8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report: October 20, 2005

FIRSTBANK CORPORATION
(Exact Name of Registrant as Specified in Charter)

Michigan
(State or Other Jurisdiction
of Incorporation) 000-14209
(Commission
File Number) 38-2633910
(IRS Employer
Identification No.)

311 Woodworth Avenue
Alma, Michigan
(Address of principal executive office) 48801
(Zip Code)

Registrant’s telephone number, including area code: (989) 463-3131

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[X]    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
[   ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
[   ]    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)).
[   ]    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Section 2.02 Results of Operations and Financial Conditions

On October 20, 2005, Firstbank Corporation issued a press release announcing results for the third quarter of 2005. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K.

The information in this Form 8-K and the attached Exhibit shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Section 9.01 Financial Statements and Exhibits

(c) Exhibit

Press Release Dated October 20, 2005.

2

SIGNATURE

        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.

Dated: October 20, 2005 FIRSTBANK CORPORATION
(Registrant)


By: /s/ Samuel G. Stone
     Samuel G. Stone
     Executive Vice President and CFO

3

EXHIBIT INDEX

99.1     Press Release Dated October 20, 2005.

4

EX-99

Exhibit 99.1

FOR IMMEDIATE RELEASE NEWS RELEASE

Date Submitted: October 20, 2005
NASDAQ Symbol: FBMI Contact: Samuel G. Stone
Executive Vice President and
Chief Financial Officer
(989) 466-7325

FIRSTBANK CORPORATION ANNOUNCES
THIRD QUARTER AND YEAR-TO-DATE 2005 RESULTS

Highlights Include:
•	Earnings per share (diluted) of $0.48 for the third quarter of 2005, compared to $0.46 in the second quarter of 2005 and $0.47 in the third quarter of 2004
•	Earnings per share (diluted) of $1.33 in the first nine months of 2005 compared to $1.34 in the first nine months of 2004
•	Keystone Community Bank acquisition (Kalamazoo/Portage and Southwest Michigan) completed on October 1, 2005
•	Assets top $1 Billion on October 1, 2005

Alma, Michigan (FBMI) — Thomas R. Sullivan, President and Chief Executive Officer of Firstbank Corporation announced earnings per share of $0.48 for the third quarter of 2005, compared to $0.47 for the third quarter of 2004, an increase of 2.1%. Net income was $2,597,000 for the quarter ended September 30, 2005, compared to $2,657,000 for the quarter ended September 30, 2004. Returns on average assets and average equity for the third quarter of 2005 were 1.22% and 13.5%, respectively, compared with 1.33% and 13.8%, respectively, in the third quarter of 2004. All per share amounts are fully diluted amounts and have been adjusted to reflect the 5% stock dividend paid in December 2004.

For the first nine months of 2005, earnings per share of $1.33 compared to $1.34 for the first nine months of 2004, a decrease of 0.7%. Net income was $7,242,000 for the nine months ended September 30, 2005, compared to $7,903,000 for the nine months ended September 30, 2004. Returns on average assets and average equity for the first nine months of 2005 were 1.18% and 13.1%, respectively, compared with 1.35% and 12.9%, respectively, in the first nine months of 2004.

Both the third quarter and the nine-month comparisons were affected by provision for loan loss expense. Provision expense remains at relatively low levels in 2005 due to continuing good asset quality, low levels of charge-offs, and adequate reserves. However, as disclosed in 2004, there were payoffs and pay downs of certain loans which were considered troubled and for which specific reserves had been established. These payoffs and pay downs resulted in negative provision expense in 2004. The benefit to 2004 earnings per share, assuming the provision expense had been the same as in 2005, was $0.05 in the third quarter of 2004 and $0.07 in the first nine months of 2004. Therefore, on a normalized basis, the earnings per share of $0.48 in the third quarter of 2005 represent a 14.3% increase from the normalized third quarter of 2004, and the earnings per share of $1.33 in the first nine months of 2005 represent a 5.1% increase from the normalized first nine months of 2004.

