10-K

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

Form 10-K

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2012.

[   ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [No Fee Required] for the transition period from   to   .

Commission File Number: 000-14209

FIRSTBANK CORPORATION

(Exact name of registrant as specified in its charter)

Michigan	38-2633910
(State of Incorporation)	(I.R.S. Employer Identification No.)
311 Woodworth Avenue
Alma, Michigan	48801
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code:  (989) 463-3131
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of Class	Name of each exchange on which registered
Common Stock	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Exchange Act: none

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes     No _X_

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes [ ]      No [X]

Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the 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 such filing requirements for the past 90 days.     Yes  X               No 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  [ X  ]     No  [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, and “smaller company filer” in Rule 12b-2 of the Exchange Act.    Large accelerated filer ___Accelerated filer Non-accelerated filer ­­­___          Smaller reporting company X

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes     No X  

Aggregate Market Value of common stock held by non-affiliates of the registrant as of June 30, 2012:  $73,507,207

Common stock outstanding at March 1, 2013:  8,022,952 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s annual report to shareholders for the year ended December 31, 2012, are incorporated by reference in Part II.

Portions of the definitive proxy statement for the registrant’s annual shareholders meeting to be held April 22, 2013 are incorporated by reference in Part III.

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FORWARD LOOKING STATEMENTS

This annual report on Form 10-K including, without limitation, management’s discussion and analysis of financial condition and results of operations and other sections of the Corporation’s Annual Report to Shareholders which are incorporated by reference in 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 or incorporated by reference in this report are inherently forward looking statements in that they involve judgments 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 of 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; changes in accounting principles, policies and guidelines; 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.

The Corporation’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge through the Corporation’s website (www.firstbankmi.com) as soon as reasonably practicable after the Corporation electronically files the material with, or furnishes it to, the Securities and Exchange Commission. The reference to our website address does not constitute incorporation by reference of the information contained on the website, and the information contained on the website is not part of this document.

PART 1

ITEM 1.               Business.

Firstbank Corporation (“We” or the “Corporation”) is a bank holding company. Prior to February 1, 2013, we owned all of the outstanding stock of Firstbank – Alma, Firstbank (Mt. Pleasant), Firstbank – West Branch, Keystone Community Bank, Firstbank – West Michigan, and FBMI Risk Management Services, Inc. (a captive insurance company). Effective February 1, 2013, we consolidated four bank charters into one charter. From February 1, 2013 going forward we have two subsidiary banks, Firstbank and Keystone Community Bank.

Our business is concentrated in a single industry segment – commercial banking. Each subsidiary bank is a full-service community bank. Our subsidiary banks offer all customary banking services, including the acceptance of checking, savings, and time deposits and the making of commercial, mortgage (principally single family), home improvement, automobile, and other consumer loans. Trust services are offered to customers through Citizens Bank Wealth Management in the Firstbank – Alma main office.

Our principal sources of revenues are interest and fees on loans and non-interest revenue resulting from banking and non-bank subsidiary activity. On a consolidated basis, interest and fees on loans accounted for approximately 75% of total revenue in 2012, 79% in 2011, and 80% in 2010. Non-interest revenue accounted for approximately 17% of total revenue in 2012, 13% in 2011, and 14% in 2010. Interest on securities accounted for approximately 8% of total revenue 2012 and 8% in 2011, and 6% in 2010. We have no foreign assets and no income from foreign sources. The business of our subsidiary banks is not seasonal to any material extent. Beginning in 2001, each of our subsidiary banks established mortgage company subsidiaries. Each of our subsidiary banks also offers securities brokerage services at their main offices through arrangements with third party brokerage firms.

Firstbank is a Michigan state chartered bank which was incorporated in 1894.  Its main office and one branch are located in Mount Pleasant, Michigan. As of December 31, 2012, prior to the merger, Firstbank also had two full service branches in each of Union Township, Lakeview and Cadillac, and one full service branch located in each of the following communities near Mount Pleasant:  Clare, Shepherd, Howard City, Morley, Remus, Canadian Lakes, and Winn.  Firstbank Mortgage Company, a subsidiary of the bank, was established in 2001. As a result of the bank charter consolidation effective February 1, 2013, all of our branches are branches of Firstbank (except for branches of Keystone Community Bank). Also on February 1, 2013 we closed five offices of the consolidated Firstbank, in Morley, Prescott, Sunfield, Winn and Woodland.

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Prior to February 1, 2013, Firstbank – Alma was a Michigan state chartered bank.  It and its predecessors have operated continuously in Alma, Michigan since 1880.  Its main office and one branch are located in Alma.  Firstbank – Alma also had two full service branches located in St Johns, and one full service branch located in each of the following communities near Alma:  Ashley, Dewitt, Ithaca, Merrill, Pine River Township, St. Charles, St. Louis and Vestaburg. Firstbank – Alma Mortgage Company, a subsidiary of the bank, was established in 2001. Firstbank – Alma was consolidated into Firstbank on February 1, 2013.

Prior to February 1, 2013, Firstbank – West Branch was a Michigan state chartered bank which was incorporated in 1980. Its main office and two branches are located in West Branch, Michigan.  Firstbank – West Branch also has one full service branch located in each of the following communities near West Branch:  Fairview, Hale, Higgins Lake, Prescott, Rose City, St. Helen and West Branch Township.  Firstbank – West Branch owns Firstbank - West Branch Mortgage Company (a subsidiary of the bank, established in 2001). Firstbank - West Branch also owns 46% of First Investors Title, LLC which is a title insurance provider. Firstbank – West Branch was consolidated into Firstbank on February 1, 2013.

Prior to February 1, 2013, Firstbank – West Michigan (formerly Ionia County National Bank of Ionia) was a Michigan state chartered bank which was established in 1934 and acquired by us on July 1, 2007. Its main office and two branches are located in Ionia, with one branch each in Belding, Hastings, Lowell, Sunfield, and Woodland. Firstbank – West Michigan was consolidated into Firstbank on February 1, 2013.

Keystone Community Bank is a Michigan state chartered bank which was established in 1997 and acquired by us on October 1, 2005. Its main office and three branches are located in Kalamazoo with two additional branches in Portage and one branch in Paw Paw. Keystone Mortgage Services, LLC, is a 99% owned subsidiary of the bank.  Keystone Premium Finance, LLC, is a 90% owned subsidiary of the bank. Keystone T.I. Sub, LLC is wholly owned by the bank, and KCB Title Insurance Agency, LLC is a 50% owned subsidiary of Keystone T.I. Sub, LLC. Keystone Community Bank was not consolidated into Firstbank.

The following table shows comparative information concerning our subsidiary banks at December 31, 2012:

	Firstbank – Alma		Firstbank (Mt. Pleasant)		Firstbank – West Branch		Keystone		Firstbank - West Michigan		Total
			(In Thousands of Dollars)
Assets	$	366,645	$	421,250	$	249,626	$	250,648	$	205,619	$	1,493,788
Deposits	$	309,613	$	372,947	$	199,409	$	198,962	$	169,174	$	1,250,105
Loans	$	197,315	$	289,823	$	184,550	$	178,185	$	116,537	$	966,410

As of December 31, 2012 we employed 438 persons on a full-time equivalent basis.

Banking in our market areas and in the State of Michigan is highly competitive. In addition to competition from other commercial banks, we face significant competition from non-bank financial institutions. Savings and loan associations are able to compete aggressively with commercial banks for deposits and loans. Credit unions and finance companies are also significant factors in the consumer loan market. Insurance companies, investment firms and retailers are significant competitors for investment products. Banks compete for deposits with a broad spectrum of other types of investments such as mutual funds, debt securities of corporations and debt securities of the federal government, state governments and their respective agencies. The principal methods of competition for financial services are price (interest rates paid on deposits, interest rates charged on loans and fees charged for services) and service (the convenience and quality of services rendered to customers).

Our subsidiary banks compete directly with other banks, thrift institutions, credit unions and other non-depository financial institutions in five geographic banking markets where their offices are located. Firstbank – Alma primarily competes in Gratiot, Clinton, Bay, Montcalm, and Saginaw counties; Firstbank (Mount Pleasant) primarily in Isabella, Clare, Mecosta, Montcalm, and Wexford counties; Firstbank – West Branch primarily in Iosco, Oscoda, Ogemaw, and Roscommon counties; Keystone Community Bank primarily in Kalamazoo and Van Buren counties, and Firstbank – West Michigan primarily competes in Ionia, Kent, Montcalm, Barry, and Eaton counties.

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SUPERVISION AND REGULATION

Banks and bank holding companies are extensively regulated. We are a bank holding company that is regulated by the Federal Reserve System. Firstbank – Alma, Firstbank (Mount Pleasant), Firstbank – West Branch,  Keystone Community Bank and Firstbank – West Michigan are chartered under state law and are supervised, examined, and regulated by the Federal Deposit Insurance Corporation and the Division of Financial Institutions of the Michigan Office of Financial and Insurance Regulation.

General

Financial institutions and their holding companies are extensively regulated under federal and state law. Consequently, our growth and earnings performance can be affected not only by management decisions and general economic conditions, but also by the statutes administered by, and the regulations and policies of, various governmental regulatory authorities.  Those authorities include, but are not limited to, the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), the Federal Deposit Insurance Corporation (“FDIC”), the Commissioner of the Michigan Office of Financial and Insurance Regulation ("Commissioner"), the Internal Revenue Service, and state taxing authorities. The effect of such statutes, regulations and policies can be significant, and cannot be predicted with a high degree of certainty.

Federal and state laws and regulations generally applicable to financial institutions and their holding companies regulate, among other things, the scope of business, investments, reserves against deposits, capital levels relative to operations, lending activities and practices, the nature and amount of collateral for loans, the establishment of branches, mergers, consolidations and dividends.  The system of supervision and regulation applicable to us and our banks establishes a comprehensive framework for our respective operations and is intended primarily for the protection of the FDIC's deposit insurance funds, our depositors, and the public, rather than our shareholders.

Federal law and regulations establish supervisory standards applicable to the lending activities of our bank, including internal controls, credit underwriting, loan documentation and loan-to-value ratios for loans secured by real property.

Regulatory Developments

Dodd-Frank Act: The Dodd-Frank Act was signed into law by President Obama on July 21, 2010. The Dodd-Frank Act represents a comprehensive overhaul of the financial services industry within the United States, established the new federal Consumer Financial Protection Bureau ("CFPB"), and requires the CFPB and other federal agencies to implement many new and significant rules and regulations. The CFPB has issued significant new regulations that impact consumer mortgage lending and servicing. Those regulations become effective in January 2014. In addition, the CFPB is drafting regulations that will change the disclosure requirements and forms used under the Truth in Lending Act and Real Estate Settlement and Procedures Act. Compliance with these new laws and regulations and other regulations under consideration by the CFPB may result in additional costs to us.

Deposit Insurance: The FDIC finalized changes to its deposit insurance assessment base effective April 1, 2011, which uses average consolidated total assets less average tangible equity as the assessment base instead of quarterly deposits. Additional information about these changes may be found in this Item 1 below under the heading "Our Banks – Deposit Insurance."

As a result of provisions of the Dodd-Frank Act, all funds in a "noninterest-bearing transaction account" were insured in full by the FDIC from December 31, 2010, through December 31, 2012. This temporary unlimited coverage is in addition to, and separate from, the general FDIC deposit insurance coverage of up to $250,000 available to depositors. The temporary coverage for noninterest-bearing transaction accounts expired as scheduled on December 31, 2012. Large depositors may look to reduce their exposure to individual institutions and spread their deposits among various institutions. While we don’t believe the impact of the expiring deposit insurance will have a significant impact on our banks or our customers, it is possible that large depositors could remove their uninsured balances from our banks. However, our banks could also benefit from movement of large uninsured balances from other financial institutions to our banks. The increase in maximum deposit insurance coverage to $250,000 was made permanent under the Dodd-Frank Act.

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Debit Card Interchange Fees and Routing: The Federal Reserve Board in June 2011 issued a rule to implement a provision in the Dodd-Frank Act that requires it to set debit-card interchange fees so they are "reasonable and proportional" in relation to the cost of the transaction incurred by the card issuer. The rule could result in a significant reduction in banks' debit-card interchange revenue. Though the rule technically does not apply to institutions with less than $10 billion, there is concern that the price controls will harm community banks, such as our banks, which will be pressured by the marketplace to lower their own interchange rates.

Future Legislation.  Various other legislative and regulatory initiatives, including proposals to overhaul the banking regulatory system, are from time to time introduced in Congress and state legislatures, as well as regulatory agencies.  Such future legislation regarding financial institutions may change banking statutes and our operating environment in substantial and unpredictable ways, and could increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive balance depending on whether any such potential legislation is introduced and enacted. The nature and extent of future legislative and regulatory changes affecting financial institutions is very unpredictable. We cannot determine the ultimate effect that any such potential legislation, if enacted, would have upon our financial condition or results of operations.

Firstbank Corporation

General.  Firstbank Corporation is registered with, and subject to regulation by, the Federal Reserve Board under the Bank Holding Company Act, as amended (the "BHCA").  Under the BHCA, we are subject to periodic examination by the Federal Reserve Board, and are required to file with the Federal Reserve Board periodic reports of our operations and such additional information as the Federal Reserve Board may require.

In accordance with Federal Reserve Board policy, we are expected to act as a source of financial strength to our subsidiary banks and to commit resources to support our subsidiary banks in circumstances where we might not do so absent such policy.  The Dodd-Frank Act codified this policy as a statutory requirement.

In addition, if the Commissioner deems one or more of our subsidiary bank's capital to be impaired, the Commissioner may require our subsidiary bank to restore its capital by a special assessment upon us as the bank's sole shareholder.  If we were to fail to pay any such assessment, the directors of the applicable bank would be required, under Michigan law, to sell the shares of the bank's stock owned by us to the highest bidder at either a public or private auction and use the proceeds of the sale to restore the bank's capital.

Investments and Activities.  In general, any direct or indirect acquisition by us of any voting shares of any bank which would result in our direct or indirect ownership or control of more than 5% of any class of voting shares of such bank, and any merger or consolidation between us and another financial holding company or bank holding company, will require the prior written approval of the Federal Reserve Board under the BHCA.

The merger or consolidation of an existing bank subsidiary of ours with another bank, or the acquisition by such a subsidiary of assets of another bank, or the assumption of liability by such a subsidiary to pay any deposits in another bank, will require the prior written approval of the responsible Federal depository institution regulatory agency under the Bank Merger Act.  In addition, in certain such cases, an application to, and the prior approval of, the Federal Reserve Board under the BHCA and/or the Commissioner under the Michigan Banking Code, may be required.

Capital Requirements.  The Federal Reserve Board uses capital adequacy guidelines in its examination and regulation of bank holding companies.  If capital falls below minimum guidelines, a bank holding company may, among other items, be denied approval to acquire or establish additional banks or non-bank businesses.

The Federal Reserve Board's capital guidelines establish the following minimum regulatory capital requirements for bank holding companies:  (a) a leverage capital requirement expressed as a percentage of total average assets, and (b) a risk-based requirement expressed as a percentage of total risk-weighted assets.  The leverage capital requirement consists of a minimum ratio of Tier 1 capital (which consists principally of shareholders' equity) to total average assets of 3% for the most highly rated companies, with minimum requirements of 4% to 5% for all others.  The risk-based requirement consists of a minimum ratio of total capital to total risk-weighted assets of 8%, of which at least one-half must be Tier 1 capital.

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Included in our Tier 1 capital as of December 31, 2012, is $36.1 million of trust preferred securities (classified on our balance sheet as "Subordinated Debentures").  The Federal Reserve has issued rules regarding trust preferred securities as a component of the Tier 1 capital of bank holding companies. The aggregate amount of trust preferred securities and certain other capital elements is limited to 25 percent of Tier 1 capital elements, net of goodwill (net of any associated deferred tax liability). The amount of trust preferred securities and certain other elements in excess of the limit could be included in the Tier 2 capital, subject to restrictions.  The provisions of the Dodd-Frank Act imposed additional limitations on the ability to include trust preferred securities as Tier 1 capital; however, these additional limitations do not apply to our outstanding trust preferred securities.

Dividends.  Firstbank Corporation is a corporation separate and distinct from our subsidiary banks.  Most of our revenues are dividends paid by our banks.  Thus, our ability to pay dividends to our shareholders is indirectly limited by statutory restrictions on our banks' ability to pay dividends described below.  Further, in a policy statement, the Federal Reserve Board has expressed its view that a bank holding company experiencing earnings weaknesses should not pay cash dividends exceeding its net income or which can only be funded in ways that weaken the bank holding company's financial health, such as by borrowing.  Additionally, the Federal Reserve Board possesses enforcement powers over bank holding companies and their non-bank subsidiaries to prevent or remedy actions that represent unsafe or unsound practices or violations of applicable statutes and regulations.  Among these powers is the ability to proscribe the payment of dividends by banks and bank holding companies.  Similar enforcement powers over our banks are possessed by the FDIC.  The "prompt corrective action" provisions of federal law and regulation authorizes the Federal Reserve Board to restrict the payment of dividends by us for an insured bank which fails to meet specified capital levels.

In addition to the restrictions on dividends imposed by the Federal Reserve Board, the Michigan Business Corporation Act provides that dividends may be legally declared or paid only if after the distribution a corporation, like us, can pay its debts as they come due in the usual course of business and its total assets equal or exceed the sum of its liabilities plus the amount that would be needed to satisfy the preferential rights upon dissolution of any holders of preferred stock whose preferential rights are superior to those receiving the distribution.

Prior to January 30, 2012, under the rules of the Troubled Asset Relief Program ("TARP") the consent of the United States Treasury was required for us to declare or pay any dividend or make any distribution on or repurchase of common stock other than (a) regular quarterly cash dividends of not more than $0.225 per share, as adjusted for any stock split, stock dividend, reverse stock split, reclassification or similar transaction, or (b) dividends payable solely in shares of our common stock. Since our exit from the TARP program, those restrictions no longer apply.

Federal Securities Regulation.  Our common stock is registered with the Securities and Exchange Commission ("SEC") under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.  We are therefore subject to the information, proxy solicitation, insider trading and other restrictions and requirements of the SEC under those statutes and related regulations.

Our Subsidiary Banks

General.  Each of our banks is a Michigan banking corporation, and its deposit accounts are insured by the Deposit Insurance Fund (the "DIF") of the FDIC. As DIF insured Michigan chartered banks, our banks are subject to the examination, supervision, reporting and enforcement requirements of various agencies. These agencies and the federal and state laws applicable to our banks and their operations, extensively regulate various aspects of the banking business including, among other things, permissible types and amounts of loans, investments and other activities, capital adequacy, branching, interest rates on loans and on deposits, the maintenance of non-interest bearing reserves on deposit accounts, and the safety and soundness of banking practices.

Deposit Insurance.  As an FDIC-insured institution, our banks are required to pay deposit insurance premium assessments to the FDIC. The FDIC has adopted a risk-based assessment system under which all insured depository institutions are placed into one of four categories and assessed insurance premiums, based upon their respective levels of capital and results of supervisory evaluation.

The FDIC is required to establish assessment rates for insured depository institutions at levels that will maintain the DIF at a Designated Reserve Ratio (DRR) selected by the FDIC within a range of 1.15% to 1.50% of estimated insured deposits. The FDIC is allowed to manage the pace at which the reserve ratio varies within this range. Due to recent disruptions in the financial markets and large numbers of bank failures in recent years, the DRR fell below 1.15%. The FDIC has adopted an Amended Restoration Plan which established the time within which the reserve ratio must be returned to 1.15% at seven years. The FDIC imposed a special assessment on all insured depository institutions that was collected on September 30, 2009. The FDIC may impose additional special assessments under certain circumstances. Additionally, in the fourth quarter of 2009, insured institutions were required to prepay their estimated risk-based assessments for all of 2010, 2011 and 2012 based on a 5% annual growth rate.

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The FDIC implemented changes to its deposit insurance assessment base effective April 1, 2011, which uses average consolidated total assets less average tangible equity as the assessment base instead of quarterly deposits. Under this new calculation, most well capitalized banks will pay 5 to 9 basis points annually, increasing up to 35 basis points for banks that post significant supervisory concerns. This base rate may be adjusted for the level of unsecured debt and brokered deposits, resulting in adjusted rates ranging from 2.5 to 9 basis points annually for most well capitalized banks to 30 to 45 basis points for banks that pose significant supervisory concerns. We estimate our annual assessment rate under these new guidelines to be 14 basis points in 2013.

During the fourth quarter of 2009, we prepaid estimated quarterly deposit insurance premium assessments to the FDIC for periods through the fourth quarter of 2012. These estimated quarterly deposit insurance premium assessments were based on projected deposit balances over the assessment periods. Due to changes in how FDIC premiums are assessed, the unused prepaid deposit insurance premium assessments totaled $2.0 million at December 31, 2012 and will be expensed over future assessment periods. The actual expense over the assessment periods will be different from this prepaid amount due to various factors, including variances in actual deposit balances and the assessment base and rates used during each assessment period.

In addition, our banks elected to participate in the FDIC's Transaction Account Guarantee Program (TAGP), which required us to pay an additional assessment to the FDIC. Under the TAGP, funds in non-interest bearing transaction accounts, in interest-bearing transaction accounts with an interest rate of 0.25% or less (after June 30, 2010), and in Interest on Lawyers Trust Accounts (IOLTA) had a temporary unlimited guarantee from the FDIC.  This temporary coverage expired on December 31, 2010. The Dodd-Frank Act extended protection similar to that provided under the TAGP through December 31, 2012 for only non-interest bearing transaction accounts. This coverage applied to all insured depository institutions, and there was no separate FDIC assessment for the insurance. Furthermore, this unlimited coverage was separate from, and in addition to, the coverage provided to depositors with respect to other accounts held at an insured depository institution.

FICO Assessments.  Our subsidiary banks, as members of the DIF, are subject to assessments to cover the payments on outstanding obligations of the Financing Corporation ("FICO").    From now until the maturity of the outstanding FICO obligations in 2019, DIF members will share the cost of the interest on the FICO bonds on a pro rata basis.  It is estimated that FICO assessments during this period will be less than 0.025% of deposits.

Commissioner Assessments.  Michigan banks are required to pay supervisory fees to the Commissioner to fund the operations of the Commissioner.  The amount of supervisory fees paid by a bank is based upon the bank's total assets, as reported to the Commissioner.

Capital Requirements.  The FDIC has established the following minimum capital standards for state-chartered, FDIC insured non-member banks, such as our banks. A leverage requirement consisting of a minimum ratio of Tier 1 capital to total average assets of 3% for the most highly-rated banks with minimum requirements of 4% to 5% for all others, and a risk-based capital requirement consisting of a minimum ratio of total capital to total risk-weighted assets of 8%, at least one-half of which must be Tier 1 capital. Tier 1 capital consists principally of shareholders' equity. These capital requirements are minimum requirements. Higher capital levels will be required if warranted by the particular circumstances or risk profiles of individual institutions.

Federal law provides the federal banking regulators with broad power to take prompt corrective action to resolve the problems of undercapitalized institutions.  The extent of the regulators' powers depends on whether the institution in question is "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized," or "critically undercapitalized."

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Regulations define these capital categories as follows:

	Total Risk-Based Capital Ratio	Tier 1 Risk-Based Capital Ratio	Leverage Ratio
Well capitalized	10% or above	6% or above	5% or above
Adequately capitalized	8% or above	4% or above	4% or above
Undercapitalized	Less than 8%	Less than 4%	Less than 4%
Significantly undercapitalized	Less than 6%	Less than 3%	Less than 3%
Critically undercapitalized	--	--	A ratio of tangible equity to total assets of 2% or less

As of December 31, 2012, each of our subsidiary banks' ratios exceeded minimum requirements for the well capitalized category.

Depending upon the capital category to which an institution is assigned, the regulators' corrective powers include:  requiring the submission of a capital restoration plan; placing limits on asset growth and restrictions on activities; requiring the institution to issue additional capital stock (including additional voting stock) or to be acquired; restricting transactions with affiliates; restricting the interest rate the institution may pay on deposits; ordering a new election of directors of the institution; requiring that senior executive officers or directors be dismissed; prohibiting the institution from accepting deposits from correspondent banks; requiring the institution to divest certain subsidiaries; prohibiting the payment of principal or interest on subordinated debt; and ultimately, appointing a receiver for the institution.

In general, a depository institution may be reclassified to a lower category than is indicated by its capital levels if the appropriate federal depository institution regulatory agency determines the institution to be otherwise in an unsafe or unsound condition or to be engaged in an unsafe or unsound practice.  This could include a failure by the institution, following receipt of a less-than-satisfactory rating on its most recent examination report, to correct the deficiency.

	Tier 1 Leverage Ratio			Tier 1 Risk-Based Capital Ratio			Total Risk-Based Capital Ratio
Minimum regulatory requirement		4	%		4	%		8	%
Well capitalized regulatory level		5	%		6	%		10	%
Firstbank Corporation – Consolidated		9.71	%		14.73	%		15.99	%
Firstbank – Alma		8.15	%		14.55	%		15.81	%
Firstbank  (Mount Pleasant)		8.12	%		11.49	%		12.74	%
Firstbank – West Branch		8.55	%		12.75	%		14.01	%
Keystone Community Bank		11.61	%		14.51	%		15.78	%
Firstbank – West Michigan		7.29	%		11.57	%		12.83	%

The following table shows the amounts by which our capital (on a consolidated basis) exceeds current regulatory requirements for a well capitalized bank on a dollar amount basis:

	Tier 1 Leverage		Tier 1 Risk-Based Capital		Total Risk-Based Capital
	(In Thousands of Dollars)
Capital Balances at December 31, 2012	$	142,884	$	142,884	$	155,135
Well Capitalized Regulatory Capital Required		58,854		38,809		77,618
Capital in Excess of Regulatory Well Capitalized	$	84,030	$	104,075	$	77,517

Dividends.  Under Michigan law, our banks are restricted as to the maximum amount of dividends it may pay on its common stock.  Our banks may not pay dividends except out of net income after deducting its losses and bad debts. A Michigan state bank may not declare or pay a dividend unless the bank will have surplus amounting to at least 20% of its capital after the payment of the dividend.

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Federal law generally prohibits a depository institution from making any capital distribution (including payment of a dividend) or paying any management fee to its holding company if the depository institution would thereafter be undercapitalized.  The FDIC may prevent an insured bank from paying dividends if the bank is in default of payment of any assessment due to the FDIC.  In addition, the FDIC may prohibit the payment of dividends by our bank, if such payment is determined, by reason of the financial condition of our bank, to be an unsafe and unsound banking practice.

Insider Transactions.  Our banks are subject to certain restrictions imposed by the Federal Reserve Act on any extensions of credit to us or our subsidiaries, on investments in the stock or other securities of our subsidiaries and the acceptance of the stock or other securities of us or our subsidiaries as collateral for loans.  Certain limitations and reporting requirements are also placed on extensions of credit by our banks to their respective directors and officers, to our directors and officers, to the directors and officers of our bank, to our principal shareholders and to "related interests" of such directors, officers and principal shareholders.  In addition, federal law and regulations may affect the terms upon which any person becoming a director or officer of our company or one of its subsidiaries or a principal shareholder in our company may obtain credit from banks with which our banks maintain a correspondent relationship.

Safety and Soundness Standards.  The federal banking agencies have adopted guidelines to promote the safety and soundness of federally insured depository institutions.  These guidelines establish standards for internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, fees and benefits, asset quality and earnings.

Investments and Other Activities.  Under federal law and FDIC regulations, FDIC insured state banks are prohibited, subject to certain exceptions, from making or retaining equity investments of a type, or in an amount, that are not permissible for a national bank.  Federal law, as implemented by FDIC regulations, also prohibits FDIC insured state banks and their subsidiaries, subject to certain exceptions, from engaging as principal in any activity that is not permitted for a national bank or its subsidiary, respectively, unless the bank meets, and continues to meet, its minimum regulatory capital requirements and the FDIC determines the activity would not pose a significant risk to the deposit insurance fund of which the bank is a member.  Impermissible investments and activities must be divested or discontinued within certain time frames set by the FDIC in accordance with federal law.  These restrictions are not currently expected to have a material impact on the operations of our bank.

Consumer Protection Laws.  Our banks' business includes making a variety of types of loans to individuals. In making these loans, we are subject to State usury and regulatory laws and to various federal statutes, including the privacy of consumer financial information provisions of the Gramm-Leach-Bliley Act and regulations promulgated there under, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Real Estate Settlement Procedures Act, and the Home Mortgage Disclosure Act and the regulations promulgated there under, which prohibit discrimination, specify disclosures to be made to borrowers regarding credit and settlement costs, and regulate the mortgage loan servicing activities of our bank, including the maintenance and operation of escrow accounts and the transfer of mortgage loan servicing.  In receiving deposits, our banks are subject to extensive regulation under State and federal law and regulations, including the Truth in Savings Act, the Expedited Funds Availability Act, the Bank Secrecy Act, the Electronic Funds Transfer Act, and the Federal Deposit Insurance Act.  Violation of these laws could result in the imposition of significant damages and fines upon our banks and their respective directors and officers.

Branching Authority.  Michigan banks have the authority under Michigan law to establish branches anywhere in the State of Michigan, subject to receipt of all required regulatory approvals.  Banks may establish interstate branch networks through acquisitions of other banks.  The establishment of de novo interstate branches or the acquisition of individual branches of a bank in another state (rather than the acquisition of an out-of-state bank in its entirety) is allowed only if specifically authorized by state law.

Michigan permits both U.S. and non-U.S. banks to establish branch offices in Michigan.  The Michigan Banking Code permits, in appropriate circumstances and with the approval of the Michigan Office of Financial and Insurance Regulation, Division of Financial Institutions, (a) acquisition of Michigan banks by FDIC-insured banks, savings banks or savings and loan associations located in other states, (b) sale by a Michigan bank of branches to an FDIC-insured bank, savings bank or savings and loan association located in a state in which a Michigan bank could purchase branches of the purchasing entity, (c) consolidation of Michigan banks and FDIC-insured banks, savings banks or savings and loan associations located in other states having laws permitting such consolidation, (d) establishment of branches in Michigan by FDIC-insured banks located in other states, the District of Columbia or U.S. territories or protectorates having laws permitting a Michigan bank to establish a branch in such jurisdiction, and (e) establishment by foreign banks of branches located in Michigan.

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The nature of the business of our subsidiaries is such that they hold title, on a temporary or permanent basis, to a number of parcels of real property. These include property owned for branch offices and other business purposes as well as properties taken in, or in lieu of, foreclosures to satisfy loans in default. Under current state and federal laws, present and past owners of real property may be exposed to liability for the cost of remediation of contamination on or originating from such properties, even though they are wholly innocent of the actions which caused the contamination. Such liabilities can be material and can exceed the value of the contaminated property.
 

Investment Securities Portfolio

The carrying values of investment securities as of the date indicated are summarized as follows:

(In Thousands of Dollars)	December 31
	2012		2011		2010
Taxable
Treasury Note	$	0	$	0	$	12,530
US Government Agencies		106,885		133,834		82,897
States and Political Subdivisions		38,015		31,162		15,510
Mortgage Backed Securities		66,277		71,052		55,899
Collateralized Mortgage Obligations		61,030		57,845		54,643
Corporate and Other		1,672		1,664		1,647
Total Taxable	$	273,879	$	295,557	$	223,126
Tax-Exempt
States and Political Subdivisions	$	79,799	$	46,627	$	32,577

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Analysis of Investment Securities Portfolio

The following table shows, by class of maturities at December 31, 2012, the amounts and weighted average yields of such investment securities (1):

	Carrying Value		Average Yield(2)
	(In Thousands of Dollars)
U.S. Government Agencies:
One Year or Less	$	50,025		3.16
Over One Through Five Years		55,222		2.71
Over Five Years Through Ten Years		1,638		2.06
Total	$	106,885
States and Political Subdivisions:
One Year or Less	$	42,887		2.05
Over One Through Five Years		49,492		2.66
Over Five Through Ten Years		22,022		3.28
Over Ten Years		3,413		4.86
Total	$	117,814
Mortgage Backed Securities:
One Year or Less	$	270		4.12
Over One Through Five Years		1,756		4.90
Over Five Through Ten Years		47,573		3.19
Over Ten Years		16,678		3.42
Total	$	66,277
Collateralized Mortgage Obligations:
One Year or Less	$	0		-
Over One Through Five Years		2,928		2.76
Over Five Through Ten Years		3,789		4.52
Over Ten Years		54,313		3.44
Total	$	61,030
Corporate and Other:
One Year or Less	$	1,672		-
Total	$	1,672
TOTAL	$	353,678

(1) Calculated on the basis of the carrying value and effective yields weighted for the scheduled maturity of each security.

(2) Weighted average yield has been computed on a fully taxable equivalent basis.  The rates shown on securities issued by states and political subdivisions have been presented assuming a 35% tax rate.

Loan Portfolio

The following table presents the loans outstanding at December 31st for the years ended:

	2012		2011		2010		2009		2008
	(In Thousands of Dollars)
Loan Categories:
Commercial and Industrial	$	149,265	$	156,551	$	164,413	$	192,096	$	184,455
Commercial Real Estate		357,831		365,029		373,996		398,416		391,572
Real Estate Mortgages		331,896		340,060		354,007		377,261		403,695
Real Estate Construction		58,530		60,280		81,016		85,229		103,206
Consumer		66,240		61,989		59,543		69,735		75,296
Total	$	963,762	$	983,909	$	1,032,975	$	1,122,737	$	1,158,224

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The following table shows the maturity of commercial and agricultural and real estate construction loans outstanding at December 31, 2012.  Also provided are the amounts due after one year, classified according to their sensitivity to changes in interest rates.

	One Year or Less		One Year to Five Years		After Five Years		Total
	(In Thousands of Dollars)
Commercial and Agricultural	$	82,315	$	56,070	$	10,880	$	149,265
Real Estate Construction		26,258		23,730		8,542		58,530
Total	$	108,573	$	79,800	$	19,422	$	207,795
Loans Due after One Year:
With Pre-determined Rate			$	67,248	$	9,204	$	76,452
With Adjustable Rates				12,552		10,218		22,770
Total			$	79,800	$	19,422	$	99,222

Nonperforming Loans and Assets

The following table summarizes nonaccrual, troubled debt restructurings and past-due loans at December 31st for the years ended:

	2012		2011		2010		2009		2008
	(In Thousands of Dollars)
Nonperforming Loans:
Nonaccrual Loans:
Commercial and Agricultural	$	447	$	1,771	$	3,565	$	3,576	$	6,511
Commercial Real Estate		8,454		15,336		16,868		22,945		9,817
Real Estate Mortgages		6,366		5,652		5,745		3,821		2,986
Consumer		401		210		184		335		268
Total		15,668		22,969		26,362		30,677		19,582
Accruing Loans 90 Days or More Past Due:
Commercial and Agricultural		0		0		0		183		1,447
Commercial Real Estate		0		0		18		408		663
Real Estate Mortgages		37		401		573		2,504		2,790
Consumer		0		18		15		126		82
Total		37		419		606		3,221		4,982
Renegotiated Loans:
Commercial and Agricultural		3,230		3,562		36		3,566		110
Commercial Real Estate		12,113		10,652		5,768		1,980		0
Real Estate Mortgages		5,188		4,703		4,252		1,560		165
Consumer		191		0		0		0		0
Total		20,722		18,917		10,056		7,106		275
Total Nonperforming Loans		36,427		42,305		37,024		41,004		24,839
Property from Defaulted Loans		2,925		5,251		8,316		7,425		5,382
Total Nonperforming Assets	$	39,352	$	47,556	$	45,340	$	48,429	$	30,221

Nonperforming assets are defined as nonaccrual loans, accruing loans 90 days or more past due, property from defaulted loans and renegotiated loans.

The amount of interest income on the above loans that was included in net income for the period ended December 31, 2012, was $1,822,000. If the nonaccrual and renegotiated loans had performed in accordance with their original terms and had been outstanding throughout the period, or since origination if held for part of the period, an additional $1,007,000 in gross interest income would have been recorded.

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Loan performance is reviewed regularly by external loan review specialists, loan officers and senior management. When reasonable doubt exists concerning collectability of interest or principal, the loan is placed in nonaccrual status. Any interest previously accrued but not collected at that time is reversed and charged against current earnings.

At December 31, 2012 we had $102,686,000 in commercial and mortgage loans for which payments are presently current although the borrowers are experiencing financial difficulties. Those loans are subject to special attention and their status is reviewed on a monthly basis.

At December 31, 2012, there were no concentrations of loans exceeding 10 percent of total loans, which are not otherwise disclosed as a category of loans, in our consolidated balance sheets contained in our Annual Report to shareholders for the year ended December 31, 2012.

Analysis of the Allowance for Loan Losses

The following table summarizes changes in the allowance for loan losses arising from loans charged off and recoveries on loans previously charged off by loan category and additions to the allowance which were charged to expense at December 31st for the years ended:

	(In Thousands of Dollars)
	2012			2011			2010			2009			2008
Balance at Beginning of Period	$	21,019		$	21,431		$	19,114		$	14,594		$	11,477
Charge-Offs:
Commercial and Agricultural		5,000			10,519			8,073			7,422			3,451
Residential Real Estate Mortgages		2,705			3,490			2,788			2,231			1,350
Consumer		727			913			1,102			1,532			1,014
Total Charge-Offs		8,432			14,922			11,963			11,185			5,815
Recoveries:
Commercial and Agricultural		513			692			325			557			252
Residential Real Estate Mortgages		258			180			216			128			93
Consumer		292			301			395			349			331
Total Recoveries		1,063			1,173			936			1,034			676
Net Charge-Offs		7,369			13,749			11,027			10,151			5,139
Provision for Loan Losses		7,690			13,337			13,344			14,671			8,256
Balance at End of Period	$	21,340		$	21,019		$	21,431		$	19,114		$	14,594
Net Charge-Offs as a Percent of Average Loans		0.75	%		1.37	%		1.05	%		.90	%		.45	%

The allowance for loan losses is based on management’s evaluation of the portfolio, past loan loss experience, current economic conditions, volume, growth, composition of the loan portfolio and other relevant factors. The allowance is increased by provisions for loan losses that have been charged to expense and reduced by net charge-offs.

Allocation of the Allowance for Loan Losses

The allowance for loan losses was allocated to provide for inherent losses within the following loan categories as of December 31st for the years ended:

	2012					2011					2010					2009					2008
(In Thousands of Dollars)
	Allowance for loan losses		% of loans to total loans			Allowance for loan losses		% of loans to total loans			Allowance for loan losses		% of loans to total loans			Allowance for loan losses		% of loans to total loans			Allowance for loan losses		% of loans to total loans
Commercial and Agricultural	$	1,896		16	%	$	2,485		16	%	$	3,024		16	%	$	3,640		17	%	$	10,621		16	%
Secured by Real Estate		17,776		77	%		17,432		77	%		17,109		78	%		13,942		77	%		2,644		77	%
Consumer		805		7	%		931		7	%		1,162		6	%		1,525		6	%		1,169		7	%
Unallocated		863		0	%		171		0	%		136		0	%		7		0	%		160		0	%
Total	$	21,340		100	%	$	21,019		100	%	$	21,431		100	%	$	19,114		100	%	$	14,594		100	%

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We have developed and implemented a comprehensive quantitative and qualitative methodology for analyzing factors which impact the allowance for loan losses. This methodology is applied consistently across our five banking subsidiaries and considers exposures to industries potentially most affected by current risks in the economic and political environment and the review of potential risks in certain credits.

Average Deposits

The daily average deposits and rates paid on such deposits for the years ending December 31st are as follows:

	2012					2011					2010
	Amount		Rate			Amount		Rate			Amount		Rate
Average Balance:	(In Thousands of Dollars)
Non-interest-bearing demand deposits	$	226,061				$	199,849				$	170,823
Interest-bearing demand deposits		344,363		0.23	%		319,053		0.41	%		274,570		0.64	%
Other savings deposits		259,330		0.22	%		235,422		0.44	%		194,855		0.58	%
Other time deposits		400,397		1.31	%		470,314		1.82	%		529,947		2.43	%
Total average deposits	$	1,230,151		0.54	%	$	1,224,638		0.89	%	$	1,170,195		1.58	%

The time remaining until maturity of time certificates of deposit and other time deposits of $100,000 or more at December 31, 2012, was as follows (In Thousands of Dollars):

Three Months or Less	$	43,518
Over Three Through Six Months		26,198
Over Six Through Twelve Months		39,442
Over Twelve Months		58,186
Total	$	167,344

Return on Equity and Assets

The following table sets forth certain financial ratios for the years ended:

	2012			2011			2010
Financial Ratios:
Return on Average Total Assets		0.70	%		0.38	%		0.25	%
Return on Average Equity		7.00	%		3.75	%		2.56	%
Average Equity to Average Total Assets		10.04	%		10.07	%		9.87	%
Dividend Payout Ratio		21.97	%		5.58	%		16.47	%

Short Term Borrowed Funds

Included in short term borrowed funds are repurchase agreements as described in Note 11 to the consolidated financial statements in our Annual Report to Shareholders for the year ended December 31, 2012, which consist of the following:

(In Thousands of Dollars)	2012			2011			2010
Amounts Outstanding at the End of the Year	$	42,785		$	46,784		$	41,328
Weighted Average Interest Rate at the End of the Year		0.19	%		0.19	%		0.19	%
Longest Maturity	1/1/13			1/1/12			1/1/11
Maximum Amount Outstanding at any Month End During Year	$	55,047		$	47,603		$	46,477
Approximate Average Amounts Outstanding During the Year	$	47,605		$	43,847		$	40,338
Approximate Weighted Average Interest Rate for the Year		0.18	%		0.19	%		0.24	%

The weighted average interest rates are derived by dividing the interest expense for the period by the daily average balance during the period.

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ITEM 1A.             Risk Factors

You should carefully consider the following risk factors, together with the other information provided in this Annual Report on Form 10-K.

Changes in economic conditions or interest rates may negatively affect our earnings, capital and liquidity.

The results of operations for financial institutions, including our banks, may be materially and adversely affected by changes in prevailing local and national economic conditions, including declines in real estate market values, rapid increases or decreases in interest rates and changes in the monetary and fiscal policies of the federal government.  Our profitability is heavily influenced by the spread between the interest rates we earn on investments and loans and the interest rates we pay on deposits and other interest-bearing liabilities.  Substantially all our loans are to businesses and individuals in Michigan and any decline in the economy of this area could adversely affect us.  Like most banking institutions, our net interest spread and margin will be affected by general economic conditions and other factors that influence market interest rates and our ability to respond to changes in such rates.  At any given time, our assets and liabilities may be such that they are affected differently by a given change in interest rates.

The value of certain securities in our investment portfolio may be negatively affected by disruptions in the market for those securities and future declines or other-than-temporary impairments could materially adversely affect our future earnings and regulatory capital.

Continued volatility in the market value for certain of our investment securities, whether caused by changes in market perceptions of credit risk, as reflected in the expected market yield of the security, or actual defaults in the portfolio could result in significant fluctuations in the value of the securities.  During the fourth quarter of 2008, the Corporation recorded an impairment charge on certain securities in its portfolio.  Further impairment of these securities or other securities is possible.  In addition, changes in accounting resulting from changes in and interpretations of applicable accounting standards may affect how we account for certain investment securities in our portfolio.  The valuation and accounting for our investment securities could have a material adverse impact on our net income and shareholders’ equity depending on the direction of the fluctuations. Furthermore, future downgrades or defaults in these securities could result in future classifications as other than temporarily impaired. This could have a material impact on our future earnings and financial condition.

The state of financial markets and the economy may adversely affect our sources of liquidity and capital.

There has been significant recent turmoil and volatility in worldwide financial markets which is, at present, ongoing. These conditions have resulted in a disruption in the liquidity of financial markets, and could directly impact us to the extent we need to access capital markets to raise funds to support our business and overall liquidity position. This situation could affect the cost of such funds or our ability to raise such funds. If we were unable to access any of these funding sources when needed, it could adversely impact our financial condition, results of operations, cash flows, and level of regulatory-qualifying capital.

There can be no assurance that the Emergency Economic Stabilization Act of 2008 and the American Recovery and Reinvestment Act will stabilize the U.S. economy and financial system.

The U.S. Congress enacted the EESA in response to the impact of the volatility and disruption in the capital and credit markets on the financial sector. The U.S. Department of the Treasury and the federal banking regulators are implementing a number of programs under this legislation that are intended to address these conditions and the asset quality, capital and liquidity issues they have caused for certain financial institutions and to improve the general availability of credit for consumers and businesses. In addition, the U.S. Congress enacted the American Recovery and Reinvestment Act (“ARRA”) in an effort to save and create jobs, stimulate the U.S. economy and promote long-term growth and stability. There can be no assurance that EESA, ARRA or the programs that are implemented under them will achieve their intended purposes. The failure of EESA, ARRA or the programs that are implemented under them to achieve their intended purposes could result in a continuation or worsening of current economic and market conditions, and this could adversely affect our financial condition, results of operations, and/or the trading price of our common stock.

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Our credit losses could increase and our allowance for loan losses may not be adequate to cover actual loan losses.

The risk of nonpayment of loans is inherent in all lending activities and nonpayment, if it occurs, may have a material adverse affect on our earnings and overall financial condition as well as the value of our common stock.  We make various assumptions and judgments about the collectability of our loan portfolio and provide an allowance for potential losses based on a number of factors.  If our assumptions are wrong, our allowance for loan and lease losses  may not be sufficient to cover our losses, thereby having an adverse affect on our operating results, and may cause us to increase the allowance in the future.  The actual amount of future provisions for loan losses cannot now be determined and may exceed the amounts of past provisions.  Additionally, federal banking regulators, as an integral part of their supervisory function, periodically review our allowance for credit losses. These regulatory agencies may require us to increase our provision for credit losses or to recognize further loan or lease charge-offs based upon their judgments, which may be different from ours. Any increase in the allowance for credit losses could have a negative effect on our net income, financial condition and results of operations.

Our business is subject to various lending risks depending on the nature of the borrower's business, its cash flow and our collateral.

Repayment of our commercial loans is often dependent on cash flow of the borrower, which may be unpredictable, and collateral securing these loans may fluctuate in value.  Our commercial loans are primarily made based on the cash flow of the borrower and secondarily on the underlying collateral provided by the borrower.  Most often, this collateral is accounts receivable, inventory, equipment or real estate.  In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.  Other collateral securing loans may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business.

Our commercial real estate loans involve higher principal amounts than other loans, and repayment of these loans may be dependent on factors outside our control or the control of our borrowers. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans generally is dependent, in large part, on sufficient income from the properties securing the loans to cover operating expenses and debt service.  Because payments on loans secured by commercial real estate often depend upon the successful operating and management of the properties, repayment of such loans may be affected by factors outside the borrower's control, such as adverse conditions in the real estate market or the economy or changes in government regulation. If the cash flow from the project is reduced, the borrower's ability to repay the loan and the value of the security for the loan may be impaired.

Our construction loans are based upon estimates of costs to construct and value associated with the completed project.  These estimates may be inaccurate.  Because of the uncertainties inherent in estimating construction costs, as well as the market value of the completed project, it is relatively difficult to evaluate accurately the total funds required to complete a project and the related loan-to-value ratio.  As a result, construction loans often involve the disbursement of substantial funds with repayment dependent, in part, on the success of the ultimate project and the ability of the borrower to sell or lease the property, rather than the ability of the borrower or guarantor to repay principal and interest. Delays in completing the project may arise from labor problems, material shortages and other unpredictable contingencies.  If the estimate of the cost of construction is inaccurate, we may be required to advance additional funds to complete construction.  If our appraisal of the value of the completed project proves to be overstated, we may have inadequate security for the repayment of the loan upon completion of the project.

Our consumer loans generally have a higher risk of default than our other loans.  Consumer loans may involve greater risk than our other loans, particularly in the case of consumer loans that are unsecured or secured by rapidly depreciating assets.  In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance as a result of damage, loss or depreciation.  The remaining deficiency often does not warrant further substantial collection efforts against the borrower beyond obtaining a deficiency judgment.  In addition, consumer loan collections are dependent on the borrower's continuing financial stability, and thus, are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy, all of which increase when the economy is weak.  Furthermore, the application of various Federal and state laws, including Federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.

We may experience difficulties in managing our growth.

To sustain our continued growth, we require additional capital to fund our expanding lending activities and any bank or branch acquisitions.  We may acquire banks and related businesses that we believe provide a strategic fit with our business.  To the extent that we grow through acquisitions, we cannot assure you that we will be able to adequately or profitably manage such growth.  Acquiring other banks and businesses involves risks commonly associated with acquisitions.

- 16 -

We rely heavily on our management and other key personnel, and the loss of any of them may adversely affect our operations.

We are and will continue to be dependent upon the services of our management team, including our Chief Executive Officer, Chief Financial Officer, the Presidents of each of our banks, and our other senior managers and commercial lenders.  Losing one or more key members of the management team could adversely affect our operations.  We do not maintain key man life insurance on any of our officers or directors.

Our future success is dependent on our ability to compete effectively in the highly competitive banking industry.

We face substantial competition in all phases of our operations from a variety of different competitors.  Our future growth and success will depend on our ability to compete effectively in this highly competitive environment.  We compete for deposits, loans and other financial services with numerous Michigan-based and out-of-state banks, thrifts, credit unions and other financial institutions as well as other entities which provide financial services.  Some of the financial institutions and financial services organizations with which we compete are not subject to the same degree of regulation as we are.  Many of our competitors have been in business for many years, are larger and have higher lending limits than we do.  The financial services industry is also likely to become more competitive as further technological advances enable more companies to provide financial services.  These technological advances may diminish the importance of depository institutions and other financial intermediaries in the transfer of funds between parties.

We are subject to significant government regulation, and any regulatory changes may adversely affect us.

The banking industry is heavily regulated under both federal and state law.  These regulations are primarily intended to protect customers, not our creditors or shareholders.  As a bank holding company, we are also subject to extensive regulation by the Federal Reserve, in addition to other regulatory and self-regulatory organizations. Our ability to establish new facilities or make acquisitions is conditioned upon the receipt of the required regulatory approvals from these organizations.  Regulations affecting banks and financial services companies undergo continuous change, and we cannot predict the ultimate effect of such changes, which could have a material adverse effect on our profitability or financial condition.

We continually encounter technological change, and we may have fewer resources than our competitors to continue to invest in technological improvements.

The banking industry is undergoing rapid technological changes with frequent introductions of new technology-driven products and services.  In addition to better serving customers, the effective use of technology increases efficiency and enables financial institutions to reduce costs.  Our future success will depend, in part, on our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience as well as to create additional efficiencies in our operations.  Many of our competitors have substantially greater resources to invest in technological improvements.  There can be no assurance that we will be able to effectively implement new technology-driven products and services or be successful in marketing such products and services to our customers.

Our articles of incorporation and by-laws and Michigan laws contain certain provisions that could make a takeover more difficult.

Our articles of incorporation and by-laws, and the laws of Michigan, include provisions which are designed to provide our board of directors with time to consider whether a hostile takeover offer is in our best interest and the best interests of our shareholders.  These provisions, however, could discourage potential acquisition proposals and could delay or prevent a change in control.  The provisions also could diminish the opportunities for a holder of our common stock to participate in tender offers, including tender offers at a price above the then-current price for our common stock.  These provisions could also prevent transactions in which our shareholders might otherwise receive a premium for their shares over then current market prices, and may limit the ability of our shareholders to approve transactions that they may deem to be in their best interests.

The Michigan Business Corporation Act contains provisions intended to protect shareholders and prohibit or discourage certain types of hostile takeover activities.  In addition to these provisions and the provisions of our articles of incorporation and by-laws, Federal law requires the Federal Reserve Board's approval prior to acquisition of "control" of a bank holding company.  All of these provisions may have the effect of delaying or preventing a change in control at the company level without action by our shareholders, and therefore, could adversely affect the price of our common stock.

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Our ability to pay dividends is limited by law and contract.

We are a holding company and substantially all of our assets are held by our banks.  Our ability to continue to make dividend payments to our shareholders will depend primarily on available cash resources at the holding company and dividends from our banks.  Dividend payments or extensions of credit from our banks are subject to regulatory limitations, generally based on capital levels and current and retained earnings, imposed by regulatory agencies with authority over our banks.  The ability of our banks to pay dividends is also subject to their profitability, financial condition, capital expenditures and other cash flow requirements. We cannot assure you that our banks will be able to pay dividends to us in the future.

Acquisitions may affect our results.

Our financial results may be adversely affected if we are unable to successfully manage any financial institutions that we acquire.

The market price for our common stock fluctuates.

The market price for our common stock has fluctuated, and the overall market and the price of our common stock may continue to fluctuate. There may be a significant impact on the market price for our common stock due to, among other things:

•  Variations in our anticipated or actual operating results or the results of our competitors;

•  Changes in investors' or analysts' perceptions of the risks and conditions of our business;

•  The size of the public float of our common stock;

•  Regulatory developments;

•  Market conditions; and

•  General economic conditions.

Additionally, the average daily trading volume for our common stock as reported on the Nasdaq National Market is relatively low compared to larger companies whose shares trade on Nasdaq. There can be no assurance that a more active or consistent trading market in our common stock will develop. As a result, relatively small trades could have a significant impact on the price of our common stock.

ITEM 1B.             Unresolved Staff Comments

There are no unresolved SEC comments with respect to reports filed by the Corporation under the Securities Exchange Act of 1934.

ITEM 2.                Properties

Our headquarters is located in the main branch office in Alma, Michigan. Our subsidiary banks operate 46 banking offices throughout central and southwestern Michigan, most of which are full service facilities. Firstbank operates larger facilities in Alma, Mt. Pleasant, West Branch and Ionia. Keystone Community Bank’s main office is in Kalamazoo. The remaining branch facilities range in size from 1,200 to 3,200 square feet, based on the location and number of employees located at the facility. All but nine of the branch locations are owned by the company, with the remaining facilities rented under various operating lease agreements which have a range of remaining terms and renewal arrangements. In several instances, branch facilities contain more space than is required for current banking operations. This excess space, totaling approximately 17,000 square feet, is leased to unrelated businesses. We also maintain a separate facility for our central operations unit near our headquarters office in Alma, Michigan.

We consider our properties and equipment to be well maintained, in good operating condition and capable of accommodating current growth forecasts for their operations. However, we may choose to add additional branch locations to expand our presence in current or contiguous markets in the future to improve our opportunities for growth. We may also enter into sale/leaseback agreements in the future.

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ITEM 3.               Legal Proceedings.

We are parties, as plaintiff or as defendant, to routine litigation arising in the normal course of their business. In the opinion of management, the liabilities arising from these proceedings, if any, will not be material to our consolidated financial condition.

ITEM 4.                Mine Safety Disclosures.

Not applicable.

Supplemental Item.  Executive Officers of the Registrant.

The following information concerning executive officers of the Corporation has been omitted from the registrant’s proxy statement pursuant to Instruction 3 to Regulation S-K, Item 401(b).

Officers of the Corporation are appointed annually by the Board of Directors of the Corporation and serve at the pleasure of the Board of Directors. Information concerning the executive officers of the Corporation is given below. Thomas R. Sullivan and Samuel G. Stone are executive officers of the corporation. None of the other listed officers are executive officers. Except as otherwise indicated, all existing officers have had the same principal employment for over 5 years.

William L. Benear (age 66) became President & CEO of Firstbank – West Michigan in August 2008. Mr. Benear became executive vice president of Firstbank – West Michigan in February of 2008. Mr. Benear has been a Vice President of the Corporation since 2000. Prior to joining the West Michigan staff, Mr. Benear was President & CEO of Firstbank – Lakeview since January of 2000.

David L. Miller (age 47) was named a Vice President of the Corporation in December 2000. Prior to this appointment Mr. Miller served as Senior Vice President of Firstbank - Lakeview, having been employed there since 1992. Mr. Miller serves in the Human Resources Department for the Corporation and its subsidiaries.

Douglas J. Ouellette (age 46) became President & CEO of Firstbank (Mt. Pleasant) and Vice President of the Corporation in February 2007.  Mr. Ouellette joined Firstbank (Mt. Pleasant) in 2000 and has served as Executive Vice President for Firstbank (Mt. Pleasant) since 2005. Subsequent to year end 2012, Mr. Ouellette was named President and Chief Operating Officer of Firstbank following the merger of the bank charters.

Daniel H. Grenier (age 59) became President & CEO of Firstbank – West Branch and Vice President of the Corporation in January 2010. Mr. Grenier joined Firstbank – West Branch in 1987. Prior to his appointment as President & CEO, Mr. Grenier served as Executive Vice President for Firstbank – West Branch.

Richard D. Rice (age 53) was named a Vice President of the Corporation in April 2004.  Mr. Rice joined the Corporation in July 2003 and has served as the Corporation’s Controller since December 2003.  From 1998 until his appointment to Firstbank Corporation, Mr. Rice served as Vice President – Accounting of National City Corporation (successor to First of America).  Previous positions Mr. Rice held during his 13-year tenure with First of America include Vice President – Accounting and several staff accounting positions.

Thomas O. Schlueter (age 55) became President & CEO of Keystone Community Bank and Vice President of the Corporation in October 2005.  From November 1998 until his appointment to President of Keystone Community Bank, Mr. Schlueter served as Executive Vice President, in addition to being named Chief Operating Officer and a Director of Keystone Community Bank in December 1999.  Prior to joining Keystone Community Bank, Mr. Schlueter was employed by First of America Bank/National City Bank for approximately 23 years, with his last position being that of Senior Vice President/Middle Market Lending Group Manager for Southwest Michigan.

Samuel G. Stone (age 67) was appointed Executive Vice President, CFO, Secretary and Treasurer of the Corporation in December 2001. From November 2000 to the December 2001 appointment, Mr. Stone was Vice President, CFO, Secretary and Treasurer of the Corporation. From 1998 until his appointment to Firstbank Corporation, Mr. Stone served as Senior Vice President – Corporate Planning of National City Corporation (successor to First of America). Previous positions Mr. Stone held during his 28-year tenure with First of America included Senior Vice President and Treasurer, Vice President – Director of Corporate Planning and Vice President – Trust Investments. Subsequent to year end 2012, Mr. Stone was named Chief Financial Officer of Firstbank following the consolidation of the bank charters.

