<PAGE>   1
                                 United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

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

                                   Form 10-Q

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

               For the Quarterly Period Ended September 30, 1996
                          Commission File No.: 0-17703

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


                             First American Bancorp
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

               Alabama                         63-0879472
         ------------------        ------------------------------------
         (State of Alabama)        (I.R.S. Employer Identification No.)

                           251 Johnston Street, S.E.
                             Decatur, Alabama 35601
                    ----------------------------------------
                    (Address of principal executive offices)

                                 (205) 340-7000
                        -------------------------------
                        (Registrant's telephone number)


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

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

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

         Indicate the number of shares outstanding of the registrant's class of
common stock, as of the last practicable date.

<TABLE>
<CAPTION>
       Class                                  Outstanding at September 30, 1996
       -----                                  ---------------------------------
<S>                                                        <C>
Common Stock, $.01 Par Value                               2,263,295
</TABLE>

The total number of pages in this report is 11.
<PAGE>   2
First American Bancorp and  Subsidiary

                                   Form 10-Q

                                     Index

<TABLE>
<CAPTION>
Part I                    Financial Information                                          Page No.
-------------------------------------------------------------------------------------------------
<S>                       <C>                                                                 <C>
Item 1                    Consolidated Statements of Condition as of
                          September 30, 1996, September 30, 1995, and
                          December 31, 1995                                                    3

                          Consolidated Statements of Income for the
                          Three Month Periods Ended September 30, 1996
                          and September 30, 1995 and for the Nine Month
                          Periods Ended September 30, 1996 and
                          September 30, 1995                                                   5

                          Consolidated Statements of Cash Flows for
                          the Nine Month Periods Ended September 30, 1996
                          and September 30, 1995                                               6

                          Notes to Consolidated Financial Statements                           7

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


Part II                   Other Information
-----------------------------------------------------------------------------
Item 1                    Legal Proceedings                                                   10

Item 2                    Changes in Securities                                               10

Item 3                    Defaults upon Senior Securities                                     10

Item 4                    Submission of Matters to a Vote of Security Holders                 10

Item 5                    Other Information                                                   10

Item 6                    Exhibits and Reports on Form 8-K                                    11

                          Signatures                                                          11
</TABLE>
<PAGE>   3
First American Bancorp and Subsidiary
Consolidated Statements of Condition
As of September 30, 1996 and 1995 and December 31, 1995


<TABLE>
<CAPTION>
                                                                           September 30,                   December 31,
Assets                                                               1996                 1995                 1995
                                                                 -------------------------------------------------------
<S>                                                              <C>                  <C>                   <C>
Cash and due from banks                                          $  9,275,349         $  8,715,171          $  9,434,479
Earning assets:
  Interest bearing deposits in other banks                            124,045              110,113               123,362
  Federal funds sold                                                                     3,275,000
  Securities available for sale
U.S. Treasury securities and obligations of
  other U.S. Government agencies and
   corporations                                                     6,437,221           10,402,660            13,462,088
Obligations of states and political subdivisions                   11,105,349           11,888,105            10,335,454
 Mortgage backed securities                                        11,411,427           18,165,503            16,942,765
Other securities                                                    1,614,574              879,206               823,976
                                                                 -------------------------------------------------------

        Total securities available for sale                        30,568,571           41,335,474            41,564,283
Mortgage loans held for sale,
  net of discount                                                     976,835              643,713               563,749
Loans, net of unearned income                                     168,266,712          127,069,152           127,053,081
Less : Allowance for loan losses                                   (1,619,144)          (1,304,898)           (1,512,454)
                                                                 -------------------------------------------------------

      Net loans                                                   166,647,568          125,764,254           125,540,627
                                                                 -------------------------------------------------------

Total earning assets                                              198,317,019          171,128,554           167,792,021

Premises and equipment, net                                         7,997,684            6,993,732             7,219,571
Other real estate                                                                           36,000                36,000
Accrued interest receivable                                         1,023,924            1,236,187             1,180,255
Deferred Tax Benefit                                                1,066,825              672,857               852,384
Other assets                                                        1,831,730              717,806               861,750
                                                                 -------------------------------------------------------

   Total Assets                                                  $219,512,531         $189,500,307          $187,376,460
                                                                 =======================================================
</TABLE>
<PAGE>   4
<TABLE>
<CAPTION>
                                                                           September 30,                   December 31,
Liabilities and Shareholders' Equity                                 1996                 1995                 1995
                                                                 -------------------------------------------------------
<S>                                                              <C>                  <C>                   <C>
  Deposits:
    Noninterest-bearing demand                                   $ 24,563,203         $ 19,334,026          $ 18,152,331
    Interest-bearing demand                                        63,369,250           71,094,769            69,491,765
    Certificates of Deposit $100,000 and over                      24,725,347           21,289,506            19,479,736
    Other time and savings                                         66,573,942           56,482,066            58,238,886
                                                                 -------------------------------------------------------

