8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

July 30, 2010

Date of Report (Date of earliest event reported)

FIRST BANKS, INC.

(Exact name of registrant as specified in its charter)

MISSOURI	0-20632	43-1175538
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

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

(314) 854-4600

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

First Banks, Inc.

Table of Contents

		Page
Item 2.02	Results of Operations and Financial Condition	1
Item 9.01	Financial Statements and Exhibits	1
Signature		2

Item 2.02 Results of Operations and Financial Condition.

On July 30, 2010, First Banks, Inc. issued a press release announcing its financial results for the three and six months ended June 30, 2010, a copy of which is attached hereto as Exhibit 99 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit
Number	Description
99	Press Release issued on July 30, 2010 – filed herewith.

1

SIGNATURE

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 hereunto duly authorized.

		FIRST BANKS, INC.
Date:	July 30, 2010	By:	/s/	Terrance M. McCarthy
				Terrance M. McCarthy
				President and Chief Executive Officer

2

EX-99

Exhibit 99

FIRST BANKS, INC.

ST. LOUIS, MISSOURI

NEWS RELEASE

Contacts:	Terrance M. McCarthy	Lisa K. Vansickle
	President and	Executive Vice President and
	Chief Executive Officer	Chief Financial Officer
	First Banks, Inc.	First Banks, Inc.
	(314) 854-5400	(314) 854-5400

Traded:	NYSE
Symbol:	FBSPrA – (First Preferred Capital Trust IV, an affiliated trust of First Banks, Inc.)

FOR IMMEDIATE RELEASE:

First Banks, Inc. Announces Second Quarter 2010 Results

St. Louis, Missouri, July 30, 2010.  First Banks, Inc. (“First Banks” or the “Company”), the holding company of First Bank, today announced a net loss of $64.9 million for the three months ended June 30, 2010 as compared to a net loss of $93.3 million for the three months ended June 30, 2009. For the six months ended June 30, 2010, First Banks recorded a net loss of $92.5 million as compared to a net loss of $182.7 million for the six months ended June 30, 2009. The net loss for the three and six months ended June 30, 2010 includes a provision for loan losses of $83.0 million and $125.0 million, respectively, as compared to $112.0 million and $220.0 million for the three and six months ended June 30, 2009, respectively .

Terrance M. McCarthy, President and Chief Executive Officer of First Banks, said, “We are encouraged with the continued improvement in our financial results as compared to the prior year. While we continue to experience losses primarily due to asset quality related issues in our construction and commercial real estate loan portfolios, we were able to increase First Bank’s regulatory capital ratios, improve our overall liquidity position and significantly decrease the level of our nonaccrual loans during the second quarter of 2010. These accomplishments represent continued achievement of our business planning strategies and will significantly assist us as we emerge out of the current economic downturn.”

Key Points for the Quarter:

· Maintained First Bank’s regulatory capital ratios at “well capitalized” levels, reflecting improvement in each of the regulatory capital ratios, including an increase in First Bank’s Total Capital Ratio to 12.11% at June 30, 2010 from 11.53% at March 31, 2010 and 10.39% at December 31, 2009. Regulatory capital ratios for First Bank and First Banks, Inc. are summarized in the table below:

	June 30,			March 31,			June 30,
	2010			2010			2009
First Bank:
Total Capital Ratio		12.11	%		11.53	%		10.17	%
Tier 1 Ratio		10.82			10.25			8.89
Leverage Ratio		7.65			7.08			7.79
First Banks, Inc.:
Total Capital Ratio		9.46			10.52			10.72
Tier 1 Ratio		4.73			5.26			6.73
Leverage Ratio		3.34			3.63			5.89

· Reduced the level of nonaccrual loans by $166.3 million at June 30, 2010 as compared to March 31, 2010. Certain asset quality results as of or for the quarterly periods are summarized in the following table:

	June 30,			March 31,		June 30,
	2010			2010		2009
Provision for loan losses	$	83,000			42,000		112,000
Nonaccrual loans		491,596			657,917		468,630
Performing troubled debt restructurings		63,880			55,493		32,465
Other real estate and repossessed assets		188,228			135,942		158,130
Potential problem loans		418,695			349,279		431,724
Net charge-offs		91,031			58,127		81,234
Allowance for loan losses as a percent of loans, net of unearned discount		4.33	%		3.97		3.51

· Maintained cash and cash equivalents at $1.47 billion and unpledged investment securities at $631.3 million at June 30, 2010 resulting in total available liquidity in excess of $2.10 billion.

· Sold 144 other real estate properties during the quarter ended June 30, 2010 resulting in the receipt of gross proceeds of $26.4 million and the recording of a net gain on the sale of the properties of $2.0 million.

· Completed the sale of $96.7 million of loans and $492.2 million of deposits in the Company’s Texas region on April 30, 2010, resulting in a pre-tax gain on sale of approximately $5.0 million and a total regulatory capital benefit of approximately $35.0 million.

· Announced the signing of two agreements providing for the sale of approximately $150.0 million of loans and $375.0 million of deposits associated with the Company’s Peoria, Galesburg, Quincy, Bartonville, Knoxville, Bloomington and Jacksonville, Illinois branches.  The transactions, which are subject to regulatory approvals and certain closing conditions, are expected to be completed during the third quarter of 2010.

