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 MARCH 31, 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 . . . 4,657,935 shares outstanding as of April 30, 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 10
Item 3. Quantitative and Qualitative Disclosures about Market Risk. page 13
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 17
Exhibit 99 -- Report on Review by Independent Certified
Public Accountants page 16
Page 2
<PAGE>
FIRSTBANK CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2000, AND DECEMBER 31, 1999
(Dollars in Thousands)
UNAUDITED
<TABLE>
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
ASSETS
Cash and due from banks $19,611 $24,786
Short term investments 495 411
----------- ------------
Total cash and cash equivalents 20,106 25,197
Securities available for sale 85,959 90,266
Loans
Loans held for sale 602 1,117
Portfolio loans
Commercial 243,660 227,855
Real estate mortgage 207,978 204,062
Consumer 77,321 75,204
----------- ------------
Total loans 529,561 508,238
Less allowance for loan losses (9,560) (9,317)
----------- ------------
Net loans 520,001 498,921
Premises and equipment, net 15,297 14,929
Acquisition intangibles 8,667 8,838
Accrued interest receivable 3,362 3,489
Other assets 8,947 8,912
----------- ------------
TOTAL ASSETS $662,339 $650,552
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest bearing accounts 71,492 75,844
Interest bearing accounts:
Demand 133,605 136,196
Savings 70,683 70,527
Time 216,352 208,837
----------- ------------
Total deposits 492,132 491,404
Securities sold under agreements to
repurchase and overnight borrowings 43,310 51,819
Notes payable 55,870 38,384
Accrued interest and other liabilities 9,261 7,913
----------- ------------
Total liabilities 600,573 589,520
SHAREHOLDERS' EQUITY
Preferred stock; no par value, 300,000 shares authorized, none issued Common
stock; 10,000,000 shares authorized, 4,679,694 shares issued and
outstanding as of March 31, 2000 (4,693,756 as of December 31, 1999) 54,915 55,263
Retained earnings 7,748 6,433
Accumulated other comprehensive loss (897) (664)
----------- ------------
Total shareholders' equity 61,766 61,032
----------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $662,339 $650,552
=========== ============
</TABLE>
See notes to consolidated financial statements.
Page 3
<PAGE>
FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
MARCH 31, 2000 AND 1999
(Dollars in Thousands)
UNAUDITED
<TABLE>
Three months ended March 31,
2000 1999
---- ----
<S> <C> <C>
Interest income:
Interest and fees on loans $11,197 $9,537
Investment securities
Taxable 914 898
Exempt from Federal Income Tax 394 453
Short term investments 49 120
---------- ----------
Total interest income 12,554 11,008
Interest expense:
Deposits 4,325 4,306
Notes payable and other 1,262 433
---------- -----------
Total interest expense 5,587 4,739
Net interest income 6,967 6,269
Provision for loan losses 175 126
---------- -----------
Net interest income after provision for loan losses 6,792 6,143
Noninterest income:
Gain on sale of mortgage loans 93 331
Service charges on deposit accounts 387 357
Trust fees 88 97
Loss on sale of securities (3)
Mortgage servicing 79 20
Other 682 616
---------- -----------
Total noninterest income 1,326 1,421
Noninterest expense:
Salaries and employee benefits 2,735 2,528
Occupancy 775 765
Amortization of intangibles 171 182
FDIC Insurance premium 25 19
Michigan Single Business Tax 163 112
Other 1,227 1,189
---------- -----------
Total noninterest expense 5,096 4,795
Income before federal income taxes 3,022 2,769
Federal income taxes 912 833
---------- -----------
NET INCOME $2,110 $1,936
Basic earnings per share $0.45 $0.41
========== ===========
Diluted earnings per share $0.44 $0.40
========== ===========
Dividends per share $0.17 $0.15
========== ===========
</TABLE>
See notes to consolidated financial statements.
