<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1995.
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transaction period from ______ to _______.
Commission file number: 0-14209
FIRSTBANK CORPORATION
(Exact name of registrant as specified in its charter)
Michigan 38-2633910
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification
Number)
311 Woodworth Avenue, Alma, Michigan 48801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (517) 463-3131
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to filing requirements for the past 90 days. [X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common stock . . . 1,469,155 shares outstanding as of October 31,
1995. (Less 3,669 unallocated ESOP shares).
<PAGE> 2
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<S> <C>
Consolidated balance sheets . . . . September 30, 1995 (unaudited), and
December 31, 1994. page 3
Consolidated statements of income (unaudited) . . . . three months ended
September 30, 1995, and September 30, 1994. page 4
Consolidated statements of income (unaudited) . . . . nine months ended
September 30, 1995, and September 30, 1994. page 5
Consolidated statements of changes in shareholders' equity (unaudited) page 6
Consolidated statements of cash flows (unaudited) . . . nine months
ended September 30, 1995, and September 30, 1994. page 7
Notes to consolidated financial statements . . . . September 30, 1995 page 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. page 12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K page 15
SIGNATURES page 16
EXHIBITS
Exhibit 27 -- Financial Data Schedule page 17
</TABLE>
Page 2 of 17
<PAGE> 3
FIRSTBANK CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- -------------
<S> <C> <C>
ASSETS
Cash and due from banks $14,656,229 $15,152,634
Interest bearing deposits with banks 245,708 406,227
Overnight investments 11,950,000 300,000
------------- -------------
Total cash and cash equivalents 26,851,937 15,858,861
Securities available for sale 25,441,952 25,234,530
Securities held to maturity (fair value $32,788,418 in
1995, $37,928,730 in 1994) 31,877,358 37,998,951
Loans
Loans held for sale 2,352,870 2,992,194
Commercial 109,450,524 99,306,532
Real estate mortgage 85,900,821 70,767,698
Consumer 56,877,320 50,324,264
------------- -------------
Total loans 254,581,535 223,390,688
Less allowance for loan losses (4,595,000) (4,100,000)
------------- -------------
Net loans 249,986,535 219,290,688
Premises and equipment, net 6,873,863 4,851,612
Accrued interest receivable 2,275,106 1,697,252
Other assets 5,574,575 4,790,108
------------- -------------
$348,881,326 $309,722,002
============= =============
TOTAL ASSETS
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest bearing accounts $40,553,714 $36,113,926
Interest bearing accounts:
Demand 62,454,389 60,317,875
Savings 56,590,649 54,368,810
Time 145,993,029 116,092,944
------------- -------------
Total deposits 305,591,781 266,893,555
Securities sold under agreements to
repurchase and overnight borrowings 10,911,492 14,143,470
Accrued interest and other liabilities 4,116,855 3,088,964
------------- -------------
Total liabilities 320,620,128 284,125,989
SHAREHOLDERS' EQUITY
Preferred stock; no par value, 300,000
shares authorized, none issued
Common stock; 2,500,000 shares authorized,
1,469,155 shares issued and outstanding
(1,468,980 in December 1994) 19,545,143 19,540,938
Retained earnings 8,667,017 6,550,164
Unrealized gain (loss) on available for sale securities 88,740 (336,272)
Less 3,669 unallocated ESOP shares
(14,680 in December 1994) (39,702) (158,817)
------------- -------------
Total shareholders' equity 28,261,198 25,596,013
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $348,881,326 $309,722,002
============= =============
</TABLE>
Page 3 of 17
<PAGE> 4
FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
September 30,
1995 1994
------------- -------------
<S> <C> <C>
Interest income:
Interest and fees on loans $6,122,128 $4,489,802
Securities
Available for sale - Taxable 364,180 181,261
Available for sale - Exempt from federal income tax 25,114 16,005
Held to maturity - Taxable 95,962 140,690
Held to maturity - Exempt from federal income tax 359,303 385,061
Short term investments 163,718 50,018
------------- -------------
Total interest income 7,130,405 5,262,837
Interest expense:
Deposits 3,035,801 1,867,586
Notes payable and other 130,497 41,505
------------- -------------
Total interest expense 3,166,298 1,909,091
------------- -------------
Net interest income 3,964,107 3,353,746
Provision for loan losses 170,000 387,060
------------- -------------
Net interest income after
provision for loan losses 3,794,107 2,966,686
Noninterest income:
Deposit account fees 243,402 197,979
Gain on sale of mortgage loans 85,761 65,757
Trust fees 60,913 48,285
Loss on sale of securities (8) (1,005)
235,328 538,929
Other
------------- -------------
Total noninterest income 625,396 849,945
Noninterest expense:
Salaries and employee benefits 1,382,556 1,464,589
Occupancy 396,527 344,739
FDIC Insurance premium 3,068 134,480
Michigan Single Business Tax 70,300 74,500
1,261,799 591,882
------------- -------------
Other
Total noninterest expense 3,114,250 2,610,190
Income before federal income taxes 1,305,253 1,206,441
343,000 328,000
------------- -------------
Federal income taxes
NET INCOME $962,253 $878,441
============= =============
PER SHARE
NET INCOME $0.66 $0.61
============= =============
DIVIDENDS $0.18 $0.14
============= =============
</TABLE>
See notes to consolidated financial statements.
