employees  who  have  a  significant role in the Registrant's internal
          control over financial reporting.


Date:  November 13, 2003        By:  /s/ Allen H. Blake
                                    -----------------------------------------
                                         Allen H. Blake
                                         President, Chief Executive Officer and
                                         Chief Financial Officer
                                         (Principal Executive Officer and
                                         Principal Financial and Accounting
                                         Officer)


<PAGE>


                                                                      EXHIBIT 32


                           CERTIFICATIONS REQUIRED BY
                      RULE 13a-14(b) (17 CFR 240.13a-4(b))
                    OR RULE 15d-14(b) (17 CFR 240.15d-14(b))
                        AND SECTION 1350 OF CHAPTER 63 OF
               TITLE 18 OF THE UNITED STATES CODE (18 U.S.C. 1350)


         I,  Allen H.  Blake,  President,  Chief  Executive  Officer  and  Chief
Financial  Officer of First Banks,  Inc.  (the  Company),  certify,  pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

         (1)   The  Quarterly  Report  on  Form  10-Q  of the  Company  for  the
               quarterly  period ended  September  30, 2003 (the  Report)  fully
               complies with the  requirements of Sections 13(a) or 15(d) of the
               Securities Exchange Act of 1934; and

         (2)   The information  contained in the Report fairly presents,  in all
               material  respects,   the  financial  condition  and  results  of
               operations of the Company.


Date:  November 13, 2003            By:  /s/ Allen H. Blake
                                        ----------------------------------------
                                             Allen H. Blake
                                             President, Chief Executive Officer
                                             and Chief Financial Officer
                                             (Principal Executive Officer
                                             and Principal Financial and
                                             Accounting Officer)

<PAGE>




                            SECURED CREDIT AGREEMENT


 ($60,000,000 Revolving Loan Facility and $20,000,000 Letter of Credit Facility)

                           dated as of August 14, 2003



                                      among


                                FIRST BANKS, INC.

                                       and

                          THE LENDERS SIGNATORY HERETO


                                       and


                     WELLS FARGO BANK, NATIONAL ASSOCIATION
                                    as Agent



                     WELLS FARGO BANK, NATIONAL ASSOCIATION
                   as Sole Lead Arranger and Sole Book Runner




<PAGE>
<TABLE>
<CAPTION>


                                TABLE OF CONTENTS


<S>                                                                                                             <C>
ARTICLE I.    DEFINITIONS AND ACCOUNTING TERMS..................................................................1

      Section 1.01  Defined Terms...............................................................................1
      Section 1.02  Accounting Terms............................................................................8

ARTICLE II.   AMOUNT AND TERMS OF REVOLVING LOAN AND LETTER OF CREDIT FACILITIES................................9

      Section 2.01  Advances....................................................................................9
      Section 2.02  Interest...................................................................................10
      Section 2.03  Margin and L/C Margin......................................................................12
      Section 2.04  Payments...................................................................................13
      Section 2.05  Revolving Loan Commitment Fee..............................................................13
      Section 2.06  Termination or Reduction of the Commitments................................................13
      Section 2.07  Voluntary Prepayments......................................................................13
      Section 2.08  Computation of Interest and Fees...........................................................14
      Section 2.09  Making of Payments.........................................................................14
      Section 2.10  Payment on Nonbusiness Days................................................................14
      Section 2.11  Use of Proceeds............................................................................14
      Section 2.12  Fees on Advances and Indemnity.............................................................14
      Section 2.13  Capital Adequacy...........................................................................16
      Section 2.14  Failure of Any Lender to Make Advances.....................................................16
      Section 2.15  Issuance of Letters of Credit..............................................................17
      Section 2.16  Payment of Amounts Drawn Under Letters of Credit...........................................17
      Section 2.17  Special Account............................................................................18
      Section 2.18  Authorization for Borrowing................................................................19
      Section 2.19  Letter of Credit Fees......................................................................19
      Section 2.20  Termination or Reduction of Letter of Credit Commitment....................................20

ARTICLE III.  CONDITIONS PRECEDENT.............................................................................20

      Section 3.01  Initial Conditions Precedent...............................................................20
      Section 3.02  Conditions Precedent to All Advances.......................................................21

ARTICLE IV.   REPRESENTATIONS AND WARRANTIES...................................................................22

      Section 4.01  Corporate Existence and Power..............................................................22
      Section 4.02  Authorization of Borrowing; No Conflict as to Law or Agreements............................22
      Section 4.03  Legal Agreements...........................................................................22
      Section 4.04  Subsidiaries...............................................................................23
      Section 4.05  Financial Condition........................................................................23
      Section 4.06  Adverse Change.............................................................................23
      Section 4.07  Litigation.................................................................................23
      Section 4.08  Regulation U...............................................................................23
      Section 4.09  Taxes......................................................................................23
      Section 4.10  Titles.....................................................................................23
      Section 4.11  ERISA......................................................................................23
      Section 4.12  Regulatory Matters.........................................................................23
<PAGE>

ARTICLE V.    AFFIRMATIVE COVENANTS............................................................................24

      Section 5.01  Reporting Requirements.....................................................................24
      Section 5.02  Books and Records; Inspection and Examination..............................................25
      Section 5.03  Compliance with Laws.......................................................................26
      Section 5.04  Payment of Taxes and Other Claims..........................................................26
      Section 5.05  Operations.................................................................................26
      Section 5.06  Insurance..................................................................................26
      Section 5.07  Preservation of Corporate Existence........................................................26
      Section 5.08  Additional Collateral......................................................................26
      Section 5.09  Notice of Acquisition......................................................................27

ARTICLE VI.   NEGATIVE COVENANTS...............................................................................27

      Section 6.01  Liens......................................................................................27
      Section 6.02  Indebtedness...............................................................................27
      Section 6.03  Guaranties.................................................................................28
      Section 6.04  Dividends..................................................................................28
      Section 6.05  Consolidation and Merger...................................................................28
      Section 6.06  Subordinated Debt..........................................................................28
      Section 6.07  Restrictions on Nature of Business.........................................................28
      Section 6.08  Negative Pledges; Subsidiary Restrictions..................................................29
      Section 6.09  Issuance of Additional Stock...............................................................29
      Section 6.10  Regulatory Matters.........................................................................27

ARTICLE VII.  FINANCIAL COVENANTS..............................................................................29

      Section 7.01  Total Risk Based Capital Ratio.............................................................29
      Section 7.02  Tier I Risk Based Capital Ratio............................................................29
      Section 7.03  Leverage Ratio.............................................................................29
      Section 7.04  Minimum Return on Assets...................................................................30
      Section 7.05  Maximum Non-Performing Assets..............................................................30
      Section 7.06  Allowance for Loan and Lease Losses........................................................30

ARTICLE VIII. EVENTS OF DEFAULT, RIGHTS AND REMEDIES...........................................................30

      Section 8.01  Events of Default..........................................................................30
      Section 8.02  Rights and Remedies........................................................................33
      Section 8.03  Offset.....................................................................................33
<PAGE>

ARTICLE IX.   THE AGENT........................................................................................34

      Section 9.01  Authorization..............................................................................34
      Section 9.02  Distribution of Payments and Proceeds......................................................34
      Section 9.03  Expenses...................................................................................35
      Section 9.04  Payments Received Directly by Lenders......................................................35
      Section 9.05  Indemnification............................................................................35
      Section 9.06  Limitations on Agent's Power...............................................................35
      Section 9.07  Exculpation................................................................................36
      Section 9.08  Agent and Affiliates.......................................................................36
      Section 9.09  Credit Investigation.......................................................................36
      Section 9.10  Resignation................................................................................36
      Section 9.11  Assignments................................................................................37
      Section 9.12  Participations.............................................................................38
      Section 9.13  Disclosure of Information..................................................................38

ARTICLE X.    MISCELLANEOUS....................................................................................39

      Section 10.01 No Waiver; Cumulative Remedies.............................................................39
      Section 10.02 Amendments, Etc............................................................................39
      Section 10.03 Notice.....................................................................................39
      Section 10.04 Costs and Expenses.........................................................................39
      Section 10.05 Indemnification by Borrower................................................................40
      Section 10.06 Execution in Counterparts..................................................................40
      Section 10.07 Binding Effect, Assignment.................................................................41
      Section 10.08 Governing Law..............................................................................41
      Section 10.09 Consent to Jurisdiction/Jury Waiver........................................................41
      Section 10.10 Severability of Provisions.................................................................41
      Section 10.11 Prior Agreements...........................................................................41
      Section 10.12 Headings...................................................................................41
      Section 10.13 No Oral Agreements.........................................................................41

</TABLE>





Exhibit A        --     Revolving Loan Commitment Amounts

Exhibit B        --     Borrower's Pledge Agreement

Exhibit C        --     Compliance Certificate

Exhibit D1       --     Application for Standby Letter of Credit

Exhibit D2       --     Standby Letter of Credit Agreement

Exhibit E        --     San Francisco Company Guaranty

Exhibit F        --     San Francisco Company Security Agreement

Exhibit G        --     Note

Exhibit H        --     Permissible Securities

Exhibit I        --     Notice of Permitted Acquisition


Schedule 4.04    --     Subsidiaries

Schedule 4.07    --     Litigation

Schedule 6.01    --     Existing Liens

Schedule 6.02    --     Indebtedness

Schedule 6.03    --     Guaranties



<PAGE>



                            SECURED CREDIT AGREEMENT


               THIS SECURED  CREDIT  AGREEMENT  dated as of August 14, 2003,  is
entered   into  by  and  among  FIRST  BANKS,   INC.,  a  Missouri   corporation
("Borrower"),  the financial  institutions  that have executed this Agreement as
lenders (each individually a "Lender" and collectively the "Lenders"), and WELLS
FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as Agent.


                                WITNESSETH THAT:

               WHEREAS Borrower, certain of the Lenders (the "Original Lenders")
and the Agent's  affiliate,  Wells Fargo Bank Minnesota,  National  Association,
were  party to a  Secured  Credit  Agreement  dated as of August  23,  2001 (the
"Original  Credit  Agreement")  pursuant to which the Lenders had severally made
available to Borrower a revolving credit facility in the aggregate amount of One
Hundred Twenty Million Dollars ($120,000,000);


               WHEREAS Borrower, the Original Lenders, and Agent were party to a
Secured  Credit  Agreement  dated as of August 22,  2002 (the  "Existing  Credit
Agreement")  pursuant to which the Original  Credit  Agreement  was restated and
superceded  and  pursuant to which Lender and Original  Lenders  severally  made
available  to  Borrower  a  revolving  credit  facility  in the amount of Ninety
Million Dollars  ($90,000,000)  and a revolving letter of credit facility in the
amount of Twenty Million Dollars ($20,000,000);


               WHEREAS,  Borrower  has  requested  that Lenders  severally  make
available a new revolving credit facility in the amount of Sixty Million Dollars
($60,000,000)  and a revolving letter of credit facility in the amount of Twenty
Million Dollars ($20,000,000);


               WHEREAS Borrower, the Lenders and Agent desire to enter into this
Secured  Credit  Agreement  in  replacement  of the Existing  Credit  Agreement,
thereby making  available to Borrower the requested  revolving credit and letter
of credit facilities; and


               WHEREAS  the  Lenders  are  willing  severally  to  provide  such
revolving  credit and letter of credit  facilities  to Borrower,  subject to the
terms and conditions hereinafter set forth;


               NOW,  THEREFORE,  in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:


                                   ARTICLE I.

                        DEFINITIONS AND ACCOUNTING TERMS


               Section  1.01.  Defined  Terms.  As used in this  Agreement,  the
                               --------------
following  terms have the following  meanings  (terms defined in the singular to
have the same meaning when used in the plural and vice versa):

               "Advance"  means  an  advance  by the  Lenders  to  the  Borrower
          pursuant to Article II.

<PAGE>

               "Additional Lender" means a financial  institution that becomes a
          Lender pursuant to the procedures set forth in Section 9.11.

               "Affiliate"  means any Person (1) which  directly  or  indirectly
          controls,  or is controlled  by, or is under common  control with, the
          Borrower  or  any   Subsidiary;   (2)  which  directly  or  indirectly
          beneficially  owns or holds five  percent (5%) or more of any class of
          voting stock of Borrower or any  Subsidiary;  or (3) five percent (5%)
          or more of the  voting  stock  of  which  is  directly  or  indirectly
          beneficially  owned or held by  Borrower or any  Subsidiary.  The term
          "Control"  for the purposes of this  Agreement  means the  possession,
          directly or indirectly,  of the power to direct or cause the direction
          of the  management  and  policies  of a Person,  whether  through  the
          ownership of voting  securities,  by contract,  or otherwise.  For the
          purposes of the foregoing definition,  a shareholder of Borrower shall
          not be deemed to be directly or indirectly  controlling  or controlled
          by the Borrower or a Subsidiary,  provided the person in question will
          not receive any proceeds from the Loans.

               "Agent" means Wells Fargo Bank, National  Association,  acting in
          its  capacity  as Agent  pursuant  to Article  IX hereof,  or any duly
          appointed successor.

               "Agreement"  means this  Secured  Credit  Agreement,  as amended,
          supplemented or modified from time to time.

               "Bank  Business  Day" means a day other than a Saturday,  Sunday,
          United  States  national  holiday  or  other  day on  which  banks  in
          Minnesota are permitted or required by law to close.

               "Bank Subsidiary" means any direct or indirect  Subsidiary of the
          Borrower  which is a bank or thrift  institution,  including,  without
          limitation the financial  institutions  listed in Schedule 4.04 hereof
          and, beginning one year following the acquisition thereof, any bank or
          thrift  institution   subsequently   becoming  a  direct  or  indirect
          Subsidiary of the Borrower.

               "Base Rate" means the rate of interest  publicly  announced  from
          time to time by the Agent as its  "prime"  or  "base"  rate or, if the
          Agent ceases to announce a rate so designated,  any similar  successor
          rate  designated  by the Agent.  Each change in the Base Rate shall be
          effective  on the day the  change in the  "prime"  or  "base"  rate is
          announced within Agent.

               "Borrower" has the meaning  assigned to such term in the preamble
          of this Agreement.

               "Borrower Pledge Agreement" means the collateral pledge agreement
          in the form of Exhibit B pledging to the Agent for the ratable benefit
          of the Lenders all of the stock of San Francisco Company.

<PAGE>

               "Borrowing"  means a borrowing  under  Article II  consisting  of
          Advances made to the Borrower by each of the Lenders severally.

               "Capitalized  Lease" of a Person  means any lease of  property by
          such Person as lessee which would be capitalized on a balance sheet of
          such Person prepared in accordance with GAAP.

               "Collateral"   means  the  Borrower's  Special  Account  and  all
          property  which is subject or is to be subject to the Liens granted by
          the Borrower Pledge  Agreement and the San Francisco  Company Security
          Agreement.

               "Commitments"  means the several revolving credit  commitments of
          the  Lenders  in the  aggregate  original  principal  amount  of Sixty
          Million Dollars ($60,000,000), as such amount may be reduced from time
          to time pursuant to Section 2.06 hereof. When used with reference to a
          particular Lender, "Commitment" means that Lender's obligation to make
          Advances in an aggregate amount equal to its Commitment Amount.

               "Commitment  Amount"  means,  with  respect to each  Lender,  the
          amount set forth  opposite  that  Lender's  name on Exhibit A, as that
          amount may be adjusted  from time to time  pursuant to Section 2.06 or
          any assignment made pursuant to Section 9.11.

               "Compliance Certificate" means a certificate in substantially the
          form of Exhibit C, or such other form as the Borrower and the Required
          Lenders may from time to time agree upon in  writing,  executed by the
          Chief Financial Officer of the Borrower and one (1) additional officer
          of the Borrower  identified on the signature  page to the  certificate
          attached   hereto  as  Exhibit  C,  stating  (i)  that  any  financial
          statements  delivered  therewith have been prepared in accordance with
          GAAP, subject to year-end audit adjustments,  (ii) whether or not such
          officer has  knowledge  of the  occurrence  of any Default or Event of
          Default and stating in  reasonable  details the facts with  respect to
          such  Default  or  Event  of  Default,  (iii)  all  relevant  facts in
          reasonable detail to evidence,  and the computations as to, whether or
          not the Borrower is in compliance  with the Financial  Covenants,  and
          (iv) all relevant  facts in  reasonable  detail to  evidence,  and the
          computations  as to, whether or not the Borrower is in compliance with
          the other covenants.

               "Default"  means any of the events  specified  in  Section  8.01,
          whether or not any requirement for the giving of notice,  the lapse of
          time, or both, or any other condition, has been satisfied.

               "ERISA"  means the  Employee  Retirement  Income  Security Act of
          1974, as amended from time to time, and the  regulations and published
          interpretations thereof.

               "ERISA  Affiliate"  means any trade or  business  (whether or not
          incorporated)  which  together with the Borrower would be treated as a
          single employer under Section 4001 of ERISA.


<PAGE>

               "Equity  Capital" of a Bank Subsidiary means the aggregate of its
          perpetual preferred stock (and related surplus), common stock, surplus
          (excluding  all  surplus  related  to  perpetual   preferred   stock),
          undivided  profits  and  capital  reserves,  plus  its net  unrealized
          holding  gains  (or  minus  its  net  realized   holding   losses)  on
          available-for-sale securities.

               "Eurodollar  Business  Day"  means a Bank  Business  Day on which
          dealings  in  U.S.  dollar  deposits  are  carried  on in  the  London
          interbank market.

               "Eurodollar  Rate"  means the annual rate equal to the sum of (i)
          the rate  obtained by dividing (a) the rate (rounded up to the nearest
          1/16 of 1%) determined by the Agent as of 11:00 a.m.  London,  England
          time on the second Eurodollar Business Day prior to the date such rate
          is to become  effective  to be the average  rate at which U.S.  dollar
          deposits  are offered or  available  to banks in the London  interbank
          market for funds to be made available on the first day of any Interest
          Period  in an amount  approximately  equal to the  amount  for which a
          Eurodollar  Rate  quotation has been requested and maturing at the end
          of such Interest  Period,  by (b) a percentage equal to 100% minus the
          Federal Reserve System reserve requirement (expressed as a percentage)
          applicable to such deposits, and (ii) the applicable Margin. In making
          such  determination,  the Agent shall utilize Telerate page 3750 under
          the heading  "British Bankers  Association  LIBOR rates" in the column
          designated "USD," as published by Bridge Information Systems, Inc., or
          such other  comparable  source as may be available to the Agent in the
          event such Telerate page is no longer published or readily available.

               "Eurodollar  Rate  Funding"  means  a  Borrowing  or any  portion
          thereof,  or any other portion of the principal  balance of the Notes,
          that bears interest at a Eurodollar Rate.

               "Event of Default"  means any of the events  specified in Section
          8.01,  provided  that any  requirement  for the giving of notice,  the
          lapse of time, or both, or any other  applicable  condition,  has been
          satisfied.

               "Existing Credit Agreement" has the meaning assigned to such term
          in the recitals to this Agreement.

               "Federal Funds Rate" means at any time an interest rate per annum
          equal to the weighted average of the rates for overnight federal funds
          transactions  with members of the Federal  Reserve System  arranged by
          federal  funds  brokers,  as  published  for such  day by the  Federal
          Reserve Bank of New York, or, if such rate is not so published for any
          day which is a Bank  Business  Day,  the  average,  determined  by the
          Agent, of the quotations for such day for such  transactions  received
          by the Agent from three federal  funds brokers of recognized  standing
          selected by it, it being  understood  that the Federal  Funds Rate for
          any day which is not a Bank  Business  Day shall be the Federal  Funds
          Rate for the next preceding Bank Business Day.

               "Financial Covenants"  means  any  covenant contained in  Article
          VII.

               "First Bank" means First Bank, a Missouri state bank.

               "Floating  Rate" means,  at any time, an annual rate equal to the
          greater of:

<PAGE>

               (i)  the Base Rate; or

               (ii) the Federal Funds Rate, plus 50 basis points (0.50%);

          The  Floating  Rate shall  change when and as the Base Rate or Federal
          Funds Rate changes.

               "Funded Debt" of the Borrower means (without duplication) (i) all
          indebtedness  of the Borrower for borrowed  money;  (ii)  indebtedness
          evidenced by bonds,  notes or similar  written debt  instruments;  and
          (iii)  the  face  amount  of  all  letters  of  credit  and   bankers'
          acceptances  issued  for the  account  of the  Borrower,  and  without
          duplication,  all drafts drawn thereunder;  provided, however, that in
                                                      --------  -------
          no event shall any  calculation  of Funded Debt  include  Subordinated
          Debt or debt of the type referred to in Section 6.02(b) or 6.02(c).

               "Funded  Debt Ratio" means the ratio of Funded Debt to Net Income
          of the Borrower for the most recent period of four fiscal quarters.

               "GAAP" means generally accepted accounting  principles applied on
          a basis  consistent  with  the  accounting  practices  applied  in the
          financial statements described in Section 4.05.

               "Interest  Period"  means,  with respect to any  Eurodollar  Rate
          Funding  (except  as  provided  below  on the  Closing  Date  of  this
          Agreement),  a period of one, two, three or six months  beginning on a
          Eurodollar  Business  Day, as elected by the  Borrower.  Each Interest
          Period shall end on the day in the final month of such Interest Period
          that immediately  precedes the date which  numerically  corresponds to
          the first day of such Interest  Period,  except that (i) if such final
          month has no numerically  corresponding  day, then the Interest Period
          shall end on the last Eurodollar  Business Day of such month, and (ii)
          if an  Interest  Period  would  otherwise  end on a day which is not a
          Eurodollar  Business Day,  such Interest  Period shall end on the next
          following   Eurodollar   Business  Day,  unless  such  next  following
          Eurodollar  Business  Day is the first  Eurodollar  Business  Day of a
          month,  in which  case  such  Interest  Period  shall  end on the next
          preceding Eurodollar Business Day.

               "L/C  Application"  means an  Application  for Standby  Letter of
          Credit in the form  attached  hereto as  Exhibit  D1,  and the  master
          Standby Letter of Credit Agreement in the form of Exhibit D2, which is
          incorporated into such Application by reference.

               "L/C Margin" means an amount  determined  under Section 2.03 that
          is charged pursuant to Section 2.19(a).

               "Lender" or  "Lenders"  has the meaning  assigned to such term in
          the preamble to this Agreement.

               "Leverage  Ratio" shall be defined and  calculated  in accordance
          with Federal  Reserve  Board  Regulation Y in the case of the Borrower
          and in accordance with Section 38 of the Federal Deposit Insurance Act
          in the case of a Bank Subsidiary.
<PAGE>

               "Letter of Credit" has the meaning given in Section 2.15.

               "Letter of Credit  Commitment" means Agent's  commitment to issue
          Letters of Credit as provided in Section 2.15.

               "Lien" means any mortgage,  deed of trust, lien, pledge, security
          interest  or other  charge  or  encumbrance,  of any kind  whatsoever,
          including but not limited to the interest of the lessor or titleholder
          under any  Capitalized  Lease,  title  retention  contract  or similar
          agreement.

               "Loan  Documents"  means this Agreement,  the Notes, the Borrower
          Pledge  Agreement,  the San  Francisco  Company  Guarantee and the San
          Francisco  Company  Security  Agreement,   as  each  may  be  renewed,
          extended,  amended,  rearranged,  restructured,  restated, replaced or
          otherwise modified from time to time.

               "Margin" means an amount determined pursuant to Section 2.03 that
          is added to other amounts to determine a Eurodollar Rate.

               "Multiemployer Plan" means a Plan described in Section 4001(a)(3)
          of  ERISA  which  covers  employees  of  the  Borrower  or  any of its
          Affiliates.

               "Net  Income"  has the  meaning  assigned  to such  term by GAAP,
          without reference to extraordinary  items or adjustments caused solely
          by changes in applicable accounting principles.

               "Non-Performing  Assets" of a Bank  Subsidiary  means the sum of:
          (i) all loans and  leases  classified  as past due 90 days or more and
          still accruing  interest;  (ii) all loans  classified as "non-accrual"
          and no longer accruing interest; (iii) all loans and leases classified
          as "restructured loans and leases"; and (iv) all other "Non-Performing
          Assets,"  as reported in the then most recent call report of such Bank
          Subsidiary.

               "Note" has the meaning set forth in Section 2.01.

               "Obligations"   means  all   debts,   liabilities,   obligations,
          covenants  and duties of the  Borrower  arising  under any of the Loan
          Documents,  whether direct or indirect, absolute or contingent, due or
          to become due, and whether now existing or hereafter arising.

               "Obligations of  Reimbursement"  has the meaning given in Section
          2.16(a).

               "PBGC"  means the Pension  Benefit  Guaranty  Corporation  or any
          entity succeeding to any or all of its functions under ERISA.

               "Percentage"  means, with respect to each Lender,  the percentage
          so  designated  next  to such  Lender's  name  in  Exhibit  A, as such
          percentage may be adjusted from time to time pursuant to Section 9.11.

               "Permitted  Acquisition" means the acquisition by the Borrower or
          any of its  Subsidiaries  of stock or other  equity  interests  in any
          other Person, the consolidation or merger of any other Person into the
          Borrower or any of its Subsidiaries,  or the transfer of any assets of
          any other  Person to the Borrower or any of its  Subsidiaries  outside
          the ordinary course of business, in each case so long as:

<PAGE>

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

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

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

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

               "Person" means an individual, partnership,  corporation, business
          trust, joint stock company, trust, unincorporated  association,  joint
          venture, governmental authority, or other juridical entity of whatever
          nature.

               "Plan"  means any  employee  benefit or other  plan  established,
          maintained,  or to which  contributions have been made by the Borrower
          or any ERISA Affiliate.

               "Primary  Equity Capital" of an entity means the aggregate of the
          allowance for loan and lease losses of such entity, as reported in the
          most  recent  Form 10-Q or Form 10-K  filed by the  Borrower  with the
          Securities  and Exchange  Commission,  plus the Equity Capital of such
          entity.

               "Prohibited  Transaction"  means any  transaction  prohibited  by
          Section 406 of ERISA or Section 4975 of the Internal  Revenue Code, as
          amended from time to time.

               "Reportable  Event"  means any of the events set forth in Section
          4043 of ERISA.

               "Required  Lenders"  means Lenders  (including,  where  relevant,
          Additional Lenders) having an aggregate Percentage of 66 2/3% or more.

               "Return on Assets" of a Person means the percentage determined by
          dividing the Net Income of such Person for the four calendar  quarters
          immediately  preceding the date of  determination by its total average
          assets during such period.  The total average assets of a Person shall
          be as reported in quarterly  financial  statements for such period or,
          in the case of a Bank  Subsidiary,  in its four most recent  quarterly
          call reports.
<PAGE>

               "Revolving Credit Termination Date" means August 12, 2004.

               "San  Francisco  Company"  means  The San  Francisco  Company,  a
          Delaware corporation.

               "San Francisco Company  Guarantee" means the Guaranty in the form
          of  Exhibit  E  to  this  Agreement,  whereby  San  Francisco  Company
          guarantees to the Lenders payment of the Obligations.

               "San  Francisco   Company  Security   Agreement"  means  the  San
          Francisco  Company  Security  Agreement  in the  form  of  Exhibit  F,
          pledging  to the Agent for the  ratable  benefit of the Lenders all of
          the stock of First Bank.

               "Subordinated  Debt" means indebtedness of the Borrower or any of
          its  Subsidiaries  which is  subordinated  in right of  payment to all
          indebtedness  of the  Borrower to any Lender,  on terms that have been
          approved in writing by the  Required  Lenders and that have been noted
          by appropriate  legend on all instruments  evidencing the Subordinated
          Debt.

               "Subsidiary"  means, as to Borrower,  any corporation  with total
          assets  exceeding  $1,000,000 of which shares of stock having ordinary
          voting power (other than stock having such power only by reason of the
          happening  of a  contingency)  to  elect a  majority  of the  board of
          directors or other managers of such corporation are at the time owned,
          or the  management  of  which  corporation  is  otherwise  controlled,
          directly or indirectly through one or more intermediaries, or both, by
          the Borrower or a Subsidiary of Borrower.

               "Tier I Risk Based Capital Ratio" shall be defined and calculated
          in accordance with Federal  Reserve Board  Regulation Y in the case of
          the Borrower and in accordance  with Section 38 of the Federal Deposit
          Insurance Act in the case of a Bank Subsidiary.

               "Total Risk Based Capital  Ratio" shall be defined and calculated
          in accordance with Federal  Reserve Board  Regulation Y in the case of
          the Borrower and in accordance  with Section 38 of the Federal Deposit
          Insurance Act in the case of a Bank Subsidiary.


