IOWA FIRST BANCSHARES CORP.
300 East Second Street
Muscatine, Iowa 52761
PHONE (563) 263-4221
www.fnbmusc.com ("investors")

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

The Annual Meeting of Shareholders of Iowa First Bancshares Corp., an Iowa
corporation, will be held at the corporate offices of the Company and its
subsidiary, First National Bank of Muscatine, Muscatine, Iowa, on Thursday,
April 15, 2004, beginning at 2:00 p.m. (local time) in order to:

1. Elect four current Directors for terms of three years each;

2. Transact any other business which may be properly brought before the
meeting or any adjournment of the meeting.

Common stockholders of record as of the close of business on March 17, 2004 are
entitled to vote at the Annual Meeting or any adjournment thereof.

While we would like to have each of you attend the meeting and vote your shares
in person, we realize this may not be possible. However, whether or not you plan
to attend the meeting, your vote is very important. Even if you plan to attend
the meeting, we encourage you to sign and return the enclosed proxy. If you are
unable to attend the meeting because of illness or any other reason, your vote
will still be cast. If you do attend the meeting, your proxy will automatically
be suspended if you elect to vote in person.

We encourage your attendance at this meeting. The Officers and Directors want to
keep you, one of the owners of the Company, informed of its activities and
progress.

Very truly yours,

/s/ D. Scott Ingstad
---------------------
Muscatine, Iowa March 18,2004 D. Scott Ingstad
Chairman of the Board

EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE, AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED, POSTAGE-PAID ENVELOPE. IT IS IMPORTANT THAT
PROXIES BE RETURNED PROMPTLY.

PROXY STATEMENT

General Information Concerning the Solicitation of Proxies

This Proxy Statement is furnished by and on behalf of the Board of directors of
Iowa First Bancshares Corp. (the "Company") in connection with the solicitation
of proxies for use at the annual meeting of shareholders of the Company to be
held on April 15, 2004 at First National Bank of Muscatine, 300 East Second
Street, Muscatine, Iowa, and at any adjournment or postponement thereof (the
"Annual Meeting").

A shareholder who gives a proxy may revoke it at any time prior to its exercise
by filing with the Corporate Secretary a written revocation or a duly executed
proxy bearing a later date. The proxy will be suspended if the shareholder is
present at the meeting and elects to vote in person. If the proxy is not
revoked, the shares represented thereby will be voted in the manner specified in
the proxy. A proxy properly executed and received prior to the Annual Meeting
which does not give specific voting instructions will be voted FOR the election
ofthe nominees to the Board of Directors set forth herein and FOR the persons
designated as proxies on the enclosed proxy card to determine what is in the
best interest of the Company in any other business that may properly come before
the meeting or any adjournment thereof. Abstentions will be treated as shares
present and entitled to vote for purposes of determining whether a quorum is
present, but not voted for purposes of determining the approval of any matter
submitted to the shareholders for a vote. If a proxy returned by a broker
indicates that the broker does not have discretionary authority to vote some or
all of the shares covered thereby for any matter submitted to the shareholders
for a vote (broker non-votes), such shares will be considered present for the
purpose of determining whether a quorum is present, but will not be entitled to
vote at the Annual Meeting of Shareholders.

As of March 17,2004,1,417,560 shares of common stock were outstanding, each of
which is entitled to one vote, in person or by proxy, at the meeting. A quorum
is defined as holders of a majority of the issued and outstanding shares of
Common Stock entitled to vote are present at the Annual Meeting, represented
either in person or by proxy. The aggregate number of votes entitled to be cast
by all stockholders present in person or represented by proxy at the Annual
Meeting, whether those shareholders vote for, against or abstain from voting on
any matter, will be counted for purposes of determining whether a quorum exists.
Only shareholders of record as of the close of business on March 17,2004 will be
entitled to notice of and to vote at the meeting.

The affirmative vote of the holders of a majority of the outstanding shares
entitled to vote is required for adoption of motions and resolutions, except
that changes in voting rights, removal of Directors, amendments to the Articles
of Incorporation, and approval of mergers, consolidations, or partial
liquidations require the affirmative vote of the holders of two-thirds of the
outstanding shares entitled to vote.

If you are registered on the stock transfer books of Iowa First Bancshares Corp.
as the holder of record of your shares, you can vote your shares in one of two
ways:

(1) By calling the toll-free telephone number with the voting form in hand and
following the simple instructions.

(2) By marking, signing, dating and promptly returning the proxy card. We have
enclosed a postage-paid envelope for your convenience.

If your shares are held of record in the name of a bank, broker or other holder
of record, you must follow the instructions from the holder of record in order
to have your shares voted.

Important Notice Regarding Delivery of Security Holder Documents

The Securities and Exchange Commission has adopted rules that allow us to
deliver a single annual report and proxy statement to a household at which two
or more security holders reside and whom we believe are members of the same
family. Accordingly, such households will receive only one copy of the Annual
Report to Shareholders and Proxy Statement or any other information statement
unless we receive instructions that you prefer multiple mailings. However, these
households will continue to receive individual proxy cards for each registered
shareholder account. If you prefer to receive copies of the above documents for
each registered shareholder account, please contact our stock transfer agent,
UMB Bank, NA, toll-free at: 1-800-884-4225. It may take up to 30 days for you to
begin receiving separate mailings if you choose that alternative.

