SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 2000
or
[ ] TRANSACTION 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 . . . . 4,625,928 shares outstanding as of July 31, 2000.
<PAGE>
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (UNAUDITED) page 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. page 11
Item 3. Quantitative and Qualitative Disclosures about Market Risk. page 14
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders page 15
Item 6. Exhibits and Reports on Form 8-K page 15
SIGNATURES page 16
EXHIBITS
Exhibit 27 - Financial Data Schedule page 17
Exhibit 99 - Report on Review by Independent Certified
Public Accountant page 18
Page 2
<PAGE>
FIRSTBANK CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2000, AND DECEMBER 31, 1999
(Dollars in Thousands)
UNAUDITED
<TABLE>
June 30, December 31,
2000 1999
---- ---
<S> <C> <C>
ASSETS
Cash and due from banks $21,673 $24,786
Short term investments 3,821 411
----------- -----------
Total cash and cash equivalents 25,494 25,197
Securities available for sale 81,868 90,266
Loans
Loans held for sale 952 1,117
Portfolio loans
Commercial 255,093 227,855
Real estate mortgage 220,220 204,062
Consumer 81,153 75,204
----------- -----------
Total loans 557,418 508,238
Less allowance for loan losses (9,764) (9,317)
----------- -----------
Net loans 547,654 498,921
Premises and equipment, net 15,624 14,929
Acquisition intangibles 8,495 8,838
Accrued interest receivable 3,952 3,489
Other assets 9,805 8,912
----------- -----------
TOTAL ASSETS $692,892 $650,552
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest bearing accounts 74,346 75,844
Interest bearing accounts:
Demand 127,629 136,196
Savings 70,743 70,527
Time 229,235 208,837
----------- -----------
Total deposits 501,953 491,404
Securities sold under agreements to
repurchase and overnight borrowings 49,798 51,819
Notes payable 70,841 38,384
Accrued interest and other liabilities 7,983 7,913
----------- -----------
Total liabilities 630,575 589,520
SHAREHOLDERS' EQUITY
Preferred stock; no par value, 300,000 shares authorized, none issued Common
stock; 10,000,000 shares authorized, 4,632,454 shares issued and
outstanding (4,693,756 as of December 31, 1999) 53,910 55,263
Retained earnings 9,100 6,433
Unrealized loss on available for sale securities (693) (664)
----------- -----------
Total shareholders' equity 62,317 61,032
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $692,892 $650,552
=========== ===========
</TABLE>
See accountants' review report and notes to consolidated financial statements.
Page 3
<PAGE>
FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
JUNE 30, 2000 AND 1999
(Dollars in Thousands)
UNAUDITED
<TABLE>
Three months ended June 30,
2000 1999
---- ----
<S> <C> <C>
Interest income:
Interest and fees on loans $11,954 $9,886
Investment securities
Taxable 849 926
Exempt from Federal Income Tax 378 433
Short term investments 51 69
----------- -----------
Total interest income 13,232 11,314
Interest expense:
Deposits 4,544 4,233
Notes payable and other 1,556 469
----------- -----------
Total interest expense 6,100 4,702
----------- -----------
Net interest income 7,132 6,612
Provision for loan losses 213 126
----------- -----------
Net interest income after provision for loan losses 6,919 6,486
Noninterest income:
Gain on sale of mortgage loans 78 207
Service charges on deposit accounts 443 405
Trust fees 107 87
Gain on sale of securities 7 21
Mortgage servicing 69 48
Other 628 539
----------- -----------
Total noninterest income 1,332 1,307
Noninterest expense:
Salaries and employee benefits 2,651 2,566
Occupancy 776 761
Amortization of intangibles 172 160
FDIC Insurance premium 25 20
Michigan Single Business Tax 152 100
Other 1,305 1,343
----------- -----------
Total noninterest expense 5,081 4,950
----------- -----------
Income before federal income taxes 3,170 2,843
Federal income taxes 1,030 862
----------- -----------
NET INCOME $2,140 $1,981
=========== ===========
Basic earnings per share $0.46 $0.42
=========== ===========
Diluted earnings per share $0.46 $0.40
=========== ===========
Dividends per share $0.17 $0.15
=========== ===========
</TABLE>
See accountants' review report and notes to consolidated financial statements.
