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, 2005

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

               For the transition period from _______ to ________

                           Commission File No. 0-20632

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

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

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

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

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

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


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

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



         Indicate by check mark whether the  registrant  is a shell  company (as
defined in Rule 12b-2 of the Exchange Act).

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



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

                                                    Shares Outstanding
                Class                               at October 31, 2005
                -----                               -------------------

   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:

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

            CONSOLIDATED STATEMENTS OF INCOME.........................................................     2

            CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
              AND COMPREHENSIVE INCOME................................................................     3

            CONSOLIDATED STATEMENTS OF CASH FLOWS.....................................................     4

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS................................................     5

  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATIONS...............................................................    17

  ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK................................    37

  ITEM 4.   CONTROLS AND PROCEDURES...................................................................    38

PART II.    OTHER INFORMATION

  ITEM 6.   EXHIBITS..................................................................................    39

SIGNATURES............................................................................................    40

</TABLE>

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<TABLE>
<CAPTION>



                                            PART I - FINANCIAL INFORMATION
                                            ITEM 1 - FINANCIAL STATEMENTS

                                                   FIRST BANKS, INC.

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

                                                                                          September 30,  December 31,
                                                                                               2005          2004
                                                                                               ----          ----
                                                                                           (unaudited)

                                                        ASSETS
                                                        ------

Cash and cash equivalents:
<S>                                                                                          <C>            <C>
     Cash and due from banks.............................................................. $  201,321       149,605
     Short-term investments...............................................................     85,808       117,505
                                                                                           ----------     ---------
          Total cash and cash equivalents.................................................    287,129       267,110
                                                                                           ----------     ---------

Investment securities:
     Available for sale...................................................................  1,559,014     1,788,063
     Held to maturity (fair value of $27,068 and $25,586, respectively)...................     27,066        25,286
                                                                                           ----------     ---------
          Total investment securities.....................................................  1,586,080     1,813,349
                                                                                           ----------     ---------

Loans:
     Commercial, financial and agricultural...............................................  1,584,191     1,575,232
     Real estate construction and development.............................................  1,421,877     1,318,413
     Real estate mortgage.................................................................  3,311,471     3,061,581
     Consumer and installment.............................................................     59,291        54,546
     Loans held for sale..................................................................    257,605       133,065
                                                                                           ----------     ---------
          Total loans.....................................................................  6,634,435     6,142,837
     Unearned discount....................................................................     (6,625)       (4,869)
     Allowance for loan losses............................................................   (139,471)     (150,707)
                                                                                           ----------     ---------
          Net loans.......................................................................  6,488,339     5,987,261
                                                                                           ----------     ---------

Bank premises and equipment, net of accumulated depreciation and amortization.............    142,405       144,486
Goodwill..................................................................................    166,170       156,849
Bank-owned life insurance.................................................................    110,318       106,788
Deferred income taxes.....................................................................    126,579       127,397
Other assets..............................................................................    101,482       129,601
                                                                                           ----------     ---------
          Total assets.................................................................... $9,008,502     8,732,841
                                                                                           ==========     =========

                                                     LIABILITIES
                                                     -----------

Deposits:
     Noninterest-bearing demand........................................................... $1,316,287     1,194,662
     Interest-bearing demand..............................................................    926,913       875,489
     Savings..............................................................................  2,103,603     2,249,644
     Time deposits of $100 or more........................................................  1,018,055       807,220
     Other time deposits..................................................................  2,015,633     2,024,955
                                                                                           ----------     ---------
          Total deposits..................................................................  7,380,491     7,151,970
Other borrowings..........................................................................    568,699       594,750
Notes payable.............................................................................     80,000        15,000
Subordinated debentures...................................................................    215,433       273,300
Deferred income taxes.....................................................................     27,670        34,812
Accrued expenses and other liabilities....................................................     64,776        62,116
Minority interest in subsidiary...........................................................      6,314            --
                                                                                           ----------     ---------
          Total liabilities...............................................................  8,343,383     8,131,948
                                                                                           ----------     ---------
<PAGE>

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

Preferred stock:
     $1.00 par value, 5,000,000 shares authorized, no shares issued and outstanding.......         --            --
     Class A convertible, adjustable rate, $20.00 par value, 750,000
       shares authorized, 641,082 shares issued and outstanding...........................     12,822        12,822
     Class B adjustable rate, $1.50 par value, 200,000 shares authorized,
       160,505 shares issued and outstanding..............................................        241           241
Common stock, $250.00 par value, 25,000 shares authorized,
     23,661 shares issued and outstanding.................................................      5,915         5,915
Additional paid-in capital................................................................      5,910         5,910
Retained earnings.........................................................................    653,798       577,836
Accumulated other comprehensive loss......................................................    (13,567)       (1,831)
                                                                                           ----------     ---------
          Total stockholders' equity......................................................    665,119       600,893
                                                                                           ----------     ---------
          Total liabilities and stockholders' equity...................................... $9,008,502     8,732,841
                                                                                           ==========     =========

The accompanying notes are an integral part of the consolidated financial statements.
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<TABLE>
<CAPTION>
                                                   FIRST BANKS, INC.

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


                                                                            Three Months Ended    Nine Months Ended
                                                                               September 30,        September 30,
                                                                           -------------------   ------------------
                                                                             2005       2004       2005      2004
                                                                             ----       ----       ----      ----
Interest income:
<S>                                                                        <C>          <C>       <C>       <C>
     Interest and fees on loans........................................... $ 109,903    86,201    303,515   254,176
     Investment securities................................................    17,057    12,784     52,001    37,098
     Short-term investments...............................................       841       476      1,701       899
                                                                           ---------  --------   --------  --------
          Total interest income...........................................   127,801    99,461    357,217   292,173
                                                                           ---------  --------   --------  --------
Interest expense:
     Deposits:
       Interest-bearing demand............................................       979       801      2,799     2,592
       Savings............................................................     8,345     5,116     20,420    14,486
       Time deposits of $100 or more......................................     7,206     3,358     18,806     9,353
       Other time deposits................................................    16,832     8,636     46,967    25,296
     Other borrowings.....................................................     4,946     1,982     12,480     3,383
     Notes payable........................................................       862       229      1,103       398
     Subordinated debentures..............................................     5,985     3,731     16,096    10,798
                                                                           ---------  --------   --------  --------
          Total interest expense..........................................    45,155    23,853    118,671    66,306
                                                                           ---------  --------   --------  --------
          Net interest income.............................................    82,646    75,608    238,546   225,867
Provision for loan losses.................................................        --     7,500     (8,000)   23,250
                                                                           ---------  --------   --------  --------
          Net interest income after provision for loan losses.............    82,646    68,108    246,546   202,617
                                                                           ---------  --------   --------  --------
Noninterest income:
     Service charges on deposit accounts and customer service fees........    10,175     9,837     29,651    28,578
     Gain on loans sold and held for sale.................................     6,505     4,676     17,865    12,866
     Net (loss) gain on sales of available-for-sale
       investment securities..............................................        (3)      257         (3)      257
     (Loss) gain on sales of branches, net of expenses....................        --       (20)        --     1,000
     Bank-owned life insurance investment income..........................     1,177     1,255      3,711     3,874
     Investment management income.........................................     2,129     1,795      6,375     5,079
     Other................................................................     4,552     4,182     13,840    10,991
                                                                           ---------  --------   --------  --------
          Total noninterest income........................................    24,535    21,982     71,439    62,645
                                                                           ---------  --------   --------  --------
Noninterest expense:
     Salaries and employee benefits.......................................    35,667    29,936    103,145    85,825
     Occupancy, net of rental income......................................     5,327     4,674     15,792    13,744
     Furniture and equipment..............................................     3,960     4,099     11,798    12,802
     Postage, printing and supplies.......................................     1,387     1,222      4,339     3,765
     Information technology fees..........................................     9,141     7,977     26,686    23,965
     Legal, examination and professional fees.............................     2,257     1,644      6,710     4,895
     Amortization of intangibles associated with the purchase
       of subsidiaries....................................................     1,168       733      3,523     2,049
     Communications.......................................................       495       469      1,470     1,333
     Advertising and business development.................................     1,623     1,297      5,018     3,902
     Charitable contributions.............................................       111       294      1,789       424
     Other................................................................     6,303     6,046     20,697    13,694
                                                                           ---------  --------   --------  --------
          Total noninterest expense.......................................    67,439    58,391    200,967   166,398
                                                                           ---------  --------   --------  --------
          Income before provision for income taxes and minority
             interest in loss of subsidiary...............................    39,742    31,699    117,018    98,864
Provision for income taxes................................................    13,265    11,951     41,568    34,844
                                                                           ---------  --------   --------  --------
          Income before minority interest in loss of subsidiary...........    26,477    19,748     75,450    64,020
Minority interest in loss of subsidiary...................................    (1,036)       --     (1,036)       --
                                                                           ---------  --------   --------  --------
          Net income......................................................    27,513    19,748     76,486    64,020
Preferred stock dividends.................................................       196       196        524       524
                                                                           ---------  --------   --------  --------
          Net income available to common stockholders..................... $  27,317    19,552     75,962    63,496
                                                                           =========  ========   ========  ========
Basic earnings per common share........................................... $1,154.52    826.33   3,210.44  2,683.56
                                                                           =========  ========   ========  ========
Diluted earnings per common share......................................... $1,139.46    815.20   3,163.13  2,642.12
                                                                           =========  ========   ========  ========
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, 2005 and 2004 and Three Months Ended December 31, 2004
                                     (dollars expressed in thousands, except per share data)



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

<S>                                                      <C>          <C>     <C>        <C>       <C>       <C>      <C>
Consolidated balances, December 31, 2003.............    $12,822      241     5,915      5,910     495,714   29,213   549,815
                                                                                                                      -------
Nine months ended September 30, 2004:
    Comprehensive income: (1)
      Net income.....................................         --       --        --         --      64,020       --    64,020
      Other comprehensive loss, net of tax:
        Unrealized losses on investment securities...         --       --        --         --          --   (1,719)   (1,719)
        Reclassification adjustment for
          gains included in net income...............         --       --        --         --          --     (167)     (167)
        Derivative instruments:
          Current period transactions................         --       --        --         --          --  (22,074)  (22,074)
                                                                                                                      -------
    Total comprehensive income.......................                                                                  40,060
    Class A preferred stock dividends,
      $0.80 per share................................         --       --        --         --        (513)      --      (513)
    Class B preferred stock dividends,
      $0.07 per share................................         --       --        --         --         (11)      --       (11)
                                                         -------      ---     -----      -----     -------  -------   -------
Consolidated balances, September 30, 2004............     12,822      241     5,915      5,910     559,210    5,253   589,351
                                                                                                                      -------
Three months ended December 31, 2004:
    Comprehensive income:
      Net income.....................................         --       --        --         --      18,888       --    18,888
      Other comprehensive loss, net of tax:
        Unrealized losses on investment securities...         --       --        --         --          --   (3,992)   (3,992)
        Derivative instruments:
          Current period transactions................         --       --        --         --          --   (3,092)   (3,092)
                                                                                                                      -------
    Total comprehensive income.......................                                                                  11,804
    Class A preferred stock dividends,
      $0.40 per share................................         --       --        --         --        (256)      --      (256)
    Class B preferred stock dividends,
      $0.04 per share................................         --       --        --         --          (6)      --        (6)
                                                         -------      ---     -----      -----     -------  -------   -------
Consolidated balances, December 31, 2004.............     12,822      241     5,915      5,910     577,836   (1,831)  600,893
                                                                                                                      -------
Nine months ended September 30, 2005:
    Comprehensive income: (1)
      Net income.....................................         --       --        --         --      76,486       --    76,486
      Other comprehensive loss, net of tax:
        Unrealized losses on investment securities...         --       --        --         --          --   (7,842)   (7,842)
        Reclassification adjustment for
          losses included in net income..............         --       --        --         --          --        2         2
        Derivative instruments:
          Current period transactions................         --       --        --         --          --   (3,896)   (3,896)
                                                                                                                      -------
    Total comprehensive income.......................                                                                  64,750
    Class A preferred stock dividends,
      $0.80 per share................................         --       --        --         --        (513)      --      (513)
    Class B preferred stock dividends,
      $0.07 per share................................         --       --        --         --         (11)      --       (11)
                                                         -------      ---     -----      -----     -------  -------   -------
Consolidated balances, September 30, 2005............    $12,822      241     5,915      5,910     653,798  (13,567)  665,119
                                                         =======      ===     =====      =====     =======  =======   =======

<PAGE>

-------------------------
(1) Disclosure of Comprehensive Income (Loss):
                                                                       Three Months Ended      Nine Months Ended
                                                                          September 30,          September 30,
                                                                       ------------------     ------------------
                                                                         2005      2004         2005      2004
                                                                         ----      ----         ----      ----
    Comprehensive income:
      Net income..................................................     $27,513    19,748       76,486    64,020
      Other comprehensive (loss) income, net of tax:
        Unrealized (losses) gains on investment securities........      (4,271)   17,397       (7,842)   (1,719)
        Reclassification adjustment for losses (gains)
          included in net income..................................           2      (167)           2      (167)
        Derivative instruments:
          Current period transactions.............................      (1,153)   (3,379)      (3,896)  (22,074)
                                                                       -------    ------       ------   -------
    Total comprehensive income....................................     $22,091    33,599       64,750    40,060
                                                                       =======    ======       ======   =======

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 CASH FLOWS - (UNAUDITED)
                                        (dollars expressed in thousands)
                                                                                               Nine Months Ended
                                                                                                 September 30,
                                                                                            -----------------------
                                                                                              2005           2004
                                                                                              ----           ----
Cash flows from operating activities:
<S>                                                                                         <C>              <C>
     Net income.........................................................................   $   76,486        64,020
     Adjustments to reconcile net income to net cash used in operating activities:
       Depreciation and amortization of bank premises and equipment.....................       12,895        13,921
       Amortization, net of accretion...................................................       13,180        12,602
       Originations and purchases of loans held for sale................................   (1,170,240)     (881,860)
       Proceeds from sales of loans held for sale.......................................      858,586       741,108
       Provision for loan losses........................................................       (8,000)       23,250
       Provision for income taxes.......................................................       41,568        34,844
       Payments of income taxes.........................................................      (41,983)      (35,480)
       Decrease in accrued interest receivable..........................................          702         1,814
       Interest accrued on liabilities..................................................      118,671        66,306
       Payments of interest on liabilities..............................................     (116,053)      (65,603)
       Gain on loans sold and held for sale.............................................      (17,865)      (12,866)
       Net loss (gain) on sales of available-for-sale investment securities.............            3          (257)
       Gain on sales of branches, net of expenses.......................................           --        (1,000)
       Other operating activities, net..................................................        9,854        (5,483)
       Minority interest in loss of subsidiary..........................................       (1,036)           --
                                                                                           ----------      --------
          Net cash used in operating activities.........................................     (223,232)      (44,684)
                                                                                           ----------      --------

Cash flows from investing activities:
     Cash paid for acquired entities, net of cash and cash equivalents received.........       (9,500)      (35,348)
     Proceeds from sales of investment securities available for sale....................           --        26,340
     Maturities of investment securities available for sale.............................      594,846       364,312
     Maturities of investment securities held to maturity...............................        1,684         3,149
     Purchases of investment securities available for sale..............................     (317,776)     (503,776)
     Purchases of investment securities held to maturity................................       (3,508)      (18,524)
     Net increase in loans..............................................................      (39,397)      (81,606)
     Recoveries of loans previously charged-off.........................................       15,702        18,129
     Purchases of bank premises and equipment...........................................       (9,876)       (4,585)
     Sale of minority interest in subsidiary............................................        7,350            --
     Other investing activities, net....................................................        1,393        12,078
                                                                                           ----------      --------
          Net cash provided by (used in) investing activities...........................      240,918      (219,831)
                                                                                           ----------      --------

Cash flows from financing activities:
     (Decrease) increase in demand and savings deposits.................................      (74,456)      101,615
     Increase (decrease) in time deposits...............................................      107,520       (13,078)
     Decrease in Federal Home Loan Bank advances........................................       (6,144)       (2,000)
     (Decrease) increase in securities sold under agreements to repurchase..............      (29,785)      248,619
     Advances drawn on notes payable....................................................       80,000            --
     Repayments of notes payable........................................................      (15,000)      (17,000)
     Proceeds from issuance of subordinated debentures..................................           --        20,619
     Payments for redemptions of subordinated debentures................................      (59,278)           --
     Cash paid for sales of branches, net of cash and cash equivalents sold.............           --       (19,353)
     Payment of preferred stock dividends...............................................         (524)         (524)
                                                                                           ----------      --------
          Net cash provided by financing activities.....................................        2,333       318,898
                                                                                           ----------      --------
          Net increase in cash and cash equivalents.....................................       20,019        54,383
Cash and cash equivalents, beginning of period..........................................      267,110       213,537
                                                                                           ----------      --------
Cash and cash equivalents, end of period................................................   $  287,129       267,920
                                                                                           ==========      ========

Noncash investing and financing activities:
     Loans transferred to other real estate.............................................   $    2,783         4,246
                                                                                           ==========      ========

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 2004
Annual Report on Form 10-K.  The  consolidated  financial  statements  have been
prepared in accordance with U.S.  generally accepted  accounting  principles and
conform to  predominant  practices  within the banking  industry.  Management of
First  Banks has made a number of  estimates  and  assumptions  relating  to the
reporting of assets and liabilities and the disclosure of contingent  assets and
liabilities to prepare the consolidated  financial statements in conformity with
U.S. generally accepted accounting principles.  Actual results could differ from
those estimates.  In the opinion of management,  all adjustments,  consisting of
normal recurring  accruals  considered  necessary for a fair presentation of the
results of  operations  for the  interim  periods  presented  herein,  have been
included.  Operating  results for the three and nine months ended  September 30,
2005 are not necessarily  indicative of the results that may be expected for the
year ending December 31, 2005.

         The  consolidated  financial  statements  include  the  accounts of the
parent company and its  subsidiaries,  giving effect to the minority interest in
one subsidiary,  as more fully described  below, and in Note 2 and Note 6 to the
Consolidated  Financial  Statements.  All significant  intercompany accounts and
transactions  have been eliminated.  Certain  reclassifications  of 2004 amounts
have been made to conform to the 2005 presentation.

         First Banks operates  through its wholly owned  subsidiary bank holding
company,  The San  Francisco  Company  (SFC),  headquartered  in San  Francisco,
California, and SFC's wholly owned subsidiary bank, First Bank, headquartered in
St. Louis, Missouri.  First Bank operates through its branch banking offices and
subsidiaries,  FB Commercial Finance, Inc., Missouri Valley Partners, Inc. (MVP)
and Small  Business  Loan Source LLC (SBLS LLC) which,  except for SBLS LLC, are
wholly owned subsidiaries.

(2)      ACQUISITIONS, INTEGRATION COSTS AND OTHER CORPORATE TRANSACTIONS

         Completed Acquisitions

         On April  29,  2005,  First  Banks  completed  its  acquisition  of FBA
Bancorp, Inc. (FBA) and its wholly owned subsidiary, First Bank of the Americas,
S.S.B.  (FBOTA),  for $10.5 million in cash.  The  acquisition  served to expand
First Banks' banking franchise in Chicago,  Illinois. The transaction was funded
through internally generated funds. FBA was headquartered in Chicago,  Illinois,
and through FBOTA,  operated three banking offices in the  southwestern  Chicago
metropolitan communities of Back of the Yards, Little Village and Cicero. At the
time of the acquisition, FBA had assets of $73.3 million, loans, net of unearned
discount,  of $54.3 million,  deposits of $55.7 million and stockholders' equity
of $7.1 million.  Goodwill,  which is not deductible for tax purposes,  was $2.8
million,  and the core deposit  intangibles,  which are not  deductible  for tax
purposes and are being  amortized over seven years  utilizing the  straight-line
method, were $1.7 million. FBA was merged with and into SFC and FBOTA was merged
with and into First Bank.

         On  September  30,  2005,  First Banks  completed  its  acquisition  of
International  Bank  of  California  (IBOC)  for  $33.7  million  in  cash.  The
acquisition  served to further expand First Banks' banking franchise in Southern
California,   providing  five   additional   banking  offices  in  Los  Angeles,
California,  including  one branch in downtown Los Angeles and four  branches in
eastern Los Angeles County, in Alhambra,  Arcadia,  Artesia and Rowland Heights.
The transaction was funded with a portion of the proceeds of First Banks' $100.0
million term loan, as further discussed in Note 10 to the Consolidated Financial
Statements.  At the time of the acquisition,  IBOC had assets of $151.6 million,
loans, net of unearned discount,  of $113.5 million,  deposits of $132.1 million
and stockholders'  equity of $18.6 million.  The assets acquired and liabilities
assumed were recorded at their estimated fair value on the acquisition date. The
fair value  adjustments  represent  current estimates and are subject to further
adjustments as the valuation data is finalized.  Preliminary goodwill,  which is
not deductible for tax purposes,  was approximately $12.4 million,  and the core
deposit  intangibles,  which are not  deductible  for tax  purposes  and will be
amortized   over  seven  years   utilizing  the   straight-line   method,   were
approximately $3.8 million. IBOC was merged with and into First Bank.