Security Ownership of Certain Beneficial Owners

The following table sets forth information known as February 28, 2004, with
respect to any person who is known to the Company to be the beneficial owner of
more than 5 percent of the common stock of Iowa First Bancshares Corp. For
information regarding Director and Executive Officer stock ownership, see
"Election of Directors".

Name and Address of Amount and Nature of Percent
Beneficial Owners Beneficial Ownership of Class
- --------------------------------------------------------------------------------

George A. Shepley
401 Hogan Court
Muscatine. Iowa ........................ 117,399 (1) 8.28%

Iowa First Bancshares Corp. Employees
Stock Ownership Plan with 401 (k)
Provisions (KSOP) (2)
Muscatine, Iowa ........................ 101,915 7.19%

(1) Includes 117,099 shares as beneficially owned by Mr. Shepley because the
Company's management believes he has the power to exercise investment
decisions with respect to such shares.

(2) The Company's KSOP holds shares of the Company's common stock pursuant to
the terms of the KSOP governing document. The Trustees of the KSOP, a
committee of the Board of Directors, has the power to dispose of KSOP
shares in accordance with the terms of the KSOP and votes any shares owned
by the KSOP, except in the case of adoption of motions regarding changes in
voting rights, removal of Directors, amendments to the Articles of
Incorporation, and approval of mergers, consolidations, or partial
liquidations. In these instances, shares allocated to participants'
accounts are voted by the respective participants. The amount of beneficial
ownership shown for the KSOP includes those shares allocated to accounts of
executive officers of the Company, which are also reflected in the
individual's respective beneficial ownership as listed in the Summary
Compensation Table on the following page.

Proposal One - Election of Directors

At the annual meeting, shareholders will be asked to elect four current
Directors to hold office for terms of three years each.

The Board of Directors and management recommend the election of the four
nominees listed herein. The named proxies intend to vote for the election of the
nominees. If, at the time of the meeting, any of such nominees is unable or
declines to serve, the discretionary authority provided in the proxy will be
exercised to vote for a substitute or substitutes, unless otherwise directed.
The Board of Directors has no reason to believe that any substitute nominee or
nominees will be required.

Information Concerning Nominees for Election as Directors

The Board of Directors presently consists of twelve Directors divided into three
classes, with four Directors in each class. Directors of one class are elected
each year to hold office for a three-year term, until their successors are duly
elected and qualified, or until their earlier resignation or removal. The terms
of office of the current Class III Directors will expire on the election of the
Directors at the 2004 annual meeting of shareholders.

The shareholders will be asked to elect the four current Class III nominees
listed herein for terms of three years or until a successor is elected and
qualified or until his or her earlier resignation or removal. If the four
nominees are elected all of the current twelve Directorships will be filled.

Certain information is set out on the following pages with respect to the four
persons nominated by the Board of Directors to serve as Directors and with
respect to the Directors continuing in office for terms expiring in 2005 and
2006.

IOWA FIRST BANCSHARES CORP. DIRECTORS

Nominated As of February 28, 2004
For Term -----------------------
Expiring, Amount and
Nominee Position(s) Or Current Nature of Percent
Or Current Held with Director Term Beneficial of
Director the Company Age Since Expires Ownership Class
- ------------------------------------------------------------------------------------------------------------------

Kim K. Bartling Director. Executive Vice President,
Chief Operating Officer and Treasurer
of the Company. EVP and CFO of
First National Bank of Muscatine. 46 1994 2006 23,188 1.64%

Roy J. Carver, Jr. Director. 60 1989 2007 * 17,400 1.23%

Stephen R. Cracker Director. President and CEO
First National Bank in Fairfield. 58 2002 2007 * 12,607 **

Larry L. Emmert Director. 62 1993 2006 24,666 1.74%

Craig R. Foss Director. Chairman of the Board,
First National Bank in Fairfield. 54 1994 2005 3,360 **

Donald R. Heckman Director. 65 1984 2005 26,060 1.84%

David R. Housley Director. 52 1999 2006 5,510 **

D. Scott Ingstad Chairman, President and CEO of the
Company. Chairman, President and
CEO, First National Bank of
Muscatine. 53 1990 2005 17,475 1.23%

Dr. Victor G. McAvoy Director. 60 1994 2007 * 7,500 **

John "Jay' S. McKee Director. 50 1999 2007 * 1,886 **

Richard L. Shepley Director. 58 2003 2006 18,219 (1) 1.29%

Beverly J. White Director. 64 1988 2005 20,824 1.47%
<FN>
* Nominated for election to the Board of Directors for a three year term at
the April 15, 2004, annual meeting of shareholders of Iowa First Bancshares
Corp.

** Less than 1 percent of the outstanding stock of the Company.

(1) The amount shown for Richard L. Shepley includes 11,319 shares of common
stock which are owned by trusts over which Mr. Shepley has only limited or
contingent ownership rights. Mr. Richard L. Shepley disclaims beneficial
ownership of such shares.
</FN>

One other Executive Officer listed in the Summary Compensation Table, Tim
Nelson, owns beneficially 6,909 shares, or less than 1 percent of the Company.