Page 4
<PAGE>
FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
JUNE 30, 2000 AND 1999
(Dollars in Thousands)
UNAUDITED
<TABLE>
Six months ended June 30,
2000 1999
---- ----
<S> <C> <C>
Interest income:
Interest and fees on loans $23,151 $19,423
Investment securities
Taxable 1,763 1,824
Exempt from Federal Income Tax 772 886
Short term investments 100 189
----------- -----------
Total interest income 25,786 22,322
Interest expense:
Deposits 8,869 8,539
Notes payable and other 2,818 902
----------- -----------
Total interest expense 11,687 9,441
----------- -----------
Net interest income 14,099 12,881
Provision for loan losses 388 252
----------- -----------
Net interest income after provision for loan losses 13,711 12,629
Noninterest income:
Gain on sale of mortgage loans 171 538
Service charges on deposit accounts 830 762
Trust fees 195 184
Gain on sale of securities 4 21
Mortgage servicing 148 68
Other 1,310 1,155
----------- -----------
Total noninterest income 2,658 2,728
Noninterest expense:
Salaries and employee benefits 5,386 5,094
Occupancy 1,551 1,526
Amortization of intangibles 343 342
FDIC Insurance premium 50 39
Michigan Single Business Tax 315 212
Other 2,532 2,533
----------- -----------
Total noninterest expense 10,177 9,746
----------- -----------
Income before federal income taxes 6,192 5,611
Federal income taxes 1,942 1,695
----------- -----------
NET INCOME $4,250 $3,916
=========== ===========
Basic earnings per share $0.91 $0.83
=========== ===========
Diluted earnings per share $0.90 $0.80
=========== ===========
Dividends per share $0.34 $0.30
=========== ===========
</TABLE>
See accountants' review report and notes to consolidated financial statements.
Page 5
<PAGE>
FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Dollars in Thousands)
UNAUDITED
<TABLE>
Accumulated
Other
Common Retained Comprehensive Comprehensive
Stock Earnings Income Income (Loss) TOTAL
========= ========== ============== ============== ============
<S> <C> <C> <C> <C> <C>
BALANCES AT DECEMBER 31, 1998 $52,796 $5,875 $1,104 $59,775
Other comprehensive income
Net income for 1999 8,036 $8,036 8,036
Other comprehensive income (loss)
Net change in unrealized appreciation
(depreciation) on available for
sale securities (1,768) (1,768) (1,768)
-----------
Comprehensive income 6,268
===========
Cash dividends - $.61 per share (2,874) (2,874)
Issuance of 50,310 shares of common stock
through exercise of stock options 817 817
Issuance of 44,246 shares of common stock
through dividend reinvestment plan 1,098 1,098
Issuance of 19,807 shares of common stock
through supplemental purchase under
dividend reinvestment plan 528 528
5% stock dividend - 224,526 shares 4,603 (4,604) (1)
Purchase of 180,150 shares of stock (4,793) (4,793)
Issuance of 7,770 shares of stock 214 214
--------- ---------- ----------- ---------- ----------
BALANCES AT DECEMBER 31, 1999 $55,263 $6,433 $(664) $61,032
========= ========== =========== ========== ==========
Other comprehensive income
Net income for year to date 4,250 4,250 4,250
Other comprehensive income (loss)
Net change in unrealized appreciation
(depreciation) on available for
sale securities (29) (29) (29)
-----------
Comprehensive income $4,221
===========
Cash dividends - $.34 per share (1,583) (1,584)
Issuance of 10,215 shares of common stock
through exercise of stock options 138 138
Issuance of 32,520 shares of common stock
through dividend reinvestment plan 612 612
Issuance of 9,365 shares of common stock
through supplemental purchase under
dividend reinvestment plan 186 186
Purchase of 119,272 shares of stock (2,405) (2,404)
Issuance of 5,861 shares of stock 116 116
--------- ---------- ----------- ---------- ----------
BALANCES AT JUNE 30, 2000 $53,910 $9,100 ($693) $62,317
========= ========== =========== ========== ==========
</TABLE>
See accountants' review report and notes to consolidated financial statements.