Page 4 of 17
<PAGE> 5
FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Nine months ended September 30,
1995 1994
------------- -------------
<S> <C> <C>
Interest income:
Interest and fees on loans $17,213,637 $12,405,654
Securities
Available for sale - Taxable 1,064,920 507,557
Available for sale - Exempt from federal income tax 69,531 35,434
Held to maturity - Taxable 368,956 460,710
Held to maturity - Exempt from federal income tax 1,092,467 1,143,627
Short term investments 279,924 153,336
------------- -------------
Total interest income 20,089,435 14,706,318
Interest expense:
Deposits 8,153,676 5,208,020
Notes payable and other 411,387 162,371
------------- -------------
Total interest expense 8,565,063 5,370,391
------------- -------------
Net interest income 11,524,372 9,335,927
Provision for loan losses 740,000 823,060
------------- -------------
Net interest income after
provision for loan losses 10,784,372 8,512,867
Noninterest income:
Deposit account fees 703,714 575,316
Gain of sale of mortgage loans 202,343 378,197
Trust fees 164,544 132,823
Gain on sale of securities 24,074 38,809
708,864 966,580
------------- -------------
Other
Total noninterest income 1,803,539 2,091,725
Noninterest expense:
Salaries and employee benefits 4,297,367 3,869,711
Occupancy 1,120,600 1,040,728
FDIC Insurance premium 286,570 378,061
Michigan Single Business Tax 215,700 198,500
2,833,522 1,840,106
------------- -------------
Other
Total noninterest expense 8,753,759 7,327,106
Income before federal income taxes 3,834,152 3,277,486
Federal income taxes 968,000 759,000
------------- -------------
NET INCOME $2,866,152 $2,518,486
============= =============
PER SHARE
NET INCOME $1.96 $1.74
============= =============
DIVIDENDS $0.51 $0.43
============= =============
</TABLE>
See notes to consolidated financial statements.
Page 5 of 17
<PAGE> 6
FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Net unrealized
appreciation
(depreciation) on Unallocated
Common Retained available for sale ESOP
Stock Earnings securities Shares TOTAL
----------- ----------- ------------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
BALANCES AT DECEMBER 31, 1993 $18,089,191 $5,638,811 $78,194 ($308,817) $23,497,379
Cash Dividends - $.57 per share (840,233) (840,233)
5% stock dividend - 69,624 shares 1,462,104 (1,469,310) (7,206)
Issuance of 28 shares of
common stock 518 518
Allocation of 13,864 ESOP shares 150,000 150,000
Forfeiture of restricted stock (10,875) (10,875)
Net change in unrealized
appreciation
(depreciation) on available for
sale securities (414,466) (414,466)
3,220,896 3,220,896
----------- ----------- ------------------ ------------ ------------
Net income for 1994
BALANCES AT DECEMBER 31, 1994 19,540,938 6,550,164 (336,272) (158,817) 25,596,013
Cash dividends - $.51 per share (749,299) (749,299)
Issuance of 171 shares of
common stock 4,205 4,205
Allocation of 11,011 ESOP shares 119,115 119,115
Net change in unrealized
appreciation
(depreciation) on available for
sale securities 425,012 425,012
Net income year to date 2,866,152 2,866,152
----------- ----------- ------------------ ------------ ------------
BALANCES AT SEPTEMBER 30, 1995 $19,545,143 $8,667,017 $88,740 ($39,702) $28,261,198
=========== =========== ================== ------------ ------------
</TABLE>
See notes to consolidated financial statements.
