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 March 31, 2006

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

               For the transition period from _______ to ________

                         Commission File Number: 0-20632

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

               MISSOURI                                  43-1175538
     (State or other jurisdiction           (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. [X] Yes [ ] No


         Indicate by check mark whether the  registrant  is a large  accelerated
filer, an accelerated filer, or a non-accelerated filer:

Large accelerated filer [ ]   Accelerated filer [ ]    Non-accelerated filer [X]


         Indicate by check mark whether the  registrant  is a shell  company (as
defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No


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

                                                     Shares Outstanding
               Class                                  at April 30, 2006
               -----                                  -----------------

  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>
           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................................    35

  ITEM 4.  CONTROLS AND PROCEDURES...................................................................    36

PART II.   OTHER INFORMATION

  ITEM 6.  EXHIBITS..................................................................................    37

SIGNATURES...........................................................................................    38

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                                      PART I - FINANCIAL INFORMATION
                                      ITEM 1 - FINANCIAL STATEMENTS

                                             FIRST BANKS, INC.

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

                                                                                          March 31,     December 31,
                                                                                            2006            2005
                                                                                            ----            ----
                                                                                         (unaudited)

                                                 ASSETS
                                                 ------

Cash and cash equivalents:
<S>                                                                                      <C>                <C>
     Cash and due from banks...........................................................  $  192,156         212,667
     Short-term investments............................................................      54,562          73,985
                                                                                         ----------       ---------
          Total cash and cash equivalents..............................................     246,718         286,652
                                                                                         ----------       ---------

Investment securities:
     Trading...........................................................................      49,875           3,389
     Available for sale................................................................   1,381,879       1,311,289
     Held to maturity (fair value of $24,360 and $25,791, respectively)................      24,720          26,105
                                                                                         ----------       ---------
          Total investment securities..................................................   1,456,474       1,340,783
                                                                                         ----------       ---------

Loans:
     Commercial, financial and agricultural............................................   1,658,700       1,619,822
     Real estate construction and development..........................................   1,644,222       1,564,255
     Real estate mortgage..............................................................   3,596,256       3,469,788
     Consumer and installment..........................................................      62,078          64,724
     Loans held for sale...............................................................     223,545         315,134
                                                                                         ----------       ---------
          Total loans..................................................................   7,184,801       7,033,723
     Unearned discount.................................................................     (13,518)        (12,952)
     Allowance for loan losses.........................................................    (140,235)       (135,330)
                                                                                         ----------       ---------
          Net loans....................................................................   7,031,048       6,885,441
                                                                                         ----------       ---------

Bank premises and equipment, net of accumulated depreciation and amortization..........     145,819         144,941
Goodwill...............................................................................     181,955         167,056
Bank-owned life insurance..............................................................     112,984         111,442
Deferred income taxes..................................................................     117,042         128,938
Other assets...........................................................................     106,649         105,080
                                                                                         ----------       ---------
          Total assets.................................................................  $9,398,689       9,170,333
                                                                                         ==========       =========

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

Deposits:
     Noninterest-bearing demand........................................................  $1,257,849       1,299,350
     Interest-bearing demand...........................................................     955,133         981,837
     Savings...........................................................................   2,165,035       2,106,470
     Time deposits of $100 or more.....................................................   1,267,396       1,076,908
     Other time deposits...............................................................   2,248,080       2,077,266
                                                                                         ----------       ---------
          Total deposits...............................................................   7,893,493       7,541,831
Other borrowings.......................................................................     347,644         539,174
Notes payable..........................................................................      95,000         100,000
Subordinated debentures................................................................     257,601         215,461
Deferred income taxes..................................................................      27,595          27,104
Accrued expenses and other liabilities.................................................      66,031          61,762
Minority interest in subsidiary........................................................       5,905           6,063
                                                                                         ----------       ---------
          Total liabilities............................................................   8,693,269       8,491,395
                                                                                         ----------       ---------
<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......................................................................     702,763         673,956
Accumulated other comprehensive loss...................................................     (22,231)        (19,906)
                                                                                         ----------       ---------
          Total stockholders' equity...................................................     705,420         678,938
                                                                                         ----------       ---------
          Total liabilities and stockholders' equity...................................  $9,398,689       9,170,333
                                                                                         ==========       =========

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
                                                                                                   March 31,
                                                                                          -------------------------
                                                                                             2006           2005
                                                                                             ----           ----

Interest income:
<S>                                                                                       <C>                <C>
     Interest and fees on loans.....................................................      $ 131,334          94,170
     Investment securities..........................................................         14,777          17,549
     Short-term investments.........................................................          1,123             509
                                                                                          ---------       ---------
          Total interest income.....................................................        147,234         112,228
                                                                                          ---------       ---------
Interest expense:
     Deposits:
       Interest-bearing demand......................................................          1,828             888
       Savings......................................................................         11,183           5,744
       Time deposits of $100 or more................................................         11,556           5,354
       Other time deposits..........................................................         20,034          13,979
     Other borrowings...............................................................          4,695           3,300
     Notes payable..................................................................          1,420             138
     Subordinated debentures........................................................          5,652           4,746
                                                                                          ---------       ---------
          Total interest expense....................................................         56,368          34,149
                                                                                          ---------       ---------
          Net interest income.......................................................         90,866          78,079
Provision for loan losses...........................................................          1,000              --
                                                                                          ---------       ---------
          Net interest income after provision for loan losses.......................         89,866          78,079
                                                                                          ---------       ---------
Noninterest income:
     Service charges on deposit accounts and customer service fees..................         10,232           9,299
     Gain on loans sold and held for sale...........................................          6,821           4,516
     Net loss on investment securities..............................................         (2,771)             --
     Bank-owned life insurance investment income....................................          1,115           1,260
     Investment management income...................................................          2,301           2,026
     Other..........................................................................          7,799           4,114
                                                                                          ---------       ---------
          Total noninterest income..................................................         25,497          21,215
                                                                                          ---------       ---------
Noninterest expense:
     Salaries and employee benefits.................................................         39,494          32,930
     Occupancy, net of rental income................................................          6,235           5,239
     Furniture and equipment........................................................          3,963           4,024
     Postage, printing and supplies.................................................          1,426           1,628
     Information technology fees....................................................          9,061           8,150
     Legal, examination and professional fees.......................................          2,097           2,371
     Amortization of intangibles associated with the purchase of subsidiaries.......          1,517           1,209
     Communications.................................................................            554             509
     Advertising and business development...........................................          1,727           1,647
     Charitable contributions.......................................................          1,617             106
     Other..........................................................................          7,124           6,056
                                                                                          ---------       ---------
          Total noninterest expense.................................................         74,815          63,869
                                                                                          ---------       ---------
          Income before provision for income taxes and minority interest in
              loss of subsidiary....................................................         40,548          35,425
Provision for income taxes..........................................................         11,703          13,298
                                                                                          ---------       ---------
          Income before minority interest in loss of subsidiary.....................         28,845          22,127
Minority interest in loss of subsidiary.............................................           (158)             --
                                                                                          ---------       ---------
          Net income................................................................         29,003          22,127
Preferred stock dividends...........................................................            196             196
                                                                                          ---------       ---------
          Net income available to common stockholders...............................      $  28,807          21,931
                                                                                          =========       =========

Basic earnings per common share.....................................................      $1,217.49          926.87
                                                                                          =========       =========

Diluted earnings per common share...................................................      $1,202.46          915.04
                                                                                          =========       =========

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

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

            CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME - (UNAUDITED)
                   Three Months Ended March 31, 2006 and 2005 and Nine Months Ended December 31, 2005
                                (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, 2004...........  $12,822     241      5,915     5,910     577,836    (1,831)  600,893
                                                                                                                  -------
Three months ended March 31, 2005:
   Comprehensive income:
     Net income....................................       --      --         --        --      22,127        --    22,127
     Other comprehensive loss, net of tax:
       Unrealized losses on investment securities..       --      --         --        --          --   (14,189)  (14,189)
       Derivative instruments:
         Current period transactions...............       --      --         --        --          --    (3,427)   (3,427)
                                                                                                                  -------
   Total comprehensive income......................                                                                 4,511
   Class A preferred stock dividends,
     $0.30 per share...............................       --      --         --        --        (192)       --      (192)
   Class B preferred stock dividends,
     $0.03 per share...............................       --      --         --        --          (4)       --        (4)
                                                     -------     ---      -----     -----     -------   -------   -------
Consolidated balances, March 31, 2005..............   12,822     241      5,915     5,910     599,767   (19,447)  605,208
                                                                                                                  -------
Nine months ended December 31, 2005:
   Comprehensive income:
     Net income....................................       --      --         --        --      74,779        --    74,779
     Other comprehensive loss, net of tax:
       Unrealized losses on investment securities..       --      --         --        --          --    (1,470)   (1,470)
       Reclassification adjustment for losses
         included in net income....................       --      --         --        --          --     1,867     1,867
       Derivative instruments:
         Current period transactions...............       --      --         --        --          --      (856)     (856)
                                                                                                                  -------
   Total comprehensive income......................                                                                74,320
   Class A preferred stock dividends,
     $0.90 per share...............................       --      --         --        --        (577)       --      (577)
   Class B preferred stock dividends,
     $0.08 per share...............................       --      --         --        --         (13)       --       (13)
                                                     -------     ---      -----     -----     -------   -------   -------
Consolidated balances, December 31, 2005...........   12,822     241      5,915     5,910     673,956   (19,906)  678,938
                                                                                                                  -------
Three months ended March 31, 2006:
   Comprehensive income:
     Net income....................................       --      --         --        --      29,003        --    29,003
     Other comprehensive loss, net of tax:
       Unrealized losses on investment securities..       --      --         --        --          --    (3,560)   (3,560)
       Reclassification adjustment for losses
         included in net income....................       --      --         --        --          --     1,538     1,538
       Derivative instruments:
         Current period transactions...............       --      --         --        --          --      (303)     (303)
                                                                                                                  -------
   Total comprehensive income......................                                                                26,678
   Class A preferred stock dividends,
     $0.30 per share...............................       --      --         --        --        (192)       --      (192)
   Class B preferred stock dividends,
     $0.03 per share...............................       --      --         --        --          (4)       --        (4)
                                                     -------     ---      -----     -----     -------   -------   -------
Consolidated balances, March 31, 2006..............  $12,822     241      5,915     5,910     702,763   (22,231)  705,420
                                                     =======     ===      =====     =====     =======   =======   =======


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

                                             FIRST BANKS, INC.

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

                                                                                               Three Months Ended
                                                                                                    March 31,
                                                                                            -----------------------
                                                                                               2006         2005
                                                                                               ----         ----

Cash flows from operating activities:
<S>                                                                                         <C>              <C>
     Net income.........................................................................    $  29,003        22,127
     Adjustments to reconcile net income to net cash provided by operating activities:
       Depreciation and amortization of bank premises and equipment.....................        4,458         4,353
       Amortization, net of accretion...................................................        3,288         3,892
       Originations of loans held for sale..............................................     (137,837)     (267,654)
       Proceeds from sales of loans held for sale.......................................      220,255       255,427
       Provision for loan losses........................................................        1,000            --
       Provision for deferred income taxes..............................................        5,062        (5,646)
       Decrease in accrued interest receivable..........................................          574         2,059
       Increase (decrease) in accrued interest payable..................................        1,126          (302)
       Purchases of trading securities..................................................      (46,957)           --
       Gain on loans sold and held for sale.............................................       (6,821)       (4,516)
       Net loss on investment securities................................................        2,771            --
       Other operating activities, net..................................................       30,463        36,163
       Minority interest in loss of subsidiary..........................................         (158)           --
                                                                                            ---------      --------
          Net cash provided by operating activities.....................................      106,227        45,903
                                                                                            ---------      --------

Cash flows from investing activities:
     Cash paid for acquired entities, net of cash and cash equivalents received.........      (20,532)           --
     Proceeds from sales of investment securities available for sale....................      147,439            --
     Maturities of investment securities available for sale.............................      151,539       177,214
     Maturities of investment securities held to maturity...............................        1,497           580
     Purchases of investment securities available for sale..............................     (281,704)      (99,249)
     Purchases of investment securities held to maturity................................         (120)         (210)
     Net increase in loans..............................................................     (275,150)       (7,583)
     Recoveries of loans previously charged-off.........................................        6,774         6,083
     Purchases of bank premises and equipment...........................................       (4,197)       (3,188)
     Other investing activities, net....................................................         (833)        2,437
                                                                                            ---------      --------
          Net cash (used in) provided by investing activities...........................     (275,287)       76,084
                                                                                            ---------      --------

Cash flows from financing activities:
     Decrease in demand and savings deposits............................................      (58,267)      (49,509)
     Increase (decrease) in time deposits...............................................      342,881       (49,902)
     Decrease in Federal Home Loan Bank advances........................................      (24,500)       (6,000)
     Decrease in securities sold under agreements to repurchase.........................     (167,030)      (32,741)
     Repayments of notes payable........................................................       (5,000)      (11,000)
     Proceeds from issuance of subordinated debentures..................................       41,238            --
     Payment of preferred stock dividends...............................................         (196)         (196)
                                                                                            ---------      --------
          Net cash provided by (used in) financing activities...........................      129,126      (149,348)
                                                                                            ---------      --------
          Net decrease in cash and cash equivalents.....................................      (39,934)      (27,361)
Cash and cash equivalents, beginning of period..........................................      286,652       267,110
                                                                                            ---------      --------
Cash and cash equivalents, end of period................................................    $ 246,718       239,749
                                                                                            =========      ========

Supplemental disclosures of cash flow information:
     Cash paid (received) during the period for:
       Interest on liabilities..........................................................    $  55,242        34,451
       Income taxes.....................................................................           36        (3,044)
                                                                                            =========      ========
     Noncash investing and financing activities:
       Loans transferred to other real estate...........................................    $   1,557           357
                                                                                            =========      ========

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 2005
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  months ended March 31, 2006 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2006.