     Total deposits                                               179,231,742          168,200,367           165,362,718

  Federal funds purchased                                           4,775,000                                    825,000
  Current portion long term debt                                      105,000            1,038,889
  Long term debt                                                   12,500,000              105,000               105,000
  Capital lease obligation                                            145,114              168,767               163,030
  Accrued expenses and other liabilities                              981,507              804,154               965,364
                                                                 -------------------------------------------------------

     Total Liabilities                                           $197,738,363         $170,317,177          $167,421,112

Shareholders' equity:
  Preferred stock, par value $.01 per share
   Authorized - 400,000 shares; none issued

  Common stock, par value $.01 per share
   Authorized - 10,000,000 shares at September 30, 1996 and
   2,500,000 shares at September 30,1995 and at December
   31, 1995; issued and outstanding 2,263,295 shares,
   2,251,791  shares and 2,251,791 shares,
    respectively                                                       22,633               20,471                20,471
  Surplus                                                          10,914,658           10,728,433            10,734,272
  Undivided profits                                                11,441,780            9,058,021             9,680,344
  Unrealized loss on securities, available
    for sale, net of tax                                             (604,903)            (623,975)             (479,739)
                                                                 -------------------------------------------------------

     Total Shareholders' Equity                                    21,774,168           19,183,130            19,955,348
                                                                 -------------------------------------------------------

Total Liabilities and Shareholders' Equity                       $219,512,531         $189,500,307          $187,376,460
                                                                 =======================================================
</TABLE>

See notes to consolidated financial statements.
<PAGE>   5
First American Bancorp and Subsidiary
Unaudited Consolidated Statements of Income
For the three month periods and the nine month periods ended September 30,
1996, and September 30, 1995


<TABLE>
<CAPTION>
                                                 Three Months Ended September 30,   Nine Months Ended September 30,
                                                      1996            1995              1996             1995
                                                   ----------      ----------        -----------      -----------
<S>                                                <C>             <C>               <C>              <C>
Revenue from earning assets:
  Interest and fees on loans                       $4,343,390      $3,230,478        $11,502,213      $ 9,285,457
  Interest on investment securities:
    Taxable                                           347,589         395,486          1,205,614        1,158,773
    Exempt from Federal income tax                    149,010         193,903            437,707          651,561
  Interest on Federal funds sold and
    interest-bearing deposits in
    other banks                                         2,030          38,735             39,920           68,833
                                                   ----------      ----------        -----------      -----------

   Total revenue from earning assets                4,842,019       3,858,602         13,185,454       11,164,624

Interest expense:
  Interest on deposits                              1,767,657       1,858,650          5,431,568        5,226,974
  Interest on long term debt and
    Federal funds purchased                           291,746          55,944            366,565          277,368
  Interest on obligations under
    Capitalized leases                                  2,983           3,450              9,309           10,682
                                                   ----------      ----------        -----------      -----------

Total interest expense                              2,062,386       1,918,044          5,807,442        5,515,024
                                                   ----------      ----------        -----------      -----------

Gross interest margin                               2,779,633       1,940,558          7,378,012        5,649,600
Provision for loan losses                             215,312         143,619            441,525          340,919
                                                   ----------      ----------        -----------      -----------

    Net interest margin                             2,564,321       1,796,939          6,936,487        5,308,681

Noninterest revenues:
  Service charges on deposits                         266,524         220,986            796,275          625,330
  Other operating revenues                            165,318         134,674            452,024          403,187
  Net securities gains (losses)                       (28,166)          9,457            (41,918)           7,861
                                                   ----------      ----------        -----------      -----------

    Total noninterest revenues                        397,676         365,117          1,206,381        1,036,378

Noninterest expenses:
  Salaries and employee benefits                    1,118,148         822,442          3,084,920        2,421,025
  Occupancy, furniture and equipment                  346,504         225,320          1,047,311          650,798
  Other operating expenses                            517,576         385,196          1,418,403        1,271,093
                                                   ----------      ----------        -----------      -----------

    Total noninterest expenses                      1,982,229       1,432,958          5,550,634        4,342,916

     Income before income taxes                       979,768         729,098          2,592,234        2,002,143

Provision for income taxes                            325,062         214,190            822,901          577,276
                                                   ----------      ----------        -----------      -----------
    Net income                                     $  654,706      $  514,908        $ 1,769,333      $ 1,424,867
                                                   ==========      ==========        ===========      ===========