         During  the  first  quarter  of  2005,  First  Banks  recorded  certain
acquisition-related  adjustments  pertaining  to  its  acquisition  of  Hillside
Investors,  Ltd. (Hillside) and its wholly owned banking  subsidiary,  CIB Bank,

<PAGE>

which was  completed  on  November  30,  2004.  Acquisition-related  adjustments
included additional purchase accounting  adjustments  necessary to appropriately
adjust the  preliminary  goodwill  of $4.3  million  recorded at the time of the
acquisition,  which was based upon current estimates  available at that time, to
reflect the receipt of additional  valuation  data.  The  aggregate  adjustments
resulted  in  a  purchase  price  reallocation  among  goodwill,   core  deposit
intangibles  and bank premises and equipment.  The purchase  price  reallocation
resulted  in the  reallocation  of $3.1  million of  negative  goodwill  to core
deposit  intangibles  and bank  premises and  equipment,  thereby  reducing such
assets by $2.8 million and $2.4  million,  net of the related tax effect of $1.1
million  and  $941,000,   respectively.   Following  the   recognition   of  the
acquisition-related adjustments, goodwill recorded was reduced from $4.3 million
to zero and the core deposit  intangibles,  which are being amortized over seven
years  utilizing the  straight-line  method,  were reduced from $13.4 million to
$10.6 million,  net of the related tax effect. The individual  components of the
$4.3 million  acquisition-related  adjustments  to goodwill and the $3.1 million
purchase price reallocation recorded in the first quarter of 2005 are summarized
as follows:

         >>    a $1.6 million increase in goodwill to adjust time deposits,  net
               of the related tax effect, to their estimated fair value;

         >>    a $967,000  increase  in  goodwill  to adjust  other real  estate
               owned,  net of the  related  tax effect,  to its  estimated  fair
               value;

         >>    a $10.0  million  reduction  in goodwill to adjust loans held for
               sale,  net of the  related tax effect,  to their  estimated  fair
               value.  These  adjustments  were based  upon the  receipt of loan
               payoffs and  significantly  higher sales prices received over the
               original  third-party  bid estimates,  for certain loans held for
               sale. All of the acquired  nonperforming loans that had been held
               for sale as of  December  31, 2004 had either been sold or repaid
               as  of  March  31,  2005,   with  the  exception  of  one  credit
               relationship, which was subsequently sold in April 2005;

         >>    a $1.7  million  increase  in  goodwill,  net of the  related tax
               effect,  and a related  decrease in core deposit  intangibles  of
               $2.8 million, resulting from the purchase price reallocation; and

         >>    a $1.4  million  increase  in  goodwill,  net of the  related tax
               effect,  and a related decrease in bank premises and equipment of
               $2.4 million, resulting from the purchase price reallocation.

         Pending Acquisitions

         On April 27,  2005,  First  Banks  executed  an  Agreement  and Plan of
Reorganization  providing for the  acquisition  of Northway State Bank (NSB) for
$10.3  million  in cash.  NSB was  headquartered  in  Grayslake,  Illinois,  and
operated  one  banking  office  located in Lake County in the  northern  Chicago
metropolitan area. As further described in Note 13 to the Consolidated Financial
Statements, First Banks completed its acquisition of NSB on October 31, 2005.

         As previously announced on August 22, 2005, First Banks entered into an
Agreement  and Plan of  Reorganization,  which was restated as a Stock  Purchase
Agreement with certain  shareholders  of First National Bank of Sachse (FNBS) on
October 28, 2005, that provides for First Banks to acquire  approximately 85% of
the  outstanding  common stock of FNBS for $45.62 per share.  FNBS  operates one
banking office located in Sachse, Texas, which is located approximately 20 miles
northeast of the Dallas  metropolitan area. At September 30, 2005, FNBS reported
assets of  approximately  $72.2 million,  loans,  net of unearned  discount,  of
approximately  $53.0  million,  deposits  of  approximately  $61.3  million  and
stockholders'  equity of approximately $9.7 million.  The transaction,  which is
subject to  regulatory  approvals  and the approval of FNBS's  shareholders,  is
expected to be completed by the first quarter of 2006.

         Other Corporate Transactions

         SBLS LLC, a Nevada-based  limited  liability  company and subsidiary of
First  Bank,  purchased  substantially  all of the  assets and  assumed  certain
liabilities  of Small  Business  Loan  Source,  Inc.  (SBLS),  headquartered  in
Houston,  Texas, in exchange for cash and certain payments  contingent on future
valuations of specifically  identified  assets,  including  servicing assets and
retained interests in  securitizations,  on August 31, 2004. In conjunction with
this  transaction,  First Bank granted to First Capital  America,  Inc. (FCA), a
corporation  owned by First Banks' Chairman and members of his immediate family,
an option to purchase  Membership  Interests  of SBLS LLC.  FCA  exercised  this
option on June 30, 2005 and paid First Bank $7.4 million in cash. As a result of
this  transaction,  SBLS LLC became 51.0% owned by First Bank and 49.0% owned by
FCA,  and  accordingly,  FCA's  ownership  interest  is  recognized  as minority
interest  in  subsidiary  in the  consolidated  balance  sheets and the  related
minority  interest  in  income  or  loss  of  subsidiary  is  recognized  in the
consolidated statements of income.

         On January  18,  2005,  First Bank  opened a de novo  branch  office in
Farmington,  Missouri, and on March 25, 2005, First Bank completed the merger of
two branch offices in Hillside,  located in the Chicago,  Illinois  metropolitan
area.
<PAGE>

         On September  23, 2005,  First Bank  completed  its  assumption  of the
deposit  liabilities of the Roodhouse,  Illinois branch office of Bank and Trust
Company,  an Illinois  commercial  bank,  for  $100,000 in cash.  At the time of
assumption,  the deposit  liabilities  of the Roodhouse  branch office were $5.1
million. The core deposit intangibles, which are deductible for tax purposes and
are being amortized over seven years utilizing the  straight-line  method,  were
$100,000.

         Acquisition and Integration Costs

         First Banks accrues certain costs  associated with its  acquisitions as
of the respective consummation dates. The accrued costs relate to adjustments to
the staffing levels of the acquired  entities or to the anticipated  termination
of information  technology or item processing contracts of the acquired entities
prior to their stated  contractual  expiration dates. The most significant costs
that First  Banks  incurs  relate to salary  continuation  agreements,  or other
similar agreements,  of executive  management and certain other employees of the
acquired  entities  that were in place  prior to the  acquisition  dates.  These
agreements  provide for payments  over  periods  ranging from three months to 15
years and are  triggered  as a result of the change in  control of the  acquired
entity.   Other  severance   benefits  for  employees  that  are  terminated  in
conjunction  with the  integration  of the acquired  entities  into First Banks'
existing  operations are normally paid to the  recipients  within 90 days of the
respective  consummation date and are expensed in the consolidated statements of
income as incurred.  The accrued severance balance of $665,000, as summarized in
the  following  table,  is comprised  of  contractual  obligations  under salary
continuation  agreements to seven  individuals with remaining terms ranging from
approximately three months to 11 years. As the obligation to make payments under
these agreements is accrued at the consummation  date, such payments do not have
any impact on the  consolidated  statements  of income.  First Banks also incurs
costs  associated  with  acquisitions  that  are  expensed  in the  consolidated
statements  of income.  These  costs  relate  principally  to  additional  costs
incurred in  conjunction  with the  information  technology  conversions  of the
respective entities.

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

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

<S>                                                                           <C>                               <C>
         Balance at December 31, 2004..................................       $  761             --             761
         Nine Months Ended September 30, 2005:
           Amounts accrued at acquisition date.........................          588            916           1,504
           Payments....................................................         (684)          (127)           (811)
                                                                              ------          -----          ------
         Balance at September 30, 2005.................................       $  665            789           1,454
                                                                              ======          =====          ======

(3)      INTANGIBLE ASSETS ASSOCIATED WITH THE PURCHASE OF SUBSIDIARIES AND BRANCH OFFICES

         Intangible  assets  associated  with the purchase of  subsidiaries  and
branch  offices,  net  of  amortization,  were  comprised  of the  following  at
September 30, 2005 and December 31, 2004:

                                                             September 30, 2005        December 31, 2004
                                                         ------------------------   -----------------------
                                                           Gross                      Gross
                                                          Carrying    Accumulated    Carrying   Accumulated
                                                           Amount    Amortization     Amount   Amortization
                                                           ------    ------------     ------   ------------
                                                                   (dollars expressed in thousands)

     Amortized intangible assets:
         Core deposit intangibles....................    $ 35,646      (10,419)       32,823      (7,003)
         Goodwill associated with
           purchases of branch offices...............       2,210       (1,110)        2,210      (1,003)
                                                         --------      -------       -------     -------
              Total..................................    $ 37,856      (11,529)       35,033      (8,006)
                                                         ========      =======       =======     =======

     Unamortized intangible assets:
         Goodwill associated with the
           purchase of subsidiaries..................    $165,070                    155,642
                                                         ========                    =======
</TABLE>



<PAGE>


         Amortization   of   intangibles   associated   with  the   purchase  of
subsidiaries  and branch offices was $1.2 million and $3.5 million for the three
and nine months ended  September 30, 2005,  respectively,  and $733,000 and $2.0
million  for  the  comparable  periods  in  2004.  Amortization  of  intangibles
associated  with the purchase of  subsidiaries,  including  amortization of core
deposit  intangibles and goodwill  associated with branch office purchases,  has
been estimated in the following table, and does not take into  consideration any
pending or potential future acquisitions or branch office purchases.
<TABLE>
<CAPTION>

                                                                                 (dollars expressed in thousands)
                  Year ending December 31:
<S>                   <C>                                                                    <C>
                      2005 remaining......................................................   $  1,305
                      2006................................................................      5,220
                      2007................................................................      5,220
                      2008................................................................      5,220
                      2009 ...............................................................      3,316
                      2010 ...............................................................      2,856
                      Thereafter..........................................................      3,190
                                                                                             --------
                           Total..........................................................   $ 26,327
                                                                                             ========
</TABLE>

         Changes  in the  carrying  amount  of  goodwill  for the three and nine
months ended September 30, 2005 and 2004 were as follows:
<TABLE>
<CAPTION>

                                                                    Three Months Ended               Nine Months Ended
                                                                       September 30,                   September 30,
                                                                  ----------------------          ----------------------
                                                                    2005          2004              2005          2004
                                                                    ----          ----              ----          ----
                                                                              (dollars expressed in thousands)

<S>                                                               <C>            <C>               <C>           <C>
           Balance, beginning of period.........................  $154,664       145,255           156,849       145,548
           Goodwill acquired during period......................    12,969         6,564            15,186         6,564
           Acquisition-related adjustments (1) (2)..............    (1,427)           --            (5,758)         (222)
           Amortization - purchases of branch offices...........       (36)          (36)             (107)         (107)
                                                                  --------      --------          --------      --------
           Balance, end of period...............................  $166,170       151,783           166,170       151,783
                                                                  ========      ========          ========      ========
           ------------------
           (1)  Acquisition-related  adjustments  of $4.3  million recorded  in the first quarter of 2005 pertain to the
                acquisition  of CIB  Bank,  as  further described in Note 2 to the Consolidated Financial Statements.
           (2)  Acquisition-related  adjustments  of $1.4  million  recorded in the third quarter of 2005 pertain to the
                acquisition  of Continental Mortgage Corporation - Delaware.
</TABLE>

(4)      SERVICING RIGHTS

         Mortgage  Banking  Activities.  At September  30, 2005 and December 31,
2004, First Banks serviced  mortgage loans for others amounting to $1.02 billion
and $1.06 billion,  respectively.  Changes in mortgage  servicing rights, net of
amortization,  for the three and nine months ended  September  30, 2005 and 2004
were as follows:
<TABLE>
<CAPTION>

                                                                    Three Months Ended               Nine Months Ended
                                                                       September 30,                   September 30,
                                                                   --------------------            ---------------------
                                                                     2005         2004               2005          2004
                                                                     ----         ----               ----          ----
                                                                              (dollars expressed in thousands)

<S>                                                                <C>           <C>                <C>           <C>
           Balance, beginning of period........................    $ 8,502       12,533             10,242        15,408
           Servicing rights acquired during the period.........         --           --                435            --
           Originated servicing rights.........................        256          345                657         1,164
           Amortization........................................     (1,261)      (1,498)            (3,837)       (5,192)
                                                                   -------      -------            -------       -------
           Balance, end of period..............................    $ 7,497       11,380              7,497        11,380
                                                                   =======      =======            =======       =======
</TABLE>
         The fair value of mortgage  servicing  rights was  approximately  $13.2
million and $16.8  million at  September  30, 2005 and 2004,  respectively,  and
$14.6  million at December  31,  2004.  The excess of the fair value of mortgage
servicing rights over the carrying value was approximately $5.7 million and $5.4
million  at  September  30,  2005 and 2004,  respectively,  and $4.4  million at
December  31,  2004.  First  Banks  did not  incur any  impairment  of  mortgage
servicing  rights during the three and nine months ended  September 30, 2005 and
2004.

<PAGE>


         Amortization  of mortgage  servicing  rights at September  30, 2005 has
been estimated in the following table:
<TABLE>
<CAPTION>

                                                                                 (dollars expressed in thousands)

                  Year ending December 31:
<S>                                                                                           <C>
                      2005 remaining......................................................    $   942
                      2006................................................................      3,286
                      2007................................................................      2,000
                      2008................................................................        863
                      2009................................................................        317
                      2010................................................................         89
                                                                                              -------
                           Total..........................................................    $ 7,497
                                                                                              =======
</TABLE>

         Other  Servicing  Activities.  At  September  30, 2005 and December 31,
2004,  First Banks serviced  United States Small Business  Administration  (SBA)
loans for others  amounting to $170.1 million and $174.7 million,  respectively.
Changes in SBA servicing  rights,  net of  amortization,  for the three and nine
months ended September 30, 2005 were as follows:
<TABLE>
<CAPTION>

                                                                     Three Months Ended               Nine Months Ended
                                                                        September 30,                   September 30,
                                                                   ---------------------             -------------------
                                                                     2005          2004               2005         2004
                                                                     ----          ----               ----         ----
                                                                              (dollars expressed in thousands)

<S>                                                                <C>                               <C>
           Balance, beginning of period........................    $12,351            --             13,013           --
           Servicing rights acquired during the period.........         --        15,076                 --       15,076
           Originated servicing rights.........................        393            --                932           --
           Amortization........................................       (576)         (163)            (1,777)        (163)
           Impairment valuation allowance......................     (2,359)           --             (2,359)          --
                                                                   -------        ------             ------       ------
           Balance, end of period..............................    $ 9,809        14,913              9,809       14,913
                                                                   =======        ======             ======       ======
</TABLE>

         The fair value of SBA servicing rights was approximately  $10.1 million
and $14.9  million  at  September  30,  2005 and 2004,  respectively,  and $13.0
million at  December  31,  2004.  The excess of the fair value of SBA  servicing
rights over the carrying value was approximately $297,000 at September 30, 2005.
The fair value of SBA servicing rights approximated the carrying values of $13.0
million  and  $14.9  million  at  December  31,  2004 and  September  30,  2004,
respectively.  First Banks  recognized  impairment of $2.4 million for the three
and nine months ended  September 30, 2005  resulting  from a decline in the fair
value of the SBA servicing assets below the carrying value following substantial
damage to several shrimping vessels within the servicing portfolio caused by the
effects of Hurricane Katrina.

         Amortization  of SBA  servicing  rights at September  30, 2005 has been
estimated in the following table:
<TABLE>
<CAPTION>

                                                                                 (dollars expressed in thousands)

                  Year ending December 31:
<S>                   <C>                                                                      <C>
                      2005 remaining......................................................    $   449
                      2006................................................................      1,607
                      2007................................................................      1,357
                      2008................................................................      1,143
                      2009................................................................        960
                      2010................................................................        805
                      Thereafter..........................................................      3,488
                                                                                              -------
                           Total..........................................................    $ 9,809
                                                                                              =======

</TABLE>

<PAGE>

(5)      EARNINGS PER COMMON SHARE

         The following is a reconciliation of the basic and diluted earnings per
share  computations  for the three and nine months ended  September 30, 2005 and
2004:
<TABLE>
<CAPTION>

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

     Three months ended September 30, 2005:
<S>                                                                          <C>              <C>          <C>
         Basic EPS - income available to common stockholders.............    $ 27,317         23,661       $ 1,154.52
         Effect of dilutive securities:
           Class A convertible preferred stock...........................         192            481           (15.06)
                                                                             --------        -------       ----------
         Diluted EPS - income available to common stockholders...........    $ 27,509         24,142       $ 1,139.46
                                                                             ========        =======       ==========
     Three months ended September 30, 2004:
         Basic EPS - income available to common stockholders.............    $ 19,552         23,661       $   826.33
         Effect of dilutive securities:
           Class A convertible preferred stock...........................         192            559           (11.13)
                                                                             --------        -------       ----------
         Diluted EPS - income available to common stockholders...........    $ 19,744         24,220       $   815.20
                                                                             ========        =======       ==========
     Nine months ended September 30, 2005:
         Basic EPS - income available to common stockholders.............    $ 75,962         23,661       $ 3,210.44
         Effect of dilutive securities:
           Class A convertible preferred stock...........................         513            516           (47.31)
                                                                             --------        -------       ----------
         Diluted EPS - income available to common stockholders...........    $ 76,475         24,177       $ 3,163.13
                                                                             ========        =======       ==========

     Nine months ended September 30, 2004:
         Basic EPS - income available to common stockholders.............    $ 63,496         23,661       $ 2,683.56
         Effect of dilutive securities:
           Class A convertible preferred stock...........................         513            565           (41.44)
                                                                             --------        -------       ----------
         Diluted EPS - income available to common stockholders...........    $ 64,009         24,226       $ 2,642.12
                                                                             ========        =======       ==========
</TABLE>

(6)      TRANSACTIONS WITH RELATED PARTIES

         First Services,  L.P., a limited partnership  indirectly owned by First
Banks'  Chairman  and  members of his  immediate  family,  provides  information
technology,  item processing and various related  services to First Banks,  Inc.
and its subsidiaries.  Fees paid under agreements with First Services, L.P. were
$7.6 million and $22.3 million for the three and nine months ended September 30,
2005,  respectively,  and $6.7  million  and $19.9  million  for the  comparable
periods in 2004. First Services,  L.P. leases  information  technology and other
equipment from First Bank.  During the three months ended September 30, 2005 and
2004,  First  Services,  L.P.  paid First Bank $1.1  million  and $1.0  million,
respectively,  and during the nine  months  ended  September  30, 2005 and 2004,
First   Services,   L.P.   paid  First  Bank  $3.3  million  and  $3.2  million,
respectively, in rental fees for the use of that equipment.

         First Brokerage America, L.L.C., a limited liability company indirectly
owned by First Banks'  Chairman and members of his  immediate  family,  received
approximately  $529,000  and $1.8  million for the three and nine  months  ended
September  30,  2005,  respectively,  and  $870,000  and  $2.6  million  for the
comparable  periods in 2004, in  commissions  paid by  unaffiliated  third-party
companies.  The commissions received were primarily in connection with the sales
of  annuities,  securities  and other  insurance  products to customers of First
Bank.

         First Title Guaranty LLC (First  Title),  a limited  liability  company
established and administered by and for the benefit of First Banks' Chairman and
members of his immediate family, received approximately $98,000 and $281,000 for
the three and nine months ended September 30, 2005,  respectively,  and $100,000
and $304,000 for the  comparable  periods in 2004, in  commissions  for policies
purchased  by  First  Banks  or  customers  of  First  Bank  from  unaffiliated,
third-party  insurers.  The insurance  premiums on which these  commissions were
earned were competitively bid, and First Banks deems the commissions First Title
earned from  unaffiliated  third-party  companies to be comparable to those that
would have been earned by an unaffiliated third-party agent.

         First Bank leases certain of its in-store  branch offices and ATM sites
from Dierbergs Markets,  Inc., a grocery store chain headquartered in St. Louis,
Missouri that is owned and operated by the brother of First Banks'  Chairman and
members of his immediate family. Total rent expense incurred by First Bank under
the lease  obligation  contracts was $72,000 and $237,000 for the three and nine
months ended September 30, 2005, respectively,  and $68,000 and $214,000 for the
comparable  periods in 2004.
<PAGE>

         First  Bank  has had in the  past,  and may  have in the  future,  loan
transactions   in  the  ordinary  course  of  business  with  its  directors  or
affiliates.  These  loan  transactions  have been on the same  terms,  including
interest rates and  collateral,  as those  prevailing at the time for comparable
transactions with unaffiliated  persons and did not involve more than the normal
risk  of  collectibility  or  present  other  unfavorable  features.   Loans  to
directors,  their  affiliates and executive  officers of First Banks,  Inc. were
approximately $33.4 million and $31.0 million at September 30, 2005 and December
31, 2004, respectively.  First Bank does not extend credit to its officers or to
officers of First Banks,  Inc., except extensions of credit secured by mortgages
on personal  residences,  loans to purchase  automobiles,  personal  credit card
accounts and deposit account overdraft  protection under a plan whereby a credit
limit has been  established  in  accordance  with First Bank's  standard  credit
criteria.

