Iowa First Bancshares Corp.
Second and Cedar
Muscatine, Iowa 52761
(563) 263-4221

For more information contact:

D. Scott Ingstad, Chairman, President and CEO (563-262-4202) Or

Kim K. Bartling, Executive Vice President, Chief Operating Officer &
Treasurer (563-262-4216)

PRESS RELEASE

FOR RELEASE October 26, 2004, at 11:00 a.m. Central Standard Time

Iowa First Bancshares Corp. Reports Third Quarter Financial Results and Dividend
Payment

Iowa First Bancshares Corp. (OTCBB IFST) today reported net income of $970,000
for the quarter ended September 30, 2004, compared to net income of $940,000 for
the quarter ended September 30, 2003, an increase of $30,000 or 3.2%. This
increase in net income primarily resulted from higher net interest income during
the third quarter of 2004 compared to the third quarter of 2003.

Basic and diluted earnings per share were $.70 for the three months ended
September 30, 2004, $.04 or 6.1% more than the same period in 2003. The
Company's annualized return on average assets for the third quarter of 2004 was
1.05% compared to .98% during the third quarter of the prior year. The Company's
annualized return on average equity for the three months ended September 30,
2004 and September 30, 2003 was 15.1% and 14.9%, respectively.

The Company recorded net income of $2,781,000 for the nine months ended
September 30, 2004, compared with net income of $2,501,000 for the three
quarters ended September 30, 2003, an increase of $280,000 or 11.2%. This
increase in net income resulted from higher net interest income, higher
noninterest income, lower provision for loan losses, and tightly controlled
noninterest expenses during the first three quarters of 2004 compared to the
same period during 2003.

Basic and diluted earnings per share were $1.99 for the nine months ended
September 30, 2004, $.23 or 13.1% more than the same period in 2003. The
Company's annualized return on average assets for the first three quarters of
2004 was .99% compared to .86% during the same quarters of the prior year. The
Company's annualized return on average equity for the nine months ended
September 30, 2004 and September 30, 2003 was 14.6% and 13.4%, respectively.

The Company's assets at September 30, 2004 totaled $370,304,000, a decrease of
$2,110,000 or 0.6% from December 31, 2003. Net loans outstanding grew $8,401,000
(3.1%) and total deposits increased $5,647,000 (2.0%) during the first nine
months of 2004. Additionally, over $7.5 million dollars of loans were sold into
the secondary market through the nine months ended September 30, 2004. The
allowance for loan losses totaled $3,370,000 at September 30, 2004, or 1.2% of
gross loans outstanding.

The net interest margin increased to 3.48% during the first three quarters of
2004 compared to 3.23% during the first three quarters of 2003. The return on
average interest-earning assets decreased 23 basis points (from 5.69% in 2003 to
5.46% in 2004) while interest paid on average interest-bearing liabilities
declined 50 basis points (from 2.82% in 2003 to 2.32% in 2004).

The Company has, during the first nine months of 2004, repurchased for the
treasury 36,372 shares representing 2.6% of the total common shares outstanding
as of the prior year end. The Company plans to continue repurchasing shares of
its common stock as they become available. These share repurchases are possible
due to the strong capital base and sufficient cash flow of Iowa First Bancshares
Corp.

The board of directors declared a $.2425 per common share cash dividend to be
paid to shareholders of record September 28, 2004. The dividend payment date is
October 26, 2004 and results in an annualized yield of 3.33% on the December 31,
2003 stock price.

Iowa First Bancshares Corp. is a bank holding company headquartered in
Muscatine, Iowa. The Company provides a wide array of banking and other
financial services to individuals, businesses and governmental organizations
through its two wholly-owned national banks located in Muscatine and Fairfield,
Iowa. Iowa First Bancshares Corp. common stock is traded on the Over-The-Counter
Bulletin Board market under the symbol IFST.

This press release contains forward-looking statements. Investors are cautioned
that all forward-looking statements involve risks and uncertainties, and several
factors could cause actual results to differ materially from those in the
forward-looking statements. Forward-looking statements may relate to anticipated
revenues, gross margins, earnings, and growth of the market for our services and
products. The following factors, among others, could cause actual results to
differ from those indicated in the forward-looking statements: uncertainties
associated with market acceptance of and demand for the Company's services and
products, impact of competitive products and pricing, dependence on third party
suppliers, uncertainties associated with the development and deployment of
technology, regulatory or other developments in the industry, and the emergence
of future opportunities or threats. Investors are directed to the Company's 2003
Annual Report on Form 10-K which is filed with the Securities and Exchange
Commission.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Dollar amounts in thousands, except per share data)

(unaudited)

For the Three For the Three For the Nine For the Nine
Months Ended Months Ended Months Ended Months Ended
September 30, 2004 September 30, 2003 September 30, 2004 September 30, 2003
------------------- ------------------ ------------------ ------------------

Net Interest Income ................ $2,958 $2,810 $8,692 $8,430
Provision for Loan Losses .......... 120 65 380 525
Noninterest Income ................. 795 838 2,331 2,250
Noninterest Expense ................ 2,239 2,202 6,615 6,582
Net Income After Income Taxes ...... 970 940 2,781 2,501

Net Income Per Common Share,
Basic and Diluted ............... $ 0.70 $ 0.66 $ 1.99 $ 1.76

As of As of As of
September 30, 2004 December 31, 2003 September 30, 2003
------------------ ----------------- ------------------

Net Loans ........................... $ 275,326 $ 266,925 $ 262,607
Total Assets ........................ 370,304 372,414 381,866
Total Deposits ...................... 283,223 277,576 282,564

Tier 1 Capital ...................... 31,852 31,195 30,769

Return on Average Equity ............ 14.6% 12.9% 13.4%
Return on Average Assets ............ .99 .83 .86
Net Interest Margin (tax equivalent) 3.48 3.22 3.23
Allowance as a Percent of Total Loans 1.21 1.18 1.27