<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, 1996.
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 . . . 1,546,718 shares outstanding as of October 31, 1996.
<PAGE> 2
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (UNAUDITED)
Consolidated balance sheets . . . . September 30, 1996,
and December 31, 1995. page 3
Consolidated statements of income . . . . three months
ended September 30, 1996, and September 30, 1995. page 4
Consolidated statements of income . . . . nine months
ended September 30, 1996, and September 30, 1995. page 5
Consolidated statements of changes in shareholders'
equity page 6
Consolidated statements of cash flows . . . nine
months ended September 30, 1996, and September 30,
1995. page 7
Notes to consolidated financial statements . . . .
September 30, 1996 page 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. page 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K page 14
SIGNATURES page 15
EXHIBITS
Exhibit 27 -- Financial Data Schedule page 16
Page 2 of 20
<PAGE> 3
<TABLE>
FIRSTBANK CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- -------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 19,431,595 $ 15,526,265
Interest bearing deposits with banks 132,771 272,475
Overnight investments 2,300,000 950,000
------------ ------------
Total cash and cash equivalents 21,864,366 16,748,740
Securities available for sale 53,119,621 61,820,558
Securities held to maturity
Loans
Loans held for sale 5,962,864 2,606,213
Portfolio Loans
Commercial 117,836,411 115,779,085
Real estate mortgage, portfolio 108,856,811 88,146,830
Consumer 67,727,921 58,315,109
------------ ------------
Total loans 300,384,007 264,847,237
Less allowance for loan losses (6,076,000) (4,876,000)
------------ ------------
Net loans 294,308,007 259,971,237
Premises and equipment, net 7,546,497 7,006,008
Accrued interest receivable 2,473,115 2,259,443
Other assets 5,636,301 5,136,839
------------ ------------
TOTAL ASSETS $384,947,907 $352,942,825
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest bearing accounts $ 48,420,687 $ 39,030,563
Interest bearing accounts:
Demand 75,361,793 64,288,096
Savings 60,453,637 54,343,238
Time 150,244,762 149,344,719
------------ ------------
Total deposits 334,480,879 307,006,616
Page 3 of 20
<PAGE> 4
Securities sold under agreements to
repurchase and overnight borrowings 11,648,735 11,842,279
Notes payable 2,239,039
Accrued interest and other liabilities 4,640,588 4,241,277
------------ ------------
Total liabilities 353,009,241 323,090,172
SHAREHOLDERS' EQUITY
Preferred stock; no par value, 300,000
shares authorized, none issued
Common stock; 2,500,000 shares authorized,
1,546,563 shares issued and outstanding
(1,542,295 in December 1995) 21,470,485 21,355,293
Retained earnings 9,972,261 7,583,783
Unrealized gain (loss) on available for sale
securities 495,920 913,577
------------ ------------
Total shareholders' equity 31,938,666 29,852,653
------------ ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $384,947,907 $352,942,825
============ ============
</TABLE>
See notes to consolidated financial statements
Page 4 of 20
<PAGE> 5
<TABLE>
FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
THREE MONTHS
ENDED SEPTEMBER 30,
1996 1995
---------- ----------
<S> <C> <C>
Interest income
Interest and fees on loans $7,046,175 $6,122,128
Investment securities
Taxable 454,264 470,549
Exempt from Federal Income Tax 361,137 384,417
Interest bearing deposits with banks 986 3,478
Overnight investments 52,866 160,240
---------- ----------
Total interest income 7,915,428 7,140,812
Interest expense:
Deposits 3,159,597 3,035,800
Notes payable and other 185,904 130,497
---------- ----------
Total interest expense 3,345,501 3,166,297
---------- ----------
Net interest income 4,569,927 3,974,515
Provision for loan losses 709,000 170,000
---------- ----------
Net interest income after
provision for loan losses 3,860,927 3,804,515
Noninterest income:
Gain on sale of mortgage loans 166,950 85,761
Service charges on deposit accounts 259,533 243,402
Trust fees 58,725 60,913
Gain on sale of securities (213) (8)
Other 280,953 224,921
---------- ----------
Total noninterest income 765,948 614,989
Noninterest expense:
Salaries and employee benefits 1,590,879 1,382,556
Occupancy 470,725 396,527
FDIC Insurance premium 23,915 3,068
Michigan Single Business Tax 104,600 70,300
