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, 2002

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

               For the transition period from _______ to ________

                           Commission File No. 0-20632

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

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

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

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

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

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


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


                                                        Shares Outstanding
                Class                                   at October 31, 2002
                -----                                   -------------------
    Common Stock, $250.00 par value                           23,661


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                                FIRST BANKS, INC.

                                TABLE OF CONTENTS





                                                                                                             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.......................................................          16

   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

CERTIFICATIONS......................................................................................        33 - 36

</TABLE>

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                         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,
                                                                                          2002            2001
                                                                                          ----            ----
                                                                                       (unaudited)

                                      ASSETS
                                      ------


Cash and cash equivalents:
<S>                                                                                   <C>                  <C>
     Cash and due from banks.......................................................   $    165,251         181,522
     Interest-bearing deposits with other financial institutions
       with maturities of three months or less.....................................          2,093           4,664
     Federal funds sold............................................................         79,300          55,688
                                                                                      ------------     -----------
          Total cash and cash equivalents..........................................        246,644         241,874
                                                                                      ------------     -----------

Investment securities:
     Available for sale, at fair value.............................................        895,491         610,466
     Held to maturity, at amortized cost (fair value of $20,037 and $20,812
       at September 30, 2002 and December 31, 2001, respectively)..................         19,384          20,602
                                                                                      ------------     -----------
          Total investment securities..............................................        914,875         631,068
                                                                                      ------------     -----------

Loans:
     Commercial, financial and agricultural........................................      1,610,062       1,681,846
     Real estate construction and development......................................        983,346         954,913
     Real estate mortgage..........................................................      2,518,374       2,445,847
     Consumer and installment......................................................         98,376         124,542
     Loans held for sale...........................................................        261,258         204,206
                                                                                      ------------     -----------
          Total loans..............................................................      5,471,416       5,411,354
     Unearned discount.............................................................         (7,396)         (2,485)
     Allowance for loan losses.....................................................       (109,875)        (97,164)
                                                                                      ------------     -----------
          Net loans................................................................      5,354,145       5,311,705
                                                                                      ------------     -----------

Derivative instruments.............................................................        101,872          54,889
Bank premises and equipment, net of accumulated depreciation and amortization......        155,419         149,604
Intangibles associated with the purchase of subsidiaries, net of amortization......        140,259         125,440
Bank-owned life insurance..........................................................         91,216          87,200
Accrued interest receivable........................................................         33,953          37,349
Deferred income taxes..............................................................         97,182          94,546
Other assets.......................................................................         35,969          44,776
                                                                                      ------------     -----------
          Total assets.............................................................   $  7,171,534       6,778,451
                                                                                      ============     ===========


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

</TABLE>

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<TABLE>
<CAPTION>




                                              FIRST BANKS, INC.

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


                                                                                      September 30,   December 31,
                                                                                          2002            2001
                                                                                          ----            ----
                                                                                       (unaudited)

                                   LIABILITIES
                                   -----------
Deposits:
     Demand:
<S>                                                                                   <C>                  <C>
       Non-interest-bearing........................................................   $    954,017         921,455
       Interest-bearing............................................................        765,390         629,015
     Savings.......................................................................      2,026,734       1,832,939
     Time:
       Time deposits of $100 or more...............................................        496,118         484,201
       Other time deposits.........................................................      1,783,444       1,816,294
                                                                                      ------------     -----------
          Total deposits...........................................................      6,025,703       5,683,904
Short-term borrowings..............................................................        214,054         243,134
Note payable.......................................................................             --          27,500
Guaranteed preferred beneficial interests in:
     First Banks, Inc. subordinated debentures.....................................        222,259         191,539
     First Banks America, Inc. subordinated debentures.............................         45,373          44,342
Accrued interest payable...........................................................         13,466          16,006
Deferred income taxes..............................................................         63,016          43,856
Accrued expenses and other liabilities.............................................         61,685          61,515
Minority interest in subsidiary....................................................         19,784          17,998
                                                                                      ------------     -----------
          Total liabilities........................................................      6,665,340       6,329,794
                                                                                      ------------     -----------

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

Preferred stock:
     $1.00 par value, 5,000,000 shares authorized, no shares issued
       and outstanding at September 30, 2002 and December 31, 2001.................             --              --
     Class A convertible, adjustable rate, $20.00 par value, 750,000
       shares authorized, 641,082 shares issued and outstanding....................         12,822          12,822
     Class B adjustable rate, $1.50 par value, 200,000 shares authorized,
       160,505 shares issued and outstanding.......................................            241             241
Common stock, $250.00 par value, 25,000 shares authorized,
     23,661 shares issued and outstanding..........................................          5,915           5,915
Capital surplus....................................................................          5,950           6,074
Retained earnings..................................................................        419,146         389,308
Accumulated other comprehensive income.............................................         62,120          34,297
                                                                                      ------------     -----------
          Total stockholders' equity...............................................        506,194         448,657
                                                                                      ------------     -----------
          Total liabilities and stockholders' equity...............................   $  7,171,534       6,778,451
                                                                                      ============     ===========
</TABLE>


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<TABLE>
<CAPTION>
                                FIRST BANKS, INC.

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


                                                                             Three Months Ended   Nine Months Ended
                                                                                September 30,       September 30,
                                                                             ------------------   -----------------
                                                                               2002       2001     2002     2001
                                                                               ----       ----     ----     ----
Interest income:
<S>                                                                         <C>        <C>        <C>      <C>
     Interest and fees on loans............................................ $ 96,080   102,181    293,904  315,098
     Investment securities.................................................    9,219     6,098     24,368   20,919
     Federal funds sold and other..........................................      512     2,445      1,454    4,100
                                                                            --------   -------   -------- --------
          Total interest income............................................  105,811   110,724    319,726  340,117
                                                                            --------   -------   -------- --------
Interest expense:
     Deposits:
       Interest-bearing demand.............................................    1,786     1,892      5,739    5,372
       Savings.............................................................    8,819    12,402     27,253   39,927
       Time deposits of $100 or more.......................................    4,624     6,788     14,803   22,117
       Other time deposits.................................................   15,986    23,486     51,837   76,629
     Short-term borrowings.................................................      806     1,338      2,635    5,000
     Note payable..........................................................      309       555        839    2,328
     Guaranteed preferred debentures.......................................    5,300     4,489     18,629   13,467
                                                                            --------   -------   -------- --------
          Total interest expense...........................................   37,630    50,950    121,735  164,840
                                                                            --------   -------   -------- --------
          Net interest income..............................................   68,181    59,774    197,991  175,277
Provision for loan losses..................................................   13,700     6,800     38,700   13,910
                                                                            --------   -------   -------- --------
          Net interest income after provision for loan losses..............   54,481    52,974    159,291  161,367
                                                                            --------   -------   -------- --------
Noninterest income:
     Service charges on deposit accounts and customer service fees.........    8,491     5,731     21,985   16,268
     Gain on mortgage loans sold and held for sale.........................    7,857     2,386     20,316    9,718
     (Loss) gain on sale of credit card portfolio, net of expenses.........       --      (422)        --    1,853
     Net (loss) gain on sales of available-for-sale investment securities..       (2)      (32)        90     (145)
     Bank-owned life insurance investment income...........................    1,505       970      4,318    3,069
     Net gain  on derivative instruments...................................    1,963     8,915      1,714   14,401
     Other.................................................................    5,662     4,298     16,417   12,580
                                                                            --------   -------   -------- --------
          Total noninterest income.........................................   25,476    21,846     64,840   57,744
                                                                            --------   -------   -------- --------
Noninterest expense:
     Salaries and employee benefits........................................   28,350    23,092     84,506   68,889
     Occupancy, net of rental income.......................................    6,302     4,163     15,938   12,379
     Furniture and equipment...............................................    4,191     3,228     12,730    8,845
     Postage, printing and supplies........................................    1,346     1,270      4,205    3,528
     Information technology fees...........................................    7,814     6,940     24,411   19,891
     Legal, examination and professional fees..............................    2,866     1,991      6,463    5,415
     Amortization of intangibles associated with
          the purchase of subsidiaries.....................................      516     1,861      1,480    5,573
     Communications........................................................      671       710      2,375    2,223
     Advertising and business development..................................    1,181     1,223      4,132    4,405
     Other.................................................................    5,917     5,845     18,992   26,213
                                                                            --------   -------   -------- --------
          Total noninterest expense........................................   59,154    50,323    175,232  157,361
                                                                            --------   -------   -------- --------
          Income before provision for income taxes, minority interest
              in income of subsidiary and cumulative effect of change
              in accounting principle......................................   20,803    24,497     48,899   61,750
Provision for income taxes.................................................    7,372     9,539     17,471   24,120
                                                                            --------   -------   -------- --------
          Income before minority interest in income of subsidiary
              and cumulative effect of change in accounting principle......   13,431    14,958     31,428   37,630
Minority interest in income of subsidiary..................................      437       577      1,066    1,622
                                                                            --------   -------   -------- --------
          Income before cumulative effect of change
              in accounting principle......................................   12,994    14,381     30,362   36,008
Cumulative effect of change in accounting principle, net of tax............       --        --         --   (1,376)
                                                                            --------   -------   -------- --------
          Net income.......................................................   12,994    14,381     30,362   34,632
Preferred stock dividends..................................................      196       196        524      524
                                                                            --------   -------   -------- --------
          Net income available to common stockholders...................... $ 12,798    14,185     29,838   34,108
                                                                            ========   =======   ======== ========
<PAGE>

Basic earnings per common share:
     Income before cumulative effect of change in accounting principle..... $ 540.87    599.47   1,261.05 1,499.67
     Cumulative effect of change in accounting principle, net of tax.......       --        --         --   (58.16)
                                                                            --------   -------   -------- --------
     Basic................................................................. $ 540.87    599.47   1,261.05 1,441.51
                                                                            ========   =======   ======== ========
Diluted earnings per common share:
     Income before cumulative effect of change in accounting principle..... $ 534.32    587.93   1,246.05 1,468.14
     Cumulative effect of change in accounting principle, net of tax.......       --        --         --   (58.16)
                                                                            --------   -------   -------- --------
     Diluted............................................................... $ 534.32    587.93   1,246.05 1,409.98
                                                                            =========  ========  ======== ========

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>

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<TABLE>
<CAPTION>

                                               FIRST BANKS, INC.