Page 6
<PAGE>
FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
JUNE 30, 2000 and 1999
(Dollars in Thousands)
UNAUDITED
<TABLE>
Six months ended June 30,
2000 1999
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income $4,250 $3,916
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan losses 388 252
Depreciation of premises and equipment 700 648
Net amortization of security premiums/discounts 78 173
Gain on sale of securities (4) (21)
Amortization of goodwill and other intangibles 343 343
Gain on sale of mortgage loans (171) (538)
Proceeds from sales of mortgage loans 16,534 33,459
Loans originated for sale (16,198) (30,430)
Increase in accrued interest receivable and other assets (1,247) (642)
Increase (decrease) in accrued interest payable and other liabilities 70 (365)
--------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,743 6,795
INVESTING ACTIVITIES
Proceeds from sale of securities available for sale 2,345 7,039
Proceeds from maturities of securities available for sale 15,497 17,675
Purchases of securities available for sale (9,656) (16,000)
Net increase in portfolio loans (49,286) (22,976)
Net purchases of premises and equipment (1,395) (1,028)
--------- --------
NET CASH USED IN INVESTING ACTIVITIES (42,495) (15,290)
FINANCING ACTIVITIES
Net increase (decrease) in deposits 10,549 (8,909)
Increase (decrease) in securities sold under agreements
to repurchase and other short term borrowings (2,021) 5,191
Increase (decrease) of note payable 32,457 (148)
Issuance of common stock 1,052 1,284
Purchase of common stock (2,405) (2,661)
Cash dividends (1,583) (1,437)
--------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 38,049 (6,680)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 297 (15,175)
Cash and cash equivalents at beginning of period 25,197 35,491
---------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $25,494 $20,316
========== =========
Supplemental Disclosure
Interest Paid $11,820 $9,672
Income Taxes Paid $2,600 $1,800
</TABLE>
See accountants' review report and notes to consolidated financial statements.
Page 7
<PAGE>
FIRSTBANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
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 six month period ended June 30, 2000,
are not necessarily indicative of the results that may be expected for the year
ended December 31, 2000. The balance sheet and statement of shareholders' equity
at December 31, 1999, have 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, 1999.
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. 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 $68,999,020 and $68,199,183 at June 30, 2000, and December 31,
1999, respectively.
See accountants' review report.
Page 8
<PAGE>
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>
June 30, December 31,
(Dollars in thousands) 2000 1999
-------------------------------------------------- ----------- ------------
<S> <C> <C>
Nonperforming loans:
Nonaccrual loans $1,624 $2,165
Loans 90 days or more past due 1,283 663
Renegotiated loans 53 55
------ ------
Total nonperforming loans $2,960 $2,883
===== =====
Property from defaulted loans $ 537 $ 511
===== ======
Nonperforming loans as a percent of:
Total loans .53% .57%
==== ====
Allowance for loan losses 30.32% 30.94%
====== ======
</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.
<TABLE>
Six Twelve
months months
ended ended
June 30, December 31,
(Dollars in thousands) 2000 1999
----------------------------------------------------- ---------------- -------------
<S> <C> <C>
Balance at beginning of period $9,317 $9,048
Charge-offs (305) (799)
Recoveries 364 554
----- -------
Net (charge-offs) recoveries 59 (245)
Additions to allowance for
loan losses 388 514
----- -----
Balance at end of period $9,764 $9,317
===== =====
Average loans outstanding
during the period $528,964 $464,581
======= =======
Loans outstanding at end of period $557,418 $508,238
======= =======
Allowance as a percent of:
Total loans at end of period 1.75% 1.83%
==== ====
Nonperforming loans at end of period 330% 323%
=== ===
Net charge-offs (recoveries) as a percent of:
Average loans outstanding (.01)% .05%
==== ===
Average Allowance for loan losses (.62)% 2.66%
==== ====
</TABLE>
See accountants' review report.