         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 6 to the Consolidated
Financial  Statements.  All significant  intercompany  accounts and transactions
have been eliminated.  Certain  reclassifications of 2005 amounts have been made
to conform to the 2006 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, First Bank Business Capital, Inc. (formerly FB Commercial Finance,
Inc.),  Missouri Valley Partners,  Inc. (MVP), Adrian N. Baker & Company (Adrian
Baker) and Small Business Loan Source LLC (SBLS LLC) which, except for SBLS LLC,
which is 51.0%  owned by First Bank and 49.0%  owned by First  Capital  America,
Inc.  (FCA),  as  further  discussed  in  Note 6 to the  Consolidated  Financial
Statements, are wholly owned subsidiaries.


(2)      ACQUISITIONS AND INTEGRATION COSTS

         Completed Acquisitions

         On  January 3, 2006,  First  Banks  completed  its  acquisition  of the
majority of the outstanding common stock of First National Bank of Sachse (FNBS)
and subsequently  completed its acquisition of the remaining  outstanding common
stock of FNBS in January 2006 for $20.8 million in cash, in aggregate.  FNBS was
headquartered and operated one banking office in Sachse,  Texas,  located in the
northeast  Dallas  metropolitan  area.  The  acquisition  served to expand First
Banks' banking franchise in Texas. The transaction was funded through internally
generated  funds.  At the  time of the  acquisition,  FNBS had  assets  of $76.2
million,  loans, net of unearned discount,  of $49.3 million,  deposits of $66.2
million  and  stockholders'  equity of $9.9  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  $9.0
million,  and the core deposit  intangibles,  which are not  deductible  for tax
purposes and are being  amortized  over five years  utilizing the  straight-line
method,  were  approximately  $3.6 million.  FNBS was merged with and into First
Bank.

         On January 20, 2006, First Bank completed its acquisition of the branch
office of Dallas  National Bank located at 4251 East Renner Road, in Richardson,
Texas (Richardson Branch). At the time of the acquisition, the Richardson Branch
had assets of $667,000,  including loans, net of unearned discount, of $144,000,
and deposits of $1.1 million.

         On March 31, 2006, First Bank completed its acquisition of Adrian Baker
for $7.0 million in cash and certain payments  contingent on the future earnings
of Adrian Baker for each of the years in the  three-year  period  following  the
closing date of the transaction.  Adrian Baker is an insurance brokerage company
based in  Clayton,  Missouri  that  provides a  comprehensive  range of employee
benefits,  commercial and personal insurance services on a nationwide basis. The
acquisition  served to  diversify  First  Banks'  products  and  services in the
highly-specialized  financial  services  industry.  The  transaction  was funded
through internally generated funds. At the time of acquisition, Adrian Baker had
assets of $3.1  million and  stockholders'  equity of $1.1  million.  The assets
acquired and liabilities  assumed were recorded at their estimated fair value on

<PAGE>

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  $5.9 million.  Adrian Baker operates as a wholly owned subsidiary
of First Bank.

         Pending Acquisitions

         On December 19,  2005,  First Banks  executed an Agreement  and Plan of
Reorganization  providing for the acquisition of Pittsfield  Community  Bancorp,
Inc. and its wholly  owned  banking  subsidiary,  Community  Bank of  Pittsfield
(collectively,  Community Bank). Community Bank was headquartered in Pittsfield,
Illinois and operated two banking offices, one in Pittsfield,  Illinois, and one
in Mount Sterling, Illinois. As further described in Note 13 to the Consolidated
Financial Statements, First Banks completed its acquisition of Community Bank on
April 28, 2006. As previously  announced on March 7, 2006, First Bank executed a
Purchase and Assumption  Agreement  providing for the sale of the Community Bank
banking  office in Mount  Sterling,  Illinois to Beardstown  Savings,  s.b. This
transaction is expected to be completed in June 2006.

         On January 18, 2006,  First Banks executed a Stock  Purchase  Agreement
providing  for  the  acquisition  of  First  Independent  National  Bank  (First
Independent).  First Independent was headquartered in Plano,  Texas and operated
two banking  offices in Plano,  Texas,  located in Collin  County.  In addition,
First  Independent was in the process of opening a de novo branch banking office
located in the  Preston  Forest  Shopping  Center in Dallas  County.  As further
described  in Note 13 to the  Consolidated  Financial  Statements,  First  Banks
completed its acquisition of First Independent on May 1, 2006.

         On January 31, 2006,  First Bank  executed a Stock  Purchase  Agreement
providing for the acquisition of KIF, Inc., an Iowa corporation,  and its wholly
owned  subsidiaries,   Universal  Premium  Acceptance  Corporation,  a  Missouri
corporation,   and  UPAC  of   California,   Inc.,  a  California   corporation,
(collectively,  UPAC) for  approximately  $52.8 million in cash. In  conjunction
with the  acquisition  of UPAC,  First Banks will repay in full the  outstanding
subordinated  notes of KIF, Inc. and the  outstanding  senior notes of Universal
Premium Acceptance Corporation, which were approximately $2.2 million and $116.7
million,  respectively,  at March 31, 2006. UPAC is an insurance premium finance
company  headquartered in the Kansas City suburb of Lenexa,  Kansas and operates
in 49 states. The transaction,  which is subject to certain state approvals,  is
expected to be completed  during the second  quarter of 2006. At March 31, 2006,
UPAC had assets of approximately  $147.5 million,  loans of approximately $144.7
million and stockholders' equity of approximately $17.9 million.

         Subsequent  to March 31, 2006,  First Banks  entered into one agreement
related to an acquisition transaction, as more fully described in Note 13 to the
Consolidated Financial Statements.

         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 five 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 $481,000,  as summarized in the following table, is
comprised of contractual obligations under salary continuation agreements to six
individuals with remaining terms ranging from  approximately one 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 integration 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.



<PAGE>


         A  summary  of  the  cumulative   acquisition  and  integration   costs
attributable  to  the  Company's  acquisitions,  which  were  accrued  as of the
consummation  dates  of the  respective  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>             <C>
         Balance at December 31, 2005.........................        $ 542            134             676
         Three Months Ended March 31, 2006:
           Amounts accrued at acquisition date................          306            379             685
           Payments...........................................         (367)          (513)           (880)
                                                                      -----           ----            ----
         Balance at March 31, 2006............................        $ 481             --             481
                                                                      =====           ====            ====
</TABLE>


(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 March
31, 2006 and December 31, 2005:
<TABLE>
<CAPTION>

                                                               March 31, 2006          December 31, 2005
                                                          -----------------------   -----------------------
                                                           Gross                     Gross
                                                          Carrying   Accumulated    Carrying   Accumulated
                                                           Amount    Amortization    Amount    Amortization
                                                           ------    ------------    ------    ------------
                                                                   (dollars expressed in thousands)

         Amortized intangible assets:
<S>                                                       <C>          <C>            <C>        <C>
              Core deposit intangibles...............     $ 40,146     (13,192)       36,555     (11,710)
              Goodwill associated with
                purchases of branch offices..........        2,210      (1,181)        2,210      (1,146)
                                                          --------     -------       -------     -------
                  Total..............................     $ 42,356     (14,373)       38,765     (12,856)
                                                          ========     =======       =======     =======

         Unamortized intangible assets:
              Goodwill associated with the
                purchase of subsidiaries.............     $180,926                   165,992
                                                          ========                   =======
</TABLE>

         Amortization   of   intangibles   associated   with  the   purchase  of
subsidiaries  and branch offices was $1.5 million and $1.2 million for the three
months ended March 31, 2006 and 2005, respectively.  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>
            2006 remaining........................................................     $ 4,550
            2007..................................................................       6,067
            2008..................................................................       6,067
            2009..................................................................       4,164
            2010..................................................................       3,704
            2011..................................................................       2,616
            Thereafter............................................................         815
                                                                                       -------
                Total.............................................................     $27,983
                                                                                       =======
</TABLE>



<PAGE>


         Changes in the  carrying  amount of goodwill for the three months ended
March 31, 2006 and 2005 were as follows:
<TABLE>
<CAPTION>

                                                                                        Three Months Ended
                                                                                             March 31,
                                                                                      ----------------------
                                                                                        2006          2005
                                                                                        ----          ----
                                                                                 (dollars expressed in thousands)

<S>                                                                                   <C>           <C>
         Balance, beginning of period.............................................    $167,056      156,849
         Goodwill acquired during the period......................................      14,896           --
         Acquisition-related adjustments (1)......................................          38       (4,285)
         Amortization - purchases of branch offices...............................         (35)         (35)
                                                                                      --------      -------
         Balance, end of period...................................................    $181,955      152,529
                                                                                      ========      =======
         ------------------
         (1)  Acquisition-related  adjustments  of $4.3 million  recorded in the first quarter of 2005 pertain to
              the  acquisition  of  CIB  Bank.  Acquisition-related adjustments   included   additional  purchase
              accounting    adjustments    necessary   to  appropriately  adjust preliminary   goodwill  recorded
              at the time of  acquisition,  which was based upon  current  estimates  available at that time,  to
              reflect the receipt of additional valuation data.


(4)      SERVICING RIGHTS

         Mortgage Banking  Activities.  At March 31, 2006 and December 31, 2005,
First Banks serviced  mortgage  loans for others  amounting to $1.04 billion and
$1.01  billion,  respectively.  Changes in  mortgage  servicing  rights,  net of
amortization,  for the  three  months  ended  March  31,  2006 and 2005  were as
follows:

                                                                                        Three Months Ended
                                                                                             March 31,
                                                                                      ----------------------
                                                                                        2006          2005
                                                                                        ----          ----
                                                                                 (dollars expressed in thousands)

         Balance, beginning of period.............................................     $6,623        10,242
         Originated mortgage servicing rights (1).................................      1,458           213
         Amortization.............................................................     (1,047)       (1,274)
                                                                                       ------        ------
         Balance, end of period...................................................     $7,034         9,181
                                                                                       ======        ======
         ------------------
         (1)  In March 2006, First Banks capitalized mortgage servicing rights  of $1.2 million  associated  with
              the  securitization of $77.1 million  of certain  residential mortgage loans held in the  Company's
              loan portfolio, resulting in  the  recognition  of $1.2 million in loan servicing income related to
              the future servicing of the underlying loans.

         First Banks did not incur any impairment of mortgage  servicing  rights
during the three months ended March 31, 2006 and 2005.

         Amortization  of mortgage  servicing  rights at March 31, 2006 has been
estimated in the following table:

                                                                                 (dollars expressed in thousands)

         Year ending December 31:
              2006 remaining..............................................................     $2,464
              2007........................................................................      2,152
              2008........................................................................      1,064
              2009........................................................................        553
              2010........................................................................        337
              2011........................................................................        207
              Thereafter..................................................................        257
                                                                                               ------
                  Total...................................................................     $7,034
                                                                                               ======
</TABLE>


<PAGE>


         Other  Servicing  Activities.  At March 31, 2006 and December 31, 2005,
First Banks serviced United States Small Business Administration (SBA) loans for
others amounting to $155.4 million and $163.4 million, respectively.  Changes in
SBA servicing rights,  net of amortization and impairment,  for the three months
ended March 31, 2006 and 2005 were as follows:
<TABLE>
<CAPTION>

                                                                                        Three Months Ended
                                                                                             March 31,
                                                                                      ----------------------
                                                                                        2006          2005
                                                                                        ----          ----
                                                                                 (dollars expressed in thousands)

<S>                                                                                    <C>           <C>
         Balance, beginning of period.............................................     $9,489        13,013
         Originated SBA servicing rights..........................................        172           191
         Amortization.............................................................       (441)         (609)
         Change in impairment valuation allowance.................................       (278)           --
                                                                                       ------        ------
         Balance, end of period...................................................     $8,942        12,595
                                                                                       ======        ======
</TABLE>

         First Banks  recognized  impairment  of $278,000  for the three  months
ended March 31, 2006 primarily resulting from certain loans placed on nonaccrual
status and payoffs received on certain existing loans. First Banks did not incur
any  impairment of SBA servicing  rights during the three months ended March 31,
2005.  At March 31,  2006 and 2005,  First  Banks  had an  impairment  valuation
allowance of $3.1 million and $459,000, respectively.