         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME - (UNAUDITED)
              Nine Months Ended September 30, 2002 and 2001 and Three Months Ended December 31, 2001
                            (dollars expressed in thousands, except per share data)


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

<S>                                                <C>          <C>    <C>       <C>     <C>      <C>        <C>    <C>
Consolidated balances, December 31, 2000.........  $12,822      241    5,915     2,267            325,580    6,021  352,846
Nine months ended September 30, 2001:
    Comprehensive income:
      Net income.................................       --       --       --        --   34,632    34,632       --   34,632
      Other comprehensive income, net of tax:
        Unrealized gains on securities, net of
          reclassification adjustment (1)........       --       --       --        --   10,555        --   10,555   10,555
        Derivative instruments:
          Cumulative effect of change in
             accounting principle, net...........       --       --       --        --    9,069        --    9,069    9,069
          Current period transactions............       --       --       --        --   34,919        --   34,919   34,919
          Reclassification to earnings...........       --       --       --        --   (2,927)       --   (2,927)  (2,927)
                                                                                         ------
      Comprehensive income.......................                                        86,248
                                                                                         ======
    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..................       --       --       --       259                 --       --      259
                                                   -------    -----    -----     -----            -------   ------  -------
Consolidated balances, September 30, 2001........   12,822      241    5,915     2,526            359,688   57,637  438,829
Three months ended December 31, 2001:
    Comprehensive income:
      Net income.................................       --       --       --        --   29,882    29,882       --   29,882
      Other comprehensive income, net of tax:
        Unrealized losses on securities, net of
          reclassification adjustment (1)........       --       --       --        --  (12,426)       --  (12,426) (12,426)
        Derivative instruments:
          Current period transactions............       --       --       --        --   (7,898)       --   (7,898)  (7,898)
          Reclassification to earnings...........       --       --       --        --   (3,016)       --   (3,016)  (3,016)
                                                                                         ------
      Comprehensive income.......................                                         6,542
                                                                                         ======
    Class A preferred stock dividends,
      $0.70 per share............................       --       --       --        --               (256)      --     (256)
    Class B preferred stock dividends,
      $0.07 per share............................       --       --       --        --                 (6)      --       (6)
    Effect of capital stock transactions of
      majority-owned subsidiary..................       --       --       --     3,548                 --       --    3,548
                                                   -------    -----     ----     -----            -------   ------   ------
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
                                                   =======    =====     =====     =====           =======   ======   =======
</TABLE>
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<TABLE>
<CAPTION>

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

                                                                        Three Months Ended  Nine Months Ended   Three Months Ended
                                                                           September 30,      September 30,        December 31,
                                                                        -----------------  ------------------   ------------------
                                                                          2002      2001      2002       2001          2001
                                                                          ----      ----      ----       ----          ----

     Unrealized (losses) gains on investment securities
<S>                                                                     <C>        <C>       <C>        <C>             <C>
        arising during the period...................................... $ (500)    1,005     7,180      10,461          (163)
     Less reclassification adjustment for (losses)
        gains included in net income...................................     (1)      (21)       59         (94)       12,263
                                                                         -----     -----     -----      ------        ------
     Unrealized (losses) gains on investment securities................ $ (499)    1,026     7,121      10,555       (12,426)
                                                                        ======     =====     =====      ======       =======

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

<PAGE>
                                FIRST BANKS, INC.

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

                                                                                                 Nine Months Ended
                                                                                                   September 30,
                                                                                             -----------------------
                                                                                               2002           2001
                                                                                               ----           ----

Cash flows from operating activities:
<S>                                                                                         <C>              <C>
     Net income........................................................................... $   30,362        34,632
     Adjustments to reconcile net income to net cash used in operating activities:
       Cumulative effect of change in accounting principle, net of tax....................         --         1,376
       Depreciation and amortization of bank premises and equipment.......................     13,857         8,954
       Amortization, net of accretion.....................................................     11,869         6,641
       Originations and purchases of loans held for sale.................................. (1,299,522)   (1,088,069)
       Proceeds from the sale of loans held for sale......................................  1,092,359       982,205
       Provision for loan losses..........................................................     38,700        13,910
       Provision for income taxes.........................................................     17,471        24,120
       Payments of income taxes...........................................................    (18,096)      (21,290)
       Decrease in accrued interest receivable............................................      3,891         5,488
       Interest accrued on liabilities....................................................    121,735       164,840
       Payments of interest on liabilities................................................   (125,303)     (165,105)
       Gain on mortgage loans sold and held for sale......................................    (20,316)       (9,718)
       Gain on sale of credit card portfolio, net of expenses.............................         --        (1,853)
       Net (gain) loss on sales of available-for-sale investment securities...............        (90)          145
       Net gain on derivative instruments.................................................     (1,714)      (14,401)
       Other operating activities, net....................................................     13,381       (18,928)
       Minority interest in income of subsidiary..........................................      1,066         1,622
                                                                                           ----------    ----------
          Net cash used in operating activities...........................................   (120,350)      (75,431)
                                                                                           ----------    ----------

Cash flows from investing activities:
     Cash received from acquired entities, net of cash and cash equivalents paid..........     44,097            --
     Proceeds from sales of investment securities available for sale......................     55,130        74,991
     Maturities of investment securities available for sale...............................    855,121       425,492
     Maturities of investment securities held to maturity.................................      3,456         2,765
     Purchases of investment securities available for sale................................   (957,312)     (455,190)
     Purchases of investment securities held to maturity..................................     (2,260)         (240)
     Proceeds from terminations of derivative instruments.................................         --         5,396
     Net decrease in loans................................................................    114,333        57,944
     Recoveries of loans previously charged-off...........................................     11,692         7,202
     Purchases of bank premises and equipment.............................................    (13,576)      (29,212)
     Other investing activities, net......................................................      8,622         3,147
                                                                                           ----------    ----------
          Net cash provided by investing activities.......................................    119,303        92,295
                                                                                           ----------    ----------

Cash flows from financing activities:
     Increase in demand and savings deposits..............................................    213,963       148,576
     Decrease in time deposits............................................................   (157,154)      (95,111)
     Decrease in federal funds purchased..................................................    (81,000)           --
     Decrease in Federal Home Loan Bank advances..........................................    (10,600)           --
     Increase (decrease) in securities sold under agreements to repurchase................     44,399        (5,417)
     Advances drawn on note payable.......................................................     36,500         5,000
     Repayments of note payable...........................................................    (64,000)      (58,500)
     Proceeds from issuance of guaranteed preferred subordinated debentures...............     24,233            --
     Payment of preferred stock dividends.................................................       (524)         (524)
     Other financing activities, net......................................................         --           (94)
                                                                                           ----------    ----------
          Net cash provided by (used in) financing activities.............................      5,817        (6,070)
                                                                                           ----------    ----------
          Net increase in cash and cash equivalents.......................................      4,770        10,794
Cash and cash equivalents, beginning of period............................................    241,874       198,279
                                                                                           ----------    ----------
Cash and cash equivalents, end of period.................................................. $  246,644       209,073
                                                                                           ==========    ==========

Noncash investing and financing activities:
     Reduction of deferred tax asset valuation reserve.................................... $       --           565
     Loans transferred to other real estate...............................................      3,584         2,821
     Loans held for sale transferred to available-for-sale investment securities..........         --           753
     Loans held for sale transferred to mortgage-backed securities........................    149,830            --
     Loans held for sale transferred to loans.............................................      2,923        35,074
                                                                                           ==========    ==========
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 2001
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 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,
2002 are not necessarily  indicative of the results that may be expected for the
year ending December 31, 2002.

         The  consolidated  financial  statements  include the accounts of First
Banks,  Inc.  and its  subsidiaries,  net of  minority  interest,  as more fully
described below.  All significant  intercompany  accounts and transactions  have
been  eliminated.  Certain  reclassifications  of 2001 amounts have been made to
conform  to the 2002  presentation.  In  particular,  the  guaranteed  preferred
beneficial  interests  in First  Banks,  Inc.  and  First  Banks  America,  Inc.
subordinated  debentures have been reclassified into the liabilities  section on
the  consolidated  balance  sheets rather than presented as a separate line item
excluded from the calculation of total liabilities. Consequently, the guaranteed
preferred  debentures  expense has been  reclassified  to interest  expense from
noninterest expense in the consolidated statements of income.

         First Banks operates through its subsidiary bank holding  companies and
subsidiary financial  institutions  (collectively  referred to as the Subsidiary
Banks) as follows:

         Union Financial Group, Ltd., headquartered in Swansea, Illinois (UFG),
         and its wholly owned subsidiary:
                First Bank, headquartered in St. Louis County, Missouri;
         First Banks America, Inc., headquartered in San Francisco,  California
         (FBA),  and its wholly  owned subsidiary:
                The San Francisco Company, headquartered in San Francisco,
                    California (SFC), and its wholly-owned subsidiary:
                         First Bank & Trust, headquartered in San Francisco,
                         California (FB&T).

         The  Subsidiary  Banks  are  wholly  owned by their  respective  parent
companies  except  FBA,  which was  93.76% and  93.69%  owned by First  Banks at
September 30, 2002 and December 31, 2001, respectively.

 (2)     ACQUISITIONS AND OTHER CORPORATE TRANSACTIONS

         On January 15, 2002,  First Banks  completed its  acquisition of Plains
Financial Corporation (PFC), and its wholly owned banking subsidiary, PlainsBank
of  Illinois,  National  Association  (PlainsBank),  Des Plaines,  Illinois,  in
exchange  for $36.5  million  in cash.  PFC  operated  a total of three  banking
facilities  in Des  Plaines,  Illinois,  and one  banking  office  in Elk  Grove
Village, Illinois. The acquisition was funded from borrowings under First Banks'
credit  agreement with a group of unaffiliated  financial  institutions.  At the
time of the transaction,  PFC had $256.3 million in total assets, $150.4 million
in loans, net of unearned discount,  $81.0 million in investment  securities and
$213.4  million  in  deposits.  This  transaction  was  accounted  for using the
purchase method of accounting. The excess of the cost over the fair value of the
net assets acquired was  approximately  $12.6 million and will not be amortized,
but instead will be  periodically  tested for impairment in accordance  with the
requirements  of SFAS No. 142 (as defined below).  The core deposit  intangibles
were  approximately  $2.9  million  and are being  amortized  over  seven  years
utilizing  the  straight-line  method.  PFC was  merged  with and into UFG,  and
PlainsBank was merged with and into First Bank.

         On June 22, 2002,  FB&T  completed  its  assumption of the deposits and
certain  liabilities  and the  purchase  of certain  assets of the  Garland  and
Denton, Texas branch offices of Union Planters Bank, National  Association.  The
transaction  resulted in the  acquisition  of $15.3  million in deposits and one
branch  office in Garland and $49.6  million in deposits and one branch  office,
including  a  detached  drive-thru   facility,   in  Denton.  The  core  deposit
intangibles associated with the branch purchases were $1.4 million and are being
amortized over seven years utilizing the straight-line method.


<PAGE>



         On  September  17,  2002,  First  Banks  and  Allegiant  Bancorp,  Inc.
(Allegiant)  signed an agreement  and plan of exchange  that  provides for First
Banks to acquire  Allegiant's  wholly  owned  banking  subsidiary,  Bank of Ste.
Genevieve (BSG).  BSG operates two locations in Ste.  Genevieve,  Missouri,  and
reported  total assets of $111.1  million and total deposits of $91.1 million at
September 30, 2002.  Under the terms of the agreement,  First Banks will acquire
BSG in exchange for approximately  974,150 shares of Allegiant common stock that
are  currently  held by  First  Banks.  The  transaction,  which is  subject  to
regulatory  approvals,  is expected to be completed during the fourth quarter of
2002. First Banks will continue to own approximately 232,000 shares of Allegiant
common stock subsequent to completion of the transaction.

         On September 23, 2002, First Banks and FBA signed an agreement and plan
of merger  pursuant to which First Banks will  acquire all of FBA's  outstanding
capital stock that is not already owned by First Banks for a price of $40.54 per
share. At September 30, 2002, FBA had 801,453 shares, or approximately  6.24% of
its outstanding  stock, held publicly.  First Banks owned the other 93.76%.  The
merger agreement provides for the merger of FBA Acquisition Corporation with and
into  FBA.  Upon  consummation  of  the  merger,  the  legal  existence  of  FBA
Acquisition  Corporation  and FBA will be combined  and FBA will become a wholly
owned  subsidiary of First Banks. At that time, FBA will be merged with and into
First Banks.  The  transaction,  which is subject to  shareholder  approval,  is
expected to be completed in December 2002.

(3)      IMPLEMENTATION OF ACCOUNTING PRONOUNCEMENTS

         In July 2001, the Financial  Accounting  Standards  Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 142 -- Goodwill and Other
Intangible  Assets.  SFAS No. 142 requires that goodwill and  intangible  assets
with  indefinite  useful lives no longer be  amortized,  but instead  tested for
impairment at least annually in accordance  with the provisions of SFAS No. 142.
SFAS No. 142 also requires that intangible  assets with definite useful lives be
amortized  over  their  respective  estimated  useful  lives to their  estimated
residual values,  and reviewed for impairment in accordance with SFAS No. 144 --
Accounting  for the  Impairment or Disposal of Long-Lived  Assets,  as discussed
below.  The amortization of goodwill ceased upon adoption of SFAS No. 142, which
for calendar year-end companies was January 1, 2002.