Net income per share based on weighted average
  number of shares outstanding                     $     0.29      $     0.25        $      0.79      $      0.71
Weighted average number of shares outstanding       2,282,451       2,047,083          2,254,262        2,015,972
</TABLE>

See notes to consolidated financial statements.
<PAGE>   6
First American Bancorp and Subsidiary
Consolidated Statements of Cash Flows
For the nine month periods ended September 30, 1996 and September 30, 1995

<TABLE>
<CAPTION>
                                                                               1996                  1995
                                                                          ------------            ------------
<S>                                                                       <C>                     <C>
Net cash provided by operating activities                                 $  1,205,420            $  3,275,054

Cash flows from investing activities:
  Proceeds from sale of securities available for sale                       13,989,412               9,547,252
  Proceeds from the maturity of securities available for sale                3,182,401               1,603,647
  Purchase of securities available for sale                                 (6,218,019)            (10,474,067)
  Net loans made to customers                                              (41,641,521)             (6,929,716)
  Capital expenditures                                                      (1,153,557)               (674,670)
  Proceeds from sale of other real estate                                       33,767                  53,040
                                                                          ------------            ------------

     Cash flows used by investing activities                               (31,807,517)             (6,874,514)

Cash flows from financing activities:
  Net increase (decrease) in demand deposit accounts                           288,357              (4,570,059)
  Net increase (decrease) in certificates of deposit
    and other time and savings deposits                                     13,580,668              14,933,517
  Net increase (decrease) in Federal funds purchased                         3,950,000
  Proceeds from issuance of debt                                            12,500,000
  Payment of capital lease obligation                                          (17,916)                (16,542)
  Repayment of long-term debt                                                                       (5,425,000)
  Proceeds from issuance of common stock                                       145,867               1,350,722
  Distribution for fractional shares                                            (3,326)                 (1,506)
                                                                          ------------            ------------

    Cash flows provided by financing activities                             30,443,650               6,271,132

Net increase (decrease) in cash and cash equivalents                          (158,447)              2,671,672
Cash and cash equivalents at beginning of period                             9,557,841               9,428,612
                                                                          ------------            ------------

Cash and cash equivalents at end of period                                $  9,399,394            $ 12,100,284
Supplemental disclosure of noncash financing activity:
  The Company paid a 10% stock dividend to shareholders of record
  on March 27, 1996. The Company also effected a stock split in the
  form of a 50% stock dividend on June 30, 1995.
</TABLE>





See notes to consolidated financial statements.
<PAGE>   7
                     First American Bancorp and Subsidiary

                   Notes to Consolidated Financial Statements

                          September 30, 1996 and 1995


Note 1 - Basis of Presentation

         In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary for a fair presentation.

         The accounting policies followed by the Company are set forth in Note
1 of the Company's financial statements contained in the Annual Report to
Shareholders for the year ended December 31, 1995.

         The condensed consolidated financial statements and notes are
presented as permitted by Form 10-Q, and do not contain certain information
included in the Company's audited financial statements and notes for the year
ended December 31, 1995.


Note 2 - Results of Operations

         The results of operations for the nine months ended September 30, 1996
and 1995 are not necessarily indicative of the results to be expected for the
full year.


Note 3 - Stock Dividend

         Earnings per weighted average number of shares outstanding in 1996
reflect a 10% stock split effected in the form of a stock dividend paid to
shareholders on April 2, 1996.  Earnings per weighted average number of shares
outstanding in 1995 reflect a 50% stock dividend paid to shareholders on June
30, 1995 and a 10% stock split effected in the form of a stock dividend to
shareholders on April 2, 1996.


Note 4 - Statement of Cash Flows

         For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.

Note 5 - Adoption of Statement of Financial Accounting Standards

         The Company adopted Statement of Financial Accounting Standards (SFAS)
Number 121, Accounting for the Impairment of Long-Lived Assets to be Disposed
Of on January 1, 1996. SFAS Number 121 requires that long-lived assets and
certain identifiable intangibles be reviewed for impairment whenever events or
circumstances indicate that the carrying amount of the assets may not be
recoverable. The adoption of SFAS Number 121 did not result in any adjustments
to the Company's earnings during the nine months ended September 30, 1996.