The beneficial ownership of current, continuing and nominated Directors is set
out in the table above. All current Directors and Executive Officers as a group
(13 persons) own beneficially 185,604 shares, which constitutes 13.1 percent of
the class.

Shares listed as beneficially owned include, for Directors who are also officers
of the Company, shares held in the Company's retirement plan for the benefit of
such individuals.

The business experience of each nominated and continuing Director is set forth
in the following section. All Directors have held their present position for at
least five years unless otherwise indicated.

Kim K. Bartling. Mr. Bartling has been Executive Vice President, Chief Operating
Officer and Treasurer since December 1996. He has served as Executive Vice
President and Chief Financial Officer of First National Bank of Muscatine since
February 1997. Mr. Bartling served as Senior Vice President, Chief Financial
Officer and Treasurer of the Company and First National Bank of Muscatine
beginning in 1988. Prior to serving in these positions he served as Vice
President/Finance of the Company and First National Bank of Muscatine since
1987. Mr. Bartling is also a Director of the Company, First National Bank of
Muscatine and First National Bank in Fairfield.

Roy J. Carver, Jr. Mr. Carver has been Chairman of Carver Pump Company, a
manufacturer of industrial pumps used in military and civilian applications,
since 1981. Mr. Carver is also a Director of Bandag, Incorporated, and Catalyst
International, Inc., which have classes of securities registered with the
Securities and Exchange Commission. Mr. Carver is also President of Carver Aero,
Inc., which operates fixed base operations at airports in Muscatine, Iowa, and
Davenport, Iowa. He also is owner of several other private businesses involved
in manufacturing, retailing and real estate development.

Stephen R. Cracker. Mr. Cracker has served as President and CEO of First
National Bank in Fairfield since January 1, 2002, prior to which he served as
Executive Vice President and Chief Operating Officer from 1985 through 2001. Mr.
Cracker also has served since 1982 as a Director of First National Bank in
Fairfield.

Larry L. Emmert. Mr. Emmert has been President of Hoffmann, Inc., a general
building contractor located in Muscatine, Iowa, since 1981. Mr. Emmert is also a
Director of First National Bank of Muscatine.

Craig R. Foss. Mr. Foss has been President and a shareholder of the law firm of
Foss, Kuiken, Gookin & Cochran, P.C., Fairfield, Iowa, since 1979. Mr. Foss is
also Chairman of the Board of First National Bank in Fairfield.

Donald R. Heckman. Mr. Heckman is an investor. Prior to retirement, Mr. Heckman
had been Factory Manager of the H. J. Heinz Co. plant located in Muscatine,
Iowa, 1973 to February 1995. This plant produced and warehoused various consumer
products including ketchup, gravy and various sauces. Mr. Heckman is also a
Director of First National Bank of Muscatine.

David R. Housley. Mr. Housley has served over fifteen years as President of
Doran and Ward Printing Co., a commercial printing company specializing in the
printing of packaging products. Mr. Housley has served since late 2001 as
President of Simpson Security Papers, Inc., a manufacturer and wholesaler of
safety/security paper used primarily by printing companies for documents,
checks, certificates, licenses, etc. He also served as President of Master
Muffler and Brake, Inc. for more than fifteen years through December 2001, and
Automart Undercar Distributors for approximately five years ending in January
2002. These companies are retail and wholesale suppliers of mufflers and various
other replacement parts for the underside of automobiles. Mr. Housley became a
Director of First National Bank of Muscatine in February 1999 and a Director of
the Company in April 1999.

D. Scott Ingstad. Mr. Ingstad has served as First National Bank of Muscatine's
Chairman of the Board since April 2003, Vice Chairman of the Board October 1999
to April 2003, and Director, President and CEO since 1990. Mr. Ingstad also has
served since April 2003 as the Company's Chairman of the Board. He served as
Vice Chairman of the Company from October 1999 to April 2003. Additionally, he
has held the positions of President, since December 1996, and CEO since January
2001, of the Company.

Victor G. McAvoy. Dr. McAvoy has served as President of Muscatine Community
College and Vice-Chancellor of the Eastern Iowa Community College District since
1986. Mr. McAvoy is also a Director of First National Bank of Muscatine.

John "Jay" S. McKee. Mr. McKee has served as Vice President of Finance of McKee
Button Company, a manufacturer of buttons emphasizing the men's dress shirt
market, since 1982. Mr. McKee became a Director of First National Bank of
Muscatine in February 1999 and a Director of the Company in April 1999.

Richard L. Shepley. Mr. Shepley has been an independent bank consultant since
2000. From 1997 until 2000, Mr. Shepley was Chief Investment Officer for
Marshall Ventures, LLC, a private equity fund specializing in financial
services. From 1990 until 1997, Mr. Shepley held various executive management
and Board of Directors positions with several companies in the commercial
banking, merchant banking, specialty finance and mortgage banking businesses.
For the period 1969 until 1990, he worked at First Bank System, Inc.,
Minneapolis, Minnesota, (now U.S. Bancorp, Inc.) where he attained the position
of Chief Credit Officer and served on the Boards of The First National Bank of
Saint Paul and First National Bank of Minneapolis. He currently serves on the
Board of Directors of Sunwest Bank, Tustin, California, which has securities
registered with the Securities and Exchange Commission as well as Franklin
National Bank, Minneapolis, Minnesota, First Eldorado Bancshares, Inc.,
Eldorado, Illinois, and American Bank, Grand Rapids, Minnesota. Mr. Shepley
became a Director of First National Bank of Muscatine in September 2003.