         On January 1, 2002,  First Banks  adopted  SFAS No. 142. At the date of
adoption,  First  Banks had  unamortized  goodwill  of $115.9  million  and core
deposit  intangibles  of $9.6  million,  which were  subject  to the  transition
provisions  of SFAS No.  142.  Under SFAS No.  142,  First  Banks  continues  to
amortize,  on a straight-line  basis, its core deposit  intangibles and goodwill
associated  with  purchases  of branch  offices.  Goodwill  associated  with the
purchase of  subsidiaries  will no longer be  amortized,  but  instead,  will be
tested  annually  for  impairment  following  First Banks'  existing  methods of
measuring and recording impairment losses.

         First  Banks  completed  the  transitional   goodwill  impairment  test
required under SFAS No. 142, to determine the potential  impact,  if any, on the
consolidated  financial  statements.  The results of the  transitional  goodwill
impairment testing did not identify any goodwill impairment losses.

         Intangible assets associated with the purchase of subsidiaries,  net of
amortization, were comprised of the following at September 30, 2002 and December
31, 2001:
<TABLE>
<CAPTION>

                                                     September 30, 2002              December 31, 2001
                                                ----------------------------  ----------------------------
                                                   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..............  $  13,871         (1,372)         9,580               --
         Goodwill associated with
           purchases of branch offices.........      2,210           (684)         2,210             (576)
                                                 ---------        -------        -------          -------
              Total............................  $  16,081         (2,056)        11,790             (576)
                                                 =========        =======        =======          =======

     Unamortized intangible assets:
         Goodwill associated with the
           purchase of subsidiaries............  $ 126,234                       114,226
                                                 =========                       =======
</TABLE>
<PAGE>

         Amortization   of   intangibles   associated   with  the   purchase  of
subsidiaries  and branch offices was $516,000 and $1.5 million for the three and
nine months ended  September 30, 2002,  respectively,  and $1.9 million and $5.6
million  for  the  comparable  periods  in  2001.  Amortization  of  intangibles
associated  with the purchase of  subsidiaries,  including  amortization of core
deposit intangibles and branch purchases, has been estimated through 2007 in the
following  table,  and does not take into  consideration  any  potential  future
acquisitions or branch purchases.

                                                              (dollars expressed
                                                                 in thousands)

         Year ending December 31:
               2002 (1).....................................    $ 1,996
               2003.........................................      2,064
               2004.........................................      2,064
               2005.........................................      2,064
               2006.........................................      2,064
               2007.........................................      2,064
                                                                -------
                  Total.....................................    $12,316
                                                                =======
         ----------------------------
         (1)  Includes $1.5  million  of  amortization for the nine months ended
              September 30, 2002.

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

                                                Three Months Ended September 30, 2002   Nine Months Ended September 30, 2002
                                                -------------------------------------   ------------------------------------
                                                 First Bank        FB&T        Total     First Bank       FB&T        Total
                                                 ----------        ----        -----     ----------       ----        -----
                                                                      (dollars expressed in thousands)

<S>                                             <C>               <C>        <C>           <C>          <C>         <C>
     Balance, beginning of period............   $ 31,173          96,623     127,796       19,165       96,695      115,860
     Goodwill acquired during period.........         --              --          --       12,577           --       12,577
     Acquisition-related adjustments.........         --              --          --         (569)          --         (569)
     Amortization - purchases of
        branch offices.......................         --             (36)        (36)          --         (108)        (108)
                                                --------         -------     -------      -------       ------      -------

     Balance, end of period..................   $ 31,173          96,587     127,760       31,173       96,587      127,760
                                                ========         =======     =======      =======       ======      =======
</TABLE>

         The following is a reconciliation  of reported net income to net income
adjusted to reflect the adoption of SFAS No. 142, as if it had been  implemented
on January 1, 2001:
<TABLE>
<CAPTION>

                                                              Three Months Ended             Nine Months Ended
                                                                 September 30,                 September 30,
                                                            --------------------         ------------------------
                                                              2002         2001             2002           2001
                                                              ----         ----             ----           ----
                                                                     (dollars expressed in thousands)
       Net income:
<S>                                                         <C>            <C>             <C>            <C>
         Reported net income...........................     $12,994        14,381          30,362         34,632
         Add back - goodwill amortization..............          --         1,815              --          5,438
                                                            -------       -------        --------       --------
           Adjusted net income.........................     $12,994        16,196          30,362         40,070
                                                            =======       =======        ========       ========

       Basic earnings per share:
         Reported net income...........................     $540.87        599.47        1,261.05       1,441.51
         Add back - goodwill amortization..............          --         76.74              --         229.86
                                                            -------       -------        --------       --------
           Adjusted net income.........................     $540.87        676.21        1,261.05       1,671.37
                                                            =======       =======        ========       ========

       Diluted earnings per share:
         Reported net income...........................     $534.32        587.93        1,246.05       1,409.98
         Add back - goodwill amortization..............          --         74.26              --         221.50
                                                            -------       -------        --------       --------
           Adjusted net income.........................     $534.32        662.19        1,246.05       1,631.48
                                                            =======       =======        ========       ========
</TABLE>
<PAGE>

         In August  2001,  the FASB  issued SFAS No. 144 --  Accounting  for the
Impairment or Disposal of Long-Lived  Assets.  SFAS No. 144 supersedes  SFAS No.
121 -- Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to be  Disposed  Of.  SFAS No. 144  addresses  financial  accounting  and
reporting for the impairment or disposal of long-lived  assets and requires that
one accounting  model be used for  long-lived  assets to be disposed of by sale,
whether  previously held and used or newly  acquired.  SFAS No. 144 broadens the
presentation of discontinued  operations to include more disposal  transactions.
Therefore, the accounting for similar events and circumstances will be the same.
The provisions of SFAS No. 144 are effective for financial statements issued for
fiscal years beginning after December 15, 2001, and interim periods within those
fiscal years, with early application encouraged.  The provisions of SFAS No. 144
generally  are to be applied  prospectively.  On January  1, 2002,  First  Banks
implemented  SFAS  No.  144,  which  did  not  have  a  material  effect  on the
consolidated financial statements.

         On October 1, 2002,  the FASB  issued SFAS No. 147 --  Acquisitions  of
Certain  Financial  Institutions,  an amendment of SFAS No. 72 -- Accounting for
Certain  Acquisitions  of  Banking  or Thrift  Institutions  and SFAS No. 144 --
Accounting  for the  Impairment  or  Disposal  of  Long-Lived  Assets  and  FASB
Interpretation  No. 9 -- Applying  APB Opinions No. 16 and 17 When a Savings and
Loan Association or a Similar Institution Is Acquired in a Business  Combination
Accounted  for by the Purchase  Method.  SFAS No. 147  addresses  the  financial
accounting  and  reporting  for the  acquisition  of all or part of a  financial
institution,  except for  transactions  between two or more mutual  enterprises.
SFAS  No.  147  removes  acquisitions  of  financial  institutions,  other  than
transactions between two or more mutual enterprises,  from the scope of SFAS No.
72. SFAS No. 147 also  provides  guidance on the  accounting  for  impairment or
disposal  of  acquired   long-term   customer-relationship   intangible  assets,
including those acquired in transactions between two or more mutual enterprises.
The  provisions  of SFAS No.  147 are  effective  for  acquisitions  on or after
October 1, 2002. On October 1, 2002, FBI implemented SFAS No. 147, which did not
have a material effect on the consolidated financial statements.

(4)      MORTGAGE SERVICING RIGHTS

         Mortgage  servicing  rights are  amortized in proportion to the related
estimated net servicing  income on a  disaggregated,  discounted  basis over the
estimated  lives of the related  mortgages  considering the level of current and
anticipated repayments,  which range from five to 10 years. The weighted average
amortization  period of the mortgage  servicing  rights is  approximately  seven
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,
                                                                      --------------------       ------------------
                                                                      2002           2001        2002         2001
                                                                      ----           ----        ----         ----
                                                                             (dollars expressed in thousands)

<S>                                                                   <C>           <C>          <C>          <C>
           Balance, beginning of period...........................    $12,354       8,629        10,125       7,048
           Originated mortgage servicing rights...................      1,998       1,402         5,958       4,693
           Amortization...........................................       (984)       (965)       (2,715)     (2,675)
                                                                      -------      ------       -------      ------
           Balance, end of period.................................    $13,368       9,066        13,368       9,066
                                                                      =======      ======       =======      ======
</TABLE>
         Amortization of mortgage servicing rights, as it relates to the balance
at September 30, 2002 of $13.4 million,  has been estimated  through 2006 in the
following table:

                                                              (dollars expressed
                                                                 in thousands)

         Year ending December 31:
            2002 (1)...........................................    $ 3,699
            2003...............................................      3,946
            2004...............................................      3,758
            2005...............................................      3,662
            2006...............................................      1,095
                                                                   -------
               Total...........................................    $16,160
                                                                   =======
         --------------------------------
         (1) Includes $2.7 million of amortization for  the  nine  months  ended
             September 30, 2002.


<PAGE>



(5)      EARNINGS PER COMMON SHARE

         The following is a reconciliation of the numerators and denominators of
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, 2002:
<S>                                                                          <C>               <C>         <C>
         Basic EPS - income before cumulative effect.....................    $  12,798         23,661      $   540.87
         Cumulative effect of change in accounting principle, net of tax.           --             --              --
                                                                             ---------        -------      ----------
         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
                                                                             =========        =======      ==========

     Three months ended September 30, 2001:
         Basic EPS - income before cumulative effect.....................    $  14,185         23,661      $   599.47
         Cumulative effect of change in accounting principle, net of tax.           --             --              --
                                                                             ---------        -------      ----------
         Basic EPS - income available to common stockholders.............       14,185         23,661          599.47
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          192            791          (11.54)
                                                                             ---------        -------      ----------
         Diluted EPS - income available to common stockholders...........    $  14,377         24,452      $   587.93
                                                                             =========        =======      ==========

     Nine months ended September 30, 2002:
         Basic EPS - income before cumulative effect.....................    $  29,838         23,661      $ 1,261.05
         Cumulative effect of change in accounting principle, net of tax.           --             --              --
                                                                             ---------        -------      ----------
         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
                                                                             =========        =======      ==========

     Nine months ended September 30, 2001:
         Basic EPS - income before cumulative effect.....................    $  35,484         23,661      $ 1,499.67
         Cumulative effect of change in accounting principle, net of tax.       (1,376)            --          (58.16)
                                                                             ---------        -------      ----------
         Basic EPS - income available to common stockholders.............       34,108         23,661        1,441.51
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          513            893          (31.53)
                                                                             ---------        -------      ----------
         Diluted EPS - income available to common stockholders...........    $  34,621         24,554      $ 1,409.98
                                                                             =========        =======      ==========
</TABLE>

(6)      TRANSACTIONS WITH RELATED PARTIES

         First Brokerage America,  L.L.C., a limited liability corporation which
is  indirectly  owned by First  Banks'  Chairman  and  members of his  immediate
family,  received approximately $918,000 and $2.7 million for the three and nine
months  ended  September  30,  2002,  and  $600,000  and  $2.0  million  for the
comparable  periods in 2001,  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 the Subsidiary Banks.