         Amortization  of SBA  servicing  rights  at  March  31,  2006  has been
estimated in the following table:
<TABLE>
<CAPTION>

                                                                                 (dollars expressed in thousands)

         Year ending December 31:
<S>           <C>                                                                             <C>
              2006 remaining.............................................................     $1,187
              2007.......................................................................      1,360
              2008.......................................................................      1,143
              2009.......................................................................        960
              2010.......................................................................        804
              2011.......................................................................        671
              Thereafter.................................................................      2,817
                                                                                              ------
                  Total..................................................................     $8,942
                                                                                              ======
</TABLE>

(5)      EARNINGS PER COMMON SHARE

         The following is a reconciliation of the basic and diluted earnings per
share (EPS) computations for the three months ended March 31, 2006 and 2005:
<TABLE>
<CAPTION>

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

     Three months ended March 31, 2006:
<S>                                                                    <C>           <C>          <C>
         Basic EPS - income available to common stockholders......     $28,807       23,661       $1,217.49
         Effect of dilutive securities:
           Class A convertible preferred stock....................         192          456          (15.03)
                                                                       -------       ------       ---------
         Diluted EPS - income available to common stockholders....     $28,999       24,117       $1,202.46
                                                                       =======       ======       =========

     Three months ended March 31, 2005:
         Basic EPS - income available to common stockholders......     $21,931       23,661       $  926.87
         Effect of dilutive securities:
           Class A convertible preferred stock....................         192          516          (11.83)
                                                                       -------       ------       ---------
         Diluted EPS - income available to common stockholders....     $22,123       24,177       $  915.04
                                                                       =======       ======       =========

</TABLE>



<PAGE>



(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
$7.7  million  and $6.7  million for the three  months  ended March 31, 2006 and
2005, respectively. First Services, L.P. leases information technology and other
equipment  from First  Bank.  During the three  months  ended March 31, 2006 and
2005,  First  Services,  L.P.  paid First Bank $1.2  million  and $1.1  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  $547,000  and  $704,000 for the three months ended March 31, 2006
and  2005,  respectively,   in  commissions  paid  by  unaffiliated  third-party
companies.  The commissions received were primarily in connection with the sales
of  annuities,  securities  and other  insurance  products to customers of First
Bank.

         First Title  Guaranty LLC D/B/A First Banc Insurors  (First  Title),  a
limited liability company  established and administered by First Banks' Chairman
and members of his immediate family,  received approximately $75,000 and $87,000
for the three months ended March 31, 2006 and 2005, respectively, 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 $86,000  and $79,000 for the three  months
ended March 31, 2006 and 2005, respectively.

         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 $36.7 million and $37.9 million at March 31, 2006 and December 31,
2005,  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.

         In June 2005,  FCA, a  corporation  owned by First Banks'  Chairman and
members of his  immediate  family,  became a 49.0% owner of SBLS LLC in exchange
for $7.4 million in cash pursuant to a written option agreement with First Bank.

         In June 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 $50.0 million
warehouse line of credit for loan funding purposes. 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 $32.5  million  and $31.4  million at March 31, 2006 and
December 31, 2005,  respectively.  Interest expense recorded under the Agreement
by SBLS LLC for the three months ended March 31, 2006 was $580,000.

         In August  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  provided  for WWT to  provide  information  technology
services  associated  with the  upgrade  of  personal  computers  for First Bank
employees  in  an  ongoing  effort  to  further  standardize  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.  Prior to
entering into this  contract,  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 ended  December  31, 2005.  As of March 31,
2006 and  December  31,  2005,  First Bank had made  payments  of  $478,000  and
$471,000, respectively, under the contract.
<PAGE>

         During the three months ended March 31,  2006,  First Bank  contributed
$500,000 to the Dierberg  Operating  Foundation,  Inc., a charitable  foundation
created  by and for the  benefit of First  Banks'  Chairman  and  members of his
immediate  family.   There  were  no  charitable   contributions  made  to  this
organization during the three months ended March 31, 2005.


(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 March 31,  2006,  First  Banks  and  First  Bank were each well
capitalized.  As of March 31,  2006,  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.

         At March 31, 2006 and December 31, 2005,  First Banks' and First Bank's
required and actual capital ratios were as follows:
<TABLE>
<CAPTION>


                                                                   Actual               For          To Be Well
                                                         -------------------------    Capital     Capitalized Under
                                                          March 31,   December 31,    Adequacy    Prompt Corrective
                                                            2006          2005        Purposes    Action Provisions
                                                            ----          ----        --------    -----------------

Total capital (to risk-weighted assets):
<S>                                                        <C>           <C>            <C>             <C>
         First Banks.................................      10.63%        10.14%         8.0%            10.0%
         First Bank..................................      10.93         10.66          8.0             10.0

Tier 1 capital (to risk-weighted assets):
         First Banks.................................       9.27          8.88          4.0              6.0
         First Bank..................................       9.68          9.41          4.0              6.0

Tier 1 capital (to average assets):
         First Banks.................................       8.44          8.13          3.0              5.0
         First Bank..................................       8.81          8.61          3.0              5.0
</TABLE>

         On March 1, 2005, the Board of Governors of the Federal  Reserve System
(Federal  Reserve) 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
Federal  Reserve'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 to be 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 Federal
Reserve'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

<PAGE>

assets) to 8.53% and 7.77%, respectively, as of March 31, 2006. In October 2005,
the Federal  Reserve,  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.
First  Banks is  awaiting  further  guidance  from the  Federal  Reserve  and is
continuing to evaluate the overall impact on the Company's  financial  condition
and results of operations.


(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,  employee benefits,  commercial and personal insurance
services,  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  and Dallas,  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 within the banking industry. The
business segment results are summarized as follows:
<TABLE>
<CAPTION>

                                                                     Corporate, Other
                                                                     and Intercompany
                                             First Bank            Reclassifications (1)       Consolidated Totals
                                      -------------------------  -------------------------   ------------------------
                                       March 31,   December 31,   March 31,   December 31,    March 31,  December 31,
                                         2006          2005         2006          2005          2006         2005
                                         ----          ----         ----          ----          ----         ----
                                                             (dollars expressed in thousands)

Balance sheet information:

<S>                                   <C>           <C>             <C>           <C>        <C>          <C>
Investment securities...............  $1,437,088    1,324,219       19,386        16,564     1,456,474    1,340,783
Loans, net of unearned discount.....   7,171,283    7,020,771           --            --     7,171,283    7,020,771
Goodwill............................     181,955      167,056           --            --       181,955      167,056
Total assets........................   9,374,726    9,148,931       23,963        21,402     9,398,689    9,170,333
Deposits............................   7,953,494    7,601,162      (60,001)      (59,331)    7,893,493    7,541,831
Notes payable.......................          --           --       95,000       100,000        95,000      100,000
Subordinated debentures.............          --           --      257,601       215,461       257,601      215,461
Stockholders' equity................     979,199      931,192     (273,779)     (252,254)      705,420      678,938
                                      ==========    =========     ========      ========     =========    =========

                                                                     Corporate, Other
                                                                     and Intercompany
                                             First Bank            Reclassifications (1)        Consolidated Totals
                                      -------------------------  -------------------------   ------------------------
                                         Three Months Ended         Three Months Ended          Three Months Ended
                                              March 31,                  March 31,                   March 31,
                                      -------------------------  -------------------------   ------------------------
                                         2006          2005         2006          2005          2006         2005
                                         ----          ----         ----          ----          ----         ----
                                                             (dollars expressed in thousands)

Income statement information:

Interest income.....................  $  147,024      112,062          210           166       147,234      112,228
Interest expense....................      49,384       29,279        6,984         4,870        56,368       34,149
                                      ----------    ---------     --------      --------     ---------    ---------
   Net interest income..............      97,640       82,783       (6,774)       (4,704)       90,866       78,079
Provision for loan losses...........       1,000           --           --            --         1,000           --
                                      ----------    ---------     --------      --------     ---------    ---------
   Net interest income after
      provision for loan losses.....      96,640       82,783       (6,774)       (4,704)       89,866       78,079
                                      ----------    ---------     --------      --------     ---------    ---------
Noninterest income..................      25,741       21,466         (244)         (251)       25,497       21,215
Noninterest expense.................      73,169       62,178        1,646         1,691        74,815       63,869
                                      ----------    ---------     --------      --------     ---------    ---------
   Income before provision for
      income taxes and minority
      interest in loss
      of subsidiary.................      49,212       42,071       (8,664)       (6,646)       40,548       35,425
Provision for income taxes..........      14,738       15,620       (3,035)       (2,322)       11,703       13,298
                                      ----------    ---------     --------      --------     ---------    ---------
   Income before minority interest
      in loss of subsidiary.........      34,474       26,451       (5,629)       (4,324)       28,845       22,127
Minority interest in loss
      of subsidiary.................        (158)          --           --            --          (158)          --
                                      ----------    ---------     --------      --------     ---------    ---------
   Net income.......................  $   34,632       26,451       (5,629)       (4,324)       29,003       22,127
                                      ==========    =========     ========      ========     =========    =========
------------------
(1) Corporate and other includes $3.7 million and $3.1 million of interest expense on subordinated debentures, after
    applicable  income tax  benefit of $2.0 million  and $1.6 million, for the three months ended March 31, 2006 and
    2005, respectively.

</TABLE>

<PAGE>

(9)      OTHER BORROWINGS

         Other  borrowings were comprised of the following at March 31, 2006 and
December 31, 2005:
<TABLE>
<CAPTION>

                                                                                March 31,       December 31,
                                                                                  2006              2005
                                                                               ----------       ------------
                                                                             (dollars expressed in thousands)

         Securities sold under agreements to repurchase:
<S>                                                                             <C>                <C>
              Daily........................................................     $182,844           199,874
              Term.........................................................      150,000           300,000
         FHLB advances (1).................................................       14,800            39,300
                                                                                --------          --------
                  Total....................................................     $347,644           539,174
                                                                                ========          ========
         -----------------
         (1)  On  March 17, 2006, First Bank  prepaid $20.5 million of FHLB  advances  that were  assumed  in
              conjunction  with  previous acquisitions. First Bank did not incur any  losses associated  with
              the prepayment of the FHLB advances.
</TABLE>

         The maturity  dates,  par amounts,  interest  rate spreads and interest
rate floor strike prices on First Bank's term repurchase  agreements as of March
31, 2006 and December 31, 2005 were as follows:
<TABLE>
<CAPTION>


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

         March 31, 2006:
<S>                                                  <C>                     <C>             <C>
             January 12, 2007 (2)..............      $ 150,000       LIBOR + 0.0050%         3.00% / Floor
                                                     =========

         December 31, 2005:
             January 12, 2007..................      $ 150,000       LIBOR + 0.0050%         3.00% / Floor
             June 14, 2007 (3).................         50,000       LIBOR - 0.3300%         3.00% / Floor
             June 14, 2007 (3).................         50,000       LIBOR - 0.3400%         3.00% / Floor
             August 1, 2007 (4)................         50,000       LIBOR + 0.0800%         3.00% / Floor
                                                     ---------
                                                     $ 300,000
                                                     =========
         ------------------
         (1)  The interest rate paid on the term repurchase agreement  is based   on the  three-month  London
              Interbank Offering Rate (LIBOR) reset in  arrears plus the  spread amount shown  above  minus a
              floating amount equal to the differential between  the  three-month LIBOR reset in  arrears and
              the strike price shown above, if the three-month LIBOR reset in arrears falls  below the strike
              price associated with the interest rate floor agreements.
         (2)  First  Bank  terminated  $50.0 million  of this  term  repurchase agreement on  April 28, 2006,
              resulting in an $83,000 prepayment  penalty and the recognition of a $310,000  loss on the sale
              of $50.0 million of available-for-sale investment securities  associated  with  the termination
              of the term repurchase agreement, as further discussed in Note 13 to the Consolidated Financial
              Statements.
         (3)  First Bank terminated these term repurchase agreements on February 14, 2006, and  recognized  a
              $1.6 million  loss  on  the  related sale  of $100.0  million  of available-for-sale investment
              securities associated with the termination of the term repurchase agreements.
         (4)  First  Bank  terminated  this  term  repurchase  agreement  on March 28,  2006, resulting  in a
              prepayment penalty of $223,000, and  the recognition  of a $746,000 loss on the related sale of
              $50.0 million of available-for-sale  investment securities  associated  with the termination of
              the term repurchase agreement.
</TABLE>
<PAGE>


(10)     NOTES PAYABLE

         Notes  payable were  comprised  of the  following at March 31, 2006 and
December 31, 2005:

                                                   March 31,       December 31,
                                                     2006              2005
                                                 -------------    --------------
                                                (dollars expressed in thousands)

         Term loan (1).........................     $95,000          100,000
                                                    =======          =======
         ------------------
         (1)  The  outstanding  principal  balance  of  the  Term  Loan Facility
              portion of the Amended and Secured Credit Agreement  is payable in
              ten equal quarterly installments of $5.0 million, which  commenced
              on March 31, 2006, with the remainder of the  Term  Loan  Facility
              balance to be repaid in full, including any  unpaid interest, upon
              maturity on August 10, 2008.

         First  Banks'  $122.5  million  Amended  and  Restated  Secured  Credit
Agreement,  dated  August  11,  2005,  with a group  of  unaffiliated  financial
institutions (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 $7.5 million  Letter of Credit
Facility portion of the Credit Agreement were $900,000 and $2.9 million at March
31, 2006 and December 31, 2005,  respectively,  and had not been drawn on by the
counterparties.  First  Banks did not have any  outstanding  advances  under the
$15.0 million Revolving Credit Facility portion of the Credit Agreement at March
31, 2006 and December 31, 2005.

         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.
First  Banks  and  First  Bank  were in  compliance  with all  restrictions  and
requirements of the Credit Agreements at March 31, 2006 and December 31, 2005.


(11)     SUBORDINATED DEBENTURES

         On March 1,  2006,  First  Bank  Statutory  Trust IV (FBST IV), a newly
formed  Delaware  statutory  trust,  issued 40,000 shares of variable rate trust
preferred  securities  at $1,000  per share in a private  placement,  and issued
1,238  shares of common  securities  to First  Banks at $1,000 per share.  First
Banks owns all of the common  securities  of FBST IV. The gross  proceeds of the
offering  were  used by FBST IV to  purchase  $41.2  million  of  variable  rate
subordinated  debentures  from First  Banks,  maturing  on March 15,  2036.  The
maturity date of the subordinated  debentures may be shortened, at the option of
First Banks,  to a date not earlier than March 15, 2011,  if certain  conditions
are  met.  The  subordinated  debentures  are the  sole  asset  of FBST  IV.  In
connection  with the issuance of the FBST IV preferred  securities,  First Banks
made certain  guarantees and  commitments  that, in the aggregate,  constitute a
full and  unconditional  guarantee by First Banks of the  obligations of FBST IV
under  the FBST IV  preferred  securities.  Proceeds  from the  issuance  of the
subordinated  debentures  to FBST  IV,  net of  offering  expenses,  were  $41.2
million. The distribution rate on the FBST IV preferred securities is equivalent
to the three-month  LIBOR plus 142.0 basis points,  and is payable  quarterly in
arrears beginning June 15, 2006.