Other 786,053 1,261,799
---------- ----------
Total noninterest expense 2,976,172 3,114,250
Page 5 of 20
<PAGE> 6
Income before federal income taxes 1,650,703 1,305,254
Federal income taxes 478,000 343,000
---------- ----------
NET INCOME $1,172,703 $ 962,254
========== ==========
Per Share:
NET INCOME $ 0.76 $ 0.63
========== ==========
DIVIDENDS $ 0.22 $ 0.17
========== ==========
</TABLE>
See notes to consolidated financial statements
Page 6 of 20
<PAGE> 7
<TABLE>
FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30,
1996 1995
----------- -----------
<S> <C> <C>
Interest income:
Interest and fees on loans $20,212,757 $17,213,637
Investment securities
Taxable 1,460,814 1,454,116
Exempt from Federal Income Tax 1,107,777 1,161,998
Interest bearing deposits with banks 10,588 12,327
Overnight investments 122,379 267,597
----------- -----------
Total interest income 22,914,315 20,109,675
Interest expense:
Deposits 9,321,463 8,153,677
Notes payable and other 531,034 411,387
----------- -----------
Total interest expense 9,852,497 8,565,064
Net interest income 13,061,818 11,544,611
Provision for loan losses 1,541,000 740,000
----------- -----------
Net interest income after
provision for loan losses 11,520,818 10,804,611
Noninterest income:
Gain on sale of mortgage loans 485,814 202,343
Service charges on deposit accounts 757,114 703,714
Trust fees 174,581 164,544
Gain on sale of securities (81) 24,074
Other 859,241 688,624
----------- -----------
Total noninterest income 2,276,669 1,783,299
Noninterest expense:
Salaries and employee benefits 4,870,351 4,297,367
Occupancy 1,357,549 1,120,600
FDIC Insurance premium 67,544 286,570
Michigan Single Business Tax 275,300 215,700
Other 2,606,144 2,833,520
----------- -----------
Total noninterest expense 9,176,888 8,753,757
Page 7 of 20
<PAGE> 8
Income before federal income taxes 4,620,599 3,834,153
Federal income taxes 1,275,000 968,000
----------- -----------
NET INCOME $ 3,345,599 $ 2,866,153
=========== ===========
Per Share:
NET INCOME $ 2.17 $ 1.87
=========== ===========
DIVIDENDS $ 0.62 $ 0.49
=========== ===========
</TABLE>
See notes to consolidated financial statements
Page 8 of 20
<PAGE> 9
<TABLE>
FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
<CAPTION>
NET UNREALIZED
APPRECIATION
(DEPRECIATION) ON UNALLOCATED
(IN THOUSANDS) COMMON RETAINED AVAILABLE FOR ESOP
STOCK EARNINGS SALE SECURITIES SHARES TOTAL
----------- ----------- ----------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
BALANCES AT DECEMBER 31, 1994 $19,540,938 $ 6,550,164 $ (336,272) $(158,817) $25,596,013
Cash dividends - $.66 per share (1,013,748) (1,013,748)
5% stock dividend - 73,113 shares 1,809,547 (1,818,112) (8,565)
Issuance of 63 shares of common stock
through exercise of stock options 1,289 1,289
Issuance of 145 shares of common stock 3,519 3,519
Allocation of 15,414 ESOP shares 158,817 158,817
Net change in unrealized appreciation
(depreciation) on available for
sale securities 1,249,849 1,249,849
Net income for 1995 3,865,479 3,865,479
----------- ----------- ---------- --------- -----------
BALANCES AT DECEMBER 31, 1995 21,355,293 7,583,783 913,577 0 29,852,653
Cash dividends - $.62 per share (957,121) (957,121)
Issuance of 4,268 shares of common stock 115,192 115,192
Net change in unrealized appreciation
(depreciation) on available for
sale securities (417,657) (417,657)
Net income year to date 3,345,599 3,345,599
----------- ----------- ---------- --------- -----------
BALANCES AT SEPTEMBER 30, 1996 $21,470,485 $ 9,972,261 $ 495,920 $ 0 $31,938,666
=========== =========== ========== ========= ===========
</TABLE>
See notes to consolidated financial statements
Page 9 of 20
<PAGE> 10
<TABLE>
FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1996 1995
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 3,345,599 $ 2,866,152
Adjustment to reconcile net income to net cash provided
by operating activities:
Provision for loan losses 1,541,000 740,000
Depreciation of premises and equipment 520,101 410,863
Net amortization of security premiums/discounts 267,416 171,140
Gain on sale of securities 81 (24,074)
Allocation of common stock to ESOP participants 119,115
Amortization of goodwill and other intangibles 201,175 180,886
Gain on sale of mortgage loans (485,814) (202,343)
Proceeds from sales of mortgage loans 32,036,281 23,956,981