         First Services,  L.P., a limited partnership  indirectly owned by First
Banks'  Chairman and his adult  children,  provides  information  technology and
various related  services to First Banks,  Inc. and its Subsidiary  Banks.  Fees
paid under  agreements  with First  Services,  L.P.  were $6.6 million and $20.3
million for the three and nine months ended September 30, 2002, and $6.0 million
and $16.9 million for the comparable periods in 2001,  respectively.  During the
three months ended September 30, 2002 and 2001, First Services,  L.P. paid First
Banks  $993,000  and  $516,000,  respectively,  and during the nine months ended
September 30, 2002 and 2001, First Services,  L.P. paid First Banks $2.9 million
and $1.5 million,  respectively,  in rental fees for the use of data  processing
and other equipment owned by First Banks.


<PAGE>



(7)      REGULATORY CAPITAL

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

         Quantitative  measures  established  by  regulation  to ensure  capital
adequacy  require  First  Banks and the  Subsidiary  Banks to  maintain  minimum
amounts and ratios of total and Tier I capital  (as defined in the  regulations)
to  risk-weighted  assets,  and of Tier I capital to average assets.  Management
believes,  as of September 30, 2002,  First Banks and the Subsidiary  Banks were
each well capitalized under the applicable regulations.

         As of  September  30,  2002,  the most recent  notification  from First
Banks' primary  regulator  categorized  First Banks and the Subsidiary  Banks as
well  capitalized  and  FBA  as  adequately  capitalized  under  the  regulatory
framework for prompt  corrective  action. To be categorized as well capitalized,
First Banks and the  Subsidiary  Banks must maintain  minimum total  risk-based,
Tier I risk-based and Tier I leverage ratios as set forth in the table below.

         At  September  30, 2002 and  December  31,  2001,  First Banks' and the
Subsidiary Banks' required and actual capital ratios were as follows:
<TABLE>
<CAPTION>

                                                              Actual                                     To Be Well
                                                     --------------------------                       Capitalized Under
                                                     September 30, December 31,      For Capital      Prompt Corrective
                                                        2002           2001       Adequacy Purposes   Action Provisions
                                                        ----           ----       -----------------   -----------------

     Total capital (to risk-weighted assets):
<S>                                                      <C>           <C>               <C>                <C>
              First Banks.............................   10.97%        10.53%            8.0%               10.0%
              First Bank..............................   10.49         10.14             8.0                10.0
              FB&T....................................   10.43         11.27             8.0                10.0

     Tier 1 capital (to risk-weighted assets):
              First Banks.............................    7.79          7.57             4.0                 6.0
              First Bank..............................    9.23          8.89             4.0                 6.0
              FB&T....................................    9.17         10.02             4.0                 6.0

     Tier 1 capital (to average assets):
              First Banks.............................    6.86          7.24             3.0                 5.0
              First Bank..............................    7.82          8.67             3.0                 5.0
              FB&T....................................    8.59          9.47             3.0                 5.0

</TABLE>

<PAGE>



(8)      BUSINESS SEGMENT RESULTS

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

         Through the respective  branch  networks,  the Subsidiary Banks provide
similar  products and services in their defined  geographic  areas. The products
and services  offered  include a broad range of commercial and personal  deposit
products,  including demand, savings, money market and time deposit accounts. In
addition,  the  Subsidiary  Banks  market  combined  basic  services for various
customer groups,  including packaged accounts for more affluent  customers,  and
sweep accounts,  lock-box  deposits and cash management  products for commercial
customers.  The Subsidiary Banks also offer both consumer and commercial  loans.
Consumer lending includes  residential real estate,  home equity and installment
lending.  Commercial  lending  includes  commercial,  financial and agricultural
loans, real estate  construction and development  loans,  commercial real estate
loans, asset-based loans, commercial leasing and trade financing.

         Other  financial  services  include  mortgage  banking,   debit  cards,
brokerage services, credit-related insurance, internet banking, automated teller
machines,  telephone banking,  safe deposit boxes, escrow and bankruptcy deposit
services,  stock option services and trust,  private  banking and  institutional
money  management  services.  The revenues  generated by each  business  segment
consist  primarily of interest  income,  generated  from the loan and investment
security  portfolios,  and service charges and fees,  generated from the deposit
products and services. The geographic areas include 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  their  respective   geographic   areas,   with  the  exception  of  loan
participations executed between the Subsidiary Banks.

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


<PAGE>
<TABLE>
<CAPTION>
         The business segment results are summarized as follows:

                                                                             First Bank                         FB&T
                                                                   ----------------------------     -------------------------
                                                                   September 30,   December 31,     September 30,December 31,
                                                                       2002            2001             2002         2001
                                                                       ----            ----             ----         ----
                                                                                   (dollars expressed in thousands)
Balance sheet information:

<S>                                                                  <C>                <C>            <C>          <C>
Investment securities...........................................   $  498,927           245,365        393,543      368,207
Loans, net of unearned discount.................................    3,164,965         3,086,023      2,310,588    2,323,263
Intangibles associated with the purchase
   of subsidiaries, net of amortization.........................       36,572            22,287        103,687      103,153
Total assets....................................................    4,063,159         3,707,081      3,135,105    3,057,920
Deposits........................................................    3,468,026         3,142,676      2,582,612    2,555,396
Note payable....................................................           --                --             --           --
Stockholders' equity............................................      370,842           321,336        396,298      398,713
                                                                   ==========         =========      =========    =========

                                                                             First Bank                         FB&T
                                                                     --------------------------        ----------------------
                                                                         Three Months Ended              Three Months Ended
                                                                            September 30,                   September 30,
                                                                     --------------------------        ----------------------
                                                                      2002                 2001          2002          2001
                                                                      ----                 ----          ----          ----
Income statement information:

Interest income.................................................   $   58,046            59,779         47,653       50,773
Interest expense................................................       19,802            27,266         12,276       18,818
                                                                   ----------         ---------      ---------    ---------
     Net interest income........................................       38,244            32,513         35,377       31,955
Provision for loan losses.......................................        6,500             4,800          7,200        2,000
                                                                   ----------         ---------      ---------    ---------
     Net interest income after provision for loan losses........       31,744            27,713         28,177       29,955
                                                                   ----------         ---------      ---------    ---------
Noninterest income..............................................       19,309            13,187          6,617        9,023
Noninterest expense.............................................       35,756            26,943         22,223       22,383
                                                                   ----------         ---------      ---------    ---------
     Income before provision for income taxes
       and minority interest in income of subsidiary............       15,297            13,957         12,571       16,595
Provision for income taxes......................................        4,967             4,922          4,695        6,751
                                                                   ----------         ---------      ---------    ---------
     Income before minority interest in income of subsidiary....       10,330             9,035          7,876        9,844
Minority interest in income of subsidiary.......................           --                --             --           --
                                                                   ----------         ---------      ---------    ---------
     Net income.................................................   $   10,330             9,035          7,876        9,844
                                                                   ==========         =========      =========     ========

                                                                             First Bank                         FB&T
                                                                     ---------------------------       ---------------------
                                                                          Nine Months Ended               Nine Months Ended
                                                                            September 30,                   September 30,
                                                                     ---------------------------       ---------------------
                                                                      2002                 2001         2002           2001
                                                                      ----                 ----         ----           ----
Income statement information:

Interest income.................................................   $  177,682           182,765        141,787      157,851
Interest expense................................................       63,817            88,563         38,704       61,870
                                                                   ----------         ---------      ---------    ---------
     Net interest income........................................      113,865            94,202        103,083       95,981
Provision for loan losses.......................................       16,000            11,000         22,700        2,910
                                                                   ----------         ---------      ---------    ---------
     Net interest income after provision for loan losses........       97,865            83,202         80,383       93,071
                                                                   ----------         ---------      ---------    ---------
Noninterest income..............................................       48,996            38,992         17,416       19,876
Noninterest expense.............................................      107,189            75,810         65,056       65,346
                                                                   ----------         ---------      ---------    ---------
     Income before provision for income taxes, minority
       interest in income of subsidiary and cumulative
       effect of change in accounting principle.................       39,672            46,384         32,743       47,601
Provision for income taxes......................................       12,900            16,249         12,317       18,807
                                                                   ----------         ---------      ---------    ---------
     Income before minority interest in income of
       subsidiary and cumulative effect of change in
       accounting principle.....................................       26,772            30,135         20,426       28,794
Minority interest in income of subsidiary.......................           --                --             --           --
                                                                   ----------         ---------      ---------    ---------
     Income before cumulative effect of change in
       accounting principle.....................................       26,772            30,135         20,426       28,794
Cumulative effect of change in accounting principle, net of tax.           --              (917)            --         (459)
                                                                   ----------         ---------      ---------    ---------
     Net income.................................................   $   26,772            29,218         20,426       28,335
                                                                   ==========         =========      =========    =========

<PAGE>

---------------------------
(1) Corporate and other includes $5.3 million and $4.5 million of guaranteed preferred debenture expense for the three  months ended
    September 30, 2002 and 2001, respectively. The applicable income tax benefit associated with the guaranteed preferred debentures
    expense was $1.9 million and $1.6 million for the  three  months  ended  September 30, 2002 and 2001, respectively. For the nine
    months ended September 30, 2002 and 2001, respectively, corporate  and  other  includes  $18.6  million  and  $13.5  million  of
    guaranteed preferred debenture expense. The applicable income tax  benefit associated  with the  guaranteed preferred debentures
    expense was $6.5 million and $4.7 million for the nine months  ended  September 30, 2002  and  2001, respectively.  In addition,
    corporate and other includes holding company expenses.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                                     Corporate, Other and
                              Intercompany Reclassifications (1)                         Consolidated Totals
                             -----------------------------------                ------------------------------------
                             September 30,        December 31,                  September 30,       December 31,
                                 2002                 2001                          2002                2001
                                 ----                 ----                          ----                ----
                                                       (dollars expressed in thousands)

<S>                             <C>                  <C>                         <C>                    <C>
                                22,405               17,496                      914,875                631,068
                               (11,533)                (417)                   5,464,020              5,408,869
                                    --                   --                      140,259                125,440
                               (26,730)              13,450                    7,171,534              6,778,451
                               (24,935)             (14,168)                   6,025,703              5,683,904
                                    --               27,500                           --                 27,500
                              (260,946)            (271,392)                     506,194                448,657
                             =========             ========                    =========              =========

                                  Corporate, Other and
                             Intercompany Reclassifications (1)                         Consolidated Totals
                             ----------------------------------                 --------------------------------
                                   Three Months Ended                                  Three Months Ended
                                      September 30,                                       September 30,
                             ----------------------------------                 --------------------------------
                               2002                   2001                       2002                      2001
                               ----                   ----                       ----                      ----

                                   112                  172                      105,811                110,724
                                 5,552                4,866                       37,630                 50,950
                             ---------             --------                    ---------              ---------
                                (5,440)              (4,694)                      68,181                 59,774
                                    --                   --                       13,700                  6,800
                             ---------             --------                    ---------              ---------
                                (5,440)              (4,694)                      54,481                 52,974
                             ---------             --------                    ---------              ---------
                                  (450)                (364)                      25,476                 21,846
                                 1,175                  997                       59,154                 50,323
                             ---------             --------                    ---------              ---------

                                (7,065)              (6,055)                      20,803                 24,497
                                (2,290)              (2,134)                       7,372                  9,539
                             ---------             --------                    ---------              ---------
                                (4,775)              (3,921)                      13,431                 14,958
                                   437                  577                          437                    577
                             ---------             --------                    ---------              ---------
                                (5,212)              (4,498)                      12,994                 14,381
                             =========             ========                    =========              =========

                                  Corporate, Other and
                             Intercompany Reclassifications (1)                        Consolidated Totals
                             ----------------------------------                 --------------------------------
                                    Nine Months Ended                                  Nine Months Ended
                                      September 30,                                      September 30,
                             -------------------------------                    --------------------------------
                               2002                   2001                       2002                      2001
                               ----                   ----                       ----                      ----