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Thomas R. Sullivan (age 62) was appointed President & CEO of the Corporation in January 2000 and also served as President, CEO, and Director of Firstbank (Mt. Pleasant) from 1991 through 2007. Mr. Sullivan was Executive Vice President of the Corporation from 1996 to 2000 and served as Vice President of the Corporation from 1991 to 1996. Subsequent to year end 2012, Mr. Sullivan was named Chief Executive Officer of Firstbank, following the consolidation of the bank charters.

James E. Wheeler, II (age 53) was appointed President & CEO of Firstbank – Alma in January 2000.  Mr. Wheeler has served as Vice President of the Corporation since March 1989. Mr. Wheeler served as Executive Vice President of Firstbank – Alma from 1999 to 2000 and from 1989 to 1999 as Senior Vice President and Chief Loan Officer of Firstbank – Alma. Subsequent to year end 2012, Mr. Wheeler was named Chief Lending Officer of Firstbank following the consolidation of bank charters.

PART II

ITEM 5.                Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.

The information under the caption “Common Stock Data” on page 20 in the registrant’s annual report to shareholders for the year ended December 31, 2012, is here incorporated by reference.

ITEM 6.                Selected Financial Data.

The information under the heading “Financial Highlights” on page 4 in the registrant’s annual report to shareholders for the year ended December 31, 2012, is here incorporated by reference.

ITEM 7.                Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 5 through 21 in the registrant’s annual report to shareholders for the year ended December 31, 2012, is here incorporated by reference.

ITEM 7A.             Quantitative and Qualitative Disclosures About Market Risk.

Information under the headings “Liquidity and Interest Rate Sensitivity” on pages 12 through 14 and “Quantitative and Qualitative Disclosure About Market Risk” on page 17 in the registrant’s annual report to shareholders for the year ended December 31, 2012, is here incorporated by reference.

ITEM 8.                Financial Statements and Supplementary Data.

The following consolidated financial statements, management's report on internal controls, and the Report of Independent Registered Public Accounting Firm are set forth in our annual report, to be delivered to shareholders in connection with the April 22, 2013 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K), and is incorporated herein by reference.

Management's Report on Internal Control Over Financial Reporting

Report of Independent Registered Public Accounting Firm

Consolidated Balances Sheets at December 31, 2012 and 2011

Consolidated Statements of Income and Comprehensive Income

for the years ended December 31, 2012, 2011 and 2010

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Consolidated Statements of Changes In Shareholders' Equity

for the years ended December 31, 2012, 2011 and 2010

Consolidated Statements of Cash Flows for the years ended

December 31, 2012, 2011 and 2010

Notes to Consolidated Financial Statements

The supplementary data required by this item set forth under the caption "Note 27 - Quarterly Financial Data" in our annual report, to be delivered to shareholders in connection with the April 22, 2013 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K), is incorporated herein by reference.

The portions of our annual report, to be delivered to shareholders in connection with the April 22, 2013 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K), which are not specifically incorporated by reference as part of this Form 10-K are not deemed to be a part of this report.

ITEM 9.                Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

ITEM 9A.            Controls and Procedures

(a)          Evaluation of Disclosure Controls and Procedures.

The Corporation’s management is responsible for the establishing and maintaining effective disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) as of the end of the period covered by this Form 10-K Annual Report. The Corporation’s Chief Executive Officer and the Chief Financial Officer, after evaluating the effectiveness of the Corporation’s disclosure controls and procedures, have concluded that the Corporation’s disclosure controls and procedures as of December 31, 2012 were adequate and effective to ensure that information required to be disclosed in this Annual Report on Form 10-K was recorded, processed, summarized, and reported on a timely basis. Management’s responsibility relating to establishing and maintaining effective disclosure controls over financial reporting are designed to produce reliable financial statements in accordance with accounting principles generally accepted in the United States.

(b)          Management’s Report on Internal Controls over Financial Reporting.

As disclosed in the Report on Management’s Assessment of Internal Control Over Financial Reporting on page 22 of the registrant’s annual report to shareholders for the year ended December 31, 2012, (incorporated herein by reference to Exhibit 13 to this Form 10 K), management assessed the Corporation’s system of internal control over financial reporting. Based on this assessment, management believes that, as of December 31, 2012, its system of internal control over financial reporting was effective.

This annual report does not include an attestation report of the Corporation’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Corporation’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report on Form 10-K.

(c)          Changes in Internal Controls.

During the year ended December 31, 2012, there were no significant changes in the Corporation's internal control over financial reporting that have materially affected or are reasonably likely to materially affect the Corporation’s internal control over financial reporting. There were no significant changes in the Corporation’s system of internal controls or other factors that could significantly affect internal controls subsequent to December 31, 2012.

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ITEM 9B.             Other Information.

None.

PART III

ITEM 10.              Directors, Executive Officers and Corporate Governance.

The information under the captions “Board of Directors”, “Corporate Governance” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the registrant’s definitive proxy statement for its annual meeting of shareholders to be held April 22, 2013, is here incorporated by reference.

The Board of Directors of the Corporation has determined that Edward B. Grant, a director and member of the Audit Committee, qualifies as an "Audit Committee Financial Expert" as defined in rules adopted by the Securities and Exchange Committee pursuant to the Sarbanes-Oxley Act of 2002.

The Board of Directors of the Corporation has adopted a Code of Ethics which details principles and responsibilities governing ethical conduct for all Corporation directors and executive officers.  The Code of Ethics is filed as an Exhibit to this Report on Form 10-K.

We provide stock options and restricted stock to our employees that qualify for those benefits under the Firstbank Corporation Stock Option Plans of 1997 and 2006, as amended. These plans provide for shares of stock, in either restricted form or under option. Grant of options may be either incentive stock options or nonqualified stock options.

We provide an incentive based bonus program as a part of our overall compensation plan.  All full time employees are eligible to receive payment under the plan, provided that our net income for the year is satisfactory. Annual bonuses are paid based on a discretionary evaluation of the performance of the employee and the employee’s individual achievements.

ITEM 11.              Executive Compensation.

Information contained under the captions “Director Compensation”, “Compensation Discussion and Analysis”, Executive Compensation”, “Compensation Committee Report” and “Compensation Committee Interlocks and Insider Participation” in the registrant’s definitive proxy statement for its annual meeting of shareholders to be held April 22, 2013, is here incorporated by reference.

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ITEM 12.              Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.

The information under the caption “Voting Securities” in the registrant’s definitive proxy statement for our annual meeting of shareholders to be held April 22, 2013, is here incorporated by reference.

Securities Authorized for Issuance Under Equity Compensation Plans.  We had the following equity compensation plans at December 31, 2012:

EQUITY COMPENSATION PLAN INFORMATION

	Number of securities to be issued upon exercise of outstanding options		Weighted-average exercise price of outstanding options		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column A)
Plan Category	(A)		(B)		(C)
Equity compensation plans approved by security holders		356,030	$	16.29		61,642
Equity compensation plans not approved by security holders		0		-		0
Total		356,030	$	16.29		61,642

These equity compensation plans are more fully described in Note 16 to the Consolidated Financial Statements.

ITEM 13.              Certain Relationships and Related Transactions, and Director Independence.

The information under the captions “Certain Relationships and Related Transactions” and “Corporate Governance – Independence of Directors and Attendance at Meetings” in the registrant’s definitive proxy statement for its annual meeting of shareholders to be held April 22, 2013, is hereby incorporated by reference.

ITEM 14.              Principal Accountant Fees and Services.

The information set forth under the heading “Relationship with Independent Certified Public Accountants” on page 30 of the Corporation’s definitive proxy statement for its annual meeting of shareholders to be held April 22, 2013, is hereby incorporated by reference.

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ITEM 15.              Exhibits and Financial Statement Schedules.

(a) (1)       Financial Statements.

The following consolidated financial statements of the Corporation and its subsidiaries and report of independent auditors are incorporated by reference from the registrant’s annual report to shareholders for the year ended December 31, 2012, in Item 8:

Statement or Report	Page Number in Annual Report
Report of Independent Registered Public Accounting Firm	21
Consolidated Balance Sheets as of December 31, 2012 and 2011	22
Consolidated Statements of Income and Comprehensive
Income for the years ended December 31, 2012, 2011, and 2010	23
Consolidated Statements of Changes in Shareholders’ Equity for
the years ended December 31, 2012, 2011, and 2010	24
Consolidated Statements of Cash Flows for the years ended
December 31, 2012, 2011, and 2010	25
Notes to Consolidated Financial Statements	28-55

The consolidated financial statements, notes to consolidated financial statements and report of independent auditors listed above are incorporated by reference in Item 8 of this report from the corresponding portions of the registrant’s annual report to shareholders for the year ended December 31, 2012.

(2) Schedules to the consolidated financial statements required by Article 9 of Regulation S-X are not required under the related instructions or are inapplicable, and therefore have been omitted.

(3) Exhibits (Numbered in accordance with Item 601 of Regulation S-K) The Exhibit Index is located on the final two pages of this report on Form 10-K.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, dated March 7, 2013.

FIRSTBANK CORPORATION

By:	/s/ Thomas R. Sullivan	By:	/s/ Samuel G. Stone
Thomas R. Sullivan		Samuel G. Stone
President & Chief Executive Officer		Executive Vice President & Chief Financial Officer
(Principal Executive Officer)		(Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the date indicated.  Each director of the Registrant, whose signature appears below, hereby appoints Thomas R. Sullivan and Samuel G. Stone and each of them severally, as his attorney-in-fact, to sign in his name and on his behalf, as a director of the Registrant, and to file with the Commission any and all Amendments to this Report on Form 10-K.

Signature	Date
/s/ Thomas R. Sullivan	March 7, 2013
Thomas R. Sullivan, Principal Executive Officer and a Director
/s/ Samuel G. Stone	March 7, 2013
Samuel G. Stone, Principal Financial and Accounting Officer
/s/ Thomas D. Dickinson	March 7, 2013
Thomas D. Dickinson, Director
/s/ David W. Fultz	March 7, 2013
David W. Fultz, Director
/s/ Jeff A. Gardner	March 7, 2013
Jeff A. Gardner, Director
/s/ William E. Goggin	March 7, 2013
William E. Goggin, Director
/s/ Edward B. Grant	March 7, 2013
Edward B. Grant, Director
/s/ Samuel A. Smith	March 7, 2013
Samuel A. Smith, Director

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Number Exhibit

3(a) Restated Articles of Incorporation of Firstbank Corporation, incorporated  by reference to the Exhibit 3(a) to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2009.

3(b) Bylaws.  Previously filed as exhibit 3.2 to the Form 8K dated January 30, 2009. Here incorporated by reference.

3(c) Certificate of Designation for Fixed Rate Cumulative Perpetual Preferred Stock, Series A, incorporated by reference to Exhibit 3.1 to the Firstbank Corporation Current Report on Form 8-K dated January 26, 2009.

4(a) Form of Certificate for the Fixed Rate Cumulative Perpetual Preferred Stock, Series A, incorporated by reference to Exhibit 4.1 to the Firstbank Corporation Current Report on Form 8-K dated January 26, 2009.

4(b) Instruments defining the Rights of Security Holders – reference is made to Exhibits 3(a), 3(b) and 3(c). In accordance with Regulation S-K Item 601(b)(4), Firstbank Corporation is not filing copies of instruments defining the rights of holders of long-term debt because none of those instruments authorizes debt in excess of 10% of the total assets of Firstbank Corporation and its subsidiaries on a consolidated basis. Firstbank Corporation hereby agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.

10(a)* Form of Indemnity Agreement with Directors and Officers.  Previously filed as Exhibit 10.1 to the registrant's Current Report on Form 8-K dated June 27, 2005.  Hereincorporated by reference.

10(b)* Stock Option and Restricted Stock Plan of 1997.  Previously filed as an appendix to the registrant’s definitive proxy statement for its annual meeting of shareholders held April 28, 1997.  Here incorporated by reference.

10(c)* 2006 Stock Compensation Plan.  Previously filed as Appendix A to registrant’s proxy statement dated March 13, 2006. Here incorporated by reference.

10(d)* Employee Stock Purchase Plan of 1999.  Previously filed as an exhibit to the registrant’s Registration Statement on Form S-8 (Registration No. 333-89771) filed on October 27, 1999.  Here incorporated by reference.

10(e)* Form of Agreement between Firstbank Corporation and each of Thomas R. Sullivan, Samuel G. Stone, William L. Benear, Douglas J. Ouellette and James E. Wheeler, II providing for certain severance benefits in connection with a change of control of Firstbank Corporation.  Filed as exhibit 10 to registrant’s report on Form 10-Q for the quarter ended September 30, 2000.  Here incorporated by reference.

10(f)* Form of Stock Option Agreement.  Previously filed as Exhibit 10(h) to the registrant’s annual report on Form 10-K for the year ended December 31, 2004. Here incorporated by reference.

10(g)* Form of Stock Option Agreement for 2006 Stock Compensation Plan. Filed as exhibit 10.1 to registrant’s report on Form 10-Q for the quarter ended June 30, 2006.  Here incorporated by reference.

10(h)* Form of Restricted Stock Agreement for 2006 Stock Compensation Plan, filed as exhibit 10(k) to registrant’s Annual Report on form 10-K for the year ended December 31, 2009. Here incorporated by reference.

10(i)* Firstbank Corporation Management Incentive Plan.

12 Ratio of Earning to Fixed Charges

13 2012 Annual Report to Shareholders.  (This report, except for those portions which are expressly incorporated by reference in this filing, is furnished for the information of the Securities and Exchange Commission and is not deemed “filed” as part of this filing).  This report was delivered to the registrant’s shareholders along with the registrant’s proxy statement dated March 22, 2013, relating to the April 22, 2013 Annual Meeting of Shareholders which was delivered to the registrant’s shareholders in compliance with Rule 14(a)-3 under the Securities Exchange Act of 1934.

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14. Code of Ethics.

21 Subsidiaries of Registrant.

23.1 Consent of Plante & Moran PLLC - Independent Registered Public Accounting Firm.

24 Powers of Attorney.  Contained on the signature page of this report.

31.1 Certificate of Chief Executive Officer of Firstbank Corporation pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certificate of Chief Financial Officer of Firstbank Corporation pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certificate of Chief Executive Officer and Chief Financial Officer of Firstbank Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 111(b)(4) of the Emergency Economic Stabilization Act of 2008 and 31 CFR subsection 30.15.

99.2  Firstbank Corporation 401(k) Plan Performance Table.

101. Interactive Data File

*Management contract or compensatory plan.

The registrant will furnish a copy of any exhibit listed above to any shareholder of the registrant without charge upon written request to Samuel G. Stone, Secretary, Firstbank Corporation, 311 Woodworth Avenue, P.O. Box 1029, Alma, Michigan 48801.

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EX-10.(I)

Exhibit 10(i)

Performance Management Incentive Plan

July, 2012

OVERVIEW OF PERFORMANCE MANAGEMENT INCENTIVE PLAN

Note: Corporate and Business Unit Performance % varies by level

DESCRIPTION OF PERFORMANCE MANAGEMENT INCENTIVE PLAN COMPONENTS

Corporate Performance Hurdles

n Hurdles are “go/no-go” activation triggers

n In order for the corporate performance piece to be activated in a given year, the Company must exceed a predefined level of earnings.  This is the Earnings Hurdle.  As a general guideline, the Earnings Hurdle will be established at 80% of the annual plan.

Individual and Business Unit Performance

n Performance measures (goals) will be established annually at both the individual and business unit levels, as follows:

§ Individual Performance – subjective, discretionary measures that are critical to meeting the overall business strategies and objectives.

§ Business Unit Performance – subjective, discretionary measures that are critical to meeting the business strategies and objectives of the business unit (e.g., affiliate bank or corporate department).

DESCRIPTION OF PERFORMANCE MANAGEMENT INCENTIVE PLAN COMPONENTS

Individual and Business Unit Performance

n The Corporate CEO, in cooperation with affiliate bank boards, may recommend a discretionary annual incentive award based on his assessment of individual and business unit performance.  This adjustment is not formula-driven, but is a subjective determination of how well the individual has performed relative to performance criteria that are important to the company, such as:

§ Asset quality, earnings and balance sheet growth

§ Comparisons to profit plans, peer groups and the industry

§ Image and community involvement

§ Communication with staff and directors

§ Professionalism, leadership and management ability

§ Employee turnover

§ Industry reputation and visibility

§ Cooperation and leadership in advancement of corporate initiatives

§ Willingness to operate within the corporate philosophy

n The Board will have the same opportunity to adjust the annual incentive for the Corporate CEO based on their assessment of individual performance.

Annual Incentive

n The annual incentive is a calculation to determine the amount the individual will receive based on the level of achievement of corporate performance and the discretionary individual and business unit performance.

ANNUAL PERFORMANCE MEASURES

Description of Annual Performance Measures

n At both the corporate and business unit levels, performance measures will be established at three levels:

§ Threshold – 85% of planned performance, this is the minimum performance acceptable to receive a portion of the annual incentive

§ Target – 100% of planned performance, this results in annual incentive at target level

§ Maximum – 125% of planned performance, this results in the maximum annual incentive payout specified under the plan

n Example:  If planned corporate (i.e., consolidated) net income is $10 million,  performance measures at each of the three levels would be as follows:

Performance Measure	Threshold (85%)	Target (100%)	Maximum (125%)
Corporate Net Income	$8,500,000	$10,000,000	$12,500,000

n Performance measures for the current year are contained in a separate document.

ANNUAL PERFORMANCE MEASURES

Applying the Performance Measures to Individuals

n On an individual basis, the weight placed on corporate performance versus business unit performance will vary based on the role of the individual, as follows:

	Corporate Performance	Individual & Business Unit Performance
Corporate CEO	70%	30%
Corporate Officers	60%	40%
Bank Presidents	50%	25% & 25%

n Example:  If the target for a bank president is $35,000, he or she would have the ability to earn $17,500 (50% of $35,000) for achieving corporate performance measures and $17,500 (50% of $35,000) for achieving bank performance measures.

n During this temporary period where Firstbank Corporation is participating in TARP, dollar amounts earned under this Performance Management Plan could be paid out in Restricted Stock shares according to TARP restrictions.

INDIVIDUAL POTENTIAL

Targets

n Targets are expressed as a percentage of base salary.  For achieving 100% of the performance measures, targets for each management group are as follows:

§ Corporate CEO:  30%

§ Corporate CFO:  25%

§ Other Corporate Officers:  20%

§ Bank Presidents:  25%

Potential

n The potential amount that may be earned for achieving various levels of performance are set forth in the chart below.

	Payout Potential
	Threshold Performance (85% - 90%)	Above Threshold (91% - 95%)	Target Performance (96% - 109%)	Above Target (110% - 124%)	Maximum Performance 125% and above
Corp CEO	15%	22.5%	30%	40%	50%
Corp CFO	10%	17.5%	25%	37.5%	50%
Corp Officers	7%	14%	20%	30%	40%
Bank Presidents	10%	17.5%	25%	37.5%	50%

n The potential has been reduced by 50% due to TARP prohibition on incentive compensation for first half of 2012.

	Payout Potential Second Half of 2012 – After TARP
Corp CEO	7.5%	11.25%	15%	20%	25%
Corp CFO	5%	8.75%	12.5%	18.75%	25%
Corp Officers	3.5%	7%	10%	15%	20%
Bank Presidents	5%	8.75%	12.5%	18.75%	25%

EX-12

EXHIBIT 12

Ratio of Earnings to Fixed Charges

(In Thousands of Dollars)	2012			2011			2010			2009			2008
Fixed charges
Interest expensed and capitalized	$	8,374		$	12,972		$	20,890		$	25,939		$	35,353
Preference dividends
Preferred dividend		1,232			1,650			1,650			1,513			0
Divided by 1 - tax rate		0.66			0.66			0.66			0.66			0.66
Preference dividend cost		1,867			2,500			2,500			2,292			0
Total fixed charges and preferred dividends		10,241			15,472			23,390			28,231			35,353
Less: Interest on deposits		(6,626	)		(10,891	)		(15,733	)		(18,841	)		(25,468	)
Total fixed charges and preferred dividends excluding interest on deposits	$	3,615		$	4,581		$	7,657		$	9,390		$	9,885
Earnings
Pre-tax income	$	14,790		$	7,457		$	5,275		$	3,735		$	(343	)
Add: Fixed charges and preferred dividends		10,241			15,472			23,390			28,231			35,353
Total earnings		25,031			22,929			28,665			31,966			35,010
Less: Interest on deposits		(6,626	)		(10,891	)		(15,733	)		(18,841	)		(25,468	)
Total earnings less interest on deposits	$	18,405		$	12,038		$	12,932		$	13,125		$	9,542
Ratio of earnings to fixed charges
Including interest on deposits		2.44	x		1.48	x		1.23	x		1.13	x		0.99	x
Excluding interest on deposits		5.09	x		2.63	x		1.69	x		1.40	x		0.97	x

EX-13

EXHIBIT 13

Rule 14a-3

Annual Report

PRESIDENT’S MESSAGE

To Our Shareholders:

I am pleased to report that 2012 was a year of continued progress for our company.  We posted improved levels of profitability, lower levels of loan losses and credit-related expenses, improved the valuation of our common stock, increased cash dividends, and we successfully exited the U.S. Treasury’s Capital Purchase Program.  We achieved these results despite a still struggling Michigan economy, continued high levels of unemployment, and depressed real estate values.  I will review the highlights of 2012, our capital and dividend actions, the recent legal restructuring of the company, and our outlook for the future.

2012 Highlights

Net income available to our common shareholders improved by 135% from $3.9 million in 2011 to over $9.2 million in 2012.  The most important measure of our financial success is our Return on Average Shareholders' Equity which improved to 7.0% from the 2011 level of 3.75%.  While improved, and approximating peer results, this return remains below our historical rate of return on our shareholders investment. Asset quality issues and credit costs improved, but remain the largest hindrance to returning to higher levels of performance.  During 2012 we made significant progress in reducing the level of non-performing loans, and in reducing the levels of loan losses, legal fees, and expenses related to collecting, securing, maintaining, and disposing of collateral from customers who could no longer service their loans.  Net charge-offs declined from $13.7 million in 2011 to $7.4 million in 2012, and we are working to reduce that level further in 2013.  Continuing improvement in the Michigan economy, and in particular a stabilization and increase in real estate values, will help us to achieve increased earnings in 2013.

Our mortgage lending business, despite low real estate valuations, has been robust as customers have refinanced their homes at record low interest rates.  In 2012 we had gains from the sale of long term fixed rate loans into the secondary market of over $6.5 million compared to $3.7 million in 2011.  All of our mortgage lenders and processing personnel throughout the company have worked tirelessly to help our customers take advantage of these historically low rates - which will literally save our customers tens of thousands of dollars over the lives of their mortgage loans.  We take great pride in helping our customers benefit from refinancing, and will continue to assist them with their financing needs in 2013.

Our banks all remain very well capitalized with ample funding and human resources to expand lending.  However, our loan portfolios have continued to shrink due to limited good quality lending opportunities within our markets combined with a general reluctance by customers to take on new debt.    As a result, total loans declined by 2.0% during 2012, but we remain well-positioned to expand our lending as the Michigan economy improves.  Helping to offset the earnings impact of the decline in loans has been our continued focus on building core deposits.  Core deposits are generally lower in cost than wholesale funding sources, but more importantly provide us with opportunities to expand our banking relationship with customers who live and work in our local communities.  This lower cost funding helped to maintain our net interest margin at 3.99% in 2012, down only slightly from 4.06% in 2011.

Capital and Dividends

Last year I reported that we were developing a plan to redeem at least half of the outstanding preferred shares before 2014, at which the time the dividend rate would increase from 5% to 9%.  We were very pleased that in June we had accumulated sufficient capital to be able to redeem $16 million of the $33 million of preferred shares outstanding when the shares were publicly auctioned by the U.S. Treasury.  Furthermore, in July we negotiated the repurchase of the warrants we had issued to Treasury in conjunction with the preferred shares.  Between the auction proceeds and our warrant payment, the U.S. Treasury received full repayment of the $33

million it had invested in our company. Earnings have improved since that time, capital has continued to build, and both banks maintain capital levels significantly above the minimum amounts required to be considered "well-capitalized" by the regulators.  We are now formulating plans to redeem the balance of the $17 million of preferred stock outstanding, all of which is held by private investors.  We expect to be able to report to you on those efforts in the near future.

We were also pleased that we were able to share our improved performance with our shareholders through additional cash dividends.  We declared five dividends during the year related to 2012 earnings totaling $0.24.  This compares with the $0.09 cash dividend paid relating to 2011 earnings.  In February of 2013 we returned to our former practice of declaring quarterly cash dividends based upon expected annual earnings, and declared a first quarter cash dividend of $0.06 payable March 28, 2013 to shareholders of record March 12, 2013.

1

Regulatory Issues & Bank Restructuring

Every shareholder is undoubtedly aware that there have been significant new pieces of legislation enacted over the past few years that are intended to prevent another financial calamity such as we have experienced the past five years.  While the target of these new laws is to protect the system from the "too big to fail" financial providers, there will be substantial new regulations to which the community banking industry will now also be subject.  These new, and yet to be implemented, regulations will place significant new compliance demands and costs on our company.  As a result, it was prudent for us to re-examine the structure of our company so that we will be better prepared to deal with the coming onslaught of new regulations.  In October 2012 we announced the consolidation of five small branch offices into other nearby branches, and a legal restructuring of our company, which consolidates the four "Firstbank" charters into one legal entity.  These actions are designed to make us more efficient without impacting how we relate to and service our customers and our communities.  We continue to believe in our community banking structure and believe it has significant benefits.  However, regulatory issues and the related costs are playing a much larger role today and must be addressed.  While we favor our community banking structure, we constantly assess its risks and costs, to ensure that we are representing all of our shareholders, customers, communities, and staff members to the best of our abilities.

2013 Outlook

The Michigan economy appears to be steadily improving; unemployment rates are still high but have been declining; the level and severity of problem loans has been declining; and low interest rates on home mortgages continue to drive the highly profitable re-financing activity.  However, weak loan demand is resulting in a shrinking net interest margin as assets shift into lower yielding investments; real estate values have failed to show improvement; and regulatory changes will impact both our revenue sources and our cost structure.  These factors, combined with the economic uncertainty over the effects of sequestration and the general dysfunction in Washington, are concerning.  Overall, we are cautiously optimistic about 2013, but recognize that we will need to remain vigilant on all of these issues to be successful.

In Conclusion

Our company is truly a reflection of all of the team members which comprise our staff.  We are fortunate to have so many dedicated and capable individuals who have devoted their time, efforts, and careers to our company, our customers, our communities and our shareholders.  I thank each and every one of them for their hard work, dedication, and commitment to Firstbank Corporation and the community banking industry.

Finally, I would like to thank our customers and communities for entrusting us with their business and for allowing us to serve them.  We stand strong and ready to serve their future needs.  The confidence displayed by our shareholders as we have worked through difficult times has been very reassuring.  Your support, encouragement, and investment in Firstbank Corporation are greatly appreciated.

Sincerely,

Thomas R. Sullivan

President & Chief Executive Officer

2

2012

Annual Report

This 2012 Annual Report contains audited financial statements and a detailed financial review.  This is Firstbank Corporation’s 2012 Annual Report to Shareholders.

The report presents information concerning the business and financial results of Firstbank Corporation in a format and level of detail that we believe shareholders will find useful and informative.  Shareholders who would like to receive even more detailed information than that contained in this 2012 Annual Report are invited to request our Annual Report on Form 10-K.

Firstbank Corporation’s Form 10-K Annual Report filed with the Securities and Exchange Commission will be provided to any shareholder, without charge, upon written request.  Requests should be addressed to Samuel G. Stone, Chief Financial Officer, Firstbank Corporation, 311 Woodworth Avenue, P.O. Box 1029, Alma, Michigan 48801-6029.  Firstbank Corporation's Form 10-K Annual Report may also be accessed through our website www.firstbankmi.com

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FINANCIAL HIGHLIGHTS

Firstbank Corporation

(In Thousands of Dollars, Except per Share Data)
For the year:	2012			2011			2010			2009			2008
Interest income	$	62,866		$	67,644		$	72,382		$	74,686		$	82,191
Net interest income		54,492			54,672			51,492			48,747			46,838
Provision for loan losses		7,690			13,337			13,344			14,671			8,256
Non-interest income		12,670			9,675			11,829			15,409			3,990
Non-interest expense		44,682			43,553			44,702			45,750			42,915
Net income		10,534			5,623			3,763			2,691			719
Net income available to common		9,259			3,944			2,084			1,151			719
At year end:
Total assets		1,498,762			1,485,299			1,458,343			1,482,356			1,425,340
Total earning assets		1,375,946			1,351,099			1,332,662			1,342,530			1,292,647
Loans		966,683			984,258			1,032,975			1,122,185			1,159,632
Deposits		1,241,401			1,220,542			1,183,783			1,149,063			1,046,914
Other borrowings		101,362			102,325			118,070			175,756			251,275
Common shareholders’ equity		130,150			122,585			115,665			114,173			114,983
Total shareholders’ equity		147,058			155,377			148,428			146,880			114,983
Average balances:
Total assets		1,500,015			1,489,737			1,488,673			1,433,555			1,396,357
Total earning assets		1,382,519			1,364,139			1,351,872			1,300,354			1,264,425
Loans		982,124			1,004,599			1,077,718			1,135,868			1,145,849
Deposits		1,230,151			1,224,638			1,170,195			1,064,567			1,024,305
Other borrowings		106,569			104,010			160,547			207,614			236,095
Common shareholders’ equity		125,900			117,287			114,207			114,424			118,494
Total shareholders’ equity		150,535			150,065			146,948			144,583			118,494
Per common share:
Basic earnings	$	1.17		$	0.50		$	0.27		$	0.15		$	0.10
Diluted earnings	$	1.16		$	0.50		$	0.27		$	0.15		$	0.10
Cash dividends	$	0.29		$	0.04		$	0.08		$	0.40		$	0.90
Common shareholders’ equity	$	16.24		$	15.53		$	14.82		$	14.77		$	15.44
Financial ratios:
Return on average assets		0.70	%		0.38	%		0.25	%		0.19	%		0.05	%
Return on average total equity		7.00	%		3.75	%		2.56	%		1.86	%		0.61	%
Average equity to average assets		10.04	%		10.07	%		9.87	%		10.09	%		8.38	%
Average common equity to average assets		8.39	%		7.87	%		7.67	%		7.98	%		8.38	%
Dividend payout ratio on common stock		21.97	%		5.58	%		16.47	%		113.80	%		935.73	%

The Company’s Form 10-K Annual Report filed with the Securities and Exchange Commission will be provided to any shareholder, without charge, upon written request. Requests should be addressed to: Samuel G. Stone, Chief Financial Officer, Firstbank Corporation, 311 Woodworth Avenue, P.O. Box 1029, Alma, Michigan 48801-6029 The Company’s Form 10-K may also be viewed through our web site at www.firstbankmi.com.

4

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The purpose of this section of the annual report is to provide a narrative discussion about Firstbank Corporation’s financial condition and results of operations. Please refer to the consolidated financial statements and the selected financial data presented in this report in addition to the following discussion and analysis. We also encourage you to read our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission.

RESULTS OF OPERATIONS

Highlights

Firstbank Corporation (“We” or “the Company”) had net income of $10.5 million for 2012 compared with $5.6 million in 2011, an increase of $4.9 million, or 87%. After payment of dividends on preferred stock, net income available to common shareholders was $9.3 million for 2012 compared with $3.9 million in 2011, an increase of $5.4 million or 135%. Core banking activities continued to provide a solid basis for earnings as net interest income was relatively constant, down $180,000 from 2011. Lower loan loss provisioning was a key to the improved earnings, declining $5.6 million from a year ago to $7.7 million in 2012.

In June we exited the Treasury’s Capital Purchase Program, buying back $16 million of our outstanding preferred stock, with the remaining $17 million placed with private investors.

In October, we announced our intention to consolidate four of our bank charters into a single organization to achieve a more efficient operation. That consolidation was approved by the regulatory agencies and was completed on February 1, 2013. We further had announced the closing of five smaller branch locations and the consolidation of the loans and deposits into other nearby locations. This consolidation was also completed in February. Earlier in the year we had closed one other location, making a total of six branch closings in 2012.

Gain on the sale of mortgage loans also added substantially to earnings increasing $2.8 million from the prior year as the record low interest rate environment spurred refinance activity. Gains on the sale of mortgage loans were $6.5 million in 2012 compared with $3.7 million in 2011.

We achieved a return on average assets of 0.70%, 0.38%, and 0.25% for 2012, 2011, and 2010, respectively. Total average assets increased $10 million in 2012, $1 million in 2011, and $55 million in 2010. Basic and diluted earnings per share were $1.17 and $1.16 in 2012 compared with, $0.50 for both basic and diluted earnings per share in 2011, and $.27 for both measures in 2010. Return on equity was 7.00% in 2012, 3.75% in 2011, and 2.56% in 2010. While these profitability measures have improved considerably in the current period, they continue to fall short of our expectations. The banking industry nationally, and in Michigan is still experiencing some impacts of the recession, but is showing continuing signs of improvement.

Net Interest Income

Our core business is earning interest on loans and securities while paying interest on deposits and borrowings. In response to an economic recession in the United States, the Federal Reserve maintained overnight interest rates at historically low levels of 0.00% to 0.25% for a fourth consecutive year. While these low short term rates allow us to lower the rates we pay on certain deposit products, it also reduces the rates we are able to earn on variable rate loan products and rates charged on renewing fixed rate loans. The net interest spread, the difference between the interest rates charged on earning assets and the rate paid on interest bearing liabilities, was relatively stable early in the year, before declining in the second half. We ended 2011 with a 3.88% net interest spread in the fourth quarter of 2011 and maintained that level through June 2012, before declining to 3.77% in the fourth quarter of 2012. As a result, our net interest margin decreased, ending the year with a net interest margin of 3.99% compared with 4.06% in 2011, and 3.87% in 2010. During 2012, our average loan to average deposit ratio was 80%, lower than the 82% in 2011 and 92% in 2010. The decreasing ratio is a result of both our efforts in attracting core deposits and declining loan balances. We maintain capital and funding capacity as well as a desire to expand lending; however, demand for quality loans in our local economies remains very soft at this time.

Net interest income decreased in 2012 by $180,000 as our lower net interest margin more than offset a higher level of average earning assets. Average interest earning assets increased $18 million from 2011 levels. The increase in average interest earning assets was largely a result of higher balances in the investment portfolio, which rose by $43 million, more than offsetting a $19 million decrease in average loan balances. A critical task of management is to price assets and liabilities so that the spread between the interest earned on assets and the interest paid on liabilities is maximized while maintaining acceptable levels of risk. While interest rates on earning assets and interest bearing liabilities are subject to market forces, in general and in the short run, we can exert more control over deposit rates than earning asset rates. However, competitive forces and the need to retain and grow deposits as a funding source place limitations on the degree of control over deposit rates. Average interest bearing liabilities decreased $18 million during the year, and the average rate paid on these liabilities fell by 39 basis points resulting in a decrease to interest expense of $4.6 million.

5

The following table presents a summary of net interest income for 2012, 2011, and 2010.

Summary of Consolidated Net Interest Income

	Year Ended December 31, 2012								Year Ended December 31, 2011								Year Ended December 31, 2010
(In Thousands of Dollars)	Average					Average			Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate			Balance			Interest		Rate
Average Assets
Interest Earning Assets:
Taxable securities	$	293,554		$	4,512		1.54	%	$	264,657		$	4,808		1.82	%	$	190,114		$	3,647		1.92	%
Tax exempt securities(1)		54,796			1,774		3.24	%		40,273			1,719		4.27	%		30,249			1,751		5.79	%
Total Securities		348,350			6,286		1.80	%		304,930			6,527		2.14	%		220,363			5,398		2.45	%
Loans(1) (2)		963,027			57,086		5.93	%		981,976			61,545		6.27	%		1,047,149			67,545		6.45	%
Federal funds sold		626			1		0.16	%		642			1		0.16	%		451			1		0.23	%
Interest bearing deposits		70,516			209		0.30	%		76,591			253		0.33	%		83,909			205		0.25	%
Total Earning Assets		1,382,519			63,582		4.60	%		1,364,139			68,326		5.01	%		1,351,872			73,149		5.41	%
Nonaccrual loans		19,097								22,623								30,569
Less allowance for loan loss		(21,814	)							(21,650	)							(20,952	)
Cash and due from banks		27,645								26,867								26,342
Other non-earning assets		92,568								97,758								100,842
Total Assets	$	1,500,015							$	1,489,737							$	1,488,673
Average Liabilities
Interest Bearing Liabilities:
Demand	$	344,363			801		0.23	%	$	319,053			1,306		0.41	%	$	274,570			1,736		0.64	%
Savings		259,330			579		0.22	%		235,422			1,032		0.44	%		194,855			1,122		0.58	%
Time		400,397			5,246		1.31	%		470,314			8,554		1.82	%		529,947			12,877		2.43	%
Total Deposits		1,004,090			6,626		0.66	%		1,024,789			10,892		1.06	%		999,372			15,735		1.58	%
Federal funds purchased and repurchase agreements		47,659			87		0.18	%		43,848			83		0.19	%		40,341			96		0.24	%
FHLB advances and notes payable		22,831			625		2.74	%		24,078			802		3.33	%		84,122			3,562		4.24	%
Subordinated debentures		36,084			1,068		2.96	%		36,084			1,197		3.32	%		36,084			1,497		4.15	%
Total Interest Bearing
Liabilities		1,110,664			8,406		0.76	%		1,128,799			12,974		1.15	%		1,159,919			20,890		1.80	%
Demand Deposits		226,061								199,849								170,823
Total Funds		1,336,725								1,328,648								1,330,742
Other Non-Interest Bearing
Liabilities		12,755								11,024								10,983
Total Liabilities		1,349,480								1,339,672								1,341,725
Average Shareholders’ Equity		150,535								150,065								146,948
Total Liabilities and
Shareholders’ Equity	$	1,500,015							$	1,489,737							$	1,488,673
Net Interest Income(1)				$	55,176							$	55,352							$	52,259
Rate Spread(1)							3.84	%							3.86	%							3.61	%
Net Interest Margin (percent of
Average earning assets) (1)							3.99	%							4.06	%							3.87	%

(1)  Presented on a fully taxable equivalent basis using a federal income tax rate of 35% for all periods presented.

(2)  Interest income includes amortization of loan fees of $2.0 million, $1.8 million, and $1.9 million for 2012, 2011, and 2010, respectively. Uncollected interest on nonaccrual loans is not included.

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The table below provides an analysis of the changes in interest income and interest expense due to volume and rate:

	2011/2012									2010/2011
	Change in Interest Due to: (1)									Change in Interest Due to: (1)
	Average Volume			Average Rate			Net Change			Average Volume			Average Rate			Net Change
	(In Thousands of Dollars)
Interest Income:
Securities
Taxable Securities(2)	$	393		$	(770	)	$	(377	)	$	1,465		$	(223	)	$	1,242
Tax-exempt Securities		530			(475	)		55			495			(527	)		(32	)
Total Securities		923			(1,245	)		(322	)		1,960			(750	)		1,210
Loans(2)		(1,171	)		(3,288	)		(4,459	)		(4,122	)		(1,878	)		(6,000	)
Interest Bearing Deposits		0			37			37			(32	)		(1	)		(33	)
Total Interest Income on Earning Assets		(248	)		(4,496	)		(4,744	)		(2,194	)		(2,629	)		(4,823	)
Interest Expense:
Deposits
Interest Paying Demand		97			(602	)		(505	)		250			(680	)		(430	)
Savings		96			(549	)		(453	)		208			(298	)		(90	)
Time		(1,148	)		(2,160	)		(3,308	)		(1,336	)		(2,987	)		(4,323	)
Total Deposits		(955	)		(3,311	)		(4,266	)		(878	)		(3,965	)		(4,843	)
Federal Funds Purchased and Securities
Sold under Agreements to Repurchase		7			(3	)		4			8			(21	)		(13	)
FHLB and Other Notes Payable		(40	)		(137	)		(177	)		(2,125	)		(635	)		(2,760	)
Subordinated Debentures		0			(129	)		(129	)		0			(300	)		(300	)
Total Interest Expense on Liabilities		(988	)		(3,580	)		(4,568	)		(2,995	)		(4,921	)		(7,916	)
Net Interest Income	$	740		$	(916	)	$	(176	)	$	801		$	2,292		$	3,093

(1) Changes in volume/rate have been allocated between the volume and rate variances on the basis of the ratio that the volume and rate variances bear to each other.

(2) Interest is presented on a fully taxable equivalent basis using a federal income tax rate of 35%.

In 2012, the average rate realized on earning assets was 4.60%, a decrease of 41 basis points from the 2011 results of 5.01%, and 81 basis points lower than the 5.41% realized in 2010. In 2008, in reaction to a weakening economy and a credit crisis in the financial markets, the Federal Reserve aggressively lowered rates by 2.25% between January and April bringing the prime rate down to 5.00%. After a six month pause in the rate reduction strategy, the Federal Reserve then lowered rates by another 1.75% in the fourth quarter with the prime rate settling at 3.25% at year end 2008, where it has remained through the end of 2012. Current language from the Federal Reserve indicates their intention to maintain this level of rates sometime into 2015. In addition, the Federal Reserve has also been purchasing longer term bonds in the open market in an effort to keep longer term rates low.

Average loans outstanding decreased $19 million in 2012 when compared with 2011. As of December 31, 2012, approximately 22% of the loan portfolio was comprised of variable rate instruments, compared with 23% as of the end of 2011. The remaining 78% of the loan portfolio is made up of fixed rate loans that do not re-price until maturity. Of the fixed rate loans approximately $175 million, or 24%, mature within twelve months and are subject to rate adjustments at maturity. At year end 2012, 92% of our variable rate commercial loan portfolio was protected by a floor compared with 89% at the end of 2011.

During 2011 and 2012 maturing securities in the investment portfolio were replaced with securities of comparable quality bearing generally lower yields. As a result, maturing securities ran off from the investment portfolio at higher rates than comparable current offerings, decreasing the overall investment portfolio yield from 2.45% in 2010 to 2.14% in 2011 and 1.80% in 2012.

Average total interest bearing deposits for the year decreased $21 million. The average rate paid on interest bearing liabilities was 0.76% in 2012, compared to 1.15% in 2011, and 1.80% in 2010. Deposit rates decreased during 2011 and 2012 with the soft economy. Average rates paid on time deposits decreased 51 basis points in 2012 compared with 2011 and 112 basis points compared with 2010, as new and renewing deposits re-priced to lower rates. Rates on checking and savings deposits also decreased in 2012, falling 18 basis points and 22 basis points, respectively. These same rates were 23 basis points and 14 basis points lower in 2011 than they had been in 2010.

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Brokered CDs are more sensitive to changes in the interest rate than CDs offered in local markets and have been issued with original maturities ranging from three months to two years. The average balance of brokered CDs in 2012 was $18 million, compared with $15 million in 2011 and $11 million in 2010. These CDs carried an average interest rate of 0.69% in 2012 compared with 0.88% in 2011, and 1.05% in 2010.

We fund a portion of our loan portfolio with borrowings from the Federal Home Loan Bank (FHLB). During 2012, the average outstanding balance of FHLB advances decreased $1.2 million although the year-end balance increased $3.0 million when compared with 2011 balances. While FHLB borrowings are one method of funding loans when core deposits are not available, the cost is typically higher than our core deposit costs. As core deposit funding has increased and loan demand decreased, we have been able to reduce our reliance on this source of funding. The 2012 average rate paid for Federal Home Loan Bank advances and notes payable was 2.74%, 59 basis points lower than 2011’s rate of 3.33%. Borrowings from the Federal Home Loan Bank carry significant prepayment penalties that act as a deterrent to early repayment.

In July of 2007, we issued $15.5 million in subordinated debentures to fund a portion of the ICNB acquisition. That issuance was split evenly between debentures that carry a fixed rate of 6.566% for five years, and variable interest rate debentures that carry a rate of 90 day LIBOR plus 1.35%. During 2012 the fixed rate debentures converted to variable rate debenture that carry a rate of 90 day LIBOR plus 1.35%. In January of 2006, we issued $10.3 million in subordinated debentures that carried a fixed rate of 6.049% for five years. During 2011 this issuance converted to a variable interest rate of 90 day LIBOR plus 1.27%. In October of 2004, we issued $10.3 million in subordinated debentures, at a variable interest rate of 90 day LIBOR plus 1.99%. The average rate paid on all subordinated debentures during 2012 was 2.96% compared with 3.32% and 4.15% in 2011 and 2010, respectively. All of the variable rate debentures re-price quarterly.

We utilize short term borrowing, made up of Federal Funds Purchased and Repurchase Agreements as a source of liquidity and to balance our daily cash needs. Average short term borrowed funds increased by $4 million when 2012 is compared with 2011.

The 2012 interest rate spread of 3.84% is two basis points lower than the 2011 spread of 3.86%, and 23 basis points higher than the 2010 spread of 3.61%. Tax equivalent net interest income decreased $176,000 in 2012 as an increase in total average earning assets of $18 million was unable to offset a seven basis point decline in the net interest margin. The net interest margin of 3.99% for 2012 was seven basis points below 2011 but 12 basis points better than in 2010. The decrease in the rate spread in 2012 was the result of rates on average earning assets decreasing 41 basis points while the average cost of interest bearing liabilities decreased 39 basis points. The seven basis point decrease in the net interest margin was a result of a higher percentage of earning assets in the investment portfolio, which earn a lower average interest rate than loans. Average earning assets represented 92% of total average assets in 2012 compared with 91% in 2010 and 2011.

Provision for Loan Losses

In accordance with accounting standards, we allocate a portion of the allowance to loans that we determine to be impaired. We analyze other loans and current market conditions on a pool basis in order to arrive at the appropriate allowance for loan losses. If a loan for which allocations had been established pays off, or the risk of loss is otherwise reduced, we reverse those specific allocations. The methodology described above resulted in a provision for loan losses in 2012 of $7.7 million, compared with $13.3 million in 2011, and $13.3 million in 2010. These provision charges, which exceed historical norms, were incurred as the struggling Michigan economy resulted in new problem loans for which either allocated reserves were established for probable losses, or loans were charged off during the year.

During 2012, we had recoveries of previously charged off loans totaling $1.1 million, and favorable outcomes on certain previously identified problem loans, reducing the amount of provision expense needed, while deterioration of certain loans to problem status and charge offs of $8.4 million increased the amount of provision expense needed. In 2011, we had recoveries of previously charged off loans totaling $1.2 million and favorable outcomes on certain previously identified problem loans, reducing the amount of provision expense needed, while deterioration of certain loans to problem status and charge offs of $14.9 million increased the amount of provision expense needed.

At December 31, 2012, the allowance for loan losses as a percent of total loans was 2.21% compared to 2.14% and 2.06% at December 31, 2011, and December 31, 2010, respectively. Total nonperforming loans (including performing restructured loans) were 3.78% of ending loans at December 31, 2012, compared to 4.27% and 3.60% at the two previous year ends. The decrease in the ratio in 2012 was due to a decrease in nonaccrual loans of $7 million and a decrease in 90 day past due loans of $0.4 million, partially offset by an increase of $2 million in restructured loans. All loans reported as restructured are current or less than 90 days past due and conforming to the agreed upon restructured terms of the loan. The increase in the nonperforming ratio in 2011 was due to a decrease in nonaccrual loans of $3 million, a reduction in 90 day past due loans of $0.2 million, which were more than offset by an increase in restructured loans of $9 million.

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Net charged off loans totaled $7.4 million in 2012 compared to $13.7 million in 2011, and $11.0 million in 2010. Net charged off loans as a percent of average loans were 0.75% in 2012, 1.37% in 2011, and 1.02% in 2010. Charge offs of $1.7 million in 2012 had specific reserves established in a prior year, while in 2011 and 2010, $3.9 million and $2.4 million, respectively, of specific allowance allocations had been set aside at the end of the prior year. Provision expense did not need to be increased to cover those previously identified losses.

Non-interest Income

Non-interest income increased by $3.0 million when 2012 is compared with 2011. Affecting the results in 2012 were gains on the sale of mortgages, which were up $2.8 million, and other income which increased $652,000. Partially offsetting these items was a decrease in service charges on deposit accounts of $273,000 and a decline in mortgage servicing income of $320,000. Comparing 2011 to 2010 non-interest income decreased by $2.2 million. Affecting the results in 2011 were gains on the sale of mortgages, which were down $2.2 million, and decreased revenue from our armored car business, which was down $174,000, (sold at the end of the first quarter of 2010). The sale of our armored car business had negligible impact on net income. Other non-interest income increased $198,000 primarily due to improved results in the sale of other real estate owned properties during the year.

9

Gains on the sale of mortgage loans increased $2.8 million in 2012 compared with 2011. The continued low interest rate environment pushed mortgage rates to record lows during the year, spurring a high level of refinance activity. Mortgage gains decreased $2.2 million when 2011 is compared with 2010. In 2010, rates began the year at a level that did not result in very much refinance or purchase activity, but by mid-year rates had fallen again to a point where refinance activity picked up considerably. In 2011, new regulatory requirements and onerous conditions placed on the sale of loans in the secondary market resulted in lower gains on the sale of loans. By midyear 2011, rates had fallen once again to the point where refinance activity picked up and the second half of the year generated higher gains. Rates remained low throughout 2012 resulting in a consistent level of mortgage refinance activity throughout the entire year.

Mortgage servicing rights, net of amortization, declined from $89,000 in 2011 to a negative $231,000 in 2012 as amortization and write downs of servicing rights due to the high level of refinancing affected this line item. When a mortgage is refinanced or pre-paid, capitalized mortgage servicing rights relating to that mortgage are written off, with the write off amounts included in the amortization cost of servicing rights. The higher level of refinance activity in 2012 compared with 2011 resulted in $605,000 more of servicing rights reversals. Income from servicing loans increased by $285,000 during 2012, partially offsetting the higher servicing rights expense. The lower refinance activity in 2011 compared with 2010 resulted in fewer mortgage loan prepayments, and therefore lower amortization cost of serving rights. Income from servicing loans sold in the secondary market increased by $173,000 over 2010, causing overall mortgage servicing income to be higher by $185,000 in 2011 when compared with 2010. In 2011, mortgage servicing income (servicing income net of amortization of capitalized serving rights) was a positive $89,000 compared with a negative $96,000 in 2010.

Deposit account service charges declined $273,000 from $4.5 million in 2011 to $4.2 million in 2012. Changing customer behavior associated with new regulation regarding overdraft charges put in place mid-year 2011 resulted in lower fees collected. Comparing 2011 to 2010, deposit account fees were down slightly, declining $84,000 from $4.6 million in 2010 to $4.5 million in 2011.

During 2012, we recorded $48,000 in securities gains compared with a loss on securities of $48,000 the prior year. The gains in 2012 and losses in 2011 resulted from routine securities transactions during the year. In 2010 we recorded $7,000 of securities gains. During 2011 we recorded a charge of $150,000 for other than temporary impairment associated with the valuation of one trust preferred security.

Courier and cash delivery services income decreased $174,000 when 2011 is compared with the prior year due to the sale of our armored car company at the end of the first quarter of 2010.

Other income increased $652,000 from $1.5 million in 2011 to $2.1 million in 2012. Other non-interest income was $1.3 million in 2010. Within the category of other income, gains on the sale of other real estate owned improved by $389,000, and other income increased $263,000 primarily due to a $178,000 non-recurring item relating to a director benefit plan. Gains on the sale of other real estate owned were $484,000 in 2012, $95,000 in 2011, and a loss of $354,000 in 2010.

Non-interest Expense

Total non-interest expense was $44.7 million in 2012 compared with $43.6 million in 2011 and $44.7 million in 2010. Within non-interest expense, salaries and benefits increased $1.4 million and other non-interest expense increased $1.7 million, while OREO expense decreased by $1.5 million during 2012. Comparing 2011 to 2010, salaries and benefits increased $374,000 and outside purchased services increased $58,000, while all other categories of expense declined.

Salary and employee benefits expenses increased $1.4 million in 2012 from $21.3 million in 2011 to $22.7 million in 2012. Within this line item, benefits cost increased $131,000, variable compensation expense increased $711,000, and base salaries increased $575,000, or 3.6%. The company’s improved performance resultd in higher payments under the variable compensation plan. In 2011, salaries and benefits increased $374,000 or 1.8% compared with 2010. Within the salary and benefit line, salaries declined $224,000 and benefits increased $598,000. The decline in salaries was in part due to a year over year reduction of $105,000 relating to the sale of our armored car business, with the remaining $119,000 coming from reductions in staffing within our banking business. The increase in benefits cost in 2011 was driven by a $639,000 increase in group insurance. We employed 438 full time equivalent employees at year end of 2012, 435 at both year end of 2011 and 2010.

Occupancy and equipment costs decreased $159,000 in 2012 compared with 2011 primarily due to a $147,000 decrease in depreciation expense. Occupancy and equipment costs also decreased $244,000 in 2011 compared with 2010 primarily due to a $216,000 decrease in depreciation expense.

FDIC expense decreased $340,000 to $1.2 million in 2012, mainly due to the full year impact of a new method of assessing premiums to banks that was instituted mid way through 2011. FDIC expense was $1.6 million in 2011, a decrease of $538,000 from 2010 caused by the new method of assessing premiums to banks that was instituted mid way through the year. FDIC expense was $2.1 million in 2010.

Amortization of intangibles was $483,000 in 2012, compared with $698,000 in 2011, a reduction of $216,000. Amortization expense in 2010 was $796,000. The year over year reduction in the costs are primarily due to the accelerated amortization method used to expense core deposit premiums from recent acquisitions and the completion of amortization on an prior acquisition.

Expenses for outside professional services in 2012 increased $85,000 compared with 2011 after increasing $58,000 from 2010. A substantial portion of the increase in 2011 was due to the reclassification of armored car expense which was previously done in-house.

Advertising and special promotion expense was $1.5 million, up $66,000, or 4.6%, in 2012 following a decrease in 2011 of $259,000. The changes in this expense category are somewhat affected by special promotion expense which is related to mortgage refinance volumes. This expense increased $89,000 during 2012 due to higher mortgage activity.

Other real estate expense and valuation write downs declined $1.5 million to $1.7 million in 2012 from $3.2 million in 2011 and $3.5 million in 2010.  The cost of carrying more properties for longer time frames and write downs due to decreasing property values caused the level of these expenses to be elevated in both 2011 and 2010. Within this category of expenses, valuation write downs were $1.1 million in 2012, $2.3 million in 2011, and $2.3 million in 2010.

Other non-interest expense increased to $10.7 million from $8.9 million in 2011 and was $9.0 million in 2010. Affecting the costs on this line in 2012 were one time nonrecurring expenses of $754,000 related to branch closings and $170,000 related to the auction and repurchase of preferred shares. We also recorded a $750,000 reserve for losses associated with mortgage put backs from loans we have sold in the secondary market.

Federal Income Tax

In 2012 we had federal tax expense of $4.3 million on pre-tax earnings of $14.8 million, resulting in an effective tax rate of 29%. In 2011 we had federal tax expense of $1.8 million on pre-tax earnings of $7.5 million, resulting in an effective tax rate of 25% and in 2010 we had federal tax expense of $1.5 million on pre-tax earnings of $5.3 million, resulting in an effective tax rate of 29%. Included in the 2010 federal tax expense was $485,000 relating to a non-cash charge associated with deferred taxes on security losses realized in prior years that we do not expect to be able to claim. Excluding the deferred tax charge, the effective tax rate for 2010 would have been 19%.

Summary of Significant Costs Relating to Asset Quality, Deposit Insurance and Branch Closings

Management believes that understanding certain costs which it believes are elevated in the current business environment may benefit the readers of this report in evaluating potential changes to our future results. The following table illustrates certain costs which management believes are either currently at an elevated level and will return to historically lower levels once the economic environment improves, or are non-recurring and are not expected to continue.

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(In Thousands of Dollars)
	2012			2011			2010			2009			2008
Provision for loan losses	$	7,690		$	13,337		$	13,344		$	14,671		$	8,256
Securities (gains)/losses		(48	)		48			(7	)		(1,321	)		5,917
Loss/(gain) on sale of OREO properties		(484	)		95			354			336			184
FDIC expense		1,220			1,560			2,098			2,430			562
Legal fees		745			814			822			734			412
Other real estate operating costs		528			894			1,206			1,116			613
Other real estate valuation write-downs		1,151			2,258			2,307			1,275			615
Branch closing expenses		754			0			0			0			0
Tax benefit on items listed at 34%		(3,929	)		(6,462	)		(6,842	)		(6,542	)		(5,630	)
Total of items net of tax benefit		7,627			12,544			13,282			12,699			10,929
Deferred tax write off		0			0			484			659			0
Total	$	7,627		$	12,544		$	13,766		$	13,358		$	10,929

FINANCIAL CONDITION

Total assets at December 31, 2012 were $1.499 billion, compared with December 31, 2011 total assets of $1.485 billion, an increase of $14 million, or 0.9%. A general lack of loan demand by qualified borrowers has resulted in an overall shrinking loan portfolio, while increases in core deposits have provided an opportunity to run off higher cost wholesale funds. Total portfolio loans decreased 2.0% at December 31, 2012 compared with the balance at the previous year end. Commercial loans decreased $8 million, or 5.2%, while commercial real estate loans decreased $10 million, or 2.1%. First lien residential mortgage loans increased $3 million, or 1.5%, while junior lien residential mortgage loans were $8 million lower at December 31, 2012, decreasing 12.4%, from the previous year end. Consumer loans grew by $3 million or 5.1% during the year. Mortgages serviced for others were $2.3 million, or 0.43% higher.