Beverly J. White. Mrs. White has served as a Director since 1993, and Vice
President since 1996, of Quality Foundry Co. Quality Foundry Co. is landlord to
a business operating a grey iron foundry specializing in semi-steel castings.
Mrs. White is also a Director of First National Bank of Muscatine.

Officers and Directors of the Company and its subsidiaries have had, and may
have in the future, banking transactions in the ordinary course of business of
the Company's subsidiaries. All such transactions are on substantially the same
terms, including interest rates on loans and collateral, as those prevailing at
the time for comparable transactions with others and involve no more than the
normal risk of collectibility.

THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" EACH OF THE DIRECTOR NOMINEES.

Director Independence and Corporate Governance

A director is not considered independent if any of the following apply: (i) a
director is, or was at any time during the past three years, employed by the
Company, including its parent and subsidiaries, (H) a director who individually,
or whose family members, accepted more than $60,000 in payments from the Company
during the current or any of the past three years, subject to various
exceptions, (iii) a director whose family member is, or at any time during the
past three years was, employed as an executive officer of the Company, (iv) a
director who received payments for property or services during the current or
any of the past three years that exceed 5% of the recipient's consolidated gross
revenues for that year, or $200,000, whichever is more, to or from an entity
where the director or his family member is a partner (other than a limited
partner), controlling shareholder or executive officer, (v) a director who is,
or who has a family member who is, employed as an executive officer of another
entity where at any time during the last three years any of the executive
officers of the listed company served on the compensation committee of such
other entity, and (vi) a director, or a directors family member is a current
partner of the Company's outside auditor or was a partner or employee of the
Company's outside auditor who worked on the Company's audit an any time during
the past three years.

All members of the Audit Committee must be independent based on pertinent SEC
Rules and also meet additional independence and financial literacy requirements.
At least one of these members must satisfy the additional requirement of having
accounting or related financial management expertise. This additional
requirement can be satisfied by the Board determining that at least one Audit
Committee member is an "audit committee financial expert" within the meaning of
the SEC Rules. Generally, the additional independence standard provides that (i)
a member of the Audit Committee, or his or her immediate family members, are
prohibited from receiving any direct or indirect compensation or fee from the
Company or its affiliates, and (ii) he or she may not be an affiliated person of
the Company or any of its subsidiaries. Generally, the financial literacy
standard provides that the Board, in its business judgment, shall determine if
each member is financially literate, taking into account factors such as the
member's education, experience and ability to read and understand financial
statements of public companies. Also, potential audit committee financial
experts must have five additional attributes, which are: (i) an understanding of
generally accepted accounting principles and financial statements, (ii) the
ability to assess the general application of such principles in connection with
the accounting for estimates, accruals and reserves, (Hi) experience preparing,
auditing, analyzing or evaluating financial statements that present a breadth
and level of complexity of accounting issues that are generally comparable to
the breadth and complexity of issues that can reasonably be expected to be
raised by the Company's financial statements, or experience actively supervising
one or more persons engaged in such activities, (iv) an understanding of
internal controls and procedures for financial reporting, and (v) an
understanding of how audit committees function. All together, attributes (i)
through (v) are referred to as the "Financial Expert Attributes."

Based on the independence, financial literacy and financial expert standards,
the Board has determined that Donald R. Heckman, John "Jay" S. McKee and Beverly
J. White are (i) independent, for purposes of serving as independent members of
the Board of Directors (ii) independent, for purposes of serving as independent
members of the Audit Committee under applicable SEC Rules, and (iii) financially
literate, for purposes of serving on the Audit Committee. The Board has also
determined that Mr. Heckman has the Financial Expert Attributes listed on the
previous page.

A majority of the directors of the Company are independent, non-employee
Directors. Directors who are also employees of the Company are: Mr. Ingstad,
Chairman of the Board, President and CEO; Mr. Bartling, Executive Vice
President, Chief Operating Officer and Treasurer, and; Mr. Cracker, President
and CEO of the subsidiary First National Bank in Fairfield. The Company has a
Code of Ethical Conduct for Principal Officers and Financial Managers. The Board
of directors believes these company leaders must set an exemplary standard of
conduct for the Company, particularly in the areas of accounting, internal
accounting control, auditing and finance. The full text of the Code of Ethical
Conduct for Principal Officers and Financial Managers has been posted to the
Company's website, www.fnbmusc.com and can be found under the Investors link.
The company has also adopted a Code of Business Conduct and Ethics for Employees
and Directors of the Company. This Code provides guidance to the Board,
management and employees in areas of ethical business conduct and risk and
assists them to recognize and deal with ethical issues including, but not
necessarily limited to, (i) conflicts of interest, (ii) corporate opportunities,
(iii) confidentiality, (iv) fair dealing, (v) protection of corporate assets,
(vi) compliance with rules and regulations, and (vii) reporting of unethical
behavior. The full text of the Code of Business Conduct and Ethics for Employees
and Directors has been posted to the Company's website, www.fnbmusc.com and can
be found under the Investors link. These Codes of Conduct serve to inform and
reinforce to all employees our strong commitment, as a corporate family, to high
ethical standards and compliance with the law.

