FOR IMMEDIATE RELEASE NEWS RELEASE

Date Submitted:              July 28, 2009
NASDAQ Symbol:         FBMI Contact:   Samuel G. Stone
                 Executive Vice President and
                 Chief Financial Officer
                 (989) 466-7325

FIRSTBANK CORPORATION ANNOUNCES
SECOND QUARTER AND YEAR-TO-DATE 2009 RESULTS

Highlights Include:

• Second quarter 2009 net income positive in spite of unusually large loan loss provision and FDIC special assessment

• Earnings per share of $0.12 for the first half of 2009 compared to $0.33 in the first half of 2008

• Ratio of the allowance for loan losses to loans increased to 1.48% at June 30, 2009, compared to 1.26% at December 31, 2008, and 1.07% at June 30, 2008

• Balance sheet and loan growth remain muted by economic conditions and loan sales into the secondary market

• Equity ratio remains strong and all affiliate banks continue to meet regulatory well-capitalized requirements

Alma, Michigan (FBMI) — Thomas R. Sullivan, President and Chief Executive Officer of Firstbank Corporation, announced earnings per share of $0.12 for the first half of 2009 compared to $0.33 in the first half of 2008. Net income was $1,575,000 for the six months ended June 30, 2009, compared to $2,442,000 for the first half of 2008. Returns on average assets and average equity for the first half of 2009 were 0.24% and 2.5%, respectively. All per share amounts are fully diluted.

Significant amounts of expenses were booked in the second quarter of 2009 that are not expected to recur at the same level. The FDIC assessed a special charge in the second quarter to all banks to help with the costs of resolving bank failures across the country. The total amount of the assessment to Firstbank was $642,000, increasing the total quarterly FDIC insurance expense to $1,155,000. As a result of the continued deterioration in real estate values, the uncertainty surrounding the bankruptcies of GM and Chrysler, and the rising state unemployment rate to over 15%, we determined that additional reserves should be established for loan losses inherent in the portfolio. Our total loan loss provision in the second quarter was $5,276,000, which replenished the reserve for the current quarter net charge-offs of $2,736,000, and built the reserve by an additional $2,540,000 to reflect our growing concern about the Michigan economy. Second quarter net charge-offs while elevated, were in line with the prior two quarters, but when combined with the buildup of reserves to cover losses inherent in the portfolio, the provision expense in the second quarter of 2009 resulted in the highest quarterly provision expense in the company’s history. In spite of these very large expense items, second quarter 2009 net income was slightly positive at $62,000, although earnings per share, calculated after payment of preferred dividends, were negative $0.04.

Helping to overcome these expenses was the continuing surge in mortgage revenues. Gain on sale of mortgage loans was $3,109,000 in the second quarter of 2009, up 31% from the $2,373,000 in the first quarter of 2009 and representing an increase of 450% over the level in the second quarter of 2008. Security gains of $187,000 in the first half of 2009 also helped total non-interest income to increase nearly 58% from the first half of 2008.

Firstbank was able to improve its net interest margin to 3.77% in the second quarter of 2009 from 3.66% in the first quarter of 2009. This improvement in margin helped net interest income in the first half of 2009 increase 2.1%, or $476,000, compared to the first half of 2008.

Non-interest expenses increased as a direct result of the difficult credit cycle, and promotional costs associated with the large increase in mortgage production. FDIC insurance expense, including the $642,000 special assessment discussed above, totaled $1,155,000 in the quarter – an increase of $1,052,000 from the second quarter 2008 FDIC expense of $103,000. Legal and other expenses related to the collection and management of delinquent loans, and costs related to the maintenance and disposal of other real estate owned, amounted to over $525,000 during the quarter, an increase of over $300,000 from the second quarter of 2008. Promotional expenses associated with the strong mortgage production increased to $246,000 in the quarter, an increase of $208,000 from the second quarter of 2008.