Page 6 of 17
<PAGE> 7
FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Nine months ended September 30,
1995 1994
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income $2,866,152 $2,518,486
Adjustments to reconcile net income to net cash provided
by operating activities
Provision for loan losses 740,000 823,060
Depreciation of premises and equipment 415,886 449,304
Net amortization of security premiums/discounts 171,140 533,393
Gain on sale of securities (24,074) (38,809)
Allocation of common stock to ESOP participants 119,115 112,500
Amortization of goodwill and other intangibles 180,886 134,103
Gain on sale of mortgage loans (202,343) (378,197)
Proceeds from sales of mortgage loans 23,956,981 34,842,738
Loans originated for sale (23,115,314) (34,696,313)
Increase in accrued interest receivable and other assets (1,762,051) (1,822,217)
Increase in accrued interest payable and other liabilities 1,027,891 729,720
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,374,269 3,207,768
INVESTING ACTIVITIES
Proceeds from sale of securities available for sale 6,219,949 4,262,288
Proceeds from maturities of securities available for sale 3,080,988 6,018,973
Proceeds from maturities of securities held to maturity 8,255,542 10,813,651
Purchases of securities available for sale (8,806,901) (6,998,600)
Purchases of securities held to maturity (2,338,617) (4,821,751)
Net increase in portfolio loans (32,075,171) (25,634,321)
Net purchases of premises and equipment (2,438,137) (372,738)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (28,102,347) (16,732,498)
FINANCING ACTIVITIES
Deposits from branch acquisitions 10,882,456
Net increase in deposits 27,815,770 18,780,462
Decrease in securities sold under agreements
to repurchase and other short term borrowings (3,231,978) (964,548)
Cash dividends (749,299) (630,330)
Proceeds from issuance of common stock 4,205 230
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 34,721,154 17,185,814
INCREASE IN CASH AND CASH EQUIVALENTS 10,993,076 3,661,084
Cash and cash equivalents at beginning of period 15,858,861 11,411,977
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $26,851,937 $15,073,061
Supplemental Disclosure
Interest Paid $8,174,491 $5,252,822
Income Taxes Paid $1,320,000 $765,000
</TABLE>
During 1995, the Corporation transferred $125,199 in securities held to
maturity to securities available for sale.
See notes to consolidated financial statements.
Page 7 of 17
<PAGE> 8
FIRSTBANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(UNAUDITED)
NOTE A - FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the three and
nine month periods ended September 30, 1995, are not necessarily indicative of
the results that may be expected for the year ended December 31, 1995. The
balance sheet at December 31, 1994, has been derived from the audited financial
statements at that date. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Corporation's annual
report on Form 10-K for the year ended December 31, 1994. Net income per share
is based on the weighted average shares outstanding (which excludes unallocated
ESOP shares) for each period, 1,459,273 in 1995 and 1,445,921 in 1994.
NOTE B - SECURITIES
Individual securities held in the security portfolio are classified as either
securities available for sale or securities held to maturity. Available for
sale securities consist of bonds and notes not classified as held to maturity.
Such securities might be sold prior to maturity due to changes in interest
rates, prepayment risks, yield, availability of alternate investments,
liquidity needs or other factors. As required by SFAS 115, securities
classified as available for sale are reported at their fair value and the
related unrealized holding gain or loss is reported, net of related income tax
effects, as a separate component of shareholders' equity until realized.
Securities held to maturity are comprised of bonds and notes for which the
Corporation's subsidiary banks have the positive intent and ability to hold
until maturity or payoff. Held to maturity securities are reported at cost,
adjusted for premiums and discounts that are recognized in interest income
using the level yield method over the period to call or maturity, whichever is
earlier.
During the second quarter of 1995, a subsidiary bank transferred a bond with a
carrying value of $125,000 from held to maturity to available for sale. The
investment was downgraded to a grade below that which the institution considers
investment quality. Subsequent to the transfer to the available for sale
portfolio, the security was sold at a gain.
Page 8 of 17
<PAGE> 9
NOTE C - LOAN COMMITMENTS
Loan commitments (including unused lines of credit and letters of credit) are
made to accommodate the financial needs of the Banks' customers. The
commitments have credit risk essentially the same as that involved in extending
loans to customers, and are subject to the Banks' normal credit policies and
collateral requirements. Loan commitments which are predominately at variable
rates, were approximately $43,196,000 and $39,110,000 at September 30, 1995,
and December 31, 1994, respectively.