The nine-month comparison is also affected by much stronger mortgage revenue in 2004 than in 2005, with mortgage gains down 37% this year. The capital management strategies of share repurchases and the self tender offer executed primarily in 2004 improved earnings per share and return on equity.

Growth in Firstbank’s balance sheet continued as total assets reached $861 million, 7.8% above the year-ago level. With the addition of Keystone Community Bank through the acquisition of Keystone Financial Corporation, which was completed on October 1, 2005, Firstbank’s total assets top $1 billion. Growth in Firstbank’s loan portfolio has already been aided by the addition of $12 million of participations in loans originated by Keystone. Total portfolio loans at the end of the third quarter of 2005 were 7.5% above the level at September 30, 2004. Commercial and commercial real estate loans increased 9.5% above the year-ago level, and residential mortgage loans increased 9.6%. Total deposits as of September 30, 2005, were 7.2% above the year-ago level, with savings deposits increasing 33.3% as a result of in-market promotions.

Firstbank’s net interest margin, at 4.46% in the third quarter of 2005, increased 0.07% from the 4.39% level achieved in the second quarter of 2005, exhibiting primarily the benefit of prepayment fees collected as certain customers switched from variable to fixed rate borrowing and also some benefit from positive rate sensitivity. For the nine months of 2005, the net interest margin was 4.43%, down 0.02% from the year-ago period. The benefits of increases in the prime rate have been tempered by the flattening of the yield curve, as rising rates in Firstbank’s variable rate commercial loan portfolio have been offset by lower spreads achieved on new and renewed fixed rate loans. The consolidated net interest margin in the fourth quarter is expected to be negatively impacted by approximately 0.09% due to the inclusion of funding costs related to the acquisition of Keystone, and because Keystone Community Bank has a lower net interest margin than Firstbank’s net interest margin.

Supported by growth in loans and other earning assets, net interest income in the third quarter of 2005 increased 6.5% from the level in the third quarter of 2004. Non-interest income in the third quarter of 2005 increased 6.1% from the year-ago quarter.

Mr. Sullivan stated, “We are looking forward to serving customers in the Kalamazoo/Portage and Southwest Michigan communities. The Firstbank and Keystone management teams are working together very well, and we are all excited about the opportunities and benefits we bring to each other. We continue to focus our efforts on growing revenues by providing more products and services to existing customers and serving new customers. We believe the staffs of all of our banks are enthusiastic and capable servants of their customers’ needs. While our year-to-date earnings comparisons to prior periods have been affected by the absence of the very strong mortgage business that benefited us so much over the past two and three years, we are encouraged that we achieved an increase in mortgage gains in the third quarter of 2005 compared to the second quarter of 2005.”

Total non-interest expenses in the third quarter of 2005 increased 3.0% from the second quarter of 2005 and included a $74,000 prepayment fee on $10 million of Federal Home Loan Bank Advances. Salaries and employee benefits expense for the first nine months of 2005 were 0.4% below the year-ago level.

Shareholders’ equity increased 2.2% in the third quarter of 2005. Firstbank did not repurchase shares in the third quarter of 2005, as capital is being maintained at an appropriate level in consideration of the acquisition of Keystone Financial Corporation, which was consummated on October 1, 2005. The ratio of average equity to average assets stood at 9.1% in the third quarter of 2005, compared to 9.0% in the second quarter of 2005 and 9.6% in the third quarter of 2004.

Firstbank’s mortgage servicing portfolio was $472.2 million as of September 30, 2005, compared to $472.8 million at June 30, 2005, and $472.5 million at September 30, 2004.

Firstbank’s asset quality measures remained strong. Net charge-offs declined to $80,000 in the third quarter of 2005, or 0.05% annualized as a percentage of average loans, compared to $106,000, or 0.06% annualized as a percentage of average loans in the second quarter of 2005. The ratio of non-performing loans to loans was 0.42% as of September 30, 2005, compared to 0.41% at June 30, 2005, and 0.37% at September 30, 2004. While non-performing loans totaled only $3,033,000 at September 30, 2005, Firstbank’s lenders currently are working with a borrower of approximately $3 million whose loans potentially could become non-performing in the fourth quarter. Adequate specific reserves already exist in Firstbank’s allowance for loan losses to cover any potential loss related to this credit.

