Subband decomposition techniques have been extensively used for data coding and analysis. In most filter banks, the goal is to obtain subsampled signals corresponding to different spectral regions of the original data. However, this approach leads to various artifacts in images having spatially varying characteristics, such as images containing text, subtitles, or sharp edges. In this paper, adaptive filter banks with perfect reconstruction property are presented for such images. The filters of the decomposition structure which can be either linear or nonlinear vary according to the nature of the signal. This leads to improved image compression ratios. Simulation examples are presented.