Page 4
<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 2,110 $2,110 2,110
Other comprehensive income (loss)
Net change in unrealized appreciation
(depreciation) on available for
sale securities (233) (233) (233)
-----------
Comprehensive income $1,877
===========
Cash dividends - $.17 per share (795) (795)
Issuance of 6,741 shares of common stock
through exercise of stock options 91 91
Issuance of 16,230 shares of common stock
through dividend reinvestment plan 305 305
Issuance of 5,663 shares of common stock
through supplemental purchase under
dividend reinvestment plan 112 112
Purchase of 43,675 shares of stock (875) (875)
Issuance of 970 shares of stock 19 19
------------ ----------- ----------- ------------ ----------
BALANCES AT MARCH 31, 2000 $54,915 $7,748 $(897) $61,766
============ =========== =========== ============ ==========
</TABLE>
See notes to consolidated financial statements.
Page 5
<PAGE>
FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
MARCH 31, 2000 and 1999
(Dollars in Thousands)
UNAUDITED
<TABLE>
Three months ended March 31,
2000 1999
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income $2,110 $1,936
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan losses 175 126
Depreciation of premises and equipment 361 320
Net amortization of security premiums/discounts 20 86
Loss on sale of securities 3
Amortization of goodwill and other intangibles 171 181
Gain on sale of mortgage loans (93) (331)
Proceeds from sales of mortgage loans 11,218 19,156
Loans originated for sale (10,610) (19,099)
Increase (decrease) in accrued interest receivable and other assets 213 (833)
Increase in accrued interest payable and other liabilities 1,348 820
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,916 2,362
INVESTING ACTIVITIES
Proceeds from sale of securities available for sale 995 350
Proceeds from maturities of securities available for sale 10,569 8,924
Purchases of securities available for sale (7,634) (6,342)
Net increase in portfolio loans (21,770) (4,329)
Net purchases of premises and equipment (729) (450)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (18,569) (1,847)
FINANCING ACTIVITIES
Net increase (decrease) in deposits 728 (5,887)
Decrease in securities sold under agreements
to repurchase and other short term borrowings (8,509) (4,225)
Increase (decrease) of note payable 17,486 (14)
Cash proceeds from issuance of common stock 527 568
Purchase of common stock (875) (1,062)
Cash dividends (795) (720)
------------ ------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 8,562 (11,340)
DECREASE IN CASH AND CASH EQUIVALENTS (5,091) (10,825)
Cash and cash equivalents at beginning of period 25,197 35,492
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $20,106 $24,667
============ ============
Supplemental Disclosure
Interest Paid $5,609 $4,700
Income Taxes Paid $0 $0
</TABLE>
See notes to consolidated financial statements.
Page 6
<PAGE>
FIRSTBANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 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 three month period ended March 31,
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 $67,301,620 and $68,199,183 at March 31, 2000, and December 31,
1999, respectively.
Page 7
<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>
March 31, December 31,
(Dollars in thousands) 2000 1999
-------------------------------------------------- ---------------------------
<S> <C> <C>
Nonperforming loans:
Nonaccrual loans $1,867 $2,165
Loans 90 days or more past due 519 663
Renegotiated loans 53 55
------ ------
Total nonperforming loans $2,439 $2,883
===== =====
Property from defaulted loans $ 601 $ 511
===== ======
Nonperforming loans as a percent of:
Total loans .46% .57%
==== ====
Allowance for loan losses 25.51% 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>
Three Twelve
months months
ended ended
March 31, December 31,
(Dollars in thousands) 2000 1999
- ----------------------------------------------------- --------------- -------------
<S> <C> <C>
Balance at beginning of period $9,317 $9,048
Charge-offs (178) (799)
Recoveries 246 554
----- ------
Net (charge-offs) recoveries 68 (245)
Additions to allowance for
loan losses 175 514
----- -----
Balance at end of period $9,560 $9,317
===== =====
Average loans outstanding
during the period $516,505 $464,581
======= =======
Loans outstanding at end of period $529,561 $508,238
======= =======
Allowance as a percent of:
Total loans at end of period 1.81% 1.83%
==== ====
Nonperforming loans at end of period 320% 323%
=== ===
Net charge-offs (recoveries) as a percent of:
Average loans outstanding (.01)% .05%
==== ===
Average Allowance for loan losses (.72)% 2.66%
==== ====
</TABLE>
Page 8
<PAGE>
NOTE E - RECLASSIFICATION
Certain 1999 amounts have been reclassified to conform to the 2000 presentation.