Loans originated for sale (34,907,118) (23,115,314)
Increase in accrued interest receivable and other assets (699,152) (1,762,051)
Increase in accrued interest payable and other liabilities 399,311 1,027,891
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,218,880 4,369,246
INVESTING ACTIVITIES
Proceeds from sale of securities available for sale 2,035,359 6,219,949
Proceeds from maturities of securities available for sale 16,846,749 3,080,988
Proceeds from maturities of securities held to maturity 8,255,542
Purchases of securities available for sale (11,081,483) (8,806,901)
Purchases of securities held to maturity (2,338,617)
Net increase in portfolio loans (32,521,118) (32,075,171)
Net purchases of premises and equipment (1,060,590) (2,433,114)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (25,781,083) (28,097,324)
FINANCING ACTIVITIES
Net increase in deposits 27,474,263 38,698,226
Decrease in securities sold under agreements
to repurchase and other short term borrowings (193,544) (3,231,978)
Increase on Note Payable 2,239,039
Cash dividends (957,121) (749,299)
Proceeds from issuance of common stock 115,192 4,205
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 28,677,829 34,721,154
Page 10 of 20
<PAGE> 11
INCREASE IN CASH AND CASH EQUIVALENTS 5,115,626 10,993,076
Cash and cash equivalents at beginning of period 16,748,740 15,858,861
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 21,864,366 $ 26,851,937
============ ============
Supplemental Disclosure
Interest Paid $ 9,769,548 $ 8,174,491
Income Taxes Paid $ 1,660,000 $ 1,320,000
</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 11 of 20
<PAGE> 12
FIRSTBANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(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 nine month period ended September 30, 1996, are not
necessarily indicative of the results that may be expected for the year
ended December 31, 1996. The balance sheet at December 31, 1995, 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, 1995. Net income per share is based on the
weighted average shares outstanding (which excludes unallocated ESOP shares
for 1995) for each period, 1,543,532 in 1996 and 1,518,217 in 1995.
NOTE B - SECURITIES
Individual securities held in the security portfolio are classified as
securities available for sale. 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.
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 $48,122,203 and
$43,503,341 at September 30, 1996, and December 31, 1995, respectively.
Page 12 of 20
<PAGE> 13
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>
SEPTEMBER 30, DECEMBER 31,
(DOLLARS IN THOUSANDS) 1996 1995
---------------------------------------- ------------- ------------
<S> <C> <C> <C>
Nonperforming loans:
Nonaccrual loans $135 $ 47
Loans 90 days or more past due 446 386
Renegotiated loans 157 182
----- -----
Total nonperforming loans $738 $615
===== =====
Property from defaulted loans $ 81 $ 0
===== =====
Nonperforming loans as a percent of:
Total loans .25% .23%
=== ===
Allowance for loan losses 12.15% 12.61%
===== =====
</TABLE>
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.
Page 13 of 20
<PAGE> 14
<TABLE>
<CAPTION>
NINE NINE TWELVE
MONTHS MONTHS MONTHS
ENDED ENDED ENDED
SEPT. 30, SEPT. 30, DECEMBER 31,
(DOLLARS IN THOUSANDS) 1996 1995 1995
----------------------------------- --------- --------- ------------
<S> <C> <C> <C> <C>
Balance at beginning of period $ 4,876 $ 4,100 $ 4,100
Charge-offs (548) (608) (738)
Recoveries 207 363 429
-------- -------- --------
Net charge-offs (341) (245) (309)
Additions to allowance for
loan losses 1,541 740 1,085
-------- -------- --------
Balance at end of period $ 6,076 $ 4,595 $ 4,876
======== ======== ========
Average loans outstanding
during the period $284,559 $238,693 $243,962
======== ======== ========
Loans outstanding at end of period $300,384 $254,582 $264,847
======== ======== ========
Allowance as a percent of:
Total loans at end of period 2.02% 1.80% 1.84%
==== ==== ====
Nonperforming loans at end of period 823% 729% 793%
=== === ===
Net charge-offs as a percent of:
Average loans outstanding .12% .10% .13%
=== === ===
Average Allowance for loan losses 6.55% 5.59% 6.93%
==== ==== ====
</TABLE>
Page 14 of 20
<PAGE> 15
NOTE E - RECLASSIFICATION
Certain 1995 amounts have been reclassified to conform to the 1996
presentation.