               Section  1.02.   Accounting   Terms.  All  accounting  terms  not
                                ------------------
specifically   defined  herein  shall  be  construed  in  accordance  with  GAAP
consistent with those applied in the preparation of the financial statements and
reports  referred to in Section 4.05, and all financial data submitted  pursuant
to this Agreement shall be prepared in accordance with such principles.
<PAGE>

                                   ARTICLE II.

       AMOUNT AND TERMS OF REVOLVING LOAN AND LETTER OF CREDIT FACILITIES


               Section 2.01 Advances.
                            --------
               (a) Each Lender agrees,  severally but not jointly,  on the terms
          and subject to the conditions  hereinafter set forth, to make Advances
          to the  Borrower  from time to time  during the  period  from the date
          hereof to and including the Revolving  Credit  Termination  Date in an
          aggregate  amount not to exceed at any time  outstanding that Lender's
          Commitment Amount. The total amount of the Advances outstanding at any
          time hereunder shall not exceed the Commitments.  Within the limits of
          the Commitments,  the Borrower may borrow,  prepay pursuant to Section
          2.07 and reborrow  under this Section 2.01.  The Advances made by each
          Lender shall be evidenced by and repayable in accordance with a single
          promissory  note of the  Borrower  (a "Note")  payable to the order of
          that Lender,  substantially in the form of Exhibit G hereto, dated the
          date  hereof.  The Notes shall bear  interest on the unpaid  principal
          amount  thereof  from  the date  thereof  until  paid as set  forth in
          Section 2.02.

               (b) Each Borrowing  under this Section 2.01 shall occur following
          written or  telephonic  request to the Agent  from the  Borrower,  any
          telephonic request to be confirmed by fax in such form as the Borrower
          and the Agent may agree. Each such notice or request shall specify (i)
          the date of the  requested  Borrowing,  (ii) the amount  thereof,  and
          (iii)  if any  portion  of such  Borrowing  will  bear  interest  at a
          Eurodollar  Rate,  the Interest  Period  selected by the Borrower with
          respect thereto.  Such notice or request must be received by the Agent
          not later than 1:00 p.m.  (Minneapolis  time) on the Bank Business Day
          prior to the day on which such Borrowing is to occur or, if all or any
          portion of the Borrowing will bear interest at a Eurodollar  Rate, not
          later than three  Eurodollar  Business Days prior to the date on which
          such  Borrowing is to occur.  Upon receiving a request for a Borrowing
          under  this  Section  2.01,  and in any event not later than 2:00 p.m.
          (Minneapolis time) on the day that the request is received,  the Agent
          will notify the Lenders of the amount of the requested Borrowing,  the
          amount  of  each  Lender's  Advance  with  respect  thereto,  and,  if
          applicable,  the fact that the Borrower has elected a Eurodollar  Rate
          and the Interest Period selected by the Borrower.  Upon fulfillment of
          the applicable  conditions set forth in Article III, each Lender shall
          remit  its  Percentage  of the  requested  Borrowing  to the  Agent in
          immediately  available  funds.  So long as a Lender receives notice of
          the requested  Borrowing prior to 2:00 p.m.  (Minneapolis time) on the
          date the request is  received,  that Lender will make its Advance with
          respect to that  Borrowing  available to the Agent by wire transfer of
          immediately  available  funds to the Agent not later  than  11:00 a.m.
          (Minneapolis  time) on the date called for in such notice.  If payment
          is not made by a Lender  when due  hereunder  interest  on the  unpaid
          amount  shall  accrue from and  including  the due date to the date of
          payment  at the Base Rate,  and shall be  payable on demand.  Prior to
          12:00 noon (Minneapolis  time) on the day of the requested  Borrowing,
          the Agent shall disburse such funds by wire  transferring  the same to
          an account  designated  by the Borrower at First Bank or in such other
          manner as the Agent and the  Borrower  may from time to time  agree in
          writing.  The Agent shall have no obligation to disburse the requested

<PAGE>

          Borrowing  if any  condition  set  forth in  Article  III has not been
          satisfied on the day of the requested Borrowing.  Each Borrowing shall
          be in the amount of  $1,000,000  or an  integral  multiple of $100,000
          greater than  $1,000,000.  The Borrower  shall  promptly  confirm each
          telephonic  request  for an Advance by  executing  and  delivering  an
          appropriate  confirmation certificate to the Agent. The Borrower shall
          be obligated to repay all Advances made to it notwithstanding the fact
          that the person  requesting the same was not in fact  authorized so to
          do. Any request for an Advance shall be deemed to be a  representation
          that the  statements set forth in Article IV are correct except to the
          extent that the same relate specifically to an earlier date.

               (c) In the event  that any one or more  Lenders'  obligations  to
          make Advances at the Eurodollar Rate are suspended pursuant to Section
          2.02(d)  following  a request for a Borrowing  that  specifies  that a
          Eurodollar  Rate is to  apply,  such  Lenders  shall  nevertheless  be
          obliged to fund their  respective  Advances,  and such Advances  shall
          bear interest at the Floating Rate until they are repaid or until such
          Lenders may again make,  maintain or fund  Advances at the  Eurodollar
          Rate and the  Borrower  requests  pursuant to Section  2.02(b)  that a
          Eurodollar Rate be applicable to such Advances.

               Section 2.02 Interest
                            --------

               (a) Floating Rate.  Unless the Borrower  elects a Eurodollar Rate
          pursuant to Section  2.01(b) or subsection  (b) of this  Section,  the
          principal  balance of the Notes shall bear  interest  at the  Floating
          Rate.

               (b) Conversion of Principal to Eurodollar  Rates. At the election
          of the  Borrower,  which  may be  exercised  from  time to  time,  the
          Borrower may request in writing or by telephone that a Eurodollar Rate
          be applicable for the portion of the outstanding  principal balance of
          the Notes (including any Advance requested or to be requested) and for
          the Interest  Period  indicated  by the  Borrower in its request.  The
          portion of the outstanding balance of the Notes for which a Eurodollar
          Rate is requested  must, on the first day of the  applicable  Interest
          Period,  either (A) bear  interest at the Floating  Rate,  or (B) bear
          interest  at a  Eurodollar  Rate with  respect  to which the  Interest
          Period expires on such first day. A request for a Eurodollar Rate must
          be received by the Agent  before 1:00 p.m.  (Minneapolis  time) on the
          day  three  Eurodollar  Business  Days  before  the  first  day of the
          proposed  Interest  Period.  Upon receiving a request for a Eurodollar
          Rate, and in any event not later than the close of business on the day
          that the request is received, the Agent will notify the Lenders of the
          principal  amount  to be  subject  to  such  Eurodollar  Rate  and the
          Interest  Period  applicable   thereto.   Not  later  than  4:00  p.m.
          (Minneapolis time) on the second Eurodollar  Business Day prior to the
          date on which such Eurodollar Rate is to become  effective,  the Agent
          will notify the Lenders and the  Borrower of the  interest  rate to be
          applicable  thereto.  Following a request for a Eurodollar  Rate under
          this  Section or  Section  2.01,  the  Eurodollar  Rate as  determined
          hereunder  shall be the  interest  rate  applicable  for the  proposed
          Interest Period to the portion of the outstanding principal balance of
          the Notes to which the quotation  related,  subject to fluctuations in
          the applicable Margin (and the remaining part of the principal balance
          of the Notes,  if any,  shall continue to bear interest at the rate or
          rates  previously  applicable to such amounts).  At the termination of
          such Interest  Period,  the interest rate applicable to the portion of

<PAGE>

          the  principal  balance  of the  Notes to which  the  Eurodollar  Rate
          quotation  was  applicable  shall revert to the Floating Rate unless a
          new  Eurodollar  Rate  quotation  is  requested  by  the  Borrower  in
          accordance with this paragraph.

               (c) Setting and Notice of Rates.  The Eurodollar  Rate applicable
          to each  Eurodollar  Rate  Funding  shall be  determined  by the Agent
          between the opening of business and 11:00 a.m.  (Minneapolis  time) on
          the  second  Eurodollar  Business  Day prior to the  beginning  of the
          applicable Interest Period. Promptly following such determination, the
          Agent shall give notice thereof (which may be by telephone if promptly
          confirmed  by  fax)  to  the  Borrower  and  each  Lender.  Each  such
          determination  of the applicable  Eurodollar  Rate shall be conclusive
          and binding upon the parties  hereto,  in the absence of  demonstrable
          error. The Agent,  upon written request of the Borrower or any Lender,
          shall  deliver to the Borrower or such  requesting  Lender a statement
          showing  the  computations  used  by  the  Agent  in  determining  the
          applicable Eurodollar Rate hereunder.

               (d)  Limitations on Eurodollar  Rate Fundings.  In no event shall
          more than six Eurodollar Rate Fundings be outstanding at any one time.
          In no event may the  Borrower  request a  Eurodollar  Rate Funding if,
          after giving  effect to such  Eurodollar  Rate  Funding,  the Borrower
          would be required to prepay the  Eurodollar  Rate  Funding in order to
          pay the  principal  amount of the  Advances  on the  Revolving  Credit
          Termination Date. In no event may the Borrower rescind any request for
          a Eurodollar Rate Funding once made.  Notwithstanding  anything to the
          contrary in this  Agreement,  the Agent and the Lenders  shall have no
          obligation  to honor any request for a  Eurodollar  Rate  Funding if a
          Default or Event of Default has occurred and is  continuing  when such
          request is made or on the first day of the Interest Period  applicable
          thereto.  If on or prior to the first day of any  Interest  Period the
          Agent reasonably  determines (which determination shall be conclusive)
          that  by  reason  of  circumstances  affecting  the  relevant  market,
          adequate  and  reasonable  means do not  exist  for  ascertaining  the
          Eurodollar  Rate for such  Interest  Period,  or the Required  Lenders
          reasonably  determine  (which  determination  shall be conclusive) and
          notify  the Agent that the  Eurodollar  Rate will not  adequately  and
          fairly  reflect  the cost to the  Lenders  of  funding  the  requested
          Eurodollar Rate Funding for such Interest Period, then the Agent shall
          give the Borrower  prompt  notice  thereof  specifying  the amounts or
          periods,  and so long as such condition remains in effect, the Lenders
          shall be under no obligation to fund any Eurodollar  Rate Fundings and
          the Borrower  shall,  on the last day(s) of the then current  Interest
          Period(s) for the outstanding Eurodollar Rate Fundings,  either prepay
          such Eurodollar Rate Fundings or convert such Eurodollar Rate Fundings
          into  Floating Rate  Borrowings  in accordance  with the terms of this
          Agreement.  Notwithstanding any other provision of this Agreement,  in
          the event that it becomes  unlawful for any Lender to make,  maintain,
          or fund Advances at the Eurodollar  Rate  hereunder,  then such Lender
          shall  promptly   notify  the  Borrower   thereof  and  such  Lender's
          obligation to make,  maintain or fund Advances at the Eurodollar  Rate
          shall be  suspended  until such time as such  Lender  may again  make,
          maintain,  and fund Advances at the Eurodollar Rate. If the obligation
          of any Lender to make,  maintain or fund  Advances  at the  Eurodollar
          Rate shall be  suspended  pursuant to this  subsection  2.02(d),  such
          Lender's  affected  Advances  shall be  automatically  converted  into
          Floating Rate Advances on the last day(s) of the then current Interest
          Period(s) for the affected Advances.

<PAGE>
               (e)  Records.  Absent  error,  the  records of the Agent shall be
          conclusive  evidence as to the amount of each  Eurodollar Rate Funding
          and the interest rate and Interest Period applicable thereto.

               (f) Default Interest. Upon the occurrence of any Default or Event
          of Default,  and so long as such Default or Event of Default continues
          without  written  waiver  thereof by the Required  Lenders,  each Note
          shall  bear  interest  at an annual  rate that  shall be four  percent
          (4.00%) plus the annual rate at which interest would otherwise  accrue
          on that Note.  Accrual of interest at such increased rate shall not be
          deemed a waiver or excuse of any such Default or Event of Default.

               Section 2.03 Margin and L/C Margin.
                            ---------------------

               (a)  Generally.  The  Margin  and  the  L/C  Margin  through  and
          including the first  adjustment  occurring as specified below shall be
          1.00% and  1.125%  respectively.  Beginning  with the  receipt  by the
          Lenders of the financial statements and Compliance Certificate for the
          period ending  September 30, 2003, the Margin and the L/C Margin shall
          be adjusted  each  quarter on the basis of the Funded Debt Ratio as at
          the  end of the  previous  fiscal  quarter,  in  accordance  with  the
          following table:
<TABLE>
<CAPTION>


           Funded Debt Ratio                          Margin in Basis Points          L/C Margin in Basis Points
           -----------------                          ----------------------          --------------------------
<S>                                                          <C>                                <C>
           1.75 to 1.00 or more                               125.0                              137.5

           1.00 to 1.00 or more, but less                     112.5                              125.0
              than 1.75 to 1.00

           Less than 1.00 to 1.00                             100.0                              112.5
</TABLE>

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

               (b)  Adjustments.  If,  upon  receipt of the  Borrower's  audited
          financial  statements with respect to any fiscal year of the Borrower,
          the Margin or L/C Margin is determined to be higher than that based on
          the  Borrower's  interim  financial  statements  as of the end of such
          fiscal year,  and the Borrower is thus  determined  to have  underpaid
          interest or Letter of Credit Fees since the adjustment  date following
          the end of such fiscal  year,  the  Borrower  shall pay such amount on
          demand. If, upon such receipt,  the Margin or L/C Margin is determined
          to be lower  than  that  based  on the  Borrower's  interim  financial
          statements as of the end of such fiscal year, and the Borrower is thus
          determined  to have  overpaid  interest or Letter of Credit Fees since
          the adjustment date following the end of such fiscal year, the Lenders
          shall credit such  overpayment,  first, as a prepayment of accrued but
          unpaid interest on the Notes, and, second, as a prepayment of interest
          thereafter accruing on the Notes.
<PAGE>

               Section 2.04 Payments.
                            --------

               (a)  Interest.  Interest accruing on the principal balance of the
          Notes shall be due and payable as follows:

               (i)  Interest  accruing on the principal  balance of the Notes at
                    the Floating  Rate each  calendar  quarter  shall be due and
                    payable on the last day of that calendar  quarter,  with the
                    first  quarterly  payment of interest due on the last day of
                    September,  2003;  and the last payment of interest shall be
                    due on the Revolving Credit Termination Date.

               (ii) Interest on each  Eurodollar  Rate Funding  shall be due and
                    payable on the last day of the  applicable  Interest  Period
                    or, if such Interest  Period is six months,  on the last day
                    of the third month during such Interest  Period,  and on the
                    last day of such Interest Period.


               (b)  Principal.  The principal  balance of the Notes shall be due
          and payable in full on the Revolving Credit Termination Date.

               Section 2.05 Revolving Loan Commitment Fee.  The  Borrower  shall
                            -----------------------------
pay to the Agent, for the benefit of the Lenders,  a commitment fee at an annual
rate equal to 22.5 basis points (.225%)  applied to the aggregate  daily average
unused amount of the Commitment  Amounts.  This  commitment fee shall be due and
payable quarterly in arrears,  with the first payment due September 30, 2003 for
the period from the Closing Date through  September  30, 2003,  and payments due
quarterly thereafter.  Any such commitment fee remaining unpaid on the Revolving
Credit Termination Date shall be due and payable on that date.

               Section 2.06  Termination  or Reduction of the  Commitments.  The
                             ---------------------------------------------
Borrower  may at any time and from time to time  upon 10  calendar  days'  prior
notice  to  the  Agent  permanently   terminate  the  Commitments  in  whole  or
permanently reduce the Commitments in part, without penalty or premium, provided
that  (i) the  Commitments  may not be  terminated  while  any  Advances  remain
outstanding, (ii) each partial reduction shall be in the amount of $1,000,000 or
a multiple thereof,  (iii) any partial reduction of the Commitments shall be pro
rata as to each Lender in accordance with that Lender's Percentage,  and (iv) no
reduction  shall  reduce the  Commitments  to an amount less than the  aggregate
amount of the Advances outstanding at the time.

               Section 2.07 Voluntary  Prepayments.  The Borrower may prepay the
                            ----------------------
portion of the  principal  balance of the Notes  bearing  interest at a Floating
Rate (the  "Floating  Rate  Portion") in whole or in part,  at any time and from
time to  time;  provided  that  (i)  prepayment  of any  Lender's  Note  must be
accompanied  by pro  rata  prepayment  of each  other  Lender's  Note,  (ii) any
prepayment  of the  full  amount  of any Note  shall  include  accrued  interest
thereon,  and (iii) each partial  prepayment of the Floating Rate Portion of the
Notes shall be in the principal amount of $1,000,000 or an integral  multiple of
$100,000 greater than $1,000,000.
<PAGE>


               The Borrower may prepay the portion of the  principal  balance of
the Notes bearing  interest at a Eurodollar Rate (the "Eurodollar Rate Portion")
in whole or in part, at any time from time to time; provided that (i) prepayment
of any Lender's Note must be  accompanied  by pro rata  prepayment of each other
Lender's Note,  (ii) any prepayment of the full amount of any Note shall include
accrued interest thereon,  (iii) each partial  prepayment of the Eurodollar Rate
Portion  of the  Notes  shall be in the  principal  amount of  $1,000,000  or an
integral  multiple of $100,000 greater than  $1,000,000,  (iv) any prepayment of
the  Eurodollar  Rate  Portion  of the Notes  shall be made only upon three Bank
Business Days' notice to the Agent,  and (v) if the prepayment is made on a date
other than the last day of the applicable  Interest Period, such prepayment must
be accompanied by a written agreement from Borrower to reimburse the Lenders for
any amounts due to the Lenders pursuant to Section 2.12(b).

               Section 2.08 Computation of Interest and Fees. Interest under the
                            --------------------------------
Notes and all fees under the Agreement  shall be computed on the basis of actual
number of days elapsed in a year of 360 days.

               Section  2.09 Making of Payments.  All payments of principal  and
                             ------------------
interest under the Notes and of the fees hereunder shall be made to the Agent in
immediately  available  funds.  Payments  received after 2:00 p.m.  (Minneapolis
time) on any day shall be deemed  received on the next  succeeding Bank Business
Day. The  Borrower and the Lenders  agree that the amount shown on the books and
records of the Agent as being the principal  balance of each Lender's Note shall
be prima facie  evidence  of such  principal  amount.  Upon  Agent's  receipt of
written request by Borrower, the Borrower authorizes the Agent to charge against
any  account  the  Borrower  may  maintain  with  Wells  Fargo  Bank,   National
Association,  an amount equal to the accrued interest and fees from time to time
due and payable to the Agent under the Notes or hereunder,  or (at the option of
the Required Lenders) to make an Advance in such amount.

               Section 2.10 Payment on Nonbusiness Days. Payments of interest on
                            ---------------------------
Eurodollar  Fundings shall be governed by Section  2.04(a)(ii).  With respect to
all other  payments  to be made  hereunder  or under the  Notes,  whenever  such
payments shall be stated to be due on a day other than a Bank Business Day, such
payment may be made on the next succeeding Bank Business Day, and such extension
of time shall in each case be included in the computation of payment of interest
on such Note or the fees hereunder, as the case may be.

               Section 2.11 Use of Proceeds.  The proceeds of the Advances shall
                            ---------------
be  used  by the  Borrower  (i)  for its  general  corporate  purposes,  (ii) to
refinance existing  indebtedness under the Existing Credit Agreement,  and (iii)
for Permitted Acquisitions.

               Section 2.12 Fees on Advances and  Indemnity.  In addition to any
                            -------------------------------
interest  payable  on  Advances  made  hereunder  and any fees or other  amounts
payable hereunder, the Borrower agrees:

               (a) If at any time the enactment of any new generally  applicable
          law,  rule or  regulation  or the  issuance of a generally  applicable
          interpretation or administration thereof by any governmental authority
          (including,  without  limitation,  Regulation D of the Federal Reserve
          Board):

<PAGE>

               (i)  shall  subject any Lender to any tax,  duty or other charges
                    (including but not limited to any tax designed to discourage
                    the purchase or  acquisition  of foreign  securities or debt
                    instruments by United States nationals) with respect to this
                    Agreement,  or shall materially change the basis of taxation
                    of payments to any Lender of the principal of or interest on
                    any portion of the  principal  balance of the Notes  bearing
                    interest at a Eurodollar  Rate (except for the imposition of
                    or changes in respect of the rate of tax on the  overall net
                    income of that Lender); or

               (ii) shall  impose or deem  applicable  or increase  any reserve,
                    special  deposit or similar  requirement  against assets of,
                    deposits  with or for the account of, or credit  extended by
                    any Lender  because of any portion of the principal  balance
                    of any Note bearing interest at a Eurodollar Rate;

          and the result of any of the  foregoing  would be to increase the cost
          to that Lender of making or maintaining  any such portion or to reduce
          any sum  received or  receivable  by that Lender with  respect to such
          portion,  then,  within 30 days after demand by any Lender  specifying
          the basis of the Lender's assertion in reasonable detail, the Borrower
          shall  pay that  Lender  such  additional  amount or  amounts  as will
          compensate that Lender for such increased cost or reduction; provided,
          however, that no amount shall be payable by Borrower if the reason for
          the  additional   charges,   reserves,   special  deposit  or  similar
          requirements  against a particular  Lender arises from a change in the
          status  of the  Lender,  rather  than  from  the  imposition  of  such
          requirements against commercial lending institutions generally.

               (b) The Borrower shall also  compensate any Lender,  upon written
          request by that Lender  (which  request  shall set forth the basis for
          requesting  such  amounts),  for all losses and expenses in respect of
          any interest or other  consideration paid by that Lender to lenders of
          funds  borrowed by it or deposited  with it to maintain any portion of
          the  principal  balance  of any Note at a  Eurodollar  Rate which that
          Lender  may  sustain  to the  extent  not  otherwise  compensated  for
          hereunder and not mitigated by the  reemployment  of such funds to the
          extent such loss or expense arises (i) as a consequence of any failure
          by the  Borrower  to make  any  payment  when  due of any  amount  due
          hereunder in connection with any Eurodollar Rate Fundings, (ii) due to
          any failure of the Borrower to borrow or convert any  Eurodollar  Rate
          Fundings on a date specified  therefor in a notice  thereof,  or (iii)
          due to any payment or prepayment of any  Eurodollar  Rate Funding on a
          date other  than the last day of the  applicable  Interest  Period for
          such  Eurodollar  Rate Funding.  A certificate  as to any such loss or
          expense (including  calculations,  in reasonable  detail,  showing how
          that Lender computed such loss or expense) shall be promptly submitted
          by that Lender to the  Borrower.  Such loss or expense may be computed
          as though that Lender acquired deposits in the London interbank market
          to fund that  portion  of the  principal  balance  whether or not that
          Lender actually did so.

               (c)  A  notice  from  any  Lender  under  this  Section  claiming
          compensation and setting forth the additional  amount or amounts to be
          paid to it hereunder  shall be conclusive in the absence of error.  In
          determining any such amount, a Lender may use any reasonable averaging
          and attribution methods.
<PAGE>

               Section 2.13 Capital  Adequacy.  If any Lender  determines at any
                            -----------------
time that its Return has been reduced as a result of any Capital  Adequacy  Rule
Change,  that Lender may require the Borrower to pay it the amount  necessary to
restore its Return to what it would have been had there been no Capital Adequacy
Rule Change. For purposes of this Section:

               (a) "Return",  for any period, means the percentage determined by
          dividing  (i) the sum of interest  and ongoing fees earned by a Lender
          under this Agreement  during such period,  by (ii) the average capital
          that Lender is required to maintain  during such period as a result of
          its being a party to this Agreement,  as reasonably determined in good
          faith  by that  Lender  based  upon  its  total  capital  requirements
          pursuant to the Capital  Adequacy Rules then in effect.  Return may be
          calculated  for  each  calendar  quarter  and for the  shorter  period
          between the end of a calendar  quarter and the date of  termination in
          whole of this Agreement.

               (b) "Capital  Adequacy Rule" means any law,  rule,  regulation or
          guideline  regarding  capital adequacy that applies to any Lender,  or
          the interpretation thereof by any governmental or regulatory authority
          with  supervisory  authority over such Lender.  Capital Adequacy Rules
          include  rules  requiring  financial  institutions  to maintain  total
          capital  in amounts  based  upon  percentages  of  outstanding  loans,
          binding loan commitments and letters of credit.

               (c) "Capital Adequacy Rule Change" means any change applicable to
          banks generally in any Capital  Adequacy Rule occurring after the date
          of this  Agreement,  but the term  does not  include  any  changes  in
          applicable  requirements that at the date hereof are scheduled to take
          place under the existing  Capital  Adequacy  Rules or any increases in
          the capital that any Lender is required to maintain to the extent that
          the  increases  are required due to a  regulatory  authority's  action
          affecting only that Lender.

               (d) For purposes of this Section,  "Lender"  includes (but is not
          limited  to) the Agent,  the  Lenders,  as defined  elsewhere  in this
          Agreement,  any assignee of any interest of any Lender  hereunder  and
          any participant in the loans made hereunder.

The  initial  notice sent by a Lender  shall be sent as promptly as  practicable
after that  Lender  learns  that its Return has been  reduced,  shall  include a
demand for payment of the amount  necessary to restore that Lender's  Return for
the quarter in which the notice is sent,  and shall state in  reasonable  detail
the cause for the reduction in its Return and its  calculation  of the amount of
such  reduction.  Thereafter,  that  Lender  may send a new notice  during  each
calendar  quarter  setting forth the  calculation of the reduced Return for that
quarter and  including a demand for payment of the amount  necessary  to restore
its Return for that quarter.

               Section 2.14. Failure of Any Lender to Make Advances.  Should any
                             --------------------------------------
Lender  default in making an Advance,  the other  Lenders  shall not be released
from their several obligations to make Advances as agreed hereunder, and, in the
event such  defaulting  Lender is the Agent,  the other Lenders shall  forthwith
appoint one of  themselves  to act as Agent.  However,  such  default  shall not
obligate  any of the  Lenders to  increase  their  Commitment  Amounts.  Without



<PAGE>

limiting any other  remedies to which the  Borrower  may be  entitled,  Borrower
shall be released from all liability to pay such  defaulting  Lender any accrued
or future fees under Section 2.05 and the other  obligations  of the Borrower to
such defaulting Lender under the Loan Documents,  except the obligation to repay
the  outstanding  Revolving Loans  theretofore  made by such Lender and interest
accrued thereon as provided in the Loan Documents,  shall  terminate;  provided,
                                                                       --------
however,  once  such  default  is  cured,  then such  defaulting  Lender  shall,
-------
subsequent thereto, have all rights under the Loan Documents.


               Section 2.15. Issuance of Letters of Credit.
                             -----------------------------

               (a) The Agent  will  issue one or more  letters of credit for the
          account of the Borrower  (each a "Letter of Credit") from time to time
          during the period  from the date  hereof  until the  Revolving  Credit
          Termination  Date, in an aggregate  amount at any time outstanding not
          to exceed $20,000,000.  Each Letter of Credit, if any, shall be issued
          pursuant to a separate L/C Application entered into by the Borrower as
          applicant,  completed  in a  manner  satisfactory  to  the  Agent  and
          delivered to the Agent at least five Bank  Business  Days prior to the
          date such Letter of Credit is to be issued.  The terms and  conditions
          set forth in each such L/C Application  shall supplement the terms and
          conditions hereof, but in the event of inconsistency between the terms
          of any such L/C  Application  and the terms  hereof,  the terms hereof
          shall control.

               (b) Each Lender shall be deemed to hold a participation  interest
          in each Letter of Credit equal to that Lender's Percentage of the face
          amount  of that  Letter of  Credit.  If the  Agent  makes any  payment
          pursuant  to the terms of any  Letter of  Credit  and is not  promptly
          reimbursed,  the Agent may request that each Lender pay such  Lender's
          Percentage  of the  unreimbursed  amount.  Upon  receipt  of any  such
          request prior to 1:00 p.m.  (Minneapolis time) on a Bank Business Day,
          the recipient shall be  unconditionally  and irrevocably  obligated to
          pay  its  Percentage  of  the  unreimbursed  amount  to the  Agent  in
          immediately  available funds prior to 3:00 p.m.  (Minneapolis time) on
          such date.  Notices received after 1:00 P.M.  (Minneapolis time) shall
          be deemed to have been received on the following Bank Business Day. If
          payment is not made by a Lender  when due  hereunder,  interest on the
          unpaid  amount shall accrue from and including the date of the Agent's
          request  to the date of payment  at the Base  Rate.  After  making any
          payment  to the Agent  under  this  subsection  in  connection  with a
          particular Letter of Credit, a Lender shall be entitled to participate
          to the extent of its Percentage in the related  reimbursements and any
          interest thereon received by the Agent from the Borrower or otherwise.
          Upon receiving any such  reimbursement,  the Agent will  distribute to
          each Lender its  Percentage  of such  reimbursement  and any  interest
          thereon.