Page 9
<PAGE>
NOTE E - RECLASSIFICATION
Certain 1999 amounts have been reclassified to conform to the 2000 presentation.
See accountants' review report.
Page 10
<PAGE>
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 (Alma),
Firstbank (Mt. Pleasant), 1st Bank (West Branch), Bank of Lakeview (Lakeview),
and Firstbank - St. Johns (St. Johns) (collectively the "Banks") and Gladwin
Land Company, Inc.
Financial Condition
During the first six months of 2000, total assets have increased $42 million, or
6.51%. Securities available for sale decreased $8 million, or 9.30%. Over half
of this reduction was the result of a decline in short term investments used to
off set short term municipal deposits. Additional cash realized from the
reduction of securities available for sale was used to fund loan growth.
Total loans grew $49 million, or 9.68%, during the first half of 2000. All
categories of loans shared in the increase with the largest growth in terms of
both dollars and percentage in the commercial portfolio, which grew $27 million,
or 11.95%. The allowance for loan losses increased $447,000 from December 31,
1999, to June 30, 2000. At June 30, 2000, the allowance as a percent of
outstanding loans was 1.75%, compared to 1.83% at December 31, 1999. The
allowance as a percent of nonperforming loans was 330% and 323% at June 30,
2000, and December 31, 1999, respectively. During the first six months of 2000,
the allowance was increased by a provision of $388,000 and net recoveries of
$59,000. 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, growth and composition of the loan portfolio,
delinquencies and other relevant factors.
Total deposits increased $10.5 million, or 2.15%, during the first two quarters
of 2000. Reductions in interest and noninterest bearing demand accounts were
offset by increases in time deposit products.
Securities sold under agreements to repurchase increased slightly in the first
six months while overnight borrowings decreased over $2 million during the same
period. Notes payable increased $32 million, or 84.56%, during the first half of
2000. Of this total, $4 million was used to capitalize a new banking affiliate,
nearly $500,000 to purchase a nonbanking affiliate, and $2.4 million to fund the
Corporation's stock repurchase plan. The remaining increase in notes payable was
used to fund loan growth.
Total shareholders' equity grew $1,285,000 million, or 2.11%. Net income of
$4,250,000 and stock issuances of $1,052,000 increased shareholders' equity,
while stock repurchases of $2,405,000, dividends of $1,583,000, and net
unrealized depreciation on securities available for sale of $29,000 reduced
shareholders' equity. In January 2000, the Board of Directors authorized the
continuation of the Corporation stock repurchase plan with the approval of the
acquisition of up to 250,000 additional shares of Firstbank Corporation stock.
As of June 30, 2000, the Corporation had acquired 119,272 shares as a result of
this authorization. Book value was $13.45 per share on June 30, 2000, compared
to $13.00 at December 31, 1999.
Page 11
<PAGE>
The following table discloses compliance with current regulatory capital
requirements on a consolidated basis:
<TABLE>
Total
Tier 1 Risk-based
(Dollars in thousands) Leverage Capital Capital
-------------------------------------------- -------- ------- -------
<S> <C> <C> <C>
Capital balances at June 30, 2000 $54,086 $54,086 $60,453
Required Regulatory Capital 26,867 20,237 40,475
------ ------ ------
Capital in excess of regulatory minimums $27,219 $33,849 $19,978
====== ====== ======
Capital ratios at June 30, 2000 8.05% 10.69% 11.95%
Regulatory capital ratios -- "well capitalized"
definition 5.00% 6.00% 10.00%
Regulatory capital ratios -- minimum requirement 4.00% 4.00% 8.00%
</TABLE>
The Corporation acquired Gladwin Land Company, Inc. (a real estate appraisal
company), on May 8, 2000. The acquisition was accounted for using the purchase
method of accounting. Firstbank - St. Johns received final regulatory approval
and opened for business on June 16, 2000. The results of both of these
affiliates are included in the consolidated financial statements from the dates
of the acquisition and the opening.