Meetings and Committees of the Board of Directors and Certain Relationships and
Related Transactions

The Board of Directors held twelve regular meetings and no special meetings
during the last fiscal year. All incumbent Directors attended at least 75% of
the regular Board of Directors meetings held after each Director was duly
elected and qualified. The Board has four standing committees that deal with
human resource and compensation matters, retirement plans, audit, and
nominations to the Board. The annual retainer that each outside Company Director
received in 2003 was $5,500, plus $125 for each committee meeting attended.
During 2003, each Director of the Company served as Director and member of
committees for subsidiary boards and committees, with the exception of Mr.
Carver who served only as a Director of the Company. The annual retainer fee
paid to each outside subsidiary Director was $4,200 to $4,500, plus $75 to $250
for attendance at each committee meeting. Executive officers who also serve on
the Board of Directors do not receive such retainer or committee fees. The
Company offers the option to the directors to defer receipt of a portion of the
cash that would have been paid as directors' fees. The deferred fees are
invested by the Company, and the director is an unsecured general creditor of
the Company. At the time the deferral election is made, the director specifies
the amount of the fees to be deferred and the duration of the deferral. The
deferred fees are credited with interest computed at an annual rate equal to the
taxable equivalent rate (determined using the Company's highest marginal tax
bracket) of the highest yielding investment purchased by the Company related to
the deferred compensation agreements. The Company in 2003 paid one Director,
Richard L. Shepley, $1,350 as travel expenses in recognition of the relatively
long distance he must travel to attend board and committee meetings.

The Human Resource and Compensation Committee met four times; its members are
Mrs. White (Chairperson), Mr. Emmert, Mr. Housley, and Mr. McAvoy. All members
of the Human Resource and Compensation Committee are independent, non-employee
directors. The Retirement Plan Committee met one time during 2003; its members
are Mr. McAvoy (Chairman), Mr. Emmert, Mrs. White and Mr. Bartling. All of its
members are independent, nonemployee directors with the exception of Mr.
Bartling who is an employee of the company. Beginning in 2004, this committee
will be comprised entirely by independent, non-employee directors. The Audit
Committee met six times; it is comprised entirely by independent, non-employee
directors. Its members are Mr. Heckman (Chairman), Mr. McKee, and Mrs. White.
Mr. Heckman is considered financially sophisticated and is the designated
financial expert of the Audit Committee. The Nominating Committee did not meet
during 2003, but held a meeting in January 2004. The Nominating Committee
members are Mr. Heckman (Chairman), Mr. Emmert, and Mrs. White. Mr. Emmert was
added to the Nominating Committee to replace Mr. McAvoy who could not serve as
his current term on the board expires at the 2004 Annual Shareholders Meeting.
This committee is comprised of independent, non-employee directors.

During 2003, a company controlled by Mr. Emmert served as general contractor for
a building expansion at one of the Company's subsidiary banks. The total paid to
Mr. Emmert's firm for such services was $172,042. The Board of Directors
determined Mr. Emmert to be an independent director pursuant to SEC rules whose
service on the Board and designated committees was in the best interests of the
Company and its shareholders. The Board based their determination on the fact
that the total paid to Mr. Emmert's firm for services performed was less than
$200,000 and less than 5% of his firm's gross revenue for 2003. Additionally,
the aforementioned services performed by his firm were provided as a result of
competitive bids with outside companies which were reviewed, discussed and
decided upon by the full Board of Directors except Mr. Emmert who was never
present during such deliberations or votes. Approval of Mr. Emmert's company's
final bid and contract was unanimously approved by the Board of Directors,
including all independent, non-employee directors.

Compensation Committee Report

The Human Resource and Compensation Committee serves as the Company's
compensation committee. The Committee policy is to seek to provide fair and
competitive compensation, encourage the retention of highly qualified
individuals and enhance shareholder value by encouraging stability, safety and
increased profitability for the Company. This policy is intended to align the
financial interest of the Company's and subsidiary banks' officers (including
all executive officers of the Company) with those of the shareholders, as well
as to create an atmosphere that recognizes the contribution and performance of
each officer. In addition to merit-based promotions, the essential components of
the compensation policy for the Company's executive officers are base
compensation, cash bonuses and deferred compensation. The Company does not offer
stock-based compensation.

The Committee considers many factors when determining compensation levels for
executive officers. These factors include the extent to which each executive
officer contributes to enhancement of shareholder value and comparisons of the
Company's compensation of executive officers to the compensation paid to
executive officers by other companies in the banking industry, including peer
groups. The Committee also considers the extent to which each executive officer
contributes to attainment of earnings targets for the Company and each
subsidiary. Other factors include the executive officer's contribution to return
on average equity, contribution to maintaining and enhancing earnings per share,
contribution to the profitable growth of the Company, and contribution to
improvements in quality of assets and, thus, quality of earnings. In determining
the base compensation of the executive officers for 2003, the Committee
considered all of the aforementioned factors, as well as the average officer and
employee compensation percentage increase at the subsidiary banks.