                                   257                 (499)                     319,726                340,117
                                19,214               14,407                      121,735                164,840
                             ---------             --------                    ---------              ---------
                               (18,957)             (14,906)                     197,991                175,277
                                    --                   --                       38,700                 13,910
                             ---------             --------                    ---------              ---------
                                18,957              (14,906)                     159,291                161,367
                             ---------             --------                    ---------              ---------
                                (1,572)              (1,124)                      64,840                 57,744
                                 2,987               16,205                      175,232                157,361
                             ---------             --------                    ---------              ---------

                               (23,516)             (32,235)                      48,899                 61,750
                                (7,746)             (10,936)                      17,471                 24,120
                             ---------             --------                    ---------              ---------


                               (15,770)             (21,299)                      31,428                 37,630
                                 1,066                1,622                        1,066                  1,622
                             ---------             --------                    ---------              ---------

                               (16,836)             (22,921)                      30,362                 36,008
                                    --                   --                           --                 (1,376)
                             ---------             --------                    ---------              ---------
                               (16,836)             (22,921)                      30,362                 34,632
                             =========             ========                    =========              =========
</TABLE>

<PAGE>


(9)      GUARANTEED PREFERRED BENEFICIAL INTERESTS IN SUBORDINATED DEBENTURES

         On April 10, 2002,  First Bank Capital  Trust  (FBCT),  a  newly-formed
Delaware  business  trust  subsidiary  of First Banks,  issued  25,000 shares of
variable rate  cumulative  trust  preferred  securities at $1,000 per share in a
private placement offering,  and issued 774 shares of common securities to First
Banks at $1,000 per share.  First  Banks  owns all of the common  securities  of
FBCT.  The gross  proceeds of the offering  were used by FBCT to purchase  $25.8
million of  variable  rate  junior  subordinated  debentures  from First  Banks,
maturing on April 22, 2032. The maturity date of the subordinated debentures may
be shortened to a date not earlier  than April 22, 2007,  if certain  conditions
are met. The  subordinated  debentures are the sole asset of FBCT. In connection
with the  issuance of the FBCT  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 FBCT under the FBCT
preferred   securities.   First  Banks'   proceeds  from  the  issuance  of  the
subordinated  debentures to FBCT, net of offering expenses,  were $24.2 million,
and were used to reduce  indebtedness  currently  outstanding under First Banks'
revolving credit line with a group of unaffiliated financial  institutions.  The
distribution  rate on the FBCT securities is equivalent to the six-month  London
Interbank Offering Rate plus 387.5 basis points, and is payable semi-annually in
arrears on April 22 and October 22, beginning on October 22, 2002. Distributions
on FBCT's preferred securities were $437,000 and $828,000 for the three and nine
months ended September 30, 2002.



<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 negative impact on the economy resulting
from the events of September 11, 2001 in New York City and  Washington  D.C. and
the national  response to those events as well as the threat of future terrorist
activities,  potential wars and/or military actions related hereto, 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; and our ability to respond to changes in technology.
With  regard to our efforts to grow  through  acquisitions,  factors  that could
affect the accuracy or  completeness  of  forward-looking  statements  contained
herein include the potential for higher than anticipated operating costs arising
from the  geographic  dispersion of our offices,  as compared  with  competitors
operating solely in contiguous markets; the competition of larger acquirers with
greater  resources  than us,  fluctuations  in the  prices at which  acquisition
targets may be available for sale and in the market for our securities;  and the
potential  for  difficulty or  unanticipated  costs in realizing the benefits of
particular acquisition  transactions.  Readers of 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 currently operate banking subsidiaries with 151 branch
offices throughout  California,  Illinois,  Missouri and Texas. At September 30,
2002, we had total assets of $7.17 billion,  loans, net of unearned discount, of
$5.46 billion, total deposits of $6.03 billion and total stockholders' equity of
$506.2 million.

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

         We operate  through  two  subsidiary  banks and three  subsidiary  bank
holding companies as follows:

         Union  Financial  Group,   Ltd.,  or  UFG,  headquartered  in  Swansea,
           Illinois, and its wholly owned subsidiary:
              First   Bank,   headquartered   in  St.  Louis  County,  Missouri;
         First Banks  America,  Inc., or FBA,  headquartered  in San  Francisco,
           California  and its wholly owned subsidiary:
              The San Francisco Company, or SFC, headquartered in San Francisco,
                 California, and its wholly owned subsidiary:
                    First Bank & Trust, or FB&T, headquartered in San Francisco,
                       California.

         Our  subsidiary  banks  are  wholly  owned by their  respective  parent
companies.  We owned 93.76% and 93.69% of FBA at September 30, 2002 and December
31, 2001, respectively.
<PAGE>

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

                               Financial Condition

         Our total assets were $7.17  billion and $6.78 billion at September 30,
2002 and  December  31,  2001,  respectively.  The  increase in total  assets is
primarily  attributable to our acquisition of Plains Financial  Corporation,  or
PFC, in January 2002,  which  provided total assets of $256.3 million as well as
our  acquisition  of the  Denton  and  Garland,  Texas  branch  offices of Union
Planters Bank, National  Association,  or UPB, completed on June 22, 2002, which
provided assets of approximately $63.7 million. The increase in total assets was
partially  offset by lower loan  demand and an  anticipated  level of  attrition
associated  with our  acquisitions of Charter Pacific Bank, BYL Bancorp and UFG,
completed  during the fourth  quarter of 2001,  and of PFC.  Federal  funds sold
increased by $23.6 million due to the investment of excess funds  resulting from
reduced loan demand primarily due to economic conditions.  Investment securities
increased  $283.8  million to $914.9  million at September  30, 2002 from $631.1
million at December 31, 2001. We attribute the increase in investment securities
primarily to the purchase of  available-for-sale  investment securities of $1.11
billion  as well as the $81.0  million  of  investment  securities  acquired  in
conjunction   with  our   acquisition   of  PFC,   offset   by   maturities   of
available-for-sale   investment   securities  of  $855.1   million.   Derivative
instruments  increased  $47.0 million due to the purchase of three interest rate
swap  agreements in May and June 2002 and  mark-to-market  adjustments  required
under Statement of Financial Accounting Standards,  or SFAS, No. 133, Accounting
for Derivative  Instruments  and Hedging  Activities,  which was  implemented in
January 2001. See further discussion under "--Interest Rate Risk Management." In
addition,  intangibles  associated with the purchase of  subsidiaries  increased
$14.8 million,  which reflects core deposit  intangibles and goodwill associated
with our acquisition of PFC as well as core deposit intangibles  associated with
our branch  purchases of UPB as further  discussed in Note 2 to our consolidated
financial  statements.  The  overall  increase  in  assets  was  also due to the
increase in loans, net of unearned discount, of $55.2 million,  which is further
discussed  under  "--Loans  and  Allowance  for  Loan  Losses."  Total  deposits
increased by $341.8  million to $6.03  billion at September  30, 2002 from $5.68
billion at December 31, 2001. The increase primarily reflects deposits of $213.4
million acquired in our PFC acquisition and $64.9 million acquired in our branch
purchases  in  addition  to an increase in savings  accounts  due  primarily  to
general economic conditions.  The increase was offset by an anticipated level of
attrition associated with our acquisitions and continued aggressive  competition
within our  market  areas.  In  addition,  certain  large  commercial  accounts,
particularly  related to real estate title and escrow business,  sharply reduced
their deposit levels in 2002,  reflecting their reduced  business  activity as a
result of general economic  conditions.  Short-term  borrowings  decreased $29.1
million to $214.1  million at September 30, 2002 from $243.1 million at December
31, 2001,  primarily  due to a reduction in federal  funds  purchased.  Our note
payable  decreased by $27.5 million due to repayments  primarily  funded through
dividends from our  subsidiaries and the issuance of $25.0 million of additional
trust preferred securities as more fully described in Note 9 to our consolidated
financial  statements  offset by a $36.5  million  advance  utilized to fund our
acquisition of PFC in January 2002. Guaranteed preferred beneficial interests in
subordinated  debentures  increased  $31.8 million due to the  additional  trust
preferred securities and increased amortization of deferred issuance costs.

                              Results of Operations

Net Income

         Net income was $13.0  million and $30.4  million for the three and nine
months ended  September  30, 2002,  respectively,  compared to $14.4 million and
$34.6  million for the  comparable  periods in 2001.  Results  for 2002  reflect
increased net interest income and noninterest income, offset by higher operating
expenses  and  increased  provisions  for loan  losses,  reflecting  the current
economic   environment   and  increased   loan   charge-off,   delinquency   and
nonperforming  trends.  See  further  discussion  under "--  Provision  for Loan
Losses."  The  implementation  of SFAS No. 142,  Goodwill  and Other  Intangible
Assets, on January 1, 2002,  resulted in the  discontinuation of amortization of
certain intangibles associated with the purchase of subsidiaries.  As more fully
described  in  Note  3 to  our  consolidated  financial  statements,  if we  had
implemented  SFAS No. 142 at the beginning of 2001, net income for the three and
nine months ended  September 30, 2001 would have increased $1.8 million and $5.4
million,  respectively.  In  addition,  the  implementation  of SFAS No. 133, on
January 1, 2001, resulted in the recognition of a cumulative effect of change in
accounting  principle of $1.4 million,  net of tax,  which reduced net income in

<PAGE>

2001. Excluding this item, net income would have been $36.0 million for the nine
months ended  September  30, 2001.  The  accounting  for  derivatives  under the
requirements of SFAS No. 133 will continue to have an impact on future financial
results as further discussed above and under "--Noninterest Income."

         The  overall  increase  in  operating  expenses  for 2002,  as  further
discussed   under   "--Noninterest   Expense,"  was  partially   offset  by  the
discontinuation  of  amortization  of certain  intangibles  associated  with the
purchase of subsidiaries in accordance with the  implementation of SFAS No. 142.
Amortization  of intangibles  for the three and nine months ended  September 30,
2002 was $516,000 and $1.5 million,  respectively,  compared to $1.9 million and
$5.6 million for the comparable  periods in 2001. The higher operating  expenses
and increased  provisions for loan losses were partially offset by increased net
interest  income  and  noninterest  income as  further  discussed  under  "--Net
Interest Income" and "--Noninterest Income."

Net Interest Income

         Net interest income  (expressed on a tax equivalent basis) increased to
$68.6 million, or 4.24% of average interest-earning assets, for the three months
ended   September   30,  2002,   from  $60.0   million,   or  4.42%  of  average
interest-earning  assets, for the comparable period in 2001. For the nine months
ended  September  30, 2002 and 2001,  net interest  income  (expressed  on a tax
equivalent  basis) was  $199.1  million,  or 4.23% of  average  interest-earning
assets,  and  $175.9  million,  or 4.40%  of  average  interest-earning  assets,
respectively.  We credit the increased net interest income  primarily to the net
interest-earning assets provided by our acquisitions completed during the fourth
quarter of 2001 and in January  2002 as well as  earnings on our  interest  rate
swap agreements that we entered into in conjunction  with our interest rate risk
management   program.   As  further   discussed  under   "--Interest  Rate  Risk
Management,"  for the three and nine months  ended  September  30,  2002,  these
agreements  provided net  interest  income of $14.2  million and $38.0  million,
respectively, in comparison to $7.1 million and $12.8 million for the comparable
periods in 2001.  The increase in net interest  income,  however,  was partially
offset by reductions in prevailing interest rates during 2001,  generally weaker
loan demand and overall economic conditions, resulting in the decline in our net
interest margin.  Guaranteed  preferred  debentures expense was $5.3 million and
$18.6  million  for  the  three  and  nine  months  ended  September  30,  2002,
respectively,  compared  to $4.5  million and $13.5  million for the  comparable
periods in 2001. The increase for 2002 is primarily attributable to the issuance
of trust preferred securities by our financing  subsidiaries.  In November 2001,
First  Preferred  Capital  Trust III issued  $55.2  million  of trust  preferred
securities  and in April 2002,  First Bank Capital Trust issued $25.8 million of
trust  preferred  securities.  The overall  increase  also  reflects a change in
estimate  regarding the period over which the deferred  issuance costs are being
amortized  partially  offset by the earnings  associated  with our interest rate
swap  agreements  entered into in May and June 2002 as further  discussed  under
"--Interest Rate Risk Management."