Page 9
<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, Firstbank (Mt.
Pleasant), 1st Bank (West Branch), and Bank of Lakeview (Lakeview) (collectively
the "Banks").
Financial Condition
Total assets increased $12 million, or 1.81%, during the first three months of
2000. Cash and cash equivalents decreased by $5 million, or 20.20%, during the
first quarter of 2000 as excess cash, which was on hand to satisfy Y2K needs,
was reduced to levels needed for routine transactions.
Investment securities declined $4 million, or 4.77%, during the three months
ending March 31, 2000. Nearly all of this decrease is due to a reduction in
short term investments used to offset short term municipal deposits.
Total loans grew $21 million, or 4.2%, during the first quarter of 2000. All
categories of loans experienced increases with the largest growth in the
commercial portfolio which grew $16 million. The allowance for loan losses
increased $243,000 during the first three months of 2000. At March 31, 2000, the
allowance as a percent of outstanding loans was 1.81% compared to 1.83% at
December 31, 1999. The allowance as a percent of nonperforming loans was 320% at
the end of the first quarter of 2000 and 323% at year end 1999. During the first
quarter of 2000, the allowance was increased by net recoveries of $68,000 and a
provision of $175,000. 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 a modest $728,000, or .15%, from December 31, 1999, to
March 31, 2000. Reductions in noninterest bearing account balances of $4 million
and demand deposit account balances of $3 million were offset by increases in
time deposits of $8 million.
Securities sold under agreements to repurchase and overnight borrowings have
decreased by $9 million, or 16.42%. For the three month period ending March 31,
2000, securities sold under agreements to repurchase experienced a $2 million
increase. Overnight borrowings decreased $11 million during the same period. A
portion of the overnight borrowings had been used to fund additional cash which
was available in the event of unexpected Y2K cash needs. The remainder of the
decrease is offset by an increase in notes payable. Notes payable have increased
$17 million from the end of December, 1999, to the end of March, 2000. The
45.56% increase in notes payable has been used to fund loan demand.
Page 10
<PAGE>
Total shareholders' equity increased $700,000, or 1.20%, during the first
quarter of 2000. Net income of $2,110,000 and stock issuances of $527,000 have
increased shareholders' equity, while stock repurchases of $875,000, dividends
of $795,000, and net unrealized depreciation on securities available for sale of
$233,000 have decreased shareholders' equity. In January 2000, the Board of
Directors authorized a stock repurchase plan to acquire up to 250,000 shares of
Firstbank Corporation stock. As of March 31, 2000, the Corporation had acquired
43,675 shares as a result of this repurchase plan. Book value was $13.20 per
share at March 31, 2000, and $13.00 at December 31, 1999.
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 March 31, 2000 $53,875 $53,875 $60,105
Required Regulatory Capital 25,858 19,802 39,604
------ ------ ------
Capital in excess of regulatory minimums 28,017 34,073 20,501
Capital ratios at March 31, 2000 8.33% 10.88% 12.14%
Regulatory capital ratios -- "well capitalized" 5.00% 6.00% 10.00%
definition
Regulatory capital ratios -- minimum requirement 4.00% 4.00% 8.00%
</TABLE>
The Corporation has filed applications to charter a new bank in St. Johns,
Michigan, to be known as Firstbank - St. Johns. Pending regulatory approval, the
bank is expected to open in June 2000.
The Corporation has filed notice to acquire a real estate appraisal company to
operate as a wholly owned subsidiary of Firstbank Corporation. The transaction
is expected to be completed in May 2000.
