Note 22 - Capital Adequacy

12 Months Ended

Dec. 31, 2011

Capital Requirements on Trust Assets [Text Block]

NOTE 22 – CAPITAL ADEQUACY

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators.  Failure to meet capital requirements can initiate regulatory action.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited; as are asset growth and expansion, and capital restoration plans are required.

At year end 2011 and 2010, the most recent regulatory notifications categorize us as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed that classification.

Actual and required capital amounts at year end and ratios are presented below:

(In thousands of dollars)	Actual					Minimum Required For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
2011
Total Capital to Risk Weighted Assets
Consolidated	$	163,919		16.55	%	$	79,233		8.00	%	$	99,041		10.00	%
Firstbank – Alma		32,595		15.02	%		17,358		8.00	%		21,698		10.00	%
Firstbank – Mt. Pleasant		37,793		13.05	%		23,165		8.00	%		28,957		10.00	%
Firstbank – West Branch		22,843		13.39	%		13,649		8.00	%		17,062		10.00	%
Keystone Community Bank		26,838		14.03	%		15,299		8.00	%		19,123		10.00	%
Firstbank – West Michigan		20,035		16.95	%		9,454		8.00	%		11,818		10.00	%
Tier 1 (Core) Capital to Risk Weighted Assets
Consolidated	$	151,473		15.29	%	$	39,616		4.00	%	$	59,425		6.00	%
Firstbank – Alma		29,855		13.76	%		8,679		4.00	%		13,019		6.00	%
Firstbank – Mt. Pleasant		34,168		11.80	%		11,583		4.00	%		17,374		6.00	%
Firstbank – West Branch		20,693		12.13	%		6,825		4.00	%		10,237		6.00	%
Keystone Community Bank		24,416		12.77	%		7,649		4.00	%		11,474		6.00	%
Firstbank – West Michigan		18,533		15.68	%		4,727		4.00	%		7,091		6.00	%
Tier 1 (Core) Capital to Average Assets
Consolidated	$	151,473		10.30	%	$	58,840		4.00	%	$	73,551		5.00	%
Firstbank – Alma		29,855		8.22	%		14,536		4.00	%		18,170		5.00	%
Firstbank – Mt. Pleasant		34,168		8.31	%		16,443		4.00	%		20,554		5.00	%
Firstbank – West Branch		20,693		8.39	%		9,871		4.00	%		12,338		5.00	%
Keystone Community Bank		24,416		10.09	%		9,680		4.00	%		12,100		5.00	%
Firstbank – West Michigan		18,533		9.72	%		7,625		4.00	%		9,531		5.00	%
	Amount		Ratio			Amount		Ratio			Amount		Ratio
2010
Total Capital to Risk Weighted Assets
Consolidated	$	159,222		15.94	%	$	79,896		8.00	%	$	99,870		10.00	%
Firstbank – Alma		22,337		15.18	%		11,771		8.00	%		14,714		10.00	%
Firstbank – Mt. Pleasant		37,663		13.10	%		22,998		8.00	%		28,748		10.00	%
Firstbank – West Branch		23,582		13.56	%		13,917		8.00	%		17,396		10.00	%
Firstbank – St. Johns		8,706		12.67	%		5,496		8.00	%		6,870		10.00	%
Keystone Community Bank		25,136		12.38	%		16,249		8.00	%		20,311		10.00	%
Firstbank – West Michigan		18,338		15.36	%		9,552		8.00	%		11,940		10.00	%
Tier 1 (Core) Capital to Risk Weighted Assets
Consolidated	$	146,619		14.68	%	$	39,948		4.00	%	$	59,922		6.00	%
Firstbank – Alma		20,492		13.93	%		5,886		4.00	%		8,828		6.00	%
Firstbank – Mt. Pleasant		34,059		11.85	%		11,499		4.00	%		17,249		6.00	%
Firstbank – West Branch		21,400		12.30	%		6,959		4.00	%		10,438		6.00	%
Firstbank – St. Johns		7,834		11.40	%		2,748		4.00	%		4,122		6.00	%
Keystone Community Bank		22,554		11.10	%		8,124		4.00	%		12,187		6.00	%
Firstbank – West Michigan		16,817		14.08	%		4,776		4.00	%		7,164		6.00	%
Tier 1 (Core) Capital to Average Assets
Consolidated	$	146,619		10.02	%	$	58,518		4.00	%	$	73,148		5.00	%
Firstbank – Alma		20,492		7.51	%		10,911		4.00	%		13,639		5.00	%
Firstbank – Mt. Pleasant		34,059		8.73	%		15,607		4.00	%		19,508		5.00	%
Firstbank – West Branch		21,400		8.64	%		9,910		4.00	%		12,388		5.00	%
Firstbank – St. Johns		7,834		8.25	%		3,800		4.00	%		4,750		5.00	%
Keystone Community Bank		22,554		9.18	%		9,828		4.00	%		12,285		5.00	%
Firstbank – West Michigan		16,817		8.76	%		7,683		4.00	%		9,604		5.00	%