         Subsequent  to March 31,  2006,  First  Banks,  through a newly  formed
statutory trust affiliate,  issued $20.0 million of subordinated debentures,  as
more fully described in Note 13 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 March 31, 2006 and December
31,  2005,  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.

         In August 2004, SBLS LLC acquired  substantially  all of the assets and
assumed certain  liabilities of Small Business Loan Source, Inc. 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 March  31,  2006 and
December 31, 2005,  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 April  28,  2006,  First  Bank  Statutory  Trust V (FBST V), a newly
formed  Delaware  statutory  trust,  issued 20,000 shares of variable rate trust
preferred securities at $1,000 per share in a private placement,  and issued 619
shares of common securities to First Banks at $1,000 per share. First Banks owns
all of the common  securities of FBST V. The gross proceeds of the offering were
used  by  FBST  V to  purchase  $20.6  million  of  variable  rate  subordinated
debentures from First Banks, maturing on June 15, 2036. The maturity date of the
subordinated  debentures  may be shortened,  at the option of First Banks,  to a
date not  earlier  than  June 15,  2011,  if  certain  conditions  are met.  The
subordinated  debentures  are the sole asset of FBST V. In  connection  with the
issuance of the FBST V preferred securities, First Banks made certain guarantees
and  commitments  that, in the  aggregate,  constitute a full and  unconditional
guarantee by First Banks of the obligations of FBST V under the FBST V preferred
securities. Proceeds from the issuance of the subordinated debentures to FBST V,
net of offering expenses,  were $20.6 million. The distribution rate on the FBST
V preferred  securities is equivalent to the three-month  LIBOR plus 145.0 basis
points, and is payable quarterly in arrears beginning June 15, 2006.
<PAGE>

         On April 28, 2006,  First Banks  completed its acquisition of Community
Bank, located in Pittsfield, Illinois, for $5.1 million in cash. The acquisition
served to expand First Banks' banking franchise in Illinois. The transaction was
funded  through  internally  generated  funds.  At the time of the  acquisition,
Community Bank had assets of $20.3 million,  loans, net of unearned discount, of
$13.5  million,  deposits  of $16.0  million  and  stockholder's  equity of $3.9
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  $634,000,  and the core deposit  intangibles,
which are not  deductible for tax purposes and will be amortized over five years
utilizing the straight-line method, were approximately $517,000.  Community Bank
was merged with and into First  Bank.  The planned  sale of the  Community  Bank
banking  office in Mount  Sterling,  Illinois  to  Beardstown  Savings,  s.b. is
expected  to be  completed  in June  2006.  At the  time of the  acquisition  of
Community  Bank, the Mount  Sterling  banking office had assets of $2.9 million,
loans, net of unearned discount, of $2.5 million and deposits of $4.2 million.

         On April 28, 2006,  First Bank  terminated  $50.0 million of the $150.0
million  term  repurchase  agreement  with a maturity  date of January 12, 2007,
resulting in a prepayment  penalty of $83,000 and the  recognition of a $310,000
loss on the sale of $50.0 million of  available-for-sale  investment  securities
associated with the termination of the term repurchase agreement.

         On  May 1,  2006,  First  Banks  completed  its  acquisition  of  First
Independent,  Plano, Texas, for $19.2 million in cash. The acquisition served to
expand  First Banks'  banking  franchise in Texas.  The  transaction  was funded
through internally  generated funds and the issuance of subordinated  debentures
associated  with a  private  placement  of  $40.0  million  of  trust  preferred
securities  through  a newly  formed  affiliated  statutory  trust,  as  further
discussed in Note 11 to the Consolidated  Financial  Statements.  At the time of
the acquisition,  First  Independent had assets of $68.1 million,  loans, net of
unearned discount, of $59.4 million, deposits of $55.5 million and stockholder's
equity of $7.3  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  $9.4  million,  and the core
deposit  intangibles,  which are not  deductible  for tax  purposes  and will be
amortized over five years utilizing the straight-line method, were approximately
$2.5 million.  First  Independent will be merged with and into First Bank on May
16, 2006.

         On May  10,  2006,  First  Banks  executed  an  Agreement  and  Plan of
Reorganization providing for the acquisition of San Diego Community Bank (SDCB),
located in San Diego, California,  for approximately $25.5 million in cash. SDCB
operates three banking offices in the San Diego community, with its headquarters
in Chula Vista and two other banking  offices in Kearny Mesa and Otay Mesa.  The
transaction,  which is subject  to  regulatory  and  shareholder  approvals,  is
expected to be completed  during the third  quarter of 2006.  At March 31, 2006,
SDCB had assets of $92.4  million,  loans,  net of unearned  discount,  of $74.4
million, deposits of $76.4 million and stockholders' equity of $12.5 million.






<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,  First  Bank  Business
Capital, Inc. (formerly FB Commercial Finance,  Inc.), Missouri Valley Partners,
Inc., or MVP,  Adrian N. Baker & Company,  or Adrian Baker,  and Small  Business
Loan Source  LLC,  or SBLS LLC,  which,  except for SBLS LLC,  are wholly  owned
subsidiaries.  First  Bank  currently  operates  182 branch  banking  offices in
California,  Illinois,  Missouri and Texas.  At March 31, 2006, we had assets of
$9.40 billion,  loans, net of unearned discount,  of $7.17 billion,  deposits of
$7.89 billion and stockholders' equity of $705.4 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  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, small
business  lending,  asset-based  loans  and  trade  financing.  Other  financial
services   include   mortgage   banking,   debit  cards,   brokerage   services,
credit-related insurance,  employee benefits,  commercial and personal insurance
services,  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  many of our 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.




<PAGE>



                               Financial Condition

         Total assets were $9.40 billion at March 31, 2006,  reflecting a $228.4
million  increase from $9.17  billion at December 31, 2005.  The increase in our
total assets is primarily  attributable to internal  growth and  acquisitions of
banks in our target  markets.  Funds  available  from deposit  growth and excess
short-term  investments,  which include federal funds sold and  interest-bearing
deposits, as well as the maturities of available-for-sale investment securities,
were utilized to fund  internal  loan growth and to reinvest in  higher-yielding
available-for-sale  investment  securities.  The  increase in assets  reflects a
$150.5 million increase in our loans, net of unearned discount, to $7.17 billion
at March 31, 2006,  from $7.02  billion at December 31,  2005,  attributable  to
internal  growth,  our  acquisitions  in 2006,  partially  offset by the sale of
certain  nonperforming  loans.  The  increase in assets  also  reflects a $115.7
million net increase in our  investment  securities  portfolio to $1.46 billion.
The increase in our investment securities portfolio is primarily attributable to
a $46.5 million increase in our trading  securities and the investment of excess
federal  funds  sold in U.S.  Treasury  Bills,  partially  offset by the sale of
$150.0  million of securities  associated  with the  termination of certain term
repurchase  agreements and maturities of investment  securities during the first
quarter of 2006. In March 2006, we completed the securitization of $77.1 million
of certain residential mortgage loans held in our loan portfolio, which resulted
in a  change  in our  overall  asset  mix  from  residential  mortgage  loans to
available-for-sale  investment  securities,  as further described under "--Loans
and Allowance for Loan Losses." The increase in our assets was partially  offset
by a decrease of $11.9  million in our deferred tax assets to $117.0  million at
March 31,  2006,  from $128.9  million at December 31,  2005.  The  reduction is
primarily  attributable  to our loan sales  completed  in March  2006.  Deposits
increased  $351.7 million to $7.89 billion at March 31, 2006, from $7.54 billion
at December 31, 2005,  reflecting  internal growth through  enhanced product and
service offerings and marketing campaigns. Our subordinated debentures increased
$42.1 million  during the first quarter of 2006 primarily due to the issuance of
$41.2  million of  subordinated  debentures,  as  further  discussed  below.  In
addition,  we terminated  $150.0  million of term  repurchase  agreements in the
first quarter of 2006 to better  position our overall  interest  rate risk,  and
sold $150.0 million of available-for-sale  investment securities associated with
the termination of the term  repurchase  agreements.  Our  acquisitions of First
National  Bank of  Sachse,  or FNBS,  the  Richardson  branch  office  of Dallas
National  Bank, or  Richardson  Branch,  and Adrian Baker  provided  assets,  in
aggregate,  of $80.4 million,  loans, net of unearned discount, of $49.5 million
and  deposits  of $67.3  million.  Goodwill  increased  $14.9  million to $182.0
million  at March 31,  2006 and  reflects  our  acquisitions  of FNBS and Adrian
Baker, as further discussed in Note 2 to our Consolidated  Financial Statements.
Our  acquisition  of FNBS on January 3, 2006 provided  assets of $76.2  million,
loans, net of unearned discount, of $49.3 million, deposits of $66.2 million and
stockholders'  equity of $9.9 million.  Our acquisition of Adrian Baker on March
31,  2006  provided  assets of $3.1  million  and  stockholders'  equity of $1.1
million.  Our  purchase of the  Richardson  Branch on January 20, 2006  provided
assets and deposits of $1.1 million.

         Total deposits,  as discussed above,  increased $351.7 million to $7.89
billion at March 31, 2006,  from $7.54  billion at December  31, 2005.  Our time
deposits  increased  $361.3  million and our savings  deposits  increased  $58.6
million, partially offset by a $41.5 million decrease in our noninterest-bearing
demand  accounts  and a $26.7  million  decline in our  interest-bearing  demand
accounts.  Our acquisition of FNBS and our Richardson  Branch purchase  provided
deposits of $66.2  million and $1.1  million,  respectively,  on the  respective
acquisition  dates. 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,  contributed  to our deposit  growth
despite  continued  aggressive  competition  within  our  market  areas  and  an
anticipated level of attrition associated with our recent acquisitions.

         Other  borrowings  decreased  $191.5 million to $347.6 million at March
31, 2006,  from $539.2 million at December 31, 2005.  This  reduction  primarily
resulted  from the  termination  of $100.0  million  and $50.0  million  of term
repurchase agreements on February 14, 2006 and March 28, 2006, respectively,  as
further  described  in  Note 9 to our  Consolidated  Financial  Statements.  The
decrease also  reflects a $24.5  million  decrease in Federal Home Loan Bank, or
FHLB,  advances,  primarily  attributable  to the prepayment of $20.5 million of
advances  in March 2006 that were  assumed  with  several of our  previous  bank
acquisitions,  as  further  described  in Note 9 to our  Consolidated  Financial
Statements,  and a  $17.0  million  decrease  in  daily  securities  sold  under
agreements to repurchase  resulting from changes in the cash management activity
and demand of our commercial deposit customers.

         Our notes payable  decreased $5.0 million to $95.0 million at March 31,
2006 following payment of the first scheduled $5.0 million  quarterly  principal
installment on our $100.0 million term loan  facility,  as further  described in
Note 10 to our Consolidated Financial Statements.

         Our subordinated  debentures  increased $42.1 million to $257.6 million
at March 31, 2006,  from $215.5  million at December 31, 2005. On March 1, 2006,

<PAGE>

we issued $41.2 million of variable rate  subordinated  debentures to First Bank
Statutory  Trust IV, or FBST IV, a newly formed  Delaware  statutory  trust,  as
further  described  in Note 11 to our  Consolidated  Financial  Statements.  The
proceeds from the issuance of these subordinated debentures will be used to fund
future acquisitions as well as for general corporate  purposes.  The increase in
our subordinated  debentures was also attributable to the continued amortization
of debt  issuance  costs and changes in the fair value of our interest rate swap
agreements  designated as fair value hedges,  following the  termination  of our
single, remaining fair value interest rate swap agreement that hedged certain of
our subordinated  debentures,  as further  discussed under "--Interest Rate Risk
Management."

         Stockholders' equity was $705.4 million and $678.9 million at March 31,
2006 and  December  31,  2005,  respectively,  reflecting  an  increase of $26.5
million. The increase is primarily  attributable to net income of $29.0 million,
partially offset by a $2.3 million decrease in accumulated  other  comprehensive
income,  comprised of $303,000  associated with changes in the fair value of our
derivative  financial  instruments  and $2.0 million  associated with changes in
unrealized  gains and  losses on our  available-for-sale  investment  securities
portfolio.


                              Results of Operations


Net Income

         Net income was $29.0  million and $22.1  million  for the three  months
ended March 31, 2006 and 2005,  respectively,  reflecting  an increase of 31.1%.
Our return on average assets increased to 1.26% for the three months ended March
31, 2006,  compared to 1.04% for the  comparable  period in 2005.  Our return on
average  stockholders'  equity  increased  to 16.91% for the three  months ended
March 31, 2006, compared to 14.67% for the comparable period in 2005. Net income
for the three months ended March 31, 2006 reflects  earnings driven by increased
net interest income and net interest margin,  increased noninterest income and a
reduced  provision  for income  taxes,  partially  offset by higher  noninterest
expense.