               (c) No Letter of Credit shall be issued with an expiry date later
          than 90 days after the Revolving Credit Termination Date.

               (d) Any request for the issuance of a Letter of Credit under this
          Section  2.15  shall  be  deemed  to  be  a  representation  that  the
          statements  set forth in Article IV hereof are  correct  except to the
          extent that the same relate specifically to an earlier date.


<PAGE>

               Section  2.16.  Payment of Amounts Drawn Under Letters of Credit.
                               ------------------------------------------------
The  Borrower  agrees to pay the Agent any and all  amounts  required to be paid
under the applicable L/C  Application,  when and as required to be paid thereby,
including the amounts designated below, when and as designated:

               (a) The  Borrower  hereby  agrees  to pay the  Agent on the day a
          draft is honored under any Letter of Credit a sum equal to all amounts
          drawn under such Letter of Credit plus any and all reasonable  charges
          and  expenses  that the Agent may pay or incur  relative to such draw,
          plus interest on all such  amounts,  charges and expenses as set forth
          below (all such amounts are hereinafter referred to, collectively,  as
          the "Obligation of Reimbursement").

               (b) The  Borrower  hereby  agrees  to pay  the  Agent  on  demand
          interest on all amounts,  charges and expenses payable by the Borrower
          to the Agent under this Section  2.16,  accrued from the date any such
          draft is paid,  or any such charge or expense is paid or incurred,  by
          the Agent until payment in full by the Borrower at the Floating Rate.

               (c) Upon the  occurrence of any Default or Event of Default,  and
          so long as any such  Default  or Event of  Default  continues  without
          written waiver thereof by the Required  Lenders,  the rate of interest
          on all amounts,  charges and  expenses  payable by the Borrower to the
          Agent under this Section  2.16 shall be four percent  (4.00%) plus the
          Floating Rate.

               Section 2.17. Special Account.
                             ---------------
               (a) If the  Commitments  are  terminated  in  whole  pursuant  to
          Section 2.06, if an Event of Default shall occur,  and in any event on
          the Revolving  Credit  Termination  Date,  the Borrower  shall pay the
          Agent in immediately available funds, for deposit in a deposit account
          established  for the sole  purpose of holding  such  funds,  an amount
          equal to the maximum  aggregate amount available to be drawn under all
          Letters  of Credit  then  outstanding,  assuming  compliance  with all
          conditions  for  drawing   thereunder   (the  "Maximum   Reimbursement
          Obligation").  Alternatively,  the  Borrower may transfer to the Agent
          cash and  Permissible  Securities for deposit in a securities  account
          established  for  the  sole  purpose  of  holding  such  funds,  of an
          aggregate   Collateral  Value  equal  to  the  Maximum   Reimbursement
          Obligation; provided, however, that if the Borrower wishes to transfer
                      --------  -------
          Permissible Securities in lieu of cash, it must simultaneously deliver
          to  the  Agent  such  account  and  control  agreements and such other
          documents as the Agent may reasonably determine are necessary in order
          to  establish  and  perfect  the  security  interest  referred  to  in
          subsection (c), below. Any  such deposit account or securities account
          shall be referred to herein as the "Special Account."

               (b)  "Permissible   Securities"  means  securities  described  in
          Exhibit H, and the "Collateral Value" of a Permissible Security is its
          market value, as reasonably determined by the Agent, multiplied by the
          percentage determined pursuant to Exhibit H. The "Collateral Value" of
          cash is its face value.

               (c) The Borrower  hereby grants to the Agent,  for the benefit of
          the Lenders,  a security interest in the Special Account and all funds
          and  Permissible  Securities  held  therein  from time to time and all
          proceeds thereof, as security for the payment of all Obligations.  Any
          interest earned on funds and Permissible  Securities  deposited in the
          Special Account shall be credited to the Special  Account.  Amounts on
          deposit in the Special Account may be applied by the Agent at any time
          or from time to time to the Borrower's  Obligation of Reimbursement or
          any other Obligations,  in the Agent's sole discretion,  and shall not
          be  subject  to  withdrawal  by the  Borrower  so  long  as the  Agent
          maintains a security  interest  therein.  The Agent agrees to transfer
          any balance of cash or Permisssible  Securities in the Special Account
          to the  Borrower  at such  time as the  Obligations  have been paid in
          full.

<PAGE>

               Section 2.18.  Authorization for Borrowing. In the event that the
                              ---------------------------
Borrower shall be obligated to make any payment  pursuant to Section  2.16(a) or
any payment or transfer of securities  pursuant to Section  2.17,  and shall not
have made other arrangements for payment or transfer of securities as of the due
date,  then the Agent will  initiate a Borrowing  in an amount not to exceed the
amount  available to be borrowed  pursuant to Section 2.01 without  request from
the  Borrower  and use the  proceeds to satisfy  such  payment  obligation.  The
procedure  for  such  Borrowing,   and  the  Agent's  and  Lenders'  rights  and
Obligations  with respect thereto,  shall be in all respects  identical to those
applicable  to a Borrowing  initiated by the Borrower  pursuant to Section 2.01,
and such  Borrowing  shall not itself cause a Default or Event of Default.  Such
Borrowing shall bear interest at the Floating Rate.

               Section  2.19.  Letter of Credit  Fees.  The  Borrower  agrees to
                               ----------------------
pay fees as follows:

               (a) Letter of Credit Fees.  The Borrower  agrees to pay the Agent
          for the  benefit of the  Lenders a fee with  respect to each Letter of
          Credit,  if any,  accruing on a daily basis and  computed at an annual
          rate equal to the L/C Margin of the aggregate  amount that may then be
          drawn  on all  issued  and  outstanding  Letters  of  Credit  from and
          including  the date of issuance  of each such  Letter of Credit  until
          such date as each such Letter of Credit  shall  terminate by its terms
          or be fully  drawn,  due and payable  quarterly in arrears on the last
          day of each calendar  quarter,  commencing  September 30, 2003, and on
          the date when the last Letter of Credit expires or is fully drawn. The
          foregoing  fee shall be in addition  to any and all fees,  commissions
          and  charges of the Agent with  respect to or in  connection  with any
          such Letter of Credit.  Upon the occurrence of any Default or Event of
          Default,  and so long as such  Default or Event of  Default  continues
          without  written  waiver thereof by the Required  Lenders,  the annual
          rate at which such fee accrues shall be four percent  (4.00%) plus the
          L/C Margin.  Accrual of such fee at such  increased  rate shall not be
          deemed a waiver or excuse of any such Default or Event of Default.

               (b) Letter of Credit  Administrative Fees. The Borrower agrees to
          pay the Agent, on demand, the administrative fees charged by the Agent
          in connection  with issuing  Letters of Credit,  honoring drafts under
          Letters of Credit, amendments thereto, transfers thereof and all other
          activity with respect to Letters of Credit at the  then-current  rates
          published  by the  Agent  for such  services  rendered  on  behalf  of
          customers of the Agent generally and provided to the Borrower.

               (c) Letter of Credit  Commitment  Fee. The Borrowers shall pay to
          Agent for the  benefit of Lenders a  commitment  fee at an annual rate
          equal to 22.5 basis  points  (.225%)  applied to the  aggregate  daily
          average unused amount of the Letter of Credit Commitment  Amount.  The
          commitment fee shall be due and payable  quarterly in arrears with the
          first  quarterly  payment due September 30, 2003. Any such  commitment
          fee remaining unpaid on the Revolving Credit Termination Date shall be
          due and payable on that date.

               Section  2.20  Termination  or  Reduction  of  Letter  of  Credit
                              --------------------------------------------------
Commitment.  The  Borrower  may at any time and from  time to time upon ten (10)
----------
calendar days' prior notice to Agent, permanently terminate the Letter of Credit
Commitment  in whole or  permanently  reduce the Letter of Credit  Commitment in
part, without penalty or premium,  provided that (i) Letter of Credit Commitment
shall in all events be terminated in full if the  Commitments  are terminated in
full  pursuant to Section  2.06,  (ii) each  partial  reduction  shall be in the
amount of  $1,000,000.00  or a multiple  thereof,  and (iii) no reduction  shall
reduce  the Letter of Credit  Commitment  to an amount  less than the  aggregate
amount of all outstanding Letters of Credit at that time.

<PAGE>

                                  ARTICLE III.

                              CONDITIONS PRECEDENT

               Section 3.01 Initial Conditions Precedent.  The obligation of the
                            ----------------------------
Lenders to make any Advance and the  obligation of the Agent to issue any Letter
of Credit  are  subject to the  condition  precedent  that the Agent  shall have
received  on or  before  the day of the first  Advance  or  issuance  all of the
following,  each dated (unless  otherwise  indicated) as of the date hereof,  in
form and substance satisfactory to each Lender:

               (a) The Notes, properly executed on behalf of the Borrower.

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

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

               (d) A certificate of good standing of the Borrower, San Francisco
          Company  and First  Bank,  dated not more than twenty (20) days before
          the date of the first Advance.

               (e) A signed copy of an opinion of counsel for the  Borrower  and
          its  Subsidiaries,  addressed to the Lenders as to matters referred to
          in Sections 4.01, 4.02, 4.03 and 4.07, and as to such other matters as
          the Lenders may reasonably request, with that opinion being subject to
          customary  assumptions and  limitations  and reasonably  acceptable to
          each Lender's counsel. In the case of Section 4.07, the opinion may be
          to the best  knowledge  of such  counsel,  and, in the case of Section
          4.03,  insofar as it relates to  enforcement  of  remedies,  it may be
          subject  to  applicable  bankruptcy,  insolvency,   reorganization  or
          similar laws affecting the rights of creditors  generally from time to
          time, and to usual equity principles.

               (f) The Borrower Pledge Agreement, duly executed by the Borrower.

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

               (h) The San Francisco Company Security  Agreement,  duly executed
          by San Francisco Company.
<PAGE>

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

               (j) The San  Francisco  Company  Guarantee,  duly executed by San
          Francisco Company.

               (k) Evidence  that all of the  Borrower's  obligations  under the
          Existing  Credit  Agreement  have been paid and discharged in full, or
          will be so paid and discharged from proceeds of the first Borrowing.

It is acknowledged  that Agent currently  maintains  possession of the documents
described in subsections (g) and (i) pursuant to the Existing Credit  Agreement;
and that such possession will satisfy the requirements of such subsections.

               Section 3.02 Conditions Precedent to All Advances. The obligation
                            ------------------------------------
of each  Lender to make any Advance  (including  the  initial  Advance)  and the
obligation  of the Agent to issue any  Letter of Credit  shall be subject to the
further conditions precedent that on the date of such Advance:

               (a) The  representations  and warranties  contained in Article IV
          are  correct on and as of the date of such  Advance as though  made on
          and as of such date,  except to the extent  that such  representations
          and warranties relate solely to an earlier date.

               (b) No event has occurred and is continuing, or would result from
          such Advance, which constitutes a Default or an Event of Default.

                                   ARTICLE IV.

                         REPRESENTATIONS AND WARRANTIES

               The Borrower represents and warrants to the Lenders as follows:

               Section 4.01 Corporate Existence and Power. The Borrower and each
                            -----------------------------
of its Subsidiaries (i) is a corporation duly incorporated, validly existing and
in good standing under the laws of the state of its  incorporation,  and is duly
licensed or  qualified  to  transact  business  in all  jurisdictions  where the
character  of the  property  owned  or  leased  or the  nature  of the  business
transacted  by it makes such  licensing  or  qualification  necessary  and where
failure to be so licensed or qualified would have a materially adverse impact on
its business or  properties;  (ii) is in  compliance  with the  requirements  of
applicable laws and regulations,  the noncompliance  with which would materially
and  adversely  affect its  business or financial  condition;  and (iii) has all
requisite power and authority to conduct its business, to own its properties and
to execute and deliver,  and to perform all of its obligations  under,  the Loan
Documents.

               Section 4.02  Authorization  of  Borrowing; No Conflict as to Law
                             ---------------------------------------------------
or Agreements. The execution,  delivery and performance by the Borrower and each
-------------
of its  Subsidiaries  of the  Loan  Documents  to  which  it is a party  and the
Borrowings  and requests for Letters of Credit from time to time  hereunder have
been duly authorized by all necessary  corporate  action and do not and will not
(i) require any consent or approval of the  stockholders  of the Borrower or any
of  its  Subsidiaries,  or  any  authorization,   consent  or  approval  by  any
governmental department,  commission,  board, bureau, agency or instrumentality,
domestic or foreign, except such as have already been obtained, (ii) violate any
provision  of any  law,  rule  or  regulation  (including,  without  limitation,
Regulation X of the Board of Governors of the Federal  Reserve System) or of any
order,  writ,  injunction or decree presently in effect having  applicability to
the Borrower or any of its  Subsidiaries or of the Articles of  Incorporation or
Bylaws of the Borrower or any of its  Subsidiaries,  (iii) result in a breach of
or constitute a default  under any indenture or loan or credit  agreement or any
other  material  agreement,  lease or instrument to which the Borrower or any of
its  Subsidiaries  is a party or by which it or its  properties  may be bound or
affected,  or (iv) result in, or require, the creation or imposition of any Lien
or other charge or  encumbrance of any nature upon or with respect to any of the
properties  now  owned  or  hereafter  acquired  by the  Borrower  or any of its
Subsidiaries.
<PAGE>


               Section 4.03 Legal Agreements.  This Agreement and the other Loan
                            ----------------
Documents  to which it is a party  constitute,  the  legal,  valid  and  binding
obligations  of the  Borrower  and  each  of its  Subsidiaries,  as  applicable,
enforceable against each such party in accordance with their respective terms.

               Section 4.04 Subsidiaries.  Except as listed in Schedule 4.04, as
                            ------------
of  the  date  of  this  Agreement  the  Borrower  has  no  direct  or  indirect
Subsidiaries.  The percentage of the capital stock of each  Subsidiary  owned by
the  Borrower or by one or more other  Subsidiaries  is as set forth in Schedule
4.04.

               Section 4.05  Financial  Condition.  The Borrower has  heretofore
                             --------------------
furnished  to the Lenders its audited  financial  statements  as of December 31,
2002, and call reports of the Bank Subsidiaries dated as of June 30, 2003. Those
financial  statements fairly present the financial condition of the Borrower and
its  Subsidiaries  on the dates thereof and the results of their  operations and
cash flows for the periods  then ended,  and were  prepared in  accordance  with
GAAP,  subject,  in the case of the interim  financial  statements,  to year-end
audit adjustments.

               Section 4.06 Adverse Change.  There has been no material  adverse
                            --------------
change in the business,  properties or condition (financial or otherwise) of the
Borrower or its Subsidiaries  since the date of the latest financial  statements
referred to in Section 4.05.

               Section 4.07 Litigation. Except as disclosed in Schedule 4.07, as
                            ----------
of the date of this  Agreement,  there  are no  actions,  suits  or  proceedings
pending or, to the  knowledge of the Borrower,  threatened  against or affecting
the Borrower or any of its Subsidiaries or the properties of the Borrower or any
of its  Subsidiaries  before any court or governmental  department,  commission,
board,  bureau,  agency or  instrumentality,  domestic  or  foreign,  which,  if
determined  adversely to the Borrower or any of its  Subsidiaries,  would have a
material adverse effect on the financial condition, properties, or operations of
the Borrower or any of its Subsidiaries.

               Section 4.08 Regulation U. No part of the proceeds of any Advance
                            ------------
will be used by the Borrower or any Bank Subsidiary directly or indirectly,  (i)
to purchase or carry any margin  stock (as defined in  Regulation U of the Board
of Governors of the Federal  Reserve System;  herein,  the "Board") or to extend
credit to others for the purpose of  purchasing  or carrying any margin stock or
(ii) for any  purpose  which  entails a violation  of, or which is  inconsistent
with, the provisions of Regulation U issued by the Board.

               Section 4.09 Taxes. The Borrower and each of its Subsidiaries has
                            -----
paid or caused to be paid to the proper authorities when due all federal,  state
and local taxes  required to be  withheld  by it. The  Borrower  and each of its
Subsidiaries  has filed all  federal,  state and local tax returns  which to the
knowledge of the  officers of the  Borrower  are  required to be filed,  and the
Borrower  and  each of its  Subsidiaries  has paid or  caused  to be paid to the
respective  taxing  authorities  all  taxes as shown on said  returns  or on any
assessment  received by it to the extent such taxes have become due,  other than
taxes whose amount,  applicability  or validity is being contested in good faith
by  appropriate  proceedings  and for which the Borrower or its  Subsidiary,  as
applicable, has provided adequate reserves in accordance with GAAP.

               Section  4.10  Titles.  The  Borrower  or  its  Subsidiaries,  as
                              ------
applicable,  have  good  title to each of the  material  properties  and  assets
reflected in the latest balance sheet referred to in Section 4.05.

               Section  4.11 ERISA.  As of the date of this  Agreement,  no Plan
                             -----
established or maintained by the Borrower or any ERISA Affiliate that is subject
to  Part  3 of  Subtitle  B of  Title  I of  ERISA  had an  accumulated  funding
deficiency  (as such  term is  defined  in  Section  302 of  ERISA) in excess of
$1,000,000  as of the last day of the most recent fiscal year of such Plan ended


<PAGE>

prior to the date  hereof,  and no  liability  to the Pension  Benefit  Guaranty
Corporation or the Internal  Revenue  Service in excess of such amount has been,
or is  expected by the  Borrower or any ERISA  Affiliate  to be,  incurred  with
respect to any Plan of the Borrower or any ERISA Affiliate. Neither the Borrower
nor any of its  Subsidiaries  has any  contingent  liability with respect to any
post-retirement  benefit  under a Welfare  Plan as  described in Section 3(1) of
ERISA,  other than liability for  continuation  coverage  described in Part 6 of
Subtitle B of Title I of ERISA.

               Section 4.12 Regulatory Matters. Borrower is registered as a bank
                            ------------------
holding company under the Bank Holding Company Act, as amended  ("BHCA").  First
Bank is an "insured  depository  institution"  as defined in the Federal Deposit
Insurance Act, as amended ("FDIA"),  and the applicable  regulations  thereunder
and the  deposits  of First Bank are insured by the Bank  Insurance  Fund of the
Federal Deposit Insurance  Corporation to the maximum extent permitted under the
FDIA.

                                   ARTICLE V.

                              AFFIRMATIVE COVENANTS

               So long as any Note or L/C  Application  or any other  Obligation
hereunder shall remain unpaid, any Commitments shall be outstanding or the Agent
shall have any obligation to issue Letters of Credit,  the Borrower will comply,
and  will  cause  each  of  its  Subsidiaries  to  comply,  with  the  following
requirements, unless the Required Lenders shall otherwise consent in writing:

               Section 5.01 Reporting Requirements. The Borrower will deliver to
                            ----------------------
each Lender:

               (a) As soon as  available,  and in any event within 90 days after
          the end of each  fiscal  year of the  Borrower,  a copy of the  annual
          audit  report  of  the  Borrower  with  the  unqualified   opinion  of
          independent  certified public accountants selected by the Borrower and
          to which the Agent and the Required Lenders do not reasonably object.

               (b) As soon as  available,  and in any event within 45 days after
          the  end of  each  fiscal  quarter  of  the  Borrower,  a copy  of the
          Borrower's  Form 10Q filed with the SEC with  respect  to such  fiscal
          quarter.

               (c) As soon as  available,  and in any event within 90 days after
          the end of each  fiscal  year of the  Borrower,  the  Complete  Annual
          Report of Domestic  Holding  Companies  (FRY-6 Report) required by the
          Federal Reserve Bank of St. Louis.

               (d) As soon as available,  and in any event no later than 45 days
          after the end of each  calendar  quarter,  the  complete  FRY-9LP  and
          FRY-9C  reports   required  to  be  filed  by  the  Borrower  and  its
          Subsidiaries quarterly with the Federal Reserve Banks of the districts
          where they are located.


               (e) As soon as  available,  and in any event within 45 days after
          the end of each calendar quarter, the complete call report prepared by


<PAGE>

          each Bank Subsidiary at the end of such calendar quarter in compliance
          with the requirements of any federal or state regulatory  agency which
          has authority to examine such Bank Subsidiary,  prepared in accordance
          with the requirements imposed by the applicable regulatory authorities
          and  applied  on a basis  consistent  with  the  accounting  practices
          reflected  in  any  previous  call  reports  and  similar   statements
          delivered to the Agent prior to the date of this Agreement.

               (f) As soon as  available,  and in any event within 45 days after
          the end of each  calendar  quarter,  a  Compliance  Certificate,  duly
          executed by the chief  financial  officer of the  Borrower and one (1)
          additional officer of the Borrower identified on the signature page of
          the form of certificate attached hereto as Exhibit C.


               (g) Unless  covered by  insurance,  promptly  after the  Borrower
          learns  of  the  commencement  thereof,   notice  in  writing  of  all
          litigation  and  of  all  proceedings   before  any   governmental  or
          regulatory  agency which,  if determined  adversely to the Borrower or
          any of its  Subsidiaries,  would have a material adverse effect on the
          financial condition,  properties or operations of the Borrower and its
          Subsidiaries, taken as a whole.


               (h) As promptly as  practicable  (but in any event not later than
          five business days) after the Borrower or an executive  officer of any
          of its Subsidiaries obtains knowledge of the occurrence of any Default
          or  Event of  Default,  notice  of such  occurrence,  together  with a
          detailed  statement  by a  responsible  officer of the Borrower of the
          steps being taken by the Borrower to cure the effect of such event.


               (i) Promptly upon the filing thereof,  copies of all registration
          statements and all annual and quarterly  reports which the Borrower or
          any  Subsidiary of the Borrower  shall have filed with the  Securities
          and Exchange Commission.


               (j) Such other information respecting the financial condition and
          results of  operations of the Borrower or any of its  Subsidiaries  as
          any Lender may from time to time reasonably request.


               Section 5.02 Books and Records;  Inspection and Examination.  The
                            ----------------------------------------------
Borrower and each of its  Subsidiaries  will keep  accurate  books of record and
account for itself in which true and complete entries will be made in accordance
with GAAP and, upon request of any Lender,  will give any representative of that
Lender reasonable access to, and permit such representative to examine,  copy or
make extracts from, any and all books,  records and documents in its possession,
to inspect  any of its  properties  and to discuss  its  affairs,  finances  and
accounts  with any of its  principal  officers,  all at such times during normal
business  hours and as often as any Lender  may  reasonably  request;  provided,
                                                                       --------
however,  that with respect to the loans made by any Bank  Subsidiary,  a Lender
-------
may only review and make copies of  summaries  of the watch lists  prepared on a
quarterly  basis and loan credit  reports;  review of specific loan accounts and
loan review  reports may be requested by any Lender,  whereupon the Borrower and
such  Lender  shall  within 10 days  agree to the  number of such  accounts  and
reports  that are  reasonable  and  appropriate  to  review;  provided  further,
                                                              -----------------
however,  that during the continuance of any Default or Event of Default,  there
-------
shall  be  no  restrictions  upon  the  scope  of  the  review,  inspection  and
reproduction rights of the Lenders concerning the loans of any Subsidiary.


<PAGE>


               Section 5.03  Compliance  with Laws. The Borrower and each of its
                             ---------------------
Subsidiaries   will  comply  with  the   requirements  of  applicable  laws  and
regulations,  the noncompliance with which would materially and adversely affect
its  business  or  the  financial  condition  of  the  Borrower  or  any  of its
Subsidiaries.


               Section 5.04 Payment of Taxes and Other Claims.  The Borrower and
                            ---------------------------------
each of its  Subsidiaries  will  pay or  discharge,  when  due,  (a) all  taxes,
assessments  and  governmental  charges  levied or  imposed  upon it or upon its
income or profits, or upon any properties  belonging to it, prior to the date on
which penalties attach thereto, (b) all federal,  state and local taxes required
to be  withheld  by it, and (c) all  lawful  claims  for  labor,  materials  and
supplies  which,  if  unpaid,  might  by law  become a Lien or  charge  upon any
properties of the Borrower or any of its  Subsidiaries;  provided,  that neither
the Borrower nor any of its Subsidiaries  shall be required to pay any such tax,
assessment,  charge or claim whose  amount,  applicability  or validity is being
contested in good faith by appropriate proceedings and for which the Borrower or
its Subsidiary, as applicable, has provided adequate reserves in accordance with
GAAP.

               Section 5.05  Operations.  The Borrower will, and will cause each
                             ----------
of its  Subsidiaries  to,  operate and maintain its business and property in the
ordinary course in a prudent manner  consistent with sound banking practices and
in such a  manner  that  the  performance  by the  Borrower  of its  Obligations
hereunder is not jeopardized or impaired.

               Section 5.06 Insurance. The Borrower and each of its Subsidiaries
                            ---------
will  obtain  and  maintain  insurance  with  insurers  believed  by  it  to  be
responsible  and  reputable,  in such  amounts  and  against  such  risks as the
Borrower considers prudent and economical.  Without limiting the foregoing,  the
Borrower will cause the Bank  Subsidiaries  to maintain  blanket bond  coverage,
property and casualty  coverage,  and errors and omissions coverage as customary
for banks.

               Section 5.07  Preservation of Corporate  Existence.  The Borrower
                             ------------------------------------
and each of its Subsidiaries will preserve and maintain its corporate  existence
and all of its material rights,  privileges and franchises;  provided,  however,
                                                             --------   -------
that neither the Borrower nor its Subsidiaries shall be required to preserve any
of its  rights,  privileges  and  franchises  if its  Board of  Directors  shall
determine that the preservation thereof is no longer desirable in the conduct of
its business and that the loss  thereof is not  disadvantageous  in any material
respect to any Lender as a holder of a Note.

               Section 5.08. Additional  Collateral.  The Borrower will deliver,
                             ----------------------
and cause San Francisco  Company to deliver,  to the Agent any shares of capital
stock of any FDIC-insured  financial institution or its holding company acquired
in whole or in part with the  proceeds  of  Advances if either (A) 20 percent or
more  of any  class  of the  voting  securities  of  such  entity  are  acquired
(including  for such purpose any such voting  securities  then owned by Borrower
and any Subsidiary),  or (B) the Borrower's  investment therein is $2 million or
more (including for such purpose any outstanding  investment  theretofore made);
provided, however, that the Borrower need not deliver such shares if such entity
--------  -------
is  immediately  merged with or  consolidated  into a Subsidiary.  Any shares of
capital stock so delivered  shall  constitute  additional  collateral  under the
Borrower  Pledge  Agreement  (if delivered by the Borrower) or the San Francisco
Company Security Agreement (if delivered by San Francisco Company). The Borrower
need not  deliver to the Agent any shares of capital  stock of any  FDIC-insured
financial  institution or its holding company  acquired in whole or in part with
the  proceeds of Advances  unless and until it either has acquired 20 percent or
more of any class of the voting securities or its investment  therein becomes at
least $1 million or more; however the Borrower will not, and will not permit San
Francisco  Company to, grant any  security  interest in such shares to any third
party.


<PAGE>

               Section  5.09  Notice of  Acquisition.  At or before the time the
                              ----------------------
Borrower or a Subsidiary enters into a definitive agreement in connection with a
Permitted  Acquisition  of an entity  whose  assets are equal to or in excess of
$500,000,000 or that is subject to a regulatory order or agreement, the Borrower
will  notify the Agent of such  acquisition  in  writing.  The  notice  shall be
accompanied  by a Schedule in the form of Exhibit I, duly completed and executed
on behalf of the Borrower,  demonstrating  that such Permitted  Acquisition will
not result in an Event of Default.


                                   ARTICLE VI.

                               NEGATIVE COVENANTS

               So long as any Note or any other  Obligation shall remain unpaid,
any Commitments shall be outstanding,  or the Agent shall have any obligation to
issue Letters of Credit,  the Borrower  will comply,  and will cause each of its
Subsidiaries to comply, with the following covenants unless the Required Lenders
shall otherwise consent in writing:


               Section 6.01 Liens. The Borrower will not create,  incur,  assume
                            -----
or suffer to exist, or permit San Francisco Company to create,  incur, assume or
suffer to exist, any Lien or other charge or encumbrance of any nature on any of
the Collateral,  now owned or hereafter acquired,  or assign or otherwise convey
any right to receive  income with respect to the  Collateral or give its consent
to the subordination of any right or claim of the Borrower to any right or claim
of any other Person.