         Statement of Financial Accounting Standards (SFAS) Number 123,
Accounting for Stock-Based Compensation defines a fair value based method of
accounting for an employee stock option or similar equity instrument. However,
SFAS 123 allows an entity to continue to measure compensation costs for those
plans using the intrinsic value based method of accounting prescribed by APB
Opinion Number 25, Accounting for Stock Issued to Employees. The Company has
elected to continue to measure the compensation cost for their stock option
plans under the provisions of APB Opinion 25. The Adoption of SFAS 123 did not
result in any adjustments to the Company's earnings during the nine months
ended September 30, 1996.
<PAGE>   8
Note 6 -  Investment Securities Classifications

         The Company transferred securities with an amortized cost of $ 23.6
million from the held-to-maturity classification to the available-for-sale
classification effective August 1, 1995.  The transferred securities had an
estimated fair value of $23.2 million at the date of transfer, resulting in an
increase in the unrealized loss on securities available for sale, net of
deferred tax benefit of $197,000.  The Company transferred the securities from
the held-to-maturity classification to the available-for-sale classification to
provide additional flexibility in managing the Company's liquidity and interest
rate risk.  Currently the Company has no securities classified as held to
maturity.


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

         The following discussion is presented to aid in an understanding of
the Company's financial condition and results of operations for the third
quarter of 1996.

         The Company reported earnings of $655,000 during the third quarter of
1996 compared with $515,000 during the third quarter of 1995.  This reflected a
27.2% increase.  Net income per share during the third quarter of 1996 was $.29
compared to $.25 the third quarter of 1995.  The earnings per share in 1995
have been restated to reflect a 10% stock split effected in the form of a stock
dividend paid in 1996.


DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDER'S EQUITY

         Total assets increased 15.8% to $219.5 million at September 30, 1996
from $189.5 million at September 30, 1995, and 17.1% from $187.4 million at
December 31, 1995.  This increase was a result of the 32.4% increase in loans,
net of unearned income, which was partially offset by a 25.9% decrease in
securities.

         Securities available for sale decreased to $30.6 million designated at
September 30, 1996 from $41.3 million at September 30, 1995, a 25.9% decrease.
The decrease in the portfolio was primarily to fund the Company's loan growth
and the departure of higher cost public deposits as discussed below.

         At September 30, 1996, the Bank holds the following types of
structured notes and derivatives in its investment portfolio: Step-up bonds,
dual index notes, and collateralized mortgage obligations.  Liquidity, interest
rate risk, yield, and extension risk are all considerations in holding these
types of securities.  The Bank periodically evaluates these securities to
determine the effect that various interest rate changes has on the market value
of these securities.  The Bank understands that changing interest rates impact
the market value of the security and its average life.  The duration of these
securities are monitored in relation to the overall portfolio.  This evaluation
also addresses the possible impact on the Bank's earnings and capital resulting
form rate changes.  The potential carrying amount recoverability is also
reviewed on a regular basis.  The Bank holds no securities whose ultimate
principal redemption would be less than par.

         Loans, net of unearned income, grew to $168.3 million at September 30,
1996 from $127.1 million at September 30, 1995, or 32.4% as a result of strong
loan demand in the first three quarters in 1996.  During the first three
quarters of 1996 loans, net of unearned income, increased to $168.3 million
from $127.1 million at December 31, 1995, a 32.4% increase.

         Reserve for loan losses increased 23.1% to $1.6 million at September
30, 1996 from $1.3 million at September 30, 1995.  Loan loss reserve as a
percent of loans, net of unearned income was 0.96% at September 30, 1996,
compared to 1.03% at September 30, 1995 and 1.19% at December 31, 1995.  The
loss reserve appears to be adequate at this time when the Bank's historical low
loan loss ratio is considered.

         Bank premises and equipment increased to $8.0 million at September 30,
1996 from $7.0 million at September 30, 1995 primarily as a result of the
opening of the Madison, Alabama branch in December 1995 and the acquisition of
the Ardmore, Alabama branch March 15, 1996. Bank premises and equipment
increased 10.8% from December 31, 1995.
<PAGE>   9
         Total deposits at September 30, 1996 were $179.2 million compared with
$168.2  million a year earlier, reflecting a 6.5% increase. Total deposits
increased 8.3% from $165.4 million at December 31, 1995 to $179.2 million at
September 30, 1996. Interest bearing demand deposits decreased $6.1 million at
September 30, 1996 from December 31, 1995 due to the planned departure of
competitively bid public funds bearing a high interest rate. The departure of
these higher cost public funds has contributed to the improvement in the banks
net interest margin. At September 30, 1996, Federal Funds purchased were $4.8
million compared to Federal Funds sold of $3.3 million at September 30, 1995.
At September 30, 1996, the Company  had $12.5 million in borrowings from the
Federal Home Loan Bank (FHLB) compared with $1.0 million due at September 30,
1995. The $12.5 million FHLB debt has an interest rate of one month LIBOR
(London Interbank offered rate) minus three basis points, 5.4505% at September
30, 1996 and matures June 5, 1998. The increase in Federal Funds purchased and
Federal Home Loan Bank borrowings is due primarily Company's strong loan
demand.