(In Thousands of Dollars)
	2012		2011		Change			% Change
Commercial and industrial	$	150,208	$	158,493	$	(8,285	)		(5.2	)%
Commercial real estate		472,618		482,720		(10,102	)		(2.1	)%
First lien residential real estate		214,379		211,119		3,260			1.5	%
Junior lien residential real estate		58,748		67,053		(8,305	)		(12.4	)%
Consumer		67,809		64,524		3,285			5.1	%
Total	$	963,762	$	983,909	$	(19,847	)		(2.0	)%
Mortgages serviced for others	$	608,234	$	605,913	$	2,321			0. 4	%

Total securities available for sale increased $11 million, or 3.4%. The increase was mainly due to investment of our excess available funds at better rates than is available in shorter term assets. Securities available for sale were 24% of total assets at year end 2012, compared with 23% at the end of 2011. As loan demand picks up in the future, it is expected that the securities portfolio will decline providing the funding for that growth.

Premises and equipment decreased $731,000 after recognized depreciation of $1.9 million. Investment of $1.2 million in new ATMs, software, equipment and facility updates made up the remainder of the change.

Total deposits increased at the end of 2012 to $1.241 billion, an increase of 1.7%, compared to $1.221 billion at year end 2011. Non-interest bearing demand deposit balances increased from the end of 2011, by $36 million to $251 million at year end 2012, an increase of 16.8%. Interest bearing demand deposits grew by $8 million, or 2.2%, and savings account balances increased $24 million, or 9.8%.

At the end of 2012, we had $18 million of wholesale CDs on the balance sheet, the same level as the end of 2011. Wholesale CDs, which contain both brokered CDs and internet CDs, typically carry a higher interest rate than locally generated CDs of similar duration but are available in large dollar pools which results in lower operational cost than smaller dollar local deposits. Large dollar CDs which are generated internally and placed in our CDARS program to provide FDIC insurance for our customers are included in the wholesale CD total, but typically carry lower rates than other wholesale CDs. At the end of 2012 and 2011, all $18 million of wholesale CDs were part of our CDARS program. Including wholesale CDs, total time deposits decreased $47 million, or 11.0% compared with the end of 2011. Excluding the wholesale CDs, time deposits would have decreased from $405 million in 2011 to $358 million in 2012, a decrease of 11.6%. Time deposits were allowed to run off as we re-priced higher rate CD’s to the current low rate market because of reduced funding needs in the loan portfolio. Much of the declining balances in CDs moved to other deposit categories during the year as customers preferred the liquidity of these products over the marginal increase in rate that could be achieved from locking in their money for a longer term.

Securities sold under agreements to repurchase and federal funds purchased decreased by $4 million due to normal balance fluctuations of our customers. Over the past three to four years, management has focused its branch network on increasing core deposit growth. As a result of the growth in these core deposits and a reduction in the size of our loan portfolio, we have been able to reduce our reliance on Federal Home Loan Bank advance funding to support the loan portfolio. Federal Home Loan Bank advances were just $22 million at year end 2012, an increase of $3 million from December 31, 2011.

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Asset Quality

The Michigan economy continued to progress during 2012 resulting in a lower unemployment rate and stronger business climate for our customers. Many banks in our state have shown significant losses associated with bad loans and we were not immune from the impact that the economy had on businesses and consumers, however the improving economy has resulted in improvement in these metrics. After increasing for three years, our net charged off loans declined in 2012, as fewer customers succumbed to the economic problems. Within the last year, the value of development projects and residential properties showed some improvement resulting in fewer charged off loans and nonaccrual loan balances. Our nonaccrual loan balances remained somewhat elevated at year end, but were down 32% from year end 2011. Total of nonaccrual, restructured, and 90 day past due loans decreased 14% from year end 2011 as nonaccrual loans were down $7 million, 90 day past due loans were down $0.4 million and restructured loans increased by $1.8 million. The increase in restructured loans is due to our willingness to work with our customers who are experiencing financial difficulty to manage through the current downturn. While the restructured loan balance often is included in a nonperforming loans total, these loans might be better characterized as underperforming. All loans reported as restructured are in compliance with the renegotiated terms of the loan. Renegotiated terms on a loan may include such things as a reduced interest rate, extending the amortization period for the loan, or in some cases a partial forgiveness of the balance due on the loan. We continue to be vigilant at monitoring these loan relationships and working through these issues with our customers.

Loans are carried at an amount which management believes will be collected. A balance considered not collectible is charged against (reduction of) the allowance for loan losses. In 2012, net charged off loans were $7.4 million, compared with $13.7 million in 2011 and $11.0 million in 2010. Net charged off loans as a percentage of average loans were 0.75% in 2012 compared with 1.37% in 2011 and 1.05% in 2010.

The total of nonaccrual loans, loans 90 days past due and any troubled loans where borrowers are under financial stress and the terms have been renegotiated to below normal market terms was $36.4 million and $42.3 million at December 31, 2012 and 2011, respectively. Total nonaccrual loans were $15.7 million at December 31, 2012, compared to $23.0 million at the end of 2011. The elevated level in nonaccrual loans for both years was largely due to economic stresses being felt in Michigan. Borrowers which had previously been able to meet their loan obligations during better times have become unable to do so in the current environment. Loans past due 90 days or more decreased to $37,000 at year end 2012 compared with $419,000 at the end of 2011, in part because of loans moving to nonaccrual status during the year. Impaired loans are commercial loans for which we believe it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. The average investment in impaired loans was $35.5 million during 2012 compared to $34.1 million during 2011. At year end, impaired loans were $32.9 million compared with $38.0 million at December 31, 2011. In the current environment, we have deemed it necessary to work with some customers to restructure loans to reduce the probability of loss to the bank. At the end of the year, we had $20.7 million of restructured loans compared with $18.9 million at year end 2011.

The allowance for loan losses was $0.3 million, or 2%, higher at year end 2012 compared with 2011. This increase was a result of provision expense of $7.7 million versus charged off loans of $8.4 million during the year, and recoveries of prior charged off loans of $1.1 million. Through our analysis process, we determined that it was necessary to provide slightly more for future probable losses than we realized in net charge offs this year due to several factors. We record provision for loan loss expense when loans for which losses are likely, are identified. For loans which carry an allocated allowance, no expense is recognized at the time of charge off to the extent that allowance has been previously provided. See the discussion of loan loss provision expense previously presented for additional information. The allowance for loan losses represents 2.21% of outstanding loans at the end of 2012, compared with 2.14% at December 31, 2011.

We maintain the allowance at a level which we believe adequately provides for losses inherent in the loan portfolio. Such losses are estimated by a variety of factors, including specific examination of certain borrowing relationships and consideration of historical losses incurred on certain types of credits. We focus on early identification of problem credits through ongoing reviews by management, loan personnel and an outside loan review specialist. Please refer to Note 6 of the Notes to Consolidated Financial Statements for more information on impaired loans.

LIQUIDITY AND INTEREST RATE SENSITIVITY

Asset liability management aids us in achieving reasonable and predictable earnings and liquidity while maintaining a balance between interest earning assets and interest bearing liabilities. We maintain a complex interest rate risk modeling system which assists management in understanding the impact of changes in rates, both in the past, and forecasted. This information allows management to make adjustment as to its view toward certain products with regard to rate and term in order to minimize our interest rate risk in a changing rate environment.

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Cash provided from operations during the year was $23.2 million while investing activities was $0.4 million in cash. Financing activities provided an additional $0.2 million in cash resulting in a total increase in our cash position of $23.8 million. For additional details on these activities see the Consolidated Statement of Cashflows on page 27 of this report.

Liquidity management involves the ability to meet the cash flow requirements of our customers. These customers may be either borrowers needing to meet their credit requirements or depositors wanting to withdraw funds. Management of interest rate sensitivity attempts to manage the level of varying net interest margins and to achieve consistent net interest income through periods of changing interest rates. The net interest margin was 3.99% in 2012 compared to 4.06% in 2011. The yield on the securities portfolio fell 34 basis points, from 2.14% in 2011 to 1.80% in 2012. Loan yields decreased 34 basis points, to 5.94% in 2012, from 6.26% in 2011. Deposit costs decreased 40 basis points from 1.06% in 2011 to 0.66% in 2012. Loan demand was muted through the year as customers were cautious about the economy, resulting in a decrease of $22 million in average loan balances. Average total earning assets increased $18 million as average securities investment increased $43 million and average interest bearing deposits with banks decreased $6 million. The interest bearing deposit balances at banks is primarily due to excess balances held at the Federal Reserve.

Full year average balances in time deposits decreased $70 million compared with the prior year, while average demand and savings balances increased $50 million. The use of Federal Home Loan Bank advances continued to become a less significant source of longer term funding, with average advances decreasing from the prior year by $1.2 million as we utilized increased core deposits to reduce these borrowings.

A decision to decrease deposit rates immediately affects most rates paid, other than time deposits, and has an immediate positive impact on net interest margin. With the exception of variable rate loans, an increase in loan rates does not affect the yield until a new loan is made or an existing loan is renewed. Likewise, an increase in deposit rates raises our cost of funds, and a decrease in loan rates only effects variable rate loans, until such time as a new fixed rate loan is generated, or re-finances. The prime rate is used to price virtually our entire variable rate loan portfolio. Therefore, reductions in the prime rate immediately have a negative effect on earnings, while an increase in prime rate has a positive effect on earnings.

The prime rate, was held constant at 3.25% throughout all of 2011 and 2012 as the Federal Reserve maintained its target fed funds rate at a range of 0 to 0.25% for both years in an effort to get the economy growing again. Prime rate began 2008 at 7.25%, was reduced seven times during the year, and once more in January of 2009 for a cumulative reduction of 4.00%. With the prime rate currently at 3.25%, the Federal Reserve has made no changes to the prime rate through the end of 2012 and has indicated that rates will likely remain at these levels through sometime in 2015.

The principal sources of liquidity for us are maturing securities, federal funds purchased or sold, loan payments by borrowers, investment securities, loans held for sale, deposit or deposit equivalent growth and Federal Home Loan Bank advances. Securities maturing or re-pricing within one year at December 31, 2012 were $103 million, compared to $151 million at December 31, 2011. Total investments available for sale were $354 million at year end 2012, an increase of $11 million from the prior year end.

The table below shows the interest sensitivity gaps for five different intervals as of December 31, 2012. Deposits that do not have a fixed maturity date are shown as immediately re-pricing according to reporting conventions.

	Maturity or Re-Pricing Frequency
				(In Millions of Dollars)
	1 Day			2 Days through 3 Months			4 Months through 12 Months			13 Months through 5 Years		More than 5 Years
Interest Earning Assets:
Loans	$	220.3		$	64.9		$	165.6		$	472.1	$	43.8
Securities		9.3			24.3			69.6			183.1		67.4
Other earning assets		61.0			0			2.0			1.0		7.3
Total		290.6			89.2			237.2			656.2		118.5
Interest Bearing Liabilities:
Deposits		613.9			86.0			154.6			135.8		0
Other interest bearing liabilities		42.8			40.6			0.1			15.8		2.1
Total		656.7			126.6			154.7			151.6		2.1
Interest Sensitivity Gap	$	(366.1	)	$	(37.4	)	$	82.5		$	504.6	$	116.4
Cumulative Gap	$	(366.1	)	$	(403.5	)	$	(321.0	)	$	183.6	$	300.0

For the one day interval, maturities of interest bearing liabilities exceed those of interest earning assets by $366 million. Included in the one day maturity classification are $614 million in savings and checking accounts which are contractually available to our customers immediately, but in practice, function as core deposits with considerably longer maturities. In the two day through the five year time frame, interest sensitive assets exceed interest sensitive liabilities by $550 million, resulting in a cumulative position of interest sensitive assets exceeding interest sensitive liabilities by $184 million through five years. For the time period greater than five years, the analysis shows an asset sensitive position, such that cumulatively, interest sensitive assets exceed interest sensitive liabilities by $300 million.

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Showing a negative cumulative gap through the twelve month period does not necessarily result in a corresponding increase in net interest income during a falling rate environment. In practice, deposit rates do not change as rapidly as would be indicated by the contractual availability of deposit balances to customers. Also, changes in the steepness of the yield curve can cause differing effects on different products. Some of the benefit associated with lower deposit rates is mitigated by rate decreases on variable rate loans, renewals of fixed rate loans to lower rates, and customer prepayments. Conversely, showing a positive cumulative gap through the twelve month period does not necessarily result in a corresponding increase in net interest income during a rising rate environment for similar reasons.

Interest rate sensitivity varies with different types of interest earning assets and interest bearing liabilities. Overnight investments, on which rates change daily, and loans tied to the prime rate differ considerably from long term investment securities and fixed rate loans. Time deposits over $100,000 and money market accounts are more interest sensitive than regular savings accounts. Comparison of the re-pricing intervals of interest earning assets to interest bearing liabilities is a measure of the interest sensitivity gap, not interest rate risk. Balancing interest rate sensitivity is a continual challenge in a changing rate environment. We use a sophisticated computer program to perform analysis of interest rate risk, assist with our asset and liability management, and measure the expected impact of interest rate changes and our sensitivity to those changes.

CONTRACTUAL OBLIGATIONS, COMMITMENTS, CONTINGENT LIABLILITES, AND OFF-BALANCE SHEET ARRANGEMENTS

We have various financial obligations, including contractual obligations and commitments that may require future cash payments.

The following table presents, as of December 31, 2012, significant fixed and determinable contractual obligations to third parties by payment date.

(In Thousands of Dollars)
Contractual Obligation	One Year or Less		1 – 3 Years		3 - 5 Years		More than 5 Years		Total
Time Deposits	$	239,810	$	100,901	$	35,655	$	5	$	376,371
Federal Funds Borrowed and Repurchase Agreements		42,785								42,785
Long Term Debt		2,500		10,777		6,181		3,035		22,493
Subordinated Debt								36,084		36,084
Operating Leases		332		217		201		0		750

Further discussion of the nature of each obligation is included in Notes 7, 10, 11, 12, and 13 to the consolidated financial statements.

Our operating lease obligations represent short and long-term lease and rental payments, primarily for facilities, and to a lesser degree for certain software and data processing equipment.

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The following table details the amounts and expected maturities of significant commitments as of December 31, 2012.

(In Thousands of Dollars)
	One Year or Less		1 - 3 Years		3 - 5 Years		More than 5 Years		Total
Credit:
Commercial real estate	$	85,440	$	19,741	$	10,705	$	4,801	$	120,687
Residential real estate		989		511		0		50,141		51,641
Construction loans		3,788		416		626		255		5,085
Revolving home equity and credit card lines		7,506		15,671		13,042		10,442		46,661
Other		1,463		14,426		3,817		1,165		20,871
Commercial standby letters of credit		16,927		2		417		3,080		20,426
Total Commitments	$	116,113	$	50,767	$	28,607	$	69,884	$	265,371

Commitments to extend credit, including loan commitments, standby letters of credit and commercial letters of credit, do not necessarily represent future cash requirements in that these commitments often expire without being drawn upon. Further discussion of these commitments is included in Note 18 to the consolidated financial statements.

CRITICAL ACCOUNTING POLICIES

Certain of our accounting policies are important to the portrayal of our financial condition since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Estimates associated with these policies are susceptible to material changes as a result of changes in facts and circumstances. Facts and circumstances which could affect these judgments include, without limitation, changes in interest rates, in local and national economic conditions or the financial condition of borrowers. Our significant accounting policies are discussed in detail in Note 1 of the Notes to the Consolidated Financial Statements.

We view critical accounting policies to be those which are highly dependent on subjective or complex judgments, estimates and assumptions, and where changes in those estimates and assumptions could have a significant impact on the financial statements. We believe that our critical accounting policies include determining the allowance for loan losses, determining the fair value of securities and other financial instruments, including possible impairment of goodwill and other assets, the valuation of mortgage servicing rights, determination of purchase accounting adjustments, determination of the fair value of other real estate owned, and estimating state and federal tax liabilities.

Allowance for Loan Losses The allowance for loan losses is a valuation allowance for probable incurred credit losses. We use a quantitative and qualitative methodology for analyzing factors which impact the allowance for loan losses consistently across our five banking subsidiaries. The process applies risk factors for historical charge-offs and delinquency experience, portfolio segment weightings and industry and regional factors and trends as they affect the banks’ portfolios. The consideration of exposures to industries potentially most affected by current risks in the economic and political environment, and the review of potential risks in certain credits that either are, or are not, considered part of the non-performing loan category contributed to the establishment of the allowance levels at each bank. Loan losses are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed.

Loans are reviewed on an ongoing basis for impairment. A loan is impaired when it is probable that we will be unable to collect all amounts due substantially in accordance with the contractual terms of the loan agreement. Impaired loans are measured based on the present value of expected cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the fair value of collateral if the loan is collateral dependent. Loans considered to be impaired are reduced to the present value of expected future cash flow or to the fair value of collateral by allocating a portion of the allowance for loan losses to such loans. If these allocations cause an increase in the calculated allowance for loan losses, such increase is reported as provision for loan loss expense. Increases or decreases in carrying value due to changes in estimates of future payments or the passage of time are reported as reductions or increases in the provision for loan losses.

Smaller balance homogeneous loans such as residential first mortgage loans secured by one to four family residences, residential construction, automobile, home equity and second mortgage loans, are collectively evaluated for impairment. Commercial loans and first mortgage loans secured by other properties are evaluated individually for impairment. When credit analysis of the borrower’s operating results and financial condition indicates the underlying ability of the borrower’s business activity is not sufficient to generate adequate cash flow to service the business’ cash needs, including our loans to the borrower, the loan is evaluated for impairment. Often this is associated with a delay or shortfall in payments of 90 days or less. Commercial loans are rated on a scale of 1 to 10, with grades 1 to 4 being satisfactory grades, 5 and 6 special attention or watch, 7 substandard, 8 impaired, 9 doubtful, and 10 loss. Loans graded 6 through 9 are considered for impairment. Loans are generally moved to nonaccrual status when 90 days or more past due. These loans are often considered impaired. Impaired loans, or portions thereof, are charged off when deemed uncollectible.

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Fair Value of Securities and Other Financial Instruments Securities available for sale consist of bonds and notes which might be sold prior to maturity due to changes in interest rate, prepayment risks, yield and availability of alternative investments, liquidity needs or other factors. Securities classified as available for sale are reported at their fair value. Declines in the fair value of securities below their cost that are other than temporary are reflected as realized losses. In estimating other-than-temporary losses, management considers: (1) the length of time and extent that fair value has been less than carrying value; (2) the financial condition and near term prospects of the issuer; and (3) our ability and intent to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value.

Market values for securities available for sale are obtained from outside sources and applied to individual securities within the portfolio. The difference between the amortized cost and the current market value of securities is recorded as a valuation adjustment and reported in other comprehensive income.

Valuation of Mortgage Servicing Rights Mortgage servicing rights are recognized as assets for the allocated value of retained servicing rights on loans sold. Servicing rights are expensed in proportion to, and over the period of, estimated net servicing revenues.

We utilize a discounted cash flow model to determine the value of our servicing rights. The valuation model utilizes mortgage prepayment speeds, the remaining life of the mortgage pool, delinquency rates, our cost to service loans, and other factors to determine the cash flow that we will receive from serving each grouping of loans. These cash flows are then discounted based on current interest rate assumptions to arrive at the fair value of the right to service those loans. Impairment is evaluated based on the fair value of the rights, using groupings of the underlying loans classified by interest rates. Any impairment of a grouping is reported as a valuation allowance.

Acquisition Intangibles  Generally accepted accounting principles require us to determine the fair value of all of the assets and liabilities of an acquired entity, and record their fair value on the date of acquisition. We employ a variety of means in determination of the fair value, including the use of discounted cash flow analysis, market comparisons, and projected future revenue streams. For certain items that we believe we have the appropriate expertise to determine the fair value, we may choose to use our own calculation of the value. In other cases, where the value is not easily determined, we consult with outside parties to determine the fair value of the asset or liability. Once valuations have been adjusted, the net difference between the price paid for the acquired company and the value of its balance sheet is recorded as goodwill. Due to the unique market conditions this year and our lower level of earnings, we contracted to have a goodwill impairment analysis completed in the third quarter. The results of that analysis indicated that no impairment existed at that time. See Note 8 to the financial statements for further information on the valuation results.

Other Real Estate Owned  is carried at its fair value. Fair value is determined through the use of appraisals and/or broker price opinions, discounted for the expected costs to maintain and sell of the property.

Uncertain Tax Liabilities Uncertain tax liabilities are estimated based on our exposures to interpretation of the applicable tax codes. We estimate our contingent tax liabilities by determining the amount of income that may be at risk of an adverse interpretation by taxing authorities on specific issues, multiplied by our effective tax rate, to determine our gross exposure. Once this exposure is determined, an estimate of the probability of an adverse adjustment being required is determined and applied to the gross liability to determine the contingent tax reserve. While changes to Michigan business taxes are likely, they are not expected to affect tax liabilities relating to prior periods.

Recent Accounting Pronouncements

During 2012, the Company adopted new guidance related to the presentation of comprehensive income in the financial statements. Among other changes, the new guidance eliminated the option to only present comprehensive income in the statement of equity. We have elected to report comprehensive income in a separate statement of comprehensive income that begins with net income. The change in presentation has been applied retrospectively and the 2011 financial statements have been restated to conform to the new presentation method. Other than the change in presentation of comprehensive income and related disclosures, the new guidance did not have a material effect on the financial statements.

In 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-02, A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. This update applies to all creditors, both public and non-public, and was introduced to provide clarification surrounding troubled debt restructurings (“TDR”). The primary characteristics that previously caused a restructuring to qualify as a TDR still exist: (1) the restructuring constitutes a concession to the borrower and (2) the borrower is experiencing financial difficulties. The update provides additional details and examples to provide clarity surrounding these items. The update also prohibits the use of the effective interest rate test when determining whether the restructuring constitutes a concession. The update is effective for annual reporting periods ending on or after December 15, 2012 (therefore, December 31, 2012, for the Company). Lastly, the disclosure requirements set forth by ASU 2010-20 regarding troubled debt restructurings, and later deferred by ASU 2011-01 until December 31, 2012 for the Company, are included in Note 7. Other than the additional disclosures, these updates did not have a significant impact on the financial statements.

16

In 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. This update to Fair Value Measurement (Topic 820) results in common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. The amendments in this update explain how to measure fair value. They do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting. However, this update does require expanded disclosure related to the nature and significance of inputs that are used in estimating and measuring the fair value of financial instruments. The amendments in this update are to be applied prospectively and are effective for annual reporting periods beginning after December 15, 2011 (therefore, December 31, 2012, for the Company). This update did not have a significant impact on the financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We face market risk to the extent that both earnings and the fair market values of our financial instruments are affected by changes in interest rates and liquidity of markets. We manage this risk with static GAP analysis and simulation modeling.Our models indicate that we have maintained an overall liability sensitive position, whereby we should benefit as rates decline. These models do not fully incorporate customer preferences and changes in their behavior. As such, we believe we are somewhat less liability sensitive in a downward rate environment than the analysis indicates. In the short run, we expect our net interest margin to be stable to slightly rising as rates on our assets re-price downward at a slower pace than our liabilities. In the longer run as time deposits re-price to lower rates, we believe or net interest margin will be fairly stable, and maintain our overall profitability. As of the date of this annual report we do not know of nor expect there to be any material change in the general nature of our primary market risk exposure in the near term.

Our market risk exposure is mainly comprised of our vulnerability to interest rate risk. We do not accept significant interest rate risk in our mortgage banking operations. To manage our interest rate risk in mortgage banking we generally lock in our sale price to the secondary market at the same time we make a rate commitment to the borrower. Prevailing interest rates and interest rate relationships in the future will be primarily determined by market factors which are outside of our control. All information provided in response to this item consists of forward looking statements. Reference is made to the section captioned “Forward Looking Statements” in this annual report for a discussion of the limitations on our responsibility for such statements.

The following tables provide information about our financial instruments that are sensitive to changes in interest rates as of December 31, 2012 and 2011. They show expected maturity date values for loans and securities which were calculated without adjusting the instruments’ contractual maturity dates for expected prepayments. Maturity date values for interest bearing core deposits were not based on estimates of the period over which the deposits would be outstanding, but rather, the opportunity for re-pricing. We believe that re-pricing dates, as opposed to expected maturity dates, may be more relevant in analyzing the value of such instruments and are reported as such in the following tables. Fair value is computed as the present value of expected cash flows at rates in effect at the date indicated.

17

Principal/Notional Amounts Maturing or Re-pricing in:							(In Thousands of Dollars)
As of December 31, 2012	2013			2014			2015			2016			2017			Thereafter			Total		Fair Value 12/31/12
Rate Sensitive Assets:
Fixed interest rate loans	$	118,044		$	86,252		$	76,460		$	92,776		$	135,106		$	228,901		$	737,539	$	735,315
Average interest rate		6.21	%		6.46	%		6.18	%		5.62	%		5.16	%		5.63	%
Variable interest rate loans		111,074			23,696			12,407			22,503			29,762			29,702			229,144		216,217
Average interest rate		4.22	%		4.75	%		4.81	%		4.15	%		4.26	%		4.43	%
Fixed interest rate securities		43,536			49,742			27,445			43,143			24,780			154,249			342,895		342,895
Average interest rate		1.30	%		1.50	%		1.82	%		0.96	%		1.64	%		2.33	%
Variable interest rate Securities																	10,783			10,783		10,783
Average interest rate																	2.51	%
Other interest bearing assets		63,040			447			497									7,266			71,250		71,250
Average interest rate		0.28	%		1.29	%		1.30	%
Rate Sensitive Liabilities:
Savings and interest bearing checking		613,921																		613,921		613,847
Average interest rate		0.20	%
Time deposits		239,810			69,766			31,135			22,614			13,041			5			376,371		378,756
Average interest rate		0.85	%		1.24	%		2.27	%		1.83	%		1.01	%		1.49	%
Fixed interest rate borrowings		2,500			4,000			6,777			3,094			3,087			3,035			22,493		24,122
Average interest rate		1.81	%		0.47	%		1.13	%		1.42	%		5.44	%		6.09	%
Variable interest rate borrowings																	36,084			36,084		36,093
Average interest rate																	1.83	%
Repurchase agreements		42,785																		42,785		42,785
Average interest rate		0.18	%

As of December 31, 2011	2012			2013			2014			2015			2016			Thereafter			Total		Fair Value 12/31/11
Rate Sensitive Assets:
Fixed interest rate loans	$	101,743		$	129,355		$	111,042		$	96,217		$	110,175		$	207,830		$	756,362	$	748,060
Average interest rate		6.77	%		6.48	%		6.58	%		6.45	%		5.78	%		6.15	%
Variable interest rate loans		114,846			26,292			24,878			13,914			21,926			26,040			227,896		217,864
Average interest rate		4.62	%		4.29	%		4.95	%		5.05	%		4.42	%		4.53	%
Fixed interest rate securities		26,343			36,086			58,787			60,012			13,492			133,909			328,629		328,629
Average interest rate		1.32	%		1.51	%		1.54	%		1.59	%		1.72	%		2.87	%
Variable interest rate Securities																	13,555			13,555		13,555
Average interest rate																	2.73	%
Other interest bearing assets		37,154			1,997			450			496						7,266			47,363		47,363
Average interest rate		0.28	%		1.29	%		1.30	%		1.30	%
Rate Sensitive Liabilities:
Savings and interest bearing checking		582,545																		582,545		582,449
Average interest rate		0.27	%
Time deposits		261,196			91,785			25,188			25,363			19,512			49			423,093		426,509
Average interest rate		1.43	%		1.64	%		2.47	%		2.82	%		2.25	%		2.51	%
Fixed interest rate borrowings		7,776			1,500						849			3,113			13,951			27,189		29,450
Average interest rate		2.28	%		2.74	%					4.79	%		1.45	%		6.21	%
Variable interest rate borrowings																	28,352			28,352		28,397
Average interest rate																	1.96	%
Repurchase agreements		46,784																		46,784		46,784
Average interest rate		0.19	%

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CAPITAL RESOURCES

We obtain funds for our operating expenses and dividends to shareholders through dividends from our subsidiary banks. In general, the subsidiary banks pay only those amounts required to meet holding company cash requirements, while maintaining appropriate capital at the banks. Capital is maintained at the subsidiary banks to support their current operations and projected future growth.

Bank regulators have established risk based capital guidelines for banks and bank holding companies. Minimum capital levels are established under these guidelines and each asset category is assigned a perceived risk weighting. Off balance sheet items, such as loan commitments and standby letters of credit, also require capital allocations.

As of December 31, 2012, our total capital to risk weighted assets exceeded the minimum requirement for capital adequacy purposes of 8% by $78 million. Tier 1 capital to risk weighted assets exceeded the minimum of 4% by $104 million, and Tier 1 capital to average assets exceeded the minimum of 4% by $84 million. In the current economic environment, regulatory agencies are encouraging banks to maintain capital well above this minimum requirement. At year end 2012, our total capital to risk weighted assets exceeded the well capitalized minimum requirement for capital adequacy purposes of 10% by $58 million. Tier 1 capital to risk weighted assets exceeded the well capitalized minimum of 6% by $85 million, and Tier 1 capital to average assets exceeded the well capitalized minimum of 5% by $69 million.

For a more complete discussion of capital requirements please refer to Note 22 of the Notes to Consolidated Financial Statements. The Federal Deposit Insurance Corporation insures specified customer deposits and assesses premium rates based on defined criteria. Insurance assessment rates may vary from bank to bank based on the factors that measure the perceived risk of a financial institution. One condition for maintaining the lowest risk assessment, and therefore, the lowest insurance rate, is the maintenance of capital at the “well capitalized” level. Each of our affiliate banks has exceeded the regulatory criteria for a “well capitalized” financial institution.

A certain level of capital growth is desirable to maintain an appropriate ratio of equity to total assets. The compound annual growth rate for total average assets for the past five years was 4.2%. The compound annual growth rate for average equity over the same period was 6.5%.

We have established an internal goal of maintaining our dividend payout ratio within a range that will create capital growth to support asset growth in the balance sheet. In 2008 we maintained our dividend payment rate at higher levels and distributed more capital to our shareholders than was generated, resulting in a negative earnings retention percentage. As a result of our earnings in 2008 and the need to preserve capital, the Board of Directors’ reduced the dividend in 2009 to better align with these objectives. Earnings continued under pressure in 2009 and dividends again exceeded earnings, causing a negative retention rate, and resulting in the Board of Directors’ decision to further reduce the dividend in the first quarter and further yet in the second quarter of 2010. In the first quarter of 2012, the Board of Directors determined to pay an additional $0.05 per share cash dividend on common stock in addition to the regular quarterly amount of $0.01 per share, for a total of $0.06 per share, based on the results of earnings for the full year of 2011. As 2012 concluded, the Board of Directors determined to pay an additional $0.20 per share in addition to the regular quarterly amount of $0.01 per share, based on projected 2012 earnings, resulting in a total payout of $0.24 per share relating to 2012. To achieve the goal of acceptable internal capital growth, we intend to continue our efforts to return to higher earnings levels, and will adjust our dividend payout rate as appropriate.

As an additional enhancement to capital growth we offer a dividend reinvestment program. The Firstbank Corporation Dividend Reinvestment Plan was first offered in 1988. At December 31, 1988, 123 owners holding 209,856 shares participated in the Plan. At the end of 2012, 1,226 owners held over 1.3 million shares in the Plan.

To further strengthen our capital position, we elected to participate in the United States Treasury’s Capital Purchase Plan (CPP), whereby we issued $33 million of preferred stock and warrants to purchase up to 578,947 shares of our common stock at a price of $8.55, to the United States Treasury on January 30, 2009. The preferred stock issued in this transaction requires a 5% dividend for five years and then converts to a 9% dividend rate. As our capital position has improved, we exited the CPP and repurchased $16 million of the preferred stock and our outstanding common stock warrants during 2012. The remaining $17 million of the preferred stock was purchased from the Treasury by private investors.

We are not aware of any recommendations by regulatory authorities at December 31, 2012, which are likely to have a material effect on our liquidity, capital resources or operations.

POLICY REGARDING THE CONFIDENTIALITY OF REGULATORY EXAMINATIONS

Firstbank Corporation and its affiliate banks are subject to regular examination by government regulators, as are all other banks and bank holding companies. By law we are prohibited from disclosing the ratings and other information contained in those examination reports. These confidentiality requirements are designed to promote the integrity of the examination process and to avoid the results being used as a rating or endorsement of a particular financial institution.

19

We sometimes receive inquiries about the contents and results of our regulatory examinations. Disclosing this information could violate the confidentiality requirements under federal law. In addition, even partial disclosure taken out of context could result in misunderstanding and misinterpretation. As a result, it is the policy of Firstbank Corporation and its affiliates not to comment on or disclose information regarding regulatory examination reports and related communications. Firstbank Corporation remains committed to disclosing detailed information through the United States Securities and Exchange Commission reporting process. In addition, the quarterly reports of condition reports for each of our banks are available at www.fdic.gov and information regarding our holding company is available at www.federalreserve.gov.

FORWARD LOOKING STATEMENTS

This annual report including, without limitation, management’s discussion and analysis of financial condition and results of operations, and other sections of our Annual Report to Shareholders, contain 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 Company itself. Words such as “anticipate”, “believe”, “determine”, “estimate”, “expect”, “forecast”, “intend”, “is likely”, “plan”, “project”, “opinion”, “should”, variations of such terms, and similar expressions are intended to identify such forward-looking statements. 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; the ability of the Company to locate and correct all data sensitive computer codes; and the vicissitudes of the national economy. The Company undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.

COMMON STOCK DATA

Firstbank Corporation Common Stock was held by 1,783 shareholders of record as of December 31, 2012. Total shareholders number approximately 2,800, including those whose shares are held in nominee name through brokerage firms. Our shares are listed on the NASDAQ Global Select Market under the symbol FBMI and are traded by several brokers. The range of high and low sales prices for shares of common stock for each quarterly period during the past two years is as follows:

Quarter	High		Low
4th 2012	$	11.45	$	10.00
3rd 2012	$	11.49	$	9.19
2nd 2012	$	10.42	$	8.32
1st 2012	$	8.68	$	4.97
4th 2011	$	5.36	$	4.59
3rd 2011	$	6.03	$	4.78
2nd 2011	$	6.27	$	5.58
1st 2011	$	7.15	$	6.14

The prices quoted above were obtained from www.NASDAQ.com. Prices have been adjusted to reflect stock dividends.

The following table summarizes cash dividends paid per share of common stock during 2012 and 2011.

	2012		2011
First Quarter	$	0.06	$	0.01
Second Quarter		0.01		0.01
Third Quarter		0.01		0.01
Fourth Quarter		0.21		0.01
Total	$	0.29	$	0.04

Our principal sources of funds to pay cash dividends are the earnings of, and dividends paid by, our subsidiary banks. Under current regulations the subsidiary banks are restricted in their ability to transfer funds in the form of cash dividends, loans, and advances to the holding company (See Note 20 of the Notes to Consolidated Financial Statements). As of January 1, 2013, approximately $23.1 million of the subsidiaries’ retained earnings were available for transfer in the form of dividends to the holding company without prior regulatory approval. In addition, the subsidiaries’ 2013 earnings are expected to be available for distributions as dividends to the holding company.

20

STOCK PERFORMANCE

The following graph compares the cumulative total shareholder return on the common stock of the Corporation to the Standard & Poor’s 500 Stock Index and the NASDAQ Bank Index, assuming a $100 investment at the end of 2007. The Standard & Poor’s 500 Stock Index is a broad equity market index. The NASDAQ Bank Index is composed of banks and savings institutions as well as companies performing functions closely related to banking, such as check cashing agencies, currency exchanges, safe deposit companies and corporations for banking abroad. Cumulative total return is measured by dividing (1) the sum of (A) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (B) the difference between the share price at the end and the beginning of the measurement period; by (2) the share price at the beginning of the measurement period.

The table below shows dollar values for cumulative total shareholder return plotted in the graph above.

	2007		2008		2009		2010		2011		2012
Firstbank Corporation	$	100.00	$	63.31	$	70.35	$	49.63	$	43.76	$	93.97
S & P 500	$	100.00	$	63.00	$	79.68	$	91.68	$	93.61	$	108.59
NASDAQ Bank	$	100.00	$	78.46	$	65.67	$	74.97	$	67.10	$	79.64

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MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

The management of Firstbank Corporation has the responsibility for preparing the accompanying consolidated financial statements and for their integrity and objectivity. The statements were prepared in accordance with accounting principles generally accepted in the United States of America. The consolidated financial statements include amounts that are based on management's best estimates and judgments. Management also prepared other information in the annual report and is responsible for its accuracy and consistency with the financial statements.

The Company's 2012 consolidated financial statements have been audited by Plante & Moran, PLLC independent registered public accounting firm. Management has made available to Plante & Moran, PLLC all financial records and related data, as well as the minutes of Boards of Directors' meetings. Management believes that all representations made to Plante & Moran, PLLC during the audit were valid and appropriate.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Firstbank Corporation is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control system is designed to provide reasonable assurance to the Company's management and Board of Directors regarding the reliability of financial reporting and the presentation of published financial statements. The system of internal control provides for division of responsibility and is documented by written policies and procedures that are communicated to employees with significant roles in the financial reporting process and updated as necessary. Management monitors the system of internal control for compliance.

The Company maintains an internal auditing program that independently assesses the effectiveness of the internal controls and recommends possible improvements thereto. However, all internal control systems, no matter how well designed, have inherent limitations.

The Company's management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2012. In making this assessment, it used the criteria for effective internal control over financial reporting set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in "Internal Control-Integrated Framework". Based on our assessment management concludes that, as of December 31, 2012, the Company's internal control over financial reporting is effective based on those criteria.

FIRSTBANK CORPORATION

\s\ Thomas R. Sullivan

Thomas R. Sullivan

President & Chief Executive Officer

(Principal Executive Officer)

\s\ Samuel G. Stone

Samuel G. Stone

Executive Vice President & Chief Financial Officer

(Principal Financial and Accounting Officer)

Dated: March 11, 2013

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Firstbank Corporation

We have audited the accompanying consolidated balance sheet of Firstbank Corporation as of December 31, 2012 and 2011, and the related consolidated statements of income and comprehensive income, changes in shareholders' equity, and cash flows for each of the three years ended December 31, 2012. Our responsibility is to express an opinion on these financial statements.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.  Our audit of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Firstbank Corporation as of December 31, 2012 and 2011, and the results of its operations and its cash flows for each of the years in the three year period ended December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.

	\s\ Plante & Moran, PLLC
Grand Rapids, Michigan	Plante & Moran, PLLC
March 11,  2013

23

FIRSTBANK CORPORATION

CONSOLIDATED BALANCE SHEETS

(In Thousands of Dollars, Except for Share Data)

	December 31,
ASSETS	2012			2011
Cash and due from banks	$	38,544		$	40,151
Short term investments		61,057			35,665
Total cash and cash equivalents		99,601			75,816
FDIC insured bank time certificates of deposit		2,927			4,432
Trading Account Securities		6			2
Securities available for sale		353,678			342,184
Federal Home Loan Bank stock		7,266			7,266
Loans held for sale		2,921			349
Loans		963,762			983,909
Allowance for loan losses		(21,340	)		(21,019	)
Premises and equipment, net		24,356			25,087
Goodwill		35,513			35,513
Core deposits and other intangibles		965			1,448
Other real estate owned		2,925			5,251
Accrued interest receivable and other assets		26,182			25,061
TOTAL ASSETS	$	1,498,762		$	1,485,299
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Deposits:
Non-interest bearing demand accounts	$	251,109		$	214,904
Interest bearing accounts:
Demand		348,598			340,942
Savings		265,323			241,603
Time		376,371			423,093
Total Deposits		1,241,401			1,220,542
Securities sold under agreements to repurchase and overnight borrowings		42,785			46,784
Federal Home Loan Bank advances		22,493			19,457
Subordinated debentures		36,084			36,084
Accrued interest payable and other liabilities		8,941			7,055
Total Liabilities		1,351,704			1,329,922
SHAREHOLDERS’ EQUITY
Preferred stock; no par value, 300,000 shares authorized; 17,000 and 33,000 shares issued and outstanding in 2012 and 2011		16,908			32,792
Common stock; no par value, 20,000,000 shares authorized; 8,001,903 and 7,892,486 shares issued and outstanding in 2012 and 2011		115,621			115,734
Retained earnings		10,921			3,955
Accumulated other comprehensive income		3,608			2,896
Total Shareholders’ Equity		147,058			155,377
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,498,762		$	1,485,299

See notes to consolidated financial statements.

24

FIRSTBANK CORPORATION

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In Thousands of Dollars, Except for Per Share Data)

	Year Ended December 31,
	2012			2011			2010
Interest Income:
Loans, including fees	$	56,975		$	61,465		$	67,390
Securities:
Taxable		4,557			4,888			3,649
Exempt from federal income tax		1,169			1,118			1,138
Short term investments		165			173			205
Total Interest Income		62,866			67,644			72,382
Interest Expense:
Deposits		6,626			10,891			15,733
FHLB advances and notes payable		625			801			3,564
Subordinated debentures		1,036			1,197			1,497
Other		87			83			96
Total Interest Expense		8,374			12,972			20,890
Net Interest Income		54,492			54,672			51,492
Provision for loan losses		7,690			13,337			13,344
Net Interest Income after Provision for Loan Losses		46,802			41,335			38,148
Non-Interest Income:
Service charges on deposit accounts		4,219			4,492			4,576
Gain on sale of mortgage loans		6,523			3,683			5,907
Mortgage servicing, net of amortization		(231	)		89			(96	)
Gain/(loss) on trading account securities		4			(11	)		3
Gain/(loss) on securities transactions		44			(37	)		4
Courier and cash delivery services		0			0			174
Other		2,111			1,459			1,261
Total Non-Interest Income		12,670			9,675			11,829
Non-Interest Expense:
Salaries and employee benefits		22,680			21,263			20,889
Occupancy and equipment		5,152			5,311			5,555
FDIC insurance premium		1,220			1,560			2,098
Amortization of intangibles		483			698			796
Outside professional services		1,287			1,202			1,144
Advertising and promotions		1,491			1,425			1,684
OREO expense and valuation write downs		1,679			3,153			3,513
Other		10,690			8,941			9,023
Total Non-Interest Expense		44,682			43,553			44,702
Income before federal income taxes		14,790			7,457			5,275
Federal income taxes		4,256			1,834			1,512
NET INCOME	$	10,534		$	5,623		$	3,763
Preferred stock dividends and accretion of discount on preferred stock	$	1,275		$	1,679		$	1,679
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	9,259		$	3,944		$	2,084
Basic earnings per common share	$	1.17		$	0.50		$	0.27
Diluted earnings per common share	$	1.16		$	0.50		$	0.27
COMPREHENSIVE INCOME
Net income	$	10,534		$	5,623		$	3,763
Change in unrealized gain on securities, net of tax and reclassification effects		712			2,750			(452	)
TOTAL COMPREHENSIVE INCOME	$	11,246		$	8,373		$	3,311

See notes to consolidated financial statements.

25

FIRSTBANK CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2012, 2011, AND 2010

(In Thousands of Dollars, Except for Share and per Share Data)

	Common Stock			Preferred Stock			Retained Earnings/ (Accumulated Deficit)			Accumulated Other Comprehensive Income (Loss)			Total
Balances at January 1, 2010	$	114,746		$	32,734		$	(1,198	)	$	598		$	146,880
Net income for 2010								3,763						3,763
Cash dividends on common stock - $0.08 per share								(620	)					(620	)
Accrued dividends on preferred stock and accretion of discount on preferred stock					29			(1,679	)					(1,650	)
Amortization of stock warrants		(29	)					29						0
Issuance of 21,933 shares of common stock through the dividend reinvestment plan		121												121
Issuance of 6,555 shares of common stock from supplemental shareholder investments		34												34
Issuance of 44,587 shares of common stock		237												237
Stock option and restricted stock expense		115												115
Net change in unrealized gain/(loss) on securities available for sale, net of tax of $(233)	­­­­­			­­­­­			­­­­­				(452	)		(452	)
BALANCES AT DECEMBER 31, 2010		115,224			32,763			295			146			148,428
Net income for 2011								5,623						5,623
Cash dividends on common stock - $0.04 per share								(313	)					(313	)
Accrued dividends on preferred stock and accretion of discount on preferred stock					29			(1,679	)					(1,650	)
Amortization of stock warrants		(29	)					29						0
Issuance of 11,610 shares of common stock through the dividend reinvestment plan		62												62
Issuance of 34,803 shares of common stock from supplemental shareholder investments		197												197
Issuance of 42,379 shares of common stock		162												162
Stock option and restricted stock expense		118												118
Net change in unrealized gain/(loss) on securities available for sale, net of tax of $1,417	­­­­­			­­­­­			­­­­­				2,750			2,750
BALANCES AT DECEMBER 31, 2011		115,734			32,792			3,955			2,896			155,377
Net income for 2012								10,534						10,534
Cash dividends on common stock - $0.29 per share								(2,314	)					(2,314	)
Accrued dividends on preferred stock and accretion of discount on preferred stock					22			(1,269	)					(1,247	)
Redemption of 16,000 shares of preferred stock		850			(15,906	)								(15,056	)
Amortization of stock warrants		(15	)					15						0
Repurchase of stock warrants		(1,947	)											(1,947	)
Issuance of 46,512 shares of common stock through the dividend reinvestment plan		440												440
Issuance of 21,925 shares of common stock from supplemental shareholder investments		201												201
Issuance of 40,980 shares of common stock		262												262
Stock option and restricted stock expense		96												96
Net change in unrealized gain/(loss) on securities available for sale, net of tax of $366											712			712
BALANCES AT DECEMBER 31, 2012	$	115,621		$	16,908		$	10,921		$	3,608		$	147,058

See notes to consolidated financial statements.

26

FIRSTBANK CORPORATION

CONSOLIDATED STATEMENTS OF CASHFLOWS

(In Thousands of Dollars)

	Year Ended December 31,
	2012			2011			2010
OPERATING ACTIVITIES
Net income	$	10,534		$	5,623		$	3,763
Adjustments to reconcile net income to net cash from operating activities:
Provision for loan losses		7,690			13,337			13,344
Depreciation of premises and equipment		1,915			2,062			2,278
Net amortization and accretion of security premiums/discounts		4,096			3,783			2,161
(Gain)/Loss on trading account securities		(4	)		11			(3	)
(Gain)/Loss on securities transactions		(44	)		37			(4	)
Amortization of intangibles		483			698			796
Stock option and restricted stock grant compensation expense		96			118			115
Gain on sale of mortgage loans		(6,523	)		(3,683	)		(5,907	)
Proceeds from sales of mortgage loans		200,957			115,100			186,040
Loans originated for sale		(197,006	)		(110,411	)		(180,910	)
Deferred federal income tax expense/(benefit)		(27	)		(1,299	)		499
Decrease in accrued interest receivable and other assets		(860	)		4,513			6,042
Increase/(decrease) in accrued interest payable and other liabilities		1,886			(1,007	)		(2,595	)
NET CASH FROM OPERATING ACTIVITIES		23,193			28,882			25,619
INVESTING ACTIVITIES
Proceeds from sales of securities available for sale		2,780			2,190			7,420
Proceeds from maturities of CDs		1,505			0			0
Proceeds from maturities and calls of securities available for sale		136,526			128,048			112,836
Purchase of securities available for sale		(153,775	)		(210,398	)		(229,458	)
Redemption of Federal Home Loan Bank stock		0			937			881
Net decrease in portfolio loans		8,632			28,015			69,346
Proceeds from sale of other real estate owned		5,873			6,850			6,645
Net purchases of premises and equipment		(1,184	)		(1,718	)		(2,272	)
NET CASH FROM/(USED IN) INVESTING ACTIVITIES		357			(46,076	)		(34,602	)
FINANCING ACTIVITIES
Net increase in deposits		20,859			36,759			34,720
Net increase/(decrease) in securities sold under agreements to repurchase and overnight borrowings		(3,999	)		5,456			1,919
Repayment of Federal Home Loan Bank borrowings		(7,964	)		(24,201	)		(68,605	)
Proceeds from Federal Home Loan Bank borrowings		11,000			3,000			9,000
Repurchase of preferred stock		(15,056	)		0			0
Repurchase of stock warrants		(1,947	)		0			0
Cash proceeds from issuance of common stock		903			421			392
Cash dividends on preferred stock		(1,247	)		(1,650	)		(1,650	)
Cash dividends on common stock		(2,314	)		(313	)		(620	)
NET CASH FROM/(USED IN) FINANCING ACTIVITIES		235			19,472			(24,844	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		23,785			2,278			(33,827	)
Cash and cash equivalents at beginning of year		75,816			73,538			107,365
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	99,601		$	75,816		$	73,538
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest	$	8,677		$	13,539		$	21,597
Income taxes	$	4,800		$	1,975		$	855
Non cash transfer of loans to other real estate owned	$	4,214		$	5,948		$	10,167

See notes to consolidated financial statements.

27

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations:  Firstbank Corporation (the “Company”) is a bank holding company. Each of our subsidiary banks is a full service community bank. The subsidiary banks offer all customary banking services, including the acceptance of checking, savings and time deposits, and the making of commercial, agricultural, real estate, personal, home improvement, automobile and other installment and consumer loans. Our consolidated assets were, $1.5 billion as of December 31, 2012, and primarily represent commercial and retail banking activity. Mortgage loans serviced for others of $608 million, as of December 31, 2012, are not included in the consolidated balance sheet.

Principles of Consolidation:  The consolidated financial statements include the accounts of the Company and its subsidiaries, Firstbank – Alma; Firstbank (Mt. Pleasant); Firstbank – West Branch; Keystone Community Bank and Firstbank – West Michigan (the “Banks”); 1st Armored, Incorporated (sold March 31, 2010); 1st Title, Incorporated; 1st Investors Title, LLC; Austin Mortgage Company; and FBMI Risk Management Services, Inc., after elimination of inter-company accounts and transactions. These subsidiaries are wholly owned, except 1st Investors Title, LLC, which we held a 46% share at December 31, 2012. We do not consolidate their results into the results of the Company. Firstbank – St Johns was merged into Firstbank - Alma in 2011. Each of our five banks operates its own Mortgage Company. The operating results of these companies are consolidated into each Bank’s financial statements. During 2004 we formed a special purpose trust, Firstbank Capital Trust I, in 2006 we formed Firstbank Capital Trust II, and in 2007 we formed Firstbank Capital Trust III and Firstbank Capital Trust IV, for the sole purpose of issuing trust preferred securities. These trusts are not consolidated into our financial statements.

Use of Estimates:  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period.  Actual results could differ from those estimates.

Investments:  Investments are presented at fair value as required by accounting principles. Our investment portfolio is classified as available for sale, as such; adjustments to the fair value are reported as a change in equity. If a security is deemed to be other than temporarily impaired, the adjustment to fair value is recorded through the income statement.

Certain Significant Estimates:  The primary estimates incorporated into our financial statements, which are susceptible to change in the near term, include the allowance for loan losses, the determination of the fair value of certain financial instruments, fair value of investments, determination of state and federal tax assets and liabilities, goodwill, purchase accounting and core deposit intangible valuations, valuation of other real estate owned, and the valuation of mortgage servicing rights.

Current Vulnerability Due to Certain Concentrations:  Our business is concentrated in the mid-central and southwestern sections of the lower peninsula of Michigan. While the loan portfolio is diversified, the customers’ ability to honor their debts is partially dependent on the local economies. Our service area is primarily dependent on manufacturing (automotive and other), agricultural and recreational industries. Most commercial and agricultural loans are secured by business assets, including commercial and agricultural real estate and federal farm agency guarantees. Generally, consumer loans are secured by various items of personal property and mortgage loans are secured by residential real estate. Our funding sources include time deposits and other deposit products which bear interest. Periods of rising interest rates result in an increase in our cost of funds and an increase in the yields on certain assets. Conversely, periods of falling interest rates result in a decrease in yields on certain assets and costs of certain funds.

Cash and Cash Equivalents:  Cash and cash equivalents include cash on hand, amounts due from banks and short term investments with an original maturity of 90 days or less, which include interest bearing deposits with banks and the Federal Reserve, federal funds sold, and overnight money market fund investments. Generally, federal funds and overnight money market funds are purchased for a one day period. We report customer loan transactions, deposit transactions and repurchase agreements and overnight borrowings on a net basis within our cash flow statement.

Trading Account Securities: From time to time, we invest in the common stock of other companies. Trading account securities are adjusted to fair value through the income statement, with increases in value reflected as non-interest income and decreases in value reflected as a decrease to non-interest income.

Securities Available for Sale:  Securities available for sale consist of bonds and notes which might be sold prior to maturity due to changes in interest rate, prepayment risks, yield and availability of alternative 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 (the difference between the fair value and amortized cost of the securities so classified) is reported in other comprehensive income. Other securities such as Federal Home Loan Bank stock are carried at cost. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method.  Gains and losses on sales are recorded on the trade date and are determined using the specific identification method.

28

Declines in the fair value of securities below their cost that are other than temporary are reflected as realized losses. In estimating other-than-temporary losses, management considers: (1) the length of time and extent that fair value has been less than carrying value; (2) the financial condition and near term prospects of the issuer; and (3) the Company’s ability and intent to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value.

Mortgage Banking Activities:  Servicing rights are recognized as assets based on the allocated value of retained servicing rights on loans sold. Servicing rights are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights, using groupings of the underlying loans as to interest rates. Any impairment of a grouping is reported as a valuation allowance.

Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. Amortization of mortgage serving rights is netted against loan servicing fee income in the income statement.

Mortgage Derivatives: From time to time, we enter into mortgage banking derivatives such as forward contracts and rate lock commitments in the ordinary course of business. The derivatives are not designated as hedges and are carried at fair value. The net gain or loss on mortgage banking derivatives is included in gain on sale of loans.

Loans Held for Sale:  Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or market, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings.

Mortgage loans held for sale are generally sold with servicing rights retained. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold, which is reduced by the cost allocated to the servicing right. We generally lock in the sale price to the purchaser of the loan at the same time we make a rate commitment to the borrower.

Loans:  Loans receivable, for which management has the intent and ability to hold for the foreseeable future or payoff are reported at their outstanding unpaid principal balances, net of any deferred fees or costs on originated loans, unamortized premiums or discounts. Loan origination fees and certain origination costs are capitalized and recognized as an adjustment to yield of the related loan. Interest income is reported on the interest method and includes amortization of net deferred loan fees and costs over the loan term without anticipating prepayments. Interest income on mortgage and commercial loans is discontinued at the time the loan becomes 90 days delinquent unless the credit is well secured and in process of collection. Consumer and unsecured consumer line of credit loans are typically charged off no later than 120 days past due. Loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued, but not received, for loans placed on nonaccrual status, is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans classified as troubled debt restructurings (TDR’s) are accounted for in generally the same manner as all other loans. Troubled debt restructuring of loans is undertaken to improve the likelihood that the loan will be repaid in full under the modified terms in accordance with a reasonable repayment schedule. All modified loans are evaluated to determine whether the loans should be reported as a TDR. A loan is a TDR when we, for economic or legal reasons related to the borrower’s financial difficulties, grant a concession to the borrower by modifying or renewing a loan that we would not otherwise consider. To make this determination, we must determine whether (1) the borrower is experiencing financial difficulties and (2) we have granted the borrower a concession. This determination requires consideration of all of the facts and circumstances surrounding the modification. An overall general decline in the economy or some deterioration in a borrower’s financial condition does not automatically mean the borrower is experiencing financial difficulties.

If the loan is in accrual status at the time of the restructuring, the borrower has the ability to make the payments under the restructured terms, and the restructuring does not forgive principal, the loan remains on an accrual basis under the new terms. If there is a forgiveness of debt or partial charge off, the loan will generally be placed on nonaccrual status with any accrued interest reversed against interest income. If a loan is in nonaccrual status at the time of a restructuring or subsequently becomes nonaccrual, it will remain in nonaccrual status until the borrower has demonstrated the ability to make the payments under the restructured terms by making a minimum of six monthly payments. If the borrower makes the six monthly payments without becoming past due 30 days or more, it may be returned to accrual status. The determination of the need for an allowance for loan loss adjustment is based on the sum of: (1) a factor relating to historical losses multiplied times the balance of the loan, and (2) a net present value adjustment relating to a change in interest rate, if applicable. The amount recorded in the allowance for loan losses for restructured loans during the years ended December 31, 2012 and 2011 was $2.3 million and $591,000, respectively. Restructured loans charged off were $1.7 million in 2012 and $2.4 million in 2011.

29

Allowance for Loan Losses:  The allowance for loan losses is a valuation allowance for probable incurred credit losses. Management uses a quantitative and qualitative methodology for analyzing factors which impact the allowance for loan losses consistently across its banking subsidiaries. The process applies risk factors for historical charge-offs and delinquency experience, portfolio segment weightings and industry and regional factors and trends as they affect the banks’ portfolios. Consideration of exposures to industries potentially most affected by risks in the current economic and political environment, and the review of potential risks in certain credits that are considered part of the non-performing loan category contributed to the establishment of the allowance levels at each bank. Loan losses are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed.

Loans are reviewed on an ongoing basis for impairment. A loan is impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans are measured based on the present value of expected cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the fair value of collateral, if the loan is collateral dependent. Loans considered to be impaired are reduced to the present value of expected future cash flows or to the fair value of collateral by allocating a portion of the allowance for loan losses to such loans. If these allocations cause an increase in the allowance for loan losses such increase is reported as provision for loan loss through the income statement. Increases or decreases in carrying value due to changes in estimates of future payments or the passage of time are reported as reductions or increases in the provision for loan losses.

Smaller balance homogeneous loans such as residential first mortgage loans secured by one to four family residences, residential construction, automobile, home equity and second mortgage loans, are collectively evaluated for impairment. Commercial loans and first mortgage loans secured by other properties are evaluated individually for impairment. When credit analysis of the borrower’s operating results and financial condition indicates the underlying ability of the borrower’s business activity is not sufficient to generate adequate cash flow to service the business’ cash needs, including our loans to the borrower, the loan is evaluated for impairment. Often this is associated with a delay or shortfall in payments of 90 days or less. Commercial and commercial real estate loans are rated on a scale of 1 to 10, with grades 1 to 4 being pass grades, 5 watch, 6 special mention, 7 substandard, 8 impaired, 9 doubtful and 10 loss. Loans graded 6, 7, and 8 are reviewed for possible impairment at least quarterly. Loans are generally moved to nonaccrual status when 90 days or more past due and considered impaired. Impaired loans, or portions thereof, are charged off when deemed uncollectible.  For a more complete explanation of our loan grading system, see Note 6.