         On August 30, 2004,  First Bank granted to FCA, a corporation  owned by
First Banks' Chairman and members of his immediate  family,  a written option to
purchase 735 Membership  Interests of SBLS LLC, a wholly owned limited liability
company of First Bank, at a price of $10,000 per  Membership  Interest,  or $7.4
million in  aggregate.  The option could have been  exercised by FCA at any time
prior to its expiration,  which was extended to June 30, 2005. On June 30, 2005,
FCA   exercised   this  option  and  paid  First  Bank  $7.4  million  in  cash.
Consequently,  SBLS LLC became 51.0% owned by First Bank and 49% owned by FCA as
of June 30, 2005.

         On June 30,  2005,  SBLS LLC  executed a  Multi-Party  Agreement by and
among SBLS LLC, First Bank, Colson Services Corp., fiscal transfer agent for the
SBA,  and the SBA,  in addition to a Loan and  Security  Agreement  by and among
First Bank and the SBA  (collectively,  the Agreement) that provides a warehouse
line of credit for loan funding purposes.  The Agreement  provides for a maximum
credit  line of $50.0  million  and has an  initial  term of three  years with a
maturity date of June 30, 2008. At the end of the first year, First Bank, at its
option, may extend the existing maturity date by one additional year, subject to
certain conditions.  Interest is payable monthly, in arrears, on the outstanding
balances at a rate equal to First Bank's prime lending rate.  Advances under the
Agreement  are secured by the  assignment  of the majority of the assets of SBLS
LLC.  The  balance of advances  outstanding  under this line of credit was $31.9
million at September 30, 2005.  Interest  expense  recorded  under the Agreement
since its inception on June 30, 2005 was $518,000.

         On August 5, 2005,  First Bank entered into a contract  with World Wide
Technology,  Inc.  (WWT),  a wholly owned  subsidiary  of World Wide  Technology
Holding Co.,  Inc.  (WWTHC).  WWTHC is an electronic  procurement  and logistics
company in the  information  technology  industry  headquartered  in St.  Louis,
Missouri.  The  contract  provides  for WWT to  provide  information  technology
services  associated  with the  deployment  of personal  computers to First Bank
employees in an effort to further  modernize  the  technological  infrastructure
throughout  the First Bank branch  banking  network.  Mr.  David L.  Steward,  a
director  of First  Banks and a member of the Audit  Committee  of First  Banks,
serves as the Chairman of the Board of Directors of WWTHC.  The Audit  Committee
of First Banks  reviewed  and approved the  utilization  of WWT for  information
technology  services  with  fees not to  exceed  $500,000  for the  year  ending
December 31, 2005.  As of September  30, 2005,  First Bank had made  payments of
$3,000 under the contract.

(7)      REGULATORY CAPITAL

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

         Quantitative  measures  established  by  regulation  to ensure  capital
adequacy  require  First  Banks and First Bank to maintain  minimum  amounts and
ratios  of  total  and  Tier  I  capital  (as  defined  in the  regulations)  to
risk-weighted  assets,  and of Tier I  capital  to  average  assets.  Management
believes,  as of September  30, 2005,  First Banks and First Bank were each well
capitalized.  As of September 30, 2005, the most recent  notification from First
Banks'  primary  regulator  categorized  First  Banks  and  First  Bank  as well
capitalized under the regulatory  framework for prompt corrective  action. To be
categorized  as well  capitalized,  First  Banks  and First  Bank must  maintain
minimum total  risk-based,  Tier I risk-based and Tier I leverage  ratios as set
forth in the following table.



<PAGE>


         At September  30, 2005 and  December  31, 2004,  First Banks' and First
Bank's required and actual capital ratios were as follows:
<TABLE>
<CAPTION>


                                                                         Actual                For         To Be Well
                                                               ---------------------------   Capital    Capitalized Under
                                                               September 30,  December 31,   Adequacy   Prompt Corrective
                                                                   2005           2004       Purposes   Action Provisions
                                                                   ----           ----       --------   -----------------

         Total capital (to risk-weighted assets):
<S>                                                                <C>           <C>            <C>           <C>
              First Banks.....................................     10.31%        10.61%         8.0%          10.0%
              First Bank......................................     10.92         10.73          8.0           10.0

         Tier 1 capital (to risk-weighted assets):
              First Banks.....................................      9.06          8.43          4.0            6.0
              First Bank......................................      9.66          9.47          4.0            6.0

         Tier 1 capital (to average assets):
              First Banks.....................................      8.12          7.89          3.0            5.0
              First Bank......................................      8.67          8.86          3.0            5.0
</TABLE>

         On March 1, 2005, the Board of Governors of the Federal  Reserve System
(Board)  adopted a final rule,  Risk-Based  Capital  Standards:  Trust Preferred
Securities and the Definition of Capital, which allows for the continued limited
inclusion of trust  preferred  securities  in Tier 1 capital.  The Board's final
rule  limits  restricted  core  capital  elements  to 25% of the sum of all core
capital elements,  including  restricted core capital elements,  net of goodwill
less any associated  deferred tax liability.  Amounts of restricted core capital
elements in excess of these limits may  generally be included in Tier 2 capital.
Specifically,  amounts of qualifying  trust preferred  securities and cumulative
perpetual  preferred  stock in excess of the 25% limit may be included in Tier 2
capital,  but will be limited,  together with subordinated debt and limited-life
preferred stock, to 50% of Tier 1 capital. In addition,  the final rule provides
that in the last five years before the maturity of the  underlying  subordinated
note, the outstanding  amount of the associated  trust  preferred  securities is
excluded  from  Tier 1  capital  and  included  in Tier 2  capital,  subject  to
one-fifth  amortization  per  year.  The final  rule  provides  for a  five-year
transition   period,   ending  March  31,  2009,  for  the  application  of  the
quantitative  limits.  Until March 31, 2009, the aggregate  amount of qualifying
cumulative  perpetual preferred stock and qualifying trust preferred  securities
that may be  included  in Tier 1  capital  is  limited  to 25% of the sum of the
following  core  capital  elements:   qualifying  common  stockholders'  equity,
qualifying  noncumulative and cumulative  perpetual preferred stock,  qualifying
minority  interest  in the equity  accounts  of  consolidated  subsidiaries  and
qualifying trust preferred  securities.  First Banks has evaluated the impact of
the final rule on the Company's  financial  condition and results of operations,
and  determined  the  implementation  of the  Board's  final  rules that will be
effective   in  March  2009  would  reduce  First  Banks'  Tier  1  capital  (to
risk-weighted assets) and Tier 1 capital (to average assets) to 8.54% and 7.66%,
respectively,  as of  September  30,  2005.  On October 6, 2005,  the Board,  in
conjunction with various other regulatory agencies,  announced plans to consider
various  proposed  revisions to U.S.  risk-based  capital  standards  that would
enhance risk sensitivity of the existing  framework.  The comment period ends in
90 days.

(8)      BUSINESS SEGMENT RESULTS

         First Banks'  business  segment is First Bank. The reportable  business
segment is consistent with the management  structure of First Banks,  First Bank
and the internal reporting system that monitors performance. First Bank provides
similar products and services in its defined geographic areas through its branch
network.  The products and services  offered include a broad range of commercial
and personal deposit products,  including demand, savings, money market and time
deposit  accounts.  In addition,  First Bank markets combined basic services for
various  customer  groups,   including   packaged  accounts  for  more  affluent
customers,  and sweep accounts,  lock-box deposits and cash management  products
for  commercial  customers.  First Bank also offers both consumer and commercial
loans.  Consumer  lending  includes  residential  real  estate,  home equity and
installment  lending.  Commercial  lending  includes  commercial,  financial and
agricultural loans, real estate  construction and development loans,  commercial
real  estate  loans,  asset-based  loans and trade  financing.  Other  financial
services   include   mortgage   banking,   debit  cards,   brokerage   services,
credit-related insurance, internet banking, automated teller machines, telephone
banking,  safe deposit boxes and trust,  private banking and institutional money
management  services.  The revenues generated by First Bank consist primarily of
interest income, generated from the loan and investment security portfolios, and
service charges and fees, generated from the deposit products and services.  The
geographic areas include eastern Missouri, Illinois, including Chicago, southern
and northern  California,  and  Houston,  Dallas,  Irving,  McKinney and Denton,
Texas. The products and services are offered to customers primarily within First
Banks' respective geographic areas.



<PAGE>


         The business  segment results are consistent with First Banks' internal
reporting system and, in all material  respects,  with U.S.  generally  accepted
accounting  principles and practices  predominant in the banking  industry.  The
business segment results are summarized as follows:
<TABLE>
<CAPTION>

                                                                           Corporate, Other
                                                                           and Intercompany
                                                  First Bank               Reclassifications (1)          Consolidated Totals
                                          ---------------------------   ---------------------------   ----------------------------
                                          September 30,  December 31,   September 30,  December 31,   September 30,  December 31,
                                              2005           2004           2005           2004           2005           2004
                                              ----           ----           ----           ----           ----           ----
                                                                   (dollars expressed in thousands)
Balance sheet information:

<S>                                       <C>            <C>            <C>              <C>          <C>            <C>
Investment securities...................  $1,575,720     1,803,454         10,360         9,895        1,586,080     1,813,349
Loans, net of unearned discount.........   6,627,810     6,137,968             --            --        6,627,810     6,137,968
Goodwill................................     166,170       156,849             --            --          166,170       156,849
Total assets............................   8,995,185     8,720,331         13,317        12,510        9,008,502     8,732,841
Deposits................................   7,416,505     7,161,636        (36,014)       (9,666)       7,380,491     7,151,970
Notes payable...........................          --            --         80,000        15,000           80,000        15,000
Subordinated debentures.................          --            --        215,433       273,300          215,433       273,300
Stockholders' equity....................     922,437       877,473       (257,318)     (276,580)         665,119       600,893
                                          ==========     =========       ========      ========        =========     =========

                                                                            Corporate, Other
                                                                            and Intercompany
                                                  First Bank              Reclassifications (1)           Consolidated Totals
                                          ------------------------       ----------------------         -----------------------
                                              Three Months Ended           Three Months Ended              Three Months Ended
                                                 September 30,                 September 30,                  September 30,
                                          ------------------------       ----------------------         -----------------------
                                             2005          2004            2005          2004              2005          2004
                                             ----          ----            ----          ----              ----          ----
                                                                    (dollars expressed in thousands)
Income statement information:

Interest income.........................  $  127,612        99,311            189           150          127,801        99,461
Interest expense........................      38,419        19,916          6,736         3,937           45,155        23,853
                                          ----------     ---------       --------      --------        ---------     ---------
     Net interest income................      89,193        79,395         (6,547)       (3,787)          82,646        75,608
Provision for loan losses...............          --         7,500             --            --               --         7,500
                                          ----------     ---------       --------      --------        ---------     ---------
     Net interest income after
       provision for loan losses........      89,193        71,895         (6,547)       (3,787)          82,646        68,108
                                          ----------     ---------       --------      --------        ---------     ---------
Noninterest income......................      24,739        22,133           (204)         (151)          24,535        21,982
Noninterest expense.....................      65,773        57,398          1,666           993           67,439        58,391
                                          ----------     ---------       --------      --------        ---------     ---------
     Income before provision for income
       taxes and minority interest
       in loss of subsidiary............      48,159        36,630         (8,417)       (4,931)          39,742        31,699
Provision for income taxes..............      16,206        13,663         (2,941)       (1,712)          13,265        11,951
                                          ----------     ---------       --------      --------        ---------     ---------
     Income before minority interest
       in loss of subsidiary............      31,953        22,967         (5,476)       (3,219)          26,477        19,748
Minority interest in loss of subsidiary.      (1,036)           --             --            --           (1,036)           --
                                          ----------     ---------       --------      --------        ---------     ---------
     Net income.........................  $   32,989        22,967         (5,476)       (3,219)          27,513        19,748
                                          ==========     =========       ========      ========        =========     =========
<PAGE>

                                                                           Corporate, Other
                                                                           and Intercompany
                                                  First Bank              Reclassifications (1)           Consolidated Totals
                                          ------------------------       ----------------------         -----------------------
                                               Nine Months Ended            Nine Months Ended              Nine Months Ended
                                                 September 30,                 September 30,                  September 30,
                                          ------------------------       ----------------------         -----------------------
                                             2005          2004            2005          2004              2005          2004
                                             ----          ----            ----          ----              ----          ----
                                                                   (dollars expressed in thousands)

Income statement information:

Interest income.........................  $  356,682       291,744            535           429          357,217       292,173
Interest expense........................     101,615        55,162         17,056        11,144          118,671        66,306
                                          ----------     ---------       --------      --------        ---------     ---------
     Net interest income................     255,067       236,582        (16,521)      (10,715)         238,546       225,867
Provision for loan losses...............      (8,000)       23,250             --            --           (8,000)       23,250
                                          ----------     ---------       --------      --------        ---------     ---------
     Net interest income after
       provision for loan losses........     263,067       213,332        (16,521)      (10,715)         246,546       202,617
                                          ----------     ---------       --------      --------        ---------     ---------
Noninterest income......................      72,079        63,102           (640)         (457)          71,439        62,645
Noninterest expense.....................     197,016       163,303          3,951         3,095          200,967       166,398
                                          ----------     ---------       --------      --------        ---------     ---------
     Income before provision for
       income taxes and minority
       interest in loss of subsidiary...     138,130       113,131        (21,112)      (14,267)         117,018        98,864
Provision for income taxes..............      48,940        42,613         (7,372)       (7,769)          41,568        34,844
                                          ----------     ---------       --------      --------        ---------     ---------
     Income before minority interest
       in loss of subsidiary............      89,190        70,518        (13,740)       (6,498)          75,450        64,020
Minority interest in loss of subsidiary.      (1,036)           --             --            --           (1,036)           --
                                          ----------     ---------       --------      --------        ---------     ---------
     Net income.........................  $   90,226        70,518        (13,740)       (6,498)          76,486        64,020
                                          ==========     =========       ========      ========        =========     =========
------------------
(1)  Corporate  and  other  includes  $3.9 million  and $2.4 million  of  interest  expense on subordinated debentures, after
     applicable income tax benefit of $2.1 million and $1.3 million, for the three months ended  September 30, 2005 and 2004,
     respectively. For the nine months ended September 30, 2005 and 2004, corporate and other includes $10.5 million and $7.0
     million of interest expense on subordinated debentures, after applicable  income tax  benefits  of $5.6 million and $3.8
     million, respectively.
</TABLE>
<PAGE>

(9)      OTHER BORROWINGS

         Other  borrowings were comprised of the following at September 30, 2005
and December 31, 2004:
<TABLE>
<CAPTION>

                                                                                   September 30,     December 31,
                                                                                       2005              2004
                                                                                  --------------     ------------
                                                                                  (dollars expressed in thousands)

         Securities sold under agreements to repurchase:
<S>                                                                                  <C>                <C>
              Daily...............................................................   $ 179,321          209,106
              Term................................................................     350,000          350,000
         FHLB advances............................................................      39,300           35,644
         Fed funds purchased......................................................          78               --
                                                                                     ---------          -------
                  Total other borrowings..........................................   $ 568,699          594,750
                                                                                     =========          =======
</TABLE>

         In accordance with the Company's interest rate risk management program,
First Bank  modified its term  repurchase  agreements  under  master  repurchase
agreements  with  unaffiliated  third parties on March 21, 2005 to terminate the
interest rate cap  agreements  previously  embedded  within the  agreements  and
simultaneously  enter into interest rate floor agreements,  also embedded within
the agreements. These modifications resulted in adjustments to the interest rate
spread to LIBOR for the  agreements,  as set forth in the following  table.  The
modified  terms  of  the  repurchase  agreements  became  effective  immediately
following  the  respective  quarterly  scheduled  interest  payment  dates  that
occurred  during the second quarter of 2005.  First Bank did not incur any costs
in conjunction with the modifications of the agreements.

         The maturity  dates,  par amounts,  interest  rate spreads and interest
rate floor/cap  strike prices on First Bank's term  repurchase  agreements as of
September 30, 2005 and December 31, 2004 were as follows:
<TABLE>
<CAPTION>

                                                                     Par         Interest Rate    Interest Rate Floor/
                     Maturity Date                                 Amount        Spread (1)(2)   Cap Strike Price (1)(2)
                     -------------                                 ------       ---------------  -----------------------
                                                                        (dollars expressed in thousands)

         September 30, 2005:
<S>                                                              <C>                    <C>           <C>
              August 15, 2006.................................   $  50,000      LIBOR + 0.4600%       3.00% / Floor
              January 12, 2007................................     150,000      LIBOR + 0.0050%       3.00% / Floor
              June 14, 2007...................................      50,000      LIBOR - 0.3300%       3.00% / Floor
              June 14, 2007...................................      50,000      LIBOR - 0.3400%       3.00% / Floor
              August 1, 2007..................................      50,000      LIBOR + 0.0800%       3.00% / Floor
                                                                 ---------
                                                                 $ 350,000
                                                                 =========

         December 31, 2004:
              August 15, 2006.................................   $  50,000      LIBOR - 0.8250%       3.00% / Cap
              January 12, 2007................................     150,000      LIBOR - 0.8350%       3.50% / Cap
              June 14, 2007...................................      50,000      LIBOR - 0.6000%       5.00% / Cap
              June 14, 2007...................................      50,000      LIBOR - 0.6100%       5.00% / Cap
              August 1, 2007..................................      50,000      LIBOR - 0.9150%       3.50% / Cap
                                                                 ---------
                                                                 $ 350,000
                                                                 =========
         -------------------------
         (1) As of  September  30, 2005,  the interest  rates paid on the term repurchase agreements  were based on
             the  three-month  London  Interbank Offering Rate reset in arrears plus  or  minus  the  spread amount
             shown above minus a floating amount equal to the differential between the three-month London Interbank
             Offering Rate reset in arrears and the strike price shown  above,  if the three-month London Interbank
             Offering Rate reset in arrears falls below the strike price  associated  with the interest  rate floor
             agreements.
         (2) As of December 31, 2004, the  interest rates paid on the term  repurchase agreements were based on the
             three-month London Interbank Offering Rate reset in arrears minus the spread amount shown above plus a
             floating amount equal to the differential between the three-month London Interbank Offering Rate reset
             in arrears and the strike price shown above, if the three-month  London  Interbank Offering Rate reset
             in arrears exceeded the strike price associated with the interest rate cap agreements.
</TABLE>
<PAGE>

(10)     NOTES PAYABLE

         On August 11,  2005,  First Banks  entered into an Amended and Restated
Secured Credit  Agreement with a group of  unaffiliated  financial  institutions
(Credit  Agreement)  in the  amount  of $122.5  million.  The  Credit  Agreement
replaced a secured  credit  agreement  dated August 14, 2003,  and  subsequently
amended on August 12, 2004, that provided a $75.0 million  revolving credit line
and a $25.0 million letter of credit  facility.  The Credit  Agreement  contains
material  changes to the structure and terms of the financing  arrangement,  the
most  significant of which is the addition of a term loan. The Credit  Agreement
provides a $15.0 million revolving credit facility  (Revolving  Credit),  a $7.5
million  letter of credit  facility (LC Facility) and a $100.0 million term loan
facility (Term Loan). Interest is payable on outstanding principal loan balances
of the Revolving  Credit at a floating  rate equal to either the lender's  prime
rate or, at First Banks' option,  the London Interbank Offering Rate (Eurodollar
Rate) plus a margin determined by the outstanding loan balances and First Banks'
net  income for the  preceding  four  calendar  quarters.  If the loan  balances
outstanding under the Revolving Credit are accruing at the prime rate,  interest
is paid monthly. If the loan balances outstanding under the Revolving Credit are
accruing at the  Eurodollar  Rate,  interest is payable  based on the one,  two,
three or six-month  Eurodollar  Rate,  as selected by First  Banks.  Interest is
payable on  outstanding  principal  loan balances of the Term Loan at a floating
rate equal to the Eurodollar  Rate plus a margin  determined by the  outstanding
loan  balances  and First  Banks'  net income for the  preceding  four  calendar
quarters.  There were no amounts  borrowed on the Revolving Credit on August 11,
2005. First Banks borrowed $80.0 million on the Term Loan on August 11, 2005 and
borrowed the remaining $20.0 million on November 14, 2005, as further  described
in Note 13 to the Consolidated  Financial Statements.  The outstanding principal
balance of the Term Loan is payable in ten equal quarterly  installments of $5.0
million  commencing  on March  31,  2006,  with the  remainder  of the Term Loan
balance to be repaid in full,  including any unpaid  interest,  upon maturity on
August 10, 2008. Amounts may be borrowed under the Revolving Credit until August
10,  2006,  at which time the  principal  and  interest  outstanding  is due and
payable.  The Credit Agreement  requires  maintenance of certain minimum capital
ratios for First  Banks and First Bank,  certain  maximum  nonperforming  assets
ratios for First Bank and a minimum  return on assets ratio for First Banks.  In
addition, it contains additional covenants, including a limitation on the amount
of dividends on First Banks' common stock that may be paid to stockholders.  The
Credit  Agreement is secured by First Banks'  ownership  interest in the capital
stock of its  subsidiaries.  Letters  of  credit  issued to  unaffiliated  third
parties on behalf of First  Banks under the LC  Facility  were $3.7  million and
$6.3 million at September 30, 2005 and December 31, 2004, respectively,  and had
not been drawn on by the counterparties.