Results of Operations
For the second quarter of 2000, net income was $2,140,000, basic earnings per
share were $0.46, and diluted earnings per share were also $0.46 compared to
$1,981,000, $0.42, and $0.40 for the second quarter of 1999. Net income for the
first half of 2000 was $4,250,000 with basic earnings per share of $0.91 and
diluted earnings per share of $0.90, compared to $3,916,000, $0.83, and $0.80
for the first six months of 1999. Average earning assets increased $19 million,
or 3.16%, from the end of June 1999 to June 30, 2000. The yield on earning
assets increased 8 basis points to 8.49% at June 30, 2000, compared to 8.41% at
June 30, 1999. The cost of funding related liabilities increased 22 basis points
when comparing the six month periods ended June 30, 2000 and 1999, from 3.74% in
1999 to 3.96% in 2000. Net interest margin declined 13 basis points from 4.83%
for the first half of 1999 to 4.70% for the six months ending June 30, 2000. Net
interest income before provision increased $520,000, or 7.86%, in the second
quarter of 2000 and $1,218,000, or 9.46%, in the first half of 2000 compared to
the same periods in 1999. The provision for loan losses increased $136,000 to
$388,000 for the first half of 2000, and $87,000 to $213,000 in the second
quarter of 2000. These increases reflect the recognition of strong loan growth
as opposed to concern over loan quality.
Total noninterest income decreased $70,000, or 2.57%, during the first half of
2000 when compared to the same period in 1999. The only significant change
occurred in mortgage servicing income. As mortgage rates have increased and many
real estate agencies are using affiliated mortgage processors, all of the banks
have experienced a significant decline in mortgage volume. The gain on sale of
mortgages declined 68.22%, or $367,000, in the first six months of 2000 compared
to the same period in 1999.
Page 12
<PAGE>
Noninterest expense increased 4.42%, or $431,000, during the first half of 2000
compared to the six months ending June 30, 1999. Approximately two-thirds of
this increase falls into the salary and benefit line item. Salaries and benefits
increases reflect annual salary adjustments as well as the addition of staff to
accommodate a branch that opened in the fall of 1999, the initial hiring to
staff a new bank, and salary and commissions to staff an appraisal company.
FORWARD LOOKING STATEMENTS
This report contains forward-looking statements that are based on management's
beliefs, assumptions, current expectations, estimates and projections about the
financial services industry, the economy, and about the Corporation itself.
Words such as "anticipate," "believe," "determine," "estimate," "expect,"
"forecast," "intend," "is likely," "plan," "project," "opinion," variations of
such terms, and similar expressions are intended to identify such
forward-looking statements. The presentations and discussions of the provision
and allowance for loan losses, and determinations as to the need for other
allowances presented in this report are inherently forward-looking statements in
that they involve judgements and statements of belief as to the outcome of
future events. These statements are not guarantees of future performance and
involve certain risks, uncertainties, and assumptions that are difficult to
predict with regard to timing, extent, likelihood, and degree of occurrence.
Therefore, actual results and outcomes may materially differ from what may be
expressed or forecasted in such forward-looking statements. Internal and
external factors that may cause such a difference include changes in interest
rates and interest rate relationships; demand for products and services; the
degree of competition by traditional and non-traditional competitors; changes in
banking regulations; changes in tax laws; changes in prices, levies, and
assessments; the impact of technological advances; governmental and regulatory
policy changes; the outcomes of pending and future litigation and contingencies;
trends in customer behavior and customer ability to repay loans; software
failure, errors or miscalculations; and the vicissitudes of the national
economy. The Corporation undertakes no obligation to update, amend or clarify
forward-looking statements, whether as a result of new information, future
events, or otherwise.
Page 13
<PAGE>
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Information under the headings, "Liquidity and Interest Rate Sensitivity" on
pages 8 and 9 and "Quantitative and Qualitative Disclosure About Market Risk" on
pages 9 through 11 in the registrant's annual report to shareholders for the
year ended December 31, 1999, is here incorporated by reference. Firstbank's
annual report is filed as Exhibit 13 to its Form 10-K annual report for its
fiscal year ended December 31, 1999.