         The  increase in earnings in 2006  reflects our  continuing  efforts to
strengthen  earnings and simultaneously  improve asset quality.  The increase in
earnings for the three months  ended March 31, 2006  compared to the  comparable
period in 2005 reflects a 16.4%  increase in net interest  income and a 33 basis
point  increase in our net  interest  margin;  a 20.2%  increase in  noninterest
income;  partially offset by a 17.1% increase in our noninterest expense levels.
Our net  interest-earning  assets  provided by internal loan growth coupled with
higher interest rates on loans,  higher-yielding  investment securities, and our
2005 and 2006  acquisitions  have  contributed  to an increase  in our  interest
income.  In addition,  interest expense increased as a result of higher interest
rates on an  increasing  deposit  base  driven  by  internal  growth,  marketing
campaigns  and our 2005 and 2006  acquisitions.  Higher  interest  rates paid on
other borrowings, our term loan and our subordinated debentures also contributed
to an increase in interest  expense.  In addition,  our 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,  which  declined  primarily  as a result of an increase  in  prevailing
interest rates and the maturity and  termination  of certain  interest rate swap
agreements,  as  further  discussed  under  "--Interest  Rate Risk  Management."
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.

         Our ongoing  efforts to improve our overall  asset  quality  levels are
reflected by a 29.1% decrease in our  nonperforming  assets,  which decreased to
$70.4  million  at March 31,  2006 from  $99.2  million at  December  31,  2005.
Nonperforming  loans  decreased to $67.1  million at March 31, 2006,  from $97.2
million at December 31, 2005 and $79.8 million at March 31, 2005.  Nonperforming
loans represented 0.94% of loans, net of unearned  discount,  at March 31, 2006,
compared to 1.38% at December 31, 2005 and 1.30% at March 31,  2005.  Loans past
due 90 days or more and still  accruing  interest were $2.2 million at March 31,
2006,  compared to $5.6  million at December  31, 2005 and $8.8 million at March
31, 2005. The 29.1%  reduction in the level of  nonperforming  assets during the
three months ended March 31, 2006  primarily  resulted  from the sale of certain
acquired  nonperforming  loans,  loan payoffs  and/or  external  refinancing  of
various credits. We recorded a provision for loan losses of $1.0 million for the
three months ended March 31, 2006. We did not record a provision for loan losses
for the comparable period in 2005. Our net loan recoveries were $3.3 million for
the three months ended March 31, 2006,  compared to net loan charge-offs of $6.6
million for the  comparable  period in 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,   as  further  discussed  under
"--Provision for Loan Losses" and "--Loans and Allowance for Loan Losses."

         Noninterest  income  increased  20.2% to $25.5  million  for the  three
months ended March 31, 2006, compared to $21.2 million for the comparable period
in 2005. The increase for the first quarter of 2006 is primarily attributable to
increased  gains on loans sold and held for sale,  including a $1.7 million gain
on the sale of certain  nonperforming loans, as further discussed under "--Loans

<PAGE>

and  Allowance  for Loan  Losses,"  and  increased  service  charges  on deposit
accounts  and  customer  service  fees  related  to  higher  deposit   balances.
Noninterest income for 2006 also includes $1.2 million associated with increased
loan servicing income generated from the  capitalization  of mortgage  servicing
rights related to the securitization of certain residential mortgage loans and a
$1.5 million gain on the sale of a parcel of other real estate.  The increase in
noninterest  income was partially offset by a $2.4 million pre-tax loss on sales
of  available-for-sale  investment securities associated with the termination of
$150.0 million of term repurchase agreements,  as further described in Note 9 to
our Consolidated Financial Statements.

         Noninterest  expense was $74.8  million and $63.9 million for the three
months ended March 31, 2006 and 2005,  respectively.  Our  efficiency  ratio was
64.29%  and  64.32%  for the  three  months  ended  March  31,  2006  and  2005,
respectively.  The overall increase in our noninterest expenses was attributable
to increased  expense levels  associated with our growth in 2005 and 2006, which
expanded our  employee  base and added two branch  offices in 2006,  nine branch
offices in 2005 and the  addition  of one de novo  branch  office in early 2005.
This growth  contributed  to a $6.6  million  increase in salaries  and employee
benefits  expense and a $935,000  increase in our  occupancy  and  furniture and
equipment  expenditures.  The increase in salaries and employee benefits expense
also resulted  from  continued  costs  associated  with  employing and retaining
qualified  personnel,  including  increased  costs driven by enhanced  incentive
compensation  programs and other employee benefits plans. Our system conversions
associated  with  recent   acquisitions   and  the  expansion  of  technological
equipment,  networks and communication  channels,  contributed to an increase in
information  technology  fees of 11.2%.  In addition,  charitable  contributions
expense  increased  $1.5 million for the first  quarter of 2006  compared to the
same period in 2005. 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.


Net Interest Income

         Net interest income (expressed on a tax-equivalent  basis) increased to
$91.2  million  for the three  months  ended March 31,  2006,  compared to $78.4
million for the comparable period in 2005,  reflecting continued growth. Our net
interest  margin  increased  33 basis points to 4.30% for the three months ended
March 31,  2006,  from 3.97% for the three  months  ended  March 31,  2005.  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 our net  interest  income to an
increase in interest-earning assets provided by internal growth and our 2005 and
2006  acquisitions,   higher  interest  rates  on  loans,  and   higher-yielding
investment securities, partially offset by increased interest expense associated
with higher interest rates on an increasing  deposit base and increased interest
rates  paid  on  our  other  borrowings,   including  our  term  loan.   Average
interest-earning  assets  increased to $8.61  billion for the three months ended
March 31,  2006,  from $8.01  billion for the three months ended March 31, 2005.
The increase is  attributable  to internal  growth and  interest-earning  assets
provided by our  acquisitions  completed in 2005 and 2006, which provided assets
of $280.3  million and $80.4  million in aggregate,  respectively.  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. The impact of these derivative financial instruments reduced
net  interest  income by $1.4 million for the three months ended March 31, 2006,
compared to  providing  increased  net  interest  income of $3.6 million for the
comparable period in 2005,  reflecting a decline in our earnings on our interest
rate swap agreements of $5.0 million,  as further  discussed  under  "--Interest
Rate Risk  Management."  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.

         Average  loans,  net of unearned  discount,  were $7.16 billion for the
three  months  ended March 31,  2006,  in  comparison  to $6.18  billion for the
comparable  period in 2005. The yield on our loan  portfolio  increased to 7.45%
for the three  months  ended  March 31,  2006,  in  comparison  to 6.18% for the
comparable  period in 2005.  Although our loan portfolio  yields  increased with
rising  interest rates during 2005 and 2006,  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
$200.0  million  in  March  2005  resulted  in  decreased  earnings  on our swap

<PAGE>

agreements thereby  contributing to a reduction in yields on our loan portfolio,
and a reduction of our net interest  income of $2.7 million for the three months
ended March 31, 2006, compared to the comparable period in 2005. Interest income
on our loan portfolio for 2006 reflects a $2.0 million  recovery of interest and
fees from the payoff of a single  nonaccrual  loan, as further  described  under
"--Loans and Allowance for Loan Losses." We primarily  attribute the increase in
average loans of $972.7 million for the three months ended March 31, 2006,  over
the comparable period in 2005, to internal growth, our acquisitions completed in
2005 and 2006,  partially  offset by a $77.1  million  reduction  related to the
securitization  of certain of our  residential  mortgage  loans held in our loan
portfolio, and reductions in our nonperforming loan portfolio due to the sale of
certain nonperforming loans, loan payoffs and/or external refinancing of various
credits, as further described under "--Loans and Allowance for Loan Losses." Our
acquisitions  completed  during 2005 and 2006  provided  loans,  net of unearned
discount,  of $209.6  million and $49.5 million,  in aggregate,  on the dates of
acquisition,  respectively.  The components of the increase in average loans for
2006 compared to the first quarter of 2005 were primarily  comprised of a $537.8
million  increase  in average  real  estate  mortgage  loans,  a $256.8  million
increase in average real estate  construction  and  development  loans,  a $92.9
million  increase in average loans held for sale, and an $83.0 million  increase
in average  commercial,  financial  and  agricultural  loans.  The  increase  in
residential real estate mortgage loans resulted from our recent acquisitions and
our business strategy  decision to retain a portion of our residential  mortgage
loan production that would have previously been sold in the secondary market.

         Average investment  securities were $1.35 billion and $1.74 billion for
the three months ended March 31, 2006 and 2005,  respectively.  The yield on our
investment  portfolio  was 4.51%  for the three  months  ended  March 31,  2006,
compared  to 4.14%  for the  comparable  period in 2005.  Investment  securities
provided by our  acquisitions  completed in 2005 and 2006 were $20.1 million and
$14.4 million,  in aggregate,  respectively,  as of the  respective  acquisition
dates. Funds available from deposit growth and excess short-term investments, as
well as the maturities of investment  securities  were utilized to fund internal
loan  growth and to reinvest in  higher-yielding  available-for-sale  investment
securities,  including $200.0 million of U.S. Treasury Bills. In March 2006, our
investment securities increased $77.1 million due to the securitization of $77.1
million of certain of our residential mortgage loans held in our loan portfolio.
Additionally,  as  further  described  in Note 9 to our  Consolidated  Financial
Statements,  we  terminated  two $50.0  million term  repurchase  agreements  on
February  14,  2006 and  recognized  a $1.6  million  loss on the sale of $100.0
million  of   available-for-sale   investment  securities  associated  with  the
termination  of the  term  repurchase  agreements.  We also  terminated  a $50.0
million term  repurchase  agreement on March 28, 2006 and  recognized a $969,000
loss on the sale of $50.0 million of  available-for-sale  investment  securities
associated with the termination of the term repurchase agreement.

         Average deposits  increased to $7.73 billion for the three months ended
March 31, 2006,  from $7.09 billion for the  comparable  period in 2005. For the
three months ended March 31, 2006, the aggregate  weighted  average rate paid on
our deposit  portfolio  increased 101 basis points to 2.80%,  from 1.79% for the
comparable  period in 2005, and is primarily  attributable to the current rising
interest rate environment.  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 in February 2005,
resulted in a decrease in our net interest income of $354,000 for 2006, compared
to the comparable period in 2005. The increase in average deposits is reflective
of internal  growth  stemming  from our  deposit  development  programs  and our
acquisitions  completed  during  2005 and  2006,  which  provided  deposits,  in
aggregate, of $238.1 million and $67.3 million, respectively. Average demand and
savings deposits were $4.37 billion and $4.29 billion for the three months ended
March 31, 2006 and 2005, respectively.  Average time deposits were $3.35 billion
and  $2.80  billion  for the  three  months  ended  March  31,  2006  and  2005,
respectively.

         Average  other  borrowings  decreased  to $460.7  million for the three
months  ended  March 31,  2006,  compared to $578.0  million for the  comparable
period in 2005. The aggregate weighted average rate paid on our other borrowings
was 4.13% for the three months  ended March 31, 2006,  compared to 2.32% for the
comparable  period in 2005.  The  increased  rate  paid on our other  borrowings
reflects the rising short-term interest rate environment that began in mid-2004.
The  $117.2   million   decrease  in  average  other   borrowings  is  primarily
attributable  to the  termination  of $100.0  million and $50.0  million of term
repurchase agreements on February 14, 2006 and March 28, 2006, respectively,  as
further  described  in  Note  9 to our  Consolidated  Financial  Statements.  In
addition, on March 17, 2006, we prepaid $20.5 million of FHLB advances that were
acquired with several  previous  bank  acquisitions.  The remaining  decrease is
attributable to a decrease in our average daily securities sold under agreements
to repurchase,  principally in connection with the cash management activities of
our commercial deposit customers.

         Our notes payable averaged $99.9 million and $7.7 million for the three
months  ended  March 31, 2006 and 2005,  respectively.  The  aggregate  weighted
average rate paid on our notes  payable was 5.76% and 7.30% for the three months
ended March 31, 2006 and 2005,  respectively.  The  weighted  average  rate paid

<PAGE>

reflects  unused  credit  commitment  and letter of credit  facility fees on our
secured credit  agreement.  Exclusive of these fees,  the weighted  average rate
paid on our notes  payable was 5.69% and 3.76% for the three  months ended March
31, 2006 and 2005, respectively.  In August 2005, we entered into an Amended and
Restated  Secured  Credit  Agreement  and  restructured  our  overall  financing
arrangement.  In conjunction with this transaction, we borrowed $80.0 million on
the term loan in August 2005 and borrowed  the  remaining  $20.0  million on the
term loan in November  2005. The proceeds of the term loan were used to fund our
acquisition of International Bank of California,  or IBOC, and to partially fund
the redemption of our 10.24%  subordinated  debentures issued to First Preferred
Capital Trust II in September 2005, as further  discussed below. The outstanding
balance of our former $100.0 million credit  facility was repaid in full in June
2005 through dividends from our subsidiary bank.