Expense control efforts in the more manageable categories were successful. Comparing the first half of 2009 with the first half of 2008, salaries and employee benefits expense declined 1.7% and occupancy and equipment expense declined 6.7%. The total of other noninterest expense categories showed an increase from $5,392,000 in the first half of 2008 to $6,714,000 in the first half of 2009, but over 85% of the increase is related to legal and other costs of managing problem loans, and costs associated with the very profitable surge in the mortgage business, leaving the remaining costs in the category of other noninterest expense to increase less than 4%.

Total assets of Firstbank Corporation at June 30, 2009, were $1.426 billion, an increase of 2.7% over the year-ago period. Total portfolio loans of $1.130 billion were 2.0% below the year-ago level. Commercial and commercial Real estate loans increased 5.4% over this twelve month period, but residential mortgage, real estate construction, and consumer loans decreased. Although mortgage refinance activity is very strong in Firstbank’s markets, this type of lending activity results in loans being financed in the secondary market rather than on the balance sheet of the company. While Firstbank has ample resources to increase loans on its balance sheet, demand for funding new ventures by quality borrowers remains weak due to uncertainty about the economy. Total deposits as of June 30, 2009, were $1.056 billion, compared to $1.014 billion at June 30, 2008, an increase of 4.2%.

Mr. Sullivan stated, “Our lenders continue to do an excellent job of working with borrowers who are financially stressed by the current economic conditions, to both protect the interests of the bank and our shareholders as well as structure credits in the best possible way to accommodate expected cash flows. The bankruptcies of General Motors and Chrysler in the second quarter are bellwethers that signify the depth of the recession, and while we have very little exposure to auto manufacturers and suppliers directly, we know that these problems will ripple through the economy. Therefore we thought it prudent not only to replenish the reserve for the loan losses that have occurred, but also to make a significant increase in the reserve for losses inherent in the portfolio. We, as every bank in the country, also were required to contribute to the FDIC to replenish their reserves due to failures of other banks, mostly outside of Michigan. Considering all of the credit related costs, we were pleased to make even a small amount of net income in the quarter.

“Our mortgage lenders, processors, and back room staff worked extremely hard again in the second quarter helping record numbers of customers to improve their financial positions, and achieving record levels of mortgage revenue for our company.

“We are very disappointed to experience such weak earnings, as are all of our shareholders, however, with good people doing the right things for both our customers and our shareholders and the continuing strong financial condition of our company and our banks, we are remaining well positioned to emerge from the recession in a strong competitive position and with excellent opportunity for earnings growth when the time arrives.”

As a result of providing additional reserves for loan losses, at June 30, 2009, the ratio of the allowance for loan losses to loans increased to 1.48%, compared to 1.26% at December 31, 2008, and 1.07% at June 30, 2008. The ratio of allowance for loan loss to non-performing loans stood at 63% on June 30, 2009, compared to 59% at December 31, 2008.

Net charge-offs were $2,736,000 in the second quarter of 2009 after having risen to $2,054,000 in the first quarter. For the first half of 2009, net charge-offs were 0.84% of average loans on an annualized basis. The ratio of non-performing loans (including loans past due over 90 days) to loans was 2.34% at June 30, 2009, compared to 2.14% as of December 31, 2008, and 1.56% at June 30, 2008.

Total equity remained virtually unchanged during the second quarter of 2009 and was 28.7% above the level at December 31, 2008, reflecting the improvement obtained by the issuance of $33 million preferred stock at the end of January. The ratio of average equity to average assets rose to 10.5% in the second quarter of 2009 – approximately two full percentage points over levels of 2007 and 2008. All of Firstbank Corporation’s affiliate banks met the regulatory well-capitalized requirements prior to the issuance of preferred stock in January and continue to meet these requirements.