Premises and Equipment:  Premises and equipment are stated on the basis of cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the assets, primarily by accelerated methods for income tax purposes and by the straight line method for financial reporting purposes.  Buildings and related components are assigned useful lives ranging from 5 to 33 years. Furniture, fixtures and equipment are assigned useful lives ranging from 3 to 10 years.

Other Real Estate Owned:  Other real estate owned includes properties acquired through either a foreclosure proceeding or acceptance of a deed in lieu of foreclosure and is initially recorded at the fair value less estimated carrying and selling costs when acquired, establishing a new cost basis. These properties are evaluated periodically and, if fair value is deemed to have declined subsequent to foreclosure, a valuation allowance is recorded through noninterest expense. Costs incurred for the property after foreclosure are expensed as incurred. Other real estate owned totaled approximately $2.9 million and $5.3 million at December 31, 2012 and 2011. Gains and losses on the sale of other real estate owned are recorded on the income statement as other income.

The following table summarizes the activity associated with other real estate owned during the years ended December 31:

(In Thousands of Dollars)	2012			2011
Balance at beginning of year	$	5,251		$	8,316
Properties transferred into OREO		4,214			5,948
Valuation impairments recorded		(1,151	)		(2,258	)
Proceeds from sale of properties		(5,873	)		(6,850	)
Gain on sale of properties		484			95
Balance at end of year	$	2,925		$	5,251

Goodwill and Other Intangible Assets: Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified. A more frequent assessment is performed if conditions in the market place or changes in the company’s organizational structure occur. We use a discounted income approach and a market valuation model, which compares the inherent value of our company to valuations of recent transactions in the market place to determine if our goodwill has been impaired. See Note 8 for additional information.

30

Other intangible assets consist of core deposit intangibles arising from whole bank and branch acquisitions. They are initially measured at fair value and then are amortized on an accelerated method over their estimated useful lives.

Long Term Assets:  Premises and equipment, core deposit and other intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, a charge is taken to earnings, and the assets are written down to new estimate of fair value.

Loan Commitments and Related Financial Instruments:  Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Income Taxes:  We record income tax expense based on the amount of taxes due on our tax return plus the change in deferred taxes, computed based on the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities using enacted tax rates. A valuation allowance is recorded, if needed, and reduces deferred tax assets to the amount expected to be realized.

Earnings Per Share:  Basic earnings per share is calculated by dividing net income available for common shareholders (net income less preferred stock dividends and accretion of the preferred stock discount) by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by dividing net income available for common shareholders by the weighted average common shares outstanding including the dilutive effect of additional common shares that may be issued under outstanding stock options and warrants.

Comprehensive Income:  Comprehensive income consists of net income and changes in unrealized gains and losses on securities available for sale, net of tax, which is recognized as a separate component of equity. Accumulated other comprehensive income consists of unrealized gains and losses on securities available for sale, net of tax.

Recent Accounting Pronouncements: During 2012, the Company adopted new guidance related to the presentation of comprehensive income in the financial statements. Among other changes, the new guidance eliminated the option to only present comprehensive income in the statement of equity. We have elected to report comprehensive income in a separate statement of comprehensive income that begins with net income. The change in presentation has been applied retrospectively and the 2011 financial statements have been restated to conform to the new presentation method. Other than the change in presentation of comprehensive income and related disclosures, the new guidance did not have a material effect on the financial statements.

In 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-02, A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. This update applies to all creditors, both public and non-public, and was introduced to provide clarification surrounding troubled debt restructurings (“TDR”). The primary characteristics that previously caused a restructuring to qualify as a TDR still exist: (1) the restructuring constitutes a concession to the borrower and (2) the borrower is experiencing financial difficulties. The update provides additional details and examples to provide clarity surrounding these items. The update also prohibits the use of the effective interest rate test when determining whether the restructuring constitutes a concession. The update is effective for annual reporting periods ending on or after December 15, 2012 (therefore, December 31, 2012, for the Corporation). Lastly, the disclosure requirements set forth by ASU 2010-20 regarding troubled debt restructurings, and later deferred by ASU 2011-01 until December 31, 2012 for the Company, are included in Note 6. Other than the additional disclosures, these updates did not have a significant impact on the financial statements.

In 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. This update to Fair Value Measurement (Topic 820) results in common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. The amendments in this update explain how to measure fair value. They do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting. However, this update does require expanded disclosure related to the nature and significance of inputs that are used in estimating and measuring the fair value of financial instruments. The amendments in this update are to be applied prospectively and are effective for annual reporting periods beginning after December 15, 2011 (therefore, December 31, 2012, for the Corporation). This update did not have a significant impact on the financial statements.

Effect of Newly Issued Accounting Standards: There are no newly issued and not yet effective accounting standards at this time.

Loss Contingencies:  Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are such matters that will have a material effect on the financial statements as of December 31, 2012.

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Fair Value of Financial Instruments:  Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

Reclassification:  Certain 2010 and 2011 amounts may have been reclassified to conform to the 2012 presentation.

Operating Segments:  While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a company wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

NOTE 2 – ACQUISITIONS AND DIVESTITURES

On March 31, 2010, we sold our 1st Armored, Inc. armored car company. No gain or loss was recorded on the transaction. Historical earnings from 1st Armored, Inc. are included in the financial statements presented through the date of its sale within this report. Financial results subsequent to March 31, 2010 are excluded for 1st Armored, Inc. as the sale transaction was completed on that date.

NOTE 3 – RESTRICTIONS ON CASH AND DUE FROM BANKS

Our subsidiary banks are required to maintain average reserve balances in the form of cash and non-interest bearing balances due from the Federal Reserve Bank. The average reserve balances required to be maintained during 2012 and 2011 were $17.8 million and $14.6 million, respectively. These balances earned interest at a rate of 0.25% during both 2012 and 2011.

NOTE 4 – SECURITIES

The fair value of securities available for sale was as follows:

(In Thousands of Dollars)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
Securities Available for Sale:
December 31, 2012:
U.S. governmental agency	$	105,629	$	1,271	$	(15	)	$	106,885
States and political subdivisions		116,123		1,786		(95	)		117,814
Mortgage Backed Securities		64,550		1,729		(2	)		66,277
Collateralized Mortgage Obligations		60,278		810		(58	)		61,030
Equity and other Securities		1,610		62		0			1,672
Total	$	348,190	$	5,658	$	(170	)	$	353,678
December 31, 2011:
U.S. governmental agency	$	132,534	$	1,325	$	(25	)	$	133,834
States and political subdivisions		76,574		1,238		(23	)		77,789
Mortgage Backed Securities		70,059		1,080		(87	)		71,052
Collateralized Mortgage Obligations		57,006		854		(15	)		57,845
Equity and other Securities		1,606		58		0			1,664
Total	$	337,779	$	4,555	$	(150	)	$	342,184

Securities with unrealized losses at year end 2012 and 2011 not recognized in income are as follows:

(In Thousands of Dollars)	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
December 31, 2012:
U.S. governmental agency	$	10,135	$	(15	)	$	0	$	0		$	10,135	$	(15	)
States and political subdivisions		17,141		(93	)		582		(2	)		17,723		(95	)
Mortgage Backed Securities		0		0			513		(2	)		513		(2	)
Collateralized Mortgage Obligations		19,995		(55	)		721		(3	)		20,716		(58	)
Total Temporarily Impaired	$	47,271	$	(163	)	$	1,816	$	(7	)	$	49,087	$	(170	)
December 31, 2011:
U.S. governmental agency	$	0	$	0		$	17,974	$	(25	)	$	17,974	$	(25	)
States and political subdivisions		3,738		(2	)		2,249		(21	)		5,987		(23	)
Mortgage Backed Securities		0		0			18,091		(87	)		18,091		(87	)
Collateralized Mortgage Obligations		0		0			6,590		(15	)		6,590		(15	)
Total Temporarily Impaired	$	3,738	$	(2	)	$	44,904	$	(148	)	$	48,642	$	(150	)

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Unrealized losses on securities shown in the previous tables have not been recognized into income because management has the intent and ability to hold these securities for the foreseeable future. The decline in market value is due to changes in interest rates for debt securities and considered normal market fluctuations for equity securities. Management has also reviewed the issuers’ bond ratings, noting they are of high credit quality.

Trading account securities are marked to market with the change in value reported on the income statement. Gains and losses on available for sale securities are recognized if the security is either deemed to be other than temporarily impaired, or the security is sold. During 2010 we sold one security that was other than temporarily impaired and recognized a $26,000 loss. Due to continuing problems with another security, we recorded an additional charge for other than temporary impairment of $150,000 bringing the carrying value of that security to zero. Both of these securities were trust preferred securities of Michigan banks that had a combined original book value of $500,000. The following table shows gross gains and losses on investment securities for the three year period:

(In Thousands of Dollars)	2012		2011			2010
Trading Account Securities Gains/(Losses)	$	4	$	(11	)	$	3
Available for Sale Securities
Other than temporary impairment losses	$	0	$	0		$	(150	)
Gross realized gains		44		28			200
Gross realized losses		0		(65	)		(46	)
Net realized gains (losses)	$	44	$	(37	)	$	4

The fair value of securities at December 31, 2012, by stated maturity, is shown below. Actual maturities may differ from stated maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In Thousands of Dollars)	Fair Value
Due in one year or less	$	93,182
Due after one year through five years		109,398
Due after five years through ten years		75,022
Due after ten years		74,404
Total		352,006
Equity securities		1,672
Total securities	$	353,678

At December 31, 2012 and 2011, securities with carrying values approximating $45,645,000 and $46,784,000 were pledged to secure public trust deposits, securities sold under agreements to repurchase, and for such other purposes as required or permitted by law.

Federal Home Loan Bank stock is carried at cost, which approximates its fair value.

NOTE 5 – LOAN SERVICING

Loans held for sale at year end are as follows:

(In Thousands of Dollars)
	2012		2011
Loans held for sale	$	2,921	$	349
Less: Allowance to adjust to lower of cost or market		0		0
Loans held for sale, net	$	2,921	$	349

Mortgage loans serviced for others are not reported as assets.  The principal balances of these loans at year end are as follows:

(In Thousands of Dollars)
	2012		2011
Mortgage loan portfolios serviced for:
Freddie Mac	$	605,000	$	601,710
Fannie Mae	$	1,140	$	1,446
Federal Home Loan Bank	$	2,094	$	2,757

Custodial escrow balances maintained in connection with serviced loans were $1,433,000 and $1,438,000 at year end 2012 and 2011.

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Activity for capitalized mortgage servicing rights, included in other assets on the Consolidated Balance Sheet, was as follows:

(In Thousands of Dollars)
	2012			2011			2010
Servicing rights:
Beginning of year	$	4,596		$	4,603		$	3,705
Additions		2,512			1,505			2,428
Amortized to expense		(2,115	)		(1,512	)		(1,530	)
End of year	$	4,993		$	4,596		$	4,603

Management has determined that no valuation allowance was necessary at December 31, 2012, 2011, or 2010.

The fair value of mortgage servicing rights was $5,494,000 and $6,034,000 at year end 2012 and 2011. Fair value at the end of 2012 was determined using a discount rate of 7.018%, a weighted average constant prepayment rate of 17.01%, depending on the stratification of the specific right, and a weighted average delinquency rate of 1.01%.  At the end of 2011, fair value was determined using a discount rate of 7.375%, a weighted average constant prepayment rate of 14.79%, depending on the stratification of the specific right, and a weighted average delinquency rate of 1.09%

The weighted average amortization period is 3.6 years as of December 31, 2012.  Estimated amortization expense for each of the next five years is:

(In Thousands of Dollars)
2013	$	1,152
2014	$	949
2015	$	797
2016	$	660
2017	$	530
Thereafter	$	905

NOTE 6 – LOANS

The following information provides a description of how loan grades are determined for our Commercial and Industrial and Commercial Real Estate segments. In general, for Commercial and Industrial, and Commercial Real Estate segments, the probability of loss increases with each rate change from the Grade 1 Excellent down through the Grade 9 Doubtful Nonaccrual classes. For Consumer and Residential Mortgage segments, the probability of loss increases as loans move down from current to greater than 60 days past due, nonaccrual.

Grade 1 Excellent – Characteristics of loans in this category include: the loan is generally secured by cash or readily marketable securities; the borrower provides annual audited financials with interim financials reviewed quarterly; the loan has no delinquencies over ten days in the past year; the company’s management is considered to have a high degree of integrity; management of the company has over 15 years of experience; lines of credit have not and are not expected to be utilized; financial statements demonstrate consistently strong profits; and the company has little competition and excellent growth prospects.

Grade 2 Quality – Characteristics of loans in this category include: high net worth borrowers with excellent cash flow and a high degree of liquidity; the borrower generally has annual audited financial statements; there has been one or fewer delinquencies over ten days in the past year; the company’s management is considered to have a high degree of integrity; the company’s management has over ten years of experience; lines of credit have had nominal use over the preceding 12 months; financial statements demonstrate consistent profitability; and the company is in an excellent competitive position.

Grade 3 Good – Loans in this category are very strong, but may lack some of the net worth and/or cash flow characteristics of the previous rating. Characteristics of loans in this category include: annual reviewed financial statements and compiled quarterly financial statements; there has only been one or fewer delinquencies over 15 days in the past year; the company’s management has solid integrity; the company’s management is capable and has over five years of experience; lines of credit have regular usage with no balance in the last 60 days; financial statements demonstrate consistent but nominal profits; and the company has good a solid market share.

Grade 4 Acceptable – Characteristics of loans in this category include: annual compiled financial statements with quarterly information available or CPA prepared tax returns; there are only two or fewer delinquencies over 15 days of which only one is over 30 days in the past year; the company’s management has average business experience of over three years; lines of credit have regular use but have no current balance or a significant reduction in balance in the last 30 days; the company has been profitable in two of the preceding three years; and the company is competitive in its market and is maintaining its market share.

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Loans graded as one through four are considered as Pass loans and are shown as one class of loans in our credit quality table.

Grade 5 Watch - This rating is used for loans which have shown some sign of weakness, but have not degraded to the point of requiring an impairment review. Characteristics of loans in this rating include: annual management prepared financial statements; delinquencies not exceeding three times over 30 days or one time over 60 days in the past year; weakening financial statements but profitable in two of the last three years; and a declining market share in a competitive market. These loans merit monitoring by management to assure that if circumstances deteriorate further actions are taken to protect the bank’s position.

Grade 6 Special Mention - This rating is used for loans which are included on a watch list and have degraded to a point where additional supervision is required; however, the bank remains confident in the full collection of all principal and interest. These loans are reviewed for impairment on a quarterly basis. Characteristics of loans in this rating may include: repeat delinquency; longer term negative trends in financial results; continuing deterioration of cash flows; concerns regarding the liquidity of guarantors; and other negative business trends.

Grade 7 Substandard - This rating is for loans for which a lender is actively working with the borrower to resolve issues and the full repayment of the loan is questionable. The loan is inadequately protected by current sound worth of the borrower, paying capacity of the guarantor, or pledged collateral. Loans in this grade have well defined weaknesses that jeopardize the full collectability of the loan and a distinct possibility of loss exists.  These loans are reviewed for impairment on a quarterly basis. Characteristics of loans in this rating may include: persistent delinquency; poor financial results of the business; negative cash flow; the ability of guarantor(s) to provide support for the loan is questionable.

Grade 8 Impaired Nonaccrual - This rating is for loans which are considered impaired and classified as nonaccrual. Loans in this grade have all the weaknesses of those classified as substandard grade 7 above, with the added characteristic that, based upon currently known facts, the weaknesses make collection of all principal and interest due according to contractual terms unlikely. These loans are reviewed for impairment on a quarterly basis. Loans in this grade may be assigned an allocated reserve in the loan loss allowance analysis if a determination is made that the future cash flows or the value of the collateral do not support the current carrying value of the loan.

Grade 9 Doubtful Nonaccrual- This rating is for loans which are considered impaired and are classified as nonaccrual. Loans in this grade have all the weaknesses of those classified as impaired nonaccrual grade 8 above, with the added characteristic that the weaknesses make full collection through payment or liquidation of the collateral, based on currently known facts, highly questionable or improbable. These loans are reviewed for impairment on a quarterly basis. Loans in this grade may be assigned an allocated reserve in the loan loss allowance analysis if a determination is made that the future cash flows or the value of the collateral do not support the current carrying value of the loan.

Restructured Loans

Impaired Restructured and Accruing - Loans where the borrower is experiencing financial difficulty and the bank has granted a concession to the borrower. A concession may be: a reduction in the contractual interest rate below current market rates for loans of similar quality, a lengthening of the accrual time frame beyond normal market terms, a forgiveness of a portion of the outstanding principal, or acceptance of collateral in lieu of payment for a portion of the loan balance. If the loan is in accrual status at the time of the restructuring, the borrower has the ability to make the payments under the restructured terms, and the restructuring does not forgive principal, the loan remains on an accrual status under the new terms. However, if there is a forgiveness of debt or partial charge off, the loan will generally be graded as impaired nonaccrual (Grade 8) with any accrued interest reversed against interest income. If a loan is in nonaccrual status at the time of a restructuring, it will remain in nonaccrual status (Grade 8) at the time of restructuring. All non-accruing restructured loans remain in nonaccrual status until the borrower has demonstrated the ability to make the payments under the restructured terms by making a minimum of six months of payments. If the borrower makes the six months of payments without becoming past due 30 days or more, the loan may be returned to accrual status. The determination of the need for an allowance for loan loss adjustment is based on a factor relating to historical losses multiplied by the balance of the loan for residential mortgages, or a collateral impairment review for commercial loans, and a net present value adjustment relating to a change in interest rate and other terms, if applicable.

Impaired Restructured and Accruing loans are graded seven or better based on the above definitions. If a restructured loan is graded as eight or nine, it is reported as Impaired Nonaccrual, or Doubtful Nonaccrual, respectively.

For commercial loans graded eight and nine and consumer and residential mortgage loans reported in nonaccrual, interest income is generally not recognized until the loan improves and is returned to accrual status. In some cases, if the loan is well secured and the borrower’s ability to support the loan payments has improved, such as in the case of a restructured nonaccrual loan, interest income may be recognized on a cash basis while the loan is in nonaccrual status.

For Consumer and Residential Mortgage Loan segments, loans are classified by risk based on current delinquency and nonaccrual status. These segments of loans will contain a separate class for restructured loans, if they exist.

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The following credit quality indicators provide a system for distribution of our loan portfolio in a manner consistent with the previously described loan grading system and for use in the determination of our loan loss allowance. This presentation differs somewhat by loan category from classification of loans presented elsewhere in our regulatory reports and within this report. These variations primarily relate to how real estate loans are analyzed internally to determine the adequacy of the loan loss allowance, versus how we are required to report real estate loans for regulatory purposes.

Credit Quality Indicators:

Loans at period end were as follows:
(In Thousands of Dollars)	December 31, 2012		December 31, 2011
Commercial and Industrial
Pass loans	$	133,844	$	122,812
Watch loans		5,375		19,542
Special mention loans		5,433		7,878
Substandard loans		1,879		2,928
Impaired restructured and accruing loans		3,230		3,562
Impaired nonaccrual loans		447		1,771
Total Commercial and Industrial		150,208		158,493
Commercial Real Estate
Pass loans	$	373,527	$	373,320
Watch loans		50,741		56,571
Special mention loans		18,119		21,155
Substandard loans		9,664		5,686
Impaired restructured and accruing loans		12,113		10,652
Impaired nonaccrual loans		8,429		15,336
Doubtful nonaccrual loans		25		0
Total Commercial Real Estate		472,618		482,720
Residential Mortgages 1st Liens
Performing loans	$	202,342	$	199,117
Loans > 60 days past due		1,046		2,203
Impaired restructured and accruing loans		4,953		4,425
Nonaccrual loans		6,038		5,374
Total First lien residential mortgage loans		214,379		211,119
Residential Mortgages Junior Liens
Performing loans	$	58,089	$	66,169
Loans > 60 days past due		96		328
Impaired restructured and accruing loans		235		278
Nonaccrual loans		328		278
Total Junior lien residential mortgage loans		58,748		67,053
Consumer
Performing loans	$	67,178	$	64,075
Loans > 60 days past due		39		239
Impaired restructured and accruing loans		191		210
Nonaccrual loans		401		0
Total Consumer		67,809		64,524
Total Loans	$	963,762	$	983,909

Allowance for Loan Losses

The allowance for loan losses is determined based on management’s estimate of probable losses incurred within the loan portfolio as of the balance sheet date. We determine the amount of the allowance for loan losses based on periodic evaluation of the loan portfolios and other relevant factors. This evaluation is inherently subjective and requires material estimates, which are subject to change. Factors that are considered in the evaluation of individual, and pools of loans, include: historical loss experience; likelihood of default; liquidation value of a loan’s underlying collateral; timing and amounts of expected future cash flows; and our exposure to loss in the event of default. We further estimate the impact of qualitative factors that may cause future losses to differ from historical experience. Such factors include: changes in credit quality, macro economic impacts on our customers, and changes in underwriting standards.

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Our historical loss experience is determined based on actual losses incurred over the previous twelve quarters. We utilize a method of averaging these losses whereby we place a heavier emphasis on more recent experience. Our model provides a 50% weighting on the most recent four quarters, 30% weighting on the middle four quarters, and 20% weighting on the oldest four quarters.

The loan portfolio is segmented into five loan types: commercial and industrial loans; commercial real estate loans; consumer loans; residential mortgages – first liens; and residential mortgage – junior liens. These segments are further grouped by credit quality classifications.

The segments comprising commercial and industrial loans and commercial real estate loans are classified based on the loan grading system described above. We group loans rated as one through four together into one class of Pass loans. Commercial and industrial and commercial real estate loans graded as Pass and Watch are assigned a unique pooled loss rate based on historical losses incurred over the prior three years as described above. We adjust the calculated historical loss rate up or down based on current developments, that in management’s judgment are not reflected in the historical losses of the company. The current outstanding balance for each of these classes of loans is then multiplied by the adjusted historical loss rate to determine the amount of allowance for loan losses to reserve on that pool of loans.

Loans graded special mention use a shorter 12 month loss history to determine the loss rate. Losses over the preceding 12 month period are divided by the average balance outstanding of substandard and impaired loans to determine a historical loss rate. That calculated historical loss rate is multiplied by a probability factor to determine a loss rate to be applied to this class of loans. The probability factor is determined from an analysis of the migration of special mention loans to more severe risk classes over the preceding 12 month period.

Loans graded as substandard use the shorter 12 month loss history to determine the loss rate. Losses over the preceding 12 month period are divided by the average balance outstanding of substandard and impaired loans to determine a historical loss rate. The calculated historical loss rate, without adjustment for migration, is then multiplied times the outstanding balance of substandard loans to determine the amount of allowance for loan losses to provide for this class of loans.

Loans graded as impaired nonaccrual, impaired doubtful, and impaired restructured and accruing are individually analyzed for loan losses. An allocated reserve is established within the allowance for loan losses for the difference between the carrying value of the loan and its determined collectable value. To determine the collectable value of the loan, the present value of expected cash flows, the collateral value, or some combination of the two is used. The allocated reserve is established as the difference between the carrying value of the loan and the collectable value.

For consumer and residential loan segments, loans that are current, or less than 60 days past due are assigned a unique historical loss rate as described above for commercial Pass and Watch loans. For loans that are more than 60 days past due including nonaccrual loans, a loss rate is determined based on charge offs within the last 12 months, divided by the sum of the average balance of loans 60 days or more past due and nonaccrual loans. These loss rates are multiplied by the outstanding balances in each unique loan segment at the end of the reporting period to determine the amount of allowance for loan loss.

For restructured loans where the bank has granted a rate concession, an additional amount is added to the loan loss reserve that represents the difference in the present value of the cash flows between the original terms and the new terms of the modified loan, using the original interest rate of the loan as a discount rate. Any change in the present value of the loan due to passage of time is reflected as an adjustment to provision for loan loss expense.

After each of the steps outlined above is completed, the results are aggregated and compared with the existing balance of the allowance for loan losses. If the aggregation is greater than the balance, the allowance for loan losses is increased through a charge to earnings on the provision for loan losses line. If the resulting aggregation is below the current balance of the allowance for loan losses, management will determine, based upon the number, potential impact, and uncertainty of the estimates contained within the process whether the unallocated reserve is excessive. If in management’s judgment the unallocated reserve exceeds a level deemed prudent given the inherent uncertainty of these issues, a reversal of the provision for loan losses may be recorded.

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The following table provides a breakdown of our loan portfolio by the primary credit quality indicators we use in the determination of our allowance for loan losses.

Allowance for credit losses and recorded investment in financing receivables:

(In Thousands of Dollars)
Twelve months ending December 31, 2012	Commercial and Industrial			Commercial Real Estate			First Lien Residential Mortgages			Junior Lien Residential Mortgages			Consumer Loans			Unallocated		Total
Allowance for Credit Losses:
Beginning balance	$	2,485		$	11,534		$	5,393		$	505		$	931		$	171	$	21,019
Provision for loan losses		(104	)		4,033			2,225			535			309			692		7,690
Loans charged off		(560	)		(4,440	)		(2,220	)		(485	)		(727	)		0		(8,432	)
Recoveries		75			438			258			0			292			0		1,063
Ending balance	$	1,896		$	11,565		$	5,656		$	555		$	805		$	863	$	21,340
Ending balance: individually evaluated for impairment	$	515		$	2,971		$	0		$	0		$	0		$	0	$	3,486
Ending balance: collectively evaluated for impairment	$	1,381		$	8,594		$	5,656		$	555		$	805		$	863	$	17,854
Financing Receivables:
Ending balance	$	150,208		$	472,618		$	214,379		$	58,748		$	67,809		$	0	$	963,762
Ending balance: individually evaluated for impairment	$	3,677		$	20,567		$	0		$	0		$	0		$	0	$	24,244
Ending balance: collectively evaluated for impairment	$	146,531		$	452,051		$	214,379		$	58,748		$	67,809		$	0	$	939,518
Twelve months ending December 31, 2011
Allowance for Credit Losses:
Beginning balance	$	3,024		$	12,375		$	3,960		$	774		$	1,162		$	136	$	21,431
Provision for loan losses		1,836			6,611			4,468			6			381			35		13,337
Loans charged off		(2,546	)		(7,973	)		(3,215	)		(275	)		(913	)		0		(14,922	)
Recoveries		171			521			180			0			301			0		1,173
Ending balance	$	2,485		$	11,534		$	5,393		$	505		$	931		$	171	$	21,019
Ending balance: individually evaluated for impairment	$	253		$	3,622		$	0		$	0		$	0		$	0	$	3,875
Ending balance: collectively evaluated for impairment	$	2,232		$	7,912		$	5,393		$	505		$	931		$	171	$	17,144
Financing Receivables:
Ending balance	$	158,493		$	482,720		$	211,397		$	66,775		$	64,524		$	0	$	983,909
Ending balance: individually evaluated for impairment	$	5,331		$	25,988		$	0		$	0		$	0		$	0	$	31,319
Ending balance: collectively evaluated for impairment	$	153,162		$	456,732		$	211,397		$	66,775		$	64,524		$	0	$	952,590

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(continued)

Twelve months ending December 31, 2010	Commercial and Industrial			Commercial Real Estate			First Lien Residential Mortgages			Junior Lien Residential Mortgages			Consumer Loans			Unallocated		Total
Allowance for Credit Losses:
Beginning balance	$	3,640		$	10,473		$	2,502		$	967		$	1,525		$	7	$	19,114
Provision for loan losses		812			8,222			3,844			(7	)		344			129		13,344
Loans charged off		(1,707	)		(6,366	)		(2,602	)		(186	)		(1,102	)		0		(11,963	)
Recoveries		279			46			216			0			395			0		936
Ending balance	$	3,024		$	12,375		$	3,960		$	774		$	1,162		$	136	$	21,431
Ending balance: individually evaluated for impairment	$	812		$	4,688		$	0		$	0		$	0		$	0	$	5,500
Ending balance: collectively evaluated for impairment	$	2,212		$	7,687		$	3,960		$	774		$	1,162		$	136	$	15,931
Financing Receivables:
Ending balance	$	164,332		$	509,285		$	203,765		$	76,293		$	77,945		$	0	$	1,031,620
Ending balance: individually evaluated for impairment	$	1,972		$	24,390		$	0		$	0		$	0		$	0	$	26,362
Ending balance: collectively evaluated for impairment	$	162,360		$	484,895		$	203,765		$	76,293		$	77,945		$	0	$	1,005,258

Age Analysis of Past Due Loans:

(In thousands of dollars)
At December 31, 2012	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Nonaccrual loans		Current		Total Financing Receivables		Recorded Investment > 90 days and accruing
Commercial and Industrial	$	206	$	140	$	0	$	346	$	447	$	149,415	$	150,208	$	0
Commercial Real Estate		604		1,881		0		2,485		8,454		461,679		472,618		0
Residential Mortgages 1st Liens		772		969		37		1,778		6,038		206,563		214,379		37
Residential Mortgages Junior Liens		473		96		0		569		328		57,851		58,748		0
Consumer		435		39		0		474		401		66,934		67,809		0
Total	$	2,490	$	3,125	$	37	$	5,652	$	15,668	$	942,442	$	963,762	$	37
At December 31, 2011
Commercial and Industrial	$	1,039	$	94	$	0	$	1,133	$	1,771	$	155,589	$	158,493	$	0
Commercial Real Estate		4,313		500		0		4,813		15,336		462,571		482,720		0
Residential Mortgages 1st Liens		973		1,875		328		3,176		5,374		202,569		211,119		328
Residential Mortgages Junior Liens		561		255		73		889		278		65,886		67,053		73
Consumer		848		221		18		1,087		210		63,227		64,524		18
Total	$	7,734	$	2,945	$	419	$	11,098	$	22,969	$	949,842	$	983,909	$	419

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Impaired loans were as follows:

(In Thousands of Dollars)
December 31, 2012	Recorded Investment		Unpaid Principal Balance		Related Allowance
Period end loans with no allocated allowance for loan losses
Commercial and Industrial	$	891	$	891	$	0
Commercial Real Estate		9,215		9,212		0
Residential Mortgages 1st Liens		10,993		10,993		0
Residential Mortgages Junior Liens		562		562		0
Consumer		592		592		0
Total	$	22,253	$	22,250	$	0
Period end loans with allocated allowance for loan losses
Commercial and Industrial	$	2,273	$	2,792	$	515
Commercial Real Estate		8,377		11,346		2,971
Residential Mortgages 1st Liens		0		0		0
Residential Mortgages Junior Liens		0		0		0
Consumer		0		0		0
Total	$	10,650	$	14,138	$	3,486
Total
Commercial and Industrial	$	3,164	$	3,683	$	515
Commercial Real Estate		17,592		20,558		2,971
Residential Mortgages 1st Liens		10,993		10,993		0
Residential Mortgages Junior Liens		562		562		0
Consumer		592		592		0
Total	$	32,903	$	36,388	$	3,486
December 31, 2011
Period end loans with no allocated allowance for loan losses
Commercial and Industrial	$	4,358	$	5,846		0
Commercial Real Estate		11,940		16,987		0
Residential Mortgages 1st Liens		10,079		11,120		0
Residential Mortgages Junior Liens		278		331		0
Consumer		210		249		0
Total	$	26,865	$	34,533	$	0
Period end loans with allocated allowance for loan losses
Commercial and Industrial	$	720	$	998	$	253
Commercial Real Estate		10,423		15,225		3,622
Residential Mortgages 1st Liens		0		0		0
Residential Mortgages Junior Liens		0		0		0
Consumer		0		0		0
Total	$	11,143	$	16,223	$	3,875
Total
Commercial and Industrial	$	5,078	$	6,844	$	253
Commercial Real Estate		22,363		32,212		3,622
Residential Mortgages 1st Liens		10,079		11,120		0
Residential Mortgages Junior Liens		278		331		0
Consumer		210		249		0
Total	$	38,008	$	50,756	$	3,875

Note: Recorded investment includes principal outstanding plus deferred fee and accrued interest, net of related allowance for loan losses.

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Average recorded investment and income recognized on impaired loans were as follows:

(In Thousands of Dollars)	Twelve months ended December 31, 2012				Twelve months ended December 31, 2011				Twelve months ended December 31, 2010
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Period end loans with no allocated allowance for loan losses
Commercial and Industrial	$	2,862	$	160	$	2,073	$	116	$	1,121	$	0
Commercial Real Estate		10,213		846		12,444		452		12,432		158
Residential Mortgages 1st Liens		9,998		416		9,223		219		7,721		253
Residential Mortgages Junior Liens		502		13		459		2		295		1
Consumer		450		17		192		0		200		5
Total	$	24,025	$	1,452	$	24,391	$	789	$	21,769	$	417
Period end loans with allocated allowance for loan losses
Commercial and Industrial	$	880	$	24	$	722	$	0	$	438	$	0
Commercial Real Estate		10,561		52		9,003		28		8,724		125
Residential Mortgages 1st Liens		0		0		0		0		0		0
Residential Mortgages Junior Liens		0		0		0		0		0		0
Consumer		0		0		0		0		0		0
Total	$	11,441	$	76	$	9,725	$	28	$	9,162	$	125
Total
Commercial and Industrial	$	3,742	$	184	$	2,795	$	116	$	1,559	$	0
Commercial Real Estate		20,774		898		21,447		480		21,156		283
Residential Mortgages 1st Liens		9,998		416		9,223		219		7,721		253
Residential Mortgages Junior Liens		502		13		459		2		295		1
Consumer		450		17		191		0		200		5
Total	$	35,466	$	1,528	$	34,116	$	817	$	30,931	$	542

Loan Modifications as of the period ending:

(In thousands of dollars)	Troubled Debt Restructurings						Troubled Debt Restructurings that Subsequently Defaulted
	Number of contracts		Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Number of contracts		Recorded investment
December 31, 2012
Commercial and Industrial		11	$	1,199	$	1,188		5	$	1,143
Commercial Real Estate		17		4,456		4,221		4		401
Residential Mortgages 1st Liens		19		1,948		1,943		2		190
Residential Mortgages Junior Liens		4		126		126		1		9
Consumer		3		128		127		0		0
Total		54	$	7,857	$	7,605		12	$	1,743
December 31, 2011
Commercial and Industrial		11	$	3,615	$	3,526		2	$	468
Commercial Real Estate		13		4,017		3,786		10		1,233
Residential Mortgages 1st Liens		13		1,427		1,291		11		828
Residential Mortgages Junior Liens		1		83		83		0		0
Consumer		0		0		0		0		0
Total		85	$	9,142	$	8,686		23	$	2,529
December 31, 2010
Commercial and Industrial		1	$	36	$	36		0	$	0
Commercial Real Estate		7		6,604		5,757		3		860
Residential Mortgages 1st Liens		27		3,025		2,633		8		614
Residential Mortgages Junior Liens		1		43		0		1		43
Consumer		0		0		0		0		0
Total		36	$	9,708	$	8,426		12	$	1,517

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NOTE 7 – PREMISES AND EQUIPMENT

Year end premises and equipment were as follows:
(In Thousands of Dollars)	2012			2011
Land	$	6,186		$	6,186
Buildings		32,891			33,082
Furniture, fixtures and equipment		17,431			17,951
Total		56,508			57,219
Less:
Accumulated depreciation		(32,152	)		(32,132	)
Total	$	24,356		$	25,087

Depreciation expense was $1,915,000, $2,062,000, and $2,278,000 for 2012, 2011, and 2010. Facility rent expense was $359,000 in 2012 compared with $377,000 for 2011, and $403,000 for 2010. Equipment rent expense was $249,000 in 2012 compared with $250,000 for 2011, and $252,000 for 2010. Rental commitments for the next five years under non-cancelable operating leases were as follows (before considering renewal options that generally are present):

(In Thousands of Dollars)
	Facilities		Equipment		Total
2013	$	325	$	7	$	332
2014		115		3		118
2015		97		2		99
2016		99		0		99
2017		102		0		102
Total	$	738	$	12	$	750

NOTE 8 – GOODWILL AND INTANGIBLE ASSETS

Goodwill

During the third quarter, Firstbank Corporation retained an independent third party to perform a goodwill impairment analysis. The valuation date was July 31, 2012. The steps that Austin utilized in a Step 1 valuation test included the reporting unit and the appropriate standard and level of value, the calculation of fair value and the comparison of fair value to carrying value. We determined that Firstbank Corporation was the relevant reporting unit to be valued. The standard of value used in the valuation was fair value. The definition of fair value is that it is the value of ownership of the specific business with consideration of synergies, efficiencies and other value enhancing factors. The appropriate level of value used was controlling interest level. This is consistent with allowing for synergies and other factors as described previously and also considers premiums where appropriate. The appraisal methodology utilized by us includes the following valuation approaches:

A. Income Approach: Under this approach, a discounted cash flow value is calculated based on earnings capacity.

B. Asset Approach: This approach is based on the difference between the estimated market value of assets and liabilities.

C. Market Approach: This analysis is based on price-to-earnings multiples, price-to-tangible-book ratios and core deposit premiums for selected bank sale transactions.

We used the individual valuation results to calculate their estimate of the fair value of common equity. This figure was then compared to the carrying value of equity to determine whether the Step 1 test had passed or failed. In its findings, management determined that the fair value of Firstbank’s common equity was $140.0 million, above its carrying value of $127.6 million on the testing date. As required by generally accepted accounting principles, since the Step 1 test passed, it was not necessary to complete a Step 2 test.

Based on the analysis, management concluded that the implied fair value of goodwill exceeded the carrying value; therefore, no goodwill impairment charge was required at this time. Whole bank sale transactions at a premium to tangible book value in the market place play an important role in the determination of fair value of the company. Changes in the pricing of future whole bank sales could negatively affect future valuation and result in goodwill impairment at a future date.

There was no change in the carrying amount of goodwill during the year.

(In Thousands of Dollars)
	2012		2011
Balance at January 1	$	35,513	$	35,513
Goodwill from acquisitions/(divestitures)		0		0
Balance at December 31	$	35,513	$	35,513

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Acquired Intangible Assets

Acquired intangible assets at year end were as follows:                                                                                                                     

(In Thousands of Dollars)	2012			2011			2010
Core deposit intangibles resulting from bank and branch acquisitions:
Gross Amount	$	7,930		$	7,930		$	7,930
Accumulated Amortization		(6,965	)		(6,482	)		(5,785	)
Net Carrying Value	$	965		$	1,448		$	2,145

Aggregate amortization expense was $483,000, $698,000, and $796,000 for 2012, 2011, and 2010, respectively. Our estimated amortization expense for each of the next five years is:

(In Thousands of Dollars)

Year	Amount
2013	$	370
2014		278
2015		185
2016		99
2017		33

NOTE 9 – FEDERAL INCOME TAXES

Federal income taxes consist of the following:

(In Thousands of Dollars)	2012			2011			2010
Current expense	$	4,283		$	3,133		$	1,013
Deferred expense (benefit)		(27	)		(1,299	)		14
Change in deferred tax valuation allowance		0			0			485
Total	$	4,256		$	1,834		$	1,512

A reconciliation of the difference between federal income tax expense and the amount computed by applying the federal statutory tax rate of 34% in 2012, 2011 and 2010 is as follows:

(In Thousands of Dollars)	2012			2011			2010
Tax at statutory rate	$	5,177		$	2,610		$	1,846
Effect of tax-exempt interest		(479	)		(443	)		(489	)
Deferred tax valuation allowance		0			0			485
Other		(442	)		(333	)		(330	)
Federal income taxes	$	4,256		$	1,834		$	1,512
Effective tax rate		29	%		25	%		29	%

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The components of deferred tax assets and liabilities included in other assets on the Consolidated Balance Sheet consist of the following at December 31st year end:

(In Thousands of Dollars)
	2012			2011
Deferred tax assets:
Allowance for loan losses	$	7,256		$	7,147
Deferred compensation		655			718
Losses on capital investments		1,159			1,727
Other		1,254			1,304
Total deferred tax assets		10,324			10,896
Deferred tax liabilities:
Fixed assets		(1,821	)		(1,851	)
Mortgage servicing rights		(1,697	)		(1,563	)
Purchase accounting adjustments		(234	)		(373	)
Unrealized gain on securities available for sale		(1,859	)		(1,492	)
Other		(428	)		(992	)
Total deferred tax liabilities		(6,039	)		(6,271	)
Net deferred tax assets		4,285			4,625
Deferred tax valuation allowance		(1,143	)		(1,143	)
Net deferred tax assets	$	3,142		$	3,482

A valuation allowance related to deferred tax assets is required when it is considered more likely than not that all or part of the benefits related to such assets will not be realized. In reviewing the company’s position relative to deferred tax assets associated with certain incurred capital losses, management determined that a valuation adjustment of $1,143,000 was necessary at year end 2012, the same amount as yearend 2011. These valuation adjustments were recorded through the income statement on the Federal income tax line item when they occurred. Based on this determination, a non-cash charge was made to record the valuation adjustment, reducing our deferred tax asset, and increasing income tax expense by $485,000 in 2011. The establishment of a valuation allowance does not relinquish our rights to utilize the deferred asset, but rather recognizes that at the current time management does not believe the deferred asset will be able to be utilized prior to its expiration. The deferred assets for which the valuation allowance was established were related to capital losses for which we do not believe we will have capital gains to offset. These assets are: $70,000 to expire in 2013, and $588,000 to expire in 2015 and $485,000 for which an expiration date has yet to be established, as we have not sold the underlying stock.

Losses on capital investments have a three year carry back and five year carry forward time period for offset. The timeframe begins with the sale of the investment. Certain tax planning strategies have been established, including the possible sale and leaseback of certain of our facilities or other assets that management believes could be executed if necessary to retain the benefits listed above.

Net deferred tax assets at December 31, 2012 and 2011 are included in other assets in the accompanying consolidated balance sheets.

NOTE 10 – DEPOSITS

Time deposits of $100,000 or more were $167 million and $196 million at year end 2012 and 2011. There were $17.6  million and $16.1 million of brokered CDs included in time deposits of $100,000 or more in 2012 and 2011 respectively.

Scheduled maturities of time deposits at December 31, 2012 were as follows:

(In Thousands of Dollars)
Year	Amount
2013	$	239,810
2014		69,766
2015		31,135
2016		22,614
2017		13,041
2018 and thereafter		5
Total	$	376,371

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NOTE 11 – BORROWINGS

Information relating to securities sold under agreements to repurchase is as follows:

(In Thousands of Dollars)
	2012			2011
At December 31:
Outstanding Balance	$	42,785		$	46,784
Average Interest Rate		0.19	%		0.19	%
Daily Average for the Year:
Outstanding Balance	$	47,605		$	43,847
Average Interest Rate		0.18	%		0.19	%
Maximum Outstanding at any Month End	$	55,047		$	47,603

Securities sold under agreements to repurchase (repurchase agreements) generally have original maturities of less than one year. Repurchase agreements are treated as financings and the obligations to repurchase securities sold are reflected as liabilities. Securities involved with the agreements are recorded as assets of the Company and are primarily held in safekeeping by correspondent banks. Repurchase agreements are offered principally to certain large deposit customers as deposit equivalent investments.

We had no unsecured overnight borrowings, in the form of federal funds purchased at December 31, 2012. There were no overnight borrowings at December 31, 2011.

NOTE 12 – FEDERAL HOME LOAN BANK ADVANCES

Long term borrowings have been secured from the Federal Home Loan Bank. At year end, advances from the Federal Home Loan Bank were as follows:

(In Thousands of Dollars)
	2012		2011
Borrowings with a fixed rates at year end	$	22,493	$	19,457
Borrowings with a variable rate of interest at year end	$	0	$	0

Fixed rate advances shown above ranged in the interest rate owed from 0.41% to 7.30% and averaged 2.39% at year end 2012 and maturity dates ranged from January 2013 to March 2026. Higher rate advances were borrowed to match fund specific loans in the past, and are matched in duration and prepayment terms to those loans. At the end of 2011, rates ranged from 1.28% to 7.30% and averaged 3.41%, with maturities ranging from January 2012 to March 2026. Each Federal Home Loan Bank advance is payable at its maturity date without penalty, however, substantial penalties do exist if an advance is paid before its contractual maturity. Such penalties vary from advance to advance and are based on the size, interest rate, and remaining term of each specific advance. Advances of $3.5 million may be converted from fixed to variable rate by the FHLB, but may be repaid, without penalty, if that option is exercised. The advances were collateralized by $177.7 million and $183.7 million of first mortgage loans under a blanket lien arrangement and pledges of specific mortgages at year end 2012 and 2011. As of December 31, 2012, we had $84.4 million of additional borrowing capacity with the Federal Home Loan Bank. Federal Home Loan Bank borrowings have decreased substantially as increased core deposits and low loan demand have combined to reduce the need for this funding in the near term.

Maturities of FHLB advances are as follows:

(In Thousands of Dollars)
2013	$	2,500
2014		4,000
2015		6,777
2016		3,094
2017		3,087
2018 and thereafter		3,035
Total	$	22,493

NOTE 13 – SUBORDINATED DEBENTURES

On October 18, 2004, a trust formed by us issued $10,310,000 of 90 day LIBOR plus 1.99% variable rate trust preferred securities as part of a pooled offering of such securities. We issued subordinated debentures to the trust in exchange for the proceeds of the offering; the debentures represent the sole assets of the trust. We may redeem the subordinated debentures, in whole or in part, any time on or after October 18, 2009 at 100% of the principal amount of the securities. The debentures are required to be paid in full on October 18, 2034.

45

On January 20, 2006, a trust formed by us issued $10,310,000 of trust preferred securities as part of a pooled offering of such securities. The securities carried an interest rate of 6.049% for five years, and then converted to a variable rate of 90 day LIBOR plus 1.27% in 2011, for the remainder of their term. We issued subordinated debentures to the trust in exchange for the proceeds of the offering; the debentures represent the sole assets of the trust. We may redeem the subordinated debentures, in whole or in part, any time on or after April 7, 2011 at 100% of the principal amount of the securities. The debentures are required to be paid in full on April 7, 2036.

On July 30, 2007, two trusts, formed by us, issued $15,464,000 of trust preferred securities as part of a pooled offering of such securities. One of the trusts issued $7,732,000 of variable rate securities at 90 day LIBOR plus 1.35% (6.71% on the date of issuance). The other trust issued $7,732,000 of fixed rate securities that carried an interest rate of 6.566% for five years, and then converted to a variable rate of 90 day LIBOR plus 1.35% in 2012 for the remainder of their term. Firstbank then issued subordinated debentures to the trust in exchange for the proceeds of the offering; the debentures represent the sole assets of each of the trusts. We may redeem the subordinated debentures, in whole or in part, any time on or after July 30, 2012 at 100% of the principal amount of the securities. The debentures are required to be paid in full on July 30, 2037.

The trusts are not consolidated with the Company’s financial statements, but rather the subordinated debentures are shown as a liability. Our investment in the stock of the trust was $1,084,000 and is included in equity securities available for sale. These investments are restricted from sale and are carried at historical cost, which approximates fair value.

NOTE 14 – SHAREHOLDERS’ EQUITY

We are subject to various regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums.  At year end 2012 and 2011 we exceeded all requirements to be classified as well as capitalized.

On January 30, 2009 we issued 33,000 shares of Series A, no par value $1,000 liquidation preference, fixed rate cumulative perpetual preferred stock (Preferred Stock) and warrants to purchase 578,947 shares of our common stock at an exercise price of $8.55 per share (Warrants), to the U.S. Department of Treasury in return for $33 million under the Capital Purchase Program (CPP). Of the proceeds, $32.7 million was allocated to the Preferred Stock and $0.3 million was allocated to the Warrants based on the relative fair value of each. The $0.3 million discount on the Preferred Stock is being accreted using an effective yield method over five years. The Preferred Stock and Warrants qualify as Tier 1 capital.

On June 28, 2012 the U.S. Department of Treasury sold all of the shares of our Preferred Stock in a modified Dutch auction process. During the auction, we successfully bid on and retired 16,000 of the 33,000 outstanding shares of our Preferred Stock at a price of $941.01 per share, or $15.1 million in the aggregate. As a result of the retirement of these shares, 17,000 shares remain outstanding, held by private investors, and carry the same terms under which they were originally issued.

The warrants were immediately exercisable for 578,947 shares of our common stock at an exercise price of $8.55 per common share. The warrants were transferrable and could be exercised at any time on or before January 30, 2019. We negotiated a repurchase of all of the outstanding warrants with the U.S. Treasury at a price of $1,946,670. The repurchase of these warrants occurred in July 2012 and reduced equity by the amount of the purchase price.

The remaining 17,000 shares of Preferred Stock pay cumulative quarterly cash dividends at a rate of 5% per year on the $1,000 liquidation preference through February 15, 2014 and at a rate of 9% per year thereafter. We accrue dividends based on the rates, liquidation preference and time since last quarterly dividend payment. We may redeem the Preferred Stock for the liquidation preference plus accrued and unpaid dividends subject to prior consultation with the Federal Reserve Board.

Under the CPP, the consent of the U.S. Treasury was required for any quarterly common stock dividend of more than $0.225 per share (subject to adjustment for stock splits, stock dividends and certain other transactions) and for any common share repurchases (other than common share repurchases in connection with any benefit plan in the ordinary course of business) in each case until January 30, 2012, unless the Preferred Stock had been fully redeemed or the U.S. Treasury had transferred all the Preferred Stock to third parties prior to that date. This restriction on common stock dividends lapsed in January of 2012. In addition, all accrued and unpaid dividends on the Preferred Stock must be declared and the payment set aside for the benefit of the holders of Preferred Stock before any dividend may be declared on our common stock and before any shares of our common stock may be repurchased, subject to certain limited exceptions. Holders of shares of the Preferred Stock have no right to exchange or convert such shares into any other security of Firstbank Corporation and have no right to require the redemption or repurchase of the Preferred Stock. The Preferred Stock does not have a sinking fund.  The Preferred Stock is non-voting, other than class voting rights on certain matters that could adversely affect the Preferred Stock.

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NOTE 15 – BENEFIT PLANS

The Firstbank Corporation 401(k) plan, a defined contribution plan, is an IRS qualified 401(k) salary deferral plan, under which Firstbank Corporation stock is one of the investment options. The Board of Directors approved changing the plan to a Safe Harbor 401(k) plan for the 2008 plan year. A Safe Harbor plan relieves administrative testing in exchange for immediate vesting of the employee’s matching contributions. Both employee and employer contributions may be made to the plan. The Company’s 2012, 2011 and 2010 matching 401(k) contributions charged to expense were $539,000, $522,000 and $537,000 respectively.  The percent of the Company’s matching contribution to the 401(k), and the determination to offer a Safe Harbor plan, is determined annually by the Board of Directors.

Firstbank – West Michigan had a deferred compensation plan for its directors and executive officers. The plan was frozen before the ICNB acquisition and has a balance at the end of 2012 of $1.9 million compared with $2.1 million at the end of 2011. Expense associated with the plan was $131,000 in 2012, $110,000 in 2011, and $94,000 in 2010. Payments under the deferred plan were $231,000 in 2012, $171,000 in 2011, and $187,000 in 2010.

NOTE 16 – STOCK BASED COMPENSATION

The Company has stock based compensation plans as described below. Total compensation cost that has been charged against income for those plans was $96,000, $118,000, and $115,000 for 2012, 2011 and 2010. The total income tax benefit resulting from these charges was $33,000, $40,000 and $39,000, respectively.

The Firstbank Corporation Stock Compensation Plans of 1993, 1997 and 2006 (“Plans”), as amended, which were shareholder approved, provide for the grant of 395,986, 593,798 and 315,000 shares of stock, respectively, in either restricted form or under option. Options may be either incentive stock options or nonqualified stock options. As of December 31, 2012 only nonqualified stock options and restricted stock shares have been issued under the plans. The Plan of 1993 terminated April 26, 2003. The 1997 Plan terminated April 28, 2007. The 2006 Plan will terminate February 27, 2016. The Board, at its discretion, may terminate any or all of the Plans prior to the Plans’ scheduled termination dates. At year end 2012, there were 61,642 shares available for grant under the 2006 Plan.

Stock Option

Each option granted under the Plans may be exercised in whole or in part during such period as is specified in the option agreement governing that option. Options may only be issued with exercise prices equal to, or greater than, the stock’s market value on the date of issuance. The length of time available for a stock option to be exercised is governed by each option agreement, but has not been more than ten years from the issuance date.

All companies are required to record compensation cost for stock options provided to employees in return for employee service. The cost is measured at the fair value of the options when granted. This cost is expensed over the employee service period, which is normally the vesting period of the options.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of our common stock. We use historical data to estimate option exercise and post-vesting termination behavior. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The weighted average fair value of options granted was $2.33 in 2010. There were no options granted in 2011 or 2012.

	2010
Risk-free interest rate		2.11	%
Expected option life (years)		7
Expected stock price volatility		44.7	%
Dividend yield		0.7	%

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Activity under the plans:

	Twelve months ended December 31, 2012									Twelve months ended December 31, 2011
Total options outstanding	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value (000)		Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value (000)
Beginning of period		396,898		$	16.58						454,745		$	16.55
Granted		0			-						0
Exercised		0			-						0
Forfeited		(6,279	)	$	19.00						(25,273	)	$	19.45
Expired		(34,589	)	$	19.20						(32,574	)	$	13.51
End of period		356,030		$	16.29		4.5	$	479		396,898		$	16.58		5.1	$	0
Options exercisable, end of period		303,270		$	17.95		4.0	$	269		305,468		$	19.18		4.3	$	0

There were no options exercised in either 2012 or 2011. As of December 31, 2012, there was $32,000 of total unrecognized compensation cost related to non-vested stock options granted under the Plans. The cost is expected to be recognized over a weighted-average period of 1.5 years.

Options outstanding at December 31, 2012 were as follows:

			Options outstanding						Exercisable
Range of exercise prices			Shares		Weighted Average Exercise Price		Weighted Average Contractual Life (years)		Shares		Weighted Average Exercise Price
$5.19	-	$8.00		97,700	$	6.61		6.8		60,320	$	7.03
$8.01	–	$16.00		90,950	$	12.87		5.8		75,570	$	13.74
$16.01	-	$23.00		89,215	$	22.42		3.4		89,215	$	22.42
$23.01	-	$26.18		78,165	$	25.36		1.4		78,165	$	25.36
Total				356,030	$	16.29		4.5		303,270	$	17.95

Restricted Stock

Restricted shares may be issued under the Plans as described above. Compensation expense is recognized over the vesting period of the shares based on the market value of the shares on the issue date.

A summary of changes in the Company’s non-vested shares for 2012 and 2011 follows:

	2012				2011
Non-vested Shares	Shares		Weighted-Average Grant-Date Fair Value		Shares		Weighted-Average Grant-Date Fair Value
Non-vested at January 1, 2012		22,627	$	5.99		13,373	$	9.13
Granted		14,980	$	10.30		14,120	$	5.00
Vested		3,553	$	7.61		4,866	$	11.77
Non-vested at December 31, 2012		34,054	$	7.68		22,627	$	5.99

As of December 31, 2012, there was $210,000 of total unrecognized compensation cost related to non-vested shares granted under the Restricted Stock Plan. The cost is expected to be recognized over a weighted-average period of 2.1 years. The total fair value of shares vested during the years ended December 31, 2012, 2011 and 2010 was $27,000, $57,000, and $23,000. Expense associated with restricted stock and include in the total compensation cost presented earlier in this note were $56,000 in 2012 compared with $37,000 in 2011 and $20,000 in 2010.

NOTE 17 – RELATED PARTY TRANSACTIONS

Loans to principal officers, directors, and their affiliates were as follows:

(In Thousands of Dollars)	2012			2011
Beginning balance	$	40,477		$	48,510
New loans		39,074			46,283
Repayments		(43,885	)		(47,972	)
Deletion of Directors		(896	)		(6,344	)
Ending balance	$	34,770		$	40,477

48

Deposits from principal officers, directors, and their affiliates at year end 2012 and 2011 were $27.1 million and $28.5 million respectively.

NOTE 18 – FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

Some financial instruments, such as loan commitments, credit lines, letters of credit and overdraft protection are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met and usually have expiration dates. Commitments may expire without being used. Off-balance sheet risk to credit loss exists up to the face amount of these instruments although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.

Financial instruments with off-balance sheet risk were as follows at year end:

(In Thousands of Dollars)	2012				2011
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to make loans (at market rates)	$	82,395	$	10,137	$	44,091	$	11,254
Unused lines of credit and letters of credit	$	25,923	$	126,490	$	22,205	$	118,443
Standby letters of credit	$	5,201	$	15,225	$	4,776	$	15,110

Commitments to make loans are generally made for periods of 60 days or less. Fixed rate loan commitments have interest rates ranging from 3.38% to 7.00% and maturities ranging from 1 year to 10 years.

NOTE 19 – CONTINGENCIES

From time to time certain claims are made against the Company and its banking subsidiaries in the normal course of business. There were no outstanding claims considered by management to be material at December 31, 2012.

NOTE 20 – DIVIDEND LIMITATION OF SUBSIDIARIES

Capital guidelines adopted by Federal and State regulatory agencies and restrictions imposed by law limit the amount of cash dividends the banks can pay to the Company. At December 31, 2012, using the most restrictive of these conditions for each bank, the aggregate cash dividends that the banks can pay the Company without prior approval was $23,118,000. It is not the intent of management to have dividends paid in amounts which would reduce the capital of the banks to levels below those which are considered prudent by management and in accordance with guidelines of regulatory authorities.

NOTE 21 – STOCK REPURCHASE PROGRAM

We currently have no authorized common or preferred stock repurchase program in place. No common stock was repurchased in 2011 or 2012. In June of 2012 we repurchased 16,000 shares of our 33,000 outstanding shares of preferred stock at a price of at a price of $941.01 per share (liquidation preference value $1,000). In July of 2012, we negotiated a repurchase of all 578,947 outstanding common stock warrants, which were issued to the U.S. Treasury at the time of their investment in our preferred shares, for a total price of $1,946,670.