         Average loans, net of unearned  discount,  were $5.36 billion and $5.42
billion for the three and nine months ended September 30, 2002, respectively, in
comparison  to $4.83  billion and $4.84  billion for the  comparable  periods in
2001. The yield on our loan portfolio, however, decreased to 7.12% and 7.26% for
the three and nine months ended September 30, 2002, respectively,  in comparison
to  8.40%  and  8.72%  for the  comparable  periods  in  2001.  This was a major
contributor to the decline in our net interest  margin of 18 basis points and 17
basis  points  for  the  three  and  nine  months  ended   September  30,  2002,
respectively,  from the comparable  periods in 2001. We attribute the decline in
yields and our net  interest  margin  primarily to the  decreases in  prevailing
interest rates throughout  2001.  During the period from January 1, 2001 through
December  31,  2001,  the  Board of  Governors  of the  Federal  Reserve  System
decreased the targeted Federal funds rate 11 times, resulting in 11 decreases in
the prime rate of interest  from 9.50% to 4.75%.  This is reflected  not only in
the rate of interest  earned on loans that are  indexed to the prime  rate,  but
also in other assets and  liabilities  which either have  variable or adjustable
rates, or which matured or repriced during this period.  As discussed above, 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.

         For the three and nine months ended  September 30, 2002,  the aggregate
weighted  average  rate paid on our  deposit  portfolio  decreased  to 2.44% and
2.67%,  respectively,  compared to 4.09% and 4.51% for the comparable periods in
2001.  We  attribute  the  decline  primarily  to rates paid on savings and time
deposits,  which have continued to decline in conjunction with the interest rate
reductions  previously  discussed.  The decrease in rates paid for the three and
nine  months  ended  September  30,  2002 is a result  of  generally  decreasing
interest  rates  during 2001.  However,  the  competitive  pressures on deposits
within our market areas precluded us from fully  reflecting the general interest
rate decreases in our deposit  pricing and still  providing an adequate  funding
source for loans.
<PAGE>

         The aggregate weighted average rate paid on our note payable was 21.37%
and 4.69% for the three and nine months ended September 30, 2002,  respectively,
compared to 7.09% and 6.84% for the comparable  periods in 2001. The increase in
the weighted  average rate paid for the three  months ended  September  30, 2002
primarily reflects increased commitment,  arrangement and other fees paid during
the  third  quarter  to renew our  secured  credit  agreement.  Due to the small
average  balance  outstanding  on our note payable during the three months ended
September  30, 2002,  the timing of the  recognition  of these fees results in a
disproportionate  weighted average rate paid for the period. The overall decline
for the nine months ended  September  30, 2002 is reflective of the current rate
environment.  Amounts  outstanding under our $90.0 million line of credit with a
group of unaffiliated  financial  institutions  bear interest at the lead bank's
corporate  base rate or, at our  option,  at the  Eurodollar  rate plus a margin
determined by the outstanding balance and our profitability. Thus, our revolving
credit line  represents  a  relatively  high-cost  funding  source 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 during 2001
and in the  outstanding  balance of the note payable in 2002.  During 2001,  our
note  payable  was  fully  repaid  from  the  proceeds  of the  trust  preferred
securities issued by First Preferred Capital Trust III. However, on December 31,
2001, we obtained a $27.5 million  advance to fund our acquisition of UFG and in
January 2002, we utilized the note payable to fund our  acquisition  of PFC. The
note was fully repaid in September  2002.  The aggregate  weighted  average rate
paid on our  short-term  borrowings  also declined for the three and nine months
ended  September  30,  2002,  as  compared  to the  comparable  periods in 2001,
reflecting reductions in the current interest rate environment.

         The aggregate  weighted  average rate paid on our guaranteed  preferred
debentures  declined  to 7.88% and 9.80%  for the  three and nine  months  ended
September  30,  2002,  respectively,  from  9.74% and  9.85% for the  comparable
periods in 2001. The decreased  rates  primarily  reflect the earnings impact of
our interest  rate swap  agreements  into in May and June 2002.  The decline was
partially  offset by the additional  expense of our trust  preferred  securities
issued in November 2001 and April 2002 as well as a change in estimate regarding
the  period  over  which the  deferred  issuance  costs  associated  with  these
obligations are being amortized.


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

                                            Three Months Ended September 30,                   Nine Months Ended September 30,
                                 -------------------------------------------------   -----------------------------------------------
                                             2002                     2001                      2002                    2001
                                 -------------------------   ---------------------   ----------------------   ----------------------
                                             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).......... $5,361,625  96,236  7.12% $4,828,254 102,244 8.40% $5,415,946 294,274 7.26% $4,836,210 315,305 8.72%
   Investment securities (4)...    938,971   9,479  4.01     414,968   6,216 5.94     766,146  25,123 4.38     424,200  21,288 6.71
   Federal funds sold
        and other..............    115,703     512  1.76     137,255   2,445 7.07     115,477   1,454 1.68      84,093   4,100 6.52
                                ---------- -------        ---------- -------       ---------- -------       ---------- -------
        Total interest-earning
          assets...............  6,416,299 106,227  6.57   5,380,477 110,905 8.18   6,297,569 320,851 6.81   5,344,503 340,693 8.52
                                           -------                   -------                  -------                  -------
Nonearning assets..............    694,685                   552,684                  676,661                  529,260
                                ----------                ----------               ----------               ----------
        Total assets........... $7,110,984                $5,933,161               $6,974,230               $5,873,763
                                ==========                ==========               ==========               ==========

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

Interest-bearing liabilities:
   Interest-bearing deposits:
     Interest-bearing demand
       deposits................ $  774,144   1,786  0.92% $  515,406   1,892 1.46% $  721,982   5,739 1.06% $  482,891   5,372 1.49%
     Savings deposits..........  1,999,395   8,819  1.75   1,551,180  12,402 3.17   1,947,271  27,253 1.87   1,485,391  39,927 3.59
     Time deposits of $100
       or more (3).............    500,657   4,624  3.66     520,594   6,788 5.17     501,054  14,803 3.95     524,974  22,117 5.63
     Other time deposits (3)...  1,810,274  15,986  3.50   1,738,050  23,486 5.36   1,811,532  51,837 3.83   1,776,272  76,629 5.77
                                ---------- -------        ---------- -------       ---------- -------       ---------- -------
        Total interest-bearing
          deposits.............  5,084,470  31,215  2.44   4,325,230  44,568 4.09   4,981,839  99,632 2.67   4,269,528 144,045 4.51
   Short-term borrowings.......    195,465     806  1.64     151,823   1,338 3.50     187,634   2,635 1.88     161,755   5,000 4.13
   Notes payable...............      5,738     309 21.37      31,059     555 7.09      23,904     839 4.69      45,521   2,328 6.84
   Guaranteed preferred
        debentures (3).........    266,817   5,300  7.88     182,924   4,489 9.74     254,044  18,629 9.80     182,860  13,467 9.85
                                ---------- -------        ---------- -------       ---------- -------       ---------- -------
        Total interest-bearing
          liabilities..........  5,552,490  37,630  2.69   4,691,036  50,950 4.31   5,447,421 121,735 2.99   4,659,664 164,840 4.73
                                           -------                   -------                  -------                  -------
Noninterest-bearing liabilities:
   Demand deposits.............    912,807                   725,624                  916,822                  718,468
   Other liabilities...........    152,086                   105,114                  141,769                  105,929
                                ----------                  ---------              ----------               ----------
        Total liabilities......  6,617,383                 5,521,774                6,506,012                5,484,061
Stockholders' equity...........    493,601                   411,387                  468,218                  389,702
                                ----------                ----------               ----------               ----------
        Total liabilities and
          stockholders' equity. $7,110,984                $5,933,161               $6,974,230               $5,873,763
                                ==========                ==========               ==========               ==========

Net interest income............             68,597                    59,955                  199,116                  175,853
                                           =======                   =======                  =======                  =======
Interest rate spread...........                     3.88                     3.87                     3.82                     3.79
Net interest margin (5)........                     4.24%                    4.42%                    4.23%                    4.40%
                                                   =====                     ====                    =====                     ====
--------------------
(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
    $416,000 and $1.1 million for  the  three and nine months ended September 30, 2002, and $181,000 and $576,000 for the comparable
    periods in 2001, respectively.
(5) 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 $13.7 million and $38.7 for the three
and nine months ended September 30, 2002, respectively, compared to $6.8 million
and $13.9  million  for the  comparable  periods in 2001.  The  increase  in the
provision  for loan losses  reflects a higher level of problem loans and related
loan  charge-offs  and past due loans  resulting  from the  economic  conditions
within our markets. Net loan charge-offs were $7.6 million and $27.4 million for
the three and nine months ended September 30, 2002, respectively,  in comparison
to $3.2  million  and $14.8  million  for the  comparable  periods in 2001.  The
increase  in net loan  charge-offs  reflects  the  general  slowdown in economic
conditions prevalent within our markets as well as an aggregate of $15.0 million
of loan charge-offs on five large credit relationships,  representing nearly 55%
of loan charge-offs in 2002. Loan recoveries were $3.4 million and $11.7 for the
three and nine months ended September 30, 2002,  respectively,  in comparison to
$3.4 million and $7.2 million for the  comparable  periods in 2001. In addition,
nonperforming  assets and loans past due 90 days or more and still accruing have
increased to $110.1 million at September 30, 2002 from $86.8 million at December
31, 2001, and are expected remain at these higher-than-normal levels in the near
future.  Management  considered  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 $25.5  million and $64.8  million for the three
and nine months ended September 30, 2002,  respectively,  in comparison to $21.8
million and $57.7 million for the comparable periods in 2001. Noninterest income
consists  primarily of service charges on deposit  accounts and customer service
fees,  mortgage-banking  revenues,  bank-owned life insurance investment income,
net gains on derivative instruments and other income.

         Service charges on deposit accounts and customer service fees were $8.5
million  and $22.0  million for the three and nine months  ended  September  30,
2002,  respectively,  in  comparison  to $5.7 million and $16.3  million for the
comparable  periods in 2001.  We attribute  the increase in service  charges and
customer service fees to:

         >>    our acquisitions completed during 2001 and 2002;

         >>    additional  products and services  available  and utilized by our
               expanding base of consumer 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 $7.9 million and
$20.3  million  for  the  three  and  nine  months  ended  September  30,  2002,
respectively,  in comparison to $2.4 million and $9.7 million for the comparable
periods in 2001. The overall increase is primarily attributable to a significant
increase  in the  volume  of loans  originated  and sold  commensurate  with the
reductions in mortgage loan rates  experienced  in 2001 as well as the continued
expansion of our mortgage banking activities.

         During the nine months ended  September  30,  2001,  we recorded a $1.9
million pre-tax gain on the sale of our credit card portfolio,  net of expenses.
The sale of this  portfolio was consistent  with our strategic  decision to exit
this product line and enter into an agent relationship with a larger credit card
service provider.

         Bank-owned life insurance  investment  income was $1.5 million and $4.3
million for the three and nine months ended September 30, 2002, respectively, in
comparison to $970,000 and $3.1 million for the comparable  periods in 2001. The
increase  for 2002  reflects  changes  in the  portfolio  mix of the  underlying
investments   which  improved  our  return  on  this  product  as  well  as  the
reinvestment of earnings.