               Section  6.02  Indebtedness.  Neither the Borrower nor any of its
                              ------------
Subsidiaries that are not Bank Subsidiaries will incur, create, assume or permit
to exist any indebtedness or liability on account of deposits or advances or any
indebtedness  for  borrowed  money,  or  any  other  indebtedness  or  liability
evidenced by notes, bonds, debentures or similar obligations, except:


               (a) Indebtedness to the Lenders under the Notes.


               (b) Indebtedness of  the Borrower or its  Subsidiaries  listed in
          Schedule 6.02 hereto, and any extensions or renewals thereof.


               (c) Indebtedness of the Borrower or any of its Subsidiaries  that
          may be treated as regulatory  capital,  or that is issued to provide a
          source of repayment of  securities  that may be treated as  regulatory
          capital, of the Borrower or such Subsidiary.


               (d) Subordinated Debt, or renewals or extensions thereof.


               (e) Indebtedness not otherwise permitted under this Section 6.02,
          so long as all such  indebtedness  does not exceed  $5,000,000  in the
          aggregate outstanding at any one time.



<PAGE>

               Section  6.03  Guaranties.  Neither the  Borrower  nor any of its
                              ----------
Subsidiaries  will assume,  guarantee,  endorse or otherwise  become directly or
contingently  liable in  connection  with any  obligations  of any other Person,
except:

               (a) The endorsement of negotiable  instruments by the Borrower or
          any  of  its   Subsidiaries  for  deposit  or  collection  or  similar
          transactions in the ordinary course of business.

               (b)  Guaranties,  endorsements  and other  direct  or  contingent
          liabilities  in connection  with the  obligations  of other Persons in
          existence on the date hereof and listed in Schedule 6.03 hereto.

               (c)  Letters  of credit  and other  obligations  in the nature of
          guaranties incurred by the Bank Subsidiaries in the ordinary course of
          their banking businesses.

               (d) Guaranties of obligations permitted by Section 6.02(c).

               (e)  Other  assumptions,  guarantees,  endorsements  and  similar
          liabilities in connection  with  obligations of other Persons,  not in
          excess of $5,000,000 in the aggregate outstanding at any one time.

               Section 6.04 Dividends.  The Borrower will not pay dividends,  or
                            ---------
make any payments on account of the purchase,  redemption or other retirement of
any of its common stock, or make any distribution in respect  thereof,  directly
or  indirectly   (any  such  payment  or   distribution   being  a  "shareholder
distribution").  The Borrower will not make any  shareholder  distribution  with
respect to any of its  preferred  stock in excess of $1,000,000 in the aggregate
during any period of 12 consecutive months.

               Section 6.05  Consolidation and Merger.  Neither the Borrower nor
                             ------------------------
any of its  Subsidiaries  will  consolidate  with or merge into any  Person,  or
permit any other Person to merge into it, or acquire (in a transaction analogous
in purpose or effect to a consolidation or merger) all or  substantially  all of
the assets of any other Person, except that the foregoing shall not prohibit any
Permitted Acquisition.

               Section 6.06 Subordinated  Debt.  Neither the Borrower nor any of
                            ------------------
its Subsidiaries will (i) make any payment of, or acquire, any Subordinated Debt
except as expressly permitted by the subordination  provision thereof; (ii) give
security for all or any part of such  Subordinated  Debt;  (iii) amend or cancel
the  subordination  provisions of such  Subordinated  Debt; (iv) take or omit to
take any action as a result of which the subordination of such Subordinated Debt
or any part  thereof to the Notes might be  terminated,  impaired  or  adversely
affected;  or (v) omit to give the Lenders  prompt written notice of any default
under any agreement or instrument  relating to such  Subordinated Debt by reason
whereof such Subordinated Debt might become or be declared to be immediately due
and payable.

               Section 6.07  Restrictions  on Nature of  Business.  The Borrower
                             ------------------------------------
will not, and will not permit any of its  Subsidiaries  to, change the nature of
its  business  substantially,  and  will  not  engage,  or  permit  any  of  its
Subsidiaries  to engage,  in any line of business if, as a result  thereof,  the
business of the Borrower and its  Subsidiaries,  taken as a whole,  would not be
predominantly  the  banking and thrift  business  (including  activities  deemed
closely  related to banking  and/or  thrift  business by  applicable  regulatory
authorities) as currently constituted.


<PAGE>


               Section  6.08  Negative  Pledges;  Subsidiary  Restrictions.  The
                              --------------------------------------------
Borrower  will  not,  and  will  not  permit  any  Subsidiary   (including  Bank
Subsidiaries) to, enter into any agreement,  bond, note or other instrument with
or for the benefit of any Person other than the Lenders which would (i) prohibit
the Borrower or such Subsidiary from granting, or otherwise limit the ability of
the Borrower or such  Subsidiary to grant, to the Lenders any Lien on any assets
or properties of the Borrower or such Subsidiary (it being agreed, however, that
nothing  herein shall  preclude the Bank  Subsidiaries  from  granting  security
interests to secure  deposits),  or (ii) require the Borrower or such Subsidiary
to grant a Lien to any other  Person if the Borrower or such  Subsidiary  grants
any Lien to the Lenders.  Except  pursuant to any  applicable law or regulation,
the Borrower will not permit any  Subsidiary to place or allow any  restriction,
directly or indirectly,  on the ability of such  Subsidiary to (a) pay dividends
or any  distributions on or with respect to such  Subsidiary's  capital stock or
(b) make loans or other cash payments to the Borrower.

               Section 6.09 Issuance of Additional  Stock.  Neither the Borrower
                            -----------------------------
nor any  Subsidiary  whose  shares are pledged  pursuant to either the  Borrower
Pledge  Agreement or the San  Francisco  Company  Security  Agreement  will (and
Borrower  will not  permit  any of the same) to issue any  additional  shares of
capital stock unless such additional shares are immediately  pledged pursuant to
the Borrower Pledge Agreement or the San Francisco  Company Security  Agreement,
as applicable.

               Section 6.10 Regulatory  Matters.  Borrower shall not cease to be
                            -------------------
registered as a bank holding company under the BHCA.  First Bank shall not cease
to be an  insured  depository  institution  as defined in the FDIA nor shall its
deposits cease to be insured by the Bank  Insurance Fund of the Federal  Deposit
Insurance Corporation to the maximum extent permitted under the FDIA.


                                  ARTICLE VII.

                               FINANCIAL COVENANTS

               Section 7.01 Total Risk Based Capital  Ratio.  The Borrower shall
                            -------------------------------
maintain  on a  consolidated  basis,  and shall  cause each Bank  Subsidiary  to
maintain, its Total Risk Based Capital Ratio at not less than 10%, determined as
of each quarter end.

               Section 7.02 Tier I Risk Based Capital Ratio.  The Borrower shall
                            -------------------------------
maintain  on a  consolidated  basis,  and shall  cause each Bank  Subsidiary  to
maintain, its Tier I Risk Based Capital Ratio at not less than 6%, determined as
of each quarter end.

               Section 7.03 Leverage  Ratio.  The Borrower  shall  maintain on a
                            ---------------
consolidated basis, and shall cause each Bank Subsidiary to maintain,  a minimum
Tier I Leverage Ratio of not less than 5%, determined as of each quarter end.


<PAGE>

               Section 7.04 Minimum Return on Assets. The Borrower will maintain
                            ------------------------
(on a consolidated  basis) its Return on Assets,  determined as of each calendar
quarter end, at not less than .70%.

               Section 7.05 Maximum Non-Performing Assets.
                            -----------------------------

               (a) The  Borrower  will  maintain on a  consolidated  basis,  its
          Non-Performing Assets at an amount not greater than 25% of its Primary
          Equity Capital, determined as of each calendar quarter end.

               (b)  The   Borrower   will  cause  First  Bank  to  maintain  its
          Non-Performing  Assets at an amount not greater than 15 percent of its
          Primary  Equity  Capital,  determined  as of  each  quarter  end.  For
          purposes of this Section 7.05(b),  First Bank's  Non-Performing  Asset
          known as the Lake of the Ozarks Development in an amount not in excess
          of $12 million shall not be treated as a Non-Performing Asset.


               Section 7.06  Allowance for Loan and Lease  Losses.  The Borrower
                             ------------------------------------
will cause the Bank  Subsidiaries to maintain their combined  allowance for loan
and lease losses at not less than 100% of their combined  Non-Performing Assets.
The Bank  Subsidiaries'  allowance for loan or lease losses at any time shall be
the amount set forth in the most recent Form 10-Q or 10-K filed by the  Borrower
with the Securities and Exchange Commission (or any successor report).

                                  ARTICLE VIII.

                     EVENTS OF DEFAULT, RIGHTS AND REMEDIES

               Section 8.01 Events of Default. "Event of Default", wherever used
                            -----------------
herein, means any one of the following events:

               (a) Default in the payment of principal of any Note when the same
          becomes due and payable.

               (b) Default in the payment of interest on any Note or of any fees
          or other  amounts  required to be paid under this  Agreement,  and the
          continuance of such default for a period of ten days or more.

               (c) Failure to pay when due any amount  specified in Section 2.16
          hereof  relating to the  Borrower's  Obligation of  Reimbursement,  or
          failure to pay  immediately  when due any amounts  required to be paid
          for deposit in the Special Account.

               (d) Default in the  performance,  or breach,  of any  covenant or
          agreement  on the  part of the  Borrower  contained  in any  Financial
          Covenant or in Article VI hereof.

               (e) Default in a material respect in the performance,  or breach,
          of any covenant or agreement of the Borrower in this Agreement  (other
          than a covenant or agreement a default in whose  performance  or whose
          breach is elsewhere  specifically dealt with in this Section), and the
          continuance  of such  default  or breach for a period of 30 days after
          the date on which an  executive  officer of the Borrower or any of its
          Subsidiaries first obtains knowledge of such default or breach.


<PAGE>

               (f) Any  representation  or warranty made by the Borrower in this
          Agreement or by the  Borrower  (or any of its  officers) or any of its
          Subsidiaries  (or any of its  officers)  in any other  Loan  Document,
          certificate,  instrument,  or  statement  contemplated  by or  made or
          delivered  pursuant to or in  connection  with this  Agreement,  shall
          prove to have been  incorrect or  misleading  in any material  respect
          when made.

               (g) A default under any bond,  debenture,  note or other evidence
          of indebtedness  of the Borrower or any of its  Subsidiaries in excess
          of  $2,000,000  (other than to the Lenders) or under any  indenture or
          other  instrument  under which any such evidence of  indebtedness  has
          been issued or by which it is governed  where a party  thereto has the
          right to accelerate any  indebtedness  owing  thereunder to such party
          from the  Borrower  or any of its  Subsidiaries  as a  result  of such
          default,  or any default by the Borrower or any of its Subsidiaries in
          the  payment  of  required  principal  or  interest  under  any of the
          foregoing agreements or instruments.

               (h) An event of default shall occur under any security agreement,
          mortgage,  deed of trust,  assignment or other instrument or agreement
          directly  or  indirectly  securing  any  obligations  of the  Borrower
          hereunder or under any Note or under any guaranty of such obligations.

               (i) Default in the payment of any amount in excess of  $2,000,000
          owed by the  Borrower or any of its  Subsidiaries  to any Lender other
          than hereunder or under the Notes and the expiration of the applicable
          period of grace, if any, with respect thereto; provided, however, that
                                                         --------  -------
          if such default shall be cured by the Borrower or its  Subsidiary,  as
          applicable, as may be permitted by the terms of such indebtedness,  or
          waived by the Lender holding such indebtedness,  in each case prior to
          the  commencement  of any action under Section 8.02, then the Event of
          Default  hereunder by reason of such default shall be deemed  likewise
          to have been thereupon cured or waived.

               (j) The Borrower or any of its Subsidiaries  shall be adjudicated
          a bankrupt or insolvent,  or admit in writing its inability to pay its
          debts  as they  mature,  or  make an  assignment  for the  benefit  of
          creditors;  or the Borrower or any of its Subsidiaries shall apply for
          or consent to the  appointment  of any receiver,  trustee,  or similar
          officer for it or for all or any substantial part of its property;  or
          such receiver,  trustee or similar officer shall be appointed  without
          the  application  or consent of the  Borrower  or its  Subsidiary,  as
          applicable  and such  appointment  shall continue  undischarged  for a
          period of 30 days;  or the Borrower or any of its  Subsidiaries  shall
          institute (by petition, application, answer, consent or otherwise) any
          bankruptcy, insolvency,  reorganization,  arrangement, readjustment of
          debt,  dissolution,  liquidation or similar proceeding  relating to it
          under the laws of any  jurisdiction;  or any such proceeding  shall be
          instituted  (by  petition,   application  or  otherwise)  against  the
          Borrower  or  any of  its  Subsidiaries  and  shall  continue  without
          dismissal for a period of 30 days; or any judgment,  writ,  warrant of
          attachment  or execution or similar  process shall be issued or levied
          against a  substantial  part of the property of the Borrower or any of
          its Subsidiaries and such judgment, writ, or similar process shall not
          be released, vacated or fully bonded within 30 days after its issue or
          levy.


<PAGE>

               (k) A  petition  shall  be filed  by the  Borrower  or any of its
          Subsidiaries  under the  United  States  Bankruptcy  Code  naming  the
          Borrower  or any of its  Subsidiaries  as  debtor;  or an  involuntary
          petition   shall  be  filed   against  the  Borrower  or  any  of  its
          Subsidiaries  under  the  United  States  Bankruptcy  Code,  and  such
          petition  shall  not have  been  dismissed  within  45 days  after the
          Borrower of the  applicable  Subsidiary  has  received  notice of such
          filing;  or an order for relief shall be entered in any case under the
          United  States  Bankruptcy  Code  naming  the  Borrower  or any of its
          Subsidiaries as debtor.

               (l) The rendering against the Borrower or any of its Subsidiaries
          of a final  judgment,  decree  or order  for the  payment  of money in
          excess of $10,000,000 and the continuance of such judgment,  decree or
          order  unsatisfied and in effect for any period of 30 consecutive days
          without a stay of execution or other similar relief.

               (m) A writ of attachment,  garnishment,  levy or similar  process
          shall be issued  against or served  upon the Agent or any Lender  with
          respect to (i) any property of the Borrower or any of its Subsidiaries
          in  the  possession  of  the  Agent  or  such  Lender,   or  (ii)  any
          indebtedness of the Agent or such Lender to the Borrower or any of its
          Subsidiaries, and the same shall not be lifted within 30 days.

               (n) A trustee shall have been appointed by an appropriate  United
          States  District Court to administer any Plan, or the Pension  Benefit
          Guaranty  Corporation  shall have instituted  proceedings to terminate
          any Plan or to appoint a trustee to administer any Plan, or withdrawal
          liability  shall have been asserted  against the Borrower or any ERISA
          Affiliate  by a  Multiemployer  Plan;  or the  Borrower  or any  ERISA
          Affiliate  shall  have  incurred  liability  to  the  Pension  Benefit
          Guaranty Corporation,  the Internal Revenue Service, the Department of
          Labor or Plan participants in excess of $2,000,000 with respect to any
          Plan; or any Reportable  Event that the Required Lenders may determine
          in good faith  might  constitute  grounds for the  termination  of any
          Plan, for the  appointment by the  appropriate  United States District
          Court of a trustee to  administer  any Plan or for the  imposition  of
          withdrawal  liability with respect to a Multiemployer Plan, shall have
          occurred and be continuing 30 days after written notice to such effect
          shall have been given to the Borrower by the Lenders.

               (o) The issuance  against the Borrower or any  Subsidiary  of the
          Borrower  (including without  limitation,  any Bank Subsidiary) of any
          informal or formal administrative action,  temporary or permanent,  by
          any federal or state regulatory agency having  jurisdiction or control
          over the Borrower or such Subsidiary,  such action taking the form of,
          but not limited to: (i) any directive citing  conditions or activities
          deemed to be unsafe or unsound or breaches of fiduciary duty or law or
          regulation;  (ii) a  memorandum  of  understanding;  (iii) a cease and
          desist order;  (iv) the termination of insurance  coverage of customer
          deposits  by  the  Federal  Deposit  Insurance  Corporation;  (v)  the
          suspension  or removal of an  executive  officer or  director,  or the
          prohibition of  participation by any others in the business affairs of
          the Borrower or such Subsidiary; (vi) a capital maintenance agreement;
          or (vii) any  other  regulatory  action,  agreement  or  understanding
          involving  safety or soundness  issues with respect to the Borrower or
          such Subsidiary.



<PAGE>

               (p)  James  F.  Dierberg,  Mary W.  Dierberg,  members  of  their
          immediate family, and trusts,  partnerships and other organizations of
          which they have  effective  voting  control  shall cease to own in the
          aggregate at least 51% of the voting shares of the Borrower.

               Section 8.02 Rights and Remedies. Upon the occurrence of an Event
                            -------------------
of Default or at any time thereafter until such Event of Default is cured to the
written satisfaction of the Required Lenders, the Agent may, with the consent of
the Required Lenders, and shall, upon written request of the Required Lenders:

               (a) By notice to the Borrower,  declare the  Commitments  and the
          Agent's  obligation  to issue  Letters  of  Credit  to be  terminated,
          whereupon the same shall forthwith terminate.

               (b)  By  notice  to  the  Borrower,  declare  the  entire  unpaid
          principal amount of the Notes then  outstanding,  all interest accrued
          and unpaid thereon, and all other amounts payable under this Agreement
          to be forthwith due and payable, whereupon the Notes, all such accrued
          interest  and all such amounts  shall become and be forthwith  due and
          payable, without presentment, demand, protest or further notice of any
          kind, all of which are hereby expressly waived by the Borrower.

               (c) By notice to the Borrower, require the Borrower to pay to the
          Agent in  immediately  available  funds,  for  deposit in the  Special
          Account,  an amount equal to the maximum aggregate amount available to
          be drawn under all Letters of Credit then outstanding.

               (d) Without  notice to the Borrower and without  further  action,
          apply (and direct each Lender to apply) any and all money owing by any
          Lender to the  Borrower to the payment of the Notes then  outstanding,
          including interest accrued thereon, and of all other Obligations.

               (e) Exercise any other rights and remedies available to the Agent
          and the Lenders by law or agreement.

Notwithstanding  the  foregoing,  upon the  occurrence  of an  Event of  Default
described in Section 8.01(j) or (k) hereof,  the entire unpaid  principal amount
of the Notes then outstanding,  all interest accrued and unpaid thereon, and all
other  Obligations  shall be immediately  due and payable  without  presentment,
demand, protest or notice of any kind.

               Section  8.03  Offset.  In addition to the  remedies set forth in
                              ------
Section 8.02,  upon the occurrence of any Event of Default and thereafter  while
the same be continuing,  the Borrower hereby irrevocably  authorizes each Lender
to set off any Obligations  owed to such Lender against all deposits and credits
of the  Borrower  with,  and any and all claims of the  Borrower  against,  such
Lender.  Such right shall exist  whether or not such Lender  shall have made any
demand  hereunder  or  under  any  other  Loan  Document,  whether  or  not  the
Obligations,  or any part thereof,  or deposits and credits held for the account
of the Borrower is or are matured or unmatured,  and regardless of the existence
or adequacy of any collateral,  guaranty or any other security,  right or remedy
available to such Lender or Lenders.  Each Lender agrees that, as promptly as is
reasonably possible after the exercise of any such setoff right, it shall notify
the Borrower of its exercise of such setoff right;  provided,  however, that the
                                                    --------   -------
failure of such Lender to provide  such notice  shall not affect the validity of
the exercise of such setoff rights.
<PAGE>

                                   ARTICLE IX.

                                    THE AGENT

               Section  9.01  Authorization.  Each Lender and the holder of each
                              -------------
Note  irrevocably  appoints  and  authorizes  the Agent to act on behalf of such
Lender or holder to the extent  provided herein or in any document or instrument
delivered hereunder or in connection herewith,  and to take such other action as
may be reasonably incidental thereto.

               Section 9.02 Distribution of Payments and Proceeds.
                            -------------------------------------

               (a) After  deduction of any costs of  collection  as  hereinafter
          provided,   the  Agent  shall  remit  to  each  Lender  that  Lender's
          Percentage  of all  payments of  principal,  interest,  fees and other
          amounts for the account of the Lenders  that are received by the Agent
          under the Loan Documents. Each Lender's interest in the Loan Documents
          shall be  payable  solely  from  payments,  collections  and  proceeds
          actually  received  by the  Agent  under the Loan  Documents;  and the
          Agent's only  liability to the Lenders  hereunder  shall be to account
          for  each  Lender's  Percentage  of  such  payments,  collections  and
          proceeds  in  accordance  with  this  Agreement.  If the Agent is ever
          required for any reason to refund any such  payments,  collections  or
          proceeds,  each  Lender  will refund to the Agent,  upon  demand,  its
          Percentage of such payments,  collections  or proceeds,  together with
          its Percentage of interest or penalties,  if any, payable by the Agent
          in connection with such refund. The Agent may, in its sole discretion,
          make payment to the Lenders in anticipation of receipt of payment from
          the  Borrower.  If the Agent  fails to  receive  any such  anticipated
          payment from the Borrower,  each Lender shall  promptly  refund to the
          Agent,  upon demand,  any such payment made to it in  anticipation  of
          payment from the Borrower, together with interest for each day on such
          amount until so refunded at a rate equal to the Federal Funds Rate for
          each such date.

               (b) Notwithstanding  the foregoing,  if any Lender has wrongfully
          refused to fund its  Percentage  of any  Borrowing or other Advance as
          required  hereunder,  or if the principal balance of any Lender's Note
          is for any other  reason  less than its  Percentage  of the  aggregate
          principal balances of the Notes then outstanding,  the Agent may remit
          all payments  received by it to the other  Lenders until such payments
          have reduced the aggregate  amounts owed by the Borrower to the extent
          that the aggregate  amount owing to such Lender  hereunder is equal to
          its  Percentage  of the  aggregate  amount owing to all of the Lenders
          hereunder.  The  provisions of this paragraph are intended only to set
          forth  certain  rules for the  application  of payments,  proceeds and
          collections  in the event that a Lender has breached  its  obligations
          hereunder  and shall not be deemed  to  excuse  any  Lender  from such
          obligations.


<PAGE>

               Section 9.03  Expenses.  All payments,  collections  and proceeds
                             --------
received or effected by the Agent may be applied, first, to pay or reimburse the
Agent for all costs,  expenses,  damages and liabilities at any time incurred by
or imposed upon the Agent in  connection  with this  Agreement or any other Loan
Document  (including  but  not  limited  to  all  reasonable   attorney's  fees,
foreclosure   expenses  and  advances  made  to  protect  the  security  of  any
collateral).  If the Agent does not receive  payments,  collections  or proceeds
sufficient to cover any such costs,  expenses,  damages or liabilities within 30
days after their incurrence or imposition, each Lender shall, upon demand, remit
to the Agent its Percentage of the difference between (i) such costs,  expenses,
damages and liabilities, and (ii) such payments, collections and proceeds.

               Section 9.04 Payments Received Directly by Lenders. If any Lender
                            -------------------------------------
or other  holder of a Note shall obtain any payment or other  recovery  (whether
voluntary,  involuntary,  by  application  of offset or otherwise) on account of
principal  of or interest on any Note other than through  distributions  made in
accordance  with Section 9.02,  such Lender or holder shall promptly give notice
of such fact to the Agent and shall  purchase  from the other Lenders or holders
such participations in the Notes held by them as shall be necessary to cause the
purchasing  Lender  or  holder to share the  excess  payment  or other  recovery
ratably with each of them; provided,  however, that if all or any portion of the
                           --------   -------
excess  payment or other recovery is thereafter  recovered from such  purchasing
Lender or holder,  the purchase  shall be rescinded  and the  purchasing  Lender
restored to the extent of such recovery (but without interest thereon).

               Section 9.05 Indemnification.  The Agent shall not be required to
                            ---------------
do any act  hereunder  or under  any  other  document  or  instrument  delivered
hereunder or in  connection  herewith or take any action toward the execution or
enforcement of the agency hereby created,  or to prosecute or defend any suit in
respect of this Agreement or the Notes or any documents or instrument  delivered
hereunder or in connection  herewith unless  indemnified to its  satisfaction by
the holders of the Notes against loss,  cost,  liability and expense;  provided,
                                                                       --------
however,  that no  Lender  shall be  obligated  to  indemnify  the Agent for any
-------
portion of any such loss,  cost,  liability or expense  resulting from the gross
negligence or willful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall,  in the opinion of the Agent,  be  insufficient  or
become impaired, the Agent may call for additional indemnity and not commence or
cease to do the acts  indemnified  against  until such  additional  indemnity is
furnished.

               Section 9.06  Limitations on Agent's Power.  Notwithstanding  any
                             ----------------------------
other provision of this Agreement,  the Agent shall not have the power,  without
the  consent of all of the  Lenders,  to (i)  forgive  any  indebtedness  of the
Borrower  arising  under this  Agreement or the Notes,  (ii) agree to reduce the
rate of interest  charged under this  Agreement or the  commitment  fees payable
under Sections 2.05 and 2.19(c),  (iii) agree to extend the maturity or decrease
the amount of any payment  (whether of principal,  interest,  fees or otherwise)
due under this Agreement or the Notes, (iv) release any Collateral from the lien
created by the Borrower Pledge  Agreement or the San Francisco  Company Security
Agreement, or (v) amend the definition of "Required Lenders" in Section 1.01. In
addition,  in no event may the Agent increase the total Commitment Amount (being
the aggregate sum of all Commitment  Amounts of all Lenders)  hereunder  without
the consent of all Lenders or increase or decrease the Commitment  Amount of any
given Lender without the consent of that Lender.


<PAGE>

               Section  9.07  Exculpation.  The Agent  shall be entitled to rely
                              -----------
upon advice of counsel  concerning legal matters,  and upon this Agreement,  any
Loan Document and any schedule, certificate,  statement, report, notice or other
writing  which it believes to be genuine or to have been  presented  by a proper
person.  Neither  the Agent nor any of its  directors,  officers,  employees  or
agents shall (a) be responsible for any recitals,  representations or warranties
contained in, or for the  execution,  validity,  genuineness,  effectiveness  or
enforceability of this Agreement,  any Loan Document, or any other instrument or
document delivered hereunder or in connection  herewith,  (b) be responsible for
the validity, genuineness, perfection, effectiveness, enforceability, existence,
value or  enforcement  of any  collateral  security,  (c) be  under  any duty to
inquire into or pass upon any of the foregoing  matters,  or to make any inquiry
concerning  the  performance  by  the  Borrower  or  any  other  obligor  of its
obligations,  or (d) in any  event,  be liable as such for any  action  taken or
omitted by it or them,  except for its or their own gross  negligence or willful
misconduct.  The agency  hereby  created shall in no way impair or affect any of
the rights and powers of, or impose any duties or obligations upon, the Agent in
its individual capacity.

               Section 9.08 Agent and Affiliates.  The Agent shall have the same
                            --------------------
rights and powers hereunder in its individual  capacity as any other Lender, and
may  exercise  or  refrain  from  exercising  the same as though it were not the
Agent,  and the Agent and its affiliates may accept  deposits from and generally
engage in any kind of business  with the  Borrower as fully as if the Agent were
not the Agent hereunder.

               Section 9.09 Credit Investigation. Each  Lender acknowledges that
                            --------------------
it  has  made  such  inquiries  and  taken such  care on its own behalf as would
have  been  the case had its  Commitment  been  granted  and the  Advances  made
directly by such Lender to the Borrower without the intervention of the Agent or
any other Lender.  Each Lender agrees and  acknowledges  that the Agent makes no
representations or warranties about the  creditworthiness  of the Borrower,  any
Subsidiary or any other party to this Agreement or with respect to the legality,
validity, sufficiency or enforceability of this Agreement, any Loan Document, or
any other instrument or document delivered hereunder or in connection herewith.

               Section  9.10  Resignation.  The Agent may  resign as such at any
                              -----------
time upon at least 30 days' prior notice to the Borrower and the Lenders. In the
event of any resignation of the Agent, the Required Lenders shall as promptly as
practicable  appoint a successor  Agent.  If no such successor  Agent shall have
been  so  appointed  by the  Required  Lenders  and  shall  have  accepted  such
appointment  within 30 days  after  the  resigning  Agent's  giving of notice of
resignation,  then the resigning Agent may, on behalf of the Lenders,  appoint a
successor  Agent,  which shall be a commercial  bank organized under the laws of
the United States of America or of any State thereof. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent,  such successor Agent shall
thereupon be entitled to receive from the prior Agent such documents of transfer
and assignment as such successor Agent may reasonably  request and the resigning
Agent shall be discharged from its duties and obligations  under this Agreement.
After any resignation  pursuant to this Section,  the provisions of this Section
shall inure to the  benefit of the  retiring  Agent as to any  actions  taken or
omitted to be taken by it while it was an Agent hereunder.