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 2012 and 2011, 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.

49

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
2012
Total Capital to Risk Weighted Assets
Consolidated	$	155,135		15.99	%	$	77,618		8.00	%	$	97,023		10.00	%
Firstbank – Alma		33,195		15.81	%		16,797		8.00	%		20,997		10.00	%
Firstbank – Mt. Pleasant		37,816		12.74	%		23,748		8.00	%		29,685		10.00	%
Firstbank – West Branch		23,021		14.01	%		13,144		8.00	%		16,430		10.00	%
Keystone Community Bank		28,641		15.78	%		14,521		8.00	%		18,151		10.00	%
Firstbank – West Michigan		15,226		12.83	%		9,493		8.00	%		11,866		10.00	%
Tier 1 (Core) Capital to Risk Weighted Assets
Consolidated	$	142,884		14.73	%	$	38,809		4.00	%	$	58,214		6.00	%
Firstbank – Alma		30,541		14.55	%		8,399		4.00	%		12,598		6.00	%
Firstbank – Mt. Pleasant		34,097		11.49	%		11,874		4.00	%		17,811		6.00	%
Firstbank – West Branch		20,945		12.75	%		6,572		4.00	%		9,858		6.00	%
Keystone Community Bank		26,333		14.51	%		7,260		4.00	%		10,891		6.00	%
Firstbank – West Michigan		13,729		11.57	%		4,746		4.00	%		7,119		6.00	%
Tier 1 (Core) Capital to Average Assets
Consolidated	$	142,884		9.71	%	$	58,854		4.00	%	$	73,568		5.00	%
Firstbank – Alma		30,541		8.15	%		14,998		4.00	%		18,748		5.00	%
Firstbank – Mt. Pleasant		34,097		8.12	%		16,765		4.00	%		20,994		5.00	%
Firstbank – West Branch		20,945		8.55	%		9,803		4.00	%		12,253		5.00	%
Keystone Community Bank		26,333		11.61	%		9,072		4.00	%		11,340		5.00	%
Firstbank – West Michigan		13,729		7.29	%		7,538		4.00	%		9,422		5.00	%

	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	%

50

NOTE 23 – FAIR VALUE

Carrying amount and estimated fair values of financial instruments were as follows at year end:

December 31, 2012 (In thousands of dollars)	Carrying Amount			Estimated Fair Value			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Financial Assets:
Cash and cash equivalents	$	99,601		$	99,601		$	99,601	$	0		$	0
FDIC insured bank certificates of deposit		2,927			2,927			2,927		0			0
Trading account securities		6			6			6		0			0
Securities available for sale		353,678			353,678			91		331,717			21,870
Federal Home Loan Bank stock		7,266			7,266			0		0			7,266
Loans held for sale		2,921			2,921			0		2,921			0
Loans, net of allowance		942,422			930,354			0		0			930,354
Financial Liabilities:
Deposits		(1,241,401	)		(1,243,712	)		0		0			(1,243,712	)
Securities sold under agreements to repurchase and overnight borrowings		(42,785	)		(42,785	)		0		(42,785	)		0
Federal Home Loan Bank advances		(22,493	)		(24,122	)		0		0			(24,122	)
Subordinated debentures		(36,084	)		(36,093	)		0		0			(36,093	)

December 31, 2011 (In thousands of dollars)	Carrying			Fair
	Amount			Value
Financial Assets:
Cash and cash equivalents	$	75,816		$	75,816
FDIC insured bank certificates of deposit		4,432			4,432
Trading account securities		2			2
Securities available for sale		342,184			342,184
Federal Home Loan Bank stock		7,266			7,266
Loans held for sale		349			349
Loans, net		962,890			944,756
Accrued interest receivable		4,531			4,531
Financial Liabilities:
Deposits		(1,220,542	)		(1,215,484	)
Securities sold under agreements to repurchase and overnight borrowings		(46,784	)		(46,784	)
Federal Home Loan Bank advances		(19,457	)		(21,359	)
Accrued interest payable		(762	)		(762	)
Subordinated debentures		(36,084	)		(36,488	)

The methods and assumptions used to estimate fair value are described as follows: The carrying amount is the estimated fair value for cash and cash equivalents, short term borrowings, Federal Home Loan Bank stock, demand deposits, short term debt, and variable rate loans or deposits that re-price frequently and fully. Security fair values are based on market prices or dealer quotes, and if no such information is available, on the rate and term of the security and information about the issuer. For fixed rate loans and variable rate loans, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk based on historical losses on similar loan pools. For deposits with infrequent re-pricing or re-pricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life of the product.

Fair values for impaired loans are estimated using discounted cash flow analysis or underlying collateral values for the specific loans in the portfolio and assumes the bank will resolve them through orderly liquidation. Fair value of loans held for sale is based on market quotes. Fair value of debt is based on current rates for similar financing. The fair value of off-balance sheet items is based on the current fees or cost that would be charged to enter into or terminate such arrangements. The fair value of off-balance sheet items was not material to the consolidated financial statements at December 31, 2012 and 2011.

The following tables present information about our assets measured at fair value on a recurring basis at December 31, 2012 and 2011, and valuation techniques used by us to determine those fair values.

51

Level 1 assets are those which are actively traded on an open market and pricing is publicly available.

Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability. Level 3 securities include local municipal securities where market pricing is not available, trust preferred securities issued by banks, and other miscellaneous investments.

Assets Measured at Fair Value on a Recurring Basis

(Dollars in Thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2012
Securities available for sale
U.S. Government Agency Bonds	$	0	$	106,885	$	0	$	106,885
Mortgage Backed Securities		0		66,277		0		66,277
U.S. Government Agency CMOs		0		61,030		0		61,030
States and political subdivisions		0		97,525		20,289		117,814
Equity and Other Securities		91		0		1,581		1,672
Total Securities available for sale	$	91	$	331,717	$	21,870	$	353,678
Trading equity securities	$	6	$	0	$	0	$	6
December 31, 2011
Securities available for sale
U.S. Government Agency Bonds	$	0	$	133,834	$	0	$	133,834
Mortgage Backed Securities		0		71,052		0		71,052
U.S. Government Agency CMOs		0		57,845		0		57,845
States and political subdivisions		0		62,447		15,342		77,789
Equity and Other Securities		92		0		1,572		1,664
Total Securities available for sale	$	92	$	325,179	$	16,914	$	342,184
Trading equity securities	$	2	$	0	$	0	$	2

Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis

(Dollars in Thousands)	2012			2011
Balance at beginning of year	$	16,914		$	10,833
Total realized and unrealized gains/(losses) included in income		0			0
Total unrealized gains/(losses) included in other comprehensive income		0			0
Purchases of securities		17,262			11,325
Sales of securities		0			0
Calls and maturities		(12,663	)		(5,244	)
Net transfers in to Level 3		357			0
Balance at December 31 of each year	$	21,870		$	16,914

Both observable and unobservable inputs may be used to determine the fair value of positions classified as Level 3 assets. As a result, the unrealized gains and losses for these assets presented in the tables above may include changes in fair value that were attributable to both observable and unobservable inputs.

Available for sale investments securities categorized as Level 3 assets primarily consist of bonds issued by local municipalities and other like assets. We carry local municipal securities at historical cost, which approximates fair value, unless economic conditions for the municipality changes to a degree requiring a valuation adjustment.

We also have assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. These assets consist of impaired loans and other real estate owned. We have estimated the fair value of impaired loans using Level 3 inputs, specifically valuation of loans based on either a discounted cash flow projection, or a discount to the appraised value of the collateral underlying the loan. We use discounted appraised values or broker’s price opinions to determine the fair value other real estate owned.

52

Assets Measured at Fair Value on a Nonrecurring Basis

(Dollars in Thousands)	Balance at December 31,		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
2012
Impaired loans	$	36,388	$	0	$	0	$	36,388
Other real estate owned	$	1,296	$	0	$	0	$	1,296
Other repossessed assets	$	250	$	0	$	0	$	250
2011
Impaired loans	$	41,889	$	0	$	0	$	41,889
Other real estate owned	$	2,223	$	0	$	0	$	2,223

Impaired loans categorized as Level 3 assets consist of non-homogeneous loans that are considered impaired. We estimate the fair value of the loans based on the present value of expected future cash flows using management’s best estimate of key assumptions. These assumptions include future payment ability, timing of payment streams, and estimated realizable values of available collateral (typically based on outside appraisals). Other real estate owned is valued based on either a recent appraisal for the property or a brokers' price opinion of the value of the property, which are discounted for expected costs to dispose of the property. Losses on impaired loans were charged to the allowance for loan losses. Losses in other real estate owned and other repossessed assets were charged to earnings through other non-interest expense on the income statement.

NOTE 24 – BASIC AND DILUTED EARNINGS PER SHARE

(In Thousands, Except per Share Data)	Year Ended December 31
	2012		2011		2010
Basic earnings per common share
Net income available to common shareholders	$	9,259	$	3,944	$	2,084
Weighted average common shares outstanding		7,933		7,843		7,766
Basic earnings per common share	$	1.17	$	0.50	$	0.27
Diluted Earnings per Share
Net income available to common shareholders	$	9,259	$	3,944	$	2,084
Weighted average common shares outstanding		7,933		7,843		7,766
Add dilutive effects of assumed exercises of options		24		2		2
Weighted average common and dilutive potential
Common shares outstanding		7,957		7,845		7,768
Diluted earnings per common share	$	1.16	$	0.50	$	0.27

Stock options for 219,223 shares of common stock were not considered in computing diluted earnings per share for 2012, because they were anti-dilutive. Stock options and warrants for 975,845 and 1,033,692 shares of common stock were not considered in computing diluted earnings per share for 2011 and 2010, respectively, because they were anti-dilutive.

53

NOTE 25 – FIRSTBANK CORPORATION (PARENT COMPANY ONLY)

CONDENSED FINANCIAL INFORMATION

CONDENSED BALANCE SHEETS

	Year Ended December 31,
(In Thousands of Dollars)	2012		2011
ASSETS
Cash and cash equivalents	$	11,167	$	16,870
Investment in and advances to banking subsidiaries		168,883		170,981
Securities		1,090		1,086
Other assets		4,327		4,104
Total Assets	$	185,467	$	193,041
LIABILITIES AND EQUITY
Accrued expenses and other liabilities	$	2,325	$	1,580
Subordinated Debentures		36,084		36,084
Shareholders’ equity		147,058		155,377
Total Liabilities and Shareholders’ Equity	$	185,467	$	193,041

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

	Year Ended December 31,
	2012			2011			2010
Dividends and returns of capital from banking subsidiaries (net of capital infusions)	$	16,150		$	3,680		$	4,000
Other income		5,821			5,921			5,656
Other expense		(10,043	)		(8,440	)		(8,418	)
Income before income tax and undistributed subsidiary income		11,928			1,161			1,238
Income tax benefit		1,416			844			532
Equity in undistributed subsidiary income		(2,810	)		3,618			1,993
Net income		10,534			5,623			3,763
Change in unrealized gain (loss) on securities, net of tax and classification effects		712			2,750			(452	)
Comprehensive income	$	11,246		$	8,373		$	3,311

CONDENSED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2012			2011			2010
Cash flows from operating activities
Net income	$	10,534		$	5,623		$	3,763
Adjustments:
Unrealized (gain)/loss on trading account securities		(4	)		11			(3	)
Equity in undistributed subsidiary income		(5,190	)		(3,618	)		(1,993	)
Stock option and restricted stock grant compensation expense		96			118			115
Change in other assets		(223	)		3,797			6,734
Change in other liabilities		745			138			(1,410	)
Net cash from operating activities		5,958			6,069			7,206
Cash flows from investing activities
Sale of securities available for sale		0			0			2,818
Net decrease in commercial loans		0			1,000			(786	)
Return from/(payments for) investments in subsidiaries		8,000			(4,220	)		(1,950	)
Net cash from/(used in) investing activities		8,000			(3,220	)		82
Cash flows from financing activities
Redemption of preferred stock		(15,056	)		0			0
Redemption of common stock warrants		(1,947	)		0			0
Proceeds from issuance of common stock		903			421			393
Dividends on preferred stock		(1,247	)		(1,650	)		(1,650	)
Dividends on common stock		(2,314	)		(313	)		(620	)
Net cash used for financing activities		(19,661	)		(1,542	)		(1,877	)
Net change in cash and cash equivalents		(5,703	)		1,307			5,411
Beginning cash and cash equivalents		16,870			15,563			10,152
Ending cash and cash equivalents	$	11,167		$	16,870		$	15,563

54

NOTE 26 – OTHER COMPREHENSIVE INCOME

Other comprehensive income components and related taxes were as follows:

(In Thousands of Dollars)	2012			2011			2010
Change in unrealized holding gains and losses on available for sale securities	$	1,034		$	4,204		$	(689	)
Reclassification adjustments for gains and losses later recognized in income		44			(37	)		4
Net unrealized gains and (losses)		1,078			4,167			(685	)
Tax effect		(366	)		(1,417	)		233
Other comprehensive income (loss)	$	712		$	2,750		$	(452	)

NOTE 27 – QUARTERLY FINANCIAL DATA (UNAUDITED)

(In Thousands of Dollars, Except per Share Data)			2012
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Year
Interest income	$	16,126	$	16,020	$	15,574	$	15,146	$	62,866
Net interest income		13,766		13,838		13,542		13,346		54,492
Income before federal income taxes		3,440		3,342		3,765		4,243		14,790
Net income		2,417		2,404		2,715		2,998		10,534
Preferred stock dividends		420		420		220		215		1,275
Net income available to common shareholders		1,997		1,984		2,495		2,783		9,259
Basic earnings per common share	$	0.25	$	0.25	$	0.32	$	0.35	$	1.17
Diluted earnings per common share	$	0.25	$	0.25	$	0.31	$	0.35	$	1.16

			2011
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Year
Interest income	$	16,989	$	17,215	$	16,924	$	16,516	$	67,644
Net interest income		13,292		13,741		13,781		13,858		54,672
Income before federal income taxes		1,564		686		2,170		3,037		7,457
Net income		1,215		628		1,630		2,150		5,623
Preferred stock dividends		420		420		420		419		1,679
Net income available to common shareholders		795		208		1,210		1,731		3,944
Basic earnings per common share	$	0.10	$	0.03	$	0.15	$	0.22	$	0.50
Diluted earnings per common share	$	0.10	$	0.03	$	0.15	$	0.22	$	0.50

NOTE 28 – SUBSEQUENT EVENTS

On February 1, 2013 we completed the consolidation of four of our bank charters into a single organization to achieve a more efficient operation. We also completed the closing of five smaller branch locations and the consolidation of the loans and deposits into other nearby locations on that same date.

55

FIRSTBANK CORPORATION

BOARD OF DIRECTORS	OFFICERS
William E. Goggin, Chairman	Thomas R. Sullivan
Chairman, Firstbank – Alma	President & Chief Executive Officer
Attorney, Goggin Law Offices
	Samuel G. Stone
Thomas D. Dickinson, CPA	Executive Vice President, Chief Financial
Certified Public Accountant	Officer, Secretary & Treasurer
Biggs, Hausserman Thompson & Dickinson
	William L. Benear
David W. Fultz	Vice President
Owner, Fultz Insurance Agency &,
Kirtland Insurance Agency	Daniel H. Grenier
	Vice President
Jeff A. Gardner
Certified Property Manager &	David L. Miller
Owner, Gardner Group	Vice President
Edward B. Grant, Ph.D., CPA	Douglas J. Ouellette
Chairman, Firstbank (Mt. Pleasant)	Vice President
General Manager, Public Broadcasting,
Central Michigan University	Richard D. Rice
	Vice President and Controller
Samuel A. Smith
Owner, Smith Family Funeral Homes	Thomas O. Schlueter
	Vice President
Thomas R. Sullivan
President & Chief Executive Officer, Firstbank Corporation	James E. Wheeler, II
	President
	NON-BANK SUBSIDIARY
	Austin Mortgage Company, LLC
	FBMI Risk Management Services
FIRSTBANK CORPORATION	FIRSTBANK CORPORATION
311 Woodworth Avenue	OPERATIONS CENTER
P. O. Box 1029	308 Woodworth Avenue
Alma, Michigan  48801	Alma, Michigan  48801
(989) 463-3131
www.firstbankmi.com

56

FIRSTBANK – ALMA

BOARD OF DIRECTORS	OFFICERS
William E. Goggin, Chairman	James E. Wheeler, II
Chairman, Firstbank Corporation	President & Chief Executive Officer
Attorney, Goggin Law Office
	Richard A. Barratt
Mark J. Abernathy	Executive Vice President
President, Alma College
	Craig A. Bishop
Martha A. Bamfield	Community Bank President-St Johns
Dentist, Nester & Bamfield, DDS, PC
	Laura A. Crocker
Cindy M. Bosley	Vice President
Chief Administrative Officer, Masonic Pathways
	Gregory A. Daniels
Sara Clark-Pierson	Vice President
Attorney, Certified Public Accountant, Clark Family Enterprises.
	Tammy L. Halfmann
Todd G. Deitrich	Vice President
President, Olympian Tool, Inc.
	Marita A. Harkness
Ann M. Flermoen	Vice President
Dentist, Ann M. Flermoen, DDS
	Janette Havlik
Frank G. Pauli	Vice President
President, Pauli Ford-Mercury, Inc.
	Jeffery A. Hicks
Samuel A. Smith	Vice President
Owner, Smith Family Funeral Homes
	Timothy M. Lowe
Thomas R. Sullivan	Vice President
President & Chief Executive Officer
Firstbank Corporation	Autumn Redman
	Vice President
James E. Wheeler, II
President & Chief Executive Officer, Firstbank – Alma	Daniel P. Redman
Vice President, Firstbank Corporation	Vice President
	Joan S. Welke
	Vice President
	Pamela K. Winters
	Vice President
	SUBSIDIARY
	Firstbank – Alma Mortgage Company

OFFICE LOCATIONS
Alma	Ashley	DeWitt	Ithaca
7455 N. Alger Road	114 S. Sterling St.	13215 S. US – 27 B.R.	219 E. Center St.
(989)463-3134	(989) 847-2394	(517) 668-8000	(989) 875-4107
230 Woodworth Ave.	Merrill	St. Charles	St. Johns
(989)463-3137	125 W. Saginaw St.	102 Pine St.	201 N. Clinton Ave.
	(989) 643-7253	(989) 865-9918	(989) 227-8383
311 Woodworth Ave.
(989) 463-3131	St. Louis	Vestbaburg	1065 Superior Dr.
	135 W. Washington Ave.	9002 W. Howard City-Edmore Rd	(989) 227-6995
	(989) 681-5758	(989) 268-5445

57

FIRSTBANK (MT. PLEASANT)

BOARD OF DIRECTORS	OFFICERS
Edward B. Grant, Ph.D, CPA, Chairman	Douglas J. Ouellette
General Manager, Public Broadcasting, Central Michigan University	President & Chief Executive Officer
Steven K. Anderson	Peter D. Stalker
President & CEO Cadillac Tire Center, Cadillac	Community Bank President-Cadillac
Ralph M. Berry	Daniel J. Timmins
Owner, Berry Funeral Homes	Community Bank President-Clare
Glen D. Blystone, CPA	Mark B.Perry
Blystone & Bailey, CPA’s PC	Senior Vice President
Kenneth C. Bovee	Robert L. Wheeler
President & Chief Executive Officer, Keystone Management Group	Senior Vice President
Robert E. List, CPA	Cheryl L. Gaudard
Shareholder, Weinlander Fitzhugh,CPA’s	Vice President
Robert J. Long	Cheryl A. Hall
Owner, Summit Petroleum Corporation	Vice President
Keith D. Merchant	Barbara J. Kain
President, B&P Manufacturing	Vice President
J. Regan O’Neill	Robert S. Klimczak
President and Co-Founder, Network Reporting Corporation	Vice President
President and Co-Founder, NetMed Transcription Services, LLC
	Karen L. McKenzie
Douglas J. Ouellette	Vice President
President & Chief Executive Officer, Firstbank (Mt. Pleasant)
Vice President, Firstbank Corporation	Teresa L. Rupert
	Vice President
E. Lynn Pohl
Partner, Boge, Wybenga & Bradely, PC	Tracey L. Sallee
	Vice President
Kenneth A. Rader
Owner, Ken Rader Farms	Dianne M. Stilson
	Vice President
Phillip R. Seybert
President, P.S. Equities, Inc.
Thomas R. Sullivan	SUBSIDIARY
President & Chief Executive Officer, Firstbank Corporation	Firstbank (Mt. Pleasant) Mortgage Company

OFFICE LOCATIONS
Mt. Pleasant	Cadillac	Howard City	Remus
102 S. Main St.	114 W. Pine St.	830 W. Shaw St.	201 W Whetland Ave.
(989) 773-2600	(231) 775-9000	(231) 937-4383	(989) 967-3602
4699 Pickard St.	8851 E. 34 Road	Lakeview	Shepherd
(989) 773-2335	(231) 779-8954	506 Lincoln Ave.	258 W. Wright Ave.
		(989) 352-7271	(989) 828-6625
2015 S. Mission St.	Clare
(989) 773-3959	806 N. McEwan Ave.	9531 N. Greenville Rd.
	(989) 386-7313	(989) 352-8180
1925 E. Remus Rd.
(989) 775-8528	Canadian Lakes
	10049 Buchanan Rd.
	Stanwood, MI

58

FIRSTBANK – WEST BRANCH

BOARD OF DIRECTORS	OFFICERS
Joseph M. Clark, Chairman	Daniel H. Grenier
Owner, Morse Clark Furniture	President & Chief Executive Officer
Bryon A. Bernard	Kim D. vonKronenberger
CEO, Bernard Building Center	Executive Vice President
Robert J. Carpenter, CPA	Danny J. Gallagher
Vice President, Robertson & Carpenter CPAs, P.C.	Senior Vice President
David W. Fultz	Frank J. Benjamin
Owner, Fultz Insurance Agency &	Vice President
Kirtland Insurance Agency
	Lorri A. Burzlaff
Daniel H. Grenier	Vice President
President & Chief Executive Officer, Firstbank – West Branch
Vice President, Firstbank Corporation	Pamela J. Crainer
	Vice President
Robert T. Griffin, Jr.
Owner and President, Griffin Beverage Company,	Eileen S. Fournier
Northern Beverage Co. and West Branch Tank & Trailer	Vice President
Christine R. Juarez	James L. Kloostra
Attorney, Juarez and Juarez, PLLC	Vice President
Norman J. Miller	Stevens P. Loomis
Owner, Miller Farms and Miller Dairy Equipment and Feed	Vice President
Thomas R. Sullivan	Mark D. Wait
President & Chief Executive Officer, Firstbank Corporation	Vice President
Mark D. Weber, MD	Marie A. Wilkins
Orthopedic Surgeon	Vice President
Kimberly Zygiel	Lorri A. Burzlaff
Accountant, Stephenson, Gracik & Company, PC
	Subsidiaries
	Firstbank – West Branch Mortgage Company

OFFICE LOCATIONS
West Branch	Fairview	Hale	Higgins Lake
502 W. Houghton Ave.	1979 Miller Rd.	3281 M-65	4522 W. Higgins Lake Dr.
(989) 345-7900	(989) 848-2243	(989) 728-7566	(989) 821-9231
601 W. Houghton Ave.	Rose City	St. Helen
(989) 345-7900	505 S. Bennett St.	1990 N. St. Helen Rd.
	(989) 685-3909	(989) 389-1311
2087 S. M-76
(989) 345-5050
2375 M-30
(989) 345-6210

59

KEYSTONE COMMUNITY BANK

BOARD OF DIRECTORS	OFFICERS
Kenneth V. Miller, Chairman	Thomas O. Schlueter
Partner, Havirco	President & Chief Executive Officer
Owner, Millennium Restaurant Group
	Thomas D. Lundquist
John M. Brink	Senior Vice President
Brink, Key & Chludzinski, P.C.
	Cynthia J. Carter
Michelle L. Eldridge	Vice President
Principal, LVM Capital Management, LTD.
	Sara S. Dana
Samuel T. Field	Vice President
Attorney, Field & Field, P.C
	Kimberly A. Labadie
Jeff A. Gardner	Vice President
Certified Property Manager &
Owner, Gardner Group	Cynthia L. Mount
	Vice President
John E. Hopkins
Retired, former President & Chief Executive Officer,	Derek T. Naylor
Kalamazoo Community Foundation	Vice President
Ronald A. Molitor	Ryan M. Turtle
President, Mol-Son, Inc.	Vice President
John M. Novak
Principal, Miller Canfield Attorneys & Counselors
Thomas O. Schlueter
President & Chief Executive Officer, Keystone Community Bank
Vice President, Firstbank Corporation
Thomas R. Sullivan
President & Chief Executive Officer, Firstbank Corporation
	SUBSIDIARY
	Keystone Mortgage Services, LLC

OFFICE LOCATIONS
Kalamazoo	Portage	Paw Paw
107 West Michigan Ave.	6405 South Westnedge Ave.	900 East Michigan Avenue
(269) 553-9100	(269) 321-9100	(269) 655-1000
235 North Drake Road	3910 West Centre Street
(269) 544-9100	(269) 323-9100
2925 Oakland Drive
(269) 488-9200
5073 Gull Road
(269)488-4800

60

FIRSTBANK – WEST MICHIGAN

BOARD OF DIRECTORS	OFFICERS
Janice K. DeYoung, Chairman	William L. Benear
Former Business Owner	President & Chief Executive Officer
William L. Benear	Clare R. Colwell
President & Chief Executive Officer, Firstbank – West Michigan	Executive Vice President
Vice President, Firstbank Corporation
	Kevin M. Meade
Thomas D. Dickinson, CPA	Senior Vice President
Biggs, Hausserman Thompson & Dickinson P.C.
	Brian Talbot
Jerome I. Gregory	Senior Vice President
Chief Executive Officer, Carr Real Estate, Inc.
	Debrann Hausserman
David M. Laux	Vice President
President, Industrial Engineering Services, Inc.
	William Kavanagh
Douglas J. Ouellette	Vice President
President & Chief Executive Officer, Firstbank (Mt. Pleasant)
Vice President, Firstbank Corporation	Daniel V. King
	Vice President
James E. Reagan, D.D.S.
Dentist, James E. Reagan, DDS	Blaine A. Kemme
	Vice President
Thomas R. Sullivan
President & Chief Executive Officer, Firstbank Corporation	Michele M. Krick
	Vice President
	Daniel P. Mitchell
	Vice President
	Subsidiary
	ICNB Mortgage Company

OFFICE LOCATIONS
Ionia	Belding	Lowell	Hastings
302 W. Main St.	9344 W. Belding Rd.	2601 W. Main St.	1500 W. M-43 Hwy.
(616) 527-0220	(616) 794-0890	(616) 897-6171	(269) 948-2905
202 N. Dexter St.
(616) 527-1550
2600 S. State Rd.
(616) 527-9250

61

BUSINESS OF THE COMPANY

Firstbank Corporation is a bank holding company.  As of December 31, 2012 our subsidiaries are Firstbank – Alma; Firstbank (Mt. Pleasant); Firstbank – West Branch; Keystone Community Bank; Firstbank – West Michigan; FBMI Risk Management Services, Inc.; and Austin Mortgage Company, LLC. As of December 31, 2012, Firstbank Corporation and its subsidiaries employed 438 people on a full-time equivalent basis.

We are in the business of banking. Each of our subsidiary banks is a full service community bank. The subsidiary banks offer all customary banking services, including the acceptance of checking, savings and time deposits and the making of commercial, agricultural, real estate, personal, home improvement, automobile and other installment and consumer loans. Trust services are offered to customers through Citizens Bank Wealth Management in the Firstbank – Alma main office.

The banks obtain most of their deposits and loans from residents and businesses in Barry, Bay, Clare, Gratiot, Kalamazoo, Ionia, Iosco, Isabella, Mecosta, Midland, Montcalm, Ogemaw, Oscoda, Roscommon, Saginaw, and parts of Clinton, Eaton, Kent, Wexford and Van Buren counties. Firstbank – Alma has its main office and one branch in Alma, Michigan, and branches located in each of the following areas: Ashley, Dewitt, Ithaca, Merrill, Pine River Township (near Alma), St. Charles, St. Johns (2 branches), St. Louis, and Vestaburg, Michigan. Firstbank (Mt. Pleasant) has its main office and one branch located in Mt. Pleasant, Michigan, two branches located in Union Township (near Mt. Pleasant), two branches in Lakeview, two branches in Cadillac, and one branch located in each of the following areas: Canadian Lakes, Clare, Howard City, Remus, and Shepherd, Michigan. Firstbank – West Branch has its main office in West Branch, Michigan, and one branch located in each of the following areas: Fairview, Hale, Higgins Lake, Rose City, St. Helen, and West Branch Township (near West Branch), Michigan. Keystone Community bank has its main office and three branches located in Kalamazoo, Michigan, two additional branches in Portage, Michigan, and one branch in Paw Paw, Michigan. Firstbank – West Michigan has its main office and two additional branches in Ionia, Michigan, and one branch each in Belding, Hastings, and Lowell, Michigan. The banks have no material foreign assets or income.  Subsequent to year end, we closed five smaller branch locations in Morley, Winn, Prescott, Sunfield and Woodland. The deposits and loans were consolidated the loans and deposits into other nearby locations on February 1.

Our principal sources of revenues are interest and fees on loans and non-interest revenue resulting from banking and non-bank subsidiary activity. On a consolidated basis, interest and fees on loans accounted for approximately 75% of total revenues in 2012, 79% in 2011, and 80% in 2010. Non-interest revenue accounted for approximately 17% of total revenue in 2012, 13% in 2011, and 14% in 2010. Interest on securities accounted for approximately 8% of total revenue in 2012, 8% in 2011, and 6% in 2010.

Annual Meeting

The annual meeting of shareholders will be held on Monday, April 22, 2013 at 4:30 p.m., Heritage Center, Alma College, Alma, Michigan.

Independent Auditors	General Counsel
Plante & Moran, PLLC	Varnum LLP
Grand Rapids, Michigan	Grand Rapids, Michigan

Stock Information

Firstbank Corporation common stock is traded on the NASDAQ National Market System under the symbol FBMI.  For research information and/or investment recommendations, contact:

Raymond James	- or -	FIG Partners, LLC
800-248-8863		800-677-9654

Transfer Agent Information

Registrar and Transfer Company is Firstbank Corporation’s Transfer Agent.  You may contact the Investor Relations Department at 800-368-5948.

62

EX-14

EXHIBIT 14

CODE OF ETHICS

FIRSTBANK CORPORATION

CODE OF ETHICS FOR CHIEF EXECUTIVE OFFICER AND

SENIOR FINANCIAL OFFICERS

In my role as the Chief Executive Officer or as a Senior Financial Officer of Firstbank Corporation (the "Company"), I certify to the Company and the Audit Committee of the Board of Directors of the Company, that I will adhere to and advocate the following principles and responsibilities governing my professional and ethical conduct to the best of my knowledge and ability:

1. I will act with honesty and integrity, avoiding actual or apparent conflicts of interest in all personal and professional relationships.

2. I will provide information that is accurate, complete, objective, relevant, timely and understandable.

3. I will comply with the rules and regulations of federal, state, and local governments and other appropriate private and public regulatory agencies.

4. I will act in good faith, responsibly, and with due care.  I will not misrepresent material facts or allow my independent judgment to be subordinated or otherwise compromised.

5. I will respect and maintain the confidentiality of information reviewed or acquired in carrying out my duties except when authorized or otherwise legally obligated to disclose.

6. I will share knowledge and maintain skills important and relevant to the needs of the Company.

7. I will proactively practice and promote ethical behavior as a professional in my role with the Company.

8. I will comply with and adhere to all of the Company's policies and practices, including those policies governing accounting and financial reporting practices and corporate governance.

9. I will promptly disclose to an appropriate person or persons any material transaction or relationship that reasonably could be expected to give rise to a conflict of interest and/or violations of this Code.

EX-21

EXHIBIT 21

FIRSTBANK CORPORATION SUBSIDIARIES

NAME	STATE OF INCORPORATION	OWNERSHIP
Firstbank – Alma (1)	Michigan	100%
Firstbank	Michigan	100%
Firstbank – West Branch (1)	Michigan	100%
Keystone Community Bank	Michigan	100%
1st Title, Inc.	Michigan	100% by Firstbank – West Branch
Firstbank – Alma Mortgage Company (2)	Michigan	100% by Firstbank - Alma
Firstbank (Mt. Pleasant) Mortgage Company (2)	Michigan	100% by Firstbank  (Mt. Pleasant)
Firstbank – West Branch Mortgage Company (2)	Michigan	100% by Firstbank – West Branch
Keystone Mortgage Services, LLC (3)	Michigan	100% by Keystone Community Bank
Keystone Premium Finance	Michigan	90% by Keystone Community Bank and 10% by Keystone Mortgage Services, LLC
Keystone T.I. Sub, LLC	Michigan	100% by Keystone Community Bank
KCB Title Insurance Agency, LLC	Michigan	50% by Keystone T.I. Sub, LLC
1st Investors Title, LLC	Michigan	46% owned by Firstbank – West Branch
FBMI Risk Management Services, Inc.	Nevada	100%
Firstbank – West Michigan (1)	Michigan	100%
ICNB Mortgage Company, LLP (2)	Michigan	100% by Firstbank – West Michigan
First Investment Center	Michigan	100% by Firstbank – West Michigan
Austin Mortgage Company, Inc	Michigan	100%

(1) Consolidated into Firstbank effective February 1, 2013.

(2) Consolidated into Firstbank effective February 28, 2013.

(3) Consolidated into Keystone Community Bank effective February 28, 2013.

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements of Firstbank Corporation on Form S-8 (File Nos. 333-97011, 333-60190, 333-95427, 333-53957) and Form S-3 (File Nos. 333-84286, 333-15131) of our reports dated March 11, 2013 with respect to the consolidated financial statements of Firstbank Corporation, which report is included in the 2012 Annual Report on Form 10-K of Firstbank Corporation.

/s/ Plante & Moran, PLLC

Plante & Moran, PLLC

Grand Rapids, Michigan

March 11, 2013

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Thomas R. Sullivan, certify that:

1. I have reviewed this Annual Report on Form 10-K of Firstbank Corporation.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 11, 2013

/s/ Thomas R. Sullivan

Thomas R. Sullivan

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Samuel G. Stone, certify that:

1. I have reviewed this Annual Report on Form 10-K of Firstbank Corporation.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 11, 2013

/s/Samuel G. Stone

Samuel G. Stone

Chief Financial Officer

EX-32.1

Exhibit 32.1

Each of Thomas R. Sullivan, Chief Executive Officer, and Samuel G. Stone, Chief Financial Officer, of Firstbank Corporation., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Annual Report on Form 10-K for the fiscal year ended December 31, 2012, which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

(2) the information contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2012, fairly presents, in all material respects, the financial condition and results of operations of  Firstbank Corporation.

Dated:   March 11, 2013

/s/ Thomas R. Sullivan

Thomas R. Sullivan

Chief Executive Officer

/s/Samuel G. Stone

Samuel G. Stone

Chief Financial Officer

EX-99.1

EXHIBIT 99.1

I, Thomas R. Sullivan, PEO, certify, based on my knowledge, and

I, Samuel G. Stone, PFO, certify, based on my knowledge, that:

(i) The compensation committee of Firstbank Corporation has discussed, reviewed, and evaluated with senior risk officers at least every six months during any part of the most recently completed fiscal year that was a TARP period, senior executive officer (SEO) compensation plans and employee compensation plans and the risks these plans pose to Firstbank Corporation;

(ii) The compensation committee of Firstbank Corporation has identified and limited during any part of the most recently completed fiscal year that was a TARP period any features of the SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of Firstbank Corporation and has identified any features of the employee compensation plans that pose risks to Firstbank Corporation and has limited those features to ensure that Firstbank Corporation is not unnecessarily exposed to risks;

(iii) The compensation committee has reviewed, at least every six months during any part of the most recently completed fiscal year that was a TARP period, the terms of each employee compensation plan and identified any features of the plan that could encourage the manipulation of reported earnings of Firstbank Corporation to enhance the compensation of an employee, and has limited any such features;

(iv) The compensation committee of Firstbank Corporation will certify to the reviews of the SEO compensation plans and employee compensation plans required under (i) and (iii) above;

(v) The compensation committee of Firstbank Corporation will provide a narrative description of how it limited during any part of the most recently completed fiscal year that was a TARP period the features in:

(A) SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of Firstbank Corporation;

(B) Employee compensation plans that unnecessarily expose Firstbank Corporation to risks; and

(C) Employee compensation plans that could encourage the manipulation of reported earnings of Firstbank Corporation to enhance the compensation of an employee;

(vi) Firstbank Corporation has required that bonus payments to SEOs or any of the next twenty most highly compensated employees, as defined in the regulations and guidance established under section 111 of EESA (bonus payments), be subject to a recovery or “clawback” provision during any part of the most recently completed fiscal year that was a TARP period if the bonus payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria;

(vii) Firstbank Corporation has prohibited any golden parachute payment, as defined in the regulations and guidance established under section 111 of EESA, to a SEO or any of the next five most highly compensated employees during any part of the most recently completed fiscal year that was a TARP period;

(viii) Firstbank Corporation has limited bonus payments to its applicable employees in accordance with section 111 of EESA and the regulations and guidance established thereunder during any part of the most recently completed fiscal year that was a TARP period;

(ix) Firstbank Corporation and its employees have complied with the excessive or luxury expenditures policy, as defined in the regulations and guidance established under section 111 of EESA, during any part of the most recently completed fiscal year that was a TARP period; and any expenses that, pursuant to the policy, required approval of the board of directors, a committee of the board of directors, an SEO, or an executive officer with a similar level of responsibility were properly approved;

(x) Firstbank Corporation will permit a non-binding shareholder resolution in compliance with any applicable Federal securities rules and regulations on the disclosures provided under the federal securities laws related to SEO compensation paid or accrued during any part of the most recently completed fiscal year that was a TARP period;

(xi) Firstbank Corporation will disclose the amount, nature, and justification for the offering, during any part of the most recently completed fiscal year that was a TARP period, of any perquisites, as defined in the regulations and guidance established under section 111 of EESA, whose total value exceeds $25,000 for any employee who is subject to the bonus payment limitations identified in paragraph (viii);

(xii) Firstbank Corporation will disclose whether Firstbank Corporation, the board of directors of Firstbank Corporation, or the compensation committee of Firstbank Corporation has engaged during any part of the most recently completed fiscal year that was a TARP period, a compensation consultant; and the services the compensation consultant or any affiliate of the compensation consultant provided during this period;

(xiii) Firstbank Corporation has prohibited the payment of any gross-ups, as defined in the regulations and guidance established under section 111 of EESA, to the SEOs and the next twenty most highly compensated employees during any part of the most recently completed fiscal year that was a TARP period;

(xiv) Firstbank Corporation has substantially complied with all other requirements related to employee compensation that are provided in the agreement between Firstbank Corporation and Treasury, including any amendments;

(xv) Firstbank Corporation has submitted to Treasury a complete and accurate list of the SEOs and the twenty next most highly compensated employees for the current fiscal year, with the non-SEOs ranked in descending order of level of annual compensation, and with the name, title, and employer of each SEO and most highly compensated employee identified; and

(xvi) I understand that a knowing and willful false or fraudulent statement made in connection with this certification may be punished by fine, imprisonment, or both. (See, for example 18 U.S.C. 1001.)

Dated:    March 11, 2013                                                                 

/s/ Thomas R. Sullivan

Thomas R. Sullivan

Principal Executive Officer

/s/Samuel G. Stone

Samuel G. Stone

Principal Financial Officer

EX-99.2

EXHIBIT 99.2

Firstbank Corporation 401(k) Plan

Performance Table*

	VALUE			VALUE			VALUE			VALUE			VALUE
	AS OF			AS OF			AS OF			AS OF			AS OF
FUND	12/31/2008			12/31/2009			12/31/2010			12/31/2011			12/31/2012
Vanguard Total Bond Market Index Fund	$	1,051.50		$	1,115.01		$	1,187.93		$	1,279.28		$	1,329.18
		5.15	%		6.04	%		6.54	%		7.69	%		3.90	%
Vanguard 500 Index Fund	$	630.30		$	798.02		$	918.13		$	937.22		$	1,086.90
		(36.97	)%		26.61	%		15.05	%		2.08	%		15.97	%
T. Rowe Price Personal Income Fund	$	796.20		$	998.99		$	1,115.67		$	1,125.60		$	1,266.64
		(20.38	)%		25.47	%		11.68	%		0.89	%		12.53	%
T. Rowe Price Retirement 2010	$	732.90		$	937.75		$	1,056.84		$	1,062.55		$	1,194.73
		(26.71	)%		27.95	%		12.70	%		0.54	%		12.44	%
T. Rowe Price Retirement 2015	$	697.80		$	916.56		$	1,042.95		$	1,039.62		$	1,183.19
		(30.22	)%		31.35	%		13.79	%		(0.32	)%		13.81	%
T. Rowe Price Retirement 2020	$	665.20		$	892.63		$	1,024.21		$	1,011.92		$	1,163.80
		(33.48	)%		34.19	%		14.74	%		(1.20	)%		15.01	%
T. Rowe Price Retirement 2030	$	622.10		$	855.82		$	992.84		$	966.03		$	1,128.52
		(37.79	)%		37.57	%		16.01	%		(2.70	)%		16.82	%
T. Rowe Price Retirement 2040	$	611.50		$	850.41		$	990.82		$	956.24		$	1,124.06
		(38.85	)%		39.07	%		16.51	%		(3.49	)%		17.55	%
T. Rowe Price Retirement Income	$	816.20		$	996.34		$	1,096.97		$	1,112.65		$	1,224.47
		(18.38	)%		22.07	%		10.10	%		1.43	%		10.05	%
Vanguard Mid Cap Index Fund	$	582.20		$	817.58		$	1,027.05		$	1,006.61		$	1,167.87
		(41.78	)%		40.43	%		25.62	%		(1.99	)%		16.02	%
Columbia Acorn Fund Class Z	$	614.50		$	858.15		$	1,081.27		$	1,031.42		$	1,216.36
		(38.55	)%		39.65	%		26.00	%		(4.61	)%		17.93	%
Vanguard Small Cap Index Fund	$	640.00		$	872.58		$	1,115.59		$	1,085.69		$	1,283.83
		(36.00	)%		36.34	%		27.85	%		(2.68	)%		18.25	%
Columbia Small Cap Value Fund				$	1,247.40		$	1,572.47		$	1,478.12		$	1,646.33
(since inception)					24.74	%		26.06	%		(6.00	)%		11.38	%
Vanguard Total International Stock Index Fund							$	1,367.00		$	1,168.51		$	1,381.30
(since inception)								36.70	%		(14.52	)%		18.21	%
T Rowe Price Retirement 2045				$	1,391.00		$	1,619.68		$	1,563.48		$	1,838.96
(since inception)					39.10	%		16.44	%		(3.47	)%		17.62	%
T Rowe Price Retirement 2050				$	1,389.00		$	1,616.93		$	1,562.61		$	1,836.84
(since inception)					38.90	%		16.41	%		(3.36	)%		17.55	%

EXHIBIT 99.2

Firstbank Corporation 401(k) Plan

Performance Table*

(continued)

	VALUE			VALUE			VALUE			VALUE			VALUE
	AS OF			AS OF			AS OF			AS OF			AS OF
FUND	12/31/2008			12/31/2009			12/31/2010			12/31/2011			12/31/2012
Vanguard Short Term Treasury				$	1,014.40		$	1,041.18		$	1,064.71		$	1,071.63
(since inception)					1.44	%		2.64	%		2.26	%		0.65	%
Fidelity Advisor New Insights Fund							$	1,163.40		$	1,154.91		$	1,340.96
(since inception)								16.34	%		(0.73	)%		16.11	%
T. Rowe Price Mid Cap Growth Fund							$	1,280.60		$	1,265.10		$	1,441.08
(since inception)								28.06	%		(1.21	)%		13.91	%
Goldman Sachs Mid Cap Value Fund							$	1,248.50		$	1,170.34		$	1,387.33
(since inception)								24.85	%		(6.26	)%		18.54	%
Vanguard Short Term Investment Grade Fund							$	1,052.10		$	1,072.41		$	1,120.88
(since inception)								5.21	%		1.93	%		4.52	%
Vanguard Intermediate Term Treasury Fund							$	1,073.50		$	1,178.70		$	1,208.88
(since inception)								7.35	%		9.80	%		2.56	%
Blackrock Equity Dividend Fund													$	1,121.80
(since inception)														12.18	%
Manning & Napier World Opportunities Fund													$	1,188.10
(since inception)														18.81	%
Mathews Pacific Tiger Fund													$	1,210.00
(since inception)														21.00	%
Delaware Emerging Markets Fund													$	1,167.20
(since inception)														16.72	%
Northern Institutional Treasury Portfolio Fund													$	1,000.20
(since inception)														0.02	%
Firstbank Stock Fund	$	633.10		$	703.56		$	496.36		$	437.59		$	939.78
		(36.69	)%		11.13	%		(29.45	)%		(11.84	)%		114.76	%

*All assume an initial investment on 1/01/2008, or inception date of the fund, of $1,000.00.

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Note 5 - Loan Servicing (Tables)

12 Months Ended

Dec. 31, 2012

Disclosure of Long Lived Assets Held-for-sale [Table Text Block]

(In Thousands of Dollars)
	2012		2011
Loans held for sale	$	2,921	$	349
Less: Allowance to adjust to lower of cost or market		0		0
Loans held for sale, net	$	2,921	$	349

Mortgage Loans Serviced For Others [Table Text Block]

(In Thousands of Dollars)
	2012		2011
Mortgage loan portfolios serviced for:
Freddie Mac	$	605,000	$	601,710
Fannie Mae	$	1,140	$	1,446
Federal Home Loan Bank	$	2,094	$	2,757

Schedule of Compliance with Regulatory Capital Requirements for Mortgage Companies [Table Text Block]

(In Thousands of Dollars)
	2012			2011			2010
Servicing rights:
Beginning of year	$	4,596		$	4,603		$	3,705
Additions		2,512			1,505			2,428
Amortized to expense		(2,115	)		(1,512	)		(1,530	)
End of year	$	4,993		$	4,596		$	4,603

Mortgage Servicing Rights [Member]

Schedule of Expected Amortization Expense [Table Text Block]

(In Thousands of Dollars)
2013	$	1,152
2014	$	949
2015	$	797
2016	$	660
2017	$	530
Thereafter	$	905

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Note 24 - Basic And Diluted Earnings Per Share (Detail)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	219,223	975,845	1,033,692

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Note 26 - Other Comprehensive Income (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Comprehensive Income (Loss) [Table Text Block]

(In Thousands of Dollars)	2012			2011			2010
Change in unrealized holding gains and losses on available for sale securities	$	1,034		$	4,204		$	(689	)
Reclassification adjustments for gains and losses later recognized in income		44			(37	)		4
Net unrealized gains and (losses)		1,078			4,167			(685	)
Tax effect		(366	)		(1,417	)		233
Other comprehensive income (loss)	$	712		$	2,750		$	(452	)

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Note 17 - Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Related Party Transactions [Table Text Block]

(In Thousands of Dollars)	2012			2011
Beginning balance	$	40,477		$	48,510
New loans		39,074			46,283
Repayments		(43,885	)		(47,972	)
Deletion of Directors		(896	)		(6,344	)
Ending balance	$	34,770		$	40,477

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Note 6 - Loans (Detail) - Allowance for Credit Losses and Recorded Investment in Financing Receivables (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Beginning balance	$ 21,019	$ 21,431	$ 19,114
Provision for loan losses	7,690	13,337	13,344
Loans charged off	(8,432)	(14,922)	(11,963)
Recoveries	1,063	1,173	936
Ending balance	21,340	21,019	21,431
Ending balance: individually evaluated for impairment	3,486	31,319	5,500
Ending balance: collectively evaluated for impairment	17,854	952,590	15,931
Ending balance	963,762	983,909	1,031,620
Ending balance: individually evaluated for impairment	24,244	3,875	26,362
Ending balance: collectively evaluated for impairment	939,518	17,144	1,005,258
Commercial and Industrial [Member]
Beginning balance	2,485	3,024	3,640
Provision for loan losses	(104)	1,836	812
Loans charged off	(560)	(2,546)	(1,707)
Recoveries	75	171	279
Ending balance	1,896	2,485	3,024
Ending balance: individually evaluated for impairment	515	5,331	812
Ending balance: collectively evaluated for impairment	1,381	153,162	2,212
Ending balance	150,208	158,493	164,332
Ending balance: individually evaluated for impairment	3,677	253	1,972
Ending balance: collectively evaluated for impairment	146,531	2,232	162,360
Commercial Real Estate Portfolio Segment [Member]
Beginning balance	11,534	12,375	10,473
Provision for loan losses	4,033	6,611	8,222
Loans charged off	(4,440)	(7,973)	(6,366)
Recoveries	438	521	46
Ending balance	11,565	11,534	12,375
Ending balance: individually evaluated for impairment	2,971	25,988	4,688
Ending balance: collectively evaluated for impairment	8,594	456,732	7,687
Ending balance	472,618	482,720	509,285
Ending balance: individually evaluated for impairment	20,567	3,622	24,390
Ending balance: collectively evaluated for impairment	452,051	7,912	484,895
First Lien Residential Mortgage Loans [Member]
Beginning balance	5,393	3,960	2,502
Provision for loan losses	2,225	4,468	3,844
Loans charged off	(2,220)	(3,215)	(2,602)
Recoveries	258	180	216
Ending balance	5,656	5,393	3,960
Ending balance: individually evaluated for impairment	0	0	0
Ending balance: collectively evaluated for impairment	5,656	211,397	3,960
Ending balance	214,379	211,397	203,765
Ending balance: individually evaluated for impairment	0	0	0
Ending balance: collectively evaluated for impairment	214,379	5,393	203,765
Junior Lein Residential Mortgage Loans [Member]
Beginning balance	505	774	967
Provision for loan losses	535	6	(7)
Loans charged off	(485)	(275)	(186)
Recoveries	0	0	0
Ending balance	555	505	774
Ending balance: individually evaluated for impairment	0	0	0
Ending balance: collectively evaluated for impairment	555	66,775	774
Ending balance	58,748	66,775	76,293
Ending balance: individually evaluated for impairment	0	0	0
Ending balance: collectively evaluated for impairment	58,748	505	76,293
Consumer Portfolio Segment [Member]
Beginning balance	931	1,162	1,525
Provision for loan losses	309	381	344
Loans charged off	(727)	(913)	(1,102)
Recoveries	292	301	395
Ending balance	805	931	1,162
Ending balance: individually evaluated for impairment	0	0	0
Ending balance: collectively evaluated for impairment	805	64,524	1,162
Ending balance	67,809	64,524	77,945
Ending balance: individually evaluated for impairment	0	0	0
Ending balance: collectively evaluated for impairment	67,809	931	77,945
Unallocated Financing Receivables [Member]
Beginning balance	171	136	7
Provision for loan losses	692	35	129
Loans charged off	0	0	0
Recoveries	0	0	0
Ending balance	863	171	136
Ending balance: individually evaluated for impairment	0	0	0
Ending balance: collectively evaluated for impairment	863	0	136
Ending balance	0	0	0
Ending balance: individually evaluated for impairment	0	0	0
Ending balance: collectively evaluated for impairment	$ 0	$ 171	$ 0

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Note 27 - Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Quarterly Financial Information [Table Text Block]

(In Thousands of Dollars, Except per Share Data)			2012
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Year
Interest income	$	16,126	$	16,020	$	15,574	$	15,146	$	62,866
Net interest income		13,766		13,838		13,542		13,346		54,492
Income before federal income taxes		3,440		3,342		3,765		4,243		14,790
Net income		2,417		2,404		2,715		2,998		10,534
Preferred stock dividends		420		420		220		215		1,275
Net income available to common shareholders		1,997		1,984		2,495		2,783		9,259
Basic earnings per common share	$	0.25	$	0.25	$	0.32	$	0.35	$	1.17
Diluted earnings per common share	$	0.25	$	0.25	$	0.31	$	0.35	$	1.16

			2011
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Year
Interest income	$	16,989	$	17,215	$	16,924	$	16,516	$	67,644
Net interest income		13,292		13,741		13,781		13,858		54,672
Income before federal income taxes		1,564		686		2,170		3,037		7,457
Net income		1,215		628		1,630		2,150		5,623
Preferred stock dividends		420		420		420		419		1,679
Net income available to common shareholders		795		208		1,210		1,731		3,944
Basic earnings per common share	$	0.10	$	0.03	$	0.15	$	0.22	$	0.50
Diluted earnings per common share	$	0.10	$	0.03	$	0.15	$	0.22	$	0.50

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Note 8 - Goodwill and Intangible Assets (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Equity, Fair Value Disclosure	$ 140,000,000
Members' Equity	127,600,000
Amortization of Intangible Assets	$ 483,000	$ 698,000	$ 796,000

XML

Note 20 - Dividend Limitation of Subsidiaries (Detail) (USD $)	Dec. 31, 2012
Amount Available for Dividend Distribution without Prior Approval from Regulatory Agency	$ 23,118,000

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Note 12 - Federal Home Loan Bank Advances (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Federal Home Loan Bank, Advances, by Branch of FHLB Bank [Table Text Block]

(In Thousands of Dollars)
	2012		2011
Borrowings with a fixed rates at year end	$	22,493	$	19,457
Borrowings with a variable rate of interest at year end	$	0	$	0

Schedule of Investments in and Advances to Affiliates, Schedule of Investments [Table Text Block]

(In Thousands of Dollars)
2013	$	2,500
2014		4,000
2015		6,777
2016		3,094
2017		3,087
2018 and thereafter		3,035
Total	$	22,493

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Note 26 - Other Comprehensive Income

12 Months Ended

Dec. 31, 2012

Comprehensive Income (Loss) Note [Text Block]

NOTE 26 – OTHER COMPREHENSIVE INCOME

Other comprehensive income components and related taxes were as follows:

(In Thousands of Dollars)	2012			2011			2010
Change in unrealized holding gains and losses on available for sale securities	$	1,034		$	4,204		$	(689	)
Reclassification adjustments for gains and losses later recognized in income		44			(37	)		4
Net unrealized gains and (losses)		1,078			4,167			(685	)
Tax effect		(366	)		(1,417	)		233
Other comprehensive income (loss)	$	712		$	2,750		$	(452	)

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Note 8 - Goodwill and Intangible Assets (Detail) - Carrying Amount of Goodwill During the Year (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Balance at January 1	$ 35,513	$ 35,513
Goodwill from acquisitions/(divestitures)	0	0
Balance at December 31	$ 35,513	$ 35,513

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Note 27 - Quarterly Financial Data (Unaudited) (Detail) - Quarterly Financial Data (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Interest income	$ 62,866	$ 67,644	$ 72,382
Net interest income	54,492	54,672	51,492
Income before federal income taxes	14,790	7,457	5,275
Net income	10,534	5,623	3,763
Preferred stock dividends	1,275	1,679	1,679
Net income available to common shareholders	9,259	3,944	2,084
Basic earnings per common share (in Dollars per share)	$ 1.17	$ 0.50	$ 0.27
Diluted earnings per common share (in Dollars per share)	$ 1.16	$ 0.50	$ 0.27
First Quarter [Member]
Interest income	16,126	16,989
Net interest income	13,766	13,292
Income before federal income taxes	3,440	1,564
Net income	2,417	1,215
Preferred stock dividends	420	420
Net income available to common shareholders	1,997	795
Basic earnings per common share (in Dollars per share)	$ 0.25	$ 0.10
Diluted earnings per common share (in Dollars per share)	$ 0.25	$ 0.10
Second Quarter [Member]
Interest income	16,020	17,215
Net interest income	13,838	13,741
Income before federal income taxes	3,342	686
Net income	2,404	628
Preferred stock dividends	420	420
Net income available to common shareholders	1,984	208
Basic earnings per common share (in Dollars per share)	$ 0.25	$ 0.03
Diluted earnings per common share (in Dollars per share)	$ 0.25	$ 0.03
Third Quarter [Member]
Interest income	15,574	16,924
Net interest income	13,542	13,781
Income before federal income taxes	3,765	2,170
Net income	2,715	1,630
Preferred stock dividends	220	420
Net income available to common shareholders	2,495	1,210
Basic earnings per common share (in Dollars per share)	$ 0.32	$ 0.15
Diluted earnings per common share (in Dollars per share)	$ 0.31	$ 0.15
Fourth Quarter [Member]
Interest income	15,146	16,516
Net interest income	13,346	13,858
Income before federal income taxes	4,243	3,037
Net income	2,998	2,150
Preferred stock dividends	215	419
Net income available to common shareholders	$ 2,783	$ 1,731
Basic earnings per common share (in Dollars per share)	$ 0.35	$ 0.22
Diluted earnings per common share (in Dollars per share)	$ 0.35	$ 0.22