Firstbank Corporation, headquartered in Alma, Michigan, is a financial services company using a multi-bank-charter format with assets of $1.4 billion and 51 banking offices serving Michigan’s Lower Peninsula. Bank subsidiaries include: Firstbank – Alma; Firstbank (Mt. Pleasant); Firstbank – West Branch; Firstbank – St. Johns; Keystone Community Bank; and Firstbank – West Michigan.

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, changes in interest rates, and the resolution of problem loans. 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:									Six Months Ended:
	Jun 30 2009			Mar 31 2009			Jun 30 2008			Jun 30 2009			Jun 30 2008
Interest income:
Interest and fees on loans	$	17,504		$	17,624		$	19,031		$	35,128		$	38,786
Investment securities
Taxable		648			746			945		$	1,394			1,984
Exempt from federal income tax		321			332			349		$	653			702
Short term investments		23			30			86			53			177
Total interest income		18,496			18,732			20,411			37,228			41,649
Interest expense:
Deposits		4,819			5,168			6,431			9,987			13,520
Notes payable and other borrowing		1,821			1,963			2,463			3,784			5,148
Total interest expense		6,640			7,131			8,894			13,771			18,668
Net interest income		11,856			11,601			11,517			23,457			22,981
Provision for loan losses		5,276			1,588			3,465			6,864			4,281
Net interest income after provision for loan losses		6,580			10,013			8,052			16,593			18,700
Noninterest income:
Gain on sale of mortgage loans		3,109			2,373			565			5,482			1,707
Service charges on deposit accounts		1,122			1,083			1,256			2,205			2,424
Gain (loss) on trading account securities		16			(129	)		(160	)		(113	)		(173	)
Gain (loss) on sale of AFS securities		357			(57	)		(67	)		300			62
Mortgage servicing		(191	)		(352	)		131			(543	)		8
Other		715			279			622			994			1,252
Total noninterest income		5,128			3,197			2,347			8,325			5,280
Noninterest expense:
Salaries and employee benefits		5,551			5,630			5,523			11,181			11,370
Occupancy and equipment		1,529			1,727			1,740			3,256			3,489
Amortization of intangibles		245			245			281			490			562
FDIC insurance premium		1,155			371			103			1,526			216
Other		3,460			3,254			2,672			6,714			5,392
Total noninterest expense		11,940			11,227			10,319			23,167			21,029
Income before federal income taxes		(232	)		1,983			80			1,751			2,951
Federal income taxes		(294	)		470			(212	)		176			509
Net Income		62			1,513			292			1,575			2,442
Preferred Stock Dividends		413			275			0			688			0
Net Income available to Common Shareholders		($ 351	)	$	1,238		$	292		$	887		$	2,442
Fully Tax Equivalent Net Interest Income	$	12,071		$	11,829		$	11,791		$	23,900		$	23,542
Per Share Data:
Basic Earnings	$	(0.04	)	$	0.16		$	0.04		$	0.12		$	0.33
Diluted Earnings	$	(0.04	)	$	0.16		$	0.04		$	0.12		$	0.33
Dividends Paid	$	0.100		$	0.100		$	0.225		$	0.200		$	0.450
Return on Average Assets (a)		0.03%			0.46%			0.10%			0.24%			0.37%
Return on Average Equity (a)		0.3%			4.8%			1.2%			2.5%			4.3%
Net Interest Margin (FTE) (a)		3.77%			3.66%			3.77%			3.72%			3.78%
Book Value Per Share (b)	$	15.02		$	15.10		$	15.78		$	15.02		$	15.78
Average Equity/Average Assets		10.5%			9.4%			8.6%			9.9%			8.6%
Net Charge-offs	$	2,736		$	2,054		$	2,687		$	4,790		$	3,430
Net Charge-offs as a % of Average Loans (c)(a)		0.96%			0.71%			0.94%			0.84%			0.60%
(a) Annualized
(b) Period End
(c) Total loans less loans held for sale