<PAGE>


               Section 9.11 Assignments.
                            -----------

               (a) No Lender may assign any of its rights or  obligations  under
          any Loan Document  without the prior  written  consent of the Borrower
          and  the  Agent,  which  consent  may  not be  unreasonably  withheld;
          provided,  however,  that the  consent  of the  Borrower  shall not be
          --------   -------
          required in connection  with any such assignment made at any time when
          a Default or an Event of Default has occurred and is  continuing.  Any
          assignment   permitted   hereunder  shall  be  by  written  assignment
          agreement in form and substance reasonably satisfactory to Agent which
          assignment agreement shall be acknowledged by both Agent and Borrower.
          The  aggregate  principal  amount of the Notes and the  portion of the
          Commitment  Amounts so  assigned in any  assignment  shall be not less
          than  $5,000,000,  and the  assigning  Lender  shall  retain  at least
          $5,000,000 of such Notes and  Commitment  Amounts for its own account;
          provided, however, that the foregoing restriction shall not apply to a
          --------  -------
          Lender  assigning  its entire Note and  Commitment  Amount to a single
          institution.   Simultaneously   with  each  assignment  of  Notes  and
          Commitment  Amounts,  the  assigning  Lender  shall be  deemed to have
          assigned a  proportional  share of its  obligations  and rights  under
          Section  2.15(b).  If the Agent and (if  applicable)  the  Borrower so
          consent,  then,  from  and  after  the  effective  date  of  any  such
          assignment, the assignee thereunder (an "Additional Lender") shall, to
          the extent that rights and obligations hereunder have been assigned to
          it pursuant to such  assignment,  have the rights and  obligations  so
          assigned to it, and the  assigning  Lender  shall,  to the extent that
          rights and  obligations  have been  assigned  by it  pursuant  to such
          assignment, relinquish its rights and be released from its obligations
          under this  Agreement.  Within five business days after any request of
          the Agent following such  assignment of Notes and Commitment  Amounts,
          the  Borrower  will  execute and deliver to the Agent new Notes to the
          order of such assignee in amounts corresponding to the interest in the
          assigning   Lender's  rights  and  obligations  under  this  Agreement
          acquired  by such  assignee  pursuant to such  assignment  and, if the
          assigning   Lender  has  retained  an  interest  in  such  rights  and
          obligations, new Notes to the order of the assigning Lender in amounts
          corresponding  to such  interests  retained by it hereunder.  Such new
          Notes shall be in an aggregate principal amount equal to the aggregate
          principal amount of the Notes to be replaced by such new Notes,  shall
          be dated the effective date of such  assignment and shall otherwise be
          in the form of the Notes to be replaced thereby.  Such new Notes shall
          be issued in substitution  for, but not in satisfaction or payment of,
          the Notes  being  replaced  thereby.  The Agent shall bear the cost of
          preparation  of such new Notes.  Upon the  issuance of such new Notes,
          the term,  "Note",  as used herein,  shall  include all such new Notes
          issued pursuant to this Section 9.11.

               (b) Any Lender making an assignment  under this Section shall pay
          the Agent a  transfer  fee in the amount of $3,000  simultaneous  with
          such assignment.

               (c)  Notwithstanding  any other provision of this Agreement,  any
          Lender  may at any  time  create  a  security  interest  in all or any
          portion of its rights under this  Agreement and that Lender's Notes in
          favor of any Federal  Reserve Bank in accordance  with Regulation A of
          the Board of Governors of the Federal Reserve System.



<PAGE>

               (d) Except as set forth in this  Section  9.11 and the  following
          Section  9.12,  no Lender may assign any of its rights or  obligations
          under any Loan Document.

               Section 9.12 Participations. In addition to the rights granted in
                            --------------
Section 9.11,  each Lender may grant  participations  in a portion of its Notes,
Commitments and obligations under Section 2.15(b) to any institutional investor,
without the consent of the Borrower or the Agent, but only so long as (except in
the case of a participation  granted to an affiliate of a Lender,  in which case
the limitation and qualification set forth in clause (a) and (b) below shall not
apply):

               (a)  Within  five  Bank   Business   Days  after   granting   any
          participation,  such Lender gives the Agent and the Borrower notice of
          such participation,  including the name, address and telecopier number
          of the participant and the amount of the Notes and Commitments covered
          by the participation; and

               (b) The principal amount of the  participations  so granted is no
          less than $5,000,000.

               No holder of any such  participation,  other than an affiliate of
such  Lender,  shall be entitled to require  such Lender to take or omit to take
any action  hereunder,  except that such Lender may agree with such  participant
that such Lender will not, without such participant's  consent,  (i) forgive any
indebtedness  of the Borrower under this  Agreement or the Notes,  (ii) agree to
reduce the rate of  interest  charged  under this  Agreement,  or (iii) agree to
extend the final maturity of any indebtedness  evidenced by the Notes, except as
expressly  provided  by the terms of the Loan  Documents.  No Lender  shall,  as
between the  Borrower  and such  Lender,  be relieved of any of its  obligations
hereunder  as a result of any such  granting of a  participation.  The  Borrower
hereby  acknowledges  and agrees that any participant  described in this Section
will,  for purposes of Section  9.04,  be  considered  to be a Lender  hereunder
(provided that such  participant  shall not be entitled to receive any more than
the Lender  selling  such  participation  would have  received had such sale not
taken  place)  and may rely on, and  possess  all rights  under,  any  opinions,
certificates, or other instruments or documents delivered under or in connection
with any Loan Document.  Except as set forth in this Section 9.12, no Lender may
grant any participation in any Loan Document or Commitment.

               Section 9.13 Disclosure of Information.  The Borrower  authorizes
                            -------------------------
each Lender and the Agent to disclose to any participant, assignee or Additional
Lender  (each,  a  "Transferee")  and  any  prospective  Transferee  any and all
financial  and other  information  in the  possession of the Agent or any Lender
concerning  the Borrower which has been delivered to the Agent or such Lender by
the Borrower pursuant to this Agreement or which has been delivered to the Agent
or such Lender by the Borrower in connection  with the credit  evaluation of the
Borrower by the Agent or such  Lender  prior to  entering  into this  Agreement;
provided,  however, that prior to disclosing such information to a Transferee or
--------   -------
prospective Transferee,  the applicable Lender shall obtain from such Transferee
or  prospective  Transferee  a  confidentiality  agreement  agreeing  that  such
information shall be used only in connection with such Person's  evaluation and,
if  applicable,  administration  of its interest in this Agreement and the loans
hereunder, and shall not be disclosed to any other person, subject to exceptions
permitting disclosure to regulators and auditors,  disclosure as required by law
or judicial  process,  and disclosure under such other limited  circumstances as
that Lender and such Transferee or prospective Transferee may reasonably agree.
<PAGE>

                                   ARTICLE X.

                                  MISCELLANEOUS

               Section 10.01 No Waiver; Cumulative Remedies. No failure or delay
                             ------------------------------
on the part of the Lenders in  exercising  any right,  power or remedy under the
Loan  Documents  shall  operate  as a waiver  thereof;  nor shall  any  Lender's
acceptance  of  payments  while any  Default or Event of Default is  outstanding
operate as a waiver of such Default or Event of Default,  or any right, power or
remedy under the Loan Documents; nor shall any single or partial exercise of any
such right,  power or remedy preclude any other or further  exercise  thereof or
the exercise of any other right,  power or remedy under the Loan Documents.  The
remedies  provided in the Loan Documents are cumulative and not exclusive of any
remedies provided by law.

               Section  10.02  Amendments,  Etc.  No  amendment,   modification,
                               ----------------
termination  or waiver of any  provision of any Loan  Document or consent to any
departure by the Borrower  therefrom shall be effective unless the same shall be
in writing  and signed by the  Required  Lenders  (or, in the case of any action
described in Section 9.06,  the number of Lenders  specified for the  applicable
action in such Section) and then such waiver or consent shall be effective  only
in the specific instance and for the specific purpose for which given. No notice
to or demand on the Borrower in any case shall entitle the Borrower to any other
or further notice or demand in similar or other circumstances.


               Section  10.03  Notice.  Except as otherwise  expressly  provided
                               ------
herein, all notices and other  communications  hereunder shall be in writing and
shall be (i) personally delivered,  (ii) transmitted by registered mail, postage
prepaid, (iii) sent by Federal Express or similar expedited delivery service, or
(iv) transmitted by telecopy (followed, in the case of any notice from the Agent
or a Lender to the  Borrower,  pursuant to any of Sections  8.02(a),  8.02(b) or
8.03, by a notice transmitted by registered mail, postage prepaid), in each case
addressed to the party to whom notice is being given at its address as set forth
by its signature  below,  or, if  telecopied,  transmitted  to that party at its
telecopier  number set forth by its signature  below;  or, as to each party,  at
such other  address or  telecopier  number as may  hereafter be  designated in a
notice  by that  party to the  other  party  complying  with  the  terms of this
Section.  All such notices or other  communications shall be deemed to have been
given on (i) the date received if delivered  personally,  by mail, or by Federal
Express or similar expedited delivery service,  or (ii) the date of transmission
if delivered  by  telecopy,  except that notices or requests to the Agent or any
Lender  pursuant to any of the  provisions  of Article II shall not be effective
until received.


               Section 10.04 Costs and Expenses.  The Borrower  agrees to pay on
                             ------------------
demand (i) all costs and expenses  incurred by the Agent in connection  with the
negotiation,  preparation,  execution,  administration  or amendment of the Loan
Documents and the other instruments and documents to be delivered  hereunder and
thereunder,  including the reasonable fees and out-of-pocket expenses of counsel
for the Agent with respect thereto, whether paid to outside counsel or allocated
by in-house  counsel,  and (ii) all costs and expenses  incurred by the Agent or
any Lender in connection with the  enforcement of the Loan Documents,  including
the reasonable fees and  out-of-pocket  expenses of counsel for the Agent or any
Lender with respect  thereto,  whether  paid to outside  counsel or allocated by
in-house counsel.

<PAGE>

               Section 10.05  Indemnification  by Borrower.  The Borrower hereby
                              ----------------------------
agrees to  indemnify  the  Agent and the  Lenders  and each  officer,  director,
employee and agent thereof (herein  individually each called an "Indemnitee" and
collectively  called the  "Indemnitees")  from and  against  any and all losses,
claims, damages, reasonable expenses (including, without limitation,  reasonable
attorneys'  fees) and liabilities  (all of the foregoing being herein called the
"Indemnified  Liabilities")  incurred by an  Indemnitee  in  connection  with or
arising out of the  execution or delivery of this  Agreement or any agreement or
instrument  contemplated  hereby, the performance by the parties hereto of their
respective  obligations  hereunder  or the use of the  proceeds  of any  Advance
(including but not limited to any such loss, claim, damage, expense or liability
arising out of any claim in which it is alleged that any "Environmental Law" has
been breached with respect to any activity or property of the Borrower),  except
for any  portion  of such  losses,  claims,  damages,  expenses  or  liabilities
incurred solely as a result of the gross negligence or willful misconduct of the
applicable Indemnitee or the breach of this Agreement or any other Loan Document
by that  Indemnitee.  "Environmental  Law" shall mean (i) any federal,  state or
local  law,  statute,  ordinance,  rule,  regulation,   code,  license,  permit,
authorization, approval, consent, legal doctrine, order, directive, executive or
administrative  order,  judgment,  decree,  injunction,   legal  requirement  or
agreement  with  any  governmental   entity  relating  to  (A)  the  protection,
preservation  or  restoration  of  the  environment  (which  includes,   without
limitation, air, water vapor, surface water, groundwater, drinking water supply,
structures,  soil,  surface land,  subsurface land, plant and animal life or any
other natural resource), or to human health or safety as it relates to hazardous
materials,  or (B) the exposure to, or the use, storage,  recycling,  treatment,
generation, transportation,  processing, handling, labeling, production, release
or  disposal  of,  hazardous  materials,  in each case as amended  and as now in
effect, including,  without limitation, the Federal Comprehensive  Environmental
Response,  Compensation and Liability Act of 1980, the Superfund  Amendments and
Reauthorization  Act of 1986, the Federal Water  Pollution  Control Act of 1972,
the Federal  Clean Air Act, the Federal  Clean Water Act,  the Federal  Resource
Conservation  and  Recovery  Act of 1976  (including,  but not  limited  to, the
Hazardous  and Solid  Waste  Amendments  thereto  and  Subtitle  I  relating  to
underground  storage  tanks),  the Federal Solid Waste  Disposal and the Federal
Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide
Act,  the  Federal  Occupational  Safety and Health Act of 1970 as it relates to
hazardous materials,  the Federal Hazardous  Substances  Transportation Act, the
Emergency Planning and Community Right-To-Know Act, the Safe Drinking Water Act,
the Endangered  Species Act, the National  Environmental  Policy Act, the Rivers
and Harbors  Appropriation Act or any so-called  "Superfund" or "Superlien" law,
each as amended and as now or  hereafter  in effect,  and (ii) any common law or
equitable doctrine  (including,  without limitation,  injunctive relief and tort
doctrines  such as negligence,  nuisance,  trespass and strict  liability)  that
imposes  liability or obligations  for injuries or damages due to, or threatened
as a result of the presence of or exposure to any hazardous material.  If and to
the extent that the foregoing indemnity may be unenforceable for any reason, the
Borrower  hereby  agrees to make the  maximum  contribution  to the  payment and
satisfaction of each of the Indemnified  Liabilities  which is permissible under
applicable law. All  obligations  provided for in this Section shall survive any
termination of this Agreement.

               Section 10.06 Execution in  Counterparts.  This Agreement and the
                             --------------------------
other Loan  Documents  may be  executed in any number of  counterparts,  each of
which when so executed and  delivered  shall be deemed to be an original and all
of which counterparts of this Agreement or such other Loan Document, as the case
may be, taken together, shall constitute but one and the same instrument.

               Section  10.07 Binding  Effect,  Assignment.  The Loan  Documents
                              ----------------------------
shall be binding  upon and inure to the benefit of the  Borrower and the Lenders
and their respective successors and assigns,  except that the Borrower shall not
have the right to assign its rights  thereunder or any interest  therein without
the prior written consent of each of the Lenders.

               Section 10.08 Governing Law. The Loan Documents shall be governed
                             -------------
by, and construed in accordance with, the laws of the State of Missouri.
<PAGE>

               Section 10.09 Consent to  Jurisdiction/Jury  Waiver. The Borrower
                             -------------------------------------
and the Lenders each irrevocably (i) agree that any suit,  action or other legal
proceeding  arising  out of or  relating  to this  Agreement  or any other  Loan
Document may be brought in a court of record in Hennepin  County in the State of
Minnesota  or in the Courts of the United  States  located in such  State,  (ii)
consent  to the  jurisdiction  of  each  such  court  in  any  suit,  action  or
proceeding, (iii) waive any objection which they may have to the laying of venue
of any such suit, action or proceeding in any such courts and any claim that any
such suit,  action or proceeding has been brought in an inconvenient  forum, and
(iv) agree that a final judgment in any such suit, action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other  manner  provided by law.  The  Borrower and Lender each waives the
right to a trial by jury in any action based on or pertaining to this Agreement.

               Section 10.10  Severability of Provisions.  Any provision of this
                              --------------------------
Agreement  which is  prohibited or  unenforceable  shall be  ineffective  to the
extent  of  such  prohibition  or  unenforceability   without  invalidating  the
remaining provisions hereof.

               Section 10.11 Prior Agreements. This Agreement and the other Loan
                             ----------------
Documents and related documents  described herein restate and supersede in their
entirety  any and all prior  agreements  and  understandings,  oral or  written,
between any of the Lenders and the Borrower.

               Section  10.12  Headings.  Article and  Section  headings in this
                               --------
Agreement are included  herein for  convenience  of reference only and shall not
constitute a part of this Agreement for any other purpose.

               Section 10.13 No Oral Agreements.  ORAL AGREEMENTS OR COMMITMENTS
                             ------------------
TO LOAN MONEY,  EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING  REPAYMENT OF A DEBT
INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE.  TO PROTECT
YOU   (BORROWER)   AND  US  (LENDERS   AND  AGENT)  FROM   MISUNDERSTANDING   OR
DISAPPOINTMENT,  ANY  AGREEMENT WE REACH  COVERING SUCH MATTERS ARE CONTAINED IN
THIS  WRITING,  WHICH IS THE COMPLETE AND  EXCLUSIVE  STATEMENT OF THE AGREEMENT
BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.





             [The balance of this page is intentionally left blank.]



<PAGE>

               IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective  officers thereunto duly authorized as of the
date first above written.

Address:                                FIRST BANKS, INC.
600 James S. McDonnell Blvd.
Mail Code M1-199-014
Hazelwood, MO 63042
Attention:  Allen H. Blake              By /s/ Allen H. Blake
Telecopier:  (314) 592-6621                -------------------------------------
                                           Its President
                                               ---------------------------------

























            (Signature Page to Secured Credit Agreement Page 1 of 9)
<PAGE>


Address:                                WELLS FARGO BANK, NATIONAL
MAC:  N9305-071                             ASSOCIATION, as Agent
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention:  Doug Gallun                 By  /s/ Douglas A. Gallun
Telecopier: 612-667-3510                    ------------------------------------
                                            Its Vice President
                                                --------------------------------































            (Signature Page to Secured Credit Agreement Page 2 of 9)
<PAGE>


Address:                                 WELLS FARGO BANK, NATIONAL
MAC:  N9305-071                              ASSOCIATION, as a Lender
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention:  Doug Gallun                  By /s/ Douglas A. Gallun
Telecopier: 612-667-3510                    ------------------------------------
                                            Its Vice President
                                                --------------------------------

Commitment Amount:  $14,318,182
Percentage: 23.86364%



























            (Signature Page to Secured Credit Agreement Page 3 of 9)


<PAGE>


Address:                                 BANK ONE
120 South LaSalle Street
Chicago, Illinois 60603-3400
Attention: Thomas Hackett
Telecopier: (312) 661-9511               By /s/ Thomas H. Hackett
                                            ------------------------------------
                                            Its First Vice President
                                                --------------------------------
Commitment Amount:  $8,863,637
Percentage: 14.77273


























            (Signature Page to Secured Credit Agreement Page 4 of 9)

<PAGE>


Address:                                 LASALLE BANK NATIONAL
One Metropolitan Square                      ASSOCIATION
211 North Broadway, Suite 4050
St. Louis, Missouri 63102
Attention: Robert J. Mathias             By /s/ Robert J. Mathias
Telecopier: (314) 621-3947                  ------------------------------------
                                            Its Senior Banker
                                                --------------------------------

Commitment Amount:  $8,863,637
Percentage: 14.77273%




























            (Signature Page to Secured Credit Agreement Page 5 of 9)

<PAGE>


Address:                                 THE NORTHERN TRUST COMPANY
50 South LaSalle Street
Chicago, Illinois 60675
Attention: Thomas E. Bernhardt           By /s/ Thomas E. Bernhardt
Telecopier: 312-557-8337                    ------------------------------------
                                            Its Vice President
                                                --------------------------------

Commitment Amount:  $7,500,000
Percentage: 12.50000%































            (Signature Page to Secured Credit Agreement Page 6 of 9)


<PAGE>


Address:                                 UNION BANK OF CALIFORNIA, N.A.
445 South Figureroa Street
Los Angeles, California 90071
Attention: Dennis A. Cattell             By /s/ Dennis A. Cattell
Telecopier: (213) 236-5548                  ------------------------------------
                                            Its Vice President
                                                --------------------------------

Commitment Amount:  $5,454,545
Percentage: 9.09091%
































            (Signature Page to Secured Credit Agreement Page 7 of 9)


<PAGE>


Address:                                 FIFTH THIRD BANK (CHICAGO)
1701 Golf Road, Tower One, Suite 700
Rolling Meadows, IL 60008
Attention: Patrick A. Horne              By /s/ Patrick A. Horne
Telecopier: (847) 354-7130                  ------------------------------------
                                           Its  Vice President
                                                --------------------------------

Commitment Amount:  $7,500,000
Percentage: 12.50000%





























            (Signature Page to Secured Credit Agreement Page 8 of 9)
<PAGE>


Address:                                 U.S. BANK NATIONAL ASSOCIATION
Correspondent Banking
SL-TW-11SI
7th & Washington
St. Louis, MO   63101
Attention: David C. Buettner             By /s/ David C. Buettner
Telecopier: (314) 418-8394                  ------------------------------------
                                            Its Vice President
                                                --------------------------------

Commitment Amount:  $7,500,000
Percentage: 12.50000%






























            (Signature Page to Secured Credit Agreement Page 9 of 9)
<PAGE>

<TABLE>
<CAPTION>


                                                              EXHIBIT A




                                                    REVOLVING LOAN COMMITMENT AMOUNTS


---------------------------------------- -------------------- --------------------- ------------------------------------------
                                              Commitment          Percentage
Name                                            Amount              Amount           Notice Address
---------------------------------------- -------------------- --------------------- ------------------------------------------
<S>                                         <C>                    <C>              <C>
Wells Fargo Bank, National                  $14,318,182            23.86364%        MAC N9305-071
     Association, as a Bank                                                         Sixth and Marquette
                                                                                    Minneapolis, Minnesota 55479
                                                                                    Attention: Doug Gallun
                                                                                    Telecopier: 612-667-3510
---------------------------------------- -------------------- --------------------- ------------------------------------------
Bank One                                     $8,863,637            14.77273%        120 South LaSalle Street
                                                                                    Chicago, Illinois 60603-3400
                                                                                    Attention: Sunil Mehta
                                                                                    Telecopier: (312) 661-9511
---------------------------------------- -------------------- --------------------- ------------------------------------------
LaSalle Bank National Association            $8,863,637            14.77273%        One Metropolitan Square
                                                                                    211 North Broadway, Suite 4050
                                                                                    St. Louis, Missouri 63102
                                                                                    Attention: Robert J. Mathias
                                                                                    Telecopier: (314) 621-3947
---------------------------------------- -------------------- --------------------- ------------------------------------------
The Northern Trust Company                   $7,500,000            12.50000%        50 South LaSalle Street
                                                                                    Chicago, Illinois 60675
                                                                                    Attention: Thomas E. Bernhardt
                                                                                    Telecopier: (312) 557-8337
---------------------------------------- -------------------- --------------------- ------------------------------------------
Union Bank of California, N.A.               $5,454,545             9.09091%        445 South Figureroa Street
                                                                                    Los Angeles, California 90071
                                                                                    Attention: Dennis A. Cattell
                                                                                    Telecopier: (213) 236-5548
---------------------------------------- -------------------- --------------------- ------------------------------------------
Fifth Third Bank (Chicago)                   $7,500,000            12.50000%        1701 Gold Road
                                                                                    Tower One, Suite 700
                                                                                    Rolling Meadows, IL 60008
                                                                                    Attention: Patrick A. Horne
                                                                                    Telecopier: (847) 354-7130
---------------------------------------- -------------------- --------------------- ------------------------------------------
U.S. Bank National Association               $7,500,000            12.50000%        Correspondent Banking
                                                                                    SL-TW-11SI
                                                                                    7th & Washington
                                                                                    St. Louis, MO   63101
                                                                                    Attention:  David C. Buettner, VP
                                                                                    Telecopier:  (314) 418-8394
---------------------------------------- -------------------- --------------------- ------------------------------------------
</TABLE>



<PAGE>

                                    EXHIBIT B

                            BORROWER PLEDGE AGREEMENT

          This  Agreement  is made as of this 14th day of August,  2003,  by and
between FIRST BANKS,  INC., a Missouri  Corporation  ("Debtor")  and WELLS FARGO
BANK, NATIONAL  ASSOCIATION,  a national banking  association,  as Agent for the
"Lenders"  pursuant to the Secured Credit  Agreement  described  below ("Secured
Party").


                                    RECITALS

          Debtor, Secured Party and certain financial institutions have executed
a  secured  credit   agreement  dated  as  of  August  14,  2003,  (the  "Credit
Agreement"),  pursuant to which such financial institutions (the "Lenders") have
agreed to lend up to  $60,000,000  to Debtor and pursuant to which Secured Party
has  agreed to issue up to  $20,000,000  in face  amount of  standby  letters of
credit for the account of Debtor.

          One condition to the Lenders' and Secured  Party's  commitments  under
the Credit Agreement is that Debtor execute, deliver and perform this Collateral
Pledge  Agreement,  thereby  granting a security  interest to Secured Party,  as
agent for the Lenders, in the Collateral described herein.

          Now,  therefore,  in  consideration  of the  premises  and the  mutual
agreements herein set forth, the parties hereto hereby agree as follows:


          1.  Security  Interest  and  Collateral.  To secure  the  payment  and
performance  of the  "Obligations,"  as  such  term  is  defined  in the  Credit
Agreement,  Debtor hereby grants Secured Party (for its own account and as agent
for the Lenders) a security interest (the "Security Interest") in (i) all of the
capital stock of The San Francisco  Company,  a Delaware  corporation,  owned by
Debtor,  (ii) any capital stock that Debtor may hereafter acquire and deliver to
Secured Party  pursuant to Section 5.08 of the Credit  Agreement,  and (iii) all
proceeds of such  capital  stock and all other  rights in  connection  with such
property (collectively the "Collateral").


          2.  Representations,  Warranties  and  Covenants.  Debtor  represents,
warrants and covenants that:


               (a)  Debtor  will join with  Secured  Party in taking  any action
          required by Secured  Party in order to perfect the  Security  Interest
          and to protect the rights and priorities of Secured Party with respect
          to the Collateral.  To that end, Debtor has delivered to Secured Party
          certificates   representing   all  of  the  shares  of  capital  stock
          constituting  Collateral  and executed and  delivered  one blank stock
          power for each such  certificate.  Debtor  will,  at  Secured  Party's
          request at any one or more times (i) duly endorse,  in blank, each and
          every  additional  security  certificate  and instrument  constituting
          Collateral by signing on such  certificate or instrument or by signing
          a separate document of assignment or transfer;  (ii) join with Secured



<PAGE>

          Party in executing  any  instructions  or agreements  with  securities
          intermediaries  for the purpose of obtaining control of any investment
          property that may hereafter constitute Collateral;  and (iii) instruct
          the issuer of any security that may hereafter constitute Collateral to
          register such security in the name of Secured Party.

               (b) Debtor is the owner of the  Collateral  free and clear of all
          liens,  encumbrances,  security interests and restrictions  except the
          Security Interest and any restrictive legend appearing on any security
          certificate or any instrument constituting Collateral.

               (c) Debtor will keep the Collateral  free and clear of all liens,
          encumbrances and security interests, except the Security Interest.

               (d) Debtor will pay,  when due, all taxes and other  governmental
          charges levied or assessed upon or against any Collateral.

               (e)  Debtor  will  upon  receipt  deliver  to  Secured  Party all
          investment  property  distributed  on account of  Collateral,  such as
          stock   dividends  and   securities   resulting   from  stock  splits,
          reorganizations  and  recapitalizations.  The Security  Interest shall
          attach to all such proceeds.

          3. Events of Default. The occurrence of any Event of Default under the
Credit Agreement shall be an Event of Default hereunder.

          4. Remedies Upon Event of Default.  Upon the occurrence of an Event of
Default and during the continuance  thereof,  Secured Party may exercise any one
or more of the rights and remedies  specified in the Credit Agreement,  and also
any one or more of the following  rights or remedies:  (i) notify the obligor on
or issuer of any  Collateral or any securities  intermediary  to make payment to
Secured Party of any amounts due or  distributable  on any  Collateral,  (ii) in
Debtor's name or Secured  Party's name enforce  collection of any  Collateral by
suit or otherwise,  or surrender,  release or exchange all or any part of it, or
compromise,  extend or renew for any  period  any  obligation  evidenced  by the
Collateral,  (iii)  receive  and keep in its  possession  or under  its  control
subject to the Security  Interest all  proceeds of  Collateral,  except that any
money received from the Collateral may, at Secured Party's option, be applied in
reduction  of the  Obligations;  (iv)  exercise all voting and other rights as a
holder of any  Collateral;  (v)  exercise  and  enforce  any or all  rights  and
remedies  available upon default to a secured party under the Uniform Commercial
Code,  including the right to (A) order any securities  intermediary to sell any
Collateral  on any  established  market  or over the  counter  or to  cause  any
Collateral  to be  redeemed;  (B) give any transfer or  redemption  order to any
issuer of Collateral;  or (C) offer and sell Collateral  privately to purchasers
who will  agree to take the  Collateral  for  investment  and not with a view to
distribution and who will agree to the imposition of restrictive  legends on any
certificates representing Collateral,  and the right to arrange for a sale which
would otherwise qualify as exempt from registration  under the Securities Act of
1933;  and if notice to Debtor of any intended  disposition of Collateral or any
other intended action is required by law in a particular  instance,  such notice
shall be deemed commercially reasonable if given at least 10 calendar days prior


<PAGE>

to the date of  intended  disposition  or other  action;  and (vi)  exercise  or
enforce any or all other rights or remedies available to Secured Party by law or
agreement against any Collateral,  against Debtor or against any other person or
property.