In determining the compensation level for the Chief Executive Officer, the
Committee specifically reviews trends in the Company's earnings per share,
return on average equity, and strength of the balance sheet. It looks at the
overall return to shareholders, including dividends paid and changes in the fair
market value of the Company's stock. The Committee also assesses the CEO's
effectiveness in leadership and communication skills, as demonstrated by the
level at which the subsidiary banks attain their targets for earnings and asset
quality, and the effectiveness of the strategic and operating planning process,
which the CEO leads. During 2002, the Company's earnings per share increased
7.8%, cash dividends declared per share resulted in a yield on beginning of the
year price of4.1%, total average assets grew 1.2%, and total shareholder return
was over 23%. Return on average equity was 14.9%. Nonaccrualloans, renegotiated
loans and loans past due 90 days or more increased $2,015,000 (262%) while net
average loans increased a modest $183,000, or less than one percent.

This report submitted by the Human Resource and Compensation Committee:

Beverly J. White, Chairperson
Larry L. Emmert
David R. Housley
Victor G. McAvoy

Executive Compensation

The following table sets forth the remuneration paid or accrued for the past
three years by the Company and its subsidiaries to the highest paid executive
officers whose 2003 cash compensation exceeded $100,000.

SUMMARY COMPENSATION TABLE

Long Term Compensation
---------------------------------
Awards Payouts
Annual Compensation ---------------------- ---------
----------------------------------------- Restricted All Other
Other Annual Stock Options or LTIP Compen-
Name and Principal Position(s) Year Salary $ Bonus $ Compensation $ Awards $ SARs#$ Payouts $ sation $(1)
- ------------------------------------------------------------------------------------------------------------------------------------

D. Scott Ingstad 2003 179,100 12,313 - - - - - - - - 36,681
Chairman, President & CEO 2002 175,000 23,406 - - - - - - - - 29,868
of the Company; Chairman, 2001 173,400 21,935 - - - - - - - - 23,088
President and CEO, First National
Bank of Muscatine

Kim K. Bartling 2003 140,595 9,139 - - - - - - - - 26,015
Director, Executive Vice 2002 136,500 18,428 - - - - - - - - 22,490
President, Chief Operating 2001 132,500 16,475 - - - - - - - - 17,558
Officer and Treasurer of the Company;
Director, EVP and CFO, First National
Bank of Muscatine; Director,
First National Bank in Fairfield

Stephen R. Cracker 2003 104,000 - - - - - - - - - - 13,983
Director of the Company; 2002 100,000 5,000 - - - - - - - - 13,698
Director, President and CEO, 2001 92,865 2,437 - - - - - - - - 11,437
First National Bank in Fairfield

Tim M. Nelson 2003 113,467 9,645 - - - - - - - - 17,097
Executive Vice President 2002 109,333 13,940 - - - - - - - - 14,033
and Senior Loan Officer, 2001 105,600 9,000 - - - - - - - - 11,045
First National Bank of
Muscatine
<FN>

(1) Includes contributions to the employee stock ownership plan with 401(k)
provisions totaling: $22,981 for Mr. Ingstad, $17,247 for Mr. Bartling,
$11,699 for Mr. Cracker, and $13,598 for Mr. Nelson. Also includes matching
contributions and interest earnings under the Company's deferred
compensation plan totaling: $13,700 for Mr. Ingstad, $8,768 for Mr.
Bartling, $2,284 for Mr. Cracker, and $3,499 for Mr. Nelson.
</FN>

The remainder of this page left intentionally blank.

Audit Committee Report

In accordance with its written charter adopted by the Board of Directors, the
Audit Committee assists the Board of Directors in fulfilling its
responsibilities to stockholders concerning the Company's financial reporting
and internal controls, and facilitates open communication among the Audit
Committee, Board of Directors, outside auditors, and management. In discharging
its oversight role, the Audit Committee reviewed and discussed the audited
financial statements contained in the 2003 Annual Report on Form 10-K with the
Company's management and independent auditor. Management is responsible for the
financial statements and the reporting process, including the system of internal
controls. The independent auditor is responsible for expressing an opinion on
the conformity of those financial statements with accounting principles
generally accepted in the United States of America.

The Committee met privately with the independent auditor, and discussed issues
deemed significant by the auditor, including those required by Statement on
Auditing Standards No. 61 (Communications with Audit Committees). In addition,
the Committee discussed with the independent auditor its independence from Iowa
First Bancshares Corp. and its management, including the matters in the written
disclosures required by Independence Standards Board Standard No.1 (Independence
Discussions with Audit Committees), and considered whether the provision of
non-audit services was compatible with maintaining the auditor's independence.

In reliance on the reviews and discussions outlined above, the Audit Committee
has recommended to the Board that the audited financial statements be included
in Iowa First Bancshares Corp.'s Annual Report on Form 10-K for the year ended
December 31, 2003, for filing with the SEC.

As discussed under "Director Independence and Corporate Governance" in this
Proxy Statement, each member of the Audit Committee has been determined by the
Board to be "independent" and "financially literate" in accordance with SEC
Rules. Also, Mr. Heckman has been determined by the Board to be an "audit
committee financial expert" under such rules.

This report submitted by the Audit Committee: Donald R. Heckman (Chairman), John
"Jay" S. McKee and Beverly J. White.