Mr. McCarthy continued, “Throughout the current economic downturn, we have been focused on achieving the objectives outlined in our Capital Optimization Plan in an effort to maintain First Bank’s regulatory capital ratios in excess of “well capitalized” levels. As a result of these successful initiatives, we have built First Bank’s total risk-based capital ratio to 12.11% at June 30, 2010 in comparison to 10.17% at June 30, 2009. Over the course of the next several quarters, we plan to maintain a strong focus on certain corporate initiatives while more specifically focusing on underlying objectives for restoring our profitability by exiting problem credit relationships, deploying excess liquidity into higher-yielding loans and investment securities and focusing on becoming a more efficient, smaller company.”

Net Interest Income:

· The net interest margin was 3.06% for the second quarter of 2010, in comparison to 2.76% for the first quarter of 2010 and 3.16% for the second quarter of 2009. The net interest margin continues to be negatively impacted by a high average balance of short-term investments, which was $1.24 billion, $1.95 billion and $522.9 million for the second quarter of 2010, first quarter of 2010 and second quarter of 2009, respectively. These short-term investments are currently yielding 25 basis points. The high average balance of short-term investments for the first and second quarters of 2010 was necessary to fund the sales of the Company’s Chicago and Texas regions which utilized short-term investments of approximately $832.5 million and $352.9 million, respectively, as well as the Company’s desire to maintain significant on balance sheet liquidity in the current economic downturn.

· The average yield on loans was 5.16% for the second quarter of 2010, in comparison to 5.12% for the first quarter of 2010 and 5.27% for the second quarter of 2009.

· The average cost of interest-bearing deposits was 1.14% for the second quarter of 2010, in comparison to 1.26% for the first quarter of 2010 and 1.97% for the second quarter of 2009.

Provision for Loan Losses:

· The provision for loan losses was $83.0 million for the second quarter of 2010, in comparison to $42.0 million for the first quarter of 2010 and $112.0 million for the second quarter of 2009.  The decrease in the provision for loan losses for the second quarter of 2010 as compared to the second quarter of 2009 was primarily attributable to less severe asset quality migration. The increase in the provision for loan losses for the second quarter of 2010 as compared to the first quarter of 2010 was primarily attributable to higher net charge-offs and potential problem loans.

· Net loan charge-offs were $91.0 million for the second quarter of 2010, compared to $58.1 million for the first quarter of 2010 and $81.2 million for the second quarter of 2009.

· Nonaccrual loans decreased $166.3 million during the second quarter of 2010 and $199.5 million during the first six months of 2010 to $491.6 million at June 30, 2010 compared to $657.9 million at March 31, 2010 and $691.1 million at December 31, 2009.

Noninterest Income:

· Noninterest income was $26.4 million for the second quarter of 2010, in comparison to $27.0 million for the first quarter of 2010 and $27.2 million for the second quarter of 2009.

· Noninterest income for the second quarter of 2010 includes a gain on sale of the Company’s Texas region of approximately $5.0 million, net of a reduction in goodwill and intangible assets of $20.0 million allocated to the Texas region. Noninterest income for the first quarter of 2010 includes a gain on sale of the Company’s Chicago region of approximately $8.4 million, net of a reduction in goodwill and intangible assets of $26.3 million allocated to the Chicago region.

Noninterest Expense:

· Noninterest expense decreased to $70.9 million for the second quarter of 2010 compared to $76.8 million for the first quarter of 2010 and $83.5 million for the second quarter of 2009.

· Noninterest expense includes expenses on other real estate properties of $9.6 million, $7.9 million and $3.0 million for the second quarter of 2010, first quarter of 2010 and second quarter of 2009, respectively. Noninterest expense includes FDIC insurance assessments of $6.5 million, $6.1 million and $10.0 million for the second quarter of 2010, first quarter of 2010 and second quarter of 2009, respectively.

Cash and Cash Equivalents:

· Cash and cash equivalents were $1.47 billion at June 30, 2010 and March 31, 2010, in comparison to $2.53 billion at December 31, 2009. During the second quarter of 2010, the Company funded the sale of its Texas region, resulting in a decrease in cash of approximately $352.9 million, and increased its investment securities portfolio by $106.6 million. These cash outflows were offset by substantial loan payoffs and sales of other real estate during the second quarter of 2010 thereby resulting in cash and cash equivalents remaining at the same level as March 31, 2010.

Investment Securities:

· Investment securities increased to $995.5 million at June 30, 2010 from $888.9 million at March 31, 2010 and $541.6 million at December 31, 2009. The Company is utilizing a portion of its higher level of cash and cash equivalents to fund gradual and planned increases in its investment securities portfolio.

Loans:

· Loans, net of unearned discount, decreased to $5.58 billion at June 30, 2010 from $6.30 billion at March 31, 2010 and $7.04 billion at December 31, 2009.  The reduction in loan balances for the second quarter of 2010 reflects the sale of approximately $96.7 million of loans in the Company’s Texas region, customer repayments, transfers to other real estate and loan charge-offs.