          5. Secured Party's  Duties.  Secured Party's duty of care with respect
to Collateral in its possession (as imposed by law) shall be deemed fulfilled if
Secured  Party  exercises   reasonable  care  in  physically   safekeeping  such
Collateral,  or in the case of  Collateral  in the  custody or  possession  of a
securities intermediary or other third person,  exercises reasonable care in the
selection of the securities intermediary or other third person and Secured Party
need not otherwise preserve, protect, insure or care for any Collateral. Secured
Party shall not be  obligated  to preserve  any rights  Debtor may have  against
prior parties,  to exercise at all or in any particular manner any voting rights
which may be  available  with  respect  to any  Collateral,  to  realize  on the
Collateral  at all or in any  particular  manner or order,  or to apply any cash
proceeds of Collateral in any particular order of application. Regardless of the
manner in which  Secured  Party  chooses to  exercise  control  over  Collateral
(whether by possession,  by agreement with an issuer or Securities Intermediary,
by  transferring  security  entitlements  into its own account,  or  otherwise),
Secured Party shall not be deemed to be under any obligation to Debtor,  whether
as fiduciary,  trustee,  agent or otherwise,  except the duty of good faith, the
duties specifically imposed upon Secured Party by this Agreement, and the duties
imposed  upon  it as a  secured  party  by  Articles  1, 8 and 9 of the  Uniform
Commercial Code, as in effect in Missouri.

          6. Miscellaneous. Any disposition of Collateral in the manner provided
in Section 4 shall be deemed  commercially  reasonable.  This  Agreement  can be
waived, modified,  amended,  terminated or discharged, and the Security Interest
can be released,  only explicitly in a writing signed by Secured Party. A waiver
signed by Secured Party shall be effective only in the specific instance and for
the specific purpose given.  Mere delay or failure to act shall not preclude the
exercise or enforcement of any of Secured Party's rights or remedies. All rights
and  remedies  of  Secured  Party  shall  be  cumulative  and  may be  exercised
singularly  or  concurrently,  at Secured  Party's  option,  and the exercise or
enforcement  of any one such right or remedy shall neither be a condition to nor
bar the exercise or enforcement of any other.  All notices to be given to Debtor
shall be deemed  sufficiently  given if  delivered  or mailed by  registered  or
certified mail,  postage  prepaid,  to Debtor at the address set forth following
its  signature  on the  signature  page of this  Agreement or at the most recent
address shown on Secured Party's  records.  Debtor will reimburse  Secured Party
for all  expenses  (including  reasonable  attorneys'  fees and legal  expenses)
incurred  by Secured  Party in the  protection,  defense or  enforcement  of the
Security  Interest,  including expenses incurred in any litigation or bankruptcy
or insolvency proceedings. This Agreement shall be binding upon and inure to the
benefit of Debtor and Secured Party and their  successors  and assigns and shall
take effect when signed by Debtor and  delivered  to Secured  Party,  and Debtor
waives notice of Secured  Party's  acceptance  hereof.  This Agreement  shall be
governed by the  internal  laws of Missouri  and,  unless the context  otherwise
requires,  all terms used herein which are defined in Articles 1, 8 and 9 of the
Uniform  Commercial  Code,  as in effect in  Missouri,  shall have the  meanings
therein  stated.  If any  provision  or  application  of this  Agreement is held
unlawful or  unenforceable in any respect,  such illegality or  unenforceability
shall not affect other provisions or applications which can be given effect, and



<PAGE>

this Agreement shall be construed as if the unlawful or unenforceable  provision
or  application  had never  been  contained  herein or  prescribed  hereby.  All
representations  and warranties  contained in this  Agreement  shall survive the
execution,  delivery  and  performance  of this  Agreement  and the creation and
payment of the Obligations.

          IN WITNESS  WHEREOF,  Debtor has executed this Agreement as of the day
first above written.


                                       FIRST BANKS, INC.





                                       By
                                          --------------------------------------


                                           Its
                                               ---------------------------------








                                        Address:




                                       600 James S. McDonnell Blvd.

                                       Mail Code M1-199-014

                                       Hazelwood, MO 63042-2302




<PAGE>


                                    EXHIBIT C


                             COMPLIANCE CERTIFICATE


          This  Compliance  Certificate  is being  submitted  on this ___ day of
__________________,   200__,   for  the  quarter   ending  on  the  ___  day  of
__________________, 200__, pursuant to the terms of the Secured Credit Agreement
dated as of August  ___,  2003,  (the  "Credit  Agreement"),  as the same may be
thereafter  amended  from  time  to  time,  among  Wells  Fargo  Bank,  National
Association  (the  "Agent"),  the Lenders  that are parties  thereto,  and First
Banks,  Inc., as Borrower.  Capitalized  terms used but not defined herein shall
have the meanings set forth in the Credit Agreement.


          The undersigned  officers of First Banks,  Inc.  jointly and severally
certify to the Lenders that as of the date hereof:


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


          B.   No Default or Event of Default has occurred and is continuing;


          C.   Attached is an accurate  listing of the current  Subsidiaries  of
               First Banks, Inc.; and


          D.   The  computation of Margin and L/C Margin and compliance with the
               covenants  contained in Article VII of the Credit  Agreement  are
               supported by the following:

<TABLE>
<CAPTION>

2.03  Funded Debt Ratio
      -----------------

(i) First Banks, Inc. (consolidated)
Net Income for the quarter ended:
---------------------------------                     (2)              Ratio of                           L/C
<S>                                               <C>                 <C>                <C>              <C>
                                                  Funded Debt         (2) to (1)         Margin           Margin
                                                  -----------         ----------         ------           ------
                   $
----------------   ----------------

----------------   ----------------

----------------   ----------------

----------------   ----------------


Total Net Income      $                (1)                                     %             bp               bp
                      ----------------          ---------------       ----------        -------          -------


<PAGE>

7.01  Total Risk Based Capital Ratio
      ------------------------------

                                                                         (2)
                                                                    Weighted-Risk
                                                                   Assets and Off-                        Minimum
                                                   (1)              Balance Sheet        Ratio of          Ratio
                                              Total Capital             Items           (1) to (2)       Permitted
                                              -------------        ---------------      ----------       ---------



First Banks, Inc. (consolidated)                                                                 %         10.0%
                                             ---------------       ---------------      ----------         -----


First Bank                                                                                       %         10.0%
                                             ---------------       ---------------      ----------         -----




7.02  Tier I Risk Based Capital Ratio
      -------------------------------
                                                                        (2)
                                                                   Weighted-Risk
                                                                  Assets and Off-                         Minimum
                                                    (1)            Balance Sheet          Ratio of         Ratio
                                              Tier I Capital           Items             (1) to (2)      Permitted
                                              --------------      ----------------       ----------      ---------

First Banks, Inc. (consolidated)                                                                  %         6.0%
                                              --------------      ----------------       ----------         ----


First Bank                                                                                         %        6.0%
                                              --------------      ----------------       ----------         ----






<PAGE>



7.03  Leverage Ratio
      --------------

                                                                                                          Minimum
                                                     (1)                 (2)              Ratio of         Ratio
                                               Tier I Capital        Total Assets        (1) to (2)      Permitted
                                               --------------        ------------        ----------      ---------


First Banks, Inc. (consolidated)                                                                   %        5.0%
                                              ---------------        ------------        ----------         ----

First Bank                                                                                         %        5.0%
                                              ---------------        ------------        ----------         ----




7.04  Minimum Return on Assets
      ------------------------


                                                                                                           Minimum
Net Income for the quarter ended:                                    Average Total         Ratio of         Ratio
---------------------------------                                      Assets (2)         (1) to (2)      Permitted
                                                                       ----------         ----------      ---------




First Banks, Inc. (consolidated)

                  $
----------------  ----------------

----------------  ----------------

----------------  ----------------

----------------  ----------------

Total Net Income  $               (1)                                                              %         0.70%
                  ----------------                                 --------------         ----------         -----


<PAGE>



7.05  Non-Performing Assets
      ---------------------

                                                     (1)                  (2)                              Maximum
                                                Non-Performing      Primary Equity         Ratio of         Ratio
                                                    Assets              Capital           (1) to (2)      Permitted
                                                    ------              -------           ----------      ---------

First Banks, Inc. (consolidated)                                                                   %          25%
                                             ------------------     --------------        ----------          ---

First Bank                                                     *                                   %          15%
                                             ------------------     --------------        ----------          ---




     *Not  including  the  Lake  of  the  Ozarks Development asset, currently $__________; or, if the Lake of the Ozarks
      ---
     asset is currently valued in excess of $12,000,000, including only excess of Lake of Ozarks asset over $12,000,000.
                                                                   ----




7.06  Allowance for Loan and Lease Losses
      -----------------------------------


                                                     (1)
                                                Allowance for            (2)                               Minimum
                                                  Loan and          Non-Performing         Ratio of         Ratio
                                                Lease Losses            Assets            (1) to (2)      Permitted
                                                ------------            ------            ----------      ---------


First Bank                                                                                          %        100%
                                             ------------------     --------------        -----------        ----

</TABLE>


<PAGE>



         Signed as of the day and year first above written.





                                         FIRST BANKS, INC.








                                         By:
                                              ----------------------------------
                                                 Chief Executive Officer and
                                                 Chief Financial Officer





                                         By:
                                              ----------------------------------
                                                  Senior Vice President -
                                                  Chief Accounting Officer





                                         By:
                                              ----------------------------------
                                                    Chief Operating Officer





                                         By:
                                              ----------------------------------
                                                     Chief Credit Officer




<PAGE>


                                                           EXHIBIT D1
<TABLE>
<CAPTION>


                                            APPLICATION FOR STANDBY LETTER OF CREDIT

TO:  WELLS FARGO BANK, NATIONAL ASSOCIATION
------------------------------------------------------------------------------------------------------------------------------------

           DATE                                   FOR WELLS FARGO'S USE ONLY    LETTER OF CREDIT NO.           DOCUMENT TRACK NO.

           ------------------------------         ----------------------------- ------------------------------ ---------------------

APPLICANT  SIGNING  BELOW  HEREBY  REQUESTS  THAT  WELLS  FARGO  BANK, NATIONAL
ASSOCIATION ("WELLS FARGO") ISSUE IN WELLS FARGO'S NAME  AN IRREVOCABLE STANDBY
LETTER  OF  CREDIT  (THE "CREDIT") ON SUBSTANTIALLY THE TERMS BELOW AND, UNLESS
OTHERWISE SPECIFIED  BELOW  IN  SPECIAL INSTRUCTIONS, FORWARD THE CREDIT BY THE
FOLLOWING MEANS TO THE BENEFICIARY DIRECTLY OR THROUGH A BANK SELECTED BY WELLS
FARGO:

|_| FULL CABLE/TELEX   |_| COURIER   |_| MAIL WITH BRIEF ADVICE BY CABLE/TELEX     |_| MAIL   |_| OTHER:_____________________

----------------------------------------------------------------------- ------------------------------------------------------------
<S>                                                                     <C>
ADVISING BANK: (If left blank, Wells Fargo may select)                  BENEFICIARY:   (Name and Address)





----------------------------------------------------------------------- ------------------------------------------------------------
PARTY TO BE NAMED AS REQUESTING THE CREDIT:  (Name and Address)         AMOUNT:  (In words)


                                                                        -------------------------------- ---------------------------
                                                                        (In figures)                     (Currency)
----------------------------------------------------------------------- -------------------------------- ---------------------------
AVAILABILITY:  Unless otherwise specified herein, the Credit is to be   EXPIRATION DATE:
available with Wells Fargo's issuing office by  payment  of  draft(s)                   --------------------------------------------
drawn at sight on Wells Fargo or, at Wells Fargo's  option, with  any
bank(s) or  with  a  bank  nominated by Wells Fargo by negotiation of
draft(s) drawn at sight on Wells Fargo.                                 PLACE OF EXPIRATION: Unless otherwise specified  herein, the
                                                                        Credit is to expire at Wells Fargo's issuing  office  or, if
                                                                        the  Credit is available  with any bank(s)or with a specific
                                                                        bank other than Wells Fargo's issuing office, at such  place
                                                                        as Wells Fargo shall elect.
------------------------------------------------------------------------------------------------------------------------------------
DOCUMENT(S): Draft(s) are to be accompanied by: (Attached additional signed sheet(s), if necessary, and label as attachments to this
Application.)




------------------------------------------------------------------------------------------------------------------------------------
DRAWING(S):       |_| Partial drawings are permitted.  (More than one draft may be drawn and presented under the Credit.)

                  |_| Only one draft may be drawn and presented under the Credit, and:

                  |_| the draft must be for the full amount of the Credit.     |_|  the draft may be for less than the full amount
                                                                                    of the Credit.
------------------------------------------------------------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS: (Attach additional signed sheet(s), if necessary, and label as attachments to this Application.)





------------------------------------------------------------------------------------------------------------------------------------

<PAGE>

------------------------------------------------------------------------------------------------------------------------------------
TRANSFERABILITY: (If not checked, the Credit will not be transferable.)

            |_|  The Credit is to be transferable, with transfer charges for:   |_|  Applicant's account  |_|  Beneficiary's account
------------------------------------------------------------------------------------------------------------------------------------

INQUIRIES:  Direct to:                                                       Telephone Number:
------------------------------------------------------------------------------------------------------------------------------------
APPLICANT'S AGREEMENT AND SIGNATURE: Applicant's   signature   here   indicates  agreement  to  all the terms and conditions on this
Application  and  Applicant's  agreement  that  the  Credit and its issuance will be governed by (1) the terms and conditions of the
Standby Letter of Credit Agreement between Applicant and Wells Fargo and/or (2) any  other agreement signed by Applicant pursuant to
which the Credit is to be issued. This Application is signed by Applicant's duly authorized  representative(s) on the date specified
above.

------------------------------------------------------------------------------------   ----------------------------------------
      APPLICANT                                                                                      ADDRESS


------------------------------------------      ------------------------------------   ----------------------------------------
      AUTHORIZED SIGNATURE                            TITLE                                          ADDRESS


 -----------------------------------------      ------------------------------------   ----------------------------------------
      AUTHORIZED SIGNATURE                            TITLE                                          ADDRESS
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
                                         (TO BE COMPLETED BY WELLS FARGO BANK, NATIONAL ASSOCIATION)

                     CREDIT ISSUANCE HAS BEEN APPROVED IN ACCORDANCE WITH WELLS FARGO'S CREDIT POLICIES AND PROCEDURES
------------------------------------------------------------------------------------------------------------------------------------
APPROVING OFFICER'S SIGNATURE        APPROVING OFFICER'S NAME (Print) APPROVING OFFICER'S OFFICE     AU      MAC      COMMITMENT NO.
                                                                      (Print)


------------------------------------------------------------------------------------------------------------------------------------
PHONE              AFS INTERFACE REQUIRED:       STANDALONE TRANSACTION:        COLLATERAL CODE        PURPOSE  CODE      DATE


                   YES  |_|         NO  |_|      YES  |_|       NO  |_|
------------------------------------------------------------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS: (Indicate any provisions applicable to the Credit different from those on Applicant's Relationship Management
Instructions Form)





------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>




                                   EXHIBIT D2
                       STANDBY LETTER OF CREDIT AGREEMENT




To:  WELLS FARGO BANK, NATIONAL ASSOCIATION


         Applicant  hereby  requests  that  you,  Wells  Fargo  Bank,   National
Association  ("Wells Fargo"),  issue in your name one or more standby letters of
credit pursuant to  Applications  for the issuance of such Credits and the terms
and  conditions  of this  Agreement.  Each Credit will be issued at  Applicant's
request and for its account, and, unless otherwise  specifically provided in any
Loan Document, at your option. Applicant agrees that the terms and conditions in
this Agreement shall apply to each Application and the Credit issued pursuant to
each Application,  and to transactions  under each Application,  each Credit and
this Agreement.


         SECTION 1. DEFINITIONS.  As used in this Agreement, the following terms
shall  have the  meanings  set forth  after each  term:  "Agreement"  means this
                                                          ---------
Standby Letter of Credit  Agreement as it may be revised or amended from time to
time.  "Applicant"  means  collectively  each person and/or entity  signing this
        ---------
Agreement   as   Applicant.   "Application"   means  your  printed  form  titled
                               -----------
"Application  For Standby Letter of Credit" or any other form  acceptable to you
on  which  Applicant  applies  for the  issuance  by you of a Credit  and/or  an
application for amendment of a Credit or any  combination of such  applications,
as the context may require. "Beneficiary" means the person or entity named on an
                             -----------
Application  as  the   beneficiary  or  any  transferee  of  such   beneficiary.
"Collateral"  means the Property,  together with the proceeds of such  Property,
 ----------
securing  any or all of  Applicant's  obligations  and  liabilities  at any time
existing under or in connection  with any L/C Document and/or any Loan Document.
"Commission Fee" means the fee, computed at the commission fee rate specified by
 --------------
you or  specified  in any  Loan  Document,  charged  by you at the time or times
specified by you on the amount of each Credit and on the amount of each increase
in a Credit for the time period each Credit is  outstanding.  "Credit"  means an
                                                               ------
instrument or document titled "Irrevocable Standby Letter of Credit" or "Standby
Letter of  Credit",  or any  instrument  or  document  whatever  it is titled or
whether or not it is titled  functioning as a standby  letter of credit,  issued
under or pursuant to an Application, and all renewals, extensions and amendments
of such instrument or document..  "Demand" means any sight draft,  electronic or
                                   ------
telegraphic  transmission or other written demand drawn or made, or purported to
be drawn or made,  under or in connection with any Credit.  "Document" means any
                                                             --------
instrument,  statement,  certificate or other document referred to in or related
to any  Credit or  required  by any  Credit  to be  presented  with any  Demand.
"Dollars"  means the lawful  currency  at any time for the  payment of public or
 -------
private debts in the United States of America.  "Event of Default"  means any of
                                                 ----------------
the events set forth in Section 13 of this Agreement..  "Expiration  Date" means
                                                         ----------------
the date any Credit expires. "Guarantor" means any person or entity guaranteeing
                              ---------
the payment and/or performance of any or all of Applicant's obligations under or
in connection with any L/C Document and/or any Loan Document.  "Holding Company"
                                                                ---------------

<PAGE>

means any company or other entity directly or indirectly  controlling  you. "L/C
                                                                             ---
Document" means this Agreement, each Application,  each Credit, and each Demand.
--------
"Loan  Document" means each and any promissory  note,  loan agreement,  security
 --------------
agreement,  pledge agreement,  guarantee or other agreement or document executed
in  connection  with,  or relating  to, any  extension of credit under which any
Credit is issued.  "Maximum  Rate"  means the  maximum  amount of  interest  (as
                    -------------
defined by applicable  laws),  if any,  permitted to be paid,  taken,  reserved,
received, collected or charged under applicable laws, as the same may be amended
or modified from time to time.  "Negotiation Fee" means the fee, computed at the
                                 ---------------
negotiation fee rate specified by you or specified in any Loan Document, charged
by you on the amount of each Demand paid by you or any other bank  specified  by
you when each Demand is paid. "Payment Office" means the office specified by you
                               --------------
or specified in any Loan Document as the office where  reimbursements  and other
payments  under  or in  connection  with  any  L/C  Document  are to be  made by
Applicant.  "Prime  Rate" means the rate of  interest  most  recently  announced
             -----------
within  Wells  Fargo  at its  principal  office  as its  Prime  Rate,  with  the
understanding  that the Prime Rate is one of Wells Fargo's base rates and serves
as the basis upon which  effective  rates of interest are  calculated  for those
loans making reference thereto,  and is evidenced by the recording thereof after
its announcement in such internal publication or publications as Wells Fargo may
designate.   "Property"  means  all  forms  of  property,  whether  tangible  or
              --------
intangible, real, personal or mixed. "Rate of Exchange" means Wells Fargo's then
                                      ----------------
current  selling rate of exchange in San Francisco,  California for sales of the
currency of payment of any Demand,  or of any fees or expenses or other  amounts
payable under this  Agreement,  for cable  transfer to the country of which such
currency is the legal tender.  "UCP" means the Uniform  Customs and Practice for
                                ---
Documentary Credits, an International  Chamber of Commerce  publication,  or any
substitution therefor or replacement thereof. "Unpaid and Undrawn Balance" means
                                               --------------------------
at any time the  entire  amount  which  has not been  paid by you  under all the
Credits issued for  Applicant's  account,  including,  without  limitation,  the
amount of each Demand on which you have not yet effected  payment as well as the
amount undrawn under all such Credits. "Wells Fargo & Company" means Wells Fargo
                                        ---------------------
& Company, a Delaware corporation.

         SECTION 2. HONORING DEMANDS AND DOCUMENTS.  You may receive, accept and
honor,  as complying with the terms of any Credit,  any Demand and any Documents
accompanying such Demand,  provided that such Demand and accompanying  Documents
appear on their face to comply  substantially with the provisions of such Credit
and are,  or  appear  on their  face to be,  signed or issued by (a) a person or
entity  authorized  under such  Credit to draw,  sign or issue  such  Demand and
accompanying   Documents,  or  (b)  an  administrator,   executor,   trustee  in
bankruptcy,  debtor  in  possession,  assignee  for the  benefit  of  creditors,
liquidator,  receiver or other legal  representative or successor in interest by
operation of law of any such person or entity.

         SECTION 3.  REIMBURSEMENT  FOR  PAYMENT  OF  DEMANDS.  Applicant  shall
reimburse  you for all amounts  paid by you on each Demand,  including,  without
limitation,  all such  amounts paid by you to any paying,  negotiating  or other
bank.  If in  connection  with the issuance of any Credit,  you agree to pay any
other bank the  amount of any  payment  or  negotiation  made by such other bank
under  such  Credit  upon  your  receipt  of a cable,  telex  or  other  written
telecommunication advising you of such payment or negotiation,  or authorize any
other bank to debit your account for the amount of such payment or  negotiation,
Applicant  agrees to reimburse  you for all such amounts paid by you, or debited
to your account with such other bank,  even if any Demand or Document  specified
in such  Credit  fails to arrive in whole or in part or if,  upon the arrival of
any such Demand or  Document,  the terms of such  Credit have not been  complied
with or such Demand or Document  does not  conform to the  requirements  of such
Credit or is not otherwise in order.
<PAGE>

         SECTION 4. FEES AND  EXPENSES.  Applicant  agrees to pay to you (a) all
Commission Fees,  Negotiation Fees, cable fees, amendment fees, non-usance fees,
and cancellation fees of, and all out-of-pocket  expenses incurred by, you under
or in connection with any L/C Document, and (b) all fees and charges of banks or
other  entities  other than you under or in connection  with any L/C Document if
any Application  (i) does not indicate who will pay such fees and charges,  (ii)
indicates  that  such fees and  charges  are to be paid by  Applicant,  or (iii)
indicates that such fees and charges are to be paid by the  Beneficiary  and the
Beneficiary does not, for any reason whatsoever, pay such fees or charges. There
shall be no refund of any portion of any  Commission Fee in the event any Credit
is used, reduced, amended, modified or terminated before its Expiration Date.

         SECTION 5. DEFAULT  INTEREST.  Unless  otherwise  specified in any Loan
Document,  or on  an  Application  and  agreed  to by  you,  all  amounts  to be
reimbursed  by  Applicant  to  you,  and all  fees  and  expenses  to be paid by
Applicant  to you, and all other  amounts due from  Applicant to you under or in
connection with any L/C Documents,  will bear interest (to the extent  permitted
by law), payable on demand,  from the date you paid the amounts to be reimbursed
or the date such fees,  expenses  and other  amounts were due until such amounts
are paid in full, at a rate per annum  (computed on the basis of a 360-day year,
actual days elapsed) which is the lesser of (a) two percent (2%) above the Prime
Rate in effect from time to time, or (b) the Maximum Rate.


         SECTION  6.  TIME AND  METHOD  OF  REIMBURSEMENT  AND  PAYMENT.  Unless
otherwise specified in this Section, in any Loan Document,  or on an Application
and agreed to by you, all amounts to be reimbursed by Applicant to you, all fees
and expenses to be paid by Applicant to you, and all interest and other  amounts
due to you from Applicant  under or in connection with any L/C Documents will be
reimbursed  or paid at the Payment  Office in Dollars in  immediately  available
funds without  setoff or  counterclaim  (i) on demand or, (ii) at your option by
your debiting any of  Applicant's  accounts with you, with each such debit being
made without presentment,  protest,  demand for reimbursement or payment, notice
of dishonor or any other notice  whatsoever,  all of which are hereby  expressly
waived by  Applicant.  Each such debit  will be made at the time each  Demand is
paid by you or,  if  earlier,  at the  time  each  amount  is paid by you to any
paying,  negotiating or other bank, or at the time each fee and expense is to be
paid or any interest or other amount is due under or in connection  with any L/C
Documents.  If any Demand or any fee, expense,  interest or other amount payable
under or in  connection  with any L/C  Documents is payable in a currency  other
than Dollars,  Applicant  agrees to reimburse you for all amounts paid by you on
such  Demand,  and/or to pay you all such  fees,  expenses,  interest  and other
amounts,  in one of the three  following ways, as determined by you in your sole
discretion in each case:  (a) at such place as you shall  direct,  in such other
currency; or (b) at the Payment Office in the Dollar equivalent of the amount of
such other currency calculated at the Rate of Exchange on the date determined by
you  in  your  sole  discretion;  or (c) at the  Payment  Office  in the  Dollar
equivalent,  as determined by you (which  determination  shall be deemed correct
absent manifest error), of such fees, expenses,  interest or other amounts or of
the actual cost to you of paying such Demand.  Applicant  assumes all political,
economic  and  other  risks of  disruptions  or  interruptions  in any  currency
exchange.
<PAGE>


         SECTION 7.  AGREEMENTS OF APPLICANT.  Applicant  agrees that (a) unless
otherwise specifically provided in any Loan Document, you shall not be obligated
at any time to issue any Credit for Applicant's  account;  (b) unless  otherwise
specifically  provided in any Loan Document,  if any Credit is issued by you for
Applicant's  account, you shall not be obligated to issue any further Credit for
Applicant's account or to make other extensions of credit to Applicant or in any
other manner to extend any financial  consideration  to Applicant;  (c) you have
not given Applicant any legal or other advice with regard to any L/C Document or
Loan Document; (d) if you at any time discuss with Applicant the wording for any
Credit,  any such discussion will not constitute legal or other advice by you or
any  representation  or warranty by you that any wording or Credit will  satisfy
Applicant's  needs; (e) Applicant is responsible for the wording of each Credit,
including,  without limitation, any drawing conditions, and will not rely on you
in any way in connection  with the wording of any Credit or the  structuring  of
any  transaction  related  to  any  Credit;  (f)  Applicant,  and  not  you,  is
responsible  for entering  into the  contracts  relating to the Credits  between
Applicant and the  Beneficiaries  and for causing Credits to be issued;  (g) you
may,  as you  deem  appropriate,  modify  or  alter  and use in any  Credit  the
terminology  contained  on the  Application  for such  Credit;  (h)  unless  the
Application for a Credit specifies  whether the Documents to be presented with a
Demand  under such Credit must be sent to you in one parcel or in two parcels or
may be sent to you in any number of  parcels,  you may,  if you so desire,  make
such determination and specify in the Credit whether such Documents must be sent
in one parcel or two  parcels or may be sent in any number of  parcels;  (i) you
shall not be deemed  Applicant's  agent or the agent of any  Beneficiary  or any
other user of any Credit,  and neither  Applicant,  nor any  Beneficiary nor any
other user of any Credit shall be deemed your agent; (j) Applicant will promptly
examine  all  Documents  and each  Credit  if and when  they  are  delivered  to
Applicant  and, in the event of any claim of  noncompliance  of any Documents or
any Credit with Applicant's instructions or any Application,  or in the event of
any other  irregularity,  Applicant will promptly  notify you in writing of such
noncompliance or irregularity; (k) all directions and correspondence relating to
any L/C Document  are to be sent at  Applicant's  risk;  (l) if any Credit has a
provision concerning the automatic extension of its Expiration Date, you may, at
your sole option, give notice of nonrenewal of such Credit and if Applicant does
not at any time want such Credit to be renewed  Applicant  will so notify you at
least  fifteen (15) calendar  days before you are to notify the  Beneficiary  of
such Credit or any  advising  bank of such  nonrenewal  pursuant to the terms of
such Credit;  (m) Applicant will not seek to obtain,  apply for, or acquiesce in
any  temporary  or  permanent   restraining  order,   preliminary  or  permanent
injunction,  permanent  injunction or any other pretrial or permanent injunctive
or similar  relief,  restraining,  prohibiting  or  enjoining  you,  any of your
correspondents or any advising,  confirming,  negotiating,  paying or other bank
from paying or negotiating any Demand or honoring any other  obligation under or
in  connection  with any  Credit;  and (n)  except for  Applicant's  obligations
specifically  affected by the actions  referred  to in  subsection  (vi) of this
Section  7(n),  Applicant's  obligations  under or in  connection  with each L/C
Document and Loan Document shall be absolute, unconditional and irrevocable, and
shall be  performed  strictly  in  accordance  with the  terms of each  such L/C
Document  and Loan  Document  under  all  circumstances  whatsoever,  including,
without limitation,  the following  circumstances,  the circumstances  listed in
Section  12(b)  through  (dd)  of  this  Agreement,   and  any  other  event  or
circumstance  similar  to such  circumstances:  (A)  any  lack  of  validity  or
enforceability  of any L/C  Document,  any Loan  Document,  any  Document or any
agreement  relating  to any of the  foregoing;  (B) any  amendment  of or waiver
relating to, or any consent to or departure  from,  any L/C  Document,  any Loan
Document or any  Document;  (C) any release or  substitution  at any time of any
Property  held as  Collateral;  (D) your  failure to deliver  to  Applicant  any
Document you have received with a drawing under a Credit because doing so would,
or is  likely  to,  violate  any  law,  rule  or  regulation  of any  government
authority; (E) the existence of any claim, set-off, defense or other right which
Applicant may have at any time against you or any  Beneficiary (or any person or
entity for whom any  Beneficiary  may be acting) or any other  person or entity,

<PAGE>

whether under or in connection  with any L/C Document,  any Loan  Document,  any
Document or any  Property  referred to in or related to any of the  foregoing or
under or in  connection  with  any  unrelated  transaction;  (F) any  breach  of
contract or other  dispute  between or among any two or more of you,  Applicant,
any  Beneficiary,  any transferee of any  Beneficiary,  any person or entity for
whom any Beneficiary or any transferee of any Beneficiary may be acting,  or any
other person or entity; or (G) any delay, extension of time, renewal, compromise
or other  indulgence  granted  or  agreed  to by you with or  without  notice to
Applicant,   or  Applicant's   approval,   in  respect  of  any  of  Applicant's
indebtedness  or other  obligations  to you under or in connection  with any L/C
Document or any Loan Document.