Results of Operations
For the first quarter of 2000, net income was $2,110,000 basic earnings per
share were $0.45 and diluted earnings per share were $0.44, compared to
$1,936,000, $0.41 and $0.40 for the first quarter of 1999. Average earning
assets increased $59 million, or 10.79%, for the first quarter of 2000 when
compared to the first quarter of 1999. The yield on earning assets increased 16
basis points to 8.44% during the first three months of 2000 compared to 8.27%
during the same period in 1999. The cost of funding rate related liabilities
increased 21 basis points when comparing the quarter ends of March 2000 and
March 1999, from 3.66% in 1999 to 3.87% in 2000. Net interest margin declined 2
basis points from 4.76% to 4.74% when comparing the quarters ending March 1999
and March 2000. Net interest income before provision increased $700,000, or
11.13%, when comparing the three months ending March 31, 2000, to the same
period in 1999.
The provision for loan losses increased $49,000 to $175,000 for the first
quarter of 2000 compared to the first quarter of 1999. This increase is not a
response to deteriorating loan quality, but a provision in recognition of
significant loan growth.
Page 11
<PAGE>
Total noninterest income decreased $95,000, or 6.69%, in the first quarter of
2000 when compared to the respective period in 1999. Gains on sale of mortgages
declined $238,000, or 71.90%, for the same period. With the increase in interest
rates, mortgage activity has experienced a substantial decrease.
Noninterest expense increased 6.28%, or $301,000, for the three months ending
March 31, 2000, compared to the same period in 1999. The majority of this
increase falls in 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 and initial hiring for a
new bank.
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 12
<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 first 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 13
<PAGE>
PART II. OTHER INFORMATION
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 Accounts
(b) Reports on Form 8-K
None
Page 14
<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: May 10, 2000 \s\ Thomas R. Sullivan
Thomas R. Sullivan
President, Chief Executive Officer
(Principal Executive Officer)
Date: May 10, 2000 \s\ Mary D. Deci
Mary D. Deci
Vice President and Chief Financial Officer
(Principal Accounting Officer)
Page 15
<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 condensed consolidated balance sheet of
Firstbank Corporation as of March 31, 2000, and the related condensed
consolidated statements of income, changes in shareholders' equity, and cash
flows for the three-month period then ended. These financial statements are the
responsibility of Firstbank Corporation's management. We did not make a similar
review of the condensed consolidated statements of income and cash flows for the
three-month period ended March 31, 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 March 31, 2000 condensed 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 condensed consolidated balance sheet and the related condensed
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
May 9, 2000
Page 16
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
The schedule contains summary financial information extracted from Firstbank
Corporation's unaudited financial statements and is qualified in its entirety by
reference to such financial statements as of March 31, 2000. (Dollars in
Thousands)
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 19,612
<INT-BEARING-DEPOSITS> 404
<FED-FUNDS-SOLD> 91
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 85,959
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 529,561
<ALLOWANCE> (9,560)
<TOTAL-ASSETS> 662,339
<DEPOSITS> 492,132
<SHORT-TERM> 19,050
<LIABILITIES-OTHER> 33,521
<LONG-TERM> 55,870
0
0
<COMMON> 54,915
<OTHER-SE> 6,851
<TOTAL-LIABILITIES-AND-EQUITY> 0
<INTEREST-LOAN> 11,196
<INTEREST-INVEST> 1,357
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 12,554
<INTEREST-DEPOSIT> 4,325
<INTEREST-EXPENSE> 5,587
<INTEREST-INCOME-NET> 6,967
<LOAN-LOSSES> 175
<SECURITIES-GAINS> (3)
<EXPENSE-OTHER> 5,096
<INCOME-PRETAX> 3,022
<INCOME-PRE-EXTRAORDINARY> 3,022
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,110
<EPS-BASIC> .45
<EPS-DILUTED> .44
<YIELD-ACTUAL> 8.44
<LOANS-NON> 1,867
<LOANS-PAST> 519
<LOANS-TROUBLED> 53
<LOANS-PROBLEM> 18,761
<ALLOWANCE-OPEN> 9,317
<CHARGE-OFFS> 178
<RECOVERIES> 246
<ALLOWANCE-CLOSE> 9,560
<ALLOWANCE-DOMESTIC> 7,931
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,629
</TABLE>