NOTE F - ACCOUNTING STANDARDS
In May 1995, the Financial Accounting Standards Board released Statement of
Financial Accounting Standards No. 122 "ACCOUNTING FOR MORTGAGE SERVICING
RIGHTS" (SFAS 122). This statement changes the accounting for mortgage
servicing rights retained by the loan originator. Under this standard, if
the originator sells or securitizes 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 previous practice, all such costs were
assigned to the loan. The costs allocated to mortgage servicing rights are
recorded as a separate asset and are amortized in proportion to, and over
the life of, the net servicing income. The Corporation adopted SFAS 122 as
of January 1, 1996, and its adoption has had no material impact on the
company's financial position or results of operations.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 123, ACCOUNTING FOR STOCK BASED COMPENSATION (SFAS
123). The Statement establishes a fair value based method of accounting
for employee stock options and similar equity instruments, such as
warrants, and encourages all companies to adopt that method of accounting
for all of their employee stock compensation plans. However, the Statement
allows companies to continue measuring compensation cost for such plans
using accounting guidance in place prior to SFAS 123. Companies that elect
to continue with the former method of accounting must make pro-forma
disclosures of net income and earnings per share as if the fair value
method provided for in SFAS 123 had been adopted. Disclosure requirements
are effective for financial statements issued after December 15, 1995.
Companies which elect to continue measuring compensation costs under
current guidance must present pro-forma disclosures for awards granted in
the first fiscal year beginning after December 15, 1994. However that
disclosure need not be made until financial statements for that fiscal year
are presented for comparative purposes with financial statements for a
later fiscal year. Management has concluded that the Company will not
adopt the fair value accounting provisions of SFAS 123 and will continue to
apply its current method of accounting. Accordingly, adoption of the SFAS
123 will have no impact on the Company's consolidated financial position or
results of operations.
Page 15 of 20
<PAGE> 16
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), 1st Bank (West Branch) (collectively, the
"Banks"), Niles Agency, and 1st Armored.
FINANCIAL CONDITION
Corporate assets have increased $32 million, or 9.1%, during the first nine
months of 1996. During this period, loans have increased over $34 million,
or 13.2%, with the largest increase, $24 million, in mortgage loans. All
types of loans have increased during the first three quarters of 1996. At
September 30, 1996, the Corporation's loan to deposit ratio was 87.4%. All
loans classified as loans held for sale are residential real estate
mortgages.
At September 30, 1996, the allowance for loan losses was $6,076,000, an
increase of $1,200,000 or 24.6% since December 31, 1995. For the first
three quarters of 1996, the allowance was increased by a provision of
$1,541,000 and decreased by net charge offs of $341,000. The allowance was
2.02% of outstanding loans at September 30, 1996, compared to 1.84% at
December 31, 1995. At September 30, 1996, the allowance was 823% of
nonperforming loans compared to 793% at December 31, 1995. Nonperforming
loans have increased $123,000, or 20%, to $738,000 during the first nine
months of 1996. Management continues to maintain the allowance for loan
losses at a level considered appropriate to absorb losses in the portfolio.
The allowance balance is established after considering past loan loss
experience, current economic conditions, volume, loan to deposit ratio,
growth and composition of the loan portfolio, delinquencies, and other
relevant factors.
All of the Corporation's investment securities are classified as available
for sale. Security maturities and sales have exceeded security purchases
by $8,701,000 during the first three quarters of 1996. The proceeds from
the net reduction of investment securities have been used to fund loan
demand.
Deposits have grown $27 million or 8.95% in the first three quarters of
1996. All classes of deposits have grown over this nine month period. All
of this growth has been generated from the market areas in which the
Corporation operates. The Corporation has not acquired brokered deposits
or branches during the first nine months of 1996.
Notes payable increased $2,000,000 from December 31, 1995, to September 30,
1996. This increase is the result of a one year note secured by one of the
Banks from the Federal Home Loan Bank. The proceeds of this note have been
used to fund loans.
Page 16 of 20
<PAGE> 17
Shareholders' equity increased $2,086,000, or 7.0%, during the three
quarters ended September 30, 1996. Net income of $3,346,000 and stock
transactions of $115,000 increased shareholders' equity while dividends of
$957,000 and change in net unrealized gain (loss) on available for sale
securities of $418,000 reduced shareholders' equity. Book value per share
has increased 6.7% during this same time from $19.36 per share at December
31, 1996, to $20.65 at September 30, 1996.
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>
Capital balances at September 30, 1996 $29,254 $29,254 $32,882
Required Regulatory Capital 14,728 11,511 23,022
Capital in excess of regulatory minimums 14,526 17,743 9,860
Capital ratios at September 30, 1996 7.94 10.17 11.43
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 1996 was $1,173,000, an increase of
$211,000, or 22%, from the 1995 results of $962,000. For the first nine
months of 1996, net income increased $479,000, or 17%, to $3,346,000 at
September 30, 1996, when compared to $2,866,000 for the same period in
1995.