Nominating Committee

The Nominating Committee is responsible for recommending to the full Board of
Directors nominees to stand for election as Directors and to fill any vacancies
which may occur from time to time. In addition, the Nominating Committee is
responsible for considering any nominations for director submitted by
shareholders and for reviewing the size and composition of the Board and the
criteria for selecting nominees to the Board. The Committee also recommends to
the full Board of Directors the chairmanship and composition of all Board
committees. The Nominating Committee's actions are governed by a Charter, a copy
of which is included as an exhibit to this proxy statement. The Committee
identifies nominees for membership on the board of directors based upon their
knowledge and expertise in the areas of general business, banking, accounting,
management, marketing, lending, and legal matters. Additionally the Committee
considers nominees' level of commitment to the communities in which the Company
conducts its business, overall shareholder wealth creation, strong business
ethics, as well as fair and just treatment of customers and employees.

The remainder of this page left intentionally blank.

Audit and Non-Audit Fees

The following table presents fees for professional audit services rendered by
McGladrey & Pullen, LLP for the audit of Iowa First Bancshares Corp.'s annual
financial statements for the years ended December 31, 2003 and 2002, and fees
billed for other services rendered by McGladrey & Pullen, LLP and RSM McGladrey,
Inc. (an affiliate of McGladrey & Pullen, LLP).

2003 2002
-------------------------
Audit Fees (1) ............................. $83,722 $72,660
Audit-Related Fees (2) ..................... 5,714 5,158
Tax Services (3) ........................... 6,999 5,700
All Other Fees (4) ......................... 39,093 57,947

(1) Audit fees consist of fees for professional services rendered for the audit
of Iowa First Bancshares Corp.'s financial statements and review of
financial statements included in Iowa First Bancshares Corp.'s quarterly
reports.

(2) Audit-related fees are fees principally for professional services rendered
for the audit of Iowa First Bancshares Corp.'s employee benefit plan.

(3) Tax service fees consist of compliance fees for the preparation of original
tax returns as well as tax consulting and planning related fees.

(4) Other services consist primarily of consulting services related to network
administration support and intrusion testing.

Representatives of McGladrey & Pullen, LLP, independent auditors for the
Company, will be present at the annual meeting, will have an opportunity to make
any statement they desire, and will be available to respond to appropriate
questions.

The Audit Committee has pre-approved all of the above services. The Audit
Committee, after consideration of the matter, does not believe the rendering of
these services by McGladrey & Pullen, LLP, to be incompatible with maintaining
McGladrey & Pullen, LLP's independence as our principal accountant.

Employee Stock Ownership Plan with 401 (k) Provisions

The Company sponsors an employee stock ownership plan with 401 (k) provisions.
An employee becomes a participant upon completing a minimum period of
employment. Employee contributions up to 6% oftotal compensation per employee
are matched by the employer at a rate of 50% of the employee contributed amount.
Additionally, the employer may make discretionary profit-sharing contributions
to the plan; total annual contributions cannot exceed the amount that can be
deducted for federal income tax purposes. Participants may direct investment of
the funds they have contributed to their individual accounts under the plan
utilizing several fixed income and equity investment options. A portion of the
discretionary profit-sharing contributions made by the Company or its
subsidiaries for the participants may be directed for investment in common
shares of the Company. Participant (but not Company) contributions are included
in salary in the Summary Compensation Table. The Company and its subsidiaries
contributed a cash total of $325,327 to this plan for 2003.

Performance Incentive Plans

In addition to base compensation, each executive officer of the Company and the
subsidiaries has specific annual weighted goals which, if attained, will result
in year-end cash performance incentive pay equal to 10% of base pay. The maximum
annual payment under this incentive plan is 15% of base pay for each
participant, for substantially exceeding the goals established. For the year
ended December 31, 2003, amounts paid or accrued under this incentive plan
totaled $46,303 which included $31,097 for executive officers of the Company as
a group. Also, the Company and subsidiaries have discretionary performance
incentive plans covering a majority of the officer level employees as well as
other specific employees. These plans encourage improved efficiency and
effectiveness of employees by increasing remuneration as a direct result of
individual and organizational goal attainment. Payments made or accrued under
all performance incentive plans, including the executive officer plan discussed
above, totaled $167,346 for 2003.

Executive Employment Agreements

In order to advance the interests of the Company by enabling the Company to
attract and retain the services of key executives upon which the successful
operations of the Company are largely dependent, the Board of Directors tendered
Employment and Change in Control Agreements to D. Scott Ingstad and Kim K.
Bartling. An Employment Agreement was also tendered by the Board of Directors to
Tim M. Nelson. See the Summary Compensation Table for information regarding the
company positions held by these individuals.

The Employment Agreements are for a base term of two years and automatically
renew unless 90 days notice of non-renewal is provided to the other party. If an
executive's employment is terminated prior to the expiration of the Agreement or
by the providing of notice of non-renewal, or if the executive is constructively
discharged (for example, as a result of a reduction in responsibilities or
compensation, or other breach of the Agreement by the Company), the executive is
entitled to a severance benefit of : (1) twelve months base pay; (2) any
vacation pay accrued but not yet taken; (3) an amount equal to the annual
average past three years payment under the Performance Incentive Plan; (4)
reimbursement of a portion of medical premiums paid by the executive such that
the same "cost-sharing" basis provided at the date of termination is maintained.