NOTE D - NONPERFORMING LOANS AND ALLOWANCE FOR LOAN LOSSES
Nonperforming Loans and Assets
The following table summarizes nonaccrual and past due loans at the dates
indicated:
<TABLE>
<CAPTION>
(Dollars in thousands) 9/30/95 12/31/94
------------------------------------------------ ------- --------
<S> <C> <C>
Nonperforming loans:
Nonaccrual loans $ 76 $120
Loans 90 days or more past due 336 264
Renegotiated loans 218 213
----- -----
Total nonperforming loans $630 $597
===== =====
Property from defaulted loans $ 0 $ 86
===== =====
Nonperforming loans as a percent of:
Total loans .25% .27%
===== =====
Allowance for loan losses 13.7% 14.6%
===== =====
</TABLE>
Page 9 of 17
<PAGE> 10
Analysis of the Allowance for Loan Losses
The following table summarizes changes in the allowance for loan losses arising
from loans charged off, recoveries on loans previously charged off, and
additions to the allowance which have been charged to expense.
<TABLE>
<CAPTION>
Nine Nine Twelve
months months months
ended ended ended
(Dollars in thousands) 9/30/95 9/30/94 12/31/94
- ------------------------------------------- ------- ------- --------
<S> <C> <C> <C> <C>
Balance at beginning of period $4,100 $3,254 $3,254
Charge-offs (608) (324) (499)
Recoveries 363 267 345
------- ------- -------
Net charge-offs (245) (57) (154)
Additions to allowance for
loan losses 740 823 1,000
------ ------ ------
Balance at end of period $4,595 $4,020 $4,100
====== ====== ======
Average loans outstanding
during the period $238,693 $184,837 $191,782
======== ======== ========
Loans outstanding at end of period $254,582 $204,203 $223,391
======== ======== ========
Allowance as a percent of:
Total loans at end of period 1.80% 1.97% 1.84%
==== ==== ====
Nonperforming loans at end of period 729% 876% 687%
=== === ===
Net charge-offs (recoveries) as a percent of:
Average loans outstanding .10% .03% .08%
=== === ===
Average Allowance for loan losses 5.59% 1.42% 3.76%
==== ==== ====
</TABLE>
Page 10 of 17
<PAGE> 11
NOTE E - RECLASSIFICATION
Certain 1994 amounts have been reclassified to conform to the 1995
presentation.
NOTE F - ACCOUNTING STANDARDS
In May 1993, the Financial Accounting Standards Board issued Financial
Accounting Standards Board Statements 114, Accounting By Creditors for
Impairment of a Loan, (SFAS #114). The Corporation adopted SFAS #114 as of
January 1, 1995, and its adoption has had no material impact on the company's
financial position or results of operations.
In May 1995, the Financial Accounting Standards Board released Statement of
Financial Accounting Standards No. 122 "Accounting for Mortgage Servicing
Rights" (SFAS No. 122). This statement changes the accounting for mortgage
servicing rights retained by the loan originator. Under this standard, if the
originator sells or secures mortgage loans and retains the related servicing
rights, the total cost of the mortgage loan is allocated between the loan
(without the servicing rights) and the servicing rights, based on their
relative fair values. Under current practice, all such costs were assigned to
the loan. The costs allocated to mortgage servicing rights will be recorded as
a separate asset and be amortized in proportion to, and over the life of, the
net servicing income. The carrying value of the mortgage servicing rights will
be periodically evaluated for impairment.
The Banks currently retain servicing on almost all loans originated and sold
into the secondary market. Accordingly, this statement will apply to most loan
sales. The impact on the Company's results of operations and financial
position will depend upon the volume of loans sold with servicing retained, the
cost of loans originated, the relative fair values of loans and servicing
rights at the point of sale, among other factors. In general, the standard
will increase the amount of income recognized at the time of sale and decrease
the amount of income recognized over the servicing life of the asset.
This statement is effective for the Company in fiscal 1996, although early
implementation is permitted. The statement applies to loan sale transactions
after implementation; retroactive application to servicing rights created prior
to adoption of the statement is prohibited.
Page 11 of 17
<PAGE> 12
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The consolidated financial information presented is for Firstbank Corporation
("Corporation") and its wholly owned subsidiaries, Bank of Alma, Firstbank (Mt.
Pleasant), and 1st Bank (West Branch) at September 30, 1995.
Financial Condition
Corporate assets increased $39 million, or 13%, since the end of 1994. The
majority of the asset growth, $31 million, has occurred in the loan portfolio.