         Notes payable were comprised of the following at September 30, 2005 and
December 31, 2004:
<TABLE>
<CAPTION>

                                                                                   September 30,     December 31,
                                                                                       2005              2004
                                                                                   -------------     ------------
                                                                                  (dollars expressed in thousands)

<S>                                                                                   <C>               <C>
         Revolving credit.........................................................   $     --           15,000
         Term loan................................................................     80,000               --
                                                                                     --------          -------
                  Total notes payable.............................................   $ 80,000           15,000
                                                                                     ========          =======
</TABLE>

(11)     SUBORDINATED DEBENTURES

         On September 30, 2005, First Banks redeemed the First Preferred Capital
Trust II (First Preferred II) 10.24%  cumulative  trust preferred  securities at
the liquidation value of $25 per preferred security, together with distributions
accumulated and unpaid to the redemption date. The trust preferred securities of
First  Preferred II were traded on the Nasdaq  National  Market System under the
ticker symbol "FBNKN." In conjunction with this transaction, First Banks paid in
full its outstanding $59.3 million of 10.24%  subordinated  debentures that were
issued by First Banks to First Preferred II in October 2000. The funds necessary
for the redemption of the  subordinated  debentures were provided from a portion
of the  proceeds  of First  Banks'  Term Loan,  as  discussed  in Note 10 to the
Consolidated Financial Statements.
<PAGE>

(12)     CONTINGENT LIABILITIES

         In October  2000,  First Banks  entered  into two  continuing  guaranty
contracts.  For value  received,  and for the purpose of inducing a pension fund
and its  trustees  and a welfare  fund and its  trustees  (the Funds) to conduct
business with MVP, First Bank's institutional  investment management subsidiary,
First Banks irrevocably and  unconditionally  guaranteed payment of and promised
to pay to each of the Funds any  amounts  up to the sum of $5.0  million  to the
extent  MVP is liable to the  Funds  for a breach of the  Investment  Management
Agreements   (including   the   Investment   Policy   Statement  and  Investment
Guidelines),  by and  between  MVP and the Funds  and/or  any  violation  of the
Employee  Retirement  Income  Security Act by MVP  resulting in liability to the
Funds.  The  guaranties are continuing  guaranties of all  obligations  that may
arise  for  transactions  occurring  prior  to  termination  of  the  Investment
Management  Agreements  and are  coexistent  with  the  term  of the  Investment
Management  Agreements.  The Investment  Management Agreements have no specified
term but may be terminated  at any time upon written  notice by the Trustees or,
at First Banks' option, upon thirty days written notice to the Trustees.  In the
event of termination of the Investment Management  Agreements,  such termination
shall have no effect on the liability of First Banks with respect to obligations
incurred before such  termination.  The obligations of First Banks are joint and
several  with those of MVP.  First Banks does not have any  recourse  provisions
that would  enable it to recover  from third  parties any amounts paid under the
contracts  nor does  First  Banks  hold any  assets  as  collateral  that,  upon
occurrence  of a required  payment  under the  contract,  could be liquidated to
recover  all or a portion of the  amount(s)  paid.  At  September  30,  2005 and
December 31, 2004,  First Banks had not recorded a liability for the obligations
associated with these guaranty contracts as the likelihood that First Banks will
be required to make payments under the contracts is remote.

         On June 30,  2004,  First  Bank  completed  the  sale of a  significant
portion of the leases in its commercial leasing  portfolio.  In conjunction with
the  transaction,  First Bank  recorded a liability of $2.0 million for recourse
obligations  related to the  completion of the sale. For value  received,  First
Bank, as seller,  indemnified  the buyer of certain leases from any liability or
loss   resulting   from   defaults   subsequent   to  the  sale.   First  Bank's
indemnification  for  the  recourse   obligations  is  limited  to  a  specified
percentage,  ranging from 15% to 25%, of the aggregate  lease  purchase price of
specific  pools of leases sold.  As of September 30, 2005 and December 31, 2004,
this liability was $980,000 and $1.6 million, respectively,  reflecting a change
in the  estimated  probable  loss  based  upon the  payments  received  from the
borrowers  of the  specific  pools of  leases  sold and the  performance  of the
portfolio.

         On August 31, 2004, SBLS LLC acquired  substantially  all of the assets
and assumed certain liabilities of SBLS. The Amended and Restated Asset Purchase
Agreement (Asset Purchase  Agreement)  governing this  transaction  provides for
certain payments to the seller  contingent on future  valuations of specifically
identified  assets,   including  servicing  assets  and  retained  interests  in
securitizations. SBLS LLC was not required to make any payments to the seller as
of September 30, 2005, the first  measurement  date under the terms of the Asset
Purchase Agreement. As of September 30, 2005 and December 31, 2004, SBLS LLC had
not recorded a liability for the obligations  associated  with these  contingent
payments,  as the  likelihood  that  SBLS LLC will be  required  to make  future
payments under the Asset Purchase  Agreement is not ascertainable at the present
time.

(13)     SUBSEQUENT EVENTS

         On October 31, 2005,  First Banks  completed  its  acquisition  of NSB,
Grayslake, Illinois, for $10.3 million in cash. The acquisition served to expand
First Banks' banking franchise in Chicago,  Illinois. The transaction was funded
through  internally  generated  funds. At the time of the  acquisition,  NSB had
assets of $50.4  million,  loans,  net of unearned  discount,  of $41.4 million,
deposits of $45.2 million and stockholders'  equity of $5.0 million.  The assets
acquired and liabilities  assumed were recorded at their estimated fair value on
the acquisition date. The fair value adjustments represent current estimates and
are  subject  to  further  adjustments  as  the  valuation  data  is  finalized.
Preliminary   goodwill,   which  is  not  deductible   for  tax  purposes,   was
approximately  $4.8  million,  and the core deposit  intangibles,  which are not
deductible for tax purposes and will be amortized over seven years utilizing the
straight-line method, were approximately  $909,000. NSB was merged with and into
First Bank.

         On November 14, 2005,  First Banks borrowed the remaining $20.0 million
available on its Term Loan,  bringing the total  outstanding  balance  under the
Term Loan to $100.0  million.  The Term Loan is further  described in Note 10 to
the Consolidated Financial Statements.





<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.  Generally,  forward looking  statements may be identified through the
use of words  such as:  "believe,"  "expect,"  "anticipate,"  "intend,"  "plan,"
"estimate," or words of similar meaning or future or conditional  terms such as:
"will," "would," "should," "could," "may," "likely,"  "probably," or "possibly."
Examples  of  forward  looking  statements  include,  but  are not  limited  to,
estimates  or  projections  with  respect  to our  future  financial  condition,
expected or  anticipated  revenues with respect to our results of operations and
our 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 our actual results to differ materially from those contemplated by the
forward-looking   statements   herein  include  market  conditions  as  well  as
conditions  affecting  the  banking  industry  generally  and  factors  having a
specific  impact on us,  including but not limited to:  fluctuations in interest
rates and in the economy,  including the threat of future terrorist  activities,
existing  and  potential  wars and/or  military  actions  related  thereto,  and
domestic responses to terrorism or threats of terrorism;  the impact of laws and
regulations  applicable  to us and  changes  therein;  the impact of  accounting
pronouncements  applicable to us and changes therein;  competitive conditions in
the  markets in which we conduct  our  operations,  including  competition  from
banking and non-banking  companies with substantially greater resources than us,
some of which may offer and develop products and services not offered by us; our
ability to control  the  composition  of our loan  portfolio  without  adversely
affecting interest income; the credit risk associated with consumers who may not
repay loans;  the geographic  dispersion of our offices;  the impact our hedging
activities may have on our operating results;  the highly regulated  environment
in which we operate;  and our ability to respond to changes in technology.  With
regard to our efforts to grow  through  acquisitions,  factors that could affect
the accuracy or  completeness of  forward-looking  statements  contained  herein
include the competition of larger acquirers with greater resources; fluctuations
in the prices at which acquisition targets may be available for sale; the impact
of making  acquisitions  without  using our common  stock;  and  possible  asset
quality issues,  unknown  liabilities or integration  issues with the businesses
that we have  acquired.  We do not  have a duty to and  will  not  update  these
forward-looking statements. Readers of this Quarterly Report on Form 10-Q should
therefore  consider these risks and uncertainties in evaluating  forward looking
statements and should not place undo reliance on these statements.

                                     General

         We are a registered  bank holding  company  incorporated in Missouri in
1978 and  headquartered  in St. Louis,  Missouri.  We operate through our wholly
owned  subsidiary  bank holding  company,  The San  Francisco  Company,  or SFC,
headquartered  in San  Francisco,  California,  and its wholly owned  subsidiary
bank,  First Bank,  headquartered  in St. Louis,  Missouri.  First Bank operates
through its branch  banking  offices and  subsidiaries,  FB Commercial  Finance,
Inc., Missouri Valley Partners, Inc. and Small Business Loan Source LLC, or SBLS
LLC,  which,  except for SBLS LLC,  are wholly  owned  subsidiaries.  First Bank
currently operates 177 branch banking offices in California,  Illinois, Missouri
and Texas.  At September 30, 2005, we had total assets of $9.01 billion,  loans,
net of unearned discount, of $6.63 billion,  total deposits of $7.38 billion and
total stockholders' equity of $665.1 million.

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

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

                               Financial Condition

         Total assets were $9.01 billion and $8.73 billion at September 30, 2005
and December 31, 2004,  respectively,  reflecting an increase of $275.7  million
for the nine months ended  September  30, 2005.  The increase in total assets is
attributable  to our  acquisitions  of FBA Bancorp,  Inc.,  or FBA, on April 29,
2005, which provided total assets of $73.3 million,  and  International  Bank of

<PAGE>

California,  or IBOC,  on September  30, 2005,  which  provided  total assets of
$151.6  million,  increased  goodwill  associated  with these  acquisitions,  in
addition to internal  growth within our loan portfolio and increases in cash and
cash  equivalents.  These  increases  in total assets were  partially  offset by
reductions  in  investment  securities  and other  assets.  Total loans,  net of
unearned  discount,  increased  $489.8 million to $6.63 billion at September 30,
2005,  from $6.14 billion at December 31, 2004,  reflecting  continued  internal
loan growth,  and the acquisitions of FBA and IBOC, which provided loans, net of
unearned  discount,  of $167.8 million,  in aggregate,  partially offset by loan
sales and/or payoffs or reductions of balances  associated with certain acquired
loans, as further discussed under "--Loans and Allowance for Loan Losses." Total
deposits  increased  $228.5 million to $7.38 billion at September 30, 2005, from
$7.15  billion  at  December  31,  2004.   The  deposit   growth  was  primarily
attributable  to the  acquisitions of FBA and IBOC,  which provided  deposits of
$187.8 million,  in aggregate.  The increase in deposits was partially offset by
an anticipated level of attrition associated with the deposits acquired from CIB
Bank, as further discussed below.  Available cash and cash equivalents increased
$20.0 million to $287.1  million at September 30, 2005,  from $267.1  million at
December 31,  2004.  Investment  securities  decreased  $227.3  million to $1.59
billion at  September  30,  2005,  from  $1.81  billion at  December  31,  2004,
primarily  reflecting  maturities  of $596.5  million  and  purchases  of $321.3
million,  including  $100.0  million  of  securities  purchases  and  subsequent
maturities  associated  with the  investment  of funds  provided  by a temporary
deposit, as further discussed below, and a $60.0 million purchase and subsequent
maturity  within  the  third  quarter  of 2005  associated  with  the  temporary
investment of funds provided from our $80.0 million term loan borrowed on August
11, 2005. The increase in loans was primarily  funded by available cash and cash
equivalents  and maturities of investment  securities.  Goodwill  increased $9.3
million to $166.2 million at September 30, 2005, from $156.8 million at December
31, 2004, and reflects the  reallocation  of the purchase price  associated with
our acquisition of CIB Bank, offset by goodwill associated with our acquisitions
of FBA and IBOC, as further  discussed in Note 2 to our  Consolidated  Financial
Statements.  Other assets decreased $28.1 million to $101.5 million at September
30, 2005,  from $129.6 million at December 31, 2004.  This decrease is primarily
attributable to a $9.9 million decline in our derivative  financial  instruments
from $4.7 million at December  31,  2004,  due to a decline in the fair value of
certain  derivative  financial  instruments,  the  maturity  of  $200.0  million
notional  amount of  interest  rate swap  agreements  on March 21,  2005 and the
termination  of $150.0 million and $101.2  million  notional  amount of interest
rate swap  agreements  on February 25, 2005 and May 27, 2005,  respectively,  as
further  discussed under "--Interest Rate Risk  Management."  Additionally,  the
decline in other assets reflects  decreases in servicing assets and core deposit
intangibles,  reductions in other real estate owned,  and the receipt of certain
receivables during the first quarter of 2005, including a receivable for current
income taxes of $8.3 million and a receivable for fiduciary related fees of $3.4
million.

         Total deposits  increased  $228.5 million to $7.38 billion at September
30, 2005,  from $7.15  billion at December  31, 2004.  The increase is primarily
attributable to our  acquisitions of FBA and IBOC, which provided total deposits
of $55.7 million and $132.1  million,  respectively.  A single source  temporary
commercial  money market deposit  received in the second quarter of 2005, with a
balance of $216.4  million at June 30, 2005,  has  declined to $14.1  million at
September  30, 2005.  The overall  increase in deposits was largely  offset by a
decrease  in  deposits   attributable  to  an  anticipated  level  of  attrition
associated with the deposits  acquired from CIB Bank,  particularly  savings and
time deposits,  including brokered and internet deposits. The acquisition of CIB
Bank, which was completed on November 30, 2004, provided total deposits of $1.10
billion.  Our continued  deposit  marketing focus and efforts to further develop
multiple account relationships with our customers,  coupled with slightly higher
deposit rates on certain  products,  have  contributed to deposit growth despite
continued  aggressive  competition  within our market areas and the  anticipated
level of  attrition  associated  with our recent  acquisitions.  The deposit mix
reflects our continued  efforts to  restructure  the  composition of our deposit
base as the majority of our deposit  development  programs  are directed  toward
increased transaction accounts, such as demand and savings accounts, rather than
higher cost time deposits.
<PAGE>

         Other borrowings decreased $26.1 million to $568.7 million at September
30, 2005, from $594.8 million at December 31, 2004. The decrease is attributable
to a $29.8  million  decrease  in daily  securities  sold  under  agreements  to
repurchase  resulting  from changes in customer  activity and demand,  partially
offset by a $3.7 million  increase in Federal Home Loan Bank  advances that were
assumed with our FBA acquisition.  Our notes payable  increased $65.0 million to
$80.0 million at September 30, 2005 as a result of the $80.0 million borrowed on
our $100.0  million term loan facility on August 11, 2005, as further  described
in Note 10 to our Consolidated Financial Statements. This increase was partially
offset by a $15.0  million  reduction  in  borrowings  on our  revolving  credit
facility,  which was repaid with funds generated from dividends from First Bank.
Our  subordinated  debentures  decreased to $215.4 million at September 30, 2005
from $273.3  million at December  31,  2004,  as a result of the  repayment,  on
September 30, 2005, of our $59.3 million of 10.24% subordinated  debentures that
were  issued to First  Preferred  Capital  Trust II, or First  Preferred  II, as
further  described  in Note 11 to our  Consolidated  Financial  Statements.  The
decrease in our  subordinated  debentures was partially offset by changes in the
fair value of our interest  rate swap  agreements  that are  designated  as fair
value hedges and utilized to hedge certain issues of our subordinated debentures
and the continued amortization of debt issuance costs.

         Minority  interest in SBLS LLC was $6.3 million at September  30, 2005.
On June 30, 2005,  First Capital America,  Inc., or FCA,  exercised an option to
purchase Membership  Interests of SBLS LLC for $7.4 million in cash. As a result
of this  transaction,  SBLS LLC  became 51% owned by First Bank and 49% owned by
FCA,  as  further  described  in Note 1,  Note 2 and Note 6 to our  Consolidated
Financial Statements.

         Stockholders' equity was $665.1 million and $600.9 million at September
30, 2005 and December 31, 2004,  respectively,  reflecting  an increase of $64.2
million. The increase is attributable to net income of $76.5 million,  partially
offset by an $11.7 million decrease in accumulated other  comprehensive  income,
comprised  of $3.9  million  associated  with  changes  in the fair value of our
derivative  financial  instruments  and $7.8 million  associated with changes in
unrealized gains and losses on our available-for-sale investment securities. The
decrease in accumulated other comprehensive income is reflective of increases in
prevailing  interest  rates,  a  decline  in the fair  value  of our  derivative
financial instruments, and the maturity of $200.0 million notional amount of our
interest  rate swap  agreements  designated as cash flow hedges during the first
quarter of 2005, as further discussed under "--Interest Rate Risk Management."

                              Results of Operations

Net Income

         Net income was $27.5  million and $19.7  million  for the three  months
ended  September  30,  2005 and 2004,  respectively,  reflecting  an increase of
39.3%.  Net income was $76.5 million and $64.0 million for the nine months ended
September 30, 2005 and 2004, respectively,  reflecting an increase of 19.5%. Our
return on average assets was 1.23% and 1.17% for the three and nine months ended
September 30, 2005, respectively, compared to 1.04% and 1.16% for the comparable
periods  in 2004.  Our  return on  average  stockholders'  equity was 16.61% and
16.26% for the three and nine months ended  September  30,  2005,  respectively,
compared to 13.89% and 15.11% for the comparable periods in 2004. Net income for
the three and nine months  ended  September  30,  2005  reflects  increased  net
interest  income  and  noninterest  income,  and a negative  provision  for loan
losses,  partially  offset by  increased  noninterest  expense and an  increased
provision for income taxes.

         The  increase in earnings in 2005  reflects our  continuing  efforts to
strengthen   earnings   and   simultaneously    improve   asset   quality.   Net
interest-earning   assets   provided   by  our  2004   and  2005   acquisitions,
higher-yielding  investment  securities,  and internal loan growth  coupled with
higher interest rates on loans have  contributed to increased  interest  income.
However,  net interest income was adversely affected by a decline in earnings on
our interest rate swap agreements that were entered into in conjunction with our
interest  rate risk  management  program to mitigate  the effects of  decreasing
interest  rates.  This decline in earnings on our swap  agreements was primarily
the  result  of  increasing  prevailing  interest  rates  and the  maturity  and
termination of certain interest rate swap agreements, as further discussed under
"--Interest Rate Risk  Management." In addition,  interest expense increased due
to higher  interest  rates on deposits;  a  redistribution  of deposit  balances
toward  higher-yielding  products  primarily  related to the mix of the CIB Bank
deposit base  acquired,  which  included  higher cost time  deposits,  including
brokered and internet  deposits;  increased levels of other  borrowings  coupled
with  increased  rates on such  borrowings,  including  our term  loan;  and the
issuance of additional  subordinated  debentures  late in 2004 to partially fund
our acquisition of CIB Bank.  Despite the increasing  interest rate environment,
overall  conditions within our markets and the impact of the decline in earnings
on our  interest  rate swap  agreements  continue  to exert  pressure on our net
interest income and net interest margin.
<PAGE>

         Our overall asset quality levels reflect continued  improvement  during
2005, resulting in a $19.3 million, or 21.4% reduction in nonperforming  assets,
and a $25.9  million,  or 90.3%  reduction in loans past due 90 days or more and
still accruing  interest  since December 31, 2004. A significant  portion of our
nonperforming  assets is comprised of  nonperforming  loans  associated with our
acquisition  of CIB Bank,  which reflect $32.8 million,  or 48.4%,  of our total
nonperforming  loans at September 30, 2005. The reduction in both  nonperforming
loans and loans past due 90 days or more and still  accruing  interest  reflects
our ongoing  emphasis on improving asset quality,  the sale of certain  acquired
nonperforming  loans,  a  reduction  in net  loan  charge-offs,  as well as loan
payoffs and/or external  refinancing of various  credits,  as further  discussed
under "--Loans and Allowance for Loan Losses" and "--Provision for Loan Losses."
Several of these factors contributed to a substantial reduction in our provision
for loan  losses.  We  recorded a  negative  provision  for loan  losses of $8.0
million for the nine months ended September 30, 2005, compared to provisions for
loan  losses of $7.5  million  and $23.3  million  for the three and nine months
ended September 30, 2004,  respectively.  We did not record a provision for loan
losses for the three months  ended  September  30, 2005.  We continue to closely
monitor our loan portfolio and consider these factors in our overall  assessment
of the adequacy of the allowance for loan losses.