Upon a change in control, as defined, the Change in Control Agreements become
effective. The executive will, under the Agreement, remain employed by the
Company for three years after the effective date or until executive's normal
retirement date (the Employment Term), whichever is earlier. An executive who is
terminated or constructively discharged after a change in control is entitled to
the following for the remainder of the Employment Term: (1) base pay; (2)
payments under the Performance Incentive Plan; (3) perquisites to which the
executive was entitled on the date of the change in control; and (4)
contributions for benefits expected to be made to the Company's retirement
plans.

Supplemental Compensation will also be provided to mitigate the effects of any
excise taxes applicable to executive employment payments. Each executive is
subject to a confidentiality agreement, and if the executive voluntarily
terminates employment prior to a change in control or if executive's employment
is terminated for cause, the executive will be subject to noncompetition and
nonsolicitation agreements.

Deferred Compensation Agreements

The Company has entered into Deferred Compensation Agreements with certain
directors and executive officers of the Company. Under the provisions of the
agreements the directors and officers may defer a portion of their compensation
each year. Based upon individual performance, if Board established performance
targets are met, a match of up to 50% of the officers' deferrals (with an annual
cap of $6,250 per participant) may be made by the Company. Related to the
agreements, the Company has purchased various life insurance contracts. Interest
on deferrals is computed at an annual rate equal to the taxable equivalent
(determined using the Company's highest marginal tax bracket) of the highest
yielding insurance contracts purchased by the Company related to the agreements.
At December 31, 2003 the rate was 10%. Upon retirement, the director or officer
will receive the deferral balance in 180 equal monthly installments. During the
year ended December 31, 2003, the Company expensed $152,000 related to the
agreements. As of December 31,2003, the liability related to the agreements
totaled $494,000.

The Company currently has no Incentive Stock Option or Nonstatutory Stock Option
plans.

The remainder of this page left intentionally blank.

Comparative Performance By The Company

The graph below compares cumulative total return of the Company's common stock
with (i) the Russell 2000 Stock Index, and (ii) the Media General Financial
Services, Inc. (MGFS) Index for the stocks of small banks and bank holding
companies in the Midwestern United States selected by the Company as a peer
group (representing seventeen companies each with total assets under, or
slightly over, one billion dollars). In the Company's opinion, this index, which
includes mainly smaller banking companies, affords a representative and
meaningful comparison with Iowa First Bancshares Corp. The chart assumes an
investment of $100 on January 1, 1999, in each of the Company's common stock,
the Russell 2000 Stock Index, and the MGFS Index for the stocks of the selected
bank peer group. Each year's performance is for the twelve months ended December
31. The index level for all series was set to 100.00 on January 1, 1999. The
overall performance assumes dividend reinvestment throughout the period. The
Company's common stock is thinly traded on the over-the-counter bulletin board
and is not listed on any stock market exchange, thus the price used for the
Company's common stock in the chart was the greater of the year-end bid price
supplied by one of the brokerage firms which acts as a market maker for the
Company or the appraisal price supplied by an independent appraiser. The data
points used in the omitted graph are as follows:

Comparison of Five Year Cumulative Total Return
Among the Company, the Russell 2000 Index and a
Small Bank Index

12/31/1998 12/31/1999 12/31/2000 12/31/2001 12/31/2002 12/31/2003
-----------------------------------------------------------------------

Iowa First Bancshares Corp. $100.00 $ 89.81 $ 75.97 $ 79.87 $ 98.39 $111.72
Peer Group Index Small Banks 100.00 83.68 65.48 85.19 103.43 131.64
Russell 2000 Index ......... 100.00 119.59 114.43 115.60 90.65 131.78

Deadline for Shareholder Proposals for 2005 Annual Meeting

Proposals by shareholders intended to be presented at the 2005 annual meeting
must be received at the Company's executive offices no later than November 18,
2004, to be included in the proxy statement and proxy form.

Deadline for Shareholder Nominations of Directors for 2005 Annual Meeting

Proposals by shareholders for vacant directorships intended to be presented at
the 2005 annual meeting must be received at the Company's executive offices no
later than November 18, 2004 to be included in the proxy statement and proxy
form.

General

The entire cost of soliciting proxies for the annual meeting is paid by the
Company. No solicitation other than by mail is contemplated; however officers
and directors of the Company may solicit proxies by telephone or personal
interview. Such persons will receive no additional compensation for such
services. Brokerage houses, nominees, fiduciaries, and other custodians will be
requested to forward soliciting material to the beneficial owners of shares held
of record by them and will be reimbursed by the company for their reasonable
expenses.

The Board of Directors knows of no other matters which will be brought before
the meeting, but, if other matters properly come before the meeting, the persons
named in the proxy intend to vote the proxy according to their best judgment.

On written request to the undersigned at 300 East Second Street, Muscatine, Iowa
52761, the Company will provide, without charge to the shareholder, a copy of
its Annual Report on Form 10-K, including financial statements and schedules,
filed with the Securities and Exchange Commission for its most recent fiscal
year.

Information set forth in this proxy statement is as of March 17, 2004, unless
otherwise dated.

/s/ D. Scott Ingstad
---------------------
Muscatine, Iowa D. Scott Ingstad
March 18, 2004 Chairman of the Board