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Note 6 - Loans (Detail) - Average Recorded Investment and Income Recognized on Impaired Loans (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Period end loans with no allocated allowance for loan losses
Period End Loans With No Allocated Allowance Average Recorded Investment	$ 24,025	$ 24,391	$ 21,769
Period End Loans With No Allocated Allowance Interest Income Recognized	1,452	789	417
Period end loans with allocated allowance for loan losses
Period End Loans With Allocated Allowance Average Recorded Investment	11,441	9,725	9,162
Period End Loans With Allocated Allowance Interest Income Recognized	76	28	125
Total
Average Recorded Investment	35,466	34,116	30,931
Interest Income Recognized	1,528	817	542
Commercial and Industrial [Member]
Period end loans with no allocated allowance for loan losses
Period End Loans With No Allocated Allowance Average Recorded Investment	2,862	2,073	1,121
Period End Loans With No Allocated Allowance Interest Income Recognized	160	116	0
Period end loans with allocated allowance for loan losses
Period End Loans With Allocated Allowance Average Recorded Investment	880	722	438
Period End Loans With Allocated Allowance Interest Income Recognized	24	0	0
Total
Average Recorded Investment	3,742	2,795	1,559
Interest Income Recognized	184	116	0
Commercial Real Estate Loans [Member]
Period end loans with no allocated allowance for loan losses
Period End Loans With No Allocated Allowance Average Recorded Investment	10,213	12,444	12,432
Period End Loans With No Allocated Allowance Interest Income Recognized	846	452	158
Period end loans with allocated allowance for loan losses
Period End Loans With Allocated Allowance Average Recorded Investment	10,561	9,003	8,724
Period End Loans With Allocated Allowance Interest Income Recognized	52	28	125
Total
Average Recorded Investment	20,774	21,447	21,156
Interest Income Recognized	898	480	283
First Lien Residential Mortgage Loans [Member]
Period end loans with no allocated allowance for loan losses
Period End Loans With No Allocated Allowance Average Recorded Investment	9,998	9,223	7,721
Period End Loans With No Allocated Allowance Interest Income Recognized	416	219	253
Period end loans with allocated allowance for loan losses
Period End Loans With Allocated Allowance Average Recorded Investment	0	0	0
Period End Loans With Allocated Allowance Interest Income Recognized	0	0	0
Total
Average Recorded Investment	9,998	9,223	7,721
Interest Income Recognized	416	219	253
Junior Lein Residential Mortgage Loans [Member]
Period end loans with no allocated allowance for loan losses
Period End Loans With No Allocated Allowance Average Recorded Investment	502	459	295
Period End Loans With No Allocated Allowance Interest Income Recognized	13	2	1
Period end loans with allocated allowance for loan losses
Period End Loans With Allocated Allowance Average Recorded Investment	0	0	0
Period End Loans With Allocated Allowance Interest Income Recognized	0	0	0
Total
Average Recorded Investment	502	459	295
Interest Income Recognized	13	2	1
Consumer Loans [Member]
Period end loans with no allocated allowance for loan losses
Period End Loans With No Allocated Allowance Average Recorded Investment	450	192	200
Period End Loans With No Allocated Allowance Interest Income Recognized	17	0	5
Period end loans with allocated allowance for loan losses
Period End Loans With Allocated Allowance Average Recorded Investment	0	0	0
Period End Loans With Allocated Allowance Interest Income Recognized	0	0	0
Total
Average Recorded Investment	450	191	200
Interest Income Recognized	$ 17	$ 0	$ 5

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Note 12 - Federal Home Loan Bank Advances (Detail) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate, Range from	0.41%	1.28%
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate, Range to	7.30%	7.30%
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Weighted Average Interest Rate	2.39%	3.41%
Advances from Federal Home Loan Banks (in Dollars)	$ 22,493,000	$ 19,457,000
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged (in Dollars)	177,700,000	183,700,000
Converted Fixed to Variable [Member]
Advances from Federal Home Loan Banks (in Dollars)	3,500,000
Federal Home Loan Bank Stock [Member]
Debt Instrument, Unused Borrowing Capacity, Amount (in Dollars)	$ 84,400,000

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Note 1 - Significant Accounting Policies (Detail) - Activity Associated With Other Real Estate Owned (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Balance at beginning of year	$ 5,251	$ 8,316
Properties transferred into OREO	4,214	5,948
Valuation impairments recorded	(1,151)	(2,258)
Proceeds from sale of properties	(5,873)	(6,850)	(6,645)
Gain on sale of properties	484	95
Balance at end of year	$ 2,925	$ 5,251	$ 8,316

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Note 23 - Fair Value (Detail) - Assets Measured at Fair Value on a Recurring Basis (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Securities Available For Sale	$ 353,678	$ 342,184
Trading equity securities	6	2
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities Available For Sale	0	0
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities Available For Sale	106,885	133,834
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities Available For Sale	0	0
US Government Agencies Debt Securities [Member]
Securities Available For Sale	106,885	133,834
Mortgage-backed Securities, Issued by Private Enterprises [Member] | Fair Value, Inputs, Level 1 [Member]
Securities Available For Sale	0	0
Mortgage-backed Securities, Issued by Private Enterprises [Member] | Fair Value, Inputs, Level 2 [Member]
Securities Available For Sale	66,277	71,052
Mortgage-backed Securities, Issued by Private Enterprises [Member] | Fair Value, Inputs, Level 3 [Member]
Securities Available For Sale	0	0
Mortgage-backed Securities, Issued by Private Enterprises [Member]
Securities Available For Sale	66,277	71,052
US Government Agency CMO [Member] | Fair Value, Inputs, Level 1 [Member]
Securities Available For Sale	0	0
US Government Agency CMO [Member] | Fair Value, Inputs, Level 2 [Member]
Securities Available For Sale	61,030	57,845
US Government Agency CMO [Member] | Fair Value, Inputs, Level 3 [Member]
Securities Available For Sale	0	0
US Government Agency CMO [Member]
Securities Available For Sale	61,030	57,845
Municipal Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities Available For Sale	0	0
Municipal Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities Available For Sale	97,525	62,447
Municipal Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities Available For Sale	20,289	15,342
Municipal Securities [Member]
Securities Available For Sale	117,814	77,789
Equity Securities, Other [Member] | Fair Value, Inputs, Level 1 [Member]
Securities Available For Sale	91	92
Equity Securities, Other [Member] | Fair Value, Inputs, Level 2 [Member]
Securities Available For Sale	0	0
Equity Securities, Other [Member] | Fair Value, Inputs, Level 3 [Member]
Securities Available For Sale	1,581	1,572
Equity Securities, Other [Member]
Securities Available For Sale	1,672	1,664
Fair Value, Inputs, Level 1 [Member]
Securities Available For Sale	91	92
Trading equity securities	6	2
Fair Value, Inputs, Level 2 [Member]
Securities Available For Sale	331,717	325,179
Trading equity securities	0	0
Fair Value, Inputs, Level 3 [Member]
Securities Available For Sale	21,870	16,914
Trading equity securities	$ 0	$ 0

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Note 7 - Premises and Equipment (Detail) - Year End Premises and Equipment (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Land	$ 6,186	$ 6,186
Buildings	32,891	33,082
Furniture, fixtures and equipment	17,431	17,951
Total	56,508	57,219
Less:
Accumulated depreciation	(32,152)	(32,132)
Total	$ 24,356	$ 25,087

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Note 10 - Deposits (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Time Deposits, $100,000 or More	$ 167	$ 196
Interest-bearing Domestic Deposit, Brokered	$ 17.6	$ 16.1

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Note 8 - Goodwill and Intangible Assets (Detail) - Estimated Amortization Expense for the Next Five Years (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
2013	$ 370
2014	278
2015	185
2016	99
2017	$ 33

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Note 10 - Deposits (Detail) - Scheduled Maturities of Time Deposits (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
2013	$ 239,810
2014	69,766
2015	31,135
2016	22,614
2017	13,041
2018 and thereafter	5
Total	$ 376,371

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Note 7 - Premises and Equipment (Detail) - Rental Commitments for the Next Five Years Under Non-Cancelable Operating Leases (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
2013	$ 332
2014	118
2015	99
2016	99
2017	102
Total	750
Building [Member]
2013	325
2014	115
2015	97
2016	99
2017	102
Total	738
Equipment [Member]
2013	7
2014	3
2015	2
2016	0
2017	0
Total	$ 12

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Note 6 - Loans (Detail) - Age Analysis of Past Due Loans Excluding Nonaccrual Loans (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
30-59 Days Past Due	$ 2,490	$ 7,734
60-89 Days Past Due	3,125	2,945
90 Days or More Past Due	37	419
Total Past Due	5,652	11,098
Nonaccrual Loans	15,668	22,969
Current	942,442	949,842
Total Financing Receivables	963,762	983,909
Recorded Investment > 90 days and accruing	37	419
Commercial and Industrial [Member]
30-59 Days Past Due	206	1,039
60-89 Days Past Due	140	94
90 Days or More Past Due	0	0
Total Past Due	346	1,133
Nonaccrual Loans	447	1,771
Current	149,415	155,589
Total Financing Receivables	150,208	158,493
Recorded Investment > 90 days and accruing	0	0
Commercial Real Estate Loans [Member]
30-59 Days Past Due	604	4,313
60-89 Days Past Due	1,881	500
90 Days or More Past Due	0	0
Total Past Due	2,485	4,813
Nonaccrual Loans	8,454	15,336
Current	461,679	462,571
Total Financing Receivables	472,618	482,720
Recorded Investment > 90 days and accruing	0	0
First Lien Residential Mortgage Loans [Member]
30-59 Days Past Due	772	973
60-89 Days Past Due	969	1,875
90 Days or More Past Due	37	328
Total Past Due	1,778	3,176
Nonaccrual Loans	6,038	5,374
Current	206,563	202,569
Total Financing Receivables	214,379	211,119
Recorded Investment > 90 days and accruing	37	328
Junior Lein Residential Mortgage Loans [Member]
30-59 Days Past Due	473	561
60-89 Days Past Due	96	255
90 Days or More Past Due	0	73
Total Past Due	569	889
Nonaccrual Loans	328	278
Current	57,851	65,886
Total Financing Receivables	58,748	67,053
Recorded Investment > 90 days and accruing	0	73
Consumer Loans [Member]
30-59 Days Past Due	435	848
60-89 Days Past Due	39	221
90 Days or More Past Due	0	18
Total Past Due	474	1,087
Nonaccrual Loans	401	210
Current	66,934	63,227
Total Financing Receivables	67,809	64,524
Recorded Investment > 90 days and accruing	$ 0	$ 18

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Note 18 - Financial Instruments With Off-Balance Sheet Risk

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Text Block]

NOTE 18 – FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

Some financial instruments, such as loan commitments, credit lines, letters of credit and overdraft protection are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met and usually have expiration dates. Commitments may expire without being used. Off-balance sheet risk to credit loss exists up to the face amount of these instruments although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.

Financial instruments with off-balance sheet risk were as follows at year end:

(In Thousands of Dollars)	2012				2011
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to make loans (at market rates)	$	82,395	$	10,137	$	44,091	$	11,254
Unused lines of credit and letters of credit	$	25,923	$	126,490	$	22,205	$	118,443
Standby letters of credit	$	5,201	$	15,225	$	4,776	$	15,110

Commitments to make loans are generally made for periods of 60 days or less. Fixed rate loan commitments have interest rates ranging from 3.38% to 7.00% and maturities ranging from 1 year to 10 years.

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Note 22 - Capital Adequacy (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

(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
2012
Total Capital to Risk Weighted Assets
Consolidated	$	155,135		15.99	%	$	77,618		8.00	%	$	97,023		10.00	%
Firstbank – Alma		33,195		15.81	%		16,797		8.00	%		20,997		10.00	%
Firstbank – Mt. Pleasant		37,816		12.74	%		23,748		8.00	%		29,685		10.00	%
Firstbank – West Branch		23,021		14.01	%		13,144		8.00	%		16,430		10.00	%
Keystone Community Bank		28,641		15.78	%		14,521		8.00	%		18,151		10.00	%
Firstbank – West Michigan		15,226		12.83	%		9,493		8.00	%		11,866		10.00	%
Tier 1 (Core) Capital to Risk Weighted Assets
Consolidated	$	142,884		14.73	%	$	38,809		4.00	%	$	58,214		6.00	%
Firstbank – Alma		30,541		14.55	%		8,399		4.00	%		12,598		6.00	%
Firstbank – Mt. Pleasant		34,097		11.49	%		11,874		4.00	%		17,811		6.00	%
Firstbank – West Branch		20,945		12.75	%		6,572		4.00	%		9,858		6.00	%
Keystone Community Bank		26,333		14.51	%		7,260		4.00	%		10,891		6.00	%
Firstbank – West Michigan		13,729		11.57	%		4,746		4.00	%		7,119		6.00	%
Tier 1 (Core) Capital to Average Assets
Consolidated	$	142,884		9.71	%	$	58,854		4.00	%	$	73,568		5.00	%
Firstbank – Alma		30,541		8.15	%		14,998		4.00	%		18,748		5.00	%
Firstbank – Mt. Pleasant		34,097		8.12	%		16,765		4.00	%		20,994		5.00	%
Firstbank – West Branch		20,945		8.55	%		9,803		4.00	%		12,253		5.00	%
Keystone Community Bank		26,333		11.61	%		9,072		4.00	%		11,340		5.00	%
Firstbank – West Michigan		13,729		7.29	%		7,538		4.00	%		9,422		5.00	%

	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	%

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Note 8 - Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Goodwill [Table Text Block]

(In Thousands of Dollars)
	2012		2011
Balance at January 1	$	35,513	$	35,513
Goodwill from acquisitions/(divestitures)		0		0
Balance at December 31	$	35,513	$	35,513

Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]

(In Thousands of Dollars)	2012			2011			2010
Core deposit intangibles resulting from bank and branch acquisitions:
Gross Amount	$	7,930		$	7,930		$	7,930
Accumulated Amortization		(6,965	)		(6,482	)		(5,785	)
Net Carrying Value	$	965		$	1,448		$	2,145

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Year	Amount
2013	$	370
2014		278
2015		185
2016		99
2017		33

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Note 7 - Premises and Equipment (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Depreciation	$ 1,915,000	$ 2,062,000	$ 2,278,000
Building [Member]
Operating Leases, Rent Expense	359,000	377,000	403,000
Equipment [Member]
Operating Leases, Rent Expense	$ 249,000	$ 250,000	$ 252,000

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Note 16 - Stock Based Compensation (Detail) - Activity Under the Plans (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2006	Dec. 31, 1997	Dec. 31, 1993
Beginning of period	396,898	454,745
Beginning of period (in Dollars per share)	$ 16.58	$ 16.55
Granted	0	0	315,000	593,798	395,986
Exercised	0	0
Forfeited	(6,279)	(25,273)
Forfeited (in Dollars per share)	$ 19.00	$ 19.45
Expired	(34,589)	(32,574)
Expired (in Dollars per share)	$ 19.20	$ 13.51
End of period	356,030	396,898
End of period (in Dollars per share)	$ 16.29	$ 16.58
End of period	4 years 6 months	5 years 36 days
End of period (in Dollars)	$ 479	$ 0
Options exercisable, end of period	303,270	305,468
Options exercisable, end of period (in Dollars per share)	$ 17.95	$ 19.18
Options exercisable, end of period	4 years	4 years 109 days
Options exercisable, end of period (in Dollars)	$ 269	$ 0

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Note 1 - Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2012

Other Real Estate, Roll Forward [Table Text Block]

(In Thousands of Dollars)	2012			2011
Balance at beginning of year	$	5,251		$	8,316
Properties transferred into OREO		4,214			5,948
Valuation impairments recorded		(1,151	)		(2,258	)
Proceeds from sale of properties		(5,873	)		(6,850	)
Gain on sale of properties		484			95
Balance at end of year	$	2,925		$	5,251

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Note 24 - Basic And Diluted Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

(In Thousands, Except per Share Data)	Year Ended December 31
	2012		2011		2010
Basic earnings per common share
Net income available to common shareholders	$	9,259	$	3,944	$	2,084
Weighted average common shares outstanding		7,933		7,843		7,766
Basic earnings per common share	$	1.17	$	0.50	$	0.27
Diluted Earnings per Share
Net income available to common shareholders	$	9,259	$	3,944	$	2,084
Weighted average common shares outstanding		7,933		7,843		7,766
Add dilutive effects of assumed exercises of options		24		2		2
Weighted average common and dilutive potential
Common shares outstanding		7,957		7,845		7,768
Diluted earnings per common share	$	1.16	$	0.50	$	0.27

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Note 5 - Loan Servicing (Detail) - Activity For Capitalized Mortgage Servicing Rights (Mortgage Servicing Rights [Member], USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Mortgage Servicing Rights [Member]
Servicing rights:
Beginning of year	$ 4,596,000	$ 4,603,000	$ 3,705,000
Additions	2,512,000	1,505,000	2,428,000
Amortized to expense	(2,115,000)	(1,512,000)	(1,530,000)
End of year	$ 4,993,000	$ 4,596,000	$ 4,603,000

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Note 23 - Fair Value (Detail) - Assets Measured at Fair Value on a Nonrecurring Basis (USD $) In Thousands, unless otherwise specified	12 Months Ended				24 Months Ended	12 Months Ended	24 Months Ended	12 Months Ended	24 Months Ended	12 Months Ended	24 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2011 Fair Value, Measurements, Nonrecurring [Member] Estimate of Fair Value, Fair Value Disclosure [Member]	Dec. 31, 2012 Fair Value, Measurements, Nonrecurring [Member] Estimate of Fair Value, Fair Value Disclosure [Member]	Dec. 31, 2011 Fair Value, Measurements, Nonrecurring [Member] Fair Value, Inputs, Level 1 [Member]	Dec. 31, 2012 Fair Value, Measurements, Nonrecurring [Member] Fair Value, Inputs, Level 1 [Member]	Dec. 31, 2011 Fair Value, Measurements, Nonrecurring [Member] Fair Value, Inputs, Level 2 [Member]	Dec. 31, 2012 Fair Value, Measurements, Nonrecurring [Member] Fair Value, Inputs, Level 2 [Member]	Dec. 31, 2011 Fair Value, Measurements, Nonrecurring [Member] Fair Value, Inputs, Level 3 [Member]	Dec. 31, 2012 Fair Value, Measurements, Nonrecurring [Member] Fair Value, Inputs, Level 3 [Member]
2012
Impaired loans	$ 35,466	$ 34,116	$ 30,931	$ 41,889	$ 36,388	$ 0	$ 0	$ 0	$ 0	$ 41,889	$ 36,388
Other Real Estate Owned	2,925	5,251	8,316	2,223	1,296	0	0	0	0	2,223	1,296
Other repossessed assets					$ 250		$ 0		$ 0		$ 250

XML

Note 4 - Securities (Detail) - Securities with Unrealized Losses not Recognized in Income (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Available for Sale Securities with Unrealized Losses, Less than 12 Months, Fair Value	$ 47,271	$ 3,738
Available for Sale Securities with Unrealized Losses, Less than 12 Months, Unrealized Losses	(163)	(2)
Available for Sale Securities with Unrealized Losses, 12 Months or More, Fair Value	1,816	44,904
Available for Sale Securities with Unrealized Losses, 12 Months or More, Unrealized Losses	(7)	(148)
Available for Sale Securities with Unrealized Losses, Fair Value	49,087	48,642
Available for Sale Securities with Unrealized Losses, Unrealized Losses	(170)	(150)
US Government Agencies Debt Securities [Member]
Available for Sale Securities with Unrealized Losses, Less than 12 Months, Fair Value	10,135	0
Available for Sale Securities with Unrealized Losses, Less than 12 Months, Unrealized Losses	(15)	0
Available for Sale Securities with Unrealized Losses, 12 Months or More, Fair Value	0	17,974
Available for Sale Securities with Unrealized Losses, 12 Months or More, Unrealized Losses	0	(25)
Available for Sale Securities with Unrealized Losses, Fair Value	10,135	17,974
Available for Sale Securities with Unrealized Losses, Unrealized Losses	(15)	(25)
Municipal Securities [Member]
Available for Sale Securities with Unrealized Losses, Less than 12 Months, Fair Value	17,141
Available for Sale Securities with Unrealized Losses, Less than 12 Months, Unrealized Losses	(93)
Available for Sale Securities with Unrealized Losses, 12 Months or More, Fair Value	582
Available for Sale Securities with Unrealized Losses, 12 Months or More, Unrealized Losses	(2)
Available for Sale Securities with Unrealized Losses, Fair Value	17,723
Available for Sale Securities with Unrealized Losses, Unrealized Losses	(95)
Mortgage-backed Securities, Issued by Private Enterprises [Member]
Available for Sale Securities with Unrealized Losses, Less than 12 Months, Fair Value	0	0
Available for Sale Securities with Unrealized Losses, Less than 12 Months, Unrealized Losses	0	0
Available for Sale Securities with Unrealized Losses, 12 Months or More, Fair Value	513	18,091
Available for Sale Securities with Unrealized Losses, 12 Months or More, Unrealized Losses	(2)	(87)
Available for Sale Securities with Unrealized Losses, Fair Value	513	18,091
Available for Sale Securities with Unrealized Losses, Unrealized Losses	(2)	(87)
Collateralized Mortgage Obligations [Member]
Available for Sale Securities with Unrealized Losses, Less than 12 Months, Fair Value	19,995	0
Available for Sale Securities with Unrealized Losses, Less than 12 Months, Unrealized Losses	(55)	0
Available for Sale Securities with Unrealized Losses, 12 Months or More, Fair Value	721	6,590
Available for Sale Securities with Unrealized Losses, 12 Months or More, Unrealized Losses	(3)	(15)
Available for Sale Securities with Unrealized Losses, Fair Value	20,716	6,590
Available for Sale Securities with Unrealized Losses, Unrealized Losses	(58)	(15)
US States and Political Subdivisions Debt Securities [Member]
Available for Sale Securities with Unrealized Losses, Less than 12 Months, Fair Value		3,738
Available for Sale Securities with Unrealized Losses, Less than 12 Months, Unrealized Losses		(2)
Available for Sale Securities with Unrealized Losses, 12 Months or More, Fair Value		2,249
Available for Sale Securities with Unrealized Losses, 12 Months or More, Unrealized Losses		(21)
Available for Sale Securities with Unrealized Losses, Fair Value		5,987
Available for Sale Securities with Unrealized Losses, Unrealized Losses		$ (23)

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Note 16 - Stock Based Compensation (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	2010
Risk-free interest rate		2.11	%
Expected option life (years)		7
Expected stock price volatility		44.7	%
Dividend yield		0.7	%

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Twelve months ended December 31, 2012									Twelve months ended December 31, 2011
Total options outstanding	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value (000)		Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value (000)
Beginning of period		396,898		$	16.58						454,745		$	16.55
Granted		0			-						0
Exercised		0			-						0
Forfeited		(6,279	)	$	19.00						(25,273	)	$	19.45
Expired		(34,589	)	$	19.20						(32,574	)	$	13.51
End of period		356,030		$	16.29		4.5	$	479		396,898		$	16.58		5.1	$	0
Options exercisable, end of period		303,270		$	17.95		4.0	$	269		305,468		$	19.18		4.3	$	0

Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block]

			Options outstanding						Exercisable
Range of exercise prices			Shares		Weighted Average Exercise Price		Weighted Average Contractual Life (years)		Shares		Weighted Average Exercise Price
$5.19	-	$8.00		97,700	$	6.61		6.8		60,320	$	7.03
$8.01	–	$16.00		90,950	$	12.87		5.8		75,570	$	13.74
$16.01	-	$23.00		89,215	$	22.42		3.4		89,215	$	22.42
$23.01	-	$26.18		78,165	$	25.36		1.4		78,165	$	25.36
Total				356,030	$	16.29		4.5		303,270	$	17.95

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

	2012				2011
Non-vested Shares	Shares		Weighted-Average Grant-Date Fair Value		Shares		Weighted-Average Grant-Date Fair Value
Non-vested at January 1, 2012		22,627	$	5.99		13,373	$	9.13
Granted		14,980	$	10.30		14,120	$	5.00
Vested		3,553	$	7.61		4,866	$	11.77
Non-vested at December 31, 2012		34,054	$	7.68		22,627	$	5.99

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Note 2 - Acquisitions and Divestitures

12 Months Ended

Dec. 31, 2012

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

NOTE 2 – ACQUISITIONS AND DIVESTITURES

On March 31, 2010, we sold our 1st Armored, Inc. armored car company. No gain or loss was recorded on the transaction. Historical earnings from 1st Armored, Inc. are included in the financial statements presented through the date of its sale within this report. Financial results subsequent to March 31, 2010 are excluded for 1st Armored, Inc. as the sale transaction was completed on that date.

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Note 25 - Firstbank Corporation (Parent Company Only) (Detail) - Condensed Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Cash flows from operating activities
Net income	$ 10,534	$ 5,623	$ 3,763
Equity in undistributed subsidiary income	(5,190)	(3,618)	(1,993)
Stock option and restricted stock grant compensation expense	96	118	115
Change in other assets	860	(4,513)	(6,042)
Change in other liabilities	1,886	(1,007)	(2,595)
Net cash from operating activities	23,193	28,882	25,619
Cash flows from investing activities
Net cash from/(used in) investing activities	357	(46,076)	(34,602)
Cash flows from financing activities
Proceeds from issuance of common stock	903	421	392
Dividends on preferred stock	(1,247)	(1,650)	(1,650)
Dividends on common stock	(2,314)	(313)	(620)
Net cash used for financing activities	235	19,472	(24,844)
Net change in cash and cash equivalents	23,785	2,278	(33,827)
Beginning cash and cash equivalents	99,601	75,816	73,538
Ending cash and cash equivalents	99,601	75,816	73,538
Parent Company [Member] | Beginning [Member]
Cash flows from financing activities
Beginning cash and cash equivalents	16,870	15,563	10,152
Ending cash and cash equivalents	16,870	15,563	10,152
Parent Company [Member] | Ending [Member]
Cash flows from financing activities
Beginning cash and cash equivalents	11,167	16,870	15,563
Ending cash and cash equivalents	11,167	16,870	15,563
Parent Company [Member]
Cash flows from operating activities
Unrealized (gain)/loss on trading account securities	(4)	11	(3)
Change in other assets	(223)	3,797	6,734
Change in other liabilities	745	138	(1,410)
Net cash from operating activities	5,958	6,069	7,206
Cash flows from investing activities
Sale of securities available for sale	0	0	2,818
Net decrease in commercial loans	0	1,000	(786)
Return from/(payments for) investments in subsidiaries	8,000	(4,220)	(1,950)
Net cash from/(used in) investing activities	8,000	(3,220)	82
Cash flows from financing activities
Redemption of preferred stock	(15,056)	0	0
Redemption of common stock warrants	(1,947)	0	0
Proceeds from issuance of common stock	903	421	393
Dividends on preferred stock	(1,247)	(1,650)	(1,650)
Dividends on common stock	(2,314)	(313)	(620)
Net cash used for financing activities	(19,661)	(1,542)	(1,877)
Net change in cash and cash equivalents	(5,703)	1,307	5,411
Beginning cash and cash equivalents	11,167	16,870
Ending cash and cash equivalents	$ 11,167	$ 16,870

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Note 4 - Securities (Detail) - Gross Gains and Losses on Investment Securities (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Trading Account Securities Gains/(Losses)	$ 4,000	$ (11,000)	$ 3,000
Available for Sale Securities
Other than temporary impairment losses	0	0	(150,000)
Gross realized gains	44,000	28,000	200,000
Gross realized losses	0	(65,000)	(46,000)
Net realized gains (losses)	44,000	(37,000)	4,000
Gains/Losses [Member]
Trading Account Securities Gains/(Losses)	$ 4,000	$ (11,000)	$ 3,000

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Note 9 - Federal Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Federal Income Tax Note [Table Text Block]

(In Thousands of Dollars)	2012			2011			2010
Current expense	$	4,283		$	3,133		$	1,013
Deferred expense (benefit)		(27	)		(1,299	)		14
Change in deferred tax valuation allowance		0			0			485
Total	$	4,256		$	1,834		$	1,512

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

(In Thousands of Dollars)	2012			2011			2010
Tax at statutory rate	$	5,177		$	2,610		$	1,846
Effect of tax-exempt interest		(479	)		(443	)		(489	)
Deferred tax valuation allowance		0			0			485
Other		(442	)		(333	)		(330	)
Federal income taxes	$	4,256		$	1,834		$	1,512
Effective tax rate		29	%		25	%		29	%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

(In Thousands of Dollars)
	2012			2011
Deferred tax assets:
Allowance for loan losses	$	7,256		$	7,147
Deferred compensation		655			718
Losses on capital investments		1,159			1,727
Other		1,254			1,304
Total deferred tax assets		10,324			10,896
Deferred tax liabilities:
Fixed assets		(1,821	)		(1,851	)
Mortgage servicing rights		(1,697	)		(1,563	)
Purchase accounting adjustments		(234	)		(373	)
Unrealized gain on securities available for sale		(1,859	)		(1,492	)
Other		(428	)		(992	)
Total deferred tax liabilities		(6,039	)		(6,271	)
Net deferred tax assets		4,285			4,625
Deferred tax valuation allowance		(1,143	)		(1,143	)
Net deferred tax assets	$	3,142		$	3,482

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Note 22 - Capital Adequacy

12 Months Ended

Dec. 31, 2012

Regulatory Capital Requirements under Banking Regulations [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 2012 and 2011, 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
2012
Total Capital to Risk Weighted Assets
Consolidated	$	155,135		15.99	%	$	77,618		8.00	%	$	97,023		10.00	%
Firstbank – Alma		33,195		15.81	%		16,797		8.00	%		20,997		10.00	%
Firstbank – Mt. Pleasant		37,816		12.74	%		23,748		8.00	%		29,685		10.00	%
Firstbank – West Branch		23,021		14.01	%		13,144		8.00	%		16,430		10.00	%
Keystone Community Bank		28,641		15.78	%		14,521		8.00	%		18,151		10.00	%
Firstbank – West Michigan		15,226		12.83	%		9,493		8.00	%		11,866		10.00	%
Tier 1 (Core) Capital to Risk Weighted Assets
Consolidated	$	142,884		14.73	%	$	38,809		4.00	%	$	58,214		6.00	%
Firstbank – Alma		30,541		14.55	%		8,399		4.00	%		12,598		6.00	%
Firstbank – Mt. Pleasant		34,097		11.49	%		11,874		4.00	%		17,811		6.00	%
Firstbank – West Branch		20,945		12.75	%		6,572		4.00	%		9,858		6.00	%
Keystone Community Bank		26,333		14.51	%		7,260		4.00	%		10,891		6.00	%
Firstbank – West Michigan		13,729		11.57	%		4,746		4.00	%		7,119		6.00	%
Tier 1 (Core) Capital to Average Assets
Consolidated	$	142,884		9.71	%	$	58,854		4.00	%	$	73,568		5.00	%
Firstbank – Alma		30,541		8.15	%		14,998		4.00	%		18,748		5.00	%
Firstbank – Mt. Pleasant		34,097		8.12	%		16,765		4.00	%		20,994		5.00	%
Firstbank – West Branch		20,945		8.55	%		9,803		4.00	%		12,253		5.00	%
Keystone Community Bank		26,333		11.61	%		9,072		4.00	%		11,340		5.00	%
Firstbank – West Michigan		13,729		7.29	%		7,538		4.00	%		9,422		5.00	%

	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	%

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Note 21 - Stock Repurchase Program

12 Months Ended

Dec. 31, 2012

Repurchase Agreements, Resale Agreements, Securities Borrowed, and Securities Loaned Disclosure [Text Block]

NOTE 21 – STOCK REPURCHASE PROGRAM

We currently have no authorized common or preferred stock repurchase program in place. No common stock was repurchased in 2011 or 2012. In June of 2012 we repurchased 16,000 shares of our 33,000 outstanding shares of preferred stock at a price of at a price of $941.01 per share (liquidation preference value $1,000). In July of 2012, we negotiated a repurchase of all 578,947 outstanding common stock warrants, which were issued to the U.S. Treasury at the time of their investment in our preferred shares, for a total price of $1,946,670.

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Note 17 - Related Party Transactions (Detail) (Officers Directors And Affiliates [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Officers Directors And Affiliates [Member]
Related Party Deposit Liabilities	$ 27.1	$ 28.5

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Note 1 - Significant Accounting Policies (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Assets (in Dollars)	$ 1,498,762,000	$ 1,485,299,000
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		46.00%
Allowance for Doubtful Accounts Receivable, Charge-offs (in Dollars)	1.7	2,400,000
Other Real Estate (in Dollars)	2,925,000	5,251,000	8,316,000
Serviced For Others [Member]
Mortgage Loans on Real Estate (in Dollars)	608,000,000
Building and Building Improvements [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life	5 years
Building and Building Improvements [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life	33 years
Furniture and Fixtures [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life	3 years
Furniture and Fixtures [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life	10 years
Restructured Loans [Member]
Allowance for Loan and Lease Losses, Provision for Loss, Gross (in Dollars)	$ 2.3	$ 591,000

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Note 10 - Deposits (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Maturities of Long-term Debt [Table Text Block]

(In Thousands of Dollars)
Year	Amount
2013	$	239,810
2014		69,766
2015		31,135
2016		22,614
2017		13,041
2018 and thereafter		5
Total	$	376,371

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Note 23 - Fair Value

12 Months Ended

Dec. 31, 2012

Fair Value, Measurement Inputs, Disclosure [Text Block]

NOTE 23 – FAIR VALUE

Carrying amount and estimated fair values of financial instruments were as follows at year end:

December 31, 2012 (In thousands of dollars)	Carrying Amount			Estimated Fair Value			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Financial Assets:
Cash and cash equivalents	$	99,601		$	99,601		$	99,601	$	0		$	0
FDIC insured bank certificates of deposit		2,927			2,927			2,927		0			0
Trading account securities		6			6			6		0			0
Securities available for sale		353,678			353,678			91		331,717			21,870
Federal Home Loan Bank stock		7,266			7,266			0		0			7,266
Loans held for sale		2,921			2,921			0		2,921			0
Loans, net of allowance		942,422			930,354			0		0			930,354
Financial Liabilities:
Deposits		(1,241,401	)		(1,243,712	)		0		0			(1,243,712	)
Securities sold under agreements to repurchase and overnight borrowings		(42,785	)		(42,785	)		0		(42,785	)		0
Federal Home Loan Bank advances		(22,493	)		(24,122	)		0		0			(24,122	)
Subordinated debentures		(36,084	)		(36,093	)		0		0			(36,093	)

December 31, 2011 (In thousands of dollars)	Carrying			Fair
	Amount			Value
Financial Assets:
Cash and cash equivalents	$	75,816		$	75,816
FDIC insured bank certificates of deposit		4,432			4,432
Trading account securities		2			2
Securities available for sale		342,184			342,184
Federal Home Loan Bank stock		7,266			7,266
Loans held for sale		349			349
Loans, net		962,890			944,756
Accrued interest receivable		4,531			4,531
Financial Liabilities:
Deposits		(1,220,542	)		(1,215,484	)
Securities sold under agreements to repurchase and overnight borrowings		(46,784	)		(46,784	)
Federal Home Loan Bank advances		(19,457	)		(21,359	)
Accrued interest payable		(762	)		(762	)
Subordinated debentures		(36,084	)		(36,488	)

The methods and assumptions used to estimate fair value are described as follows: The carrying amount is the estimated fair value for cash and cash equivalents, short term borrowings, Federal Home Loan Bank stock, demand deposits, short term debt, and variable rate loans or deposits that re-price frequently and fully. Security fair values are based on market prices or dealer quotes, and if no such information is available, on the rate and term of the security and information about the issuer. For fixed rate loans and variable rate loans, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk based on historical losses on similar loan pools. For deposits with infrequent re-pricing or re-pricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life of the product.

Fair values for impaired loans are estimated using discounted cash flow analysis or underlying collateral values for the specific loans in the portfolio and assumes the bank will resolve them through orderly liquidation. Fair value of loans held for sale is based on market quotes. Fair value of debt is based on current rates for similar financing. The fair value of off-balance sheet items is based on the current fees or cost that would be charged to enter into or terminate such arrangements. The fair value of off-balance sheet items was not material to the consolidated financial statements at December 31, 2012 and 2011.

The following tables present information about our assets measured at fair value on a recurring basis at December 31, 2012 and 2011, and valuation techniques used by us to determine those fair values.

Level 1 assets are those which are actively traded on an open market and pricing is publicly available.

Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability. Level 3 securities include local municipal securities where market pricing is not available, trust preferred securities issued by banks, and other miscellaneous investments.

Assets Measured at Fair Value on a Recurring Basis

(Dollars in Thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2012
Securities available for sale
U.S. Government Agency Bonds	$	0	$	106,885	$	0	$	106,885
Mortgage Backed Securities		0		66,277		0		66,277
U.S. Government Agency CMOs		0		61,030		0		61,030
States and political subdivisions		0		97,525		20,289		117,814
Equity and Other Securities		91		0		1,581		1,672
Total Securities available for sale	$	91	$	331,717	$	21,870	$	353,678
Trading equity securities	$	6	$	0	$	0	$	6
December 31, 2011
Securities available for sale
U.S. Government Agency Bonds	$	0	$	133,834	$	0	$	133,834
Mortgage Backed Securities		0		71,052		0		71,052
U.S. Government Agency CMOs		0		57,845		0		57,845
States and political subdivisions		0		62,447		15,342		77,789
Equity and Other Securities		92		0		1,572		1,664
Total Securities available for sale	$	92	$	325,179	$	16,914	$	342,184
Trading equity securities	$	2	$	0	$	0	$	2

Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis

(Dollars in Thousands)	2012			2011
Balance at beginning of year	$	16,914		$	10,833
Total realized and unrealized gains/(losses) included in income		0			0
Total unrealized gains/(losses) included in other comprehensive income		0			0
Purchases of securities		17,262			11,325
Sales of securities		0			0
Calls and maturities		(12,663	)		(5,244	)
Net transfers in to Level 3		357			0
Balance at December 31 of each year	$	21,870		$	16,914

Both observable and unobservable inputs may be used to determine the fair value of positions classified as Level 3 assets. As a result, the unrealized gains and losses for these assets presented in the tables above may include changes in fair value that were attributable to both observable and unobservable inputs.

Available for sale investments securities categorized as Level 3 assets primarily consist of bonds issued by local municipalities and other like assets. We carry local municipal securities at historical cost, which approximates fair value, unless economic conditions for the municipality changes to a degree requiring a valuation adjustment.

We also have assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. These assets consist of impaired loans and other real estate owned. We have estimated the fair value of impaired loans using Level 3 inputs, specifically valuation of loans based on either a discounted cash flow projection, or a discount to the appraised value of the collateral underlying the loan. We use discounted appraised values or broker’s price opinions to determine the fair value other real estate owned.

Assets Measured at Fair Value on a Nonrecurring Basis

(Dollars in Thousands)	Balance at December 31,		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
2012
Impaired loans	$	36,388	$	0	$	0	$	36,388
Other real estate owned	$	1,296	$	0	$	0	$	1,296
Other repossessed assets	$	250	$	0	$	0	$	250
2011
Impaired loans	$	41,889	$	0	$	0	$	41,889
Other real estate owned	$	2,223	$	0	$	0	$	2,223

Impaired loans categorized as Level 3 assets consist of non-homogeneous loans that are considered impaired. We estimate the fair value of the loans based on the present value of expected future cash flows using management’s best estimate of key assumptions. These assumptions include future payment ability, timing of payment streams, and estimated realizable values of available collateral (typically based on outside appraisals). Other real estate owned is valued based on either a recent appraisal for the property or a brokers' price opinion of the value of the property, which are discounted for expected costs to dispose of the property. Losses on impaired loans were charged to the allowance for loan losses. Losses in other real estate owned and other repossessed assets were charged to earnings through other non-interest expense on the income statement.

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Note 24 - Basic And Diluted Earnings Per Share

12 Months Ended

Dec. 31, 2012

Earnings Per Share [Text Block]

NOTE 24 – BASIC AND DILUTED EARNINGS PER SHARE

(In Thousands, Except per Share Data)	Year Ended December 31
	2012		2011		2010
Basic earnings per common share
Net income available to common shareholders	$	9,259	$	3,944	$	2,084
Weighted average common shares outstanding		7,933		7,843		7,766
Basic earnings per common share	$	1.17	$	0.50	$	0.27
Diluted Earnings per Share
Net income available to common shareholders	$	9,259	$	3,944	$	2,084
Weighted average common shares outstanding		7,933		7,843		7,766
Add dilutive effects of assumed exercises of options		24		2		2
Weighted average common and dilutive potential
Common shares outstanding		7,957		7,845		7,768
Diluted earnings per common share	$	1.16	$	0.50	$	0.27

Stock options for 219,223 shares of common stock were not considered in computing diluted earnings per share for 2012, because they were anti-dilutive. Stock options and warrants for 975,845 and 1,033,692 shares of common stock were not considered in computing diluted earnings per share for 2011 and 2010, respectively, because they were anti-dilutive.

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Note 1 - Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations:  Firstbank Corporation (the “Company”) is a bank holding company. Each of our subsidiary banks is a full service community bank. The subsidiary banks offer all customary banking services, including the acceptance of checking, savings and time deposits, and the making of commercial, agricultural, real estate, personal, home improvement, automobile and other installment and consumer loans. Our consolidated assets were, $1.5 billion as of December 31, 2012, and primarily represent commercial and retail banking activity. Mortgage loans serviced for others of $608 million, as of December 31, 2012, are not included in the consolidated balance sheet.

Principles of Consolidation:  The consolidated financial statements include the accounts of the Company and its subsidiaries, Firstbank – Alma; Firstbank (Mt. Pleasant); Firstbank – West Branch; Keystone Community Bank and Firstbank – West Michigan (the “Banks”); 1st Armored, Incorporated (sold March 31, 2010); 1st Title, Incorporated; 1st Investors Title, LLC; Austin Mortgage Company; and FBMI Risk Management Services, Inc., after elimination of inter-company accounts and transactions. These subsidiaries are wholly owned, except 1st Investors Title, LLC, which we held a 46% share at December 31, 2012. We do not consolidate their results into the results of the Company. Firstbank – St Johns was merged into Firstbank - Alma in 2011. Each of our five banks operates its own Mortgage Company. The operating results of these companies are consolidated into each Bank’s financial statements. During 2004 we formed a special purpose trust, Firstbank Capital Trust I, in 2006 we formed Firstbank Capital Trust II, and in 2007 we formed Firstbank Capital Trust III and Firstbank Capital Trust IV, for the sole purpose of issuing trust preferred securities. These trusts are not consolidated into our financial statements.

Use of Estimates:  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period.  Actual results could differ from those estimates.

Investments:  Investments are presented at fair value as required by accounting principles. Our investment portfolio is classified as available for sale, as such; adjustments to the fair value are reported as a change in equity. If a security is deemed to be other than temporarily impaired, the adjustment to fair value is recorded through the income statement.

Certain Significant Estimates:  The primary estimates incorporated into our financial statements, which are susceptible to change in the near term, include the allowance for loan losses, the determination of the fair value of certain financial instruments, fair value of investments, determination of state and federal tax assets and liabilities, goodwill, purchase accounting and core deposit intangible valuations, valuation of other real estate owned, and the valuation of mortgage servicing rights.

Current Vulnerability Due to Certain Concentrations:  Our business is concentrated in the mid-central and southwestern sections of the lower peninsula of Michigan. While the loan portfolio is diversified, the customers’ ability to honor their debts is partially dependent on the local economies. Our service area is primarily dependent on manufacturing (automotive and other), agricultural and recreational industries. Most commercial and agricultural loans are secured by business assets, including commercial and agricultural real estate and federal farm agency guarantees. Generally, consumer loans are secured by various items of personal property and mortgage loans are secured by residential real estate. Our funding sources include time deposits and other deposit products which bear interest. Periods of rising interest rates result in an increase in our cost of funds and an increase in the yields on certain assets. Conversely, periods of falling interest rates result in a decrease in yields on certain assets and costs of certain funds.

Cash and Cash Equivalents:  Cash and cash equivalents include cash on hand, amounts due from banks and short term investments with an original maturity of 90 days or less, which include interest bearing deposits with banks and the Federal Reserve, federal funds sold, and overnight money market fund investments. Generally, federal funds and overnight money market funds are purchased for a one day period. We report customer loan transactions, deposit transactions and repurchase agreements and overnight borrowings on a net basis within our cash flow statement.

Trading Account Securities: From time to time, we invest in the common stock of other companies. Trading account securities are adjusted to fair value through the income statement, with increases in value reflected as non-interest income and decreases in value reflected as a decrease to non-interest income.

Securities Available for Sale:  Securities available for sale consist of bonds and notes which might be sold prior to maturity due to changes in interest rate, prepayment risks, yield and availability of alternative 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 (the difference between the fair value and amortized cost of the securities so classified) is reported in other comprehensive income. Other securities such as Federal Home Loan Bank stock are carried at cost. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method.  Gains and losses on sales are recorded on the trade date and are determined using the specific identification method.

Declines in the fair value of securities below their cost that are other than temporary are reflected as realized losses. In estimating other-than-temporary losses, management considers: (1) the length of time and extent that fair value has been less than carrying value; (2) the financial condition and near term prospects of the issuer; and (3) the Company’s ability and intent to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value.

Mortgage Banking Activities:  Servicing rights are recognized as assets based on the allocated value of retained servicing rights on loans sold. Servicing rights are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights, using groupings of the underlying loans as to interest rates. Any impairment of a grouping is reported as a valuation allowance.

Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. Amortization of mortgage serving rights is netted against loan servicing fee income in the income statement.

Mortgage Derivatives: From time to time, we enter into mortgage banking derivatives such as forward contracts and rate lock commitments in the ordinary course of business. The derivatives are not designated as hedges and are carried at fair value. The net gain or loss on mortgage banking derivatives is included in gain on sale of loans.

Loans Held for Sale:  Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or market, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings.

Mortgage loans held for sale are generally sold with servicing rights retained. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold, which is reduced by the cost allocated to the servicing right. We generally lock in the sale price to the purchaser of the loan at the same time we make a rate commitment to the borrower.

Loans:  Loans receivable, for which management has the intent and ability to hold for the foreseeable future or payoff are reported at their outstanding unpaid principal balances, net of any deferred fees or costs on originated loans, unamortized premiums or discounts. Loan origination fees and certain origination costs are capitalized and recognized as an adjustment to yield of the related loan. Interest income is reported on the interest method and includes amortization of net deferred loan fees and costs over the loan term without anticipating prepayments. Interest income on mortgage and commercial loans is discontinued at the time the loan becomes 90 days delinquent unless the credit is well secured and in process of collection. Consumer and unsecured consumer line of credit loans are typically charged off no later than 120 days past due. Loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued, but not received, for loans placed on nonaccrual status, is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans classified as troubled debt restructurings (TDR’s) are accounted for in generally the same manner as all other loans. Troubled debt restructuring of loans is undertaken to improve the likelihood that the loan will be repaid in full under the modified terms in accordance with a reasonable repayment schedule. All modified loans are evaluated to determine whether the loans should be reported as a TDR. A loan is a TDR when we, for economic or legal reasons related to the borrower’s financial difficulties, grant a concession to the borrower by modifying or renewing a loan that we would not otherwise consider. To make this determination, we must determine whether (1) the borrower is experiencing financial difficulties and (2) we have granted the borrower a concession. This determination requires consideration of all of the facts and circumstances surrounding the modification. An overall general decline in the economy or some deterioration in a borrower’s financial condition does not automatically mean the borrower is experiencing financial difficulties.

If the loan is in accrual status at the time of the restructuring, the borrower has the ability to make the payments under the restructured terms, and the restructuring does not forgive principal, the loan remains on an accrual basis under the new terms. If there is a forgiveness of debt or partial charge off, the loan will generally be placed on nonaccrual status with any accrued interest reversed against interest income. If a loan is in nonaccrual status at the time of a restructuring or subsequently becomes nonaccrual, it will remain in nonaccrual status until the borrower has demonstrated the ability to make the payments under the restructured terms by making a minimum of six monthly payments. If the borrower makes the six monthly payments without becoming past due 30 days or more, it may be returned to accrual status. The determination of the need for an allowance for loan loss adjustment is based on the sum of: (1) a factor relating to historical losses multiplied times the balance of the loan, and (2) a net present value adjustment relating to a change in interest rate, if applicable. The amount recorded in the allowance for loan losses for restructured loans during the years ended December 31, 2012 and 2011 was $2.3 million and $591,000, respectively. Restructured loans charged off were $1.7 million in 2012 and $2.4 million in 2011.

Allowance for Loan Losses:  The allowance for loan losses is a valuation allowance for probable incurred credit losses. Management uses a quantitative and qualitative methodology for analyzing factors which impact the allowance for loan losses consistently across its banking subsidiaries. The process applies risk factors for historical charge-offs and delinquency experience, portfolio segment weightings and industry and regional factors and trends as they affect the banks’ portfolios. Consideration of exposures to industries potentially most affected by risks in the current economic and political environment, and the review of potential risks in certain credits that are considered part of the non-performing loan category contributed to the establishment of the allowance levels at each bank. Loan losses are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed.

Loans are reviewed on an ongoing basis for impairment. A loan is impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans are measured based on the present value of expected cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the fair value of collateral, if the loan is collateral dependent. Loans considered to be impaired are reduced to the present value of expected future cash flows or to the fair value of collateral by allocating a portion of the allowance for loan losses to such loans. If these allocations cause an increase in the allowance for loan losses such increase is reported as provision for loan loss through the income statement. Increases or decreases in carrying value due to changes in estimates of future payments or the passage of time are reported as reductions or increases in the provision for loan losses.

Smaller balance homogeneous loans such as residential first mortgage loans secured by one to four family residences, residential construction, automobile, home equity and second mortgage loans, are collectively evaluated for impairment. Commercial loans and first mortgage loans secured by other properties are evaluated individually for impairment. When credit analysis of the borrower’s operating results and financial condition indicates the underlying ability of the borrower’s business activity is not sufficient to generate adequate cash flow to service the business’ cash needs, including our loans to the borrower, the loan is evaluated for impairment. Often this is associated with a delay or shortfall in payments of 90 days or less. Commercial and commercial real estate loans are rated on a scale of 1 to 10, with grades 1 to 4 being pass grades, 5 watch, 6 special mention, 7 substandard, 8 impaired, 9 doubtful and 10 loss. Loans graded 6, 7, and 8 are reviewed for possible impairment at least quarterly. Loans are generally moved to nonaccrual status when 90 days or more past due and considered impaired. Impaired loans, or portions thereof, are charged off when deemed uncollectible.  For a more complete explanation of our loan grading system, see Note 6.

Premises and Equipment:  Premises and equipment are stated on the basis of cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the assets, primarily by accelerated methods for income tax purposes and by the straight line method for financial reporting purposes.  Buildings and related components are assigned useful lives ranging from 5 to 33 years. Furniture, fixtures and equipment are assigned useful lives ranging from 3 to 10 years.

Other Real Estate Owned:  Other real estate owned includes properties acquired through either a foreclosure proceeding or acceptance of a deed in lieu of foreclosure and is initially recorded at the fair value less estimated carrying and selling costs when acquired, establishing a new cost basis. These properties are evaluated periodically and, if fair value is deemed to have declined subsequent to foreclosure, a valuation allowance is recorded through noninterest expense. Costs incurred for the property after foreclosure are expensed as incurred. Other real estate owned totaled approximately $2.9 million and $5.3 million at December 31, 2012 and 2011. Gains and losses on the sale of other real estate owned are recorded on the income statement as other income.

The following table summarizes the activity associated with other real estate owned during the years ended December 31:

(In Thousands of Dollars)	2012			2011
Balance at beginning of year	$	5,251		$	8,316
Properties transferred into OREO		4,214			5,948
Valuation impairments recorded		(1,151	)		(2,258	)
Proceeds from sale of properties		(5,873	)		(6,850	)
Gain on sale of properties		484			95
Balance at end of year	$	2,925		$	5,251

Goodwill and Other Intangible Assets: Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified. A more frequent assessment is performed if conditions in the market place or changes in the company’s organizational structure occur. We use a discounted income approach and a market valuation model, which compares the inherent value of our company to valuations of recent transactions in the market place to determine if our goodwill has been impaired. See Note 8 for additional information.

Other intangible assets consist of core deposit intangibles arising from whole bank and branch acquisitions. They are initially measured at fair value and then are amortized on an accelerated method over their estimated useful lives.

Long Term Assets:  Premises and equipment, core deposit and other intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, a charge is taken to earnings, and the assets are written down to new estimate of fair value.

Loan Commitments and Related Financial Instruments:  Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Income Taxes:  We record income tax expense based on the amount of taxes due on our tax return plus the change in deferred taxes, computed based on the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities using enacted tax rates. A valuation allowance is recorded, if needed, and reduces deferred tax assets to the amount expected to be realized.

Earnings Per Share:  Basic earnings per share is calculated by dividing net income available for common shareholders (net income less preferred stock dividends and accretion of the preferred stock discount) by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by dividing net income available for common shareholders by the weighted average common shares outstanding including the dilutive effect of additional common shares that may be issued under outstanding stock options and warrants.

Comprehensive Income:  Comprehensive income consists of net income and changes in unrealized gains and losses on securities available for sale, net of tax, which is recognized as a separate component of equity. Accumulated other comprehensive income consists of unrealized gains and losses on securities available for sale, net of tax.

Recent Accounting Pronouncements: During 2012, the Company adopted new guidance related to the presentation of comprehensive income in the financial statements. Among other changes, the new guidance eliminated the option to only present comprehensive income in the statement of equity. We have elected to report comprehensive income in a separate statement of comprehensive income that begins with net income. The change in presentation has been applied retrospectively and the 2011 financial statements have been restated to conform to the new presentation method. Other than the change in presentation of comprehensive income and related disclosures, the new guidance did not have a material effect on the financial statements.

In 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-02, A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. This update applies to all creditors, both public and non-public, and was introduced to provide clarification surrounding troubled debt restructurings (“TDR”). The primary characteristics that previously caused a restructuring to qualify as a TDR still exist: (1) the restructuring constitutes a concession to the borrower and (2) the borrower is experiencing financial difficulties. The update provides additional details and examples to provide clarity surrounding these items. The update also prohibits the use of the effective interest rate test when determining whether the restructuring constitutes a concession. The update is effective for annual reporting periods ending on or after December 15, 2012 (therefore, December 31, 2012, for the Corporation). Lastly, the disclosure requirements set forth by ASU 2010-20 regarding troubled debt restructurings, and later deferred by ASU 2011-01 until December 31, 2012 for the Company, are included in Note 6. Other than the additional disclosures, these updates did not have a significant impact on the financial statements.

In 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. This update to Fair Value Measurement (Topic 820) results in common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. The amendments in this update explain how to measure fair value. They do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting. However, this update does require expanded disclosure related to the nature and significance of inputs that are used in estimating and measuring the fair value of financial instruments. The amendments in this update are to be applied prospectively and are effective for annual reporting periods beginning after December 15, 2011 (therefore, December 31, 2012, for the Corporation). This update did not have a significant impact on the financial statements.

Effect of Newly Issued Accounting Standards: There are no newly issued and not yet effective accounting standards at this time.

Loss Contingencies:  Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are such matters that will have a material effect on the financial statements as of December 31, 2012.

Fair Value of Financial Instruments:  Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

Reclassification:  Certain 2010 and 2011 amounts may have been reclassified to conform to the 2012 presentation.