         Noninterest  income was $24.5  million and $71.4  million for the three
and nine months ended September 30, 2005,  respectively,  in comparison to $22.0
million and $62.6 million for the  comparable  periods in 2004. The increase for
the first nine months of 2005 is primarily  attributable  to noninterest  income
resulting from our 2004 and 2005 acquisitions, increased gains on loans sold and
held  for  sale,  increased  investment  management  fees  associated  with  our
institutional money management subsidiary,  increased service charges on deposit
accounts and customer service fees related to higher deposit balances, increased
gains, net of losses,  on the sale of certain assets,  primarily  related to our
commercial  leasing  portfolio,  the  recognition of recoveries of certain loans
that had been charged-off by the respective financial  institutions prior to the
date of our acquisition, and recoveries of loan collection expenses. The overall
increase in  noninterest  income for 2005 was  partially  offset by a decline in
loan servicing fees,  primarily as a result of the recognition of a $2.4 million
impairment  charge on our small  business  lending  servicing  assets  following
substantial  damage to several shrimping vessels within our servicing  portfolio
caused by the effects of Hurricane Katrina. In addition,  rental income declined
as a result of our  reduced  commercial  leasing  activities,  and losses on the
disposal of fixed assets increased,  primarily associated with the demolition of
a branch  drive-thru  facility in the first quarter of 2005. Also, as previously
discussed,  we recorded $1.0 million in gains,  net of expenses,  resulting from
the sale of two Midwest branch banking offices in 2004.

         Noninterest  expense was $67.4 million and $201.0 million for the three
and nine months ended September 30, 2005,  respectively,  in comparison to $58.4
million and $166.4  million for the  comparable  periods in 2004. Our efficiency
ratio,  which is defined as the ratio of  noninterest  expense to the sum of net
interest income and noninterest  income, was 62.92% and 64.83% for the three and
nine months  ended  September  30,  2005,  respectively,  compared to 59.83% and
57.67%  for  the  comparable  periods  in  2004.  The  overall  increase  in our
noninterest  expenses  and our  efficiency  ratio is  attributable  to  expenses
resulting  from our  2004  and 2005  acquisitions,  increases  in  salaries  and
employee benefits expense,  information technology expense, and expenditures and
losses,  net of gains, on other real estate,  as further  discussed  below.  The
increase in our efficiency  ratio is also  attributable to a decrease in our net
interest margin from year-to-year in addition to larger increases in noninterest
expense as compared to the  increases  in net  interest  income and  noninterest
income, which did not increase at the same rate as noninterest expenses.  Salary
and employee benefit expenses increased due to the impact of our acquisitions in
2004 and 2005, which added a total of 26 branch offices, the addition of five de
novo branch  offices in 2004 and 2005,  and generally  higher costs of employing
and retaining qualified personnel, including enhanced incentive compensation and
employee  benefit  plans.  We continue to closely  monitor  noninterest  expense
levels following our recent  acquisitions  and have implemented  certain expense
reduction  measures  in an  effort to  improve  our  efficiency  ratio in future
periods.
<PAGE>

Net Interest Income

         Net interest income (expressed on a tax-equivalent  basis) increased to
$83.0 million and $239.5  million for the three and nine months ended  September
30, 2005, respectively, from $75.9 million and $226.8 million for the comparable
periods in 2004,  reflecting  continued growth. Our net interest rate margin was
4.00%  and  3.97%  for the  three and nine  months  ended  September  30,  2005,
respectively,  in  comparison  to 4.37% and 4.50% for the three and nine  months
ended  September 30, 2004,  respectively.  Net interest income is the difference
between  interest  earned  on our  interest-earning  assets,  such as loans  and
securities,  and  interest  paid on our  interest-bearing  liabilities,  such as
deposits  and  borrowings.  Net  interest  income is  affected  by the level and
composition of assets,  liabilities  and  stockholders'  equity,  as well as the
general level of interest rates and changes in interest  rates.  Interest income
on a tax-equivalent basis includes the additional amount of interest income that
would have been earned if our investment in certain tax-exempt  interest earning
assets had been made in assets subject to federal,  state and local income taxes
yielding  the same  after-tax  income.  Net  interest  margin is  determined  by
dividing   net   interest   income  on  a   tax-equivalent   basis  by   average
interest-earning  assets. The interest rate spread is the difference between the
average equivalent yield earned on interest-earning  assets and the average rate
paid on interest-bearing liabilities.

         We  primarily   credit  the   increase  in  net   interest   income  to
interest-earning   assets   provided   by  our  2004   and  2005   acquisitions,
higher-yielding investment securities,  internal loan growth coupled with higher
interest  rates  on  loans,  partially  offset  by  increased  interest  expense
associated  with higher  interest  rates on  deposits  and a  redistribution  of
deposit  balances  toward  higher-yielding  products,  the mix of the  CIB  Bank
deposit base acquired, as further discussed below, and increased levels of other
borrowings,  including our term loan,  coupled with increased  interest rates on
such borrowings,  and the issuance of additional subordinated debentures in late
2004 to partially  fund our  acquisition  of CIB Bank.  Net interest  income was
adversely impacted by a decline in earnings on our interest rate swap agreements
that were entered into in  conjunction  with our interest  rate risk  management
program  to  mitigate  the  effects of  decreasing  interest  rates.  As further
discussed under  "--Interest Rate Risk Management,"  these derivative  financial
instruments reduced our net interest income by $626,000 for the third quarter of
2005, in comparison to increasing  our net interest  income by $13.0 million for
the comparable  period in 2004. For the nine months ended September 30, 2005 and
2004, our derivative financial  instruments increased our net interest income by
$3.3 million and $44.7  million,  respectively.  The  decreased  earnings on our
interest rate swap  agreements for the three and nine months ended September 30,
2005  contributed to a reduction in our net interest margin of  approximately 66
basis points and 69 basis points, respectively, and reflect the impact of higher
interest rates and maturities of $750.0 million of interest rate swap agreements
designated  as cash  flow  hedges  and  $50.0  million  of  interest  rate  swap
agreements  designated  as fair value hedges  during  2004,  and the maturity of
$200.0 million of interest rate swap  agreements  designated as cash flow hedges
in March 2005, as well as the  termination  of $150.0 million and $101.2 million
of  interest  rate  swap  agreements  on  February  25,  2005 and May 27,  2005,
respectively. Although the Company has implemented other methods to mitigate the
reduction in net interest  income  resulting from the decreased  earnings on our
interest rate swap  agreements,  including  the funding of  investment  security
purchases through the issuance of term repurchase  agreements,  the reduction of
our interest rate swap agreements has resulted in a substantial reduction of net
interest income and further  compression of our net interest  margin,  which has
been partially offset by the impact of the rising rate environment.

         Average  interest-earning  assets  increased to $8.22 billion and $8.06
billion for the three and nine months ended  September  30, 2005,  respectively,
from $6.90  billion  and $6.74  billion  for  comparable  periods  in 2004.  The
increase is primarily  attributable to our three acquisitions completed in 2004,
which provided assets of $1.38 billion in aggregate,  and our acquisition of FBA
on April 29,  2005,  which  provided  assets of $73.3  million.  The increase in
average  interest-earning  assets is also attributable to internal growth within
our loan portfolio.  In addition,  we purchased  $250.0 million of callable U.S.
Government agency securities  relating to the issuance of $250.0 million of term
repurchase agreements that we entered into in conjunction with our interest rate
risk management  program during the first and second  quarters of 2004.  Despite
the rising interest rate environment,  overall competitive conditions within our
market areas and the impact of the maturity and termination of certain  interest
rate  swap  agreements,  as  discussed  above and  under  "--Interest  Rate Risk
Management,"  continue  to exert  pressure  on our net  interest  income and net
interest margin.
<PAGE>

         Average  investment  securities  increased  to $1.68  billion and $1.70
billion for the three and nine months ended  September  30, 2005,  respectively,
from $1.25 billion and $1.22  billion for the  comparable  periods in 2004.  The
yield on our  investment  portfolio  was  4.09% and 4.15% for the three and nine
months ended September 30, 2005,  respectively,  compared to 4.14% and 4.12% for
the comparable  periods in 2004. The overall  increase in the average balance of
investment securities primarily relates to our 2004 and 2005 acquisitions, which
provided   investment   securities   of  $438.0   million  and  $20.1   million,
respectively. Funds available from maturities of investment securities were used
to fund a decrease in deposits associated with an anticipated level of attrition
during the first  quarter of 2005,  primarily  time  deposits  acquired with CIB
Bank. The remaining  funds  available from  maturities of investment  securities
were used to fund loan growth and the reinvestment in additional higher-yielding
investment securities. Additionally, a portion of excess short-term investments,
which  include  federal  funds  sold  and  interest-bearing  deposits,  was also
utilized to fund deposit attrition, loan growth, and to purchase higher-yielding
available-for-sale  investment  securities,  resulting  in a decline  in average
short-term investments to $96.3 million and $75.8 million for the three and nine
months ended  September 30, 2005,  respectively,  from $136.0 million and $105.7
million  for the  comparable  periods  in  2004.  During  2005,  our  investment
securities  purchases and maturities  included the purchase of $160.0 million of
short-term  Federal Home Loan Bank discount notes associated with the investment
of funds provided by a single source temporary deposit, as previously discussed.
During 2004, our investment securities purchases included the purchase of $250.0
million  of  callable  U.S.  Government  agency  securities,   representing  the
underlying  securities   associated  with  $250.0  million,  in  aggregate,   of
three-year term repurchase agreements under master repurchase agreements that we
consummated  in the first and second  quarters of 2004, as further  described in
Note 9 to our Consolidated Financial Statements.

         Average loans, net of unearned  discount,  were $6.45 billion and $6.29
billion for the three and nine months ended  September  30, 2005,  respectively,
compared to $5.52 billion and $5.41 billion for the comparable  periods in 2004.
The  yield on our loan  portfolio  was  6.76%  and  6.46% for the three and nine
months ended September 30, 2005, respectively,  in comparison to 6.22% and 6.28%
for the comparable periods in 2004. Although our loan portfolio yields increased
with rising  interest  rates  during  2005,  total  interest  income on our loan
portfolio was adversely impacted by decreased earnings on our interest rate swap
agreements  designated  as cash  flow  hedges.  Higher  interest  rates  and the
maturities  of interest rate swap  agreements  designated as cash flow hedges of
$750.0  million in 2004 and $200.0  million in March 2005  resulted in decreased
earnings on our swap agreements thereby contributing to a reduction in yields on
our  loan  portfolio,  and a  compression  of our net  interest  income  and net
interest  margin of  approximately  $10.0 million or 48 basis points,  and $32.6
million or 54 basis  points,  for the three and nine months ended  September 30,
2005,  respectively,  as compared to the  comparable  periods in 2004.  Interest
income  on our loan  portfolio  includes  the  recognition  of $1.7  million  of
interest  income  resulting  from payoffs of certain loans on nonaccrual  status
during 2005. We attribute  the increase in average  loans of $878.9  million for
the nine months ended  September 30, 2005,  over the comparable  period in 2004,
primarily to our  acquisitions  completed  during 2004 and 2005,  which provided
total loans, in aggregate,  of $780.9 million and $167.8 million,  respectively.
The  increase is also the result of internal  loan growth,  partially  offset by
reductions  in our  nonperforming  loan  portfolio  due to the  sale of  certain
nonperforming  loans,  loan  payoffs  and/or  external  refinancing  of  various
credits.  Average commercial,  financial and agricultural loans increased $124.1
million for the nine months ended September 30, 2005, over the comparable period
in 2004,  as a result of our 2004  acquisitions.  This  increase  was  partially
offset by a $33.2 million decrease in average lease financing  volumes resulting
from our  business  strategy  initiated  in late 2002 to reduce  our  commercial
leasing activities and subsequently sell a significant  portion of the remaining
leases in our  commercial  leasing  portfolio in June 2004.  Average real estate
construction and development  loans increased  approximately  $204.8 million for
the nine months ended  September 30, 2005,  over the comparable  period in 2004,
primarily as a result of our recent  acquisitions  and seasonal  fluctuations on
existing and available credit lines as well as new loan production. Average real
estate mortgage loans increased approximately $540.2 million for the nine months
ended September 30, 2005,  over the comparable  period in 2004. This increase is
attributable  to a $395.9  million  increase in  commercial  real  estate  loans
primarily  resulting from our recent  acquisitions,  as well as a $144.3 million
increase  in  residential   real  estate   mortgage  loans  due  to  our  recent
acquisitions  and our  business  strategy  decision  to retain a portion  of our
residential mortgage loan production that would have been previously sold in the
secondary  market.  Average loans held for sale  increased  approximately  $34.1
million for the nine months ended September 30, 2005, over the comparable period
in 2004,  resulting from increased volumes of loan originations coupled with the
timing of loan sales in the secondary mortgage market.
<PAGE>

         Average  deposits  increased to $7.23 billion and $7.12 billion for the
three and nine months ended  September  30, 2005,  from $6.12  billion and $6.04
billion for the comparable  periods in 2004. For the three and nine months ended
September  30, 2005,  the  aggregate  weighted  average rate paid on our deposit
portfolio  increased  80 basis  points  and 63 basis  points to 2.22% and 2.02%,
respectively,  from 1.42% and 1.39% for the  comparable  periods in 2004, and is
primarily  attributable to the current rising interest rate  environment and the
mix of the CIB Bank  deposit  base  acquired in November  2004,  which  included
higher  cost  time  deposits,  including  brokered  and  internet  deposits.  In
addition,  the decreased  earnings  associated with certain of our interest rate
swap agreements  designated as fair value hedges,  as well as the termination of
$150.0 million of fair value hedges on February 25, 2005, resulted in a decrease
in our net interest income and net interest margin for the three and nine months
ended September 30, 2005, of approximately  $2.4 million or 12 basis points, and
$6.2 million or 11 basis points,  respectively,  compared to the same periods in
2004.  The  increase  in  average  deposits  is  primarily   reflective  of  our
acquisitions  completed  during  2004 and  2005,  which  provided  deposits,  in
aggregate, of $1.21 billion and $192.9 million,  respectively.  Although overall
average  deposit  levels  have  increased  as a  result  of our  2004  and  2005
acquisitions, the overall increase in average deposits was partially offset by a
significant  decrease  in  deposits  due to an  anticipated  level of  attrition
associated with the deposits  acquired from CIB Bank,  particularly  savings and
time deposits, including brokered and internet deposits. Excluding the impact of
our  acquisitions,  the change in our average deposit mix reflects our continued
efforts to  restructure  the  composition of our deposit base as the majority of
our deposit  development  programs are directed toward  increased  transactional
accounts,  such as demand and savings accounts,  rather than time deposits,  and
emphasize attracting more than one account relationship with customers.  Average
demand and savings  deposits  were $4.34 billion and $4.28 billion for the three
and nine months ended  September 30, 2005,  respectively,  and $4.14 billion and
$4.09 billion for the  comparable  periods in 2004.  Average total time deposits
increased to $2.89 billion and $2.84 billion for the three and nine months ended
September  30, 2005,  respectively,  compared to $1.98 billion and $1.95 billion
for the comparable  periods in 2004. The $216.4 million single source  temporary
commercial  money market  deposit that  originated in the second quarter of 2005
had  decreased to $14.1  million at September  30, 2005,  and  accounted  for an
increase in average savings deposits of  approximately  $109.6 million and $54.8
million for the three and nine months ended  September  30, 2005,  respectively,
over the comparable periods in 2004.

         Average other borrowings increased to $570.9 million and $572.7 million
for the three and nine months ended September 30, 2005,  respectively,  compared
to $541.1  million and $456.6  million for the  comparable  periods in 2004. The
aggregate weighted average rate paid on our other borrowings was 3.44% and 2.91%
for the three and nine months ended September 30, 2005,  respectively,  compared
to 1.46% and 0.99% for the  comparable  periods in 2004. The increased rate paid
on  our  other  borrowings  reflects  the  increased  short-term  interest  rate
environment  that began in the second  quarter of 2004.  The increase in average
other borrowings is primarily  attributable to $250.0 million of term repurchase
agreements  that we consummated  during 2004, as further  described in Note 9 to
our Consolidated Financial Statements.

         Our notes  payable  averaged  $44.3  million and $18.8  million for the
three and nine months ended September 30, 2005,  respectively,  and $3.1 million
for the nine months ended  September 30, 2004.  The aggregate  weighted  average
rate paid on our notes payable was 7.71% and 7.85% for the three and nine months
ended  September  30, 2005,  respectively,  and 16.97% for the nine months ended
September  30, 2004.  The  weighted  average rate paid  reflects  unused  credit
commitment and letter of credit  facility fees on our secured credit  agreement,
as well as other fees paid in conjunction with the annual renewal of our secured
credit agreement.  Amounts outstanding under our revolving line of credit with a
group of unaffiliated  financial  institutions  bear interest at a floating rate
equal to the lead bank's prime rate or, at our option,  at the London  Interbank
Offering Rate, or Eurodollar  Rate, plus a margin  determined by the outstanding
loan balances and our  profitability  for the preceding four calendar  quarters.
Amounts  outstanding under our term loan with a group of unaffiliated  financial
institutions  bear interest at a floating rate equal to the Eurodollar Rate plus
a margin  determined by the outstanding loan balances and our  profitability for
the  preceding  four  calendar  quarters.  Thus,  our secured  credit  agreement
represents a relatively  high-cost funding source as increased advances have the
effect of increasing the weighted  average rate of non-deposit  liabilities.  On
August  11,  2005,  we entered  into an  Amended  and  Restated  Secured  Credit
Agreement  and  restructured  our  overall  financing  arrangement,  as  further
described in Note 10 to our Consolidated  Financial  Statements.  In conjunction
with this  transaction,  we borrowed $80.0 million on the term loan and borrowed
the remaining  $20.0 million on November 14, 2005. The proceeds of the term loan
were used to fund our  acquisition  of IBOC and to partially fund the redemption
of our 10.24%  subordinated  debentures issued to First Preferred II, as further
discussed below.
<PAGE>

         Average subordinated  debentures were $274.5 million and $274.0 million
for the three and nine  months  ended  September  30,  2005,  compared to $211.8
million and $210.6  million for the  comparable  periods in 2004.  The aggregate
weighted  average rate paid on our  subordinated  debentures was 8.65% and 7.85%
for the three and nine months ended September 30, 2005, respectively,  and 7.01%
and  6.85%  for  the  comparable  periods  in  2004.  Interest  expense  on  our
subordinated  debentures  was $6.0  million and $16.1  million for the three and
nine months ended September 30, 2005, respectively, compared to $3.7 million and
$10.8 million for the comparable periods in 2004. As previously  discussed,  the
increase  for the three and nine  months  ended  September  30,  2005  primarily
reflects the issuance of $61.9 million of additional  subordinated debentures in
late 2004 to partially fund our acquisition of CIB Bank, partially offset by the
earnings  impact of our  interest  rate swap  agreements.  The  issuance  of the
additional  subordinated debentures as well as the termination of $101.2 million
of fair value hedges on May 27, 2005,  as further  discussed  under  "--Interest
Rate Risk Management," resulted in a decrease in our net interest income and net
interest  margin for the three and nine months  ended  September  30,  2005,  of
approximately  $2.1 million or ten basis points, and $5.0 million or eight basis
points,  respectively,  compared to the comparable periods in 2004.  However, as
further  described  in  Note 11 to our  Consolidated  Financial  Statements,  on
September  30, 2005,  we paid in full our  outstanding  $59.3  million of 10.24%
subordinated debentures that we previously issued in October 2000. The reduction
of these outstanding subordinated debentures will assist us in improving our net
interest  income  and  net  interest   margin  in  the  future,   especially  in
consideration of the high interest rate associated with them.