         Shareholders' equity increased to $21.8 million at September 30, 1996,
an 13.5% increase from $19.2 million September 30, 1995. Shareholders' equity
increased 9.0% from $20.0 million at December 31, 1995.  The increase from
December 31, 1995 was due to the Company's net income of $1.8 million in the
nine months ended September 30, 1996.  Partially offsetting the net income was
the mark-to-market adjustment for specific securities designated as available
for sale in accordance with FASB 115 of $605,000 at September 30, 1996, a
decrease of $125,000 from $480,000 at December 31, 1995. The mark-to-market
adjustment decreased $19,000 from September 30, 1995.

         At September 30, 1996, the equity capital to asset ratio was 9.9%.  At
September 30, 1995, this ratio was 10.1%; and at December 31, 1995, it was
10.6%. The current risk based capital ratios well exceed the risk based capital
guidelines established by banking regulators as illustrated below:

<TABLE>
<CAPTION>
                                                            Minimum Regulatory
                                    At September 30, 1996       Requirements
                                    ---------------------   ------------------
         <S>                                <C>                 <C>
         Risk-based capital:
         
            Tier I capital ratio            12.51%                  4.00%

            Total capital ratio             13.43%                  8.00%
         
            Leverage Ratio                   9.86%              3.00 to 5.00%
</TABLE>

ASSET AND LIABILITY MANAGEMENT, LIQUIDITY AND CAPITAL RESOURCES

         Through its asset liability management plan, management maintains
adequate liquidity to satisfy the Company's day to day cash flow requirements
and has available adequate liquidity sources to satisfy seasonal fluctuations.

RESULTS OF OPERATIONS

         During the third quarter of 1996 earnings were $655,000, compared with
third quarter earnings during 1995 of $515,000, a 27.2% increase, which
resulted primarily from an improved interest margin offset by increased
noninterest expenses.

         For the three month period ending September 30, 1996 gross interest
margin improved $0.9 million or  47.4% to $2.8 million  compared to $1.9
million at September 30, 1995.  When compared with the three month period ended
September 30, 1995, the changes in the volume and mix of earning assets and
interest-bearing liabilities as well as the current rate environment helped
improve the gross interest margin during the third quarter of 1996.

         Interest and fees on loans increased $1,113,000 or 34.5%, due to
growth in loan volume during the third quarter.  Interest on investment
securities decreased 15.7% or $93,000 as a result of decreased volume.
<PAGE>   10
         The decrease in volume of interest bearing deposits resulted
in a decrease in deposit interest expense of $91,000 or 4.9%.

         The provision for loan losses increased by $72,000 during the third
quarter of 1996 when compared with the third quarter of 1995.  With the ratio
of the reserve for loan losses to loans net of unearned income at  September
30, 1996 of 0.96%, management feels that this allocation to loan loss reserve
provides an adequate reserve to support the Bank's continued loan growth as
well as the risk of future losses.

         Total noninterest revenues during the third quarter of 1996 increased
$33,000, or 9.0% primarily as a result of increased service charges on deposit
accounts.

         Total noninterest expenses during the third quarter of 1996 increased
$549,000, or 38.3% due to increases in salaries and employee benefits, other
operating expenses, and occupancy, furniture and equipment expenses.

         Income before income taxes increased 34.4% or $251,000 primarily due
to improved gross interest margin.  Income tax expense for the third quarter of
1996 compared to 1995 increased $111,000, or 51.9% as a result of increased
before tax income.



                                    PART II



                           ITEM 1 - LEGAL PROCEEDINGS

None.


                         ITEM 2 - CHANGES IN SECURITIES

None.


                    ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None.


          ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.


                           ITEM 5 - OTHER INFORMATION

None.
<PAGE>   11
                   ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K


            Exhibit 27  Financial Data Schedule (for SEC use only)


         On August 28, 1996, the Company filed a Form 8-K reporting a change in
the Company's independent auditors by the Company's board of Directors
effective August 27, 1996.



                                   SIGNATURES

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

                                        First American Bancorp




Date:  November 13, 1996                By /s/ Dan M. David
                                           -------------------------------------
                                           Dan M. David
                                           Chairman and Chief Executive Officer


Date:  November 13, 1996                By /s/ Alfred E. Cheatham, Jr.
                                           -------------------------------------
                                           Alfred E. Cheatham, Jr.  
                                           Vice President
                                           and Chief Financial Officer