Over the last year, the Corporation has acquired four new branches from other
financial institutions. Strong loan demand in addition to access to new
markets is responsible for the 14% loan growth.
The allowance for loan losses has increased $500,000, 12%, during the nine
months ending September 30, 1995. The allowance is 1.80% of total loans at the
end of September 1995 compared to 1.97% at September 30, 1994. Management
continues to maintain the allowance for loan losses at the level considered
appropriate to absorb losses in the portfolio. The allowance balance is
established after considering past loan loss experience, current economic
conditions, volume, growth and composition of the loan portfolio, delinquencies
and other relevant factors.
Securities have decreased $5.9 million during the first nine months of 1995.
Sales and maturities of securities have reached $17.5 million during the first
three quarters of 1995, while purchases of investment securities totaled $11.1
million during the same period. Approximately 30% of the security purchases
were generated from excess funds from branch acquisitions. The majority of new
investments are classified in the available for sale portfolio. As loan demand
has grown, cash from the sales and maturities of securities have been used to
fund loan growth.
Premises and equipment have increased $2 million or 42% since the end of 1994.
During the first nine months of 1995, the Corporation has acquired one new
branch and opened new offices for two existing branches. In addition, the
Corporation has upgraded its computer system, and the cost of the new hardware
is included in the increase.
Cash and cash equivalents ending balances have increased $11 million since
December 31, 1994. The average balance for the first three quarters of 1995
for cash and cash equivalents is $13 million. Ending September 30, 1995,
balances were unusually high, and have declined to levels closer to the nine
month average.
Total deposits have increased $39 million or 15% from December 31, 1994, to
September 30, 1995. The majority of this increase, $30 million, is in time
deposits. A second quarter branch acquisition accounts for $11 million of the
total deposit increase and $7 million of the time deposit increase. In
addition, the Banks have run selective promotions to increase core deposits,
and have been successful in bidding for municipal funds.
Total shareholders' equity reflects a $2.7 million or 10% increase during the
first nine months of 1995. The components of this change are net income of
$2.9 million, dividends of $749,000, stock transactions of $123,000, and an
increase of $425,000 as a change in net unrealized gain on available for sale
securities. The book value per share was $19.28 at September 30, 1995,
compared to $17.60 at December 31, 1994.
Page 12 of 17
<PAGE> 13
The following table discloses compliance with current regulatory requirements
on a consolidated basis:
<TABLE>
<CAPTION>
Tier 1 Risk-based
(Dollars in thousands) Leverage Capital Capital
---------------------------------- -------- ------- -------
<S> <C> <C> <C> <C>
Capital balances at September 30, 1995 $25,742 $25,742 $28,996
Required Regulatory Capital 13,169 10,359 20,717
Capital in excess of regulatory minimums 12,573 15,383 8,279
Capital ratios at September 30, 1995 7.82% 9.94% 11.20%
Regulatory capital ratios -- "well capitalized"
definition 5.00% 6.00% 10.00%
Regulatory capital ratios -- minimum requirement 4.00% 4.00% 8.00%
</TABLE>
Results of Operations
Net income for the third quarter of 1995 was $962,000, an 10% increase over the
net income of $878,000 earned in the third quarter of 1994. During the first
nine months of 1995, net income increased 14% to $2,866,000 when compared to
the same period in 1994. Net interest margin was 5.20% for the quarter and
5.34% for the nine months ending September 30, 1995, compared to 5.62% and
5.41% for the corresponding periods in 1994. Net interest income has increased
$610,000 for the quarter and $2,188,000 for the nine months ending September
30, 1995, when compared to the corresponding periods of 1994. Earning assets
have increased $65 million from September 30, 1994, to September 30, 1995. The
investment of the increase in assets should provide continued strong
performance in net interest income.
The provision for loan losses was $740,000 for the first nine months of 1995 as
compared to $823,000 for the same time periods in 1994. The third quarter
provision was $170,000 for 1995 compared to $387,000 in 1994. The strong
economies in local markets in which the banks operate have allowed management
to reduce the provision during the third quarter of 1995 when compared to the
third quarter of 1994.
Noninterest income recorded a decrease of $288,000 for the nine months ending
September 30, 1995, when compared to the same period in 1994. Deposit fees
have increased $128,000 or 22% comparing the first three quarters of 1995 to
the same period in 1994. The majority of this increase is attributable to
operating three additional branches for the entire nine months of 1995 and one
new branch for three months of 1995 that were not included in the 1994 results.