<PAGE>
<TABLE>
<CAPTION>
         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:

                                        Three Months Ended September 30,                    Nine Months Ended September 30,
                               --------------------------------------------------   -----------------------------------------------
                                           2005                     2004                     2005                    2004
                               -------------------------  -----------------------   ----------------------  -----------------------
                                           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).......... $6,450,922 109,997 6.76% $5,518,978 86,315  6.22% $6,288,486 303,801 6.46% $5,409,545 254,504  6.28%
   Investment securities (4)...  1,676,052  17,296 4.09   1,247,820 12,972  4.14   1,698,032  52,710 4.15   1,221,985  37,697  4.12
   Short-term investments......     96,257     841 3.47     135,987    476  1.39      75,830   1,701 3.00     105,748     899  1.14
                                ---------- -------       ---------- ------        ---------- -------       ---------- -------
        Total interest-earning
          assets...............  8,223,231 128,134 6.18   6,902,785 99,763  5.75   8,062,348 358,212 5.94   6,737,278 293,100  5.81
                                           -------                  ------                   -------                  -------
Nonearning assets..............    651,429                  618,644                  653,118                  634,085
                                ----------               ----------               ----------               ----------
        Total assets........... $8,874,660               $7,521,429               $8,715,466               $7,371,363
                                ==========               ==========               ==========               ==========

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

Interest-bearing liabilities:
   Interest-bearing deposits:
     Interest-bearing demand
       deposits................ $  897,502     979 0.43% $  842,855    801  0.38% $  888,585   2,799 0.42% $  855,434   2,592  0.40%
     Savings deposits..........  2,171,596   8,345 1.52   2,180,594  5,116  0.93   2,150,792  20,420 1.27   2,162,174  14,486  0.89
     Time deposits of $100
       or more.................    907,311   7,206 3.15     501,660  3,358  2.66     854,041  18,806 2.94     466,543   9,353  2.68
     Other time deposits (3)...  1,979,844  16,832 3.37   1,480,167  8,636  2.32   1,986,212  46,967 3.16   1,486,212  25,296  2.27
                                ---------- -------       ---------- ------        ---------- -------        --------- -------
        Total interest-bearing
          deposits.............  5,956,253  33,362 2.22   5,005,276 17,911  1.42   5,879,630  88,992 2.02   4,970,363  51,727  1.39
   Other borrowings............    570,919   4,946 3.44     541,073  1,982  1.46     572,686  12,480 2.91     456,621   3,383  0.99
   Notes payable (5)...........     44,348     862 7.71          --    229    --      18,791   1,103 7.85       3,133     398 16.97
   Subordinated debentures (3).    274,466   5,985 8.65     211,773  3,731  7.01     274,026  16,096 7.85     210,570  10,798  6.85
                                ---------- -------       ---------- ------        ---------- -------       ---------- -------
        Total interest-bearing
          liabilities..........  6,845,986  45,155 2.62   5,758,122 23,853  1.65   6,745,133 118,671 2.35   5,640,687  66,306  1.57
                                           -------                  ------                   -------                  -------
Noninterest-bearing liabilities:
   Demand deposits.............  1,274,933                1,114,587                1,242,166                1,070,269
   Other liabilities...........     96,719                   83,109                   99,094                   94,299
                                ----------               ----------               ----------               ----------
        Total liabilities......  8,217,638                6,955,818                8,086,393                6,805,255
Stockholders' equity...........    657,022                  565,611                  629,073                  566,108
                                ----------               ----------               ----------               ----------
        Total liabilities and
          stockholders' equity. $8,874,660               $7,521,429               $8,715,466               $7,371,363
                                ==========               ==========               ==========               ==========

Net interest income............             82,979                  75,910                   239,541                  226,794
                                           =======                  ======                   =======                  =======
Interest rate spread...........                    3.56                     4.10                     3.59                      4.24
Net interest margin (6)........                    4.00%                    4.37%                    3.97%                     4.50%
                                                   ====                     ====                     ====                     =====
--------------------
(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 $333,000 and $995,000 for the three and nine months ended September 30, 2005, and $302,000  and $927,000  for the
     comparable periods in 2004, respectively.
(5)  Interest expense on the notes payable includes  commitment, arrangement and renewal fees. Exclusive of these fees, the interest
     rates paid were 5.14% and 5.81% for the three and nine months  ended  September 30, 2005, and  10.06% for the nine months ended
     September 30, 2004.
(6)  Net  interest  margin  is  the  ratio  of net interest income (expressed on a tax-equivalent basis) to average interest-earning
     assets.
</TABLE>



<PAGE>


Provision for Loan Losses

         We did not record a  provision  for loan  losses  for the three  months
ended  September  30, 2005. We recorded an $8.0 million  negative  provision for
loan losses for the nine months ended  September  30,  2005,  in  comparison  to
provisions  for loan losses of $7.5 million and $23.3  million for the three and
nine months ended September 30, 2004,  respectively.  The negative provision for
loan  losses  recorded  during  2005  is  reflective  of a  21%  improvement  in
nonperforming  loans from December 31, 2004 to September 30, 2005 resulting from
loan payoffs and/or external refinancing of various credit relationships as well
as  a  significant  reduction  in  net  loan  charge-offs.  Nonperforming  loans
decreased  $18.0 million,  or 21.0%, to $67.8 million at September 30, 2005 from
$85.8  million at December  31,  2004.  Loans past due 90 days or more and still
accruing  interest  decreased  $25.9  million,  or  90.3%,  to $2.8  million  at
September  30, 2005 from $28.7  million at December  31,  2004.  The decrease in
nonperforming  loans and past due loans during the nine months  ended  September
30, 2005 reflects an  improvement  in asset quality  resulting  from the sale of
approximately  $14.3  million  of  certain  acquired   nonperforming   loans,  a
significant  reduction in net loan  charge-offs,  as well as loan payoffs and/or
external  refinancing  of various  credits,  including  $97.3 million in payoffs
relating to 14 credit  relationships,  as further  discussed  under "--Loans and
Allowance for Loan Losses." We recorded net loan charge-offs of $1.8 million and
$4.7  million  for  the  three  and  nine  months  ended   September  30,  2005,
respectively,  compared  to $7.9  million and $18.6  million for the  comparable
periods in 2004.  Our allowance for loan losses was $139.5  million at September
30, 2005,  compared to $140.2 million at June 30, 2005,  $144.2 million at March
31, 2005 and $150.7  million at December 31, 2004. Our allowance for loan losses
as a percentage of loans, net of unearned  discount,  was 2.10% at September 30,
2005,  compared to 2.22% at June 30, 2005,  2.34% at March 31, 2005 and 2.46% at
December  31,  2004.   Our   allowance  for  loan  losses  as  a  percentage  of
nonperforming  loans was 205.64% at September  30, 2005,  compared to 188.77% at
June 30,  2005,  180.71% at March 31,  2005 and 175.65% at  December  31,  2004.
Management  continues to closely  monitor its  operations to address the ongoing
challenges posed by the significant  level of nonperforming  loans acquired with
our CIB Bank acquisition, which represent 48.4% of our total nonperforming loans
at  September  30,  2005.  While   nonperforming   loans  added  by  our  recent
acquisitions have contributed to the overall level of nonperforming assets, such
increases  have been offset by  improvements  both in the  remainder of our loan
portfolio and in the acquired loan  portfolios  subsequent to their  acquisition
dates.  Management  considers  these  factors 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 $24.5  million and $71.4  million for the three
and nine months ended September 30, 2005,  respectively,  in comparison to $22.0
million and $62.6 million for the comparable periods in 2004. Noninterest income
consists  primarily of service charges on deposit  accounts and customer service
fees,  mortgage-banking revenues,  investment management income, bank owned life
insurance investment income and other income.

         Service  charges on deposit  accounts  and  customer  service fees were
$10.2  million and $29.7  million for the three and nine months ended  September
30, 2005, respectively,  in comparison to $9.8 million and $28.6 million for the
comparable periods in 2004. The increase in service charges and customer service
fees is primarily  attributable  to increased  demand deposit  account  balances
associated  with our  acquisitions  of  Continental  Community  Bank  and  Trust
Company,  or CCB, CIB Bank and FBA,  completed in July 2004,  November  2004 and
April 2005,  respectively.  The  increase  is also  attributable  to  additional
products  and  services  available  and  utilized  by our retail and  commercial
customer  base,   increased  fee  income  from  customer   service  charges  for
non-sufficient fund and returned check fees coupled with enhanced control of fee
waivers, higher earnings allowances on commercial deposit accounts and increased
income  associated  with automated  teller machine  services and debit cards, as
well as pricing  increases on certain service charges and customer  service fees
instituted to reflect current market conditions.

         The gain on loans  sold and held for sale was $6.5  million  and  $17.9
million for the three and nine months ended September 30, 2005, respectively, in
comparison to $4.7 million and $12.9 million for the comparable periods in 2004.
The increase in 2005 is partially attributable to an increase of $2.3 million of
gains on  United  States  Small  Business  Administration,  or SBA,  loans  sold
associated  with SBLS LLC. The increase is also  attributable  to an increase in
gains on  mortgage  loans  sold  resulting  from an  increase  in the  volume of
mortgage  loan  sales in the  secondary  market  as a result of  increased  loan
origination  volumes.  In general,  new residential  mortgage loan production of
15-year fixed rate, conforming  conventional adjustable rate mortgages and other
similar  products  are being  retained  in our  portfolio,  while  other  loans,
primarily  20- and 30-year  fixed rate loans,  are  typically  being sold in the
secondary loan markets.
<PAGE>

         Gains, net of expenses, on the sale of two Midwest banking offices were
$1.0  million  for the nine  months  ended  September  30,  2004,  and reflect a
$390,000  gain,  net of  expenses,  on the  sale of one of our  Missouri  branch
banking  offices in February 2004, and a $630,000 gain, net of expenses,  on the
sale of one of our Illinois  banking offices in April 2004.  There have not been
any sales of branch banking offices during 2005.

         Investment  management income was $2.1 million and $6.4 million for the
three and nine months ended September 30, 2005,  respectively,  in comparison to
$1.8 million and $5.1  million for the  comparable  periods in 2004,  reflecting
increased  portfolio  management  fees  generated  by  our  institutional  money
management  subsidiary  attributable  to new  business  development  and overall
growth in assets under management.

         Bank-owned life insurance  investment  income was $1.2 million and $3.7
million for the three and nine months ended September 30, 2005, respectively, in
comparison to $1.3 million and $3.9 million for the comparable  periods in 2004.
The decrease in investment  income  reflects a reduced return on the performance
of the  underlying  investments  surrounding  the insurance  contracts  which is
primarily  attributable  to the portfolio mix of investments  and overall market
conditions.

         Other income was $4.6 million and $13.8  million for the three and nine
months ended September 30, 2005, respectively, in comparison to $4.2 million and
$11.0  million for the  comparable  periods in 2004.  We  attribute  the primary
components of the increase in 2005 to:

         >>    an increase of $2.3 million recorded in the third quarter of 2005
               attributable  to  recoveries of certain loan  principal  balances
               that had been  charged-off  by the various  respective  financial
               institutions prior to their acquisition by First Banks;

         >>    a recovery of agent loan  collection  expenses  of  $500,000  and
               $239,000 in the first and third  quarters of 2005,  respectively,
               as  permitted  under  a loan  participation  agreement  prior  to
               recovery of principal and interest, from funds collected from the
               liquidation of a portion of the collateral  that secured the loan
               by the receiver;

         >>    a net  decrease  in losses on the  valuation  or sale of  certain
               repossessed  assets,  primarily related to our commercial leasing
               portfolio. Net gains for 2005 were $640,000 and included $464,000
               of  gains on two  sales of  repossessed  leasing  equipment.  Net
               losses for 2004 were $307,000 and included a $750,000  write-down
               on repossessed  aircraft leasing  equipment,  partially offset by
               gains  of  $510,000  on the sale of  other  repossessed  aircraft
               leasing equipment;

         >>    an increase of $608,000  reflecting  reductions  of a  contingent
               liability  established in conjunction  with the sale of a portion
               of our commercial  leasing portfolio in June 2004. The reductions
               of the  contingent  liability in the second and third quarters of
               2005 of $478,000 and $130,000,  respectively,  were the result of
               further  reductions  in related  lease  balances for the specific
               pools of leases  sold,  as  further  discussed  in Note 12 to our
               Consolidated Financial Statements;

         >>    an increase of $571,000 in fees from fiduciary activities; and

         >>    our  acquisitions  of CCB and CIB Bank completed  during 2004 and
               FBA completed in April 2005; partially offset by

         >>    a $215,000 net decrease in loan servicing  fees. The net decrease
               is primarily  attributable to: increased fees from loans serviced
               for others,  primarily attributable to a $2.4 million increase in
               SBLS LLC loan servicing fees,  offset by a $1.6 million  increase
               in amortization of SBA servicing  rights and the recognition of a
               $2.4  million  impairment  charge  on the  SBA  servicing  rights
               following  substantial damage to several shrimping vessels within
               the  servicing  portfolio  caused  by the  effects  of  Hurricane
               Katrina;  a $329,000  decrease in mortgage loan  servicing  fees,
               including a lower level of interest  shortfall on mortgage loans,
               offset by a $1.4  million  decrease in  amortization  of mortgage
               servicing  rights;   and  increased  unused  commitment  fees  of
               $405,000.  Interest  shortfall  is  the  difference  between  the
               interest collected from a loan-servicing customer upon prepayment
               of the loan and a full  month's  interest  that is required to be
               remitted to the security owner;

         >>    a decline  of  $947,000  in  rental  income  associated  with our
               reduced commercial leasing activities;

         >>    a decline of $550,000 in income  associated  with standby letters
               of credit;
<PAGE>

         >>    a decline of $148,000 in brokerage revenue  primarily  associated
               with overall market conditions and reduced customer demand;

         >>    a net increase in losses,  net of gains,  on the  disposition  of
               certain  assets,  primarily  attributable  to a $319,000 net loss
               resulting from the demolition of a branch drive-thru  facility in
               the first quarter of 2005; and

         >>    an  increase  in net losses on our  derivative  instruments.  Net
               losses on derivative  instruments  were $403,000 and $993,000 for
               the three and nine months ended September 30, 2005, respectively,
               compared to $401,000 and $856,000 for the  comparable  periods in
               2004.

Noninterest Expense

         Noninterest  expense was $67.4 million and $201.0 million for the three
and nine months ended September 30, 2005,  respectively,  in comparison to $58.4
million and $166.4  million for the  comparable  periods in 2004. Our efficiency
ratio  increased  to 62.92%  and  64.83%  for the three  and nine  months  ended
September  30,  2005,  respectively,  from 59.83% and 57.67% for the  comparable
periods in 2004. The efficiency ratio is used by the financial services industry
to  measure  an  organization's  operating  efficiency.   The  efficiency  ratio
represents  the  ratio  of  noninterest  expense  to  net  interest  income  and
noninterest  income.  The increases in  noninterest  expense and our  efficiency
ratio for 2005 were primarily  attributable  to increases in expenses  resulting
from our 2004 and 2005  acquisitions,  and  increases  in salaries  and employee
benefits expense,  information  technology expense,  expenses and losses, net of
gains, on other real estate, and other expense.

         Salaries and  employee  benefits  expense was $35.7  million and $103.1
million for the three and nine months ended September 30, 2005, respectively, in
comparison  to $29.9  million and $85.8  million for the  comparable  periods in
2004.  We  attribute  the overall  increase to  increased  salaries and employee
benefits  expenses  associated  with  an  aggregate  of 26  additional  branches
acquired in 2004 and 2005,  five de novo  branches  opened in 2004 and 2005,  in
addition to generally  higher salary and employee  benefit costs associated with
employing  and  retaining  qualified  personnel,  including  enhanced  incentive
compensation and employee benefits plans. Our number of employees on a full-time
equivalent  basis  increased  to 2,238 at  September  30,  2005,  from  2,028 at
September 30, 2004.

         Occupancy,  net of rental income,  and furniture and equipment  expense
totaled  $9.3  million and $27.6  million  for the three and nine  months  ended
September  30,  2005,  respectively,  in  comparison  to $8.8  million and $26.5
million  for  the  comparable   periods  in  2004.  The  increase  is  primarily
attributable to higher levels of expense resulting from our acquisitions in 2004
and 2005, which added 26 branch offices,  and the opening of five de novo branch
offices in 2004 and 2005, as discussed above. The increase is also  attributable
to  increased  technology  equipment   expenditures,   continued  expansion  and
renovation  of  certain  corporate  and  branch  offices,  including  additional
production  and  administrative  offices,  and  increased  depreciation  expense
associated with capital expenditures and acquisitions.

         Information  technology and item  processing fees were $9.1 million and
$26.7  million  for  the  three  and  nine  months  ended  September  30,  2005,
respectively, in comparison to $8.0 million and $24.0 million for the comparable
periods in 2004. As more fully described in Note 6 to our Consolidated Financial
Statements,  First Services, L.P., a limited partnership indirectly owned by our
Chairman and members of his immediate family,  provides  information  technology
and  operational  support  services  to our  subsidiaries  and  us.  Information
technology fees also include fees paid to outside servicers  associated with our
mortgage lending division and our small business lending and institutional money
management subsidiaries. We attribute the level of fees to the additional branch
offices provided by our recent  acquisitions and de novo branch office openings,
deconversion costs from other providers associated with our acquisitions, growth
and  technological   advancements   consistent  with  our  product  and  service
offerings, continued expansion and upgrades to technological equipment, networks
and communication  channels,  partially offset by expense  reductions  resulting
from information  technology  conversions of our acquisitions completed in 2004,
as  well  as  the  achievement  of  certain  efficiencies  associated  with  the
implementation  of  various  technology  projects.  The  information  technology
conversions of CCB, CIB Bank and FBA were completed in September 2004,  February
2005 and June 2005, respectively.

         Legal,  examination  and  professional  fees were $2.3 million and $6.7
million for the three and nine months ended September 30, 2005, respectively, in
comparison to $1.6 million and $4.9 million for the comparable  periods in 2004.
The  continued   expansion  of  overall   corporate   activities,   the  ongoing
professional  services  utilized  by  certain  of  our  acquired  entities,  and
increased legal fees associated with commercial loan  documentation,  collection
efforts and  certain  defense  litigation  costs  primarily  related to acquired
entities have all  contributed  to the overall  expense levels in 2004 and 2005.
The  increase  in  2005 is also  attributable  to  $471,000  of  fees  paid  for
accounting  and other  services,  including  operational  and  systems  support,
provided by the seller of CIB Bank  pursuant to a service  agreement  to provide
services from the November 2004 sale date through the system  conversion date in
February 2005.
<PAGE>

         Amortization   of   intangibles   associated   with  the   purchase  of
subsidiaries  was $1.2  million  and $3.5  million for the three and nine months
ended  September  30, 2005,  respectively,  in  comparison  to $733,000 and $2.0
million for the comparable periods in 2004. The increase is attributable to core
deposit  intangibles  associated  with  our  acquisitions  of CCB and  CIB  Bank
completed in 2004 and our acquisition of FBA completed in April 2005.

         Communications and advertising and business  development  expenses were
$2.1 million and $6.5 million for the three and nine months ended  September 30,
2005, respectively, compared to $1.8 million and $5.2 million for the comparable
periods in 2004. The expansion of our sales, marketing and product group in 2004
and broadened  advertising campaigns have contributed to higher expenditures and
are consistent with our continued  focus on expanding our banking  franchise and
the  products  and  services  available  to our  customers.  Our spring and fall
advertising  campaigns have contributed to the increase in 2005. We continue our
efforts to manage these expenses through  renegotiation  of contracts,  enhanced
focus on advertising  and  promotional  activities in markets that offer greater
benefits, as well as ongoing cost containment efforts.

         Charitable  contributions expense was $111,000 and $1.8 million for the
three and nine  months  ended  September  30,  2005,  respectively,  compared to
$294,000  and  $424,000  for the  comparable  periods in 2004.  The  increase is
primarily  attributable  to a $1.5 million  contribution in May 2005 to an urban
revitalization development project located in the city of St. Louis. In exchange
for this  contribution,  we received  Missouri  state tax  credits  that will be
utilized to reduce certain state income taxes.

         Other expense was $6.3 million and $20.7 million for the three and nine
months ended September 30, 2005, respectively, in comparison to $6.0 million and
$13.7 million for the  comparable  periods in 2004.  Other  expense  encompasses
numerous general and administrative  expenses including  insurance,  freight and
courier  services,   correspondent  bank  charges,   miscellaneous   losses  and
recoveries,  expenses on other real estate owned, memberships and subscriptions,
transfer  agent  fees,  sales  taxes and travel,  meals and  entertainment.  The
increase is primarily attributable to:

         >>    an increase of $3.7 million in  expenditures  and losses,  net of
               gains, on other real estate.  Gains,  net of losses and expenses,
               on other real estate were $76,000 for the third  quarter of 2005.
               Expenditures and losses,  net of gains, on other real estate were
               $532,000  for the  nine  months  ended  September  30,  2005  and
               included  expenses  of  $812,000  and  $170,000 in the second and
               third quarters of 2005, respectively, in preparation for the sale
               of a parcel of other real estate acquired with the acquisition of
               CIB  Bank.   These   expenditures   were   partially   offset  by
               approximately  $413,000  of gains  recorded  on the sale of three
               holdings  of other  real  estate  during  the  first  and  second
               quarters  of  2005,  and  a  $307,000  gain  on  the  sale  of an
               additional  holding in the third quarter of 2005.  Gains,  net of
               losses and  expenses,  on other real estate were $24,000 and $3.2
               million for the three and nine months ended  September  30, 2004,
               and included a $2.7 million gain recorded in the first quarter of
               2004 on the sale of a residential  and  recreational  development
               property  that was  transferred  to other real  estate in January
               2003 and approximately  $390,000 of gains recorded on the sale of
               two  additional  holdings  of other  real  estate  in the  second
               quarter of 2004;

         >>    increased losses and adjustments to the carrying value of certain
               affordable housing credit partnership investments in 2005; and

         >>    expenses  associated  with continued  growth and expansion of our
               banking  franchise,  including  our de novo  branch  offices  and
               acquisitions  completed  during 2004 and 2005,  particularly  CIB
               Bank in November 2004.