FIRSTBANK CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
UNAUDITED

	Jun 30 2009			Mar 31 2009			Dec 31 2008			Jun 30 2008
ASSETS
Cash and cash equivalents:
Cash and due from banks	$	39,653		$	24,759		$	33,050		$	40,283
Short term investments		52,497			47,315			30,662			6,281
Total cash and cash equivalents		92,150			72,074			63,712			46,564
Securities available for sale		108,091			104,637			113,095			96,991
Federal Home Loan Bank stock		9,084			9,084			9,084			8,666
Loans:
Loans held for sale		2,676			5,071			1,408			191
Portfolio loans:
Commercial		183,287			177,635			184,455			214,185
Commercial real estate		395,227			398,648			391,572			334,903
Residential mortgage		390,318			395,945			403,695			393,293
Real estate construction		88,668			90,665			103,206			132,896
Consumer		72,482			72,546			75,296			77,559
Total portfolio loans		1,129,982			1,135,439			1,158,224			1,152,836
Less allowance for loan losses		(16,668	)		(14,128	)		(14,594	)		(12,328	)
Net portfolio loans		1,113,314			1,121,311			1,143,630			1,140,508
Premises and equipment, net		25,616			26,396			26,941			27,959
Goodwill		35,513			35,603			35,603			35,553
Other intangibles		3,384			3,636			3,881			4,390
Other assets		36,302			37,143			27,986			28,336
TOTAL ASSETS	$	1,426,130		$	1,414,955		$	1,425,340		$	1,389,158
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest bearing accounts	$	165,574		$	142,862		$	149,179		$	148,385
Interest bearing accounts:
Demand		226,078			229,827			223,526			219,161
Savings		162,879			161,554			154,015			160,862
Time		480,954			489,304			489,081			449,517
Wholesale CD's		20,700			12,502			31,113			35,783
Total deposits		1,056,185			1,036,049			1,046,914			1,013,708
Securities sold under agreements to
repurchase and overnight borrowings		44,163			43,671			52,917			48,718
FHLB Advances and notes payable		127,814			133,988			162,274			156,923
Subordinated Debt		36,084			36,084			36,084			36,084
Accrued interest and other liabilities		13,953			17,222			12,168			15,605
Total liabilities		1,278,199			1,267,014			1,310,357			1,271,038
SHAREHOLDERS' EQUITY
Preferred stock; no par value, 300,000
shares authorized, 33,000 outstanding		32,707			32,707			0			0
Common stock; 20,000,000 shares authorized		114,253			113,951			113,411			112,491
Retained earnings		50			1,164			686			5,790
Accumulated other comprehensive income/(loss)		921			119			886			(161	)
Total shareholders' equity		147,931			147,941			114,983			118,120
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,426,130		$	1,414,955		$	1,425,340		$	1,389,158
Common stock shares issued and outstanding		7,669,227			7,630,637			7,580,620			7,484,368
Principal Balance of Loans Serviced for Others ($mil)	$	575.1		$	534.5		$	513.1		$	517.3
Asset Quality Ratios:
Non-Performing Loans / Loans (a)		2.34%			2.07%			2.14%			1.56%
Non-Perf. Loans + OREO / Loans (a) + OREO		3.14%			2.82%			2.60%			1.89%
Non-Performing Assets / Total Assets		2.51%			2.28%			2.12%			1.58%
Allowance for Loan Loss as a % of Loans (a)		1.48%			1.24%			1.26%			1.07%
Allowance / Non-Performing Loans		63%			60%			59%			69%
Quarterly Average Balances:
Total Portfolio Loans (a)	$	1,137,106		$	1,149,168		$	1,153,716		$	1,142,047
Total Earning Assets		1,283,676			1,305,113			1,278,675			1,257,478
Total Shareholders' Equity		148,247			134,866			118,064			118,846
Total Assets		1,417,842			1,431,011			1,409,644			1,389,391
Diluted Shares Outstanding		7,643,929			7,595,469			7,540,644			7,451,664
(a) Total Loans less loans held for sale