· One-to-four family construction loans decreased to $462.3 million at June 30, 2010 from $645.5 million at March 31, 2010 and $729.8 million at December 31, 2009.

Deposits and Other Borrowings:

· Deposits were $7.01 billion at June 30, 2010, in comparison to $7.52 billion at March 31, 2010 and $8.81 billion at December 31, 2009. The decrease in deposits of $513.5 million during the second quarter of 2010 was almost solely attributable to the sale of approximately $492.2 million of deposits in the Company’s Texas region.

· Other borrowings were $577.8 million at June 30, 2010, in comparison to $570.8 million at March 31, 2010 and $777.0 million at December 31, 2009. The decrease during the first six months of 2010 primarily resulted from the payoff of $200.0 million of Federal Home Loan Bank advances during the first quarter of 2010.

FINANCIAL SUMMARY

(dollars expressed in thousands, except per share data)

(UNAUDITED)

SELECTED OPERATING DATA

	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
	2010			2010			2009			2010			2009
Interest income	$	85,133			91,831			117,262			176,964			236,801
Interest expense		22,641			27,897			42,090			50,538			90,193
Net interest income		62,492			63,934			75,172			126,426			146,608
Provision for loan losses		83,000			42,000			112,000			125,000			220,000
Net interest (loss) income  after provision for loan losses		(20,508	)		21,934			(36,828	)		1,426			(73,392	)
Noninterest income		26,445			26,983			27,162			53,428			52,662
Noninterest expense		70,864			76,818			83,514			147,682			164,364
Loss before provision for income taxes		(64,927	)		(27,901	)		(93,180	)		(92,828	)		(185,094	)
Provision for income taxes		48			105			2,972			153			2,458
Net loss		(64,975	)		(28,006	)		(96,152	)		(92,981	)		(187,552	)
Less: net loss attributable to noncontrolling interest in subsidiaries		(27	)		(437	)		(2,833	)		(464	)		(4,827	)
Net loss attributable to First Banks, Inc.	$	(64,948	)		(27,569	)		(93,319	)		(92,517	)		(182,725	)
Basic and diluted loss per common share	$	(2,958.79	)		(1,376.26	)		(4,154.41	)		(4,335.04	)		(8,145.81	)

SELECTED FINANCIAL DATA

	June 30,		December 31,		June 30,
	2010		2009		2009
Total assets	$	8,475,695		10,581,996		10,395,665
Cash and cash equivalents		1,466,807		2,525,312		873,479
Investment securities		995,487		541,557		640,456
Loans, net of unearned discount		5,584,687		7,038,920		8,197,048
Allowance for loan losses		241,969		266,448		287,317
Goodwill and other intangible assets		142,454		191,674		305,073
Deposits		7,005,183		8,805,522		8,709,345
Other borrowings		577,831		777,041		439,758
Subordinated debentures		353,943		353,905		353,866
Stockholders’ equity		434,056		522,380		794,702
Nonperforming assets		679,824		818,015		626,760

SELECTED FINANCIAL RATIOS

	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
	2010			2010			2009			2010			2009
Net interest margin		3.06	%		2.76	%		3.16	%		2.90	%		3.08	%
Yield on loans		5.16			5.12			5.27			5.14			5.29
Cost of interest-bearing deposits		1.14			1.26			1.97			1.20			2.11
Loan-to-deposit ratio		79.72			83.75			94.12			79.72			94.12

About First Banks

First Banks had assets of $8.48 billion at June 30, 2010 and currently operates 165 branch banking offices in California, Florida, Illinois and Missouri. Through its subsidiary bank, First Bank, the Company offers a broad range of financial products and services to consumers, businesses and other institutions.  Visit First Banks on the web at www.firstbanks.com.

# # #

Financial Disclosures

The financial disclosures presented in this press release reflect numeric disclosures prior to the categorical reclassifications for Discontinued Operations. The Discontinued Operations reclassifications and related disclosures may be found in First Banks’ Annual Report on Form 10-K as of and for the year ended December 31, 2009, as filed with the Securities and Exchange Commission (“SEC”) and available at the SEC’s internet site (http://www.sec.gov), and such disclosures will also be presented in First Banks’ Quarterly Report on Form 10-Q as of and for the three and six months ended June 30, 2010 upon filing with the SEC in August 2010.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements about First Banks’ plans, objectives, estimates or projections with respect to our future financial condition, expected or anticipated revenues with respect to our results of operations and our business, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of First Banks’ management and are subject to significant risks and uncertainties which may cause actual results to differ materially from those contemplated in the forward-looking statements. The following factors, among ot hers, could cause actual results to differ from those set forth in the forward-looking statements: increased competition and its effect on pricing, spending, third-party relationships and revenues; changes in interest rates and overall economic conditions; and the risk of new and changing regulation. Additional factors which may cause First Banks’ results to differ materially from those described in the forward-looking statements may be found in First Banks’ Annual Report on Form 10-K, as filed with the SEC and available at the SEC’s internet site. The forward-looking statements in this press release speak only as of the date of the press release, and First Banks does not assume any obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contained in the forward-looking statements.