Provision for Income Taxes

         The  provision for income taxes was $13.3 million and $41.6 million for
the three and nine months ended September 30, 2005, respectively,  in comparison
to $12.0  million and $34.8  million  for the  comparable  periods in 2004.  The
effective  tax rate was 32.5% and  35.2%  for the  three and nine  months  ended
September  30,  2005,  respectively,  in  comparison  to 37.7% and 35.2% for the
comparable  periods in 2004. In September 2005, we recorded a reversal of a $3.1
million  state tax reserve,  and in June 2004,  we recorded a reversal of a $2.8
million  tax  reserve  that was no longer  deemed  necessary  as a result of the
resolution of a potential  tax  liability.  Excluding  these  transactions,  the
effective  tax rate was 37.4% and  36.9%  for the  three and nine  months  ended
September  30,  2005,  respectively,  in  comparison  to 37.7% and 38.1% for the
comparable  periods  in 2004.  The  lower  effective  tax  rate in  2005,  after
adjusting  for the  nonrecurring  transactions,  was primarily the result of the
utilization of certain state tax credits.



<PAGE>
                          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  financial
instruments  we  held as of  September  30,  2005  and  December  31,  2004  are
summarized as follows:
<TABLE>
<CAPTION>
                                                                   September 30, 2005          December 31, 2004
                                                                 -----------------------     ----------------------
                                                                  Notional      Credit       Notional       Credit
                                                                   Amount      Exposure       Amount       Exposure
                                                                   ------      --------       ------       --------
                                                                            (dollars expressed in thousands)

<S>                                                               <C>             <C>         <C>            <C>
         Cash flow hedges.....................................    $300,000        199         500,000        1,233
         Fair value hedges....................................      25,000         82         276,200        9,609
         Interest rate floor agreement........................     100,000        146              --           --
         Interest rate lock commitments.......................       8,700         --           5,400           --
         Forward commitments to sell
           mortgage-backed securities.........................      50,000         --          34,000           --
                                                                  ========       ====         =======        =====
</TABLE>

         The notional  amounts of our  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  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  months  ended  September  30,  2005,  we realized net
interest expense of $626,000 on our derivative  financial  instruments,  whereas
during the nine months ended September 30, 2005, we realized net interest income
of $3.3 million on our derivative financial instruments.  For the three and nine
months  ended  September  30, 2004,  we realized  net  interest  income of $13.0
million  and  $44.7  million,   respectively,   on  our   derivative   financial
instruments. The decreased earnings are primarily attributable to an increase in
prevailing  interest  rates that began in mid-2004 and has continued  into 2005,
the maturity of $800.0 million  notional amount of interest rate swap agreements
during 2004 and $200.0  million in March  2005,  and the  termination  of $150.0
million and $101.2 million of interest rate swap  agreements  designated as fair
value hedges in February 2005 and May 2005,  respectively,  as further discussed
below.  Although  the  Company has  implemented  other  methods to mitigate  the
reduction in net interest income,  as further  discussed below, the maturity and
termination  of the swap  agreements  has resulted in a  compression  of our net
interest  margin of  approximately  66 basis  points and 69 basis points for the
three and nine months ended September 30, 2005,  respectively,  in comparison to
the  comparable  periods in 2004,  and will result in a reduction  of future net
interest  income and  further  compression  of our net  interest  margin  unless
interest rates increase. We recorded net losses on derivative instruments, which
are included in noninterest income in our consolidated  statements of income, of
$403,000 and $993,000 for the three and nine months ended September 30, 2005, in
comparison to net losses of $401,000 and $856,000 for the comparable  periods in
2004, respectively. The net losses recorded in 2005 reflect changes in the value
of our fair value hedges and the underlying hedged liabilities during 2005 until
the  termination  of  the  $150.0  million  of  interest  rate  swap  agreements
designated as fair value hedges in February 2005, and the change in the value of
our interest  rate floor  agreement  entered into in September  2005, as further
discussed below.

Cash Flow Hedges.  During September 2000, March 2001, April 2001, March 2002 and
July 2003,  we entered into interest  rate swap  agreements  of $600.0  million,
$200.0  million,  $175.0  million,  $150.0 million and $200.0  million  notional
amount,  respectively,  to effectively lengthen the repricing characteristics of
certain  interest-earning  assets to correspond  more closely with their funding
source  with the  objective  of  stabilizing  cash flow,  and  accordingly,  net
interest income over time. The underlying hedged assets are certain loans within
our commercial loan portfolio.  The swap agreements,  which have been designated
as cash flow hedges,  provide for us to receive a fixed rate of interest and pay
an adjustable rate of interest  equivalent to the weighted average prime lending
rate minus 2.70%, 2.82%, 2.82%, 2.80% and 2.85%, respectively.  The terms of the
swap agreements provide for us to pay and receive interest on a quarterly basis.
In November  2001,  we  terminated  $75.0  million  notional  amount of the 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.  In addition,  the
$150.0 million notional amount swap agreement that we entered into in March 2002
matured in March 2004, the $600.0 million  notional  amount swap agreements that
we entered into in September  2000  matured in  September  2004,  and the $200.0
million  notional  amount  swap  agreement  that we  entered  into in March 2001
matured on March 21, 2005. The amount receivable by us under the swap agreements
was $2.4 million and $2.7  million at September  30, 2005 and December 31, 2004,
respectively,  and the amount  payable by us under the swap  agreements was $2.2
million  and  $1.4  million  at  September  30,  2005  and  December  31,  2004,
respectively.
<PAGE>
         In October 2004,  we  implemented  the guidance  required by the FASB's
Derivatives  Implementation Group on Statement of Financial Accounting Standards
No.  133   Implementation   Issue  No.  G25,   Cash  Flow   Hedges:   Using  the
First-Payments-Received Technique in Hedging the Variable Interest Payments on a
Group of Non-Benchmark-Rate-Based Loans, or DIG issue G25, and de-designated all
of  the  specific   pre-existing  cash  flow  hedging  relationships  that  were
inconsistent with the guidance in DIG Issue G25. Consequently,  the $4.1 million
net gain associated with the  de-designated  cash flow hedging  relationships at
September  30, 2004,  is being  amortized to interest  income over the remaining
lives of the respective hedging  relationships,  which ranged from approximately
six  months  to  three  years  at the  date of  implementation.  We  elected  to
prospectively  re-designate new cash flow hedging relationships based upon minor
revisions  to the  underlying  hedged  items as required by the  guidance in DIG
Issue G25.  The  implementation  of DIG Issue G25 did not and is not expected to
have a material  impact on our  consolidated  financial  statements,  results of
operations or interest rate risk management program.

         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, 2005 and December 31, 2004 were as follows:
<TABLE>
<CAPTION>

                                                                 Notional   Interest Rate  Interest Rate    Fair
                          Maturity Date                           Amount         Paid        Received       Value
                          -------------                           ------         ----        --------       -----
                                                                         (dollars expressed in thousands)
         September 30, 2005:
<S>                                                             <C>              <C>           <C>         <C>
             April 2, 2006...................................   $ 100,000        3.93%         5.45%       $   543
             July 31, 2007...................................     200,000        3.90          3.08         (5,039)
                                                                ---------                                  -------
                                                                $ 300,000        3.91          3.87        $(4,496)
                                                                =========       =====         =====        =======
         December 31, 2004:
             March 21, 2005..................................   $ 200,000        2.43%         5.24%       $ 1,155
             April 2, 2006...................................     100,000        2.43          5.45          2,678
             July 31, 2007...................................     200,000        2.40          3.08         (2,335)
                                                                ---------                                  -------
                                                                $ 500,000        2.42          4.42        $ 1,498
                                                                =========       =====         =====        =======
</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 $150.0  million  notional
               amount of five-year  interest rate swap  agreements that provided
               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 were a portion
               of our other  time  deposits.  The  terms of the swap  agreements
               provided 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 $3.9 million at December 31, 2004,  and
               the amount  payable by us under the swap  agreements was $695,000
               at December 31, 2004.  Effective February 25, 2005, we terminated
               these swap  agreements.  The  termination of the swap  agreements
               resulted from an increasing level of  ineffectiveness  associated
               with the  correlation  of the hedge  positions  between  the swap
               agreements and the underlying  hedged  liabilities  that had been
               anticipated  as  the  swap  agreements  neared  their  originally
               scheduled  maturity  dates in January 2006.  The  resulting  $3.1
               million basis adjustment of the underlying hedged  liabilities is
               being  recorded as interest  expense over the remaining  weighted
               average  maturity  of  the  underlying   hedged   liabilities  of
               approximately ten months.

         >>    During May 2002, March 2003 and April 2003, we entered into $55.2
               million,   $25.0  million  and  $46.0  million  notional  amount,
               respectively,  of interest rate swap  agreements that provide for
               us to receive a fixed rate of interest and pay an adjustable rate
               of  interest  equivalent  to  the  three-month  London  Interbank
               Offering  Rate plus  2.30%,  2.55% and 2.58%,  respectively.  The
               underlying  hedged  liabilities are a portion of our subordinated
               debentures.  The terms of the swap  agreements  provide for us to
               pay and  receive  interest on a  quarterly  basis.  There were no
               amounts  receivable  or payable by us at  September  30,  2005 or
               December 31, 2004.  Effective  May 27, 2005,  we  terminated  the
               $55.2 million and $46.0 million notional swap agreements in order
               to  appropriately  modify our future hedge position in accordance
               with our interest  rate risk  management  program.  The resulting
               $854,000 basis adjustment of the underlying  hedged  liabilities,
               in  aggregate,  is being  recorded  as a  reduction  of  interest
               expense over the remaining  maturities of the  underlying  hedged
               liabilities, which range from 26 to 28 years.



<PAGE>


         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, 2005 and December 31, 2004 were as follows:
<TABLE>
<CAPTION>

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

         September 30, 2005:
<S>                                                              <C>             <C>           <C>         <C>
             March 20, 2033...................................   $ 25,000        6.04%         8.10%       $(1,220)
                                                                 ========       =====         =====        =======

         December 31, 2004:
             January 9, 2006 (1)..............................   $150,000        2.06%         5.51%       $ 3,610
             December 31, 2031 (2)............................     55,200        4.27          9.00          2,171
             March 20, 2033...................................     25,000        4.52          8.10           (929)
             June 30, 2033 (2)................................     46,000        4.55          8.15         (1,689)
                                                                 --------                                  -------
                                                                 $276,200        3.14          6.88        $ 3,163
                                                                 ========       =====         =====        =======
         ------------------
         (1) The interest rate swap agreements were terminated effective February 25, 2005, as further discussed above.
         (2) The interest rate swap agreements were terminated effective May 27, 2005, as further discussed above.
</TABLE>

Interest  Rate Cap  Agreements.  During 2003 and 2004, we entered into five term
repurchase agreements under master repurchase agreements with unaffiliated third
parties,  as  further  described  in  Note  9  to  our  Consolidated   Financial
Statements.  The  underlying  securities  associated  with the  term  repurchase
agreements are  mortgage-backed  securities and callable U.S.  Government agency
securities  and are  held by  other  financial  institutions  under  safekeeping
agreements.  The term repurchase agreements were entered into with the objective
of  stabilizing  net interest  income over time and further  protecting  our net
interest  margin  against  changes in interest  rates.  The interest  rate floor
agreements included within the term repurchase agreements (and the interest rate
cap  agreements  previously  included  within  the term  repurchase  agreements)
represent  embedded  derivative  instruments  which, in accordance with existing
accounting literature governing derivative  instruments,  are not required to be
separated from the term repurchase  agreements and accounted for separately as a
derivative  financial  instrument.  As such, the term repurchase  agreements are
reflected in other borrowings in our consolidated balance sheets and the related
interest  expense is reflected as interest  expense on other  borrowings  in our
consolidated  statements  of  income.  As  further  described  in  Note 9 to our
Consolidated  Financial  Statements,  on March 21, 2005, in accordance  with our
interest  rate  risk  management   program,  we  modified  our  term  repurchase
agreements under master repurchase agreements with unaffiliated third parties to
terminate the interest rate cap  agreements  embedded  within the agreements and
simultaneously  enter into interest rate floor agreements,  also embedded within
the  agreements.  These  modifications  resulted in  adjustments to the existing
interest rate spread to LIBOR for the underlying agreements.  The modified terms
of the term repurchase  agreements became effective during the second quarter of
2005.  We did not incur  any  costs  associated  with the  modifications  of the
agreements  nor did the  modifications  result  in a  change  to the  accounting
treatment of the embedded derivative instruments.

Interest  Rate Floor  Agreement.  On September 9, 2005, we entered into a $100.0
million notional amount three-year  interest rate floor agreement in conjunction
with our  interest  rate  risk  management  program.  The  interest  rate  floor
agreement provides for us to receive a quarterly fixed rate of interest of 5.00%
should the three-month  London  Interbank  Offering Rate equal or fall below the
strike price of 2.00%.  The carrying value of the interest rate floor agreement,
which is  included  in other  assets in our  consolidated  balance  sheets,  was
$146,000 at September 30, 2005.

Pledged  Collateral.  At September 30, 2005 and December 31, 2004, we had a $2.0
million and $5.0 million letter of credit, respectively, issued on our behalf to
the counterparty and had pledged investment securities available for sale with a
fair value of $3.9 million and $527,000,  respectively,  in connection  with our
interest  rate swap  agreements.  At September  30, 2005, we had pledged cash of
$891,000 as collateral in connection with our interest rate swap agreements.  At
December  31,  2004,  we had  accepted  cash of $6.0  million as  collateral  in
connection with our interest rate swap agreements.

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 to be sold.  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.  The  carrying  value  of these
interest  rate lock  commitments  included in other  assets in our  consolidated
balance  sheets was $366,000 and $20,000 at September  30, 2005 and December 31,
2004, respectively.



<PAGE>


                       Loans and Allowance for Loan Losses

         Interest earned on our loan portfolio  represents the principal  source
of income  for First  Bank.  Interest  and fees on loans were 86.0% and 85.0% of
total  interest  income for the three and nine months ended  September 30, 2005,
respectively,  in  comparison to 86.7% and 87.0% for the  comparable  periods in
2004. Total loans, net of unearned  discount,  increased $489.8 million to $6.63
billion,  or 73.6% of total  assets,  at September  30, 2005,  compared to $6.14
billion, or 70.3% of total assets, at December 31, 2004. The overall increase in
loans, net of unearned discount,  in 2005 is primarily  attributable to internal
loan growth and our  acquisitions of FBA and IBOC,  which provided loans, net of
unearned discount,  of $54.3 million and $113.5 million,  respectively.  The net
increase is primarily attributable to:

         >>    an  increase  of  $249.9  million  in our  real  estate  mortgage
               portfolio primarily attributable to our acquisition of FBA, which
               provided real estate mortgage loans of $54.2 million,  as well as
               internal growth within our loan portfolio;  management's business
               strategy decision in mid-2003 to retain a portion of the new loan
               production in our residential real estate mortgage portfolio as a
               result of continued weak loan demand in other sectors of our loan
               portfolio and management's business strategy in the third quarter
               of 2005 to retain additional  mortgage loan product production in
               our residential real estate mortgage portfolio, including 15-year
               fixed rate, conforming conventional adjustable rate mortgages and
               other similar  products;  and a home equity product line campaign
               that we held in mid-2004;

         >>    an  increase of $124.5  million in loans held for sale  resulting
               from the timing of loan sales in the secondary  mortgage  market,
               coupled with an overall increase in loan origination  volumes for
               the three and nine months ended September 30, 2005 as compared to
               the comparable  periods in 2004,  partially offset by the sale of
               certain acquired loans; and

         >>    an increase of $103.5 million in our real estate construction and
               development   portfolio   resulting   primarily   from  new  loan
               originations and seasonal  fluctuations on existing and available
               credit lines.

         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 September 30, 2005 and December 31, 2004:
<TABLE>
<CAPTION>

                                                                                 September 30,     December 31,
                                                                                     2005              2004
                                                                                     ----              ----
                                                                                (dollars expressed in thousands)
         Commercial, financial and agricultural:
<S>                                                                              <C>                  <C>
           Nonaccrual.........................................................   $    7,762           10,147
           Restructured.......................................................           --                4
         Real estate construction and development:
           Nonaccrual.........................................................        8,816           13,435
         Real estate mortgage:
           One-to-four family residential:
              Nonaccrual......................................................        9,993            9,881
              Restructured....................................................           10               11
           Multi-family residential loans:
              Nonaccrual......................................................          700              434
           Commercial real estate loans:
              Nonaccrual......................................................       39,616           50,671
         Lease financing:
           Nonaccrual.........................................................          760              907
         Consumer and installment:
           Nonaccrual.........................................................          166              310
                                                                                 ----------        ---------
                  Total nonperforming loans...................................       67,823           85,800
         Other real estate....................................................        2,747            4,030
                                                                                 ----------        ---------
                  Total nonperforming assets..................................   $   70,570           89,830
                                                                                 ==========        =========

         Loans, net of unearned discount......................................   $6,627,810        6,137,968
                                                                                 ==========        =========

         Loans past due 90 days or more and still accruing....................   $    2,779           28,689
                                                                                 ==========        =========

         Ratio of:
           Allowance for loan losses to loans.................................         2.10%            2.46%
           Nonperforming loans to loans.......................................         1.02             1.40
           Allowance for loan losses to nonperforming loans...................       205.64           175.65
           Nonperforming assets to loans and other real estate................         1.06             1.46
                                                                                 ==========        =========
</TABLE>
<PAGE>

         Nonperforming  loans,  consisting  of loans on  nonaccrual  status  and
certain  restructured  loans,  were $67.8  million at  September  30,  2005,  in
comparison  to $74.3  million at June 30, 2005,  $79.8 million at March 31, 2005
and $85.8  million  at  December  31,  2004.  Other real  estate  owned was $2.7
million, $2.0 million, $1.8 million and $4.0 million at September 30, 2005, June
30, 2005,  March 31, 2005 and December  31,  2004,  respectively.  Nonperforming
assets,  consisting of nonperforming loans and other real estate owned, improved
by $5.7 million,  or 7.5%,  during the third quarter of 2005, and $19.3 million,
or 21.4%,  during the first nine months of 2005,  to $70.6  million at September
30, 2005 compared to $76.3 million at June 30, 2005,  $81.6 million at March 31,
2005  and  $89.8  million  at  December  31,  2004.  A  significant  portion  of
nonperforming   assets  includes   nonperforming   loans   associated  with  our
acquisition of CIB Bank, which have decreased to $32.8 million,  or 48.4% of our
total nonperforming loans, at September 30, 2005, from $42.9 million at June 30,
2005,  $43.7 million at March 31, 2005,  and $50.5 million at December 31, 2004.
Nonperforming loans were 1.02% of loans, net of unearned discount,  at September
30, 2005,  compared to 1.18%,  1.30% and 1.40% at June 30, 2005,  March 31, 2005
and  December 31, 2004,  respectively.  Additionally,  loans past due 90 days or
more and still  accruing  interest  decreased  $25.9  million to $2.8 million at
September  30, 2005 from $28.7  million at December  31,  2004.  The decrease in
nonperforming  loans and past due loans during the nine months  ended  September
30, 2005  primarily  resulted from:  our continued  emphasis on improving  asset
quality;   the  sale  of   approximately   $14.3  million  of  certain  acquired
nonperforming  loans,  specifically  $2.8 million and $11.5  million  during the
first  and  second  quarters  of 2005,  respectively;  a  reduction  in net loan
charge-offs,  which  decreased  $6.1 million and $13.9 million for the three and
nine months ended September 30, 2005,  respectively,  compared to the comparable
periods in 2004;  strengthening  of certain loans;  and significant loan payoffs
and/or external refinancing of various credits,  including $97.3 million of loan
payoffs on 14 credit relationships during the first and second quarters of 2005.
A portion  of the loan  payoffs  and sales  during  the  first  quarter  of 2005
pertaining to certain acquired nonperforming loans that were classified as loans
held for sale as of  December  31, 2004  contributed  to a  reallocation  of the
purchase price on our acquisition of Hillside, as further discussed in Note 2 to
our Consolidated Financial Statements. Additionally, we recorded a write-down on
an acquired  parcel of other real estate owned to its estimated fair value based
upon additional data received. This $1.6 million write-down on other real estate
owned, which was also recorded as an acquisition-related adjustment in the first
quarter of 2005 and is further discussed in Note 2 to our Consolidated Financial
Statements, further contributed to the decrease in nonperforming assets.