         Average subordinated  debentures were $230.0 million and $273.8 million
for the three months ended March 31, 2006 and 2005, respectively.  The aggregate
weighted  average rate paid on our  subordinated  debentures was 9.97% and 7.03%
for the three  months  ended  March 31,  2006 and 2005,  respectively.  Interest
expense on our subordinated debentures was $5.7 million and $4.7 million for the
three  months  ended  March  31,  2006 and  2005,  respectively.  As  previously
discussed,  we issued $41.2 million of variable rate subordinated  debentures in
March 2006 to partially fund our bank  acquisitions.  In addition,  in September
2005, we repaid 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 improved future net interest income and net
interest margin,  especially  considering the high interest rate associated with
them.  However,  the earnings  impact of our interest rate swap agreements had a
declining  impact in the reduction of our interest  expense  associated with our
subordinated debentures.  These interest rate swap agreements increased interest
expense by  $814,000  for the three  months  ended March 31,  2006,  and reduced
noninterest  expense by $1.1  million for the three months ended March 31, 2005.
As further  discussed under  "--Interest Rate Risk  Management," on February 14,
2006,  we terminated  our single  remaining  $25.0  million  notional fair value
interest rate swap agreement  associated with our subordinated  debentures,  and
recognized additional expense of $849,000 on the net basis adjustment associated
with this swap agreement and the remaining net basis adjustments associated with
the fair value interest rate swap agreements that were terminated in May 2005.



<PAGE>


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


                                                                        Three Months Ended March 31,
                                                         ----------------------------------------------------------
                                                                     2006                          2005
                                                         ----------------------------  ----------------------------
                                                                      Interest                      Interest
                                                           Average    Income/  Yield/    Average    Income/  Yield/
                                                           Balance    Expense   Rate     Balance    Expense   Rate
                                                           -------    -------   ----     -------    -------   ----
                                                                      (dollars expressed in thousands)
                        ASSETS
                        ------

Interest-earning assets:
<S>                                                       <C>         <C>       <C>    <C>           <C>      <C>
    Loans (1)(2)(3)(4)...............................    $7,156,860   131,461   7.45%  $6,184,119    94,270   6.18%
    Investment securities (4)........................     1,351,287    15,033   4.51    1,741,900    17,785   4.14
    Short-term investments...........................        97,784     1,123   4.66       83,303       509   2.48
                                                         ----------   -------          ----------   -------
          Total interest-earning assets..............     8,605,931   147,617   6.96    8,009,322   112,564   5.70
                                                                      -------                       -------
Nonearning assets....................................       705,925                       654,435
                                                         ----------                    ----------
          Total assets...............................    $9,311,856                    $8,663,757
                                                         ==========                    ==========


                   LIABILITIES AND
                 STOCKHOLDERS' EQUITY
                 --------------------

Interest-bearing liabilities:
    Interest-bearing deposits:
       Interest-bearing demand deposits..............    $  970,032     1,828   0.76%  $  885,555       888   0.41%
       Savings deposits..............................     2,129,488    11,183   2.13    2,198,086     5,744   1.06
       Time deposits of $100 or more.................     1,179,410    11,556   3.97      807,398     5,354   2.69
       Other time deposits (3).......................     2,175,064    20,034   3.74    1,990,790    13,979   2.85
                                                         ----------   -------          ----------   -------
          Total interest-bearing deposits............     6,453,994    44,601   2.80    5,881,829    25,965   1.79
    Other borrowings.................................       460,748     4,695   4.13      577,997     3,300   2.32
    Notes payable (5)................................        99,944     1,420   5.76        7,667       138   7.30
    Subordinated debentures (3)......................       229,981     5,652   9.97      273,801     4,746   7.03
                                                         ----------   -------          ----------   -------
          Total interest-bearing liabilities.........     7,244,667    56,368   3.16    6,741,294    34,149   2.05
                                                                      -------                       -------
Noninterest-bearing liabilities:
    Demand deposits..................................     1,271,153                     1,207,253
    Other liabilities................................       100,517                       103,387
                                                         ----------                    ----------
          Total liabilities..........................     8,616,337                     8,051,934
Stockholders' equity.................................       695,519                       611,823
                                                         ----------                    ----------
          Total liabilities and
            stockholders' equity.....................    $9,311,856                    $8,663,757
                                                         ==========                    ==========
Net interest income..................................                  91,249                        78,415
                                                                      =======                       =======
Interest rate spread.................................                           3.80                          3.65
Net interest margin (6)..............................                           4.30%                         3.97%
                                                                                ====                          ====
------------------
(1)  For purposes of these calculations, nonaccrual loans are included in 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 $383,000 and $336,000 for the three months ended March 31, 2006 and 2005, respectively.
(5)  Interest expense on our notes payable includes commitment, arrangement and renewal fees. Exclusive  of  these
     fees,  the  interest  rates  paid  were 5.69% and 3.76% for  the  three months ended March 31, 2006 and 2005,
     respectively.
(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 recorded a provision  for loan losses of $1.0  million for the three
months ended March 31, 2006.  We did not record a provision  for loan losses for
the three months ended March 31, 2005.  We recorded net loan  recoveries of $3.3
million  for the  three  months  ended  March  31,  2006,  compared  to net loan
charge-offs  of $6.6  million  for the  comparable  period  in  2005.  Net  loan
recoveries  for the first  quarter  of 2006  included  a loan  recovery  of $5.0
million on the payoff of a single loan that was transferred to our held for sale
portfolio  on  December  31,  2005.  Excluding  this  transaction,  our net loan
charge-offs  for 2006 declined $4.9 million from the comparable  period in 2005.
The  provision  for  loan  losses  recorded  during  2006  reflects  significant
improvement in nonperforming  loans from December 31, 2005 to March 31, 2006, as
well as a significant  reduction in net loan  charge-offs.  Nonperforming  loans
decreased  $30.1  million,  or 31.0%,  to $67.1 million at March 31, 2006,  from
$97.2  million at December  31,  2005.  Loans past due 90 days or more and still
accruing interest decreased to $2.2 million at March 31, 2006,  compared to $5.6
million at December 31, 2005 and $8.8 million at March 31, 2005. The decrease in
nonperforming  loans and past due loans  during the three months ended March 31,
2006  reflects   improvement  in  asset  quality  resulting  from  the  sale  of
nonperforming  loans that were  transferred  to the held for sale  portfolio  on
December 31, 2005, loan payoffs and/or external  refinancing of various credits,
and a significant reduction in net loan charge-offs,  as further discussed under
"--Loans  and  Allowance  for Loan  Losses." Our  allowance  for loan losses was
$140.2  million at March 31,  2006,  compared to $135.3  million at December 31,
2005 and $144.2  million at March 31, 2005.  Our  allowance for loan losses as a
percentage  of loans,  net of unearned  discount,  was 1.96% at March 31,  2006,
compared  to  1.93%  and  2.34%  at  December  31,  2005  and  March  31,  2005,
respectively.  Our allowance  for loan losses as a percentage  of  nonperforming
loans was 209.00% at March 31, 2006, compared to 139.23% and 180.71% at December
31, 2005 and March 31, 2005, respectively.  Management has closely monitored its
operations to address the ongoing  challenges posed by the significant  level of
nonperforming loans acquired with our CIB Bank acquisition completed in November
2004. The level of nonperforming  loans associated with our purchase of CIB Bank
has decreased to $18.2  million,  or 27.1% of  nonperforming  loans at March 31,
2006.  These  levels  are down  significantly  from $55.0  million,  or 56.6% of
nonperforming  loans at  December  31,  2005,  and  $43.7  million,  or 54.8% of
nonperforming  loans at March 31, 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 $25.5  million and $21.2  million for the three
months ended March 31, 2006 and 2005, respectively.  Noninterest income consists
primarily of service  charges on deposit  accounts and  customer  service  fees,
mortgage-banking revenues, investment management income and other income.

         Service  charges on deposit  accounts  and  customer  service fees were
$10.2  million and $9.3  million for the three  months  ended March 31, 2006 and
2005, respectively. The increase in service charges and customer service fees is
primarily  attributable to increased demand deposit account balances  associated
with internal growth and our acquisitions of First Bank of the Americas, s.s.b.,
or FBA,  IBOC,  Northway  State Bank, or NSB, and FNBS  completed in April 2005,
September  2005,  October 2005 and January 2006,  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,  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 $6.8  million  and $4.5
million for the three  months ended March 31, 2006 and 2005,  respectively.  The
increase  in 2006 is  partially  attributable  to a $1.7  million  gain,  before
applicable  income taxes,  on the sale of certain  nonperforming  loans in March
2006 that were  transferred to the loans held for sale portfolio on December 31,
2005. The increase is also  attributable  to the  recognition of $1.2 million in
loan servicing income generated from the  capitalization  of mortgage  servicing
rights pertaining to the securitization of $77.1 million of residential mortgage
loans  held  in our  loan  portfolio,  as  further  discussed  in  Note 4 to our
Consolidated Financial Statements.

         Noninterest income includes a net loss on investment securities of $2.8
million for the three months ended March 31, 2006. The net loss in 2006 resulted
primarily from the sales of certain  investment  securities  associated with the
termination of three $50.0 million term repurchase  agreements  during the first

<PAGE>

quarter of 2006, as further  discussed in Note 9 to our  Consolidated  Financial
Statements.  The net loss also  includes a net loss of  $405,000  related to the
mark-to-market  adjustments on our trading securities  portfolio.  There were no
gains or losses on  investment  securities  recorded  for the three months ended
March 31, 2005.

         Bank-owned life insurance  investment  income was $1.1 million and $1.3
million for the three  months ended March 31, 2006 and 2005,  respectively.  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.

         Investment  management income was $2.3 million and $2.0 million for the
three months ended March 31, 2006 and 2005,  respectively,  reflecting increased
portfolio  management fees generated by MVP, our institutional  money management
subsidiary,  primarily  attributable  to new  business  development  and overall
growth in assets under management.

         Other  income was $7.8  million and $4.1  million for the three  months
ended March 31, 2006 and 2005, respectively. We attribute the primary components
of the increase in other income to:

         >>    an  increase  of $1.5  million in gains on the sale of other real
               estate.  Gains on the sale of other real estate were $1.6 million
               for the three months  ended March 31,  2006,  and included a $1.5
               million  gain  recorded  on the  sale of a parcel  of other  real
               estate  acquired with our  acquisition of CIB Bank.  Gains on the
               sale of other real  estate for the three  months  ended March 31,
               2005 were $114,000;

         >>    a release fee of $938,000  received on funds collected during the
               first quarter of 2006 from a loan  previously sold in March 2005,
               of  which  First  Bank was  entitled  to 25% of any  future  fees
               collected on the loan under a defined  release fee agreement that
               was entered into in conjunction with the loan sale;

         >>    a  decrease  of   $524,000  in  net  losses  on  our   derivative
               instruments;

         >>    an increase of $289,000 in income associated with standby letters
               of credit;

         >>    a net  increase of $262,000 in gains on the  valuation or sale of
               certain repossessed assets,  primarily  attributable to a gain of
               $310,000  on  the  sale  of  five  shrimping  vessels  that  were
               partially or entirely damaged as a result of Hurricane Katrina in
               2005; and

         >>    our acquisitions of FBA, IBOC and NSB, completed during 2005, and
               FNBS , completed in January 2006; partially offset by

         >>    a net increase in losses,  net of gains,  on the  disposition  of
               certain  assets,  primarily  attributable  to a $241,000 net loss
               resulting from the charitable donation of a branch facility.


Noninterest Expense

         Noninterest  expense was $74.8  million and $63.9 million for the three
months  ended  March  31,  2006 and 2005,  respectively.  Our  efficiency  ratio
decreased  slightly  to 64.29% for the three  months  ended  March 31, 2006 from
64.32% for the comparable  period in 2005.  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 increase in noninterest expense was primarily
attributable  to  increases  in  expenses  resulting  from  our  2005  and  2006
acquisitions, and increases in salaries and employee benefits expense, occupancy
expense,  net  of  rental  income,   information   technology  fees,  charitable
contributions expense and other expense.

         Salaries  and  employee  benefits  expense was $39.5  million and $32.9
million for the three  months  ended March 31, 2006 and 2005,  respectively.  We
attribute  the overall  increase to increased  salaries  and  employee  benefits
expenses associated with an aggregate of 11 additional branches acquired in 2005
and 2006,  one de novo branch  opened in 2005,  in addition to generally  higher
salary and employee  benefit  costs  associated  with  employing  and  retaining
qualified   personnel,   including  the  implementation  of  enhanced  incentive
compensation and employee benefits plans. Our number of employees on a full-time
equivalent  basis  increased  to  approximately  2,350 at March 31,  2006,  from
approximately 2,200 at March 31, 2005.
<PAGE>

         Occupancy,  net of rental income,  and furniture and equipment  expense
totaled $10.2 million and $9.3 million for the three months ended March 31, 2006
and 2005, respectively.  The increase is primarily attributable to higher levels
of expense  resulting  from our  acquisitions  in 2005 and 2006,  which added 11
branch  offices,  and the  opening  of one de novo  branch  office  in 2005,  as
discussed  above.  The increase is also  attributable  to  increased  technology
equipment expenditures,  continued expansion and renovation of certain corporate
and  branch  offices,   and  increased   depreciation  expense  associated  with
acquisitions and capital expenditures.

         Information  technology fees were $9.1 million and $8.2 million for the
three  months  ended  March  31,  2006 and  2005,  respectively.  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  various  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.  The  increased  level of fees is  primarily  attributable  to the
additional branch offices provided by our acquisitions and de novo branch office
openings;  certain  de-conversion costs from other providers associated with our
acquisitions;  growth and technological advancements consistent with our product
and service  offerings;  and 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 2005, as well as the achievement of certain efficiencies associated
with  the  implementation  of  various  technology  projects.   The  information
technology  conversions  of FBA, IBOC, NSB and FNBS were completed in June 2005,
October 2005, December 2005 and February 2006, respectively.

         Legal,  examination  and  professional  fees were $2.1 million and $2.4
million for the three  months ended March 31, 2006 and 2005,  respectively.  The
decrease is  primarily  attributable  to higher  professional  fees paid in 2005
related to 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.  The  reduction  in  2006  is also
attributable  to  the  settlement  and  final   resolution  of  certain  defense
litigation in the fourth  quarter of 2005.  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 2005 and 2006.