         SECTION 8. COMPLIANCE WITH LAWS AND REGULATIONS.  Applicant  represents
and  warrants  to you that no  Application,  Credit  or  transaction  under  any
Application  and/or  Credit  will  contravene  any  law  or  regulation  of  the
government of the United States or any state  thereof.  Applicant  agrees (a) to
comply  with all  federal,  state and  foreign  exchange  regulations  and other
government laws and regulations now or hereafter applicable to any L/C Document,
to  any  payments  under  or in  connection  with  any  L/C  Document,  to  each
transaction  under or in  connection  with any L/C  Document,  or to the import,
export, shipping or financing of the Property referred to in or shipped under or
in connection with any Credit,  and (b) to reimburse you for such amounts as you
may be required to expend as a result of such laws or regulations, or any change
therein  or in the  interpretation  thereof  by any court or  administrative  or
government   authority   charged  with  the   administration  of  such  laws  or
regulations.


         SECTION 9.  TAXES,  RESERVES  AND  CAPITAL  ADEQUACY  REQUIREMENTS.  In
addition to, and  notwithstanding any other provision of any L/C Document or any
Loan Document, in the event that any law, treaty, rule,  regulation,  guideline,
request,  order,  directive or determination (whether or not having the force of
law) of or from any government  authority,  including,  without limitation,  any
court, central bank or government regulatory authority, or any change therein or
in the interpretation or application  thereof,  (a) does or shall subject you to
any tax of any kind whatsoever with respect to the L/C Documents,  or change the
basis of taxation of payments to you of any amount  payable  thereunder  (except
for changes in the rate of tax on your net  income);  (b) does or shall  impose,
modify or hold applicable any reserve, special deposit,  assessment,  compulsory
loan,  Federal Deposit Insurance  Corporation  insurance or similar  requirement
against assets held by, deposits or other  liabilities in or for the account of,
advances or loans by, other credit extended by or any other acquisition of funds
by, any of your offices; (c) does or shall impose, modify or hold applicable any
capital adequacy  requirements  (whether or not having the force of law); or (d)
does or shall  impose on you any other  condition;  and the result of any of the
foregoing  is (i) to  increase  the cost to you of  issuing or  maintaining  any
Credit or of performing any transaction  under any L/C Document,  (ii) to reduce
any amount receivable by you under any L/C Document, or (iii) to reduce the rate
of return on your capital or the capital of the Holding Company to a level below
that  which  you  or the  Holding  Company  could  have  achieved  but  for  any
imposition,  modification  or  application of any capital  adequacy  requirement
(taking into consideration your policy and the policy of the Holding Company, as
the case may be, with  respect to capital  adequacy),  and any such  increase or
reduction is material (as determined by you or the Holding Company,  as the case
may be, in your or the Holding  Company's  sole  discretion);  then, in any such
case, Applicant agrees to pay to you or the Holding Company, as the case may be,
such  amount or amounts as may be  necessary  to  compensate  you or the Holding
Company  for (A) any such  additional  cost,  (B) any  reduction  in the  amount
received  by you under any L/C  Document,  or (C) to the  extent  allocable  (as
determined  by you or the  Holding  Company,  as the case may be, in your or the
Holding  Company's sole  discretion)  to any L/C Document,  any reduction in the
rate of return on yourcapital or the capital of the Holding Company.
<PAGE>

         SECTION 10.  COLLATERAL.  In addition to, and not in substitution  for,
any Property delivered,  conveyed, transferred or assigned to you under any Loan
Document as security for any or all of Applicant's  obligations  and liabilities
to you at any time existing under or in connection  with any L/C Document or any
Loan  Document,  Applicant  grants  to  you a  security  interest  in and to the
following  Collateral,  whether or not any such Collateral is in your possession
or control or the possession or control of your agents or  correspondents  or in
transit to, or set apart for, you or your agents or  correspondents,  until such
time as all Applicant's  obligations and liabilities to you at any time existing
under or in  connection  with each L/C Document and each Loan Document have been
fully paid and discharged, all as security for such obligations and liabilities,
(a) all Applicant's property,  claims, demands, right, title and interest in and
to the balance of each of  Applicant's  deposit  accounts with you now or at any
time hereafter  existing,  and all evidences of such deposit  accounts,  (b) all
Property  belonging to Applicant or in which it may have an interest,  now or at
any time hereafter delivered, conveyed,  transferred,  assigned, pledged or paid
to you or your agents or  correspondents  in any manner  whatsoever,  whether as
security or for safekeeping or otherwise,  including,  without  limitation,  any
items received for collection or  transmission,  and the proceeds of such items,
whether or not such  Property is in whole or in part  released to  Applicant  on
trust or bailee receipt or otherwise,  and (c) where  Applicant is more than one
person or entity,  all right, title and interest of each of Applicants in and to
all the Property which any of Applicants may now or hereafter obtain as security
for the  obligations  of any one or  more  of  Applicants  to one or more of the
others of  Applicants  arising under or in connection  with the  transaction  to
which any Credit relates.  Further, in addition to, and not in substitution for,
any Property delivered,  conveyed, transferred or assigned to you under any Loan
Document as security for any or all of Applicant's  obligations  and liabilities
to you at any time existing under or in connection  with any L/C Document or any
Loan Document,  Applicant agrees to deliver,  convey, transfer and assign to you
on demand, as security,  Property of a value and character  satisfactory to you,
(i) if you at any time feel insecure about Applicant's ability or willingness to
repay any amounts  which you have paid or may pay in the future on any Demand or
in  honoring  any  other of your  obligations  under or in  connection  with any
Credit,  or (ii)  without  limiting  the  generality  of the  foregoing,  if any
temporary or permanent  restraining order,  preliminary or permanent injunction,
or any other  pretrial or  permanent  injunctive  or similar  relief is obtained
restraining,  prohibiting or enjoining you, any of your  correspondents,  or any
advising,  confirming,   negotiating,  paying  or  other  bank  from  paying  or
negotiating any Demand or honoring any other  obligation  under or in connection
with any Credit.  Applicant agrees that the receipt by you or any of your agents
or  correspondents  at any  time of any  kind of  security,  including,  without
limitation,  cash,  shall not be deemed a waiver of any of your rights or powers
under this Agreement. Applicant agrees to sign and deliver to you on demand, all
such  deeds of  trust,  security  agreements,  financing  statements  and  other
documents as you shall at any time request  which are necessary or desirable (in
your sole opinion) to grant to you an effective and perfected  security interest
in and to any or all of the Collateral.  Applicant  agrees to pay all filing and
recording fees related to the perfection of any security interest granted to you
in accordance with this Section.  Applicant hereby agrees that any or all of the
Collateral  may be held and  disposed of as provided in this  Agreement  by you.
Upon any transfer,  sale, delivery,  surrender or endorsement of any Document or
Property  which is or was part of the  Collateral,  Applicant will indemnify and
hold you and your agents and  correspondents  harmless from and against each and
every claim,  demand,  action or suit which may arise against you or any of your
agents or correspondents by reason of such transfer,  sale, delivery,  surrender
or endorsement.
<PAGE>

         SECTION 11.  INDEMNIFICATION.  Except to the extent caused by your lack
of good  faith,  and  notwithstanding  any other  provision  of this  Agreement,
Applicant  agrees to reimburse and indemnify you for (a) all amounts paid by you
to any  Beneficiary  under  or in  connection  with  any  guarantee  or  similar
undertaking issued by such Beneficiary to a third party at Applicant's  request,
whether  such  request is  communicated  directly by Applicant or through you to
such Beneficiary;  and (b) all damages,  losses,  liabilities,  actions, claims,
suits,  penalties,  judgments,  obligations,  costs  or  expenses,  of any  kind
whatsoever and howsoever caused, including, without limitation,  attorneys' fees
and interest,  paid,  suffered or incurred by, or imposed upon,  you directly or
indirectly  arising out of or in connection with (i) any L/C Document,  any Loan
Document,  any Document or any Property referred to in or related to any Credit;
(ii)  Applicant's  failure  to comply  with any of its  obligations  under  this
Agreement;  (iii) the  issuance of any Credit;  (iv) the transfer of any Credit;
(v) any guarantee or similar undertaking, or any transactions thereunder, issued
by any Beneficiary to a third party at Applicant's request, whether such request
is communicated  directly by Applicant or through you to such Beneficiary;  (vi)
any communication made by you, on Applicant's  instructions,  to any Beneficiary
requesting that such Beneficiary  issue a guarantee or similar  undertaking to a
third party or the issuance of any such guarantee or similar undertaking;  (vii)
the collection of any amounts  Applicant owes to you under or in connection with
any L/C Document or any Loan Document;  (viii) the foreclosure against, or other
enforcement of, any Collateral; (ix) the protection,  exercise or enforcement of
your rights and  remedies  under or in  connection  with any L/C Document or any
Loan Document; (x) any court decrees or orders,  including,  without limitation,
temporary or permanent restraining orders, preliminary or permanent injunctions,
or any other pretrial or permanent  injunctive or similar  relief,  restraining,
prohibiting or enjoining or seeking to restrain,  prohibit or enjoin you, any of
your correspondents or any advising,  confirming,  negotiating,  paying or other
bank from  paying or  negotiating  any Demand or honoring  any other  obligation
under or in  connection  with any Credit;  or (xi) any Credit being  governed by
laws or rules  other  than the UCP in effect on the date such  Credit is issued.
The  indemnity  provided in this Section will  survive the  termination  of this
Agreement and the expiration or cancellation of any or all the Credits.

         SECTION  12.  LIMITATION  OF  LIABILITY.   Notwithstanding   any  other
provision   of  this   Agreement,   neither  you  nor  any  of  your  agents  or
correspondents  will have any liability to Applicant for any action,  neglect or
omission,  if done in good faith,  under or in connection with any L/C Document,
Loan  Document or Credit,  including,  without  limitation,  the issuance or any
amendment  of any  Credit,  the  failure  to issue or amend any  Credit,  or the
honoring or  dishonoring  of any Demand  under any  Credit,  and such good faith
action,  neglect or  omission  will bind  Applicant.  Notwithstanding  any other
provision  of any L/C  Document,  in no  event  shall  you or your  officers  or
directors be liable or responsible,  regardless of whether any claim is based on
contract or tort,  for (a) any special,  consequential,  indirect or  incidental
damages,  including,  without  limitation,  lost  profits,  arising out of or in
connection  with the  issuance of any Credit or any action taken or not taken by
you in connection with any L/C Document,  any Loan Document,  or any Document or
Property referred to in or related to any Credit; (b) the honoring of any Demand
in  accordance  with any  order or  directive  of any  court  or  government  or
regulatory body or entity requiring such honor despite any temporary restraining
order,  restraining order,  preliminary injunction,  permanent injunction or any
type of pretrial or permanent  injunctive relief or any similar relief,  however
named, restraining,  prohibiting or enjoining such honor; (c) the dishonoring of
any Demand in  accordance  with any legal or other  restriction  in force at the
time and in the place of presentment or payment;  (d) verifying the existence or
reasonableness  of any act or condition  referenced,  or any statement  made, in
connection with any drawing or presentment  under any Credit;  (e) the use which
may be made of any Credit;  (f) the  validity of any  purported  transfer of any
Credit or the identity of any purported  transferee of any Beneficiary;  (g) any
acts or omissions of any  Beneficiary  or any other user of any Credit;  (h) the
form,  validity,  sufficiency,  correctness,  genuineness or legal effect of any

<PAGE>

Demand or any Document,  or of any signatures or  endorsements  on any Demand or
Document,  even if any Demand or any Document  should in fact prove to be in any
or all respects invalid, insufficient,  fraudulent or forged; (i) payment by you
of any Demand  when the Demand and any  accompanying  Documents  appear on their
face to comply  substantially  with the terms of the Credit to which they relate
or dishonor by you of any Demand when the Demand and any accompanying  Documents
do not strictly  comply on their face with the terms of the Credit to which they
relate;  (j) the  failure of any Demand or  Document  to bear any  reference  or
adequate  reference  to the Credit to which it  relates;  (k) the failure of any
Document to  accompany  any  Demand;  (l) the failure of any person or entity to
note the  amount of any  Demand  on the  Credit  to which it  relates  or on any
Document;  (m) the failure of any person or entity to  surrender  or take up any
Credit;  (n) the  failure  of any  Beneficiary  to comply  with the terms of any
Credit or to meet the  obligations  of such  Beneficiary  to Applicant;  (o) the
failure of any person or entity to send or forward  Documents if and as required
by  the  terms  of  any  Credit;  (p)  any  errors,   inaccuracies,   omissions,
interruptions or delays in transmission or delivery of any messages,  directions
or correspondence by mail, cable, telegraph,  wireless or otherwise,  whether or
not they are in cipher; (q) any notice of nonrenewal of a Credit sent by you not
being received on time or at any time by the Beneficiary of such Credit; (r) any
inaccuracies in the translation of any messages,  directions or  correspondence;
(s) any Beneficiary's  use of the proceeds of any Demand;  (t) any Beneficiary's
failure to repay to you or Applicant  the proceeds of any Demand if the terms of
any Credit require such  repayment;  or (u) any act,  error,  neglect,  default,
negligence, gross negligence,  omission, willful misconduct, lack of good faith,
insolvency or failure in business of any of your agents or  correspondents or of
any advising, confirming,  negotiating,  paying or other bank. The occurrence of
any one or more of the contingencies referred to in the preceding sentence shall
not affect,  impair or prevent  the vesting of your rights or powers  under this
Agreement or any Loan Document or Applicant's  obligation to make  reimbursement
or payment to you under this Agreement or any Loan  Document.  The provisions of
this  Section  will  survive  the  termination  of this  Agreement  and any Loan
Documents and the expiration or cancellation of any or all the Credits.

         SECTION 13. EVENTS OF DEFAULT.  Each of the following shall  constitute
an Event of Default under this  Agreement:  (a)  Applicant's or any  Guarantor's
failure to pay any principal, interest, fee or other amount when due under or in
connection with any L/C Document or any Loan Document;  (b) Applicant's  failure
to deliver to you Property of a value and character  satisfactory  to you at any
time you have demanded  security from  Applicant  pursuant to Section 10 of this
Agreement; (c) the occurrence and continuance of any default or defined event of
default under any Loan Document or any other  agreement,  document or instrument
signed or made by Applicant or any Guarantor in your favor;  (d)  Applicant's or
any  Guarantor's  failure to perform or observe any term,  covenant or agreement
contained in this  Agreement or any Loan Document  (other than those referred to
in  subsections  (a),  (b) and (c) of this  Section,  or the breach of any other
obligation  owed by Applicant  or any  Guarantor to you, and any such failure or
breach shall be impossible to remedy or shall remain  unremedied for thirty (30)
calendar  days after  such  failure or breach  occurs;  (e) any  representation,
warranty or certification  made or furnished by Applicant or any Guarantor under
or in connection with any L/C Document, any Loan Document or any Collateral,  or
as an  inducement  to you to enter into any L/C Document or Loan  Document or to
accept any Collateral,  shall be materially false,  incorrect or incomplete when
made; (f) any material provision of this Agreement or any Loan Document shall at
any time for any  reason  cease to be valid  and  binding  on  Applicant  or any
Guarantor  or  shall  be  declared  to be null  and  void,  or the  validity  or
enforceability  thereof  shall be contested by  Applicant,  any Guarantor or any
government agency or authority, or Applicant or any Guarantor shall deny that it
has any or further  liability  or  obligation  under this  Agreement or any Loan
Document;  (g) Applicant's or any Guarantor's failure to pay or perform when due
any  indebtedness  or other  obligation  Applicant or such  Guarantor has to any
person  or  entity  other  than  you if such  failure  gives  the  payee of such
indebtedness  or the beneficiary of the performance of such obligation the right
to accelerate  the time of payment of such  indebtedness  or the  performance of
such  obligation;  (h)  any  guarantee  of,  or any  security  covering,  any of
Applicant's  indebtedness  to you arising  under or in  connection  with any L/C
Document or any Loan Document  fails to be in full force and effect at any time;

<PAGE>

(i) any material  adverse  change in Applicant's  or any  Guarantor's  financial
condition;  (j) Applicant or any Guarantor suspends the transaction of its usual
business or is expelled or suspended  from any  exchange;  (k)  Applicant or any
Guarantor dies or is incapacitated;  (l) Applicant or any Guarantor dissolves or
liquidates;  (m) Applicant or any Guarantor is not generally paying its debts as
they become due; (n) Applicant or any Guarantor becomes insolvent,  however such
insolvency  may be evidenced,  or Applicant or any  Guarantor  makes any general
assignment  for the benefit of creditors;  (o) a petition is filed by or against
Applicant or any Guarantor seeking  Applicant's or such Guarantor's  liquidation
or reorganization under the Bankruptcy Reform Act, Title 11 of the United States
Code, as amended or recodified from time to time, or a similar action is brought
by or against  Applicant or any  Guarantor  under any federal,  state or foreign
law; (p) a proceeding is instituted by or against Applicant or any Guarantor for
any relief under any bankruptcy,  insolvency or other law relating to the relief
of  debtors,  reorganization,  readjustment  or  extension  of  indebtedness  or
composition with creditors; (q) a custodian or a receiver is appointed for, or a
writ or order of attachment,  execution or garnishment is issued, levied or made
against,  any of  Applicant's  or any  Guarantor's  Property  or assets;  (r) an
application is made by any of Applicant's or any Guarantor's  judgment creditors
for an order  directing you to pay over money or to deliver other of Applicant's
or such Guarantor's Property; or (s) any government authority or any court takes
possession of any substantial part of Applicant's or any Guarantor's Property or
assets or assumes control over Applicant's or any Guarantor's affairs.

         SECTION 14. REMEDIES.  Upon the occurrence and continuance of any Event
of Default all amounts paid by you on any Demand which have not previously  been
repaid to you,  together with all interest on such  amounts,  and the Unpaid and
Undrawn  Balance,  if any, shall  automatically be owing by Applicant to you and
shall be due and payable by Applicant on demand without presentment or any other
notice of any kind,  including,  without  limitation,  notice of nonperformance,
notice  of  protest,  protest,  notice  of  dishonor,  notice  of  intention  to
accelerate,  or notice of  acceleration,  all of which are  expressly  waived by
Applicant. Upon payment of the Unpaid and Undrawn Balance to you Applicant shall
have no  further  legal  or  equitable  interest  therein,  and you  will not be
required to  segregate  on your books or records the Unpaid and Undrawn  Balance
paid by Applicant.  After you receive the Unpaid and Undrawn Balance,  you agree
to pay to Applicant,  upon  termination of all of your  liability  under all the
Credits and  Demands,  a sum equal to the amount  which has not been drawn under
all the Credits less all amounts due and owing to you from Applicant under or in
connection  with the L/C Documents  and the Loan  Documents.  Further,  upon the
occurrence and  continuance of any Event of Default,  you may sell  immediately,
without demand for payment,  advertisement or notice to Applicant,  all of which
are hereby expressly waived, any and all Collateral, received or to be received,
at private sale or public  auction or at brokers'  board or upon any exchange or
otherwise,  at your option, in such parcel or parcels, at such times and places,
for such prices and upon such terms and  conditions as you may deem proper,  and
you may apply the net proceeds of each sale, together with any sums due from you
to Applicant, to the payment of any and all obligations and liabilities due from
Applicant  to you under or in  connection  with the L/C  Documents  and the Loan
Documents,  all without  prejudice to your rights against Applicant with respect
to any and all such  obligations and liabilities  which may be or remain unpaid.
If any such sale be at brokers' board or at public auction or upon any exchange,
you may yourself be a purchaser at such sale free from any right of  redemption,
which Applicant hereby expressly waive and release. All your rights and remedies
existing  under the L/C Documents and the Loan Documents are in addition to, and
not  exclusive  of,  any rights or  remedies  otherwise  available  to you under
applicable  law.  In  addition  to any rights  now or  hereafter  granted  under

<PAGE>

applicable  law,  and not by way of  limitation  of any  such  rights,  upon the
occurrence and continuance of any Event of Default,  Applicant hereby authorizes
you at any time or from  time to time,  without  notice to  Applicant  or to any
other person (any such notice being hereby expressly waived by Applicant) and to
the extent permitted by law, to appropriate and to apply any and all Applicant's
deposits  (general  or  special,  including,  without  limitation,  indebtedness
evidenced by certificates of deposit) with you or elsewhere,  whether matured or
unmatured, and any other indebtedness at any time held or owing by you to or for
Applicant's  credit  or its  account,  against  and on  account  of  Applicant's
obligations  and  liabilities to you under or in connection  with any of the L/C
Documents or the Loan  Documents,  irrespective of whether or not you shall have
made any demand for payment of any or all such  obligations  and  liabilities or
declared any or all such obligations and liabilities to be due and payable,  and
although any or all such  obligations  and  liabilities  shall be  contingent or
unmatured.

         SECTION 15. WAIVERS. No delay,  extension of time, renewal,  compromise
or other  indulgence which may occur or be granted by you under any L/C Document
or any Loan Document  shall impair your rights or powers under this Agreement or
any Application. You shall not be deemed to have waived any of your rights under
this  Agreement or any  Application  unless such waiver is in writing  signed by
your  authorized  representative.  No such  waiver,  unless  expressly  provided
therein, shall be effective as to any transactions which occur subsequent to the
date of such waiver or as to the  continuance of any Event of Default after such
waiver. No amendment or modification of this Agreement shall be effective unless
it is in writing signed by Applicant's and your authorized representative(s).

         SECTION 16.  AMENDMENTS AND  MODIFICATIONS  TO CREDITS.  At Applicant's
verbal or written request,  or with Applicant's  verbal or written consent,  and
without extinguishing or otherwise affecting Applicant's  obligations under this
Agreement or any Loan Document,  you may with respect to any Credit,  in writing
or by any other  action,  but you will not be  obligated  to, (a)  increase  the
amount of such  Credit,  (b) extend the time for,  and amend or modify the terms
and conditions  governing,  the making and honoring of any Demand or Document or
any other terms and  conditions of such Credit,  or (c) waive the failure of any
Demand or Document to comply with the terms of such Credit,  and any  Collateral
pledged or granted to you in connection with such Credit will secure Applicant's
obligations  to you with respect to such Credit as amended,  modified or waived.
No  amendment  to, or  modification  of,  the terms of any  Credit  will  become
effective if the  Beneficiary of such Credit or any  confirming  bank objects to
such  amendment  or  modification.  If any  Credit is  amended  or  modified  in
accordance with this Section,  Applicant shall be bound by, and obligated under,
the  provisions of this  Agreement  with respect to such Credit as so amended or
modified, and any action taken by you or any advising, confirming,  negotiating,
paying or other bank in accordance with such amendment or modification.

         SECTION 17.  SUCCESSORS  AND ASSIGNS.  The terms and conditions of this
Agreement  and  each  Application  shall  bind  Applicant's  heirs,   executors,
administrators,  successors and assigns, and all rights, benefits and privileges
conferred  on you under or in  connection  with each L/C  Document and each Loan
Document shall be and hereby are extended to, conferred upon and may be enforced
by your  successors  and assigns.  Applicant  will not assign this  Agreement or
Applicant's  obligations or  liabilities to you under or in connection  with any
L/C Document or Loan Document to any person or entity without your prior written
approval.

         SECTION 18.  GOVERNING  LAW. This Agreement and each  Application,  and
Applicant's  and your  performance  under this  Agreement and each  Application,
shall be governed by and be construed in  accordance  with the laws of the State
of California.  Unless you otherwise specifically agree in writing, each Credit,
the opening of each Credit,  the  performance by you under each Credit,  and the
performance by the Beneficiary and any advising, confirming, negotiating, paying
or other  bank under each  Credit,  shall be  governed  by and be  construed  in
accordance with the UCP in force on the date of the issuance of each Credit.  In
the event that any Credit issued  pursuant to this  Agreement  states that it is
governed by the laws of a jurisdiction other than the State of California,  then
your performance under such Credit shall be governed.
<PAGE>

         SECTION 19.  JURISDICTION AND SERVICE OF PROCESS.  Any suit,  action or
proceeding  against  Applicant under or with respect to any L/C Document may, at
your sole option,  be brought in (a) the courts of the State of California,  (b)
the United States District  Courts in California,  (c) the courts of Applicant's
jurisdiction  of  incorporation  or principal  office,  or (d) the courts of the
jurisdiction  where any  Beneficiary,  any  advising,  confirming,  negotiating,
paying or other bank, or any other person or entity has brought any suit, action
or  proceeding  against  you with  respect  to any  Credit  or any  Demand,  and
Applicant hereby submits to the nonexclusive jurisdiction of such courts for the
purpose of any such suit,  action,  proceeding  or judgment and waives any other
preferential  jurisdiction by reason of domicile.  Applicant will accept joinder
in any suit, action or proceeding  brought in any court or jurisdiction  against
you by any Beneficiary, any advising, confirming,  negotiating,  paying or other
bank or any other  person or entity  with  respect to any Credit or any  Demand.
Applicant irrevocably waives trial by jury and any objection, including, without
limitation,  any objection of the laying of venue or any objection  based on the
grounds of forum non  conveniens,  which  Applicant may now or hereafter have to
the  bringing of any such action or  proceeding.  Applicant  further  waives any
right to transfer or change the venue of any suit, action or proceeding  brought
against Applicant by you under or in connection with any L/C Document. Applicant
irrevocably  consents to the service of process in any action or  proceeding  in
any court by the mailing of copies  thereof by  registered  or  certified  mail,
postage prepaid,  to Applicant at its address specified next to its signature on
this Agreement or at such other address as Applicant  shall have notified to you
in writing, such service to be effective ten (10) days after such mailing.

         SECTION 20. JOINT APPLICANTS.  If this Agreement is signed by more than
one person and/or entity as an Applicant,  this  Agreement and the  Applications
shall be the joint and several agreement of all such persons and/or entities and
that all references to "Applicant"  or  "Applicant's"  in this Agreement and the
Applications  shall  refer to all  such  persons  and/or  entities  jointly  and
severally.