With the addition of Keystone, Firstbank Corporation, headquartered in Alma, Michigan is a six bank financial services company with assets of $1.0 billion and 39 banking offices serving Michigan’s Lower Peninsula. Bank subsidiaries include: Firstbank – Alma; Firstbank (Mt. Pleasant); Firstbank – West Branch; Firstbank – Lakeview; Firstbank – St. Johns; and Keystone Community Bank.

This press release contains certain forward-looking statements that involve risks and uncertainties. When used in this press release the words “anticipate,” “believe,” “expect,” “hopeful,” “potential,” “should,” and similar expressions identify forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning future business growth, increases in interest rates and positioning of balance sheets to benefit net interest margins and earnings. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services, interest rates and fees for services. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands except per share data)
UNAUDITED

	Three months Ended:									Nine months Ended:
	Sep 30 2005			Jun 30 2005			Sep 30 2004			Sep 30 2005			Sep 30 2004
Interest income:
Interest and fees on loans	$	12,199		$	11,353		$	10,378		$	34,399		$	30,616
Investment securities
Taxable		489			504			449		$	1,451		$	1,212
Exempt from federal income tax		233			231			234			712			704
Short term investments		40			30			30			104			86
Total interest income		12,961			12,118			11,091			36,666			32,618
Interest expense:
Deposits		2,972			2,617			1,878			7,832			5,479
Notes payable and other borrowing		1,343			1,237			1,097			3,776			3,122
Total interest expense		4,315			3,854			2,975			11,608			8,601
Net interest income		8,646			8,264			8,116			25,058			24,017
Provision for loan losses		73			73			(374	)		154			(505	)
Net interest income after provision for loan losses		8,573			8,191			8,490			24,904			24,522
Noninterest income:
Gain on sale of mortgage loans		438			431			467			1,324			2,098
Service charges on deposit accounts		778			783			730			2,281			2,082
Gain on sale of securities		5			17			10			34			21
Mortgage servicing		48			30			34			126			(42	)
Other		1,301			1,336			1,182			3,615			3,450
Total noninterest income		2,570			2,597			2,423			7,380			7,609
Noninterest expense:
Salaries and employee benefits		3,896			3,836			3,888			11,619			11,667
Occupancy and equipment		1,011			969			986			2,996			2,878
Amortization of intangibles		75			75			76			226			227
FDIC insurance premium		20			21			21			62			64
Michigan single business tax		0			0			0			0			0
Other		2,308			2,193			2,008			6,717			5,617
Total noninterest expense		7,310			7,094			6,979			21,620			20,453
Income before federal income taxes		3,833			3,694			3,934			10,664			11,678
Federal income taxes		1,236			1,186			1,277			3,422			3,775
Net Income	$	2,597		$	2,508		$	2,657		$	7,242		$	7,903
Fully Tax Equivalent Interest Income	$	8,781		$	8,398		$	8,249		$	25,471		$	24,390
Per Share Data:
Basic Earnings	$	0.48		$	0.47		$	0.48		$	1.35		$	1.37
Diluted Earnings	$	0.48		$	0.46		$	0.47		$	1.33		$	1.34
Dividends Paid	$	0.22		$	0.22		$	0.20		$	0.65		$	0.59
Performance Ratios:
Return on Average Assets*		1.22	%		1.23	%		1.33	%		1.18	%		1.35	%
Return on Average Equity*		13.5	%		13.6	%		13.8	%		13.1	%		12.9	%
Net Interest Margin (FTE) *		4.46	%		4.39	%		4.44	%		4.43	%		4.45	%
Book Value Per Share+	$	14.35		$	14.10		$	13.43		$	14.35		$	13.43
Average Equity/Average Assets		9.1	%		9.0	%		9.6	%		9.1	%		10.5	%
Net Charge-offs		80			106			64			647			327
Net Charge-offs as a % of Average Loans^*		0.05	%		0.06	%		0.04	%		0.13	%		0.07	%
* Annualized
+ Period End
^ Total loans less loans held for sale