         Amortization   of   intangibles   associated   with  the   purchase  of
subsidiaries  was $1.5 million and $1.2 million for the three months ended March
31, 2006 and 2005,  respectively.  The increase is  attributable to core deposit
intangibles  associated with our  acquisitions of FBA, IBOC and NSB completed in
2005 and our acquisition of FNBS completed in January 2006.

         Charitable  contributions expense was $1.6 million and $106,000 for the
three  months  ended  March 31,  2006 and 2005,  respectively.  The  increase is
primarily attributable to First Bank's charitable  contributions to the Dierberg
Operating Foundation,  Inc., a charitable foundation created by our Chairman and
members  of  his  immediate  family,  as  further  discussed  in  Note  6 to our
Consolidated Financial Statements.

         Other  expense was $7.1  million and $6.1  million for the three months
ended March 31, 2006 and 2005, respectively.  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:

         >>    a $617,000  specific  reserve  established  in March 2006 for the
               estimated loss associated with a $3.1 million  unfunded letter of
               credit acquired with the acquisition of CIB Bank; and

         >>    expenses  associated  with continued  growth and expansion of our
               banking  franchise,  including  our de novo branch office and our
               acquisitions completed during 2005 and 2006.


Provision for Income Taxes

         The  provision for income taxes was $11.7 million and $13.3 million for
the three months ended March 31, 2006 and 2005,  representing  an effective  tax
rate of 28.9% and 37.5%, respectively. The decrease in the effective tax rate is
primarily  attributable to a $3.2 million reduction of the provision for federal
and state income taxes in the first quarter of 2006  resulting from the reversal
of  certain  tax  reserves  no  longer  deemed  necessary.   Exclusive  of  this
nonrecurring transaction,  the reduced effective tax rate of 36.8% for the three
months  ended March 31,  2006  reflects  our  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 March 31, 2006 and December 31, 2005 are summarized as
follows:
<TABLE>
<CAPTION>


                                                            March 31, 2006           December 31, 2005
                                                        ----------------------    -----------------------
                                                         Notional     Credit       Notional      Credit
                                                          Amount     Exposure       Amount      Exposure
                                                          ------     --------       ------      --------
                                                                  (dollars expressed in thousands)

<S>                                                     <C>             <C>            <C>          <C>
         Cash flow hedges............................   $ 300,000       --          300,000         114
         Fair value hedges...........................          --       --           25,000         748
         Interest rate floor agreement...............     100,000        4          100,000          70
         Interest rate lock commitments..............       6,700       --            5,900          --
         Forward commitments to sell
           mortgage-backed securities................      47,000       --           47,000          --
                                                        =========      ===          =======         ===
</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 March 31, 2006 and 2005,  we realized net
interest  expense  of $1.4  million  and net  interest  income of $3.6  million,
respectively,  on our derivative financial  instruments.  The decreased earnings
are primarily  attributable to continued increases in prevailing interest rates,
the maturity of $200.0 million  notional amount of interest rate swap agreements
designated  as cash flow  hedges  in March  2005 and the  termination  of $150.0
million,  $101.2  million  and $25.0  million of interest  rate swap  agreements
designated as fair value hedges in February  2005,  May 2005 and February  2006,
respectively,  as further discussed below.  Although the Company has implemented
other methods to mitigate the reduction in net interest income, the maturity and
termination  of the swap  agreements  has resulted in a  compression  of our net
interest  margin of  approximately  23 basis  points for the three  months ended
March 31, 2006, in comparison to the comparable  period in 2005. We recorded net
losses on derivative  instruments,  which are included in noninterest  income in
our  consolidated  statements  of income,  of $66,000 and $590,000 for the three
months ended March 31, 2006 and 2005,  respectively.  The net losses recorded in
2006 reflect changes in the value of our interest rate floor  agreement  entered
into in September 2005, as further  discussed  below. The net losses recorded in
2005  reflect  valuation  changes in the fair value of our fair value hedges and
the underlying hedged liabilities.

Cash Flow Hedges.  We entered into the following  interest rate swap agreements,
designated  as  cash  flow  hedges,   to  effectively   lengthen  the  repricing
characteristics  of certain  interest-earning  assets to  correspond  with their
funding source with the objective of stabilizing cash flow, and accordingly, net
interest income over time:

         >>    During  March 2001,  April 2001,  and July 2003,  we entered into
               interest rate swap agreements of $200.0  million,  $175.0 million
               and $200.0 million notional amount, respectively.  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 2.82%, 2.82% 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 in order to
               appropriately  modify our overall  hedge  position in  accordance
               with our interest rate risk management  program,  and on April 2,
               2006, the remaining  $100.0 million notional amount of these swap
               agreements  matured.  In addition,  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 at March 31, 2006 and  December 31,
               2005 and the amount  payable by us under the swap  agreements was
               $2.7  million and $2.5 million at March 31, 2006 and December 31,
               2005, respectively.



<PAGE>
         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 March 31, 2006 and December 31, 2005 were as follows:
<TABLE>
<CAPTION>

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

         March 31, 2006:
<S>                <C>                                 <C>             <C>             <C>          <C>
             April 2, 2006.........................    $100,000        4.93%           5.45%        $   (10)
             July 31, 2007.........................     200,000        4.90            3.08          (5,547)
                                                       --------                                     -------
                                                       $300,000        4.91            3.87         $(5,557)
                                                       ========        ====            ====         =======

         December 31, 2005:
             April 2, 2006.........................    $100,000        4.43%           5.45%        $   205
             July 31, 2007.........................     200,000        4.40            3.08          (5,296)
                                                       --------                                     -------
                                                       $300,000        4.41            3.87         $(5,091)
                                                       ========        ====            ====         =======
</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, or LIBOR. 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. In February 2005, we
               terminated  the  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 adjustments of the underlying hedged
               liabilities  were recorded as interest expense over the remaining
               weighted average maturity of the underlying hedged liabilities of
               approximately  ten  months.  At  December  31,  2005,  the  basis
               adjustments  associated  with  these swap  agreements  were fully
               amortized.

         >>    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 provided for
               us to receive a fixed rate of interest and pay an adjustable rate
               of interest equivalent to the three-month LIBOR plus 2.30%, 2.55%
               and 2.58%, respectively. The underlying hedged liabilities were a
               portion  of our  subordinated  debentures.  The terms of the swap
               agreements  provided  for us to pay  and  receive  interest  on a
               quarterly basis.  The amounts  receivable and payable by us under
               the swap  agreements  at  December  31,  2005 were  $506,000  and
               $420,000,  respectively.  In May 2005,  we  terminated  the $55.2
               million and $46.0 million  notional  swap  agreements in order to
               appropriately  modify future hedge  positions in accordance  with
               our interest rate risk management program. The resulting $854,000
               basis  adjustment  of  the  underlying  hedged  liabilities,   in
               aggregate,  was being recorded as a reduction of interest expense
               over  the   remaining   maturities  of  the   underlying   hedged
               liabilities,  which ranged from 26 to 28 years at the time of the
               termination.  Effective  February 16,  2006,  we  terminated  the
               remaining $25.0 million  notional swap agreement.  In conjunction
               with this  transaction,  we recorded the  resulting  $1.7 million
               basis  adjustment of the underlying  hedged  liabilities  and the
               remaining  balance of the basis  adjustments  associated with the
               swap  agreements  that  were  terminated  in May  2005,  totaling
               $834,000,   in  our  consolidated   statements  of  income.   The
               recognition of the net basis adjustments on all of the terminated
               fair value  interest rate swap  agreements  resulted in a pre-tax
               loss of $849,000.

Interest  Rate Floor  Agreement.  In  September  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  LIBOR 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 $4,000 and $70,000 at March 31,
2006 and December 31, 2005, respectively.
<PAGE>

         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.
In March 2005, in accordance with our interest rate risk management  program, we
modified  our term  repurchase  agreements  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.  In November  2005, we  terminated a $50.0 million term  repurchase
agreement with a maturity date of August 15, 2006, and simultaneously recognized
a loss of $2.9 million on the sale of  available-for-sale  investment securities
associated  with the termination of the term  repurchase  agreement.  As further
discussed in Note 9 to our Consolidated  Financial  Statements,  on February 14,
2006,  we  terminated  the two $50.0  million term  repurchase  agreements  with
maturity  dates of June 14, 2007, and  simultaneously  recognized a $1.6 million
loss on the sale of $100.0 million of  available-for-sale  investment securities
associated with the termination of the term repurchase agreements.  In addition,
as further  discussed in Note 9 to our  Consolidated  Financial  Statements,  on
March 28, 2006, we terminated the $50.0 million term repurchase agreement with a
maturity date of August 1, 2007, and  simultaneously  recognized a $746,000 loss
on the  sale  of  $50.0  million  of  available-for-sale  investment  securities
associated with the termination of the term repurchase agreement.

Pledged  Collateral.  At March 31, 2006 and  December  31,  2005,  we had a $2.0
million  letter of  credit  issued on our  behalf  to the  counterparty  and had
pledged  investment  securities  available  for sale  with a fair  value of $5.8
million and $5.1 million,  respectively,  in  connection  with our interest rate
swap agreements.  In addition, at December 31, 2005, we had pledged cash of $1.8
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  $563,000  and  ($49,000) at March 31, 2006 and December 31,
2005, respectively.


                       Loans and Allowance for Loan Losses

         Interest and fees on loans,  which  represents the principal  source of
income for First Banks, were 89.2% of total interest income for the three months
ended March 31, 2006, in comparison to 83.9% for the comparable  period in 2005.
Total  loans,  net of  unearned  discount,  increased  $150.5  million  to $7.17
billion, or 76.3% of total assets, at March 31, 2006, compared to $7.02 billion,
or 76.6% of total assets,  at December 31, 2005. The overall  increase in loans,
net of unearned  discount,  in 2006 is primarily  attributable  to internal loan
growth and our  acquisition  of FNBS,  which  provided  loans,  net of  unearned
discount,  of $49.3 million,  partially  offset by the  securitization  of $77.1
million of certain residential mortgage loans and the sale and payoff of certain
of our nonperforming loans that were held for sale at December 31, 2005. The net
increase is attributable to:

         >>    an  increase  of  $126.5  million  in our  real  estate  mortgage
               portfolio  primarily  attributable  to internal growth within our
               loan portfolio and our  acquisitions  completed  during 2006. Our
               acquisition of FNBS provided real estate  mortgage loans of $39.5
               million.   The   securitization   of  $77.1  million  of  certain
               residential  mortgage loans in March 2006 resulted in a change in
               our  asset   structure   from   residential   mortgage  loans  to
               available-for-sale  investment  securities.  Exclusive  of  these
               transactions,   our  portfolio   increased  $164.1  million  from
               internal growth,  largely  attributable to management's  business
               strategy  decision in the third quarter of 2005 to retain certain

<PAGE>

               mortgage loan production in our residential  real estate mortgage
               portfolio,  including 15-year fixed rate, conforming conventional
               adjustable rate mortgages and other similar products;

         >>    an increase of $80.0 million in our real estate  construction and
               development   portfolio   resulting   primarily   from  new  loan
               originations and seasonal  fluctuations on existing and available
               credit  lines,  as well as $3.9 million of loans  provided by our
               acquisition of FNBS; and

         >>    an increase of $38.9  million in our  commercial,  financial  and
               agricultural  portfolio,  primarily attributable to internal loan
               production,  including  $4.8  million  of loans  provided  by our
               acquisition of FNBS; partially offset by

         >>    a $91.6  million  decrease  in our loans held for sale  portfolio
               resulting from the timing of loan sales in the secondary mortgage
               market,  the  sale  of  certain  nonperforming  loans  that  were
               transferred  to our held for sale portfolio on December 31, 2005,
               and the payoff of a single  nonperforming  loan in  January  2006
               that was included in our held for sale  portfolio at December 31,
               2005, as further discussed below.