         SECTION 21.  SEVERABILITY.  Any provision of any L/C Document  which is
prohibited  or  unenforceable  in any  jurisdiction  shall  be,  only as to such
jurisdiction, ineffective to the extent of such prohibition or unenforceability,
but all the  remaining  provisions  of such L/C  Document  and all the other L/C
Documents shall remain valid.

         SECTION 22.  HEADINGS.  The  headings  used in this  Agreement  are for
convenience  of reference  only and shall not define or limit the  provisions of
this Agreement.

         SECTION  23.  CREDIT   AGREEMENT.   This   Agreement  and  any  related
Application  have been entered  into  pursuant to the Secured  Credit  Agreement
dated August 14, 2003, among Applicant, as Borrower,  Wells Fargo, as Agent, and
other financial institutions (the "Credit Agreement"). For so long as the Credit
Agreement remains in effect,  the provisions of Sections 4, 5, 6, 9, 10, 13, 14,
and 15 of this  Agreement  shall not be effective.  In the event that the Credit
Agreement is terminated and any Credit remains outstanding,  then the provisions
of Sections 4, 5, 6, 9, 10, 13, 14, and 15 hereof shall  thereafter apply to all
outstanding Credits until the obligations of the Applicant  thereunder have been
satisfied in full.
<PAGE>


     ADDITIONAL PROVISIONS APPLICABLE IF THE APPLICANT IS LOCATED IN OREGON
     ----------------------------------------------------------------------

         Section  Oregon 1. UNDER  OREGON LAW,  MOST  AGREEMENTS,  PROMISES  AND
COMMITMENTS  MADE BY A LENDER AFTER OCTOBER 3, 1989  CONCERNING  LOANS AND OTHER
CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL,  FAMILY, OR HOUSEHOLD  PURPOSES OR
SECURED  SOLELY  BY  THE  BORROWER'S  RESIDENCE  MUST  BE  IN  WRITING,  EXPRESS
CONSIDERATION, AND BE SIGNED BY THE LENDER TO BE ENFORCEABLE.

   ADDITIONAL PROVISIONS APPLICABLE IF THE APPLICANT IS LOCATED IN WASHINGTON
   --------------------------------------------------------------------------

         Section  Washington  1. ORAL  AGREEMENTS  OR ORAL  COMMITMENTS  TO LOAN
MONEY,  EXTEND  CREDIT OR FOREBEAR  FROM  ENFORCING  REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.

    ADDITIONAL PROVISIONS APPLICABLE IF THE APPLICANT IS LOCATED IN NEBRASKA
    ------------------------------------------------------------------------

         Section  Nebraska 1.  ENFORCEABILITY  OF WRITTEN  TERMS ONLY.  A CREDIT
AGREEMENT  MUST BE IN WRITING TO BE  ENFORCEABLE  UNDER NEBRASKA LAW. TO PROTECT
THE  PARTIES  FROM  ANY  MISUNDERSTANDINGS  OR  DISAPPOINTMENTS,  ANY  CONTRACT,
PROMISE,  UNDERTAKING  OR OFFER TO  FOREBEAR  REPAYMENT  OF MONEY OR TO MAKE ANY
OTHER FINANCIAL  ACCOMMODATION IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR
EXTENSION  OF  CREDIT,  OR ANY  AMENDMENT  OF,  CANCELLATION  OF,  WAIVER OF, OR
SUBSTITUTION  FOR ANY OR ALL OF THE TERMS OR  PROVISIONS  OF ANY  INSTRUMENT  OR
DOCUMENT EXECUTED IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF
CREDIT, MUST BE IN WRITING TO BE EFFECTIVE.

      ADDITIONAL PROVISIONS APPLICABLE IF THE APPLICANT IS LOCATED IN IOWA
      --------------------------------------------------------------------

         Section  Iowa 1.  IMPORTANT:  READ  BEFORE  SIGNING.  THE TERMS OF THIS
AGREEMENT  SHOULD BE READ  CAREFULLY  BECAUSE  ONLY THOSE  TERMS IN WRITING  ARE
ENFORCEABLE.  NO OTHER TERMS OR ORAL  PROMISES  NOT  CONTAINED  IN THIS  WRITTEN
CONTRACT  MAY BE LEGALLY  ENFORCED.  YOU MAY CHANGE THE TERMS OF THIS  AGREEMENT
ONLY BY ANOTHER WRITTEN AGREEMENT.

      ADDITIONAL PROVISIONS APPLICABLE IF APPLICANT IS LOCATED IN MISSOURI
      --------------------------------------------------------------------

         ORAL  AGREEMENTS OR  COMMITMENTS TO LOAN MONEY,  EXTEND  CREDIT,  OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW
SUCH DEBT ARE NOT  ENFORCEABLE.  TO PROTECT YOU  (BORROWER)  AND US (LENDERS AND
AGENT) FROM MISUNDERSTANDING OR DISAPPOINTMENT,  ANY AGREEMENT WE REACH COVERING
SUCH MATTERS ARE CONTAINED IN THIS WRITING,  WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE  AGREEMENT  BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.
<PAGE>


         Section  Iowa 2. By  signing  this  Agreement,  Applicant  acknowledges
receipt of a copy of this Agreement.


<TABLE>
<CAPTION>


         This Agreement is signed by Applicant's duly authorized  representative or representatives on the date specified below.




<S>              <C>                                                             <C>
                 ------------------------------------------------                -------------------------------------------------
                               [Applicant's Name]                                               [Applicant's Name]

            By:                                                             By:
                 ------------------------------------------------                -------------------------------------------------

         Title:                                                          Title:
                 ------------------------------------------------                -------------------------------------------------


                 ------------------------------------------------                -------------------------------------------------
                                    Signature                                                       Signature

       Address:                                                        Address:
                 ------------------------------------------------                -------------------------------------------------

                 ------------------------------------------------                -------------------------------------------------

                 ------------------------------------------------                -------------------------------------------------

          Date:                                                           Date:
                 ------------------------------------------------                -------------------------------------------------

</TABLE>










<PAGE>


                                    EXHIBIT E


                                    GUARANTY


                                                       -------------, ----------


                                                                 August 14, 2003


         This Guaranty is made as of the above date by the undersigned,  The San
Francisco  Company,  a  Delaware  corporation,  in favor of  Wells  Fargo  Bank,
National Association, a national banking association, as Agent for the "Lenders"
pursuant to the Secured Credit Agreement described below.


                                    RECITALS



         First Banks,  Inc. (the  "Borrower"),  the Agent and certain  financial
institutions  have executed a secured  credit  agreement  dated as of August 14,
2003,  (the  "Secured  Credit  Agreement"),  pursuant  to which  such  financial
institutions  (the  "Lenders")  have  agreed  to lend up to  $60,000,000  to the
Borrower and  pursuant to which the Agent has agreed to issue up to  $20,000,000
in face amount of standby letters of credit for the account of the Borrower.

         One condition to the Lenders' and Agent's  commitment under the Secured
Credit  Agreement  is that the  undersigned  execute,  deliver and perform  this
Guaranty,  thereby  guaranteeing  the  payment  and  performance  of all  debts,
liabilities and obligations of the Borrower to the Agent and the Lenders arising
out of the Secured Credit Agreement and any extensions, renewals or replacements
thereof (the "Indebtedness").

         Now,  therefore,  in  consideration  of the premises,  the  undersigned
hereby agrees as follows:

         1. No act or  thing  need  occur  to  establish  the  liability  of the
undersigned hereunder, and no act or thing, except full payment and discharge of
all Indebtedness,  shall in any way exonerate the undersigned or modify, reduce,
limit, or release the liability of the undersigned hereunder.

         2.  This is an  absolute,  unconditional  and  continuing  guaranty  of
payment of the  Indebtedness  and shall  continue  to be in force and be binding
upon the  undersigned,  whether or not all  Indebtedness is paid in full,  until
this Guaranty is revoked  prospectively  as to future  transactions,  by written
notice  actually  received  by the  Agent,  and  such  revocation  shall  not be
effective as to  Indebtedness  existing or  committed  for at the time of actual
receipt  of such  notice by the Agent,  or as to any  renewals,  extensions  and
refinancings thereof.

         3.  If the  undersigned  shall  be  dissolved  or  shall  be or  become
insolvent  then the Agent  shall have the right to declare  immediately  due and
payable, and the undersigned will forthwith pay to the Agent, the full amount of
all  Indebtedness,  whether due and  payable or  unmatured.  If the  undersigned
voluntarily   commences  or  there  is  commenced   involuntarily   against  the
undersigned a case under the United States  Bankruptcy  Code, the full amount of
all Indebtedness, whether due and payable or unmatured, shall be immediately due
and payable without demand or notice thereof.

         4. The undersigned  shall be liable for all  Indebtedness,  without any
limitation as to amount,  plus accrued interest thereon and all attorneys' fees,
collection costs and enforcement expenses referable thereto. Indebtedness may be
created and continued in any amount,  whether or not in excess of such principal
amount,  without  affecting  or  impairing  the  liability  of  the  undersigned
hereunder. The Agent may apply any sums received by or available to the Agent on
account of the  Indebtedness  from  Borrower  or any other  person  (except  the
undersigned),  from their properties, out of any collateral security or from any
other source to payment of the excess.  Such  application  of receipts shall not
reduce, affect or impair the liability of the undersigned hereunder.
<PAGE>

         5.  The  undersigned   will  not  exercise  or  enforce  any  right  of
contribution,   reimbursement,   recourse  or   subrogation   available  to  the
undersigned  against any person liable to payment of the Indebtedness,  or as to
any collateral security therefor, unless and until all of the Indebtedness shall
have been fully paid and discharged.

         6. The  undersigned  will pay or reimburse  the Agent for all costs and
expenses (including  reasonable  attorneys' fees and legal expenses) incurred by
the Agent in connection  with the  protection,  defense or  enforcement  of this
Guaranty in any litigation or bankruptcy or insolvency proceedings.

         7. Whether or not any existing relationship between the undersigned and
Borrower  has been  changed or ended and whether or not this  Guaranty  has been
revoked,  the Agent may, but shall not be obligated to, enter into  transactions
resulting in the creation or continuance of Indebtedness, without any consent or
approval  by the  undersigned  and without  any notice to the  undersigned.  The
liability  of the  undersigned  shall not be  affected or impaired by any of the
following acts or things (which the Agent is expressly authorized to do, omit or
suffer from time to time,  both before and after  revocation  of this  Guaranty,
without  notice  to or  approval  by the  undersigned):  (i) any  acceptance  of
collateral security,  guarantors,  accommodation  parties or sureties for any or
all  Indebtedness;  (ii) any one or more  extensions or renewals of Indebtedness
(whether or not for longer than the original  period) or any modification of the
interest  rates,  maturities  or  other  contractual  terms  applicable  to  any
Indebtedness;  (iii) any waiver or indulgence granted to Borrower,  any delay or
lack  of  diligence  in the  enforcement  of  Indebtedness,  or any  failure  to
institute  proceedings,  file a claim,  give any  required  notices or otherwise
protect any Indebtedness,  (iv) any full or partial release of, settlement with,
or agreement not to sue,  Borrower or any other guarantor or other person liable
in  respect  of  any  Indebtedness;   (v)  any  discharge  of  any  evidence  of
Indebtedness  or  the  acceptance  of  any  instrument  in  renewal  thereof  or
substitution therefor; (vi) any failure to obtain collateral security (including
rights of  setoff)  for  Indebtedness,  or to see to the  proper  or  sufficient
creation and perfection  thereof,  or to establish the priority  thereof,  or to
protect,  insure,  or enforce  any  collateral  security;  or any  modification,
substitution,  discharge,  impairment, or loss of any collateral security; (vii)
any foreclosure or enforcement of any collateral  security;  (viii) any transfer
of any  Indebtedness or any evidence  thereof;  (ix) any order of application of
any payments or credits upon  Indebtedness;  (x) any election by the Agent under
ss. 1111(b)(2) of the United States Bankruptcy Code.

         8. The undersigned  waives any and all defenses,  claims and discharges
of  Borrower,  or any other  obligor,  pertaining  to  Indebtedness,  except the
defense of discharge by payment in full.  Without limiting the generality of the
foregoing,  the undersigned will not assert,  plead or enforce against the Agent
any defense of waiver, release, discharge in bankruptcy, statute of limitations,
res judicata,  statute of frauds,  anti-deficiency  statute, fraud,  incapacity,
minority,  usury,  illegality  or  unenforceability  which may be  available  to
Borrower  or any other  person  liable in  respect of any  Indebtedness,  or any
setoff available against the Agent to Borrower or any such other person, whether
or not on account of a related  transaction.  The undersigned  expressly  agrees
that the  undersigned  shall be and remain liable for any  deficiency  remaining
after foreclosure of any mortgage or security  interest  securing  Indebtedness,
whether  or not  the  liability  of  Borrower  or any  other  obligor  for  such
deficiency is discharged pursuant to statute or judicial decision.

         9. The undersigned waives  presentment,  demand for payment,  notice of
dishonor or nonpayment,  and protest of any instrument evidencing  Indebtedness.
The Agent shall not be required first to resort for payment of the  Indebtedness
to Borrower or other persons or their properties,  or first to enforce,  realize
upon or exhaust any collateral security for Indebtedness,  before enforcing this
Guaranty.
<PAGE>

         10. If any payment  applied by the Agent to  Indebtedness is thereafter
set aside,  recovered,  rescinded  or  required  to be  returned  for any reason
(including, without limitation, the bankruptcy,  insolvency or reorganization of
Borrower  or any other  obligor),  the  Indebtedness  to which such  payment was
applied shall for the purposes of this  Guaranty be deemed to have  continued in
existence,   notwithstanding  such  application,  and  this  Guaranty  shall  be
enforceable as to such  Indebtedness  as fully as if such  application had never
been made.

         11. The liability of the undersigned under this Guaranty is in addition
to and shall be cumulative with all other  liabilities of the undersigned to the
undersigned  as guarantor or  otherwise,  without any  limitation  as to amount,
unless the instrument or agreement  evidencing or creating such other  liability
specifically provides to the contrary.

         12.  This  Guaranty  shall be  effective  upon  delivery  to the Agent,
without further act, condition or acceptance by the Agent, shall be binding upon
the  undersigned  and the  successors and assigns of the  undersigned  and shall
inure  to the  benefit  of the  Agent  and  the  Lenders  and  their  respective
participants,  successors and assigns. Any invalidity or unenforceability of any
provision  or  application  of this  Guaranty  shall  not  affect  other  lawful
provisions  and  application  hereof,  and to this  end the  provisions  of this
Guaranty  are  declared  to be  severable.  This  Guaranty  may  not be  waived,
modified, amended, terminated, released or otherwise changed except by a writing
signed by the undersigned and the Agent.  This Guaranty shall be governed by the
laws of the State of  Missouri.  The  undersigned  waives  notice of the Agent's
acceptance hereof and waives the right to a trial by jury in any action based on
or pertaining to this Guaranty.

         In witness  whereof,  the  undersigned has executed this Guaranty as of
the day and year first above written.



                                          THE SAN FRANCISCO COMPANY



                                          By
                                             -----------------------------------
                                              Its
                                                  ------------------------------



<PAGE>


                                    EXHIBIT F


                    SAN FRANCISCO COMPANY SECURITY AGREEMENT

         This  Agreement  is made as of this 14th day of  August,  2003,  by and
between THE SAN FRANCISCO COMPANY, a Delaware  Corporation  ("Debtor") and WELLS
FARGO BANK, NATIONAL ASSOCIATION,  a national banking association,  as Agent for
the "Lenders" pursuant to the Secured Credit Agreement described below ("Secured
Party").


                                    RECITALS



         First Banks, Inc. (the "Borrower"), Secured Party and certain financial
institutions  have executed a secured  credit  agreement  dated as of August 14,
2003, (the "Credit  Agreement"),  pursuant to which such financial  institutions
(the  "Lenders")  have agreed to lend up to $60,000,000 to Borrower and pursuant
to which Secured Party has agreed to issue up to  $20,000,000  in face amount of
standby letters of credit for the account of Borrower.

         One condition to the Lenders' and Secured Party's commitments under the
Credit  Agreement is that Debtor  execute,  deliver and perform this  Agreement,
thereby granting a security interest to Secured Party, as agent for the Lenders,
in the Collateral described herein.

         Now,  therefore,  in  consideration  of the  premises  and  the  mutual
agreements herein set forth, the parties hereto hereby agree as follows:

         1.  Security  Interest  and  Collateral.  To  secure  the  payment  and
performance  of the  "Obligations,"  as  such  term  is  defined  in the  Credit
Agreement,  Debtor hereby grants Secured Party (for its own account and as agent
for the Lenders) a security interest (the "Security Interest") in (i) all of the
capital stock of First Bank, a Missouri  state bank,  owned by Debtor,  and (ii)
any capital stock that Debtor may hereafter acquire and deliver to Secured Party
pursuant to Section 5.08 of the Credit Agreement, and (iii) all proceeds of such
capital   stock  and  all  other  rights  in   connection   with  such  property
(collectively the "Collateral").

         2. Representations,    Warranties  and  Covenants.  Debtor  represents,
warrants and covenants that:

            (a)     Debtor  will join with  Secured  Party in taking  any action
         required by Secured  Party  in order to perfect the  Security  Interest
         and to protect the rights  and priorities of Secured Party with respect
         to the Collateral.  To that end, Debtor has delivered  to Secured Party
         certificates   representing   all  of   the  shares  of  capital  stock
         constituting  Collateral  and executed  and  delivered  one blank stock
         power for each such  certificate.  Debtor   will,  at  Secured  Party's
         request at any one or more times  (i) duly endorse,  in blank, each and
         every  additional  security   certificate  and instrument  constituting
         Collateral by signing on such  certificate  or instrument or by signing
         a separate document of assignment or  transfer;  (ii) join with Secured
         Party in  executing  any  instructions  or agreements  with  securities
         intermediaries  for  the purpose of obtaining control of any investment
         property that may  hereafter constitute Collateral;  and (iii) instruct
         the issuer of any  security that may hereafter constitute Collateral to
         register such security in the name of Secured Party.


<PAGE>

            (b)    Debtor is the owner of the  Collateral  free and clear of all
         liens,  encumbrances,  security  interests and restrictions  except the
         Security  Interest and any restrictive legend appearing on any security
         certificate or any instrument constituting Collateral.

            (c)    Debtor will keep the Collateral  free and clear of all liens,
         encumbrances and security interests, except the Security Interest.

            (d)    Debtor will pay,  when due, all taxes and other  governmental
         charges levied or assessed upon or against any Collateral.

            (e)    Debtor  will  upon  receipt  deliver  to  Secured  Party  all
         investment  property  distributed  on  account of  Collateral,  such as
         stock   dividends  and   securities   resulting   from  stock   splits,
         reorganizations  and  recapitalizations.  The  Security  Interest shall
         attach to all such proceeds.

         3. Events of Default.  The occurrence of any Event of Default under the
Credit Agreement shall be an Event of Default hereunder.

         4. Remedies Upon Event of Default.  Upon the  occurrence of an Event of
Default and during the continuance  thereof,  Secured Party may exercise any one
or more of the rights and remedies  specified in the Credit Agreement,  and also
any one or more of the following  rights or remedies:  (i) notify the obligor on
or issuer of any  Collateral or any securities  intermediary  to make payment to
Secured  Party of any  amounts  due or  distributable  on any  Collateral,  (ii)
receive and keep in its possession or under its control  subject to the Security
Interest all proceeds of  Collateral,  except that any money  received  from the
Collateral  may,  at Secured  Party's  option,  be applied in  reduction  of the
Obligations;  (iii)  exercise  all  voting  and other  rights as a holder of any
Collateral;  (iv) exercise and enforce any or all rights and remedies  available
upon default to a secured party under the Uniform Commercial Code, including the
right to (A) order any  securities  intermediary  to sell any  Collateral on any
established  market  or over  the  counter  or to  cause  any  Collateral  to be
redeemed; (B) give any transfer or redemption order to any issuer of Collateral;
or (C) offer and sell Collateral  privately to purchasers who will agree to take
the Collateral for investment and not with a view to  distribution  and who will
agree to the imposition of restrictive legends on any certificates  representing
Collateral, and the right to arrange for a sale which would otherwise qualify as
exempt from  registration  under the  Securities  Act of 1933;  and if notice to
Debtor of any intended disposition of Collateral or any other intended action is
required  by  law  in  a  particular  instance,  such  notice  shall  be  deemed
commercially  reasonable if given at least 10 calendar days prior to the date of
intended  disposition  or other  action;  and (v) exercise or enforce any or all
other rights or remedies  available to Secured Party by law or agreement against
any Collateral, against Debtor or against any other person or property.

         5. Secured Party's Duties. Secured Party's duty of care with respect to
Collateral in its  possession  (as imposed by law) shall be deemed  fulfilled if
Secured  Party  exercises   reasonable  care  in  physically   safekeeping  such
Collateral,  or in the case of  Collateral  in the  custody or  possession  of a
securities intermediary or other third person,  exercises reasonable care in the
selection of the securities intermediary or other third person and Secured Party
need not otherwise preserve, protect, insure or care for any Collateral. Secured
Party shall not be  obligated  to preserve  any rights  Debtor may have  against
prior parties,  to exercise at all or in any particular manner any voting rights
which may be  available  with  respect  to any  Collateral,  to  realize  on the
Collateral  at all or in any  particular  manner or order,  or to apply any cash
proceeds of Collateral in any particular order of application. Regardless of the
manner in which  Secured  Party  chooses to  exercise  control  over  Collateral
(whether by possession,  by agreement with an issuer or Securities Intermediary,
by  transferring  security  entitlements  into its own account,  or  otherwise),
Secured Party shall not be deemed to be under any obligation to Debtor,  whether
as fiduciary,  trustee,  agent or otherwise,  except the duty of good faith, the
duties specifically imposed upon Secured Party by this Agreement, and the duties
imposed  upon  it as a  secured  party  by  Articles  1, 8 and 9 of the  Uniform
Commercial Code, as in effect in Missouri.

<PAGE>

         6. Miscellaneous.  Any disposition of Collateral in the manner provided
in Section 4 shall be deemed  commercially  reasonable.  This  Agreement  can be
waived, modified,  amended,  terminated or discharged, and the Security Interest
can be released,  only explicitly in a writing signed by Secured Party. A waiver
signed by Secured Party shall be effective only in the specific instance and for
the specific purpose given.  Mere delay or failure to act shall not preclude the
exercise or enforcement of any of Secured Party's rights or remedies. All rights
and  remedies  of  Secured  Party  shall  be  cumulative  and  may be  exercised
singularly  or  concurrently,  at Secured  Party's  option,  and the exercise or
enforcement  of any one such right or remedy shall neither be a condition to nor
bar the exercise or enforcement of any other.  All notices to be given to Debtor
shall be deemed  sufficiently  given if  delivered  or mailed by  registered  or
certified mail,  postage  prepaid,  to Debtor at the address set forth following
its  signature  on the  signature  page of this  Agreement or at the most recent
address shown on Secured Party's  records.  Debtor will reimburse  Secured Party
for all  expenses  (including  reasonable  attorneys'  fees and legal  expenses)
incurred  by Secured  Party in the  protection,  defense or  enforcement  of the
Security  Interest,  including expenses incurred in any litigation or bankruptcy
or insolvency proceedings. This Agreement shall be binding upon and inure to the
benefit of Debtor and Secured Party and their  successors  and assigns and shall
take effect when signed by Debtor and  delivered  to Secured  Party,  and Debtor
waives notice of Secured  Party's  acceptance  hereof.  This Agreement  shall be
governed by the  internal  laws of Missouri  and,  unless the context  otherwise
requires,  all terms used herein which are defined in Articles 1, 8 and 9 of the
Uniform  Commercial  Code,  as in effect in  Missouri,  shall have the  meanings
therein  stated.  If any  provision  or  application  of this  Agreement is held
unlawful or  unenforceable in any respect,  such illegality or  unenforceability
shall not affect other provisions or applications which can be given effect, and
this Agreement shall be construed as if the unlawful or unenforceable  provision
or  application  had never  been  contained  herein or  prescribed  hereby.  All
representations  and warranties  contained in this  Agreement  shall survive the
execution,  delivery  and  performance  of this  Agreement  and the creation and
payment of the Obligations.

         IN WITNESS  WHEREOF,  Debtor has executed this  Agreement as of the day
first above written.


                                        THE SAN FRANCISCO COMPANY


Address:




                                        By
--------------------------------          --------------------------------------
                                           Its
--------------------------------              ----------------------------------

--------------------------------

<PAGE>

                                    EXHIBIT G


                                      NOTE


$_________________                                           St. Louis, Missouri
                                                                 August 19, 2003

         For value  received,  the  undersigned  FIRST  BANKS,  INC., a Missouri
corporation  (the  "Borrower"),  hereby promises to pay on the Revolving  Credit
Termination  Date (as defined in the Credit  Agreement,  defined below),  to the
order of _____________,  a _____________ (the "Lender"),  at the office of Wells
Fargo Bank,  National  Association,  as agent (the  "Agent") at Sixth Street and
Marquette Avenue,  Minneapolis,  Minnesota,  or at any other place designated at
any time in accordance with the Credit Agreement,  in lawful money of the United
States of America and in  immediately  available  funds,  the  principal  sum of
_______________  Dollars  ($______________)  or, if less,  the aggregate  unpaid
principal  amount of all Advances  made by the Lender to the Borrower  under the
Credit  Agreement  together  with  interest on the  principal  amount  hereunder
remaining  unpaid from time to time (the "Principal  Balance"),  computed on the
basis of the actual  number of days  elapsed and a 360-day  year,  from the date
hereof  until this Note is fully paid at the rate  determined  from time to time
under the Credit  Agreement of even date herewith (as amended,  supplemented  or
restated from time to time,  the "Credit  Agreement") by and among the Borrower,
the Lenders  from time to time party  thereto  and Wells  Fargo  Bank,  National
Association,  as Agent for the Lenders thereunder. This Note may be prepaid only
in accordance with the Credit Agreement.

         This Note is issued pursuant,  and is subject, to the Credit Agreement,
which provides,  among other things,  for  acceleration  hereof.  This Note is a
"Note" referred to in the Credit Agreement.

         This Note is  secured,  among  other  things,  pursuant  to the several
security agreements  delivered pursuant to the Credit Agreement,  and may now or
hereafter  be  secured  by  one or  more  other  security  agreements  or  other
instruments or agreements.

         The Borrower  hereby agrees to pay all costs of  collection,  including
reasonable attorneys' fees and legal expenses in the event this Note is not paid
when due, whether or not legal proceedings are commenced.

         Presentment or other demand for payment, notice of dishonor and protest
are expressly waived.


                                          FIRST BANKS, INC.




                                          By ___________________________________


                                             Its _______________________________




<PAGE>


                                    EXHIBIT H


                             PERMISSIBLE SECURITIES



The following qualify as "Permissible Securities:"


                                                            Valuation Percentage
                                                            --------------------


A. Cash                                                             100%


B. (x) Negotiable debt obligations issued by the U.S. Treasury Department or the
Government National Mortgage  Association ("Ginnie Mae"), or (y) mortgage-backed
securities issued by Ginnie Mae (but with respect to either (x) or (y) excluding
interest only or principal  only stripped  securities,  securities  representing
residual  interests in mortgage  pools,  and securities that are not listed on a
national  securities  exchange  or  regularly  quoted  in a  national  quotation
service) and in each case having a remaining maturity of:


         (i)    less than one year                                  100%


         (ii)   one year or greater but less than 10 years           98%


         (iii)  ten years or longer                                  95%


C. (x)  Negotiable  debt  obligations  issued by the Federal Home Loan  Mortgage
Association ("Freddie Mac") or (y) mortgage-backed  securities issued by Freddie
Mac  but  excluding  interest  only  or  principal  only  stripped   securities,
securities  representing  residual  interests in mortgage pools,  and securities
that are not listed on a national  securities  exchange or regularly quoted in a
national quotation service.                                          95%



<PAGE>

                                    EXHIBIT I
                         Notice of Permitted Acquisition

         This  Notice is being  submitted  on this ___ day of  ________,  200__,
pursuant to Section  5.10 of the  Secured  Credit  Agreement  dated as of August
(DATE), 2003 (the "Credit  Agreement"),  by and among Wells Fargo Bank, National
 ----
Association  (the  "Agent"),  the Lenders  that are parties  thereto,  and First
Banks,  Inc., as Borrower.  Capitalized  terms used but not defined herein shall
have the meanings set forth in the Credit Agreement.

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

         The undersigned officer hereby certifies to the Lenders that:

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

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

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

         Signed as of the day and year first above written.

                                              FIRST BANKS, INC.


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