         Net loan charge-offs decreased to $1.8 million and $4.7 million for the
three and nine months ended September 30, 2005,  respectively,  compared to $7.9
million and $18.6 million for the comparable  periods in 2004. Loan  charge-offs
were  $5.4  million  and $20.4  million  for the  three  and nine  months  ended
September  30, 2005,  respectively,  in  comparison  to $12.5  million and $36.8
million for the comparable  periods in 2004.  Loan  recoveries were $3.6 million
and $15.7  million  for the three and nine  months  ended  September  30,  2005,
respectively, in comparison to $4.6 million and $18.1 million for the comparable
periods in 2004.  The allowance for loan losses was $139.5  million at September
30, 2005,  compared to $140.2 million at June 30, 2005,  $144.2 million at March
31, 2005 and $150.7  million at December 31, 2004. Our allowance for loan losses
as a percentage of loans, net of unearned  discount,  was 2.10% at September 30,
2005,  compared to 2.22% at June 30, 2005,  2.34% at March 31, 2005 and 2.46% at
December  31,  2004.   Our   allowance  for  loan  losses  as  a  percentage  of
nonperforming  loans was 205.64% at September  30, 2005,  compared to 188.77% at
June 30, 2005,  180.71% at March 31, 2005 and 175.65% at December  31, 2004.  We
continue  to  closely  monitor  our  loan  portfolio  and  address  the  ongoing
challenges  posed by the  economic  environment,  including  reduced loan demand
within certain  sectors of our loan  portfolio.  We consider this in our overall
assessment of the adequacy of the allowance for loan losses.

         Each month, the credit  administration  department  provides management
with detailed  lists of loans on the watch list and summaries of the entire loan
portfolio by risk rating. These are coupled with analyses of changes in the risk
profile  of the  portfolio,  changes in  past-due  and  nonperforming  loans and
changes  in watch  list and  classified  loans over  time.  In this  manner,  we
continually  monitor the overall  increases or decreases in the level of risk in
the  portfolio.  Factors are applied to the loan  portfolio for each category of
loan risk to  determine  acceptable  levels of  allowance  for loan  losses.  In
addition,  a quarterly  evaluation  of each lending  unit is performed  based on
certain factors,  such as lending personnel  experience,  recent credit reviews,
loan concentrations and other factors. Based on this evaluation,  changes to the
allowance  for  loan  losses  may  be  required  due to the  perceived  risk  of
particular  portfolios.  The calculated  allowance required for the portfolio is
then  compared  to the actual  allowance  balance to  determine  the  provisions
necessary  to  maintain  the  allowance  at  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,  adjustments are
made to the allowance  for loan losses.  Such  adjustments  are reflected in our
consolidated statements of income.



<PAGE>


         Changes in the  allowance for loan losses for the three and nine months
ended September 30, 2005 and 2004 were as follows:
<TABLE>
<CAPTION>

                                                                Three Months Ended           Nine Months Ended
                                                                  September 30,                September 30,
                                                               --------------------        ---------------------
                                                                 2005         2004           2005          2004
                                                                 ----         ----           ----          ----
                                                                        (dollars expressed in thousands)

<S>                                                            <C>          <C>             <C>          <C>
         Balance, beginning of period.......................   $140,164     120,966         150,707      116,451
         Acquired allowance for loan losses.................      1,065       7,379           1,484        7,379
           Other adjustments (1)(2).........................         --          --              --         (479)
                                                               --------    --------        --------     --------
                                                                141,229     128,345         152,191      123,351
                                                               --------    --------        --------     --------
         Loans charged-off..................................     (5,401)    (12,465)        (20,422)     (36,760)
         Recoveries of loans previously charged-off.........      3,643       4,590          15,702       18,129
                                                               --------    --------        --------     --------
           Net loan charge-offs.............................     (1,758)     (7,875)         (4,720)     (18,631)
                                                               --------    --------        --------     --------
         Provision for loan losses..........................         --       7,500          (8,000)      23,250
                                                               --------    --------        --------     --------
         Balance, end of period.............................   $139,471     127,970         139,471      127,970
                                                               ========    ========        ========     ========
         ---------------
         (1)  In December 2003, we established a $1.0 million specific reserve for estimated  losses  on  a $5.3
              million letter of credit that was  recorded  in  accrued and other liabilities in our consolidated
              balance sheets. In January 2004, the letter of credit was fully  funded  as a loan and the related
              $1.0 million specific reserve was reclassified from accrued and other liabilities to the allowance
              for loan losses.
         (2)  In June 2004, we reclassified $1.5 million from our allowance for loan losses to accrued and other
              liabilities to establish a specific reserve associated with the commercial leasing portfolio  sale
              and related recourse obligations for certain leases sold.
</TABLE>

                                    Liquidity

         Our  liquidity  is the ability to maintain a cash flow that is adequate
to fund  operations,  service debt  obligations  and meet  obligations and other
commitments  on a timely basis.  We 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 Bank and other  borrowings,
including  our term loan and our  revolving  credit line.  The  aggregate  funds
acquired  from these  sources were $1.67  billion and $1.42 billion at September
30, 2005 and December 31, 2004, respectively.

         The  following  table  presents the  maturity  structure of these other
sources of funds,  which consists of certificates of deposit of $100,000 or more
and other borrowings, including our notes payable, at September 30, 2005:
<TABLE>
<CAPTION>

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

<S>                                                                    <C>                  <C>            <C>
         Three months or less.....................................     $  304,411            179,399        483,810
         Over three months through six months.....................        211,873                 --        211,873
         Over six months through twelve months....................        254,008             56,000        310,008
         Over twelve months.......................................        247,763            413,300        661,063
                                                                       ----------            -------      ---------
              Total...............................................     $1,018,055            648,699      1,666,754
                                                                       ==========            =======      =========
</TABLE>
<PAGE>

         In addition to these  sources of funds,  First Bank has  established  a
borrowing  relationship  with  the  Federal  Reserve  Bank  of St.  Louis.  This
borrowing  relationship,  which is  secured by  commercial  loans,  provides  an
additional liquidity facility that may be utilized for contingency  purposes. At
September 30, 2005 and December 31, 2004, First Bank's borrowing  capacity under
the agreement was approximately $763.8 million and $778.7 million, respectively.
In addition,  First Bank's borrowing  capacity through its relationship with the
Federal Home Loan Bank was  approximately  $473.4  million and $505.2 million at
September 30, 2005 and December 31, 2004, respectively. Exclusive of the Federal
Home Loan Bank  advances  outstanding  of $39.3  million  and $35.6  million  at
September 30, 2005 and December 31, 2004, respectively, which represent advances
assumed in  conjunction  with  various  acquisitions,  First Bank had no amounts
outstanding  under its borrowing  arrangement with the Federal Home Loan Bank at
September 30, 2005 and December 31, 2004.

         In addition  to our owned  banking  facilities,  we have  entered  into
long-term leasing  arrangements to support our ongoing activities.  The required
payments under such commitments and other  contractual  obligations at September
30, 2005, were as follows:
<TABLE>
<CAPTION>

                                                            Less than       1-3         3-5         Over
                                                             1 Year        Years       Years       5 Years     Total
                                                             ------        -----       -----       -------     -----
                                                                       (dollars expressed in thousands)

<S>                                                        <C>             <C>          <C>         <C>         <C>
         Operating leases...............................   $   10,335      15,381       9,492       18,669      53,877
         Certificates of deposit (1)....................    2,044,315     797,113     161,884       30,376   3,033,688
         Other borrowings (1)...........................      235,399     393,500      13,800        6,000     648,699
         Subordinated debentures (1)....................           --          --          --      215,433     215,433
         Other contractual obligations..................        2,409         293          48           20       2,770
                                                           ----------   ---------     -------      -------   ---------
              Total.....................................   $2,292,458   1,206,287     185,224      270,498   3,954,467
                                                           ==========   =========     =======      =======   =========
         ---------------
         (1) Amounts exclude the related interest expense accrued on these obligations as of September 30, 2005.
</TABLE>


         Management  believes the available  liquidity and operating  results of
First  Bank will be  sufficient  to  provide  funds for growth and to permit the
distribution  of  dividends  to us  sufficient  to meet our  operating  and debt
service  requirements,  both on a short-term  and  long-term  basis,  and to pay
interest  on the  subordinated  debentures  that  we  issued  to our  affiliated
statutory and business financing trusts.

                       Effects of New Accounting Standards

         In November 2003, the Emerging  Issues Task Force,  or EITF,  reached a
consensus  on certain  disclosure  requirements  under  EITF Issue No 03-1,  The
Meaning  of  Other-Than-Temporary  Impairment  and Its  Application  to  Certain
Investments.  The new  disclosure  requirements  apply to investment in debt and
marketable  equity  securities  that are  accounted  for  under  SFAS  No.  115,
Accounting for Certain  Investments in Debt and Equity Securities,  and SFAS No.
124,  Accounting for Certain  Investments Held by Not-for-Profit  Organizations.
Effective  for fiscal  years  ending after  December  15,  2003,  companies  are
required to disclose information about debt or marketable equity securities with
market  values below  carrying  values.  We  previously  adopted the  disclosure
requirements of EITF Issue No. 03-1. In March 2004, the EITF came to a consensus
regarding EITF 03-1.  Securities in scope are those subject to SFAS 115 and SFAS
124. The EITF adopted a three-step  model that requires  management to determine
if impairment  exists,  decide  whether it is other than  temporary,  and record
other-than-temporary  losses in  earnings.  In  September  2004,  the  Financial
Accounting  Standards Board, or FASB, approved issuing a Staff Position to delay
the requirement to record  impairment  losses under EITF 03-1, but broadened the
scope to include  additional types of securities.  As proposed,  the delay would
have  applied  only to those debt  securities  described in paragraph 16 of EITF
03-1,  the  Consensus  that  provides   guidance  for  determining   whether  an
investment's  impairment  is other than  temporary  and should be  recognized in
income. On June 29, 2005, the FASB directed the EITF to issue EITF Issue 03-1-a,
Implementation  Guidance for the  Application  of Paragraph 16 of EITF Issue No.
03-1, as final.  On November 3, 2005,  the FASB issued FASB Staff  Position,  or
FSP, FAS 115-1 and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and

<PAGE>

Its Application to Certain  Investments.  The FSP addresses  determining when an
investment  is  considered  impaired and whether that  impairment  is other than
temporary,  and  measuring  an  impairment  loss.  The FSP  also  addresses  the
accounting after an entity recognizes an  other-than-temporary  impairment,  and
requires certain  disclosures  about  unrealized  losses that the entity did not
recognize  as  other-than-temporary   impairments.  The  FSP  is  effective  for
reporting periods beginning after December 15, 2005. We are currently evaluating
the requirements of FSP FAS 115-1 and FAS 124-1 and do not expect them to have a
material effect on our financial condition or results of operations.

         In December 2003,  the Accounting  Standards  Executive  Committee,  or
AcSEC, issued SOP 03-3, Accounting for Certain Loans or Debt Securities Acquired
in a Transfer,  effective  for loans  acquired in fiscal years  beginning  after
December 15, 2004. The scope of SOP 03-3 applies to problem loans that have been
acquired, either individually in a portfolio, or in an acquisition.  These loans
must have evidence of credit  deterioration and the purchaser must not expect to
collect  contractual  cash flows.  SOP 03-3  updates  Practice  Bulletin  No. 6,
Amortization of Discounts on Certain  Acquired  Loans,  for more recently issued
literature,  including  FASB  Statements  No. 114,  Accounting  by Creditors for
Impairment of a Loan; No. 115,  Accounting  for Certain  Investments in Debt and
Equity  Securities;  and No. 140,  Accounting  for  Transfers  and  Servicing of
Financial Assets and Extinguishments of Liabilities.  Additionally, it addresses
FASB Statement No. 91,  Accounting for  Nonrefundable  Fees and Costs Associated
with  Originating or Acquiring  Loans and Initial Direct Costs of Leases,  which
requires  that  discounts be  recognized as an adjustment of yield over a loan's
life.  SOP 03-3 states that an institution  may no longer  display  discounts on
purchased  loans  within the scope of SOP 03-3 on the balance  sheet and may not
carry over the  allowance  for loan losses.  For those loans within the scope of
SOP 03-3,  this statement  clarifies that a buyer cannot carry over the seller's
allowance   for  loan   losses  for  the   acquisition   of  loans  with  credit
deterioration.  Loans acquired with evidence of  deterioration in credit quality
since  origination  will need to be  accounted  for under a new method  using an
income  recognition model. This prohibition also applies to purchases of problem
loans not  included in a purchase  business  combination,  which  would  include
syndicated  loans  purchased  in the  secondary  market  and loans  acquired  in
portfolio purchases. We implemented SOP 03-3 in conjunction with our acquisition
of FBA, which we completed on April 29, 2005, and our acquisition of IBOC, which
we completed on September 30, 2005. At September 30, 2005, the carrying value of
acquired  problem loans that are being accounted for under SOP 03-3 totaled $1.8
million  in  aggregate,  and  were  acquired  with  our  acquisition  of IBOC on
September 30, 2005. Consequently, the implementation of SOP 03-3, as it pertains
to  these  transactions,  did not have a  material  impact  on our  consolidated
financial statements or results of operations.  We will continue to evaluate the
impact of SOP 03-3 on our  consolidated  financial  statements  and  results  of
operations  as it relates to the recently  announced  acquisitions  described in
Note 2 to our Consolidated Financial Statements and future transactions.

         In May 2005,  the FASB  issued SFAS No. 154 --  Accounting  Changes and
Error  Corrections.  SFAS No.  154,  a  replacement  of APB  Opinion  No.  20 --
Accounting  Changes and FASB Statement No. 3 -- Reporting  Accounting Changes in
Interim Financial Statements.  SFAS No. 154 requires  retrospective  application
for voluntary changes in accounting  principles unless it is impracticable to do
so. SFAS No. 154 is effective for accounting  changes and  corrections of errors
in fiscal  years  beginning  after  December  15,  2005.  Early  application  is
permitted for accounting  changes and  corrections of errors during fiscal years
beginning  after June 1, 2005. We are currently  evaluating the  requirements of
SFAS No.  154 and do not expect it to have a  material  effect on our  financial
condition or results of operations.

         In July 2005, the FASB issued an exposure  draft titled  Accounting for
Uncertain Tax  Positions,  an  Interpretation  of SFAS No. 109 -- Accounting for
Income Taxes.  This exposure draft  addresses  accounting for tax  uncertainties
that  arise  when a  position  that an  entity  takes on its tax  return  may be
different  from the position that the taxing  authority  may take,  and provides
guidance  about the accounting  for tax benefits  associated  with uncertain tax
positions, classification of a liability recognized for those tax positions, and
interim reporting considerations. The proposed interpretation is not expected to
be issued until the first quarter of 2006, at which time the FASB will decide on
a revised effective date and transition period. We are currently  evaluating the
requirements  of the exposure  draft to determine  their impact on our financial
condition and results of operations.




<PAGE>


       ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         At December 31, 2004, our risk management  program's  simulation  model
indicated a loss of projected  net interest  income in the event of a decline in
interest  rates.  We are  "asset-sensitive,"  indicating  that our assets  would
generally reprice with changes in rates more rapidly than our liabilities. While
a decline in interest  rates of less than 100 basis points was projected to have
a  relatively  minimal  impact on our net  interest  income,  an  instantaneous,
parallel  decline in the interest  yield curve of 100 basis  points  indicated a
pre-tax  projected loss of approximately  8.9% in net interest income,  based on
assets and liabilities at December 31, 2004. At September 30, 2005, 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 declines in
income  associated  with our  interest  rate swap  agreements  and  increases in
prevailing  interest  rates  beginning in mid-2004 and  continuing  in 2005,  is
reflected  in our net  interest  margin  for the  three  and nine  months  ended
September  30, 2005 as compared  to the  comparable  periods in 2004 and further
discussed under "Management's Discussion and Analysis of Financial Condition and
Results  of  Operations  -- Results  of  Operations."  During the three and nine
months  ended  September  30,  2005,  our  asset-sensitive  position and overall
susceptibility to market risks have not changed materially.  However, prevailing
interest  rates have  continued  to rise during the three and nine months  ended
September 30, 2005.




<PAGE>


                        ITEM 4 - CONTROLS AND PROCEDURES

         Our Chief  Executive  Officer  and our  Chief  Financial  Officer  have
evaluated the  effectiveness  of our  "disclosure  controls and  procedures" (as
defined in Rules  13a-15(e) and 15d-15(e)  under the Securities  Exchange Act of
1934, or the Exchange  Act), as of the end of the period covered by this report.
Based on such  evaluation,  our Chief Executive  Officer and our Chief Financial
Officer  have  concluded  that,  as of the end of  such  period,  the  Company's
disclosure  controls and  procedures  are  effective in  recording,  processing,
summarizing  and  reporting,  on a  timely  basis,  information  required  to be
disclosed  by the  Company in the  reports  that it files or  submits  under the
Exchange Act. There have not been any changes in the Company's  internal control
over  financial  reporting  (as such  term is  defined  in Rules  13a-15(f)  and
15d-15(f) under the Exchange Act) during the fiscal quarter to which this report
relates that have materially  effected,  or are reasonably  likely to materially
affect, the Company's control over financial reporting.



<PAGE>


                           Part II - OTHER INFORMATION

                                ITEM 6 - EXHIBITS

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

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

                 10        Amended   and   Restated   Secured  Credit  Agreement
                           ($100.0  million  Term  Loan  Facility, $15.0 million
                           Revolving  Credit  Facility  and  $7.5 million Letter
                           of  Credit  Facility), dated  as of  August 11, 2005,
                           by   and   among  First Banks, Inc.  and  Wells Fargo
                           Bank,  National  Association,  as   Agent,  JP Morgan
                           Chase   Bank,    N.A.,    LaSalle    Bank    National
                           Association,   The   Northern  Trust  Company,  Union
                           Bank of California, N.A., Fifth Third Bank  (Chicago)
                           and U.S. Bank National Association - filed herewith.

                31.1       Rule 13a-14(a) / 15d-14(a)  Certifications  of  Chief
                           Executive Officer - filed herewith.

                31.2       Rule 13a-14(a) / 15d-14(a)  Certifications  of  Chief
                           Financial Officer - filed herewith.

                32.1       Section   1350   Certifications  of  Chief  Executive
                           Officer - filed herewith.

                32.2       Section  1350   Certifications  of  Chief   Financial
                           Officer - filed herewith.





<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.


Date:  November 14, 2005

                                  FIRST BANKS, INC.


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


                                  By: /s/ Steven F. Schepman
                                      ------------------------------------------
                                          Steven F. Schepman
                                          Chief Financial Officer
                                          (Principal Financial and Accounting
                                          Officer)





<PAGE>


                                                                    EXHIBIT 31.1

                           CERTIFICATIONS REQUIRED BY
                        RULE 13a-14(a) OR RULE 15d-14(a)
                    UNDER THE SECURITIES EXCHANGE ACT OF 1934


I, Allen H. Blake, certify that:

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

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

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

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

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

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

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

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

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

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


Date:  November 14, 2005

                                  FIRST BANKS, INC.


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


<PAGE>


                                                                    EXHIBIT 31.2

                           CERTIFICATIONS REQUIRED BY
                        RULE 13a-14(a) OR RULE 15d-14(a)
                    UNDER THE SECURITIES EXCHANGE ACT OF 1934


I, Steven F. Schepman, certify that:

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

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

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

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

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

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

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

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

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

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


Date:  November 14, 2005

                                  FIRST BANKS, INC.


                                  By: /s/ Steven F. Schepman
                                      ------------------------------------------
                                          Steven F. Schepman
                                          Chief Financial Officer
                                          (Principal Financial and
                                          Accounting Officer)


<PAGE>



                                                                    EXHIBIT 32.1

                           CERTIFICATIONS PURSUANT TO
                             18 U.S.C. SECTION 1350


         I,  Allen H.  Blake,  President  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, 2005 (the "Report")  fully
               complies with the  requirements of Sections 13(a) or 15(d) of the
               Securities Exchange Act of 1934; and

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


Date:  November 14, 2005

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



<PAGE>


                                                                    EXHIBIT 32.2

                           CERTIFICATIONS PURSUANT TO
                             18 U.S.C. SECTION 1350


         I, Steven F. Schepman,  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, 2005 (the "Report")  fully
              complies with  the  requirements of Sections 13(a) or 15(d) of the
              Securities  Exchange Act of 1934; and

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


Date:  November 14, 2005

                                  By: /s/ Steven F. Schepman
                                      ------------------------------------------
                                          Steven F. Schepman
                                          Chief Financial Officer
                                          (Principal Financial and
                                          Accounting Officer)