         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 March 31, 2006 and December 31, 2005:
<TABLE>
<CAPTION>

                                                                                   March 31,      December 31,
                                                                                     2006             2005
                                                                                     ----             ----
                                                                                (dollars expressed in thousands)
         Commercial, financial and agricultural:
<S>                                                                               <C>                  <C>
           Nonaccrual.......................................................     $   18,762            4,937
         Real estate construction and development:
           Nonaccrual.......................................................          3,670           11,137
         Real estate mortgage:
           One-to-four family residential:
              Nonaccrual....................................................          9,941            9,576
              Restructured..................................................             10               10
           Multi-family residential loans:
              Nonaccrual....................................................            719              740
           Commercial real estate loans:
              Nonaccrual....................................................         33,789           70,625
         Lease financing:
           Nonaccrual.......................................................             10               11
         Consumer and installment:
           Nonaccrual.......................................................            197              160
                                                                                 ----------        ---------
                  Total nonperforming loans.................................         67,098           97,196
         Other real estate..................................................          3,288            2,025
                                                                                 ----------        ---------
                  Total nonperforming assets................................     $   70,386           99,221
                                                                                 ==========        =========

         Loans, net of unearned discount....................................     $7,171,283        7,020,771
                                                                                 ==========        =========

         Loans past due 90 days or more and still accruing..................     $    2,211            5,576
                                                                                 ==========        =========

         Ratio of:
           Allowance for loan losses to loans...............................           1.96%            1.93%
           Nonperforming loans to loans.....................................           0.94             1.38
           Allowance for loan losses to nonperforming loans.................         209.00           139.23
           Nonperforming assets to loans and other real estate..............           0.98             1.41
                                                                                 ==========        =========
</TABLE>

         Nonperforming  loans,  consisting  of loans on  nonaccrual  status  and
certain  restructured loans,  decreased to $67.1 million at March 31, 2006, from
$97.2  million at December 31, 2005 and $79.8  million at March 31, 2005.  Other
real estate owned was $3.3  million,  $2.0 million and $1.8 million at March 31,
2006,  December 31, 2005 and March 31,  2005,  respectively.  Our  nonperforming
assets,  consisting of nonperforming loans and other real estate owned, improved
by $28.8 million, or 29.1%, during the first quarter of 2006 to $70.4 million at
March 31, 2006, compared to $99.2 million at December 31, 2005 and $81.6 million
at March 31, 2005. A significant  portion of our  nonperforming  assets includes
nonperforming  loans  associated  with our  acquisition  of CIB Bank in November
2004, which have decreased to $18.2 million, or 27.1% of our total nonperforming
loans at March 31, 2006, from $55.0 million, or 56.6% of our nonperforming loans
at December 31, 2005, and $43.7 million,  or 54.8% of our nonperforming loans at
March  31,  2005.  Nonperforming  loans  were  0.94% of loans,  net of  unearned
discount, at March 31, 2006, compared to 1.38% at December 31, 2005 and 1.30% at
March 31, 2005. Additionally,  loans past due 90 days or more and still accruing
interest  decreased  to $2.2  million at March 31,  2006,  from $5.6  million at

<PAGE>

December  31,  2005  and $8.8  million  at  March  31,  2005.  The  decrease  in
nonperforming  loans and past due loans  during the three months ended March 31,
2006 primarily  resulted from our continued emphasis on improving asset quality,
the  sale  of  certain   nonperforming   loans,  loan  payoffs  and/or  external
refinancing of various  credits.  We had been actively  marketing  approximately
$59.7 million of nonperforming  loans that were transferred to our held for sale
portfolio on December 31, 2005.  In January 2006, we received a payoff on one of
the loans held for sale that had a carrying  value of $12.4  million at December
31, 2005. In conjunction with this transaction, we recognized a loan recovery of
$5.0  million and  interest  and late fees of $2.0  million on the payoff of the
loan.  In March 2006,  we completed  the sale of the  majority of the  remaining
loans held for sale that had a carrying value of approximately $32.5 million, in
aggregate,  at December 31, 2005,  and recorded a pre-tax gain of  approximately
$1.7  million on the sale of these  loans.  We continue  to actively  market the
remaining nonaccrual loans in our held for sale portfolio.  The overall decrease
in our  nonperforming  loans during 2006 was partially offset by the addition of
an $8.9  million  loan in our  southern  California  market  that was  placed on
nonaccrual  status in March 2006 due to deterioration of the financial  position
of the borrower.

         We recorded  net loan  recoveries  of $3.3 million for the three months
ended March 31, 2006,  compared to net loan  charge-offs of $6.6 million for the
comparable period in 2005. Net loan recoveries for 2006 included a loan recovery
of $5.0  million  on the  payoff  of a single  loan,  as  discussed  above.  Our
allowance  for loan  losses was $140.2  million at March 31,  2006,  compared to
$135.3  million at December 31, 2005 and $144.2  million at March 31, 2005.  Our
allowance  for loan losses as a percentage of loans,  net of unearned  discount,
was 1.96% at March 31, 2006, compared to 1.93% at December 31, 2005 and 2.34% at
March 31, 2005.  Our allowance for loan losses as a percentage of  nonperforming
loans was 209.00% at March 31,  2006,  compared to 139.23% at December  31, 2005
and 180.71% at March 31, 2005. 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.
In  addition,   although  we  have  experienced  continued  improvement  in  our
nonperforming  asset levels, we continue our efforts to reduce the overall level
of these assets.

         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  adjustments
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.

         Changes in the  allowance  for loan losses for the three  months  ended
March 31, 2006 and 2005 were as follows:
<TABLE>
<CAPTION>
                                                                                      Three Months Ended
                                                                                           March 31,
                                                                                    ---------------------
                                                                                      2006         2005
                                                                                      ----         ----
                                                                               (dollars expressed in thousands)

<S>                                                                                 <C>           <C>
         Balance, beginning of period...........................................    $135,330      150,707
         Acquired allowances for loan losses....................................         576           --
                                                                                    --------      -------
                                                                                     135,906      150,707
                                                                                    --------      -------
         Loans charged-off......................................................      (3,445)     (12,636)
         Recoveries of loans previously charged-off.............................       6,774        6,083
                                                                                    --------      -------
             Net loan recoveries (charge-offs)..................................       3,329       (6,553)
                                                                                    --------      -------
         Provision for loan losses..............................................       1,000           --
                                                                                    --------      -------
         Balance, end of period.................................................    $140,235      144,154
                                                                                    ========      =======
</TABLE>


<PAGE>


                                    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 FHLB and other borrowings,  including our term
loan and our  revolving  credit line.  The aggregate  funds  acquired from these
sources were $1.71  billion and $1.72 billion at March 31, 2006 and December 31,
2005, 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 March 31, 2006:
<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..........................      $  353,074          187,844           540,918
         Over three months through six months..........         241,554            5,000           246,554
         Over six months through twelve months.........         421,449          162,000           583,449
         Over twelve months............................         251,319           87,800           339,119
                                                             ----------          -------         ---------
              Total....................................      $1,267,396          442,644         1,710,040
                                                             ==========          =======         =========
</TABLE>

         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
March 31, 2006 and December 31, 2005, First Bank's borrowing  capacity under the
agreement was approximately $641.6 million and $743.6 million,  respectively. In
addition, First Bank's borrowing capacity through its relationship with the FHLB
was  approximately  $729.1  million  and $679.3  million  at March 31,  2006 and
December 31, 2005,  respectively.  Exclusive of the FHLB advances outstanding of
$14.8  million  and $39.3  million  at March 31,  2006 and  December  31,  2005,
respectively,  which  represent  advances  assumed in  conjunction  with various
acquisitions,  First  Bank  had  no  amounts  outstanding  under  its  borrowing
arrangement  with the FHLB at March 31, 2006 and December 31, 2005. On March 17,
2006, First Bank prepaid $20.5 million of FHLB advances, as further discussed in
Note 9 to our Consolidated Financial Statements.

         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 March 31,
2006 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......................    $   11,349     18,260     12,422     18,973      61,004
         Certificates of deposit (1)...........     2,581,110    770,153    149,983     14,230   3,515,476
         Other borrowings......................       334,844      2,000     10,800         --     347,644
         Notes payable (1).....................        20,000     75,000         --         --      95,000
         Subordinated debentures (1)...........            --         --         --    257,601     257,601
         Other contractual obligations.........         1,098        206         16         17       1,337
                                                   ----------    -------    -------    -------   ---------
              Total............................    $2,948,401    865,619    173,221    290,821   4,278,062
                                                   ==========    =======    =======    =======   =========
         -------------------
         (1) Amounts exclude the related interest expense accrued on these obligations as of March 31, 2006.
</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.




<PAGE>



                       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 investments in debt and
marketable equity securities that are accounted for under Statement of Financial
Accounting  Standards,  or 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 No. 115 and SFAS No. 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 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.  In June
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.
In November 2005, the FASB issued FASB Staff Position, or FSP, FAS 115-1 and FAS
124-1,  The Meaning of  Other-Than-Temporary  Impairment and 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.  On January 1, 2006,  we  implemented  the
requirements  of FSP FAS 115-1  and FAS  124-1,  which  did not have a  material
effect on our financial condition or results of operations.

         In  December  2003,  the  FASB  issued  FASB   Interpretation  No.  46,
Consolidation of Variable Interest Entities,  an interpretation of ARB No. 51, a
revision to FASB  Interpretation  No. 46,  Consolidation  of  Variable  Interest
Entities,  issued in January 2003.  This  Interpretation  is intended to achieve
more  consistent  application  of  consolidation  policies to variable  interest
entities  and,  thus to improve  comparability  between  enterprises  engaged in
similar  activities  even if some of  those  activities  are  conducted  through
variable interest entities.  The provisions of this Interpretation are effective
for financial statements issued for fiscal years ending after December 15, 2003.
We have  several  statutory  and  business  trusts that were formed for the sole
purpose  of issuing  trust  preferred  securities.  On  December  31,  2003,  we
implemented  FASB  Interpretation  No. 46, as  amended,  which  resulted  in the
deconsolidation of our statutory and business trusts. The implementation of this
Interpretation had no material effect on our consolidated  financial position or
results of operations. Furthermore, in March 2005, the Federal Reserve 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 I capital.  As further  discussed in Note 7 to our
Consolidated  Financial  Statements,  we have  evaluated the impact of the final
rule on our financial  condition and results of  operations,  and determined the
implementation  of the Federal  Reserve's  final rules that will be effective in
March  2009  would  reduce  our  bank  holding  company's  Tier  I  capital  (to
risk-weighted assets) and Tier I capital (to average assets) to 8.52% and 7.77%,
respectively,  as of March 31, 2006. In October 2005,  the Federal  Reserve,  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 ended in
January 2006. We are awaiting  further guidance from the Federal Reserve pending
the outcome of the newly proposed revisions,  and are continuing to evaluate the
proposed changes and their overall impact on our financial condition and results
of operations.

         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  SFAS No. 3 --  Reporting  Accounting  Changes  in
Interim Financial Statements,  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. On January 1, 2006, we implemented  the  requirements  of SFAS No.
154, which did not have a material effect on our financial  condition or results
of operations.
<PAGE>

         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
reporting  considerations.  The final interpretation is expected to be issued in
June 2006 and the  requirements,  as currently  proposed,  would be effective in
fiscal years beginning after December 15, 2006. We are currently  evaluating the
requirements  of the exposure  draft to determine  their impact on our financial
condition and results of operations.

         In March 2006,  the FASB issued SFAS No. 156 - Accounting for Servicing
of  Financial  Assets.  SFAS No.  156,  an  amendment  of FASB  SFAS  No.  140 -
Accounting for Transfers and Servicing of Financial  Assets and  Extinguishments
of Liabilities,  allows mark-to-market accounting for servicing rights resulting
in  reporting  that is similar to fair value hedge  accounting,  but without the
effort and system costs needed to identify  effective  hedging  instruments  and
document  hedging  relationships.  SFAS No. 156 is  effective  for fiscal  years
beginning  after  September  15,  2006.  Early  adoption is  permitted as of the
beginning  of a company's  fiscal  year  unless the  company has already  issued
interim  financial   statements  during  that  fiscal  year.  We  are  currently
evaluating  the  requirements  of SFAS No.  156 to  determine  its impact on our
financial condition and results of operations.



<PAGE>


       ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         At December 31, 2005, 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  6.4% of net interest income,  based on
assets and  liabilities at December 31, 2005. At March 31, 2006, 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, is reflected in our net interest margin for the three
months  ended March 31, 2006 as  compared to the  comparable  period in 2005 and
further  discussed  under  "Management's  Discussion  and  Analysis of Financial
Condition and Results of Operations -- Results of Operations."  During the three
months  ended  March  31,  2006,  our   asset-sensitive   position  and  overall
susceptibility to market risks have not changed materially.  However, prevailing
interest  rates have  continued to increase  during the three months ended March
31, 2006.





<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   disclosure  controls  and  procedures  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
    --------------                      -----------

         4.1      Indenture  between   First   Banks,   Inc.,  as  Issuer,   and
                  Wilmington  Trust  Company,  as Trustee,  dated as of March 1,
                  2006 - filed herewith.

         4.2      Amended  and  Restated  Declaration  of  Trust  by  and  among
                  Wilmington  Trust  Company,  as   Delaware  Trustee,  and  the
                  Institutional  Trustee,  First  Banks, Inc., as  Sponsor,  and
                  Allen H. Blake,   Peter D. Wimmer and  Lisa K.  Vansickle,  as
                  Administrators, dated as of March 1, 2006 - file herewith.

         4.3      Guarantee  Agreement by  and  between  First  Banks,  Inc. and
                  Wilmington  Trust Company,  dated  as of March 1, 2006 - filed
                  herewith.

         4.4      Placement  Agreement by and  among  First Banks,  Inc.,  First
                  Bank  Statutory  Trust  IV and FTN Financial  Capital  Markets
                  and  Keefe, Bruyette & Woods, Inc. as  Placement Agents, dated
                  as of February 16, 2006 - filed herewith.

         4.5      Floating   Rate   Junior   Subordinated   Deferrable  Interest
                  Debenture of First  Banks,  Inc., dated  as of March 1, 2006 -
                  filed herewith.

         4.6      Capital Securities  Subscription  Agreement by and among First
                  Bank   Statutory  Trust  IV,   First  Banks,  Inc.  and  First
                  Tennessee  Bank  National  Association,  dated  as of March 1,
                  2006 - file herewith.

         4.7      Capital Securities  Subscription  Agreement by and among First
                  Bank  Statutory  Trust  IV,  First Banks,  Inc. and  Preferred
                  Term  Securities  XXI, Ltd.,  dated as of March 1, 2006 - file
                  herewith.

         4.8      Capital  Securities  Certificate  P-1 of  First Bank Statutory
                  Trust IV, dated March 1, 2006 - filed herewith.

         4.9      Capital  Securities  Certificate P-2  of  First Bank Statutory
                  Trust IV,  dated  March 1, 2006 - 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:  May 12, 2006

                                           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
                                                   Senior Vice President and
                                                   Chief Financial Officer
                                                   (Principal Financial and
                                                   Accounting Officer)