FIRSTBANK CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
UNAUDITED

	Sep 30 2005			Jun 30 2005			Dec 31 2004			Sep 30 2004
ASSETS
Cash and cash equivalents:
Cash and due from banks	$	24,396		$	26,541		$	23,715		$	31,087
Short term investments		211			4,826			2,057			4,136
Total cash and cash equivalents		24,607			31,367			25,772			35,223
Securities available for sale		73,161			77,803			72,475			63,327
Federal Home Loan Bank stock		5,563			5,563			5,355			5,303
Loans:
Loans held for sale		204			1,533			1,969			434
Portfolio loans:
Commercial		116,827			104,761			110,261			110,726
Commercial real estate		249,071			242,321			225,372			223,307
Residential mortgage		245,250			243,718			231,213			223,808
Real estate construction		48,772			37,793			47,920			50,682
Consumer		55,666			55,166			54,491			56,871
Credit card		1,802			1,799			1,830			1,832
Total portfolio loans		717,388			685,558			671,087			667,226
Less allowance for loan losses		(10,087	)		(10,094	)		(10,581	)		(10,795	)
Net portfolio loans		707,301			675,464			660,506			656,431
Premises and equipment, net		17,191			17,126			17,658			17,860
Goodwill		4,465			4,465			4,465			4,880
Other intangibles		2,165			2,245			2,395			2,471
Other assets		26,552			15,121			15,540			12,873
TOTAL ASSETS	$	861,209		$	830,687		$	806,135		$	798,802
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest bearing accounts		107,559			109,269			106,208			111,165
Interest bearing accounts:
Demand		157,371			160,576			177,067			182,221
Savings		134,679			131,589			100,277			101,048
Time		245,583			222,420			219,715			207,514
Total deposits		645,192			623,854			603,267			601,948
Securities sold under agreements to
repurchase and overnight borrowings		37,465			34,374			39,100			36,021
FHLB Advances and notes payable		79,941			76,256			71,430			81,462
Subordinated Debt		10,310			10,310			10,310			0
Accrued interest and other liabilities		11,215			10,472			9,164			8,305
Total liabilities		784,123			755,266			733,271			727,736
SHAREHOLDERS' EQUITY
Preferred stock; no par value, 300,000
shares authorized, none issued
Common stock; 20,000,000 shares authorized *		65,651			65,155			64,713			56,662
Retained earnings		11,583			10,166			7,816			13,740
Accumulated other comprehensive income		(148	)		100			335			664
Total shareholders' equity		77,086			75,421			72,864			71,066
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	861,209		$	830,687		$	806,135		$	798,802
* Common stock shares issued and outstanding		5,372,849			5,350,816			5,322,137			5,289,895
Asset Quality Ratios:
Non-Performing Loans / Loans^		0.42	%		0.41	%		0.28	%		0.37	%
Non-Perf. Loans + OREO / Loans^ + OREO		0.52	%		0.54	%		0.42	%		0.43	%
Non-Performing Assets / Total Assets		0.43	%		0.45	%		0.35	%		0.36	%
Allowance for Loan Loss as a % of Loans^		1.41	%		1.47	%		1.58	%		1.62	%
Allowance / Non-Performing Loans		333	%		356	%		568	%		438	%
Quarterly Average Balances:
Total Portfolio Loans^	$	701,592		$	678,835		$	663,475		$	661,813
Total Earning Assets		785,503			765,888			746,814			741,979
Total Shareholders' Equity		76,256			74,009			72,021			76,450
Total Assets		842,529			821,362			799,688			793,781
Diluted Shares Outstanding		5,449,256			5,425,421			5,420,497			5,665,732
^ Total Loans less loans held for sale