First Bank takes a security interest in a checking account held by George’s BMW Dealership (George's) and maintained at First Bank. Later, Boone County Savings and Loan loans George’s $45,000, which executes a security agreement covering “all of George’s inventory and after acquired inventory.” Boone County Savings and Loan files a financing statement covering the collateral.

George’s subsequently writes a check from the First Bank account and uses it to buy three BMWs from the manufacturer. First Bank then files a UCC-1 with respect to the three new BMWs. Which of the following statements correctly describes the priority of First Bank and Boone County Savings and Loan with respect to the three new BMWs?

1. First Bank will have priority over Boone County Savings and Loan because the new BMWs are identifiable proceeds of its collateral in which First Bank was automatically perfected.

2. First Bank will have priority because it was first to perfect and its filing of a UCC-1 means that its security interest in the new BMWs was continuously perfected.

3. Boone County Savings and Loan will have priority because it was the first to file a UCC-1 with respect to the new BMWs.

4. Boone County Savings and Loan will have priority because First Bank only has a security interest in George’s checking account, not his inventory.