Operating Segments:  While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a company wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

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Note 25 - Firstbank Corporation (Parent Company Only)

12 Months Ended

Dec. 31, 2012

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

NOTE 25 – FIRSTBANK CORPORATION (PARENT COMPANY ONLY)

CONDENSED FINANCIAL INFORMATION

CONDENSED BALANCE SHEETS

	Year Ended December 31,
(In Thousands of Dollars)	2012		2011
ASSETS
Cash and cash equivalents	$	11,167	$	16,870
Investment in and advances to banking subsidiaries		168,883		170,981
Securities		1,090		1,086
Other assets		4,327		4,104
Total Assets	$	185,467	$	193,041
LIABILITIES AND EQUITY
Accrued expenses and other liabilities	$	2,325	$	1,580
Subordinated Debentures		36,084		36,084
Shareholders’ equity		147,058		155,377
Total Liabilities and Shareholders’ Equity	$	185,467	$	193,041

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

	Year Ended December 31,
	2012			2011			2010
Dividends and returns of capital from banking subsidiaries (net of capital infusions)	$	16,150		$	3,680		$	4,000
Other income		5,821			5,921			5,656
Other expense		(10,043	)		(8,440	)		(8,418	)
Income before income tax and undistributed subsidiary income		11,928			1,161			1,238
Income tax benefit		1,416			844			532
Equity in undistributed subsidiary income		(2,810	)		3,618			1,993
Net income		10,534			5,623			3,763
Change in unrealized gain (loss) on securities, net of tax and classification effects		712			2,750			(452	)
Comprehensive income	$	11,246		$	8,373		$	3,311

CONDENSED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2012			2011			2010
Cash flows from operating activities
Net income	$	10,534		$	5,623		$	3,763
Adjustments:
Unrealized (gain)/loss on trading account securities		(4	)		11			(3	)
Equity in undistributed subsidiary income		(5,190	)		(3,618	)		(1,993	)
Stock option and restricted stock grant compensation expense		96			118			115
Change in other assets		(223	)		3,797			6,734
Change in other liabilities		745			138			(1,410	)
Net cash from operating activities		5,958			6,069			7,206
Cash flows from investing activities
Sale of securities available for sale		0			0			2,818
Net decrease in commercial loans		0			1,000			(786	)
Return from/(payments for) investments in subsidiaries		8,000			(4,220	)		(1,950	)
Net cash from/(used in) investing activities		8,000			(3,220	)		82
Cash flows from financing activities
Redemption of preferred stock		(15,056	)		0			0
Redemption of common stock warrants		(1,947	)		0			0
Proceeds from issuance of common stock		903			421			393
Dividends on preferred stock		(1,247	)		(1,650	)		(1,650	)
Dividends on common stock		(2,314	)		(313	)		(620	)
Net cash used for financing activities		(19,661	)		(1,542	)		(1,877	)
Net change in cash and cash equivalents		(5,703	)		1,307			5,411
Beginning cash and cash equivalents		16,870			15,563			10,152
Ending cash and cash equivalents	$	11,167		$	16,870		$	15,563

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Note 9 - Federal Income Taxes (Detail) - Federal Income Taxes (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Current expense	$ 4,283	$ 3,133	$ 1,013
Deferred expense (benefit)	(27)	(1,299)	14
Change in deferred tax valuation allowance	0	0	485
Total	$ 4,256	$ 1,834	$ 1,512

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Note 25 - Firstbank Corporation (Parent Company Only) (Detail) - Condensed Balance Sheet (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
ASSETS
Cash and cash equivalents	$ 99,601,000	$ 75,816,000	$ 73,538,000	$ 107,365,000
Securities	353,678,000	342,184,000
Other assets	26,182,000	25,061,000
Total Assets	1,498,762,000	1,485,299,000
LIABILITIES AND EQUITY
Subordinated Debentures	36,084,000	36,084,000
Shareholders’ equity	147,058,000	155,377,000	148,428,000	146,880,000
Total Liabilities and Shareholders’ Equity	1,498,762,000	1,485,299,000
Parent Company [Member]
ASSETS
Cash and cash equivalents	11,167,000	16,870,000
Investment in and advances to banking subsidiaries	168,883,000	170,981,000
Securities	1,090,000	1,086,000
Other assets	4,327,000	4,104,000
Total Assets	185,467,000	193,041,000
LIABILITIES AND EQUITY
Accrued expenses and other liabilities	2,325,000	1,580,000
Subordinated Debentures	36,084,000	36,084,000
Total Liabilities and Shareholders’ Equity	$ 185,467,000	$ 193,041,000

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Note 6 - Loans (Tables)

12 Months Ended

Dec. 31, 2012

Financing Receivable Credit Quality Indicators [Table Text Block]

Loans at period end were as follows:
(In Thousands of Dollars)	December 31, 2012		December 31, 2011
Commercial and Industrial
Pass loans	$	133,844	$	122,812
Watch loans		5,375		19,542
Special mention loans		5,433		7,878
Substandard loans		1,879		2,928
Impaired restructured and accruing loans		3,230		3,562
Impaired nonaccrual loans		447		1,771
Total Commercial and Industrial		150,208		158,493
Commercial Real Estate
Pass loans	$	373,527	$	373,320
Watch loans		50,741		56,571
Special mention loans		18,119		21,155
Substandard loans		9,664		5,686
Impaired restructured and accruing loans		12,113		10,652
Impaired nonaccrual loans		8,429		15,336
Doubtful nonaccrual loans		25		0
Total Commercial Real Estate		472,618		482,720
Residential Mortgages 1st Liens
Performing loans	$	202,342	$	199,117
Loans > 60 days past due		1,046		2,203
Impaired restructured and accruing loans		4,953		4,425
Nonaccrual loans		6,038		5,374
Total First lien residential mortgage loans		214,379		211,119
Residential Mortgages Junior Liens
Performing loans	$	58,089	$	66,169
Loans > 60 days past due		96		328
Impaired restructured and accruing loans		235		278
Nonaccrual loans		328		278
Total Junior lien residential mortgage loans		58,748		67,053
Consumer
Performing loans	$	67,178	$	64,075
Loans > 60 days past due		39		239
Impaired restructured and accruing loans		191		210
Nonaccrual loans		401		0
Total Consumer		67,809		64,524
Total Loans	$	963,762	$	983,909

Allowance for Credit Losses on Financing Receivables [Table Text Block]

(In Thousands of Dollars)
Twelve months ending December 31, 2012	Commercial and Industrial			Commercial Real Estate			First Lien Residential Mortgages			Junior Lien Residential Mortgages			Consumer Loans			Unallocated		Total
Allowance for Credit Losses:
Beginning balance	$	2,485		$	11,534		$	5,393		$	505		$	931		$	171	$	21,019
Provision for loan losses		(104	)		4,033			2,225			535			309			692		7,690
Loans charged off		(560	)		(4,440	)		(2,220	)		(485	)		(727	)		0		(8,432	)
Recoveries		75			438			258			0			292			0		1,063
Ending balance	$	1,896		$	11,565		$	5,656		$	555		$	805		$	863	$	21,340
Ending balance: individually evaluated for impairment	$	515		$	2,971		$	0		$	0		$	0		$	0	$	3,486
Ending balance: collectively evaluated for impairment	$	1,381		$	8,594		$	5,656		$	555		$	805		$	863	$	17,854
Financing Receivables:
Ending balance	$	150,208		$	472,618		$	214,379		$	58,748		$	67,809		$	0	$	963,762
Ending balance: individually evaluated for impairment	$	3,677		$	20,567		$	0		$	0		$	0		$	0	$	24,244
Ending balance: collectively evaluated for impairment	$	146,531		$	452,051		$	214,379		$	58,748		$	67,809		$	0	$	939,518
Twelve months ending December 31, 2011
Allowance for Credit Losses:
Beginning balance	$	3,024		$	12,375		$	3,960		$	774		$	1,162		$	136	$	21,431
Provision for loan losses		1,836			6,611			4,468			6			381			35		13,337
Loans charged off		(2,546	)		(7,973	)		(3,215	)		(275	)		(913	)		0		(14,922	)
Recoveries		171			521			180			0			301			0		1,173
Ending balance	$	2,485		$	11,534		$	5,393		$	505		$	931		$	171	$	21,019
Ending balance: individually evaluated for impairment	$	253		$	3,622		$	0		$	0		$	0		$	0	$	3,875
Ending balance: collectively evaluated for impairment	$	2,232		$	7,912		$	5,393		$	505		$	931		$	171	$	17,144
Financing Receivables:
Ending balance	$	158,493		$	482,720		$	211,397		$	66,775		$	64,524		$	0	$	983,909
Ending balance: individually evaluated for impairment	$	5,331		$	25,988		$	0		$	0		$	0		$	0	$	31,319
Ending balance: collectively evaluated for impairment	$	153,162		$	456,732		$	211,397		$	66,775		$	64,524		$	0	$	952,590

Twelve months ending December 31, 2010	Commercial and Industrial			Commercial Real Estate			First Lien Residential Mortgages			Junior Lien Residential Mortgages			Consumer Loans			Unallocated		Total
Allowance for Credit Losses:
Beginning balance	$	3,640		$	10,473		$	2,502		$	967		$	1,525		$	7	$	19,114
Provision for loan losses		812			8,222			3,844			(7	)		344			129		13,344
Loans charged off		(1,707	)		(6,366	)		(2,602	)		(186	)		(1,102	)		0		(11,963	)
Recoveries		279			46			216			0			395			0		936
Ending balance	$	3,024		$	12,375		$	3,960		$	774		$	1,162		$	136	$	21,431
Ending balance: individually evaluated for impairment	$	812		$	4,688		$	0		$	0		$	0		$	0	$	5,500
Ending balance: collectively evaluated for impairment	$	2,212		$	7,687		$	3,960		$	774		$	1,162		$	136	$	15,931
Financing Receivables:
Ending balance	$	164,332		$	509,285		$	203,765		$	76,293		$	77,945		$	0	$	1,031,620
Ending balance: individually evaluated for impairment	$	1,972		$	24,390		$	0		$	0		$	0		$	0	$	26,362
Ending balance: collectively evaluated for impairment	$	162,360		$	484,895		$	203,765		$	76,293		$	77,945		$	0	$	1,005,258

Past Due Financing Receivables [Table Text Block]

(In thousands of dollars)
At December 31, 2012	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Nonaccrual loans		Current		Total Financing Receivables		Recorded Investment > 90 days and accruing
Commercial and Industrial	$	206	$	140	$	0	$	346	$	447	$	149,415	$	150,208	$	0
Commercial Real Estate		604		1,881		0		2,485		8,454		461,679		472,618		0
Residential Mortgages 1st Liens		772		969		37		1,778		6,038		206,563		214,379		37
Residential Mortgages Junior Liens		473		96		0		569		328		57,851		58,748		0
Consumer		435		39		0		474		401		66,934		67,809		0
Total	$	2,490	$	3,125	$	37	$	5,652	$	15,668	$	942,442	$	963,762	$	37
At December 31, 2011
Commercial and Industrial	$	1,039	$	94	$	0	$	1,133	$	1,771	$	155,589	$	158,493	$	0
Commercial Real Estate		4,313		500		0		4,813		15,336		462,571		482,720		0
Residential Mortgages 1st Liens		973		1,875		328		3,176		5,374		202,569		211,119		328
Residential Mortgages Junior Liens		561		255		73		889		278		65,886		67,053		73
Consumer		848		221		18		1,087		210		63,227		64,524		18
Total	$	7,734	$	2,945	$	419	$	11,098	$	22,969	$	949,842	$	983,909	$	419

Impaired Financing Receivables [Table Text Block]

(In Thousands of Dollars)
December 31, 2012	Recorded Investment		Unpaid Principal Balance		Related Allowance
Period end loans with no allocated allowance for loan losses
Commercial and Industrial	$	891	$	891	$	0
Commercial Real Estate		9,215		9,212		0
Residential Mortgages 1st Liens		10,993		10,993		0
Residential Mortgages Junior Liens		562		562		0
Consumer		592		592		0
Total	$	22,253	$	22,250	$	0
Period end loans with allocated allowance for loan losses
Commercial and Industrial	$	2,273	$	2,792	$	515
Commercial Real Estate		8,377		11,346		2,971
Residential Mortgages 1st Liens		0		0		0
Residential Mortgages Junior Liens		0		0		0
Consumer		0		0		0
Total	$	10,650	$	14,138	$	3,486
Total
Commercial and Industrial	$	3,164	$	3,683	$	515
Commercial Real Estate		17,592		20,558		2,971
Residential Mortgages 1st Liens		10,993		10,993		0
Residential Mortgages Junior Liens		562		562		0
Consumer		592		592		0
Total	$	32,903	$	36,388	$	3,486
December 31, 2011
Period end loans with no allocated allowance for loan losses
Commercial and Industrial	$	4,358	$	5,846		0
Commercial Real Estate		11,940		16,987		0
Residential Mortgages 1st Liens		10,079		11,120		0
Residential Mortgages Junior Liens		278		331		0
Consumer		210		249		0
Total	$	26,865	$	34,533	$	0
Period end loans with allocated allowance for loan losses
Commercial and Industrial	$	720	$	998	$	253
Commercial Real Estate		10,423		15,225		3,622
Residential Mortgages 1st Liens		0		0		0
Residential Mortgages Junior Liens		0		0		0
Consumer		0		0		0
Total	$	11,143	$	16,223	$	3,875
Total
Commercial and Industrial	$	5,078	$	6,844	$	253
Commercial Real Estate		22,363		32,212		3,622
Residential Mortgages 1st Liens		10,079		11,120		0
Residential Mortgages Junior Liens		278		331		0
Consumer		210		249		0
Total	$	38,008	$	50,756	$	3,875

Additional Information Related to Impaired Loans [Table Text Block]

(In Thousands of Dollars)	Twelve months ended December 31, 2012				Twelve months ended December 31, 2011				Twelve months ended December 31, 2010
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Period end loans with no allocated allowance for loan losses
Commercial and Industrial	$	2,862	$	160	$	2,073	$	116	$	1,121	$	0
Commercial Real Estate		10,213		846		12,444		452		12,432		158
Residential Mortgages 1st Liens		9,998		416		9,223		219		7,721		253
Residential Mortgages Junior Liens		502		13		459		2		295		1
Consumer		450		17		192		0		200		5
Total	$	24,025	$	1,452	$	24,391	$	789	$	21,769	$	417
Period end loans with allocated allowance for loan losses
Commercial and Industrial	$	880	$	24	$	722	$	0	$	438	$	0
Commercial Real Estate		10,561		52		9,003		28		8,724		125
Residential Mortgages 1st Liens		0		0		0		0		0		0
Residential Mortgages Junior Liens		0		0		0		0		0		0
Consumer		0		0		0		0		0		0
Total	$	11,441	$	76	$	9,725	$	28	$	9,162	$	125
Total
Commercial and Industrial	$	3,742	$	184	$	2,795	$	116	$	1,559	$	0
Commercial Real Estate		20,774		898		21,447		480		21,156		283
Residential Mortgages 1st Liens		9,998		416		9,223		219		7,721		253
Residential Mortgages Junior Liens		502		13		459		2		295		1
Consumer		450		17		191		0		200		5
Total	$	35,466	$	1,528	$	34,116	$	817	$	30,931	$	542

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

(In thousands of dollars)	Troubled Debt Restructurings						Troubled Debt Restructurings that Subsequently Defaulted
	Number of contracts		Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Number of contracts		Recorded investment
December 31, 2012
Commercial and Industrial		11	$	1,199	$	1,188		5	$	1,143
Commercial Real Estate		17		4,456		4,221		4		401
Residential Mortgages 1st Liens		19		1,948		1,943		2		190
Residential Mortgages Junior Liens		4		126		126		1		9
Consumer		3		128		127		0		0
Total		54	$	7,857	$	7,605		12	$	1,743
December 31, 2011
Commercial and Industrial		11	$	3,615	$	3,526		2	$	468
Commercial Real Estate		13		4,017		3,786		10		1,233
Residential Mortgages 1st Liens		13		1,427		1,291		11		828
Residential Mortgages Junior Liens		1		83		83		0		0
Consumer		0		0		0		0		0
Total		85	$	9,142	$	8,686		23	$	2,529
December 31, 2010
Commercial and Industrial		1	$	36	$	36		0	$	0
Commercial Real Estate		7		6,604		5,757		3		860
Residential Mortgages 1st Liens		27		3,025		2,633		8		614
Residential Mortgages Junior Liens		1		43		0		1		43
Consumer		0		0		0		0		0
Total		36	$	9,708	$	8,426		12	$	1,517

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Note 25 - Firstbank Corporation (Parent Company Only) (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Condensed Balance Sheet [Table Text Block]

	Year Ended December 31,
(In Thousands of Dollars)	2012		2011
ASSETS
Cash and cash equivalents	$	11,167	$	16,870
Investment in and advances to banking subsidiaries		168,883		170,981
Securities		1,090		1,086
Other assets		4,327		4,104
Total Assets	$	185,467	$	193,041
LIABILITIES AND EQUITY
Accrued expenses and other liabilities	$	2,325	$	1,580
Subordinated Debentures		36,084		36,084
Shareholders’ equity		147,058		155,377
Total Liabilities and Shareholders’ Equity	$	185,467	$	193,041

Schedule of Condensed Income Statement [Table Text Block]

	Year Ended December 31,
	2012			2011			2010
Dividends and returns of capital from banking subsidiaries (net of capital infusions)	$	16,150		$	3,680		$	4,000
Other income		5,821			5,921			5,656
Other expense		(10,043	)		(8,440	)		(8,418	)
Income before income tax and undistributed subsidiary income		11,928			1,161			1,238
Income tax benefit		1,416			844			532
Equity in undistributed subsidiary income		(2,810	)		3,618			1,993
Net income		10,534			5,623			3,763
Change in unrealized gain (loss) on securities, net of tax and classification effects		712			2,750			(452	)
Comprehensive income	$	11,246		$	8,373		$	3,311

Schedule of Condensed Cash Flow Statement [Table Text Block]

	Year Ended December 31,
	2012			2011			2010
Cash flows from operating activities
Net income	$	10,534		$	5,623		$	3,763
Adjustments:
Unrealized (gain)/loss on trading account securities		(4	)		11			(3	)
Equity in undistributed subsidiary income		(5,190	)		(3,618	)		(1,993	)
Stock option and restricted stock grant compensation expense		96			118			115
Change in other assets		(223	)		3,797			6,734
Change in other liabilities		745			138			(1,410	)
Net cash from operating activities		5,958			6,069			7,206
Cash flows from investing activities
Sale of securities available for sale		0			0			2,818
Net decrease in commercial loans		0			1,000			(786	)
Return from/(payments for) investments in subsidiaries		8,000			(4,220	)		(1,950	)
Net cash from/(used in) investing activities		8,000			(3,220	)		82
Cash flows from financing activities
Redemption of preferred stock		(15,056	)		0			0
Redemption of common stock warrants		(1,947	)		0			0
Proceeds from issuance of common stock		903			421			393
Dividends on preferred stock		(1,247	)		(1,650	)		(1,650	)
Dividends on common stock		(2,314	)		(313	)		(620	)
Net cash used for financing activities		(19,661	)		(1,542	)		(1,877	)
Net change in cash and cash equivalents		(5,703	)		1,307			5,411
Beginning cash and cash equivalents		16,870			15,563			10,152
Ending cash and cash equivalents	$	11,167		$	16,870		$	15,563

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Note 6 - Loans (Detail) - Impaired Loans (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Period End Loans With No Related Allowance Related Allowance	$ 3,486	$ 3,875
Period End Loans With Related Allowance Related Allowance	3,486	3,875
Total
Recorded Investment	32,903	38,008
Unpaid Principal Balance	36,388	50,756
Related Allowance	3,486	3,875
Period End Loans No Allocated Allowance For Loan Losses [Member] | Commercial and Industrial [Member]
Period End Loans With No Related Allowance Recorded Investment	891	4,358
Period End Loans With No Related Allowance Unpaid Principal Balance	891	5,846
Period End Loans With No Related Allowance Related Allowance	0	0
Period End Loans With Related Allowance Related Allowance	0	0
Total
Related Allowance	0	0
Period End Loans No Allocated Allowance For Loan Losses [Member] | Commercial Real Estate Loans [Member]
Period End Loans With No Related Allowance Recorded Investment	9,215	11,940
Period End Loans With No Related Allowance Unpaid Principal Balance	9,212	16,987
Period End Loans With No Related Allowance Related Allowance	0	0
Period End Loans With Related Allowance Related Allowance	0	0
Total
Related Allowance	0	0
Period End Loans No Allocated Allowance For Loan Losses [Member] | First Lien Residential Mortgage Loans [Member]
Period End Loans With No Related Allowance Recorded Investment	10,993	10,079
Period End Loans With No Related Allowance Unpaid Principal Balance	10,993	11,120
Period End Loans With No Related Allowance Related Allowance	0	0
Period End Loans With Related Allowance Related Allowance	0	0
Total
Related Allowance	0	0
Period End Loans No Allocated Allowance For Loan Losses [Member] | Junior Lein Residential Mortgage Loans [Member]
Period End Loans With No Related Allowance Recorded Investment	562	278
Period End Loans With No Related Allowance Unpaid Principal Balance	562	331
Period End Loans With No Related Allowance Related Allowance	0	0
Period End Loans With Related Allowance Related Allowance	0	0
Total
Related Allowance	0	0
Period End Loans No Allocated Allowance For Loan Losses [Member] | Consumer Loans [Member]
Period End Loans With No Related Allowance Recorded Investment	592	210
Period End Loans With No Related Allowance Unpaid Principal Balance	592	249
Period End Loans With No Related Allowance Related Allowance	0	0
Period End Loans With Related Allowance Related Allowance	0	0
Total
Related Allowance	0	0
Period End Loans No Allocated Allowance For Loan Losses [Member]
Period End Loans With No Related Allowance Recorded Investment	22,253	26,865
Period End Loans With No Related Allowance Unpaid Principal Balance	22,250	34,533
Period End Loans With No Related Allowance Related Allowance	0	0
Period End Loans With Related Allowance Related Allowance	0	0
Total
Related Allowance	0	0
Period End Loans Allocated Allowance Loan Losses [Member] | Commercial and Industrial [Member]
Period End Loans With No Related Allowance Related Allowance	515	253
Period End Loans With Related Allowance Recorded Investment	2,273	720
Period End Loans With Related Allowance Unpaid Principal Balance	2,792	998
Period End Loans With Related Allowance Related Allowance	515	253
Total
Related Allowance	515	253
Period End Loans Allocated Allowance Loan Losses [Member] | Commercial Real Estate Loans [Member]
Period End Loans With No Related Allowance Related Allowance	2,971	3,622
Period End Loans With Related Allowance Recorded Investment	8,377	10,423
Period End Loans With Related Allowance Unpaid Principal Balance	11,346	15,225
Period End Loans With Related Allowance Related Allowance	2,971	3,622
Total
Related Allowance	2,971	3,622
Period End Loans Allocated Allowance Loan Losses [Member] | First Lien Residential Mortgage Loans [Member]
Period End Loans With No Related Allowance Related Allowance	0	0
Period End Loans With Related Allowance Recorded Investment	0	0
Period End Loans With Related Allowance Unpaid Principal Balance	0	0
Period End Loans With Related Allowance Related Allowance	0	0
Total
Related Allowance	0	0
Period End Loans Allocated Allowance Loan Losses [Member] | Junior Lein Residential Mortgage Loans [Member]
Period End Loans With No Related Allowance Related Allowance	0	0
Period End Loans With Related Allowance Recorded Investment	0	0
Period End Loans With Related Allowance Unpaid Principal Balance	0	0
Period End Loans With Related Allowance Related Allowance	0	0
Total
Related Allowance	0	0
Period End Loans Allocated Allowance Loan Losses [Member] | Consumer Loans [Member]
Period End Loans With No Related Allowance Related Allowance	0	0
Period End Loans With Related Allowance Recorded Investment	0	0
Period End Loans With Related Allowance Unpaid Principal Balance	0	0
Period End Loans With Related Allowance Related Allowance	0	0
Total
Related Allowance	0	0
Period End Loans Allocated Allowance Loan Losses [Member]
Period End Loans With No Related Allowance Related Allowance	3,486	3,875
Period End Loans With Related Allowance Recorded Investment	10,650	11,143
Period End Loans With Related Allowance Unpaid Principal Balance	14,138	16,223
Period End Loans With Related Allowance Related Allowance	3,486	3,875
Total
Related Allowance	3,486	3,875
Commercial and Industrial [Member]
Period End Loans With No Related Allowance Related Allowance	515	253
Period End Loans With Related Allowance Related Allowance	515	253
Total
Recorded Investment	3,164	5,078
Unpaid Principal Balance	3,683	6,844
Related Allowance	515	253
Commercial Real Estate Loans [Member]
Period End Loans With No Related Allowance Related Allowance	2,971	3,622
Period End Loans With Related Allowance Related Allowance	2,971	3,622
Total
Recorded Investment	17,592	22,363
Unpaid Principal Balance	20,558	32,212
Related Allowance	2,971	3,622
First Lien Residential Mortgage Loans [Member]
Period End Loans With No Related Allowance Related Allowance	0	0
Period End Loans With Related Allowance Related Allowance	0	0
Total
Recorded Investment	10,993	10,079
Unpaid Principal Balance	10,993	11,120
Related Allowance	0	0
Junior Lein Residential Mortgage Loans [Member]
Period End Loans With No Related Allowance Related Allowance	0	0
Period End Loans With Related Allowance Related Allowance	0	0
Total
Recorded Investment	562	278
Unpaid Principal Balance	562	331
Related Allowance	0	0
Consumer Loans [Member]
Period End Loans With No Related Allowance Related Allowance	0	0
Period End Loans With Related Allowance Related Allowance	0	0
Total
Recorded Investment	592	210
Unpaid Principal Balance	592	249
Related Allowance	$ 0	$ 0

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Cash and due from banks	$ 38,544	$ 40,151
Short term investments	61,057	35,665
Total cash and cash equivalents	99,601	75,816
FDIC insured bank time certificates of deposit	2,927	4,432
Trading Account Securities	6	2
Securities available for sale	353,678	342,184
Federal Home Loan Bank stock	7,266	7,266
Loans held for sale	2,921	349
Loans	963,762	983,909
Allowance for loan losses	(21,340)	(21,019)
Premises and equipment, net	24,356	25,087
Goodwill	35,513	35,513
Core deposits and other intangibles	965	1,448
Other real estate owned	2,925	5,251
Accrued interest receivable and other assets	26,182	25,061
TOTAL ASSETS	1,498,762	1,485,299
Deposits:
Non-interest bearing demand accounts	251,109	214,904
Interest bearing accounts:
Demand	348,598	340,942
Savings	265,323	241,603
Time	376,371	423,093
Total Deposits	1,241,401	1,220,542
Securities sold under agreements to repurchase and overnight borrowings	42,785	46,784
Federal Home Loan Bank advances	22,493	19,457
Subordinated debentures	36,084	36,084
Accrued interest payable and other liabilities	8,941	7,055
Total Liabilities	1,351,704	1,329,922
SHAREHOLDERS’ EQUITY
Preferred stock; no par value, 300,000 shares authorized; 17,000 and 33,000 shares issued and outstanding in 2012 and 2011	16,908	32,792
Common stock; no par value, 20,000,000 shares authorized; 8,001,903 and 7,892,486 shares issued and outstanding in 2012 and 2011	115,621	115,734
Retained earnings	10,921	3,955
Accumulated other comprehensive income	3,608	2,896
Total Shareholders’ Equity	147,058	155,377
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 1,498,762	$ 1,485,299

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Note 11 - Borrowings (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Securities Financing Transactions [Table Text Block]

(In Thousands of Dollars)
	2012			2011
At December 31:
Outstanding Balance	$	42,785		$	46,784
Average Interest Rate		0.19	%		0.19	%
Daily Average for the Year:
Outstanding Balance	$	47,605		$	43,847
Average Interest Rate		0.18	%		0.19	%
Maximum Outstanding at any Month End	$	55,047		$	47,603

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Note 16 - Stock Based Compensation (Detail) - The Fair Value of Each Option Award	12 Months Ended
	Dec. 31, 2010
Risk-free interest rate	2.11%
Expected option life (years)	7 years
Expected stock price volatility	44.70%
Dividend yield	0.70%

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Note 24 - Basic And Diluted Earnings Per Share (Detail) - Basic And Diluted Earnings Per Share (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Basic earnings per common share
Income available to common shareholders (in Dollars)	$ 9,259	$ 3,944	$ 2,084
Weighted average common shares outstanding	7,933	7,843	7,766
Add dilutive effects of assumed exercises of options (in Dollars)	$ 24	$ 2	$ 2
Weighted average common and dilutive potential
Common shares outstanding	7,957	7,845	7,768
Diluted earnings per common share (in Dollars per share)	$ 1.16	$ 0.50	$ 0.27
Basic earnings per common share (in Dollars per share)	$ 1.17	$ 0.50	$ 0.27

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Consolidated Statements of Changes in Shareholders’ Equity (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Common Stock [Member]
Cash dividends on common stock - per share (in Dollars per share)	$ 0.29	$ 0.04	$ 0.08
Shares of common stock through the dividend reinvestment plan	46,512	11,610	21,933
Shares of common stock from supplemental shareholder investments	21,925	34,803	6,555
Shares of common stock	40,980	42,379	44,587
Preferred Stock [Member]
Redemption of shares of preferred stock	16,000
Accumulated Other Comprehensive Income (Loss) [Member]
Net change in unrealized gain/(loss) on securities available for sale,tax (in Dollars)	$ 366	$ 1,417	$ 233

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Note 15 - Benefit Plans (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Defined Benefit Plan, Contributions by Employer	$ 539,000	$ 522,000	$ 537,000
West Michigan [Member]
Deferred Compensation Plan Assets	1,900,000	2,100,000
Deferred Compensation Arrangement with Individual, Compensation Expense	131,000	110,000	94,000
Payments [Member]
Deferred Compensation Arrangement with Individual, Compensation Expense	$ 231,000	$ 171,000	$ 187,000

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Note 4 - Securities (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Available-for-sale Securities, Gross Realized Gain (Loss)	$ 44,000	$ (37,000)	$ 4,000
Available-for-sale Securities	353,678,000	342,184,000
Held-to-maturity Securities Pledged as Collateral	45,645,000	46,784,000
Security One [Member] | Available For Sale Securities [Member]
Available-for-sale Securities, Gross Realized Gain (Loss)			26,000
Security Two [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member]
Available-for-sale Securities			0
Security Two [Member]
Other than Temporary Impairment Losses, Investments			150,000
Michigan Banks [Member]
Available-for-sale Securities	$ 500,000

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Note 16 - Stock Based Compensation (Detail) - Summary of Changes in the Company’s Non-Vested Shares (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Non-vested at January 1, 2012	22,627	13,373
Non-vested at January 1, 2012 (in Dollars per share)	$ 5.99	$ 9.13
Non-vested at December 31, 2012	34,054	22,627
Non-vested at December 31, 2012 (in Dollars per share)	$ 7.68	$ 5.99
Granted	14,980	14,120
Granted (in Dollars per share)	$ 10.30	$ 5.00
Vested	3,553	4,866
Vested (in Dollars per share)	$ 7.61	$ 11.77

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Note 28 - Subsequent Events

12 Months Ended

Dec. 31, 2012

Subsequent Events [Text Block]

NOTE 28 – SUBSEQUENT EVENTS

On February 1, 2013 we completed the consolidation of four of our bank charters into a single organization to achieve a more efficient operation. We also completed the closing of five smaller branch locations and the consolidation of the loans and deposits into other nearby locations on that same date.

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Note 5 - Loan Servicing (Detail) - Loans Held For Sale (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Loans held for sale	$ 2,921	$ 349
Less: Allowance to adjust to lower of cost or market	21,340	21,019
Loans held for sale, net	2,921	349
Loans Held For Sale [Member]
Less: Allowance to adjust to lower of cost or market	$ 0	$ 0

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Note 15 - Benefit Plans

12 Months Ended

Dec. 31, 2012

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE 15 – BENEFIT PLANS

The Firstbank Corporation 401(k) plan, a defined contribution plan, is an IRS qualified 401(k) salary deferral plan, under which Firstbank Corporation stock is one of the investment options. The Board of Directors approved changing the plan to a Safe Harbor 401(k) plan for the 2008 plan year. A Safe Harbor plan relieves administrative testing in exchange for immediate vesting of the employee’s matching contributions. Both employee and employer contributions may be made to the plan. The Company’s 2012, 2011 and 2010 matching 401(k) contributions charged to expense were $539,000, $522,000 and $537,000 respectively.  The percent of the Company’s matching contribution to the 401(k), and the determination to offer a Safe Harbor plan, is determined annually by the Board of Directors.

Firstbank – West Michigan had a deferred compensation plan for its directors and executive officers. The plan was frozen before the ICNB acquisition and has a balance at the end of 2012 of $1.9 million compared with $2.1 million at the end of 2011. Expense associated with the plan was $131,000 in 2012, $110,000 in 2011, and $94,000 in 2010. Payments under the deferred plan were $231,000 in 2012, $171,000 in 2011, and $187,000 in 2010.

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Accounting Policies, by Policy (Policies)

12 Months Ended

Dec. 31, 2012

Dec. 31, 2011

Consolidation, Policy [Policy Text Block]

Principles of Consolidation:  The consolidated financial statements include the accounts of the Company and its subsidiaries, Firstbank – Alma; Firstbank (Mt. Pleasant); Firstbank – West Branch; Keystone Community Bank and Firstbank – West Michigan (the “Banks”); 1st Armored, Incorporated (sold March 31, 2010); 1st Title, Incorporated; 1st Investors Title, LLC; Austin Mortgage Company; and FBMI Risk Management Services, Inc., after elimination of inter-company accounts and transactions. These subsidiaries are wholly owned, except 1st Investors Title, LLC, which we held a 46% share at December 31, 2012. We do not consolidate their results into the results of the Company. Firstbank – St Johns was merged into Firstbank - Alma in 2011. Each of our five banks operates its own Mortgage Company. The operating results of these companies are consolidated into each Bank’s financial statements. During 2004 we formed a special purpose trust, Firstbank Capital Trust I, in 2006 we formed Firstbank Capital Trust II, and in 2007 we formed Firstbank Capital Trust III and Firstbank Capital Trust IV, for the sole purpose of issuing trust preferred securities. These trusts are not consolidated into our financial statements.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates:  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period.  Actual results could differ from those estimates.

Investment, Policy [Policy Text Block]

Investments:  Investments are presented at fair value as required by accounting principles. Our investment portfolio is classified as available for sale, as such; adjustments to the fair value are reported as a change in equity. If a security is deemed to be other than temporarily impaired, the adjustment to fair value is recorded through the income statement.

Trade and Other Accounts Receivable, Policy [Policy Text Block]

Certain Significant Estimates:  The primary estimates incorporated into our financial statements, which are susceptible to change in the near term, include the allowance for loan losses, the determination of the fair value of certain financial instruments, fair value of investments, determination of state and federal tax assets and liabilities, goodwill, purchase accounting and core deposit intangible valuations, valuation of other real estate owned, and the valuation of mortgage servicing rights.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Current Vulnerability Due to Certain Concentrations:  Our business is concentrated in the mid-central and southwestern sections of the lower peninsula of Michigan. While the loan portfolio is diversified, the customers’ ability to honor their debts is partially dependent on the local economies. Our service area is primarily dependent on manufacturing (automotive and other), agricultural and recreational industries. Most commercial and agricultural loans are secured by business assets, including commercial and agricultural real estate and federal farm agency guarantees. Generally, consumer loans are secured by various items of personal property and mortgage loans are secured by residential real estate. Our funding sources include time deposits and other deposit products which bear interest. Periods of rising interest rates result in an increase in our cost of funds and an increase in the yields on certain assets. Conversely, periods of falling interest rates result in a decrease in yields on certain assets and costs of certain funds.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents:  Cash and cash equivalents include cash on hand, amounts due from banks and short term investments with an original maturity of 90 days or less, which include interest bearing deposits with banks and the Federal Reserve, federal funds sold, and overnight money market fund investments. Generally, federal funds and overnight money market funds are purchased for a one day period. We report customer loan transactions, deposit transactions and repurchase agreements and overnight borrowings on a net basis within our cash flow statement.

Marketable Securities, Trading Securities, Policy [Policy Text Block]

Trading Account Securities: From time to time, we invest in the common stock of other companies. Trading account securities are adjusted to fair value through the income statement, with increases in value reflected as non-interest income and decreases in value reflected as a decrease to non-interest income.

Marketable Securities, Available-for-sale Securities, Policy [Policy Text Block]

Securities Available for Sale:  Securities available for sale consist of bonds and notes which might be sold prior to maturity due to changes in interest rate, prepayment risks, yield and availability of alternative 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 (the difference between the fair value and amortized cost of the securities so classified) is reported in other comprehensive income. Other securities such as Federal Home Loan Bank stock are carried at cost. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method.  Gains and losses on sales are recorded on the trade date and are determined using the specific identification method.

Declines in the fair value of securities below their cost that are other than temporary are reflected as realized losses. In estimating other-than-temporary losses, management considers: (1) the length of time and extent that fair value has been less than carrying value; (2) the financial condition and near term prospects of the issuer; and (3) the Company’s ability and intent to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value.

Loans and Leases Receivable, Mortgage Banking Activities, Policy [Policy Text Block]

Mortgage Banking Activities:  Servicing rights are recognized as assets based on the allocated value of retained servicing rights on loans sold. Servicing rights are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights, using groupings of the underlying loans as to interest rates. Any impairment of a grouping is reported as a valuation allowance.

Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. Amortization of mortgage serving rights is netted against loan servicing fee income in the income statement.

Derivatives, Policy [Policy Text Block]

Mortgage Derivatives: From time to time, we enter into mortgage banking derivatives such as forward contracts and rate lock commitments in the ordinary course of business. The derivatives are not designated as hedges and are carried at fair value. The net gain or loss on mortgage banking derivatives is included in gain on sale of loans.

Finance, Loan and Lease Receivables, Held-for-sale, Policy [Policy Text Block]

Loans Held for Sale:  Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or market, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings.

Mortgage loans held for sale are generally sold with servicing rights retained. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold, which is reduced by the cost allocated to the servicing right. We generally lock in the sale price to the purchaser of the loan at the same time we make a rate commitment to the borrower.

Policy Loans Receivable, Policy [Policy Text Block]

Loans:  Loans receivable, for which management has the intent and ability to hold for the foreseeable future or payoff are reported at their outstanding unpaid principal balances, net of any deferred fees or costs on originated loans, unamortized premiums or discounts. Loan origination fees and certain origination costs are capitalized and recognized as an adjustment to yield of the related loan. Interest income is reported on the interest method and includes amortization of net deferred loan fees and costs over the loan term without anticipating prepayments. Interest income on mortgage and commercial loans is discontinued at the time the loan becomes 90 days delinquent unless the credit is well secured and in process of collection. Consumer and unsecured consumer line of credit loans are typically charged off no later than 120 days past due. Loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued, but not received, for loans placed on nonaccrual status, is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans classified as troubled debt restructurings (TDR’s) are accounted for in generally the same manner as all other loans. Troubled debt restructuring of loans is undertaken to improve the likelihood that the loan will be repaid in full under the modified terms in accordance with a reasonable repayment schedule. All modified loans are evaluated to determine whether the loans should be reported as a TDR. A loan is a TDR when we, for economic or legal reasons related to the borrower’s financial difficulties, grant a concession to the borrower by modifying or renewing a loan that we would not otherwise consider. To make this determination, we must determine whether (1) the borrower is experiencing financial difficulties and (2) we have granted the borrower a concession. This determination requires consideration of all of the facts and circumstances surrounding the modification. An overall general decline in the economy or some deterioration in a borrower’s financial condition does not automatically mean the borrower is experiencing financial difficulties.

If the loan is in accrual status at the time of the restructuring, the borrower has the ability to make the payments under the restructured terms, and the restructuring does not forgive principal, the loan remains on an accrual basis under the new terms. If there is a forgiveness of debt or partial charge off, the loan will generally be placed on nonaccrual status with any accrued interest reversed against interest income. If a loan is in nonaccrual status at the time of a restructuring or subsequently becomes nonaccrual, it will remain in nonaccrual status until the borrower has demonstrated the ability to make the payments under the restructured terms by making a minimum of six monthly payments. If the borrower makes the six monthly payments without becoming past due 30 days or more, it may be returned to accrual status. The determination of the need for an allowance for loan loss adjustment is based on the sum of: (1) a factor relating to historical losses multiplied times the balance of the loan, and (2) a net present value adjustment relating to a change in interest rate, if applicable. The amount recorded in the allowance for loan losses for restructured loans during the years ended December 31, 2012 and 2011 was $2.3 million and $591,000, respectively. Restructured loans charged off were $1.7 million in 2012 and $2.4 million in 2011.

Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block]

Allowance for Loan Losses:  The allowance for loan losses is a valuation allowance for probable incurred credit losses. Management uses a quantitative and qualitative methodology for analyzing factors which impact the allowance for loan losses consistently across its banking subsidiaries. The process applies risk factors for historical charge-offs and delinquency experience, portfolio segment weightings and industry and regional factors and trends as they affect the banks’ portfolios. Consideration of exposures to industries potentially most affected by risks in the current economic and political environment, and the review of potential risks in certain credits that are considered part of the non-performing loan category contributed to the establishment of the allowance levels at each bank. Loan losses are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed.

Loans are reviewed on an ongoing basis for impairment. A loan is impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans are measured based on the present value of expected cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the fair value of collateral, if the loan is collateral dependent. Loans considered to be impaired are reduced to the present value of expected future cash flows or to the fair value of collateral by allocating a portion of the allowance for loan losses to such loans. If these allocations cause an increase in the allowance for loan losses such increase is reported as provision for loan loss through the income statement. Increases or decreases in carrying value due to changes in estimates of future payments or the passage of time are reported as reductions or increases in the provision for loan losses.

Smaller balance homogeneous loans such as residential first mortgage loans secured by one to four family residences, residential construction, automobile, home equity and second mortgage loans, are collectively evaluated for impairment. Commercial loans and first mortgage loans secured by other properties are evaluated individually for impairment. When credit analysis of the borrower’s operating results and financial condition indicates the underlying ability of the borrower’s business activity is not sufficient to generate adequate cash flow to service the business’ cash needs, including our loans to the borrower, the loan is evaluated for impairment. Often this is associated with a delay or shortfall in payments of 90 days or less. Commercial and commercial real estate loans are rated on a scale of 1 to 10, with grades 1 to 4 being pass grades, 5 watch, 6 special mention, 7 substandard, 8 impaired, 9 doubtful and 10 loss. Loans graded 6, 7, and 8 are reviewed for possible impairment at least quarterly. Loans are generally moved to nonaccrual status when 90 days or more past due and considered impaired. Impaired loans, or portions thereof, are charged off when deemed uncollectible.  For a more complete explanation of our loan grading system, see Note 6.

Property, Plant and Equipment, Policy [Policy Text Block]

Premises and Equipment:  Premises and equipment are stated on the basis of cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the assets, primarily by accelerated methods for income tax purposes and by the straight line method for financial reporting purposes.  Buildings and related components are assigned useful lives ranging from 5 to 33 years. Furniture, fixtures and equipment are assigned useful lives ranging from 3 to 10 years.

Real Estate, Policy [Policy Text Block]

Other Real Estate Owned:  Other real estate owned includes properties acquired through either a foreclosure proceeding or acceptance of a deed in lieu of foreclosure and is initially recorded at the fair value less estimated carrying and selling costs when acquired, establishing a new cost basis. These properties are evaluated periodically and, if fair value is deemed to have declined subsequent to foreclosure, a valuation allowance is recorded through noninterest expense. Costs incurred for the property after foreclosure are expensed as incurred. Other real estate owned totaled approximately $2.9 million and $5.3 million at December 31, 2012 and 2011. Gains and losses on the sale of other real estate owned are recorded on the income statement as other income.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill and Other Intangible Assets: Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified. A more frequent assessment is performed if conditions in the market place or changes in the company’s organizational structure occur. We use a discounted income approach and a market valuation model, which compares the inherent value of our company to valuations of recent transactions in the market place to determine if our goodwill has been impaired. See Note 8 for additional information.

Other intangible assets consist of core deposit intangibles arising from whole bank and branch acquisitions. They are initially measured at fair value and then are amortized on an accelerated method over their estimated useful lives.

Revenue Recognition, Long-term Contracts [Policy Text Block]

Long Term Assets:  Premises and equipment, core deposit and other intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, a charge is taken to earnings, and the assets are written down to new estimate of fair value.

Loan Commitments, Policy [Policy Text Block]

Loan Commitments and Related Financial Instruments:  Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Income Tax, Policy [Policy Text Block]

Income Taxes:  We record income tax expense based on the amount of taxes due on our tax return plus the change in deferred taxes, computed based on the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities using enacted tax rates. A valuation allowance is recorded, if needed, and reduces deferred tax assets to the amount expected to be realized.

Earnings Per Share, Policy [Policy Text Block]

Earnings Per Share:  Basic earnings per share is calculated by dividing net income available for common shareholders (net income less preferred stock dividends and accretion of the preferred stock discount) by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by dividing net income available for common shareholders by the weighted average common shares outstanding including the dilutive effect of additional common shares that may be issued under outstanding stock options and warrants.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income:  Comprehensive income consists of net income and changes in unrealized gains and losses on securities available for sale, net of tax, which is recognized as a separate component of equity. Accumulated other comprehensive income consists of unrealized gains and losses on securities available for sale, net of tax.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements: During 2012, the Company adopted new guidance related to the presentation of comprehensive income in the financial statements. Among other changes, the new guidance eliminated the option to only present comprehensive income in the statement of equity. We have elected to report comprehensive income in a separate statement of comprehensive income that begins with net income. The change in presentation has been applied retrospectively and the 2011 financial statements have been restated to conform to the new presentation method. Other than the change in presentation of comprehensive income and related disclosures, the new guidance did not have a material effect on the financial statements.

In 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-02, A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. This update applies to all creditors, both public and non-public, and was introduced to provide clarification surrounding troubled debt restructurings (“TDR”). The primary characteristics that previously caused a restructuring to qualify as a TDR still exist: (1) the restructuring constitutes a concession to the borrower and (2) the borrower is experiencing financial difficulties. The update provides additional details and examples to provide clarity surrounding these items. The update also prohibits the use of the effective interest rate test when determining whether the restructuring constitutes a concession. The update is effective for annual reporting periods ending on or after December 15, 2012 (therefore, December 31, 2012, for the Corporation). Lastly, the disclosure requirements set forth by ASU 2010-20 regarding troubled debt restructurings, and later deferred by ASU 2011-01 until December 31, 2012 for the Company, are included in Note 6. Other than the additional disclosures, these updates did not have a significant impact on the financial statements.

In 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. This update to Fair Value Measurement (Topic 820) results in common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. The amendments in this update explain how to measure fair value. They do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting. However, this update does require expanded disclosure related to the nature and significance of inputs that are used in estimating and measuring the fair value of financial instruments. The amendments in this update are to be applied prospectively and are effective for annual reporting periods beginning after December 15, 2011 (therefore, December 31, 2012, for the Corporation). This update did not have a significant impact on the financial statements.

Basis of Accounting, Policy [Policy Text Block]

Effect of Newly Issued Accounting Standards: There are no newly issued and not yet effective accounting standards at this time.

Commitments and Contingencies, Policy [Policy Text Block]

Loss Contingencies:  Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are such matters that will have a material effect on the financial statements as of December 31, 2012.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments:  Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

Reclassification, Policy [Policy Text Block]

Reclassification:  Certain 2010 and 2011 amounts may have been reclassified to conform to the 2012 presentation.

Segment Reporting, Policy [Policy Text Block]

Operating Segments:  While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a company wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

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Note 16 - Stock Based Compensation (Detail) - Options Outstanding (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Options Outstanding Shares (in Shares)	356,030
Options Outstanding Weighted Average Exercise Price	$ 16.29	$ 16.58	$ 16.55
Options Outstanding Weighted Average Contractual Life (years)	4 years 6 months	5 years 36 days
Exercisable Shares (in Shares)	303,270,000
Exercisable Weighted Average Exercise Price	$ 17.95
Range One [Member]
Range of exercise prices	$ 5.19
Range of exercise prices	$ 8.00
Options Outstanding Shares (in Shares)	97,700
Options Outstanding Weighted Average Exercise Price	$ 6.61
Options Outstanding Weighted Average Contractual Life (years)	6 years 292 days
Exercisable Shares (in Shares)	60,320,000
Exercisable Weighted Average Exercise Price	$ 7.03
Range Two [Member]
Range of exercise prices	$ 8.01
Range of exercise prices	$ 16.00
Options Outstanding Shares (in Shares)	90,950
Options Outstanding Weighted Average Exercise Price	$ 12.87
Options Outstanding Weighted Average Contractual Life (years)	5 years 292 days
Exercisable Shares (in Shares)	75,570,000
Exercisable Weighted Average Exercise Price	$ 13.74
Range Three [Member]
Range of exercise prices	$ 16.01
Range of exercise prices	$ 23.00
Options Outstanding Shares (in Shares)	89,215
Options Outstanding Weighted Average Exercise Price	$ 22.42
Options Outstanding Weighted Average Contractual Life (years)	3 years 146 days
Exercisable Shares (in Shares)	89,215,000
Exercisable Weighted Average Exercise Price	$ 22.42
Range Four [Member]
Range of exercise prices	$ 23.01
Range of exercise prices	$ 26.18
Options Outstanding Shares (in Shares)	78,165
Options Outstanding Weighted Average Exercise Price	$ 25.36
Options Outstanding Weighted Average Contractual Life (years)	1 year 146 days
Exercisable Shares (in Shares)	78,165,000
Exercisable Weighted Average Exercise Price	$ 25.36

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Note 17 - Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions Disclosure [Text Block]

NOTE 17 – RELATED PARTY TRANSACTIONS

Loans to principal officers, directors, and their affiliates were as follows:

(In Thousands of Dollars)	2012			2011
Beginning balance	$	40,477		$	48,510
New loans		39,074			46,283
Repayments		(43,885	)		(47,972	)
Deletion of Directors		(896	)		(6,344	)
Ending balance	$	34,770		$	40,477

Deposits from principal officers, directors, and their affiliates at year end 2012 and 2011 were $27.1 million and $28.5 million respectively.

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Note 5 - Loan Servicing (Detail) - Estimated Amortization Expense (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
2013	$ 370
2014	278
2015	185
2016	99
2017	33
Loan Servicing Assets [Member]
2013	1,152
2014	949
2015	797
2016	660
2017	530
Thereafter	$ 905

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Note 23 - Fair Value (Detail) - Financial Instruments, Prior Year (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Financial Assets:
Cash and cash equivalents	$ 99,601	$ 75,816	$ 73,538	$ 107,365
Cash and cash equivalents	99,601	75,816
FDIC insured bank certificates of deposit	2,927	4,432
Trading account securities	6	2
Trading account securities	6	2
Securities available for sale	353,678	342,184
Securities available for sale	353,678	342,184
Federal Home Loan Bank stock	7,266	7,266
Loans held for sale	2,921	349
Loans held for sale	2,921	349
Loans, net	942,422	962,890
Loans, net	930,354	944,756
Accrued interest receivable		4,531
Financial Liabilities:
Deposits	(1,241,401)	(1,220,542)
Deposits	(1,243,712)	(1,215,484)
Securities sold under agreements to repurchase and overnight borrowings	(42,785)	(46,784)
Securities sold under agreements to repurchase and overnight borrowings	(42,785)	(46,784)
Federal Home Loan Bank advances	(22,493)	(19,457)
Federal Home Loan Bank advances	(24,122)	(21,359)
Accrued interest payable		(762)
Subordinated debentures	(36,084)	(36,084)
Subordinated debentures	$ (36,093)	$ (36,488)

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Consolidated Statements of Cash Flows (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
OPERATING ACTIVITIES
Net income	$ 10,534,000	$ 5,623,000	$ 3,763,000
Adjustments to reconcile net income to net cash from operating activities:
Provision for loan losses	7,690,000	13,337,000	13,344,000
Depreciation of premises and equipment	1,915,000	2,062,000	2,278,000
Net amortization and accretion of security premiums/discounts	4,096,000	3,783,000	2,161,000
(Gain)/Loss on trading account securities	(4,000)	11,000	(3,000)
(Gain)/Loss on securities transactions	(44,000)	37,000	(4,000)
Amortization of intangibles	483,000	698,000	796,000
Stock option and restricted stock grant compensation expense	96,000	118,000	115,000
Gain on sale of mortgage loans	(6,523,000)	(3,683,000)	(5,907,000)
Proceeds from sales of mortgage loans	200,957,000	115,100,000	186,040,000
Loans originated for sale	(197,006,000)	(110,411,000)	(180,910,000)
Deferred federal income tax expense/(benefit)	(27,000)	(1,299,000)	499,000
Decrease in accrued interest receivable and other assets	(860,000)	4,513,000	6,042,000
Increase/(decrease) in accrued interest payable and other liabilities	1,886,000	(1,007,000)	(2,595,000)
NET CASH FROM OPERATING ACTIVITIES	23,193,000	28,882,000	25,619,000
INVESTING ACTIVITIES
Proceeds from sales of securities available for sale	2,780,000	2,190,000	7,420,000
Proceeds from maturities of CDs	1,505,000	0	0
Proceeds from maturities and calls of securities available for sale	136,526,000	128,048,000	112,836,000
Purchase of securities available for sale	(153,775,000)	(210,398,000)	(229,458,000)
Redemption of Federal Home Loan Bank stock	0	937,000	881,000
Net decrease in portfolio loans	8,632,000	28,015,000	69,346,000
Proceeds from sale of other real estate owned	5,873,000	6,850,000	6,645,000
Net purchases of premises and equipment	(1,184,000)	(1,718,000)	(2,272,000)
NET CASH FROM/(USED IN) INVESTING ACTIVITIES	357,000	(46,076,000)	(34,602,000)
FINANCING ACTIVITIES
Net increase in deposits	20,859,000	36,759,000	34,720,000
Net increase/(decrease) in securities sold under agreements to repurchase and overnight borrowings	(3,999,000)	5,456,000	1,919,000
Repayment of Federal Home Loan Bank borrowings	(7,964,000)	(24,201,000)	(68,605,000)
Proceeds from Federal Home Loan Bank borrowings	11,000,000	3,000,000	9,000,000
Repurchase of preferred stock	(15,056,000)	0	0
Repurchase of stock warrants	(1,947,000)	0	0
Cash proceeds from issuance of common stock	903,000	421,000	392,000
Cash dividends on preferred stock	(1,247,000)	(1,650,000)	(1,650,000)
Cash dividends on common stock	(2,314,000)	(313,000)	(620,000)
NET CASH FROM/(USED IN) FINANCING ACTIVITIES	235,000	19,472,000	(24,844,000)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	23,785,000	2,278,000	(33,827,000)
Cash and cash equivalents at beginning of year	75,816,000	73,538,000	107,365,000
CASH AND CASH EQUIVALENTS AT END OF YEAR	99,601,000	75,816,000	73,538,000
Cash paid during the year for:
Interest	8,677,000	13,539,000	21,597,000
Income taxes	4,800,000	1,975,000	855,000
Non cash transfer of loans to other real estate owned	$ 4,214,000	$ 5,948,000	$ 10,167,000

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Consolidated Balance Sheets (Parentheticals) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Preferred stock, shares authorized (in Shares)	300,000	300,000
Preferred stock, shares issued (in Shares)	17,000	33,000
Preferred stock; shares outstanding	17,000	33,000
Common stock,par value (in Dollars per share) (in Dollars per share) (in Dollars per share) (in Dollars per share)	$ 0	$ 0
Common stock, shares authorized (in Shares)	20,000,000	20,000,000
Common stock, shares issued (in Shares)	8,001,903	7,892,486
Common stock, shares outstanding (in Shares)	8,001,903	7,892,486

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Note 10 - Deposits

12 Months Ended

Dec. 31, 2012

Banking and Thrift Disclosure [Text Block]

NOTE 10 – DEPOSITS

Time deposits of $100,000 or more were $167 million and $196 million at year end 2012 and 2011. There were $17.6  million and $16.1 million of brokered CDs included in time deposits of $100,000 or more in 2012 and 2011 respectively.

Scheduled maturities of time deposits at December 31, 2012 were as follows:

(In Thousands of Dollars)
Year	Amount
2013	$	239,810
2014		69,766
2015		31,135
2016		22,614
2017		13,041
2018 and thereafter		5
Total	$	376,371

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Note 18 - Financial Instruments With Off-Balance Sheet Risk (Detail) - Financial Instruments With Off-Balance Sheet Risk (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Fixed Rate [Member] | Commitment to Make Loans [Member]
Off-Balance Sheet Risk	$ 82,395	$ 44,091
Fixed Rate [Member] | Unused Line of Credit [Member]
Off-Balance Sheet Risk	25,923	22,205
Fixed Rate [Member] | Standby Letters of Credit [Member]
Off-Balance Sheet Risk	5,201	4,776
Variable Rate [Member] | Commitment to Make Loans [Member]
Off-Balance Sheet Risk	10,137	11,254
Variable Rate [Member] | Unused Line of Credit [Member]
Off-Balance Sheet Risk	126,490	118,443
Variable Rate [Member] | Standby Letters of Credit [Member]
Off-Balance Sheet Risk	$ 15,225	$ 15,110

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Note 14 - Shareholders' Equity (Detail) (USD $)	6 Months Ended	12 Months Ended		1 Months Ended			10 Months Ended	61 Months Ended		1 Months Ended
	Jun. 30, 2012	Dec. 31, 2012	Dec. 31, 2011	Jan. 30, 2009 Capital Purchase Program [Member]	Jul. 31, 2012 Repurchase [Member]	Dec. 31, 2012 Repurchase of Equity [Member]	Dec. 31, 2014 Preferred Class A [Member]	Feb. 15, 2014 Preferred Class A [Member]	Jan. 30, 2009 Preferred Class A [Member]	Jun. 28, 2012 Dutch Auction [Member]	Dec. 31, 2012 Dutch Auction [Member]
Preferred Stock, Shares Issued		17,000	33,000						33,000
Preferred Stock, Liquidation Preference Per Share (in Dollars per share)									$ 1,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		578,947		578,947
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item)		8.55		8.55
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants (in Dollars)				$ 33,000,000
Temporary Equity, Aggregate Amount of Redemption Requirement (in Dollars)									32,700,000
Warrants and Rights Outstanding (in Dollars)	578,947			300,000	1,946,670
Fair Value Assumptions, Expected Term				5 years
Stock Repurchased and Retired During Period, Shares (in Shares)	16,000,000,000									16,000
Shares, Outstanding										33,000
Preferred Stock, Redemption Price Per Share (in Dollars per share)		$ 0.225								$ 941.01
Stock Repurchased During Period, Value (in Dollars)		$ (1,947,000)								$ 15,100,000
Preferred Stock, Shares Outstanding (in Shares)	33,000	17,000	33,000			17,000					17,000
Preferred Stock, Dividend Rate, Percentage							9.00%	5.00%

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Note 12 - Federal Home Loan Bank Advances (Detail) - Maturities of FHLB Advances (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
2013	$ 2,500
2014	4,000
2015	6,777
2016	3,094
2017	3,087
2018 and thereafter	3,035
Total	$ 22,493	$ 19,457

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Document And Entity Information (USD $)	12 Months Ended
	Dec. 31, 2012	Mar. 01, 2013	Jun. 30, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	FIRSTBANK CORP
Document Type	10-K
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		8,022,952
Entity Public Float			$ 73,507,207
Amendment Flag	false
Entity Central Index Key	0000778972
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Dec. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY

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Note 11 - Borrowings

12 Months Ended

Dec. 31, 2012

Short-term Debt [Text Block]

NOTE 11 – BORROWINGS

Information relating to securities sold under agreements to repurchase is as follows:

(In Thousands of Dollars)
	2012			2011
At December 31:
Outstanding Balance	$	42,785		$	46,784
Average Interest Rate		0.19	%		0.19	%
Daily Average for the Year:
Outstanding Balance	$	47,605		$	43,847
Average Interest Rate		0.18	%		0.19	%
Maximum Outstanding at any Month End	$	55,047		$	47,603

Securities sold under agreements to repurchase (repurchase agreements) generally have original maturities of less than one year. Repurchase agreements are treated as financings and the obligations to repurchase securities sold are reflected as liabilities. Securities involved with the agreements are recorded as assets of the Company and are primarily held in safekeeping by correspondent banks. Repurchase agreements are offered principally to certain large deposit customers as deposit equivalent investments.

We had no unsecured overnight borrowings, in the form of federal funds purchased at December 31, 2012. There were no overnight borrowings at December 31, 2011.