Firstbank faces market risk to the extent that both earnings and the fair values
of its financial instruments are affected by changes in interest rates. The
Corporation manages this risk with static GAP analysis and simulation modeling.
Throughout the second quarter of 2000, the results of these measurement
techniques were within the Corporation's policy guidelines. The Corporation does
not believe that there has been a material change in the nature of the
Corporation's primary market risk exposures, including the categories of market
risk to which the Corporation is exposed and the particular markets that present
the primary risk of loss to the Corporation. As of the date of this Form 10-Q
Quarterly Report, the Corporation does not know of or expect there to be any
material change in the general nature of its primary market risk exposure in the
near term.
The methods by which the Corporation manages its primary market risk exposures,
as described in the sections of its Form 10-K Annual Report incorporated by
reference in response to this item, have not changed materially during the
current year. As of the date of this Form 10-Q quarterly report, the Corporation
does not expect to change those methods in the near term. However, the
Corporation may change those methods in the future to adapt to changes in
circumstances or to implement new techniques.
The Corporation's market risk exposure is mainly comprised of its vulnerability
to interest rate risk. Prevailing interest rates and interest rate relationships
in the future will be primarily determined by market factors which are outside
of Firstbank's control. All information provided in response to this item
consists of forward looking statements. Reference is made to the section
captioned "Forward Looking Statements" on page 13 of this Form 10-Q quarterly
report for a discussion of the limitations on Firstbank's responsibility for
such statements.
Page 14
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
The annual meeting of shareholders of Firstbank Corporation was held on April
24, 2000. The purpose of the meeting was to elect directors. The name of each
director elected (along with the number of votes cast for or authority withheld)
at the meeting follows:
Votes Cast
Directors Elected Authority
to Three Year Terms For Withheld
Expiring in 2003 --- --------
----------------
David D. Roslund 3,881,126.4906 3,372
Thomas R. Sullivan 3,865,468.4906 3,372
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 27 - Financial Data Schedule
Exhibit 99 - Report on Review by Independent Certified Public
Accountants
(b) Reports on Form 8-K
None
Page 15
<PAGE>
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: August 10, 2000 \s\ Thomas R. Sullivan
Thomas R. Sullivan
President, Chief Executive Officer
(Principal Executive Officer)
Date: August 10, 2000 \s\ Mary D. Deci
Mary D. Deci
Vice President and Chief Financial Officer
(Principal Accounting Officer)
Page 16
<PAGE>
Exhibit 99
Report on Review by Independent Certified Public Accountants
Board of Directors and Shareholders
Firstbank Corporation
Alma, Michigan
We have reviewed the accompanying consolidated balance sheet of Firstbank
Corporation as of June 30, 2000, and the related consolidated statement of
income for the three month and six month periods ended June 30, 2000 and the
consolidated statements of cash flows and changes in shareholders' equity for
the six-month period ended June 30, 2000. These financial statements are the
responsibility of Firstbank Corporation's management. We did not make a similar
review of the consolidated statement of income for the three-month and six-month
period ended June 30, 1999 and cash flows for the six-month period ended June
30, 1999.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data, and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the June 30, 2000 consolidated financial statements referred to above
for them to be in conformity with generally accepted accounting principles.
The consolidated balance sheet of Firstbank Corporation as of December 31, 1999,
and the related statements of income, changes in shareholders' equity, and cash
flows for the year then ended (not presented herein) were audited by other
auditors whose report dated February 4, 2000, expressed an unqualified opinion
on those statements. In our opinion, the information set forth in the
accompanying consolidated balance sheet and the related consolidated statement
of changes in shareholders' equity as of December 31, 1999, are fairly stated,
in all material respects, in relation to the consolidated balance sheet and
consolidated statement of changes in shareholders' equity from which it has been
derived.
/s/ Andrews Hooper & Pavlik P.L.C.
Saginaw, Michigan
August 7, 2000