Net interest income has increased $1,517,000, or 13%, to $13,062,000 for
the nine months ending September 30, 1996, when compared to the same period
in 1995. During the third quarter of 1996, net interest income increased
$595,000, or 15%, when compared to the third quarter of 1995. Third
quarter 1996 and 1995 net interest income was $4,570,000 and $3,975,000
respectively.
Net interest margin was 5.24% for the nine months and 5.29% for the three
months ended September 30, 1996, compared to 5.34% and 5.20% for the
respective periods in 1995. Net interest margin continues to remain at
above average levels.
Page 17 of 20
<PAGE> 18
The provision for loan losses was $1,541,000 for the nine months, and
$709,000 for the three months ending September 30, 1996, compared to
$740,000 and $170,000 for the same periods in 1995. The increase in the
provision is not an indication of deteriorating credit quality, but rather
of conservative management.
Noninterest income has grown $493,000 or 28% for the three quarters and
$151,000, or 25%, for the third quarter of 1996 as compared to the
respective periods of 1995. The majority of this increase is due to the
gain on sale of mortgage loans. Loans originated for sale in 1996 have
exceeded 1995 activity by $11,800,000. The gain on sale of mortgage loans
has increased $283,000 or 140% for the nine months and $81,000 for the
three months ending September 30, 1996, when compared to the same periods
in 1995.
Noninterest expense increased a modest 5%, or $423,000, during the first
nine months of 1996 when compared to the first nine months of 1995. For
the third quarter of 1996, noninterest expense was $138,000 or 4% less than
the respective quarter of 1995. During the third quarter of 1996, over $4
million of mortgage loans held for sale were sold. As a result of this
sale, the lower of cost or market adjustment was reduced by $74,000.
Net income per share increased 21% to $.76 in the third quarter of 1996
when compared to $.63 in the third quarter of 1995. For the nine months
ended September 30, 1996, earnings per share were $2.17 or a 16% increase
over the nine month results of 1995 or $1.87. All 1995 per share data has
been restated to reflect the 1995 5% stock dividend.
Pending regulatory approval, the Corporation expects to acquire
approximately $20 million in deposit liabilities as the result of the
acquisitions of branches in Auburn and Merrill, Michigan, from an unrelated
financial institution. The transaction is expected to be completed late in
the fourth quarter.
Page 18 of 20
<PAGE> 19
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 19 of 20
<PAGE> 20
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, 1996 \S\ JOHN MCCORMACK
John McCormack
President, Chief Executive Officer and
Director (Principal Executive Officer)
Date: NOVEMBER 8, 1996 \S\ MARY D. DECI
Mary D. Deci
Vice President and Chief Financial
Officer (Principal Accounting Officer)
Page 20 of 20
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF FIRSTBANK
CORPORATION FOR THE PERIOD ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 19,432
<INT-BEARING-DEPOSITS> 133
<FED-FUNDS-SOLD> 2,300
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 53,120
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 300,384
<ALLOWANCE> 6,076
<TOTAL-ASSETS> 384,948
<DEPOSITS> 334,481
<SHORT-TERM> 11,649
<LIABILITIES-OTHER> 4,641
<LONG-TERM> 2,239
<COMMON> 21,471
0
0
<OTHER-SE> 10,468
<TOTAL-LIABILITIES-AND-EQUITY> 384,948
<INTEREST-LOAN> 20,213
<INTEREST-INVEST> 2,568
<INTEREST-OTHER> 133
<INTEREST-TOTAL> 22,914
<INTEREST-DEPOSIT> 9,321
<INTEREST-EXPENSE> 9,852
<INTEREST-INCOME-NET> 13,062
<LOAN-LOSSES> 1,541
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 9,177
<INCOME-PRETAX> 4,621
<INCOME-PRE-EXTRAORDINARY> 4,621
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,346
<EPS-PRIMARY> 2.17
<EPS-DILUTED> 2.17
<YIELD-ACTUAL> 5.24
<LOANS-NON> 135
<LOANS-PAST> 446
<LOANS-TROUBLED> 157
<LOANS-PROBLEM> 279
<ALLOWANCE-OPEN> 4,876
<CHARGE-OFFS> 548
<RECOVERIES> 207
<ALLOWANCE-CLOSE> 6,076
<ALLOWANCE-DOMESTIC> 4,891
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,185
</TABLE>