         The net  gain on  derivative  instruments  was  $2.0  million  and $1.7
million for the three and nine months ended September 30, 2002, respectively, in
comparison to $8.9 million and $14.4 million for the comparable periods in 2001.
The  decrease in income from  derivative  instruments  reflects  $3.8 million of
gains  resulting from the  termination of certain  interest rate swap agreements
during  the  second  quarter  of  2001,  the  sale of our  interest  rate  floor
agreements  in November  2001 and changes in the fair value of our interest rate
cap agreements and fair value hedges.
<PAGE>

         Other income was $5.7 million and $16.4  million for the three and nine
months ended September 30, 2002, respectively, in comparison to $4.3 million and
$12.6  million for the  comparable  periods in 2001.  We  attribute  the primary
components of the increase to:

         >>    our acquisitions completed during 2001 and 2002;

         >>    increased   portfolio   management  fee  income   associated  our
               Institutional Money Management division;

         >>    increased  earnings  associated  with our  international  banking
               products;

         >>    increased  rental income  associated with our commercial  leasing
               activities;

         >>    increased  rental fees from First  Services,  L.P. for the use of
               data  processing  and other  equipment  owned by First Banks (see
               Note 6 to our consolidated financial statements); and

         >>    a gain of  approximately  $448,000  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; offset by

         >>    the  write-down of  approximately  $943,000 on certain  equipment
               associated with our commercial leasing operation in June 2002.

Noninterest Expense

         Noninterest  expense was $59.2 million and $175.2 million for the three
and nine months ended September 30, 2002,  respectively,  in comparison to $50.3
million and $157.4 million for the comparable  periods in 2001. The increase for
the nine months ended September 30, 2002 reflects the noninterest expense of our
acquisitions  completed  during 2001 and 2002,  including  certain  nonrecurring
expenses  associated with those  acquisitions as well as increased  salaries and
employee benefit  expenses,  occupancy and furniture and equipment  expenses and
information  technology fees, offset by a decline in amortization of intangibles
associated with the purchase of subsidiaries and other expense.

         Salaries and employee benefits were $28.4 million and $84.5 million for
the three and nine months ended September 30, 2002, respectively,  in comparison
to $23.1  million  and $68.9  million  for the  comparable  periods in 2001.  We
primarily  associate the increase with our 2001 and 2002 acquisitions and higher
commissions  paid to mortgage  loan  originators  due to increased  loan volume.
However,  the increase  also reflects  higher salary and employee  benefit costs
associated with employing and retaining qualified  personnel.  In addition,  the
increase  includes various  additions to staff throughout 2001 to enhance senior
management expertise and expand our product lines.

         Occupancy,  net of rental income,  and furniture and equipment  expense
totaled  $10.5  million and $28.7  million  for the three and nine months  ended
September  30,  2002,  respectively,  in  comparison  to $7.4  million and $21.2
million for the comparable periods in 2001. We primarily  attribute the increase
to our  aforementioned  acquisitions,  including certain  nonrecurring  expenses
associated  with  lease  obligation  terminations,  the  relocation  of  certain
branches and operational areas,  increased  depreciation expense associated with
numerous  capital  expenditures  and the continued  expansion and  renovation of
various  corporate  and branch  offices,  including our facility that houses our
centralized operations and certain corporate administrative functions.

         Information technology fees were $7.8 million and $24.4 million for the
three and nine months ended September 30, 2002,  respectively,  in comparison to
$6.9 million and $19.9 million for the comparable periods in 2001. 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. We attribute the increased fees to growth and technological
advancements  consistent  with our  product  and  service  offerings,  continued
expansion and upgrades to technological  equipment,  networks and  communication
channels and certain  nonrecurring  expenses associated with the data processing
conversions  of UFG and PFC,  completed in the first quarter of 2002, and of the
Denton and Garland,  Texas branch purchases,  completed in the second quarter of
2002.

         Legal,  examination  and  professional  fees were $2.9 million and $6.5
million for the three and nine months ended September 30, 2002, respectively, in
comparison to $2.0 million and $5.4 million for the comparable  periods in 2001.
We primarily  attribute the increase in these fees to the continued expansion of
overall  corporate  activities,  the ongoing  professional  services utilized by
certain of our  acquired  entities  and  increased  legal fees  associated  with

<PAGE>

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  $516,000 and $1.5 million for the three and nine months ended
September 30, 2002, respectively, in comparison to $1.9 million and $5.6 million
for the  comparable  periods in 2001.  As more fully  discussed in Note 3 to our
consolidated  financial  statements,   the  significant  decrease  for  2002  is
attributable to the implementation of SFAS No. 142 in January 2002.

         Other expense was $5.9 million and $19.0 million for the three and nine
months ended September 30, 2002, respectively, in comparison to $5.8 million and
$26.2 million for the  comparable  periods in 2001.  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 decrease
in other expense for the nine months ended September 30, 2002 to a $11.5 million
nonrecurring litigation settlement charge in June 2001 associated with a lawsuit
brought by an  unaffiliated  bank  against one of our  subsidiaries  and certain
individuals related to allegations arising from the employment by our subsidiary
of individuals previously employed by the plaintiff bank, as well as the conduct
of those  individuals while employed by the plaintiff bank. The overall decrease
was offset by expenses  associated with our  acquisitions  completed during 2001
and 2002 as well as the continued growth and expansion of our banking franchise.

Provision for Income Taxes

         The  provision  for income taxes was $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,  in comparison to $9.5 million
and $24.1 million,  representing an effective income tax rate of 38.9% and 39.1%
for the comparable periods in 2001, respectively.  The decrease in the effective
income tax rate for 2002 reflects the  significant  decline in  amortization  of
intangibles associated with the purchase of subsidiaries, in accordance with the
requirements of SFAS No. 142, which is not deductible for tax purposes.

                          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, 2002           December 31, 2001
                                                                -----------------------      -----------------------
                                                                 Notional       Credit       Notional       Credit
                                                                  Amount       Exposure       Amount       Exposure
                                                                  ------       --------       ------       --------
                                                                            (dollars expressed in thousands)

<S>                                                             <C>              <C>          <C>             <C>
         Cash flow hedges.....................................  $1,050,000       1,883        900,000         1,764
         Fair value hedges....................................     387,450       7,866        200,000         6,962
         Interest rate cap agreements.........................     450,000         426        450,000         2,063
         Interest rate lock commitments.......................     106,000          --         88,000            --
         Forward commitments to sell
             mortgage-backed securities.......................     243,000          --        209,000            --
                                                                ==========       =====        =======         =====
</TABLE>


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

         During the three and nine months  ended  September  30,  2002,  the net
interest  income  realized on our  derivative  financial  instruments  was $14.2
million and $38.0 million, respectively, in comparison to $7.1 million and $12.8
million for the  comparable  periods in 2001.  The increase is primarily  due to
interest income  associated  with the additional  swap  agreements  entered into
during May and June 2002 as well as the decline in prevailing interest rates. In
addition, we realized a net gain on derivative instruments, which is included in
noninterest  income,  of $2.0  million  and $1.7  million for the three and nine
months ended September 30, 2002, respectively, in comparison to $8.9 million and
$14.4  million for the  comparable  periods in 2001.  The net decrease in income
from 2001  reflects  $3.8 million of gains  resulting  from the  termination  of
certain  interest rate swap  agreements  during the second  quarter of 2001, the

<PAGE>

sale of our interest  rate floor  agreements in November 2001 and changes in the
fair value of our interest rate cap agreements and fair value hedges.

Cash Flow Hedges

         During  September  2000,  March  2001,  April 2001 and March  2002,  we
entered into $600.0 million,  $200.0 million,  $175.0 million and $150.0 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%
and 2.80%, 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 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.  We recorded a pre-tax  gain of $2.6  million in  conjunction  with the
termination of these swap agreements. The amount receivable by us under the swap
agreements  was $3.0 million and $2.9 million at September 30, 2002 and December
31,  2001,  respectively,  and the  amount  payable  by us was $1.1  million  at
September 30, 2002 and December 31, 2001.

         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, 2002 and December 31, 2001 were as follows:
<TABLE>
<CAPTION>

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

         September 30, 2002:
<S>                <C> <C>                                     <C>               <C>           <C>       <C>
             March 14, 2004..................................  $  150,000        1.95%         3.93%     $   4,357
             September 20, 2004..............................     600,000        2.05          6.78         53,927
             March 21, 2005..................................     200,000        1.93          5.24         14,043
             April 2, 2006...................................     100,000        1.93          5.45          9,054
                                                               ----------                                ---------
                                                               $1,050,000        2.00          5.95      $  81,381
                                                               ==========       =====         =====      =========

         December 31, 2001:
             September 20, 2004..............................  $  600,000        2.05%         6.78%     $  40,980
             March 21, 2005..................................     200,000        1.93          5.24          4,951
             April 2, 2006...................................     100,000        1.93          5.45          2,305
                                                               ----------                                ---------
                                                               $  900,000        2.01          6.29      $  48,236
                                                               ==========       =====         =====      =========
</TABLE>

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 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 and
               $5.2  million  at  September  30,  2002 and  December  31,  2001,
               respectively,  and  the  amount  payable  by us  under  the  swap
               agreements  was $868,000  and $1.2 million at September  30, 2002
               and December 31, 2001, respectively.

         >>    During May 2002 and June 2002,  we entered into $55.2 million and
               $86.3 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 2.30% and 2.75%,
               respectively.  In  addition,  during June 2002,  FBA entered into
               $46.0 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 1.97%. The underlying hedged

<PAGE>

               liabilities are our guaranteed  preferred beneficial interests in
               First  Banks,  Inc.  subordinated   debentures  and  First  Banks
               America,  Inc.  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, 2002.

         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, 2002 and December 31, 2001 were as follows:
<TABLE>
<CAPTION>

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

         September 30, 2002:
<S>                                                           <C>               <C>           <C>        <C>
             January 9, 2004.................................  $   50,000        1.86%         5.37%      $  2,221
             January 9, 2006.................................     150,000        1.86          5.50         13,406
             March 31, 2027..................................      86,250        4.61          9.25           (220)
             June 30, 2028...................................      46,000        3.83          8.50            336
             December 31, 2031...............................      55,200        4.16          9.00          4,060
                                                               ----------                                 --------
                                                               $  387,450        3.03          7.17       $ 19,803
                                                               ==========       =====         =====       ========

         December 31, 2001:
             January 9, 2004.................................  $   50,000        2.48%         5.37%      $  1,761
             January 9, 2006.................................     150,000        2.48          5.50          3,876
                                                               ----------                                 --------
                                                               $  200,000        2.48          5.47       $  5,637
                                                               ==========       =====         =====       ========
</TABLE>

Interest Rate Cap Agreements

         In  conjunction  with  the  interest  rate  swap  agreements   maturing
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, 2002 and December 31, 2001,  the carrying  value of these interest
rate  cap  agreements,  which  is  included  in  derivative  instruments  in the
consolidated balance sheets, was $426,000 and $2.1 million, respectively.

Pledged Collateral

         At September 30, 2002 and December 31, 2001, we had pledged  investment
securities  available  for sale with a carrying  value of $5.9  million and $1.1
million,  respectively, in connection with our interest rate swap agreements. In
addition,  at September 30, 2002,  and December 31, 2001,  we had  accepted,  as
collateral in connection with our interest rate swap  agreements,  cash of $97.5
million and $4.9  million,  respectively.  At  December  31,  2001,  we had also
accepted investment  securities with a fair value of $53.9 million as collateral
in  connection  with our  interest  rate swap  agreements.  We are  permitted by
contract to sell or repledge the  collateral  accepted from our  counterparties,
however, at September 30, 2002 and December 31, 2001, we had not done so.

