-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OdFpzUHvtxkxekPenKuzH+hBV8MQURdNGJ6rsPrOeJNAFX+6T7PtpE4F05ohIfvJ K0yRpZMDC+bMpqtFpOXUhw== /in/edgar/work/20000811/0000926044-00-000104/0000926044-00-000104.txt : 20000921 0000926044-00-000104.hdr.sgml : 20000921 ACCESSION NUMBER: 0000926044-00-000104 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRSTBANK CORP CENTRAL INDEX KEY: 0000778972 STANDARD INDUSTRIAL CLASSIFICATION: [6022 ] IRS NUMBER: 382633910 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14209 FILM NUMBER: 692817 BUSINESS ADDRESS: STREET 1: 311 WOODWORTH AVE STREET 2: PO BOX 1029 CITY: ALMA STATE: MI ZIP: 48801 BUSINESS PHONE: 2087469610 MAIL ADDRESS: STREET 1: 311 WOODWORTH AVE CITY: ALMA STATE: MI ZIP: 48801 10-Q 1 0001.txt 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. 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 FIRSTBANK CORPORATION CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2000, AND DECEMBER 31, 1999 (Dollars in Thousands) UNAUDITED June 30, December 31, 2000 1999 ---- --- 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 =========== ===========
See accountants' review report and notes to consolidated financial statements. Page 3 FIRSTBANK CORPORATION CONSOLIDATED STATEMENTS OF INCOME JUNE 30, 2000 AND 1999 (Dollars in Thousands) UNAUDITED Three months ended June 30, 2000 1999 ---- ---- 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 =========== ===========
See accountants' review report and notes to consolidated financial statements. Page 4 FIRSTBANK CORPORATION CONSOLIDATED STATEMENTS OF INCOME JUNE 30, 2000 AND 1999 (Dollars in Thousands) UNAUDITED Six months ended June 30, 2000 1999 ---- ---- 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 =========== ===========
See accountants' review report and notes to consolidated financial statements. Page 5 FIRSTBANK CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Dollars in Thousands) UNAUDITED Accumulated Other Common Retained Comprehensive Comprehensive Stock Earnings Income Income (Loss) TOTAL ========= ========== ============== ============== ============ 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 ========= ========== =========== ========== ==========
See accountants' review report and notes to consolidated financial statements. Page 6 FIRSTBANK CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2000 and 1999 (Dollars in Thousands) UNAUDITED Six months ended June 30, 2000 1999 ---- ---- 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
See accountants' review report and notes to consolidated financial statements. Page 7 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 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: June 30, December 31, (Dollars in thousands) 2000 1999 -------------------------------------------------- ----------- ------------ 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% ====== ======
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. Six Twelve months months ended ended June 30, December 31, (Dollars in thousands) 2000 1999 - ----------------------------------------------------- ---------------- ------------- 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% ==== ====
See accountants' review report. Page 9 NOTE E - RECLASSIFICATION Certain 1999 amounts have been reclassified to conform to the 2000 presentation. See accountants' review report. Page 10 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 The following table discloses compliance with current regulatory capital requirements on a consolidated basis: Total Tier 1 Risk-based (Dollars in thousands) Leverage Capital Capital -------------------------------------------- -------- ------- ------- 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%
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 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 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 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 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 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 EX-27 2 0002.txt
9 This 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 June 30, 2000. 1,000 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 21,673 374 3,447 0 81,868 0 0 557,418 (9,764) 692,892 501,953 83,798 7,983 36,841 0 0 53,910 8,407 692,892 23,151 2,635 0 25,786 8,869 11,687 14,099 388 4 10,177 6,192 6,192 0 0 4,250 .91 .90 4.70 1,624 1,283 53 1,933 9,317 305 364 9,764 8,045 0 1,719
-----END PRIVACY-ENHANCED MESSAGE-----