Gains on sale of mortgage loans is down $176,000 or 47% for the nine months
ending September 30, 1995, when compared to the first three quarters of 1994.
Mortgage activity has been lower in 1995 than in 1994 but has accelerated
during the third quarter of 1995. We expect to see the gains continue to grow
for the remainder of the year, but not reach 1994 totals. Other noninterest
income is down 27% or $258,000 at September 30, 1995, from the 1994 levels. A
$441,000 nonrecurring gain on the termination of the pension plan was recorded
in 1994.
Total non interest expense increased 19% or $1,427,000 during the first three
quarters of 1995 when compared to the same period in 1994. Salaries increased
$428,000 or 11% primarily as the result of operating three branches in 1995
that were not purchased until the fourth quarter of 1994. In addition, another
branch was acquired late in the second quarter of 1995, and those salary costs
are also included in 1995 numbers, but not in 1994 results. The FDIC
insurance premium reflects a
Page 13 of 17
<PAGE> 14
$152,000 refund received in September 1995. The other non interest expense
increase of $993,000 reflects the costs of operating the new branches. In
addition, two branches moved into new buildings during 1995. The Corporation
has been working with outside consultants on a variety of projects designed to
increase the Corporation's franchise value. These costs are also included in
other noninterest expense.
The Corporation has approved the purchase of a new mainframe computer and the
upgrade and/or addition of PC hardware and software modules. The approval came
as the result of a recommendation of a Corporate Technology Committee who
worked with an external consultant to form a Technology Plan. The mainframe is
scheduled to be on line in November 1995. The PC upgrades have begun and will
continue throughout 1996.
Net income per share has increased 8.2% from $.61 to $.66 for the third
quarter, and 12.7% or $.22 per share from $1.74 to $1.96 for the three quarters
ending September 30, 1994 and 1995. All 1994 per share data has been restated
to reflect the 1994 5% stock dividend.
Page 14 of 17
<PAGE> 15
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 27 -- Financial Data Schedule
(b) Reports on Form 8-K
NONE
Page 15 of 17
<PAGE> 16
SIGNATURES
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 thereunto duly authorized.
FIRSTBANK CORPORATION
(Registrant)
Date: November 8, 1995 \s\ John A. McCormack
------------------- -----------------
John A. McCormack
President, Chief Executive Officer and
Director (Principal Executive Officer)
Date: November 8, 1995 \s\ Mary D. Deci
------------------- -----------------
Mary D. Deci
Vice President and Chief Financial
Officer
(Principal Accounting Officer)
Page 16 of 17
<PAGE> 17
Exhibit Index
Exhibit No
27 Financial Data Schedules
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 14,656
<INT-BEARING-DEPOSITS> 246
<FED-FUNDS-SOLD> 11,950
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 25,442
<INVESTMENTS-CARRYING> 31,877
<INVESTMENTS-MARKET> 32,788
<LOANS> 254,582
<ALLOWANCE> 4,595
<TOTAL-ASSETS> 348,881
<DEPOSITS> 305,592
<SHORT-TERM> 10,911
<LIABILITIES-OTHER> 4,117
<LONG-TERM> 0
<COMMON> 19,545
0
0
<OTHER-SE> 8,716
<TOTAL-LIABILITIES-AND-EQUITY> 348,881
<INTEREST-LOAN> 17,214
<INTEREST-INVEST> 2,596
<INTEREST-OTHER> 280
<INTEREST-TOTAL> 20,089
<INTEREST-DEPOSIT> 8,154
<INTEREST-EXPENSE> 8,565
<INTEREST-INCOME-NET> 11,524
<LOAN-LOSSES> 740
<SECURITIES-GAINS> 24
<EXPENSE-OTHER> 8,754
<INCOME-PRETAX> 3,834
<INCOME-PRE-EXTRAORDINARY> 2,866
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,866
<EPS-PRIMARY> 1.96
<EPS-DILUTED> 1.96
<YIELD-ACTUAL> 5.34
<LOANS-NON> 76
<LOANS-PAST> 336
<LOANS-TROUBLED> 218
<LOANS-PROBLEM> 8,028
<ALLOWANCE-OPEN> 4,100
<CHARGE-OFFS> 608
<RECOVERIES> 363
<ALLOWANCE-CLOSE> 4,595
<ALLOWANCE-DOMESTIC> 3,732
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 863
</TABLE>