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  banks.  Interest and fees on loans were 90.8% and
91.9% of total interest income for the three and nine months ended September 30,
2002, respectively,  in comparison to 92.3% and 92.6% for the comparable periods
in 2001. Total loans, net of unearned discount, increased $55.2 million to $5.46
billion,  or 76.2% of total  assets,  at September  30, 2002,  compared to $5.41
billion,  or 79.8% of total  assets,  at December  31,  2001.  Exclusive  of our
acquisition of PFC, which provided loans,  net of unearned  discount,  of $150.4
million,  loans  decreased  $95.2  million at  September  30,  2002  compared to
December  31,  2001.  The  decrease  primarily  results  from  declines  in  our
commercial, financial and agricultural portfolio due to an anticipated amount of
attrition  associated with our acquisitions  completed during the fourth quarter
of 2001 and the first  quarter of 2002, as well as current  economic  conditions

<PAGE>

prevalent  within  our  markets.  In  addition,  our  consumer  and  installment
portfolio, net of unearned discount, decreased to $91.0 million at September 30,
2002 from $122.1 million at December 31, 2001. This decrease reflects  continued
reductions  in new loan  volumes and the  repayment of principal on our existing
portfolio, and is also consistent with our objectives of de-emphasizing consumer
lending and expanding  commercial lending. The decrease in loans was offset by a
$57.1 million increase in loans held for sale,  which is primarily  attributable
to increased volumes resulting from the current interest rate environment.

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

                                                                                  September 30,   December 31,
                                                                                      2002            2001
                                                                                      ----            ----
                                                                                (dollars expressed in thousands)

         Commercial, financial and agricultural:
<S>                                                                               <C>                 <C>
              Nonaccrual.....................................................     $   37,413          19,326
         Real estate construction and development:
              Nonaccrual.....................................................         25,645           3,270
         Real estate mortgage:
              Nonaccrual.....................................................         32,943          41,898
              Restructured terms.............................................          1,956           2,013
         Consumer and installment:
              Nonaccrual.....................................................          1,276             794
              Restructured terms.............................................             --               7
                                                                                 -----------      ----------
                  Total nonperforming loans..................................         99,233          67,308
         Other real estate...................................................          3,125           4,316
                                                                                 -----------      ----------
                  Total nonperforming assets.................................    $   102,358          71,624
                                                                                 ===========      ==========

         Loans, net of unearned discount.....................................    $ 5,464,020       5,408,869
                                                                                 ===========      ==========

         Loans past due 90 days or more and still accruing...................    $     7,778          15,156
                                                                                 ===========      ==========

         Ratio of:
              Allowance for loan losses to loans.............................           2.01%           1.80%
              Nonperforming loans to loans...................................           1.82            1.24
              Allowance for loan losses to nonperforming loans...............         110.72          144.36
              Nonperforming assets to loans and other real estate............           1.87            1.32
                                                                                 ===========      ==========
</TABLE>

         Nonperforming  loans,  consisting  of loans on  nonaccrual  status  and
certain  restructured  loans,  were $99.2  million at  September  30,  2002,  in
comparison to $67.3 million at December 31, 2001. The increase in  nonperforming
loans is primarily  attributable to general  economic  conditions as well as the
addition of a $16.1 million  borrowing  relationship  to nonaccrual  real estate
construction  and  development  loans  during  the second  quarter of 2002.  The
relationship relates to a residential and recreational  development project that
had  significant  financial  difficulties  and  experienced  inadequate  project
financing,  project delays and weak project  management.  This  relationship had
previously  been on  nonaccrual  status and was removed from  nonaccrual  status
during  the third  quarter  of 2001 due to  financing  being  recast  with a new
borrower,  who  appeared  able  to  meet  ongoing  developmental   expectations.
Subsequent to that time, the new borrower has  encountered  internal  management
problems,  which have negatively impacted and further delayed development of the
project.  Loan  charge-offs  also increased  significantly  to $11.0 million and
$39.0  million  for  the  three  and  nine  months  ended  September  30,  2002,
respectively,  from $6.6 million and $22.0 million for the comparable periods in
2001,  primarily due to the general  slowdown in economic  conditions as well as
charge-offs  aggregating  $15.0  million  on five  large  credit  relationships,
representing  nearly 55% of loan  charge-offs  in 2002.  We attribute the higher
trends in  nonperforming  and  delinquent  loans  and  charge-offs  to  economic
conditions  in our  markets.  Consistent  with the  general  economic  slow down
experienced  within our primary markets,  we anticipate this trend will continue
in the near future.


<PAGE>


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

                                                                       Three Months Ended       Nine Months Ended
                                                                          September 30,           September 30,
                                                                       ------------------     -------------------
                                                                        2002       2001        2002        2001
                                                                        ----       ----        ----        ----
                                                                            (dollars expressed in thousands)

<S>                                                                    <C>        <C>         <C>        <C>
         Allowance for loan losses, beginning of period..............  $ 103,794  77,141      97,164     81,592
         Acquired allowances for loan losses.........................         --      --       1,366         --
                                                                       --------- -------     -------    -------
                                                                         103,794  77,141      98,530     81,592
                                                                       --------- -------     -------    -------
         Loans charged-off...........................................    (11,014) (6,620)    (39,047)   (21,956)
         Recoveries of loans previously charged-off..................      3,395   3,427      11,692      7,202
                                                                       --------- -------     -------    -------
         Net loan charge-offs........................................     (7,619) (3,193)    (27,355)   (14,754)
                                                                       --------- -------     -------    -------
         Provision for loan losses...................................     13,700   6,800      38,700     13,910
                                                                       --------- -------     -------    -------
         Allowance for loan losses, end of period....................  $ 109,875  80,748     109,875     80,748
                                                                       ========= =======     =======    =======
</TABLE>

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

                                    Liquidity

         Our liquidity and the liquidity of our subsidiary  banks is the ability
to  maintain a cash flow,  which is adequate to fund  operations,  service  debt
obligations and meet other  commitments on a timely basis.  Our subsidiary banks
receive funds for liquidity from customer deposits, loan payments, maturities of
loans and investments,  sales of investments and earnings.  In addition,  we may
avail ourselves of other sources of funds by issuing  certificates of deposit in
denominations of $100,000 or more,  borrowing federal funds,  selling securities
under  agreements to repurchase and utilizing  borrowings  from the Federal Home
Loan Banks and other  borrowings,  including  our  revolving  credit  line.  The
aggregate  funds  acquired  from these  sources  were $710.2  million and $754.8
million at September 30, 2002 and December 31, 2001, respectively.

         The  following  table  presents the  maturity  structure of these other
sources of funds, which consists of certificates of deposit of $100,000 or more,
short-term borrowings and our revolving note payable, at September 30, 2002:
<TABLE>
<CAPTION>

                                                                                 (dollars expressed in thousands)

<S>                                                                                          <C>
         Three months or less..........................................................      $345,099
         Over three months through six months..........................................       100,119
         Over six months through twelve months.........................................       131,532
         Over twelve months............................................................       133,422
                                                                                             --------
                Total..................................................................      $710,172
                                                                                             ========
</TABLE>
<PAGE>

         In  addition  to these  sources  of funds,  our  subsidiary  banks have
established  borrowing  relationships  with the Federal  Reserve  Banks in their
respective  districts.  These  borrowing  relationships,  which are  secured  by
commercial loans,  provide an additional liquidity facility that may be utilized
for  contingency  purposes.  At September  30, 2002 and  December 31, 2001,  the
borrowing   capacity  of  our  subsidiary   banks  under  these  agreements  was
approximately $1.19 billion and $1.21 billion,  respectively.  In addition,  our
subsidiary  banks'  borrowing  capacity  through  their  relationships  with the
Federal Home Loan Banks was  approximately  $387.3 million and $234.6 million at
September 30, 2002 and December 31, 2001, respectively. Exclusive of the Federal
Home Loan Bank  advances  outstanding  at First Bank of $10.0  million and $20.1
million  at  September  30,  2002  and  December  31,  2001,  respectively,  our
subsidiaries  had no amounts  outstanding  under either of these  agreements  at
September 30, 2002 and December 31, 2001, however, under a separate Federal Home
Loan Bank  agreement,  FB&T had advances  outstanding of $10.0 million and $10.5
million at September 30, 2002 and December 31, 2001, respectively.

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



<PAGE>


       ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         At December 31, 2001, our risk management  program's  simulation  model
indicated a loss of projected  net interest  income in the event of a decline in
interest rates.  While a decline in interest rates of less than 100 basis points
was projected to have a relatively minimal impact on our net interest income, an
instantaneous,  parallel decline in the interest yield curve of 100 basis points
indicated a pre-tax projected loss of approximately 6.1% of net interest income,
based on assets and  liabilities at December 31, 2001. At September 30, 2002, 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 reductions in prevailing  interest rates  throughout  2001, is reflected in
our reduced net interest  margin for the three and nine months  ended  September
30,  2002 as compared to the  comparable  periods in 2001 and further  discussed
under  "--Results  of  Operations."  During  the  three  and nine  months  ended
September 30, 2002, 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
             --------------                      -----------


                  10.1                   $110,000,000 Secured Credit  Agreement,
                                         dated  as  of  August 22,  2002,  among
                                         First   Banks,  Inc.  and  Wells  Fargo
                                         Bank Minneapolis, National Association,
                                         American  National Bank & Trust Company
                                         of Chicago, The Northern Trust Company,
                                         Union Bank of California N.A., SunTrust
                                         Bank, Nashville and Fifth Third  Bank -
                                         incorporated  herein  by  reference  to
                                         Exhibit  B  to  the  Company's Schedule
                                         13-E, dated October 8, 2002.

(b)   We  filed  no reports on Form 8-K for the three months ended September 30,
      2002.



<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 12, 2002                 By: /s/  James F. Dierberg
                                      ------------------------------------------
                                           James F. Dierberg
                                           Chairman of the Board of Directors
                                           and Chief Executive Officer
                                           (Principal Executive Officer)


November 12, 2002                 By: /s/  Allen H. Blake
                                      ------------------------------------------
                                           Allen H. Blake
                                           President and Chief Financial Officer
                                           (Principal Financial and
                                           Accounting Officer)


<PAGE>



                                  CERTIFICATION
                       REQUIRED BY RULES 13A-14 AND 15D-14
                    UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, James F. Dierberg, certify that:

1.   I have reviewed  this  quarterly  report on Form 10-Q of First Banks,  Inc.
     (the "registrant");

2.   Based on my knowledge,  this  quarterly  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 quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  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
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  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  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "evaluation date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the evaluation date.

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: November 12, 2002
                                      FIRST BANKS, INC.



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

<PAGE>

                                  CERTIFICATION
                       REQUIRED BY RULES 13A-14 AND 15D-14
                    UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Allen H. Blake, certify that:

1.   I have reviewed  this  quarterly  report on Form 10-Q of First Banks,  Inc.
     (the "registrant");

2.   Based on my knowledge,  this  quarterly  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 quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  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
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  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  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "evaluation date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the evaluation date.

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: November 12, 2002
                                FIRST BANKS, INC.



                                By: /s/ Allen H. Blake
                                    --------------------------------------------
                                        Allen H. Blake
                                        President and Chief Financial Officer
                                        (Principal Financial and Accounting
                                        Officer)

<PAGE>


                        CERTIFICATION OF PERIODIC REPORT


         I, James F.  Dierberg,  Chairman  of the Board of  Directors  and Chief
Executive  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,  2002  (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.


Dated:  November 12, 2002               /s/  James F. Dierberg
                                        ----------------------------------------
                                             James F. Dierberg
                                             Chairman of the Board of Directors
                                             and Chief Executive Officer



<PAGE>




                        CERTIFICATION OF PERIODIC REPORT


         I,  Allen H.  Blake,  President  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,  2002  (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.


Dated:  November 12, 2002          /s/  Allen H. Blake
                                   ---------------------------------------------
                                        Allen H. Blake
                                        President and Chief Financial Officer