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Note 8 - Goodwill and Intangible Assets (Detail) - Acquired Intangible Assets (Core Deposits [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Core Deposits [Member]
Core deposit intangibles resulting from bank and branch acquisitions:
Gross Amount	$ 7,930	$ 7,930	$ 7,930
Accumulated Amortization	(6,965)	(6,482)	(5,785)
Net Carrying Value	$ 965	$ 1,448	$ 2,145

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Note 12 - Federal Home Loan Bank Advances (Detail) - Long Term Borrowings Have Been Secured from the Federal Home Loan Bank (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Fixed Rate [Member]
Borrowings with a fixed rates at year end	$ 22,493	$ 19,457
Borrowings with a variable rate of interest at year end	22,493	19,457
Variable Rate [Member]
Borrowings with a fixed rates at year end	0	0
Borrowings with a variable rate of interest at year end	$ 0	$ 0

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Consolidated Statements of Income and Comprehensive Income (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Interest Income:
Loans, including fees	$ 56,975,000	$ 61,465,000	$ 67,390,000
Securities:
Taxable	4,557,000	4,888,000	3,649,000
Exempt from federal income tax	1,169,000	1,118,000	1,138,000
Short term investments	165,000	173,000	205,000
Total Interest Income	62,866,000	67,644,000	72,382,000
Interest Expense:
Deposits	6,626,000	10,891,000	15,733,000
FHLB advances and notes payable	625,000	801,000	3,564,000
Subordinated debentures	1,036,000	1,197,000	1,497,000
Other	87,000	83,000	96,000
Total Interest Expense	8,374,000	12,972,000	20,890,000
Net Interest Income	54,492,000	54,672,000	51,492,000
Provision for loan losses	7,690,000	13,337,000	13,344,000
Net Interest Income after Provision for Loan Losses	46,802,000	41,335,000	38,148,000
Non-Interest Income:
Service charges on deposit accounts	4,219,000	4,492,000	4,576,000
Gain on sale of mortgage loans	6,523,000	3,683,000	5,907,000
Mortgage servicing, net of amortization	(231,000)	89,000	(96,000)
Gain/(loss) on trading account securities	4,000	(11,000)	3,000
Gain/(loss) on securities transactions	44,000	(37,000)	4,000
Courier and cash delivery services	0	0	174,000
Other	2,111,000	1,459,000	1,261,000
Total Non-Interest Income	12,670,000	9,675,000	11,829,000
Non-Interest Expense:
Salaries and employee benefits	22,680,000	21,263,000	20,889,000
Occupancy and equipment	5,152,000	5,311,000	5,555,000
FDIC insurance premium	1,220,000	1,560,000	2,098,000
Amortization of intangibles	483,000	698,000	796,000
Outside professional services	1,287,000	1,202,000	1,144,000
Advertising and promotions	1,491,000	1,425,000	1,684,000
OREO expense and valuation write downs	1,679,000	3,153,000	3,513,000
Other	10,690,000	8,941,000	9,023,000
Total Non-Interest Expense	44,682,000	43,553,000	44,702,000
Income before federal income taxes	14,790,000	7,457,000	5,275,000
Federal income taxes	4,256,000	1,834,000	1,512,000
NET INCOME	10,534,000	5,623,000	3,763,000
Preferred stock dividends and accretion of discount on preferred stock	1,275,000	1,679,000	1,679,000
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	9,259,000	3,944,000	2,084,000
Basic earnings per common share (in Dollars per share)	$ 1.17	$ 0.50	$ 0.27
Diluted earnings per common share (in Dollars per share)	$ 1.16	$ 0.50	$ 0.27
COMPREHENSIVE INCOME
Net income	10,534,000	5,623,000	3,763,000
Change in unrealized gain on securities, net of tax and reclassification effects	712,000	2,750,000	(452,000)
TOTAL COMPREHENSIVE INCOME	$ 11,246,000	$ 8,373,000	$ 3,311,000

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Note 5 - Loan Servicing

12 Months Ended

Dec. 31, 2012

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 5 – LOAN SERVICING

Loans held for sale at year end are as follows:

(In Thousands of Dollars)
	2012		2011
Loans held for sale	$	2,921	$	349
Less: Allowance to adjust to lower of cost or market		0		0
Loans held for sale, net	$	2,921	$	349

Mortgage loans serviced for others are not reported as assets.  The principal balances of these loans at year end are as follows:

(In Thousands of Dollars)
	2012		2011
Mortgage loan portfolios serviced for:
Freddie Mac	$	605,000	$	601,710
Fannie Mae	$	1,140	$	1,446
Federal Home Loan Bank	$	2,094	$	2,757

Custodial escrow balances maintained in connection with serviced loans were $1,433,000 and $1,438,000 at year end 2012 and 2011.

Activity for capitalized mortgage servicing rights, included in other assets on the Consolidated Balance Sheet, was as follows:

(In Thousands of Dollars)
	2012			2011			2010
Servicing rights:
Beginning of year	$	4,596		$	4,603		$	3,705
Additions		2,512			1,505			2,428
Amortized to expense		(2,115	)		(1,512	)		(1,530	)
End of year	$	4,993		$	4,596		$	4,603

Management has determined that no valuation allowance was necessary at December 31, 2012, 2011, or 2010.

The fair value of mortgage servicing rights was $5,494,000 and $6,034,000 at year end 2012 and 2011. Fair value at the end of 2012 was determined using a discount rate of 7.018%, a weighted average constant prepayment rate of 17.01%, depending on the stratification of the specific right, and a weighted average delinquency rate of 1.01%.  At the end of 2011, fair value was determined using a discount rate of 7.375%, a weighted average constant prepayment rate of 14.79%, depending on the stratification of the specific right, and a weighted average delinquency rate of 1.09%

The weighted average amortization period is 3.6 years as of December 31, 2012.  Estimated amortization expense for each of the next five years is:

(In Thousands of Dollars)
2013	$	1,152
2014	$	949
2015	$	797
2016	$	660
2017	$	530
Thereafter	$	905

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Note 4 - Securities

12 Months Ended

Dec. 31, 2012

Investment Holdings [Text Block]

NOTE 4 – SECURITIES

The fair value of securities available for sale was as follows:

(In Thousands of Dollars)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
Securities Available for Sale:
December 31, 2012:
U.S. governmental agency	$	105,629	$	1,271	$	(15	)	$	106,885
States and political subdivisions		116,123		1,786		(95	)		117,814
Mortgage Backed Securities		64,550		1,729		(2	)		66,277
Collateralized Mortgage Obligations		60,278		810		(58	)		61,030
Equity and other Securities		1,610		62		0			1,672
Total	$	348,190	$	5,658	$	(170	)	$	353,678
December 31, 2011:
U.S. governmental agency	$	132,534	$	1,325	$	(25	)	$	133,834
States and political subdivisions		76,574		1,238		(23	)		77,789
Mortgage Backed Securities		70,059		1,080		(87	)		71,052
Collateralized Mortgage Obligations		57,006		854		(15	)		57,845
Equity and other Securities		1,606		58		0			1,664
Total	$	337,779	$	4,555	$	(150	)	$	342,184

Securities with unrealized losses at year end 2012 and 2011 not recognized in income are as follows:

(In Thousands of Dollars)	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
December 31, 2012:
U.S. governmental agency	$	10,135	$	(15	)	$	0	$	0		$	10,135	$	(15	)
States and political subdivisions		17,141		(93	)		582		(2	)		17,723		(95	)
Mortgage Backed Securities		0		0			513		(2	)		513		(2	)
Collateralized Mortgage Obligations		19,995		(55	)		721		(3	)		20,716		(58	)
Total Temporarily Impaired	$	47,271	$	(163	)	$	1,816	$	(7	)	$	49,087	$	(170	)
December 31, 2011:
U.S. governmental agency	$	0	$	0		$	17,974	$	(25	)	$	17,974	$	(25	)
States and political subdivisions		3,738		(2	)		2,249		(21	)		5,987		(23	)
Mortgage Backed Securities		0		0			18,091		(87	)		18,091		(87	)
Collateralized Mortgage Obligations		0		0			6,590		(15	)		6,590		(15	)
Total Temporarily Impaired	$	3,738	$	(2	)	$	44,904	$	(148	)	$	48,642	$	(150	)

Unrealized losses on securities shown in the previous tables have not been recognized into income because management has the intent and ability to hold these securities for the foreseeable future. The decline in market value is due to changes in interest rates for debt securities and considered normal market fluctuations for equity securities. Management has also reviewed the issuers’ bond ratings, noting they are of high credit quality.

Trading account securities are marked to market with the change in value reported on the income statement. Gains and losses on available for sale securities are recognized if the security is either deemed to be other than temporarily impaired, or the security is sold. During 2010 we sold one security that was other than temporarily impaired and recognized a $26,000 loss. Due to continuing problems with another security, we recorded an additional charge for other than temporary impairment of $150,000 bringing the carrying value of that security to zero. Both of these securities were trust preferred securities of Michigan banks that had a combined original book value of $500,000. The following table shows gross gains and losses on investment securities for the three year period:

(In Thousands of Dollars)	2012		2011			2010
Trading Account Securities Gains/(Losses)	$	4	$	(11	)	$	3
Available for Sale Securities
Other than temporary impairment losses	$	0	$	0		$	(150	)
Gross realized gains		44		28			200
Gross realized losses		0		(65	)		(46	)
Net realized gains (losses)	$	44	$	(37	)	$	4

The fair value of securities at December 31, 2012, by stated maturity, is shown below. Actual maturities may differ from stated maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In Thousands of Dollars)	Fair Value
Due in one year or less	$	93,182
Due after one year through five years		109,398
Due after five years through ten years		75,022
Due after ten years		74,404
Total		352,006
Equity securities		1,672
Total securities	$	353,678

At December 31, 2012 and 2011, securities with carrying values approximating $45,645,000 and $46,784,000 were pledged to secure public trust deposits, securities sold under agreements to repurchase, and for such other purposes as required or permitted by law.

Federal Home Loan Bank stock is carried at cost, which approximates its fair value.

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Note 16 - Stock Based Compensation

12 Months Ended

Dec. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 16 – STOCK BASED COMPENSATION

The Company has stock based compensation plans as described below. Total compensation cost that has been charged against income for those plans was $96,000, $118,000, and $115,000 for 2012, 2011 and 2010. The total income tax benefit resulting from these charges was $33,000, $40,000 and $39,000, respectively.

The Firstbank Corporation Stock Compensation Plans of 1993, 1997 and 2006 (“Plans”), as amended, which were shareholder approved, provide for the grant of 395,986, 593,798 and 315,000 shares of stock, respectively, in either restricted form or under option. Options may be either incentive stock options or nonqualified stock options. As of December 31, 2012 only nonqualified stock options and restricted stock shares have been issued under the plans. The Plan of 1993 terminated April 26, 2003. The 1997 Plan terminated April 28, 2007. The 2006 Plan will terminate February 27, 2016. The Board, at its discretion, may terminate any or all of the Plans prior to the Plans’ scheduled termination dates. At year end 2012, there were 61,642 shares available for grant under the 2006 Plan.

Stock Option

Each option granted under the Plans may be exercised in whole or in part during such period as is specified in the option agreement governing that option. Options may only be issued with exercise prices equal to, or greater than, the stock’s market value on the date of issuance. The length of time available for a stock option to be exercised is governed by each option agreement, but has not been more than ten years from the issuance date.

All companies are required to record compensation cost for stock options provided to employees in return for employee service. The cost is measured at the fair value of the options when granted. This cost is expensed over the employee service period, which is normally the vesting period of the options.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of our common stock. We use historical data to estimate option exercise and post-vesting termination behavior. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The weighted average fair value of options granted was $2.33 in 2010. There were no options granted in 2011 or 2012.

	2010
Risk-free interest rate		2.11	%
Expected option life (years)		7
Expected stock price volatility		44.7	%
Dividend yield		0.7	%

Activity under the plans:

	Twelve months ended December 31, 2012									Twelve months ended December 31, 2011
Total options outstanding	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value (000)		Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value (000)
Beginning of period		396,898		$	16.58						454,745		$	16.55
Granted		0			-						0
Exercised		0			-						0
Forfeited		(6,279	)	$	19.00						(25,273	)	$	19.45
Expired		(34,589	)	$	19.20						(32,574	)	$	13.51
End of period		356,030		$	16.29		4.5	$	479		396,898		$	16.58		5.1	$	0
Options exercisable, end of period		303,270		$	17.95		4.0	$	269		305,468		$	19.18		4.3	$	0

There were no options exercised in either 2012 or 2011. As of December 31, 2012, there was $32,000 of total unrecognized compensation cost related to non-vested stock options granted under the Plans. The cost is expected to be recognized over a weighted-average period of 1.5 years.

Options outstanding at December 31, 2012 were as follows:

			Options outstanding						Exercisable
Range of exercise prices			Shares		Weighted Average Exercise Price		Weighted Average Contractual Life (years)		Shares		Weighted Average Exercise Price
$5.19	-	$8.00		97,700	$	6.61		6.8		60,320	$	7.03
$8.01	–	$16.00		90,950	$	12.87		5.8		75,570	$	13.74
$16.01	-	$23.00		89,215	$	22.42		3.4		89,215	$	22.42
$23.01	-	$26.18		78,165	$	25.36		1.4		78,165	$	25.36
Total				356,030	$	16.29		4.5		303,270	$	17.95

Restricted Stock

Restricted shares may be issued under the Plans as described above. Compensation expense is recognized over the vesting period of the shares based on the market value of the shares on the issue date.

A summary of changes in the Company’s non-vested shares for 2012 and 2011 follows:

	2012				2011
Non-vested Shares	Shares		Weighted-Average Grant-Date Fair Value		Shares		Weighted-Average Grant-Date Fair Value
Non-vested at January 1, 2012		22,627	$	5.99		13,373	$	9.13
Granted		14,980	$	10.30		14,120	$	5.00
Vested		3,553	$	7.61		4,866	$	11.77
Non-vested at December 31, 2012		34,054	$	7.68		22,627	$	5.99

As of December 31, 2012, there was $210,000 of total unrecognized compensation cost related to non-vested shares granted under the Restricted Stock Plan. The cost is expected to be recognized over a weighted-average period of 2.1 years. The total fair value of shares vested during the years ended December 31, 2012, 2011 and 2010 was $27,000, $57,000, and $23,000. Expense associated with restricted stock and include in the total compensation cost presented earlier in this note were $56,000 in 2012 compared with $37,000 in 2011 and $20,000 in 2010.

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Note 12 - Federal Home Loan Bank Advances

12 Months Ended

Dec. 31, 2012

Federal Home Loan Bank Advances, Disclosure [Text Block]

NOTE 12 – FEDERAL HOME LOAN BANK ADVANCES

Long term borrowings have been secured from the Federal Home Loan Bank. At year end, advances from the Federal Home Loan Bank were as follows:

(In Thousands of Dollars)
	2012		2011
Borrowings with a fixed rates at year end	$	22,493	$	19,457
Borrowings with a variable rate of interest at year end	$	0	$	0

Fixed rate advances shown above ranged in the interest rate owed from 0.41% to 7.30% and averaged 2.39% at year end 2012 and maturity dates ranged from January 2013 to March 2026. Higher rate advances were borrowed to match fund specific loans in the past, and are matched in duration and prepayment terms to those loans. At the end of 2011, rates ranged from 1.28% to 7.30% and averaged 3.41%, with maturities ranging from January 2012 to March 2026. Each Federal Home Loan Bank advance is payable at its maturity date without penalty, however, substantial penalties do exist if an advance is paid before its contractual maturity. Such penalties vary from advance to advance and are based on the size, interest rate, and remaining term of each specific advance. Advances of $3.5 million may be converted from fixed to variable rate by the FHLB, but may be repaid, without penalty, if that option is exercised. The advances were collateralized by $177.7 million and $183.7 million of first mortgage loans under a blanket lien arrangement and pledges of specific mortgages at year end 2012 and 2011. As of December 31, 2012, we had $84.4 million of additional borrowing capacity with the Federal Home Loan Bank. Federal Home Loan Bank borrowings have decreased substantially as increased core deposits and low loan demand have combined to reduce the need for this funding in the near term.

Maturities of FHLB advances are as follows:

(In Thousands of Dollars)
2013	$	2,500
2014		4,000
2015		6,777
2016		3,094
2017		3,087
2018 and thereafter		3,035
Total	$	22,493

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Note 9 - Federal Income Taxes (Detail) - Reconciliation of the Difference between Federal Income Tax Expense and the Federal Statutory Tax Rate Amount (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Tax at statutory rate	$ 5,177	$ 2,610	$ 1,846
Effect of tax-exempt interest	(479)	(443)	(489)
Deferred tax valuation allowance	0	0	485
Other	(442)	(333)	(330)
Federal income taxes	4,256	1,834	1,512
Effective tax rate	29.00%	25.00%	29.00%
Federal Reconcilliation [Member]
Federal income taxes	$ 4,256	$ 1,834	$ 1,512

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Note 8 - Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 8 – GOODWILL AND INTANGIBLE ASSETS

Goodwill

During the third quarter, Firstbank Corporation retained an independent third party to perform a goodwill impairment analysis. The valuation date was July 31, 2012. The steps that Austin utilized in a Step 1 valuation test included the reporting unit and the appropriate standard and level of value, the calculation of fair value and the comparison of fair value to carrying value. We determined that Firstbank Corporation was the relevant reporting unit to be valued. The standard of value used in the valuation was fair value. The definition of fair value is that it is the value of ownership of the specific business with consideration of synergies, efficiencies and other value enhancing factors. The appropriate level of value used was controlling interest level. This is consistent with allowing for synergies and other factors as described previously and also considers premiums where appropriate. The appraisal methodology utilized by us includes the following valuation approaches:

A. Income Approach: Under this approach, a discounted cash flow value is calculated based on earnings capacity.

B. Asset Approach: This approach is based on the difference between the estimated market value of assets and liabilities.

C. Market Approach: This analysis is based on price-to-earnings multiples, price-to-tangible-book ratios and core deposit premiums for selected bank sale transactions.

We used the individual valuation results to calculate their estimate of the fair value of common equity. This figure was then compared to the carrying value of equity to determine whether the Step 1 test had passed or failed. In its findings, management determined that the fair value of Firstbank’s common equity was $140.0 million, above its carrying value of $127.6 million on the testing date. As required by generally accepted accounting principles, since the Step 1 test passed, it was not necessary to complete a Step 2 test.

Based on the analysis, management concluded that the implied fair value of goodwill exceeded the carrying value; therefore, no goodwill impairment charge was required at this time. Whole bank sale transactions at a premium to tangible book value in the market place play an important role in the determination of fair value of the company. Changes in the pricing of future whole bank sales could negatively affect future valuation and result in goodwill impairment at a future date.

There was no change in the carrying amount of goodwill during the year.

(In Thousands of Dollars)
	2012		2011
Balance at January 1	$	35,513	$	35,513
Goodwill from acquisitions/(divestitures)		0		0
Balance at December 31	$	35,513	$	35,513

Acquired Intangible Assets

Acquired intangible assets at year end were as follows:                                                                                                                     

(In Thousands of Dollars)	2012			2011			2010
Core deposit intangibles resulting from bank and branch acquisitions:
Gross Amount	$	7,930		$	7,930		$	7,930
Accumulated Amortization		(6,965	)		(6,482	)		(5,785	)
Net Carrying Value	$	965		$	1,448		$	2,145

Aggregate amortization expense was $483,000, $698,000, and $796,000 for 2012, 2011, and 2010, respectively. Our estimated amortization expense for each of the next five years is:

(In Thousands of Dollars)

Year	Amount
2013	$	370
2014		278
2015		185
2016		99
2017		33

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Note 4 - Securities (Detail) - Unrealized Gains and Losses in Investments (USD $)	Dec. 31, 2012	Dec. 31, 2011
Securities Available for Sale:
Amortized Cost	$ 348,190,000	$ 337,779,000
Unrealized Gains	5,658,000	4,555,000
Unrealized Losses	(170,000)	(150,000)
Carrying Value	353,678,000	342,184,000
US Government Agencies Debt Securities [Member]
Securities Available for Sale:
Amortized Cost	105,629,000	132,534,000
Unrealized Gains	1,271,000	1,325,000
Unrealized Losses	(15,000)	(25,000)
Carrying Value	106,885,000	133,834,000
US States and Political Subdivisions Debt Securities [Member]
Securities Available for Sale:
Amortized Cost	116,123,000	76,574,000
Unrealized Gains	1,786,000	1,238,000
Unrealized Losses	(95,000)	(23,000)
Carrying Value	117,814,000	77,789,000
Mortgage-backed Securities, Issued by Private Enterprises [Member]
Securities Available for Sale:
Amortized Cost	64,550,000	70,059,000
Unrealized Gains	1,729,000	1,080,000
Unrealized Losses	(2,000)	(87,000)
Carrying Value	66,277,000	71,052,000
Collateralized Mortgage Obligations [Member]
Securities Available for Sale:
Amortized Cost	60,278,000	57,006,000
Unrealized Gains	810,000	854,000
Unrealized Losses	(58,000)	(15,000)
Carrying Value	61,030,000	57,845,000
Equity Securities, Other [Member]
Securities Available for Sale:
Amortized Cost	1,610,000	1,606,000
Unrealized Gains	62,000	58,000
Unrealized Losses	0	0
Carrying Value	$ 1,672,000	$ 1,664,000

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Note 23 - Fair Value (Detail) - Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Total unrealized gains/(losses) included in other comprehensive income	$ 1,078	$ 4,167	$ (685)
Fair Value, Inputs, Level 3 [Member]
Balance at beginning of year	16,914	10,833
Total realized and unrealized gains/(losses) included in income	0	0
Total unrealized gains/(losses) included in other comprehensive income	0	0
Purchases of securities	17,262	11,325
Sales of securities	0	0
Calls and maturities	(12,663)	(5,244)
Net transfers in to Level 3	357	0
Balance at December 31 of each year	$ 21,870	$ 16,914

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Note 6 - Loans

12 Months Ended

Dec. 31, 2012

Debt Disclosure [Text Block]

NOTE 6 – LOANS

The following information provides a description of how loan grades are determined for our Commercial and Industrial and Commercial Real Estate segments. In general, for Commercial and Industrial, and Commercial Real Estate segments, the probability of loss increases with each rate change from the Grade 1 Excellent down through the Grade 9 Doubtful Nonaccrual classes. For Consumer and Residential Mortgage segments, the probability of loss increases as loans move down from current to greater than 60 days past due, nonaccrual.

Grade 1 Excellent – Characteristics of loans in this category include: the loan is generally secured by cash or readily marketable securities; the borrower provides annual audited financials with interim financials reviewed quarterly; the loan has no delinquencies over ten days in the past year; the company’s management is considered to have a high degree of integrity; management of the company has over 15 years of experience; lines of credit have not and are not expected to be utilized; financial statements demonstrate consistently strong profits; and the company has little competition and excellent growth prospects.

Grade 2 Quality – Characteristics of loans in this category include: high net worth borrowers with excellent cash flow and a high degree of liquidity; the borrower generally has annual audited financial statements; there has been one or fewer delinquencies over ten days in the past year; the company’s management is considered to have a high degree of integrity; the company’s management has over ten years of experience; lines of credit have had nominal use over the preceding 12 months; financial statements demonstrate consistent profitability; and the company is in an excellent competitive position.

Grade 3 Good – Loans in this category are very strong, but may lack some of the net worth and/or cash flow characteristics of the previous rating. Characteristics of loans in this category include: annual reviewed financial statements and compiled quarterly financial statements; there has only been one or fewer delinquencies over 15 days in the past year; the company’s management has solid integrity; the company’s management is capable and has over five years of experience; lines of credit have regular usage with no balance in the last 60 days; financial statements demonstrate consistent but nominal profits; and the company has good a solid market share.

Grade 4 Acceptable – Characteristics of loans in this category include: annual compiled financial statements with quarterly information available or CPA prepared tax returns; there are only two or fewer delinquencies over 15 days of which only one is over 30 days in the past year; the company’s management has average business experience of over three years; lines of credit have regular use but have no current balance or a significant reduction in balance in the last 30 days; the company has been profitable in two of the preceding three years; and the company is competitive in its market and is maintaining its market share.

Loans graded as one through four are considered as Pass loans and are shown as one class of loans in our credit quality table.

Grade 5 Watch - This rating is used for loans which have shown some sign of weakness, but have not degraded to the point of requiring an impairment review. Characteristics of loans in this rating include: annual management prepared financial statements; delinquencies not exceeding three times over 30 days or one time over 60 days in the past year; weakening financial statements but profitable in two of the last three years; and a declining market share in a competitive market. These loans merit monitoring by management to assure that if circumstances deteriorate further actions are taken to protect the bank’s position.

Grade 6 Special Mention - This rating is used for loans which are included on a watch list and have degraded to a point where additional supervision is required; however, the bank remains confident in the full collection of all principal and interest. These loans are reviewed for impairment on a quarterly basis. Characteristics of loans in this rating may include: repeat delinquency; longer term negative trends in financial results; continuing deterioration of cash flows; concerns regarding the liquidity of guarantors; and other negative business trends.

Grade 7 Substandard - This rating is for loans for which a lender is actively working with the borrower to resolve issues and the full repayment of the loan is questionable. The loan is inadequately protected by current sound worth of the borrower, paying capacity of the guarantor, or pledged collateral. Loans in this grade have well defined weaknesses that jeopardize the full collectability of the loan and a distinct possibility of loss exists.  These loans are reviewed for impairment on a quarterly basis. Characteristics of loans in this rating may include: persistent delinquency; poor financial results of the business; negative cash flow; the ability of guarantor(s) to provide support for the loan is questionable.

Grade 8 Impaired Nonaccrual - This rating is for loans which are considered impaired and classified as nonaccrual. Loans in this grade have all the weaknesses of those classified as substandard grade 7 above, with the added characteristic that, based upon currently known facts, the weaknesses make collection of all principal and interest due according to contractual terms unlikely. These loans are reviewed for impairment on a quarterly basis. Loans in this grade may be assigned an allocated reserve in the loan loss allowance analysis if a determination is made that the future cash flows or the value of the collateral do not support the current carrying value of the loan.

Grade 9 Doubtful Nonaccrual- This rating is for loans which are considered impaired and are classified as nonaccrual. Loans in this grade have all the weaknesses of those classified as impaired nonaccrual grade 8 above, with the added characteristic that the weaknesses make full collection through payment or liquidation of the collateral, based on currently known facts, highly questionable or improbable. These loans are reviewed for impairment on a quarterly basis. Loans in this grade may be assigned an allocated reserve in the loan loss allowance analysis if a determination is made that the future cash flows or the value of the collateral do not support the current carrying value of the loan.

Restructured Loans

Impaired Restructured and Accruing - Loans where the borrower is experiencing financial difficulty and the bank has granted a concession to the borrower. A concession may be: a reduction in the contractual interest rate below current market rates for loans of similar quality, a lengthening of the accrual time frame beyond normal market terms, a forgiveness of a portion of the outstanding principal, or acceptance of collateral in lieu of payment for a portion of the loan balance. If the loan is in accrual status at the time of the restructuring, the borrower has the ability to make the payments under the restructured terms, and the restructuring does not forgive principal, the loan remains on an accrual status under the new terms. However, if there is a forgiveness of debt or partial charge off, the loan will generally be graded as impaired nonaccrual (Grade 8) with any accrued interest reversed against interest income. If a loan is in nonaccrual status at the time of a restructuring, it will remain in nonaccrual status (Grade 8) at the time of restructuring. All non-accruing restructured loans remain in nonaccrual status until the borrower has demonstrated the ability to make the payments under the restructured terms by making a minimum of six months of payments. If the borrower makes the six months of payments without becoming past due 30 days or more, the loan may be returned to accrual status. The determination of the need for an allowance for loan loss adjustment is based on a factor relating to historical losses multiplied by the balance of the loan for residential mortgages, or a collateral impairment review for commercial loans, and a net present value adjustment relating to a change in interest rate and other terms, if applicable.

Impaired Restructured and Accruing loans are graded seven or better based on the above definitions. If a restructured loan is graded as eight or nine, it is reported as Impaired Nonaccrual, or Doubtful Nonaccrual, respectively.

For commercial loans graded eight and nine and consumer and residential mortgage loans reported in nonaccrual, interest income is generally not recognized until the loan improves and is returned to accrual status. In some cases, if the loan is well secured and the borrower’s ability to support the loan payments has improved, such as in the case of a restructured nonaccrual loan, interest income may be recognized on a cash basis while the loan is in nonaccrual status.

For Consumer and Residential Mortgage Loan segments, loans are classified by risk based on current delinquency and nonaccrual status. These segments of loans will contain a separate class for restructured loans, if they exist.

The following credit quality indicators provide a system for distribution of our loan portfolio in a manner consistent with the previously described loan grading system and for use in the determination of our loan loss allowance. This presentation differs somewhat by loan category from classification of loans presented elsewhere in our regulatory reports and within this report. These variations primarily relate to how real estate loans are analyzed internally to determine the adequacy of the loan loss allowance, versus how we are required to report real estate loans for regulatory purposes.

Credit Quality Indicators:

Loans at period end were as follows:
(In Thousands of Dollars)	December 31, 2012		December 31, 2011
Commercial and Industrial
Pass loans	$	133,844	$	122,812
Watch loans		5,375		19,542
Special mention loans		5,433		7,878
Substandard loans		1,879		2,928
Impaired restructured and accruing loans		3,230		3,562
Impaired nonaccrual loans		447		1,771
Total Commercial and Industrial		150,208		158,493
Commercial Real Estate
Pass loans	$	373,527	$	373,320
Watch loans		50,741		56,571
Special mention loans		18,119		21,155
Substandard loans		9,664		5,686
Impaired restructured and accruing loans		12,113		10,652
Impaired nonaccrual loans		8,429		15,336
Doubtful nonaccrual loans		25		0
Total Commercial Real Estate		472,618		482,720
Residential Mortgages 1st Liens
Performing loans	$	202,342	$	199,117
Loans > 60 days past due		1,046		2,203
Impaired restructured and accruing loans		4,953		4,425
Nonaccrual loans		6,038		5,374
Total First lien residential mortgage loans		214,379		211,119
Residential Mortgages Junior Liens
Performing loans	$	58,089	$	66,169
Loans > 60 days past due		96		328
Impaired restructured and accruing loans		235		278
Nonaccrual loans		328		278
Total Junior lien residential mortgage loans		58,748		67,053
Consumer
Performing loans	$	67,178	$	64,075
Loans > 60 days past due		39		239
Impaired restructured and accruing loans		191		210
Nonaccrual loans		401		0
Total Consumer		67,809		64,524
Total Loans	$	963,762	$	983,909

Allowance for Loan Losses

The allowance for loan losses is determined based on management’s estimate of probable losses incurred within the loan portfolio as of the balance sheet date. We determine the amount of the allowance for loan losses based on periodic evaluation of the loan portfolios and other relevant factors. This evaluation is inherently subjective and requires material estimates, which are subject to change. Factors that are considered in the evaluation of individual, and pools of loans, include: historical loss experience; likelihood of default; liquidation value of a loan’s underlying collateral; timing and amounts of expected future cash flows; and our exposure to loss in the event of default. We further estimate the impact of qualitative factors that may cause future losses to differ from historical experience. Such factors include: changes in credit quality, macro economic impacts on our customers, and changes in underwriting standards.

Our historical loss experience is determined based on actual losses incurred over the previous twelve quarters. We utilize a method of averaging these losses whereby we place a heavier emphasis on more recent experience. Our model provides a 50% weighting on the most recent four quarters, 30% weighting on the middle four quarters, and 20% weighting on the oldest four quarters.

The loan portfolio is segmented into five loan types: commercial and industrial loans; commercial real estate loans; consumer loans; residential mortgages – first liens; and residential mortgage – junior liens. These segments are further grouped by credit quality classifications.

The segments comprising commercial and industrial loans and commercial real estate loans are classified based on the loan grading system described above. We group loans rated as one through four together into one class of Pass loans. Commercial and industrial and commercial real estate loans graded as Pass and Watch are assigned a unique pooled loss rate based on historical losses incurred over the prior three years as described above. We adjust the calculated historical loss rate up or down based on current developments, that in management’s judgment are not reflected in the historical losses of the company. The current outstanding balance for each of these classes of loans is then multiplied by the adjusted historical loss rate to determine the amount of allowance for loan losses to reserve on that pool of loans.

Loans graded special mention use a shorter 12 month loss history to determine the loss rate. Losses over the preceding 12 month period are divided by the average balance outstanding of substandard and impaired loans to determine a historical loss rate. That calculated historical loss rate is multiplied by a probability factor to determine a loss rate to be applied to this class of loans. The probability factor is determined from an analysis of the migration of special mention loans to more severe risk classes over the preceding 12 month period.

Loans graded as substandard use the shorter 12 month loss history to determine the loss rate. Losses over the preceding 12 month period are divided by the average balance outstanding of substandard and impaired loans to determine a historical loss rate. The calculated historical loss rate, without adjustment for migration, is then multiplied times the outstanding balance of substandard loans to determine the amount of allowance for loan losses to provide for this class of loans.

Loans graded as impaired nonaccrual, impaired doubtful, and impaired restructured and accruing are individually analyzed for loan losses. An allocated reserve is established within the allowance for loan losses for the difference between the carrying value of the loan and its determined collectable value. To determine the collectable value of the loan, the present value of expected cash flows, the collateral value, or some combination of the two is used. The allocated reserve is established as the difference between the carrying value of the loan and the collectable value.

For consumer and residential loan segments, loans that are current, or less than 60 days past due are assigned a unique historical loss rate as described above for commercial Pass and Watch loans. For loans that are more than 60 days past due including nonaccrual loans, a loss rate is determined based on charge offs within the last 12 months, divided by the sum of the average balance of loans 60 days or more past due and nonaccrual loans. These loss rates are multiplied by the outstanding balances in each unique loan segment at the end of the reporting period to determine the amount of allowance for loan loss.

For restructured loans where the bank has granted a rate concession, an additional amount is added to the loan loss reserve that represents the difference in the present value of the cash flows between the original terms and the new terms of the modified loan, using the original interest rate of the loan as a discount rate. Any change in the present value of the loan due to passage of time is reflected as an adjustment to provision for loan loss expense.

After each of the steps outlined above is completed, the results are aggregated and compared with the existing balance of the allowance for loan losses. If the aggregation is greater than the balance, the allowance for loan losses is increased through a charge to earnings on the provision for loan losses line. If the resulting aggregation is below the current balance of the allowance for loan losses, management will determine, based upon the number, potential impact, and uncertainty of the estimates contained within the process whether the unallocated reserve is excessive. If in management’s judgment the unallocated reserve exceeds a level deemed prudent given the inherent uncertainty of these issues, a reversal of the provision for loan losses may be recorded.

The following table provides a breakdown of our loan portfolio by the primary credit quality indicators we use in the determination of our allowance for loan losses.

Allowance for credit losses and recorded investment in financing receivables:

(In Thousands of Dollars)
Twelve months ending December 31, 2012	Commercial and Industrial			Commercial Real Estate			First Lien Residential Mortgages			Junior Lien Residential Mortgages			Consumer Loans			Unallocated		Total
Allowance for Credit Losses:
Beginning balance	$	2,485		$	11,534		$	5,393		$	505		$	931		$	171	$	21,019
Provision for loan losses		(104	)		4,033			2,225			535			309			692		7,690
Loans charged off		(560	)		(4,440	)		(2,220	)		(485	)		(727	)		0		(8,432	)
Recoveries		75			438			258			0			292			0		1,063
Ending balance	$	1,896		$	11,565		$	5,656		$	555		$	805		$	863	$	21,340
Ending balance: individually evaluated for impairment	$	515		$	2,971		$	0		$	0		$	0		$	0	$	3,486
Ending balance: collectively evaluated for impairment	$	1,381		$	8,594		$	5,656		$	555		$	805		$	863	$	17,854
Financing Receivables:
Ending balance	$	150,208		$	472,618		$	214,379		$	58,748		$	67,809		$	0	$	963,762
Ending balance: individually evaluated for impairment	$	3,677		$	20,567		$	0		$	0		$	0		$	0	$	24,244
Ending balance: collectively evaluated for impairment	$	146,531		$	452,051		$	214,379		$	58,748		$	67,809		$	0	$	939,518
Twelve months ending December 31, 2011
Allowance for Credit Losses:
Beginning balance	$	3,024		$	12,375		$	3,960		$	774		$	1,162		$	136	$	21,431
Provision for loan losses		1,836			6,611			4,468			6			381			35		13,337
Loans charged off		(2,546	)		(7,973	)		(3,215	)		(275	)		(913	)		0		(14,922	)
Recoveries		171			521			180			0			301			0		1,173
Ending balance	$	2,485		$	11,534		$	5,393		$	505		$	931		$	171	$	21,019
Ending balance: individually evaluated for impairment	$	253		$	3,622		$	0		$	0		$	0		$	0	$	3,875
Ending balance: collectively evaluated for impairment	$	2,232		$	7,912		$	5,393		$	505		$	931		$	171	$	17,144
Financing Receivables:
Ending balance	$	158,493		$	482,720		$	211,397		$	66,775		$	64,524		$	0	$	983,909
Ending balance: individually evaluated for impairment	$	5,331		$	25,988		$	0		$	0		$	0		$	0	$	31,319
Ending balance: collectively evaluated for impairment	$	153,162		$	456,732		$	211,397		$	66,775		$	64,524		$	0	$	952,590

Twelve months ending December 31, 2010	Commercial and Industrial			Commercial Real Estate			First Lien Residential Mortgages			Junior Lien Residential Mortgages			Consumer Loans			Unallocated		Total
Allowance for Credit Losses:
Beginning balance	$	3,640		$	10,473		$	2,502		$	967		$	1,525		$	7	$	19,114
Provision for loan losses		812			8,222			3,844			(7	)		344			129		13,344
Loans charged off		(1,707	)		(6,366	)		(2,602	)		(186	)		(1,102	)		0		(11,963	)
Recoveries		279			46			216			0			395			0		936
Ending balance	$	3,024		$	12,375		$	3,960		$	774		$	1,162		$	136	$	21,431
Ending balance: individually evaluated for impairment	$	812		$	4,688		$	0		$	0		$	0		$	0	$	5,500
Ending balance: collectively evaluated for impairment	$	2,212		$	7,687		$	3,960		$	774		$	1,162		$	136	$	15,931
Financing Receivables:
Ending balance	$	164,332		$	509,285		$	203,765		$	76,293		$	77,945		$	0	$	1,031,620
Ending balance: individually evaluated for impairment	$	1,972		$	24,390		$	0		$	0		$	0		$	0	$	26,362
Ending balance: collectively evaluated for impairment	$	162,360		$	484,895		$	203,765		$	76,293		$	77,945		$	0	$	1,005,258

Age Analysis of Past Due Loans:

(In thousands of dollars)
At December 31, 2012	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Nonaccrual loans		Current		Total Financing Receivables		Recorded Investment > 90 days and accruing
Commercial and Industrial	$	206	$	140	$	0	$	346	$	447	$	149,415	$	150,208	$	0
Commercial Real Estate		604		1,881		0		2,485		8,454		461,679		472,618		0
Residential Mortgages 1st Liens		772		969		37		1,778		6,038		206,563		214,379		37
Residential Mortgages Junior Liens		473		96		0		569		328		57,851		58,748		0
Consumer		435		39		0		474		401		66,934		67,809		0
Total	$	2,490	$	3,125	$	37	$	5,652	$	15,668	$	942,442	$	963,762	$	37
At December 31, 2011
Commercial and Industrial	$	1,039	$	94	$	0	$	1,133	$	1,771	$	155,589	$	158,493	$	0
Commercial Real Estate		4,313		500		0		4,813		15,336		462,571		482,720		0
Residential Mortgages 1st Liens		973		1,875		328		3,176		5,374		202,569		211,119		328
Residential Mortgages Junior Liens		561		255		73		889		278		65,886		67,053		73
Consumer		848		221		18		1,087		210		63,227		64,524		18
Total	$	7,734	$	2,945	$	419	$	11,098	$	22,969	$	949,842	$	983,909	$	419

Impaired loans were as follows:

(In Thousands of Dollars)
December 31, 2012	Recorded Investment		Unpaid Principal Balance		Related Allowance
Period end loans with no allocated allowance for loan losses
Commercial and Industrial	$	891	$	891	$	0
Commercial Real Estate		9,215		9,212		0
Residential Mortgages 1st Liens		10,993		10,993		0
Residential Mortgages Junior Liens		562		562		0
Consumer		592		592		0
Total	$	22,253	$	22,250	$	0
Period end loans with allocated allowance for loan losses
Commercial and Industrial	$	2,273	$	2,792	$	515
Commercial Real Estate		8,377		11,346		2,971
Residential Mortgages 1st Liens		0		0		0
Residential Mortgages Junior Liens		0		0		0
Consumer		0		0		0
Total	$	10,650	$	14,138	$	3,486
Total
Commercial and Industrial	$	3,164	$	3,683	$	515
Commercial Real Estate		17,592		20,558		2,971
Residential Mortgages 1st Liens		10,993		10,993		0
Residential Mortgages Junior Liens		562		562		0
Consumer		592		592		0
Total	$	32,903	$	36,388	$	3,486
December 31, 2011
Period end loans with no allocated allowance for loan losses
Commercial and Industrial	$	4,358	$	5,846		0
Commercial Real Estate		11,940		16,987		0
Residential Mortgages 1st Liens		10,079		11,120		0
Residential Mortgages Junior Liens		278		331		0
Consumer		210		249		0
Total	$	26,865	$	34,533	$	0
Period end loans with allocated allowance for loan losses
Commercial and Industrial	$	720	$	998	$	253
Commercial Real Estate		10,423		15,225		3,622
Residential Mortgages 1st Liens		0		0		0
Residential Mortgages Junior Liens		0		0		0
Consumer		0		0		0
Total	$	11,143	$	16,223	$	3,875
Total
Commercial and Industrial	$	5,078	$	6,844	$	253
Commercial Real Estate		22,363		32,212		3,622
Residential Mortgages 1st Liens		10,079		11,120		0
Residential Mortgages Junior Liens		278		331		0
Consumer		210		249		0
Total	$	38,008	$	50,756	$	3,875

Note: Recorded investment includes principal outstanding plus deferred fee and accrued interest, net of related allowance for loan losses.

Average recorded investment and income recognized on impaired loans were as follows:

(In Thousands of Dollars)	Twelve months ended December 31, 2012				Twelve months ended December 31, 2011				Twelve months ended December 31, 2010
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Period end loans with no allocated allowance for loan losses
Commercial and Industrial	$	2,862	$	160	$	2,073	$	116	$	1,121	$	0
Commercial Real Estate		10,213		846		12,444		452		12,432		158
Residential Mortgages 1st Liens		9,998		416		9,223		219		7,721		253
Residential Mortgages Junior Liens		502		13		459		2		295		1
Consumer		450		17		192		0		200		5
Total	$	24,025	$	1,452	$	24,391	$	789	$	21,769	$	417
Period end loans with allocated allowance for loan losses
Commercial and Industrial	$	880	$	24	$	722	$	0	$	438	$	0
Commercial Real Estate		10,561		52		9,003		28		8,724		125
Residential Mortgages 1st Liens		0		0		0		0		0		0
Residential Mortgages Junior Liens		0		0		0		0		0		0
Consumer		0		0		0		0		0		0
Total	$	11,441	$	76	$	9,725	$	28	$	9,162	$	125
Total
Commercial and Industrial	$	3,742	$	184	$	2,795	$	116	$	1,559	$	0
Commercial Real Estate		20,774		898		21,447		480		21,156		283
Residential Mortgages 1st Liens		9,998		416		9,223		219		7,721		253
Residential Mortgages Junior Liens		502		13		459		2		295		1
Consumer		450		17		191		0		200		5
Total	$	35,466	$	1,528	$	34,116	$	817	$	30,931	$	542

Loan Modifications as of the period ending:

(In thousands of dollars)	Troubled Debt Restructurings						Troubled Debt Restructurings that Subsequently Defaulted
	Number of contracts		Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Number of contracts		Recorded investment
December 31, 2012
Commercial and Industrial		11	$	1,199	$	1,188		5	$	1,143
Commercial Real Estate		17		4,456		4,221		4		401
Residential Mortgages 1st Liens		19		1,948		1,943		2		190
Residential Mortgages Junior Liens		4		126		126		1		9
Consumer		3		128		127		0		0
Total		54	$	7,857	$	7,605		12	$	1,743
December 31, 2011
Commercial and Industrial		11	$	3,615	$	3,526		2	$	468
Commercial Real Estate		13		4,017		3,786		10		1,233
Residential Mortgages 1st Liens		13		1,427		1,291		11		828
Residential Mortgages Junior Liens		1		83		83		0		0
Consumer		0		0		0		0		0
Total		85	$	9,142	$	8,686		23	$	2,529
December 31, 2010
Commercial and Industrial		1	$	36	$	36		0	$	0
Commercial Real Estate		7		6,604		5,757		3		860
Residential Mortgages 1st Liens		27		3,025		2,633		8		614
Residential Mortgages Junior Liens		1		43		0		1		43
Consumer		0		0		0		0		0
Total		36	$	9,708	$	8,426		12	$	1,517

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Note 7 - Premises and Equipment

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment Disclosure [Text Block]

NOTE 7 – PREMISES AND EQUIPMENT

Year end premises and equipment were as follows:
(In Thousands of Dollars)	2012			2011
Land	$	6,186		$	6,186
Buildings		32,891			33,082
Furniture, fixtures and equipment		17,431			17,951
Total		56,508			57,219
Less:
Accumulated depreciation		(32,152	)		(32,132	)
Total	$	24,356		$	25,087

Depreciation expense was $1,915,000, $2,062,000, and $2,278,000 for 2012, 2011, and 2010. Facility rent expense was $359,000 in 2012 compared with $377,000 for 2011, and $403,000 for 2010. Equipment rent expense was $249,000 in 2012 compared with $250,000 for 2011, and $252,000 for 2010. Rental commitments for the next five years under non-cancelable operating leases were as follows (before considering renewal options that generally are present):

(In Thousands of Dollars)
	Facilities		Equipment		Total
2013	$	325	$	7	$	332
2014		115		3		118
2015		97		2		99
2016		99		0		99
2017		102		0		102
Total	$	738	$	12	$	750

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Note 9 - Federal Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Text Block]

NOTE 9 – FEDERAL INCOME TAXES

Federal income taxes consist of the following:

(In Thousands of Dollars)	2012			2011			2010
Current expense	$	4,283		$	3,133		$	1,013
Deferred expense (benefit)		(27	)		(1,299	)		14
Change in deferred tax valuation allowance		0			0			485
Total	$	4,256		$	1,834		$	1,512

A reconciliation of the difference between federal income tax expense and the amount computed by applying the federal statutory tax rate of 34% in 2012, 2011 and 2010 is as follows:

(In Thousands of Dollars)	2012			2011			2010
Tax at statutory rate	$	5,177		$	2,610		$	1,846
Effect of tax-exempt interest		(479	)		(443	)		(489	)
Deferred tax valuation allowance		0			0			485
Other		(442	)		(333	)		(330	)
Federal income taxes	$	4,256		$	1,834		$	1,512
Effective tax rate		29	%		25	%		29	%

The components of deferred tax assets and liabilities included in other assets on the Consolidated Balance Sheet consist of the following at December 31st year end:

(In Thousands of Dollars)
	2012			2011
Deferred tax assets:
Allowance for loan losses	$	7,256		$	7,147
Deferred compensation		655			718
Losses on capital investments		1,159			1,727
Other		1,254			1,304
Total deferred tax assets		10,324			10,896
Deferred tax liabilities:
Fixed assets		(1,821	)		(1,851	)
Mortgage servicing rights		(1,697	)		(1,563	)
Purchase accounting adjustments		(234	)		(373	)
Unrealized gain on securities available for sale		(1,859	)		(1,492	)
Other		(428	)		(992	)
Total deferred tax liabilities		(6,039	)		(6,271	)
Net deferred tax assets		4,285			4,625
Deferred tax valuation allowance		(1,143	)		(1,143	)
Net deferred tax assets	$	3,142		$	3,482

A valuation allowance related to deferred tax assets is required when it is considered more likely than not that all or part of the benefits related to such assets will not be realized. In reviewing the company’s position relative to deferred tax assets associated with certain incurred capital losses, management determined that a valuation adjustment of $1,143,000 was necessary at year end 2012, the same amount as yearend 2011. These valuation adjustments were recorded through the income statement on the Federal income tax line item when they occurred. Based on this determination, a non-cash charge was made to record the valuation adjustment, reducing our deferred tax asset, and increasing income tax expense by $485,000 in 2011. The establishment of a valuation allowance does not relinquish our rights to utilize the deferred asset, but rather recognizes that at the current time management does not believe the deferred asset will be able to be utilized prior to its expiration. The deferred assets for which the valuation allowance was established were related to capital losses for which we do not believe we will have capital gains to offset. These assets are: $70,000 to expire in 2013, and $588,000 to expire in 2015 and $485,000 for which an expiration date has yet to be established, as we have not sold the underlying stock.

Losses on capital investments have a three year carry back and five year carry forward time period for offset. The timeframe begins with the sale of the investment. Certain tax planning strategies have been established, including the possible sale and leaseback of certain of our facilities or other assets that management believes could be executed if necessary to retain the benefits listed above.

Net deferred tax assets at December 31, 2012 and 2011 are included in other assets in the accompanying consolidated balance sheets.

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Note 5 - Loan Servicing (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Custodial Escrow Balance [Member]
Servicing Asset (in Dollars)	$ 1,433,000	$ 1,438,000
Mortgage Servicing Rights [Member]
Servicing Asset (in Dollars)	$ 5,494,000	$ 6,034,000
Fair Value Inputs, Discount Rate	7.018%	7.375%
Fair Value Inputs, Prepayment Rate	17.01%	14.79%
Delinquency Rate	1.01%	1.09%
Weighted Average Amortization Period	3 years 219 days

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Note 9 - Federal Income Taxes (Detail) - Deferred Tax Assets and Liabilities (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Deferred tax assets:
Allowance for loan losses	$ 7,256	$ 7,147
Deferred compensation	655	718
Losses on capital investments	1,159	1,727
Other	1,254	1,304
Total deferred tax assets	10,324	10,896
Deferred tax liabilities:
Fixed assets	(1,821)	(1,851)
Mortgage servicing rights	(1,697)	(1,563)
Purchase accounting adjustments	(234)	(373)
Unrealized gain on securities available for sale	(1,859)	(1,492)
Other	(428)	(992)
Total deferred tax liabilities	(6,039)	(6,271)
Net deferred tax assets	4,285	4,625
Deferred tax valuation allowance	(1,143)	(1,143)
Net deferred tax assets	$ 3,142	$ 3,482

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Note 5 - Loan Servicing (Detail) - Mortgage Loans Serviced For Others (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Freddie Mac [Member]
Mortgage loan portfolios serviced for:
Mortgage Loan Portfolios Serviced For	$ 605,000	$ 601,710
Fannie Mae [Member]
Mortgage loan portfolios serviced for:
Mortgage Loan Portfolios Serviced For	1,140	1,446
Federal Home Loan Bank [Member]
Mortgage loan portfolios serviced for:
Mortgage Loan Portfolios Serviced For	$ 2,094	$ 2,757

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Note 18 - Financial Instruments With Off-Balance Sheet Risk (Detail)	12 Months Ended
	Dec. 31, 2012
Minimum [Member]
Fixed Rate Loan Commitment Interest Rate	3.38%
Fixed Rate Loan Commitment Maturities	1 year
Maximum [Member]
Fixed Rate Loan Commitment Interest Rate	7.00%
Fixed Rate Loan Commitment Maturities	10 years

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Note 4 - Securities (Detail) - Carrying Value of Securities at Maturity (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Due in one year or less	$ 93,182
Due after one year through five years	109,398
Due after five years through ten years	75,022
Due after ten years	74,404
Total	352,006
Equity securities	1,672
Total securities	$ 353,678	$ 342,184

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Note 13 - Subordinated Debentures (Detail) (USD $)	1 Months Ended	10 Months Ended							7 Months Ended
	Jan. 20, 2006	Oct. 18, 2004	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012 Preferred Trust Securities [Member]	Dec. 31, 2011 Preferred Trust Securities [Member]	Jan. 20, 2006 Preferred Trust Securities [Member]	Oct. 18, 2004 Preferred Trust Securities [Member]	Jul. 30, 2007 Both Trusts [Member]	Jul. 30, 2007 Trust One [Member]	Jul. 30, 2007 Trust Two [Member]
Proceeds from Issuance of Trust Preferred Securities (in Dollars)	$ 10,310,000	$ 10,310,000							$ 15,464,000	$ 7,732,000	$ 7,732,000
Debt Instrument, Interest Rate, Stated Percentage							6.049%	1.99%		6.71%	6.566%
Debt Instrument, Basis Spread on Variable Rate						1.27%				1.35%	1.35%
Subordinated Debt (in Dollars)			$ 36,084,000	$ 36,084,000	$ 1,084,000

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Note 27 - Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2012

Quarterly Financial Information [Text Block]

NOTE 27 – QUARTERLY FINANCIAL DATA (UNAUDITED)

(In Thousands of Dollars, Except per Share Data)			2012
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Year
Interest income	$	16,126	$	16,020	$	15,574	$	15,146	$	62,866
Net interest income		13,766		13,838		13,542		13,346		54,492
Income before federal income taxes		3,440		3,342		3,765		4,243		14,790
Net income		2,417		2,404		2,715		2,998		10,534
Preferred stock dividends		420		420		220		215		1,275
Net income available to common shareholders		1,997		1,984		2,495		2,783		9,259
Basic earnings per common share	$	0.25	$	0.25	$	0.32	$	0.35	$	1.17
Diluted earnings per common share	$	0.25	$	0.25	$	0.31	$	0.35	$	1.16

			2011
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Year
Interest income	$	16,989	$	17,215	$	16,924	$	16,516	$	67,644
Net interest income		13,292		13,741		13,781		13,858		54,672
Income before federal income taxes		1,564		686		2,170		3,037		7,457
Net income		1,215		628		1,630		2,150		5,623
Preferred stock dividends		420		420		420		419		1,679
Net income available to common shareholders		795		208		1,210		1,731		3,944
Basic earnings per common share	$	0.10	$	0.03	$	0.15	$	0.22	$	0.50
Diluted earnings per common share	$	0.10	$	0.03	$	0.15	$	0.22	$	0.50

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Note 23 - Fair Value (Tables)

12 Months Ended

Dec. 31, 2012

Fair Value, by Balance Sheet Grouping [Table Text Block]

December 31, 2012 (In thousands of dollars)	Carrying Amount			Estimated Fair Value			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Financial Assets:
Cash and cash equivalents	$	99,601		$	99,601		$	99,601	$	0		$	0
FDIC insured bank certificates of deposit		2,927			2,927			2,927		0			0
Trading account securities		6			6			6		0			0
Securities available for sale		353,678			353,678			91		331,717			21,870
Federal Home Loan Bank stock		7,266			7,266			0		0			7,266
Loans held for sale		2,921			2,921			0		2,921			0
Loans, net of allowance		942,422			930,354			0		0			930,354
Financial Liabilities:
Deposits		(1,241,401	)		(1,243,712	)		0		0			(1,243,712	)
Securities sold under agreements to repurchase and overnight borrowings		(42,785	)		(42,785	)		0		(42,785	)		0
Federal Home Loan Bank advances		(22,493	)		(24,122	)		0		0			(24,122	)
Subordinated debentures		(36,084	)		(36,093	)		0		0			(36,093	)

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

(Dollars in Thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2012
Securities available for sale
U.S. Government Agency Bonds	$	0	$	106,885	$	0	$	106,885
Mortgage Backed Securities		0		66,277		0		66,277
U.S. Government Agency CMOs		0		61,030		0		61,030
States and political subdivisions		0		97,525		20,289		117,814
Equity and Other Securities		91		0		1,581		1,672
Total Securities available for sale	$	91	$	331,717	$	21,870	$	353,678
Trading equity securities	$	6	$	0	$	0	$	6
December 31, 2011
Securities available for sale
U.S. Government Agency Bonds	$	0	$	133,834	$	0	$	133,834
Mortgage Backed Securities		0		71,052		0		71,052
U.S. Government Agency CMOs		0		57,845		0		57,845
States and political subdivisions		0		62,447		15,342		77,789
Equity and Other Securities		92		0		1,572		1,664
Total Securities available for sale	$	92	$	325,179	$	16,914	$	342,184
Trading equity securities	$	2	$	0	$	0	$	2

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

(Dollars in Thousands)	2012			2011
Balance at beginning of year	$	16,914		$	10,833
Total realized and unrealized gains/(losses) included in income		0			0
Total unrealized gains/(losses) included in other comprehensive income		0			0
Purchases of securities		17,262			11,325
Sales of securities		0			0
Calls and maturities		(12,663	)		(5,244	)
Net transfers in to Level 3		357			0
Balance at December 31 of each year	$	21,870		$	16,914

Fair Value Measurements, Nonrecurring [Table Text Block]

(Dollars in Thousands)	Balance at December 31,		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
2012
Impaired loans	$	36,388	$	0	$	0	$	36,388
Other real estate owned	$	1,296	$	0	$	0	$	1,296
Other repossessed assets	$	250	$	0	$	0	$	250
2011
Impaired loans	$	41,889	$	0	$	0	$	41,889
Other real estate owned	$	2,223	$	0	$	0	$	2,223

Prior Year [Member]

Fair Value, by Balance Sheet Grouping [Table Text Block]

December 31, 2011 (In thousands of dollars)	Carrying			Fair
	Amount			Value
Financial Assets:
Cash and cash equivalents	$	75,816		$	75,816
FDIC insured bank certificates of deposit		4,432			4,432
Trading account securities		2			2
Securities available for sale		342,184			342,184
Federal Home Loan Bank stock		7,266			7,266
Loans held for sale		349			349
Loans, net		962,890			944,756
Accrued interest receivable		4,531			4,531
Financial Liabilities:
Deposits		(1,220,542	)		(1,215,484	)
Securities sold under agreements to repurchase and overnight borrowings		(46,784	)		(46,784	)
Federal Home Loan Bank advances		(19,457	)		(21,359	)
Accrued interest payable		(762	)		(762	)
Subordinated debentures		(36,084	)		(36,488	)

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Note 14 - Shareholders' Equity

12 Months Ended

Dec. 31, 2012

Stockholders' Equity Note Disclosure [Text Block]

NOTE 14 – SHAREHOLDERS’ EQUITY

We are subject to various regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums.  At year end 2012 and 2011 we exceeded all requirements to be classified as well as capitalized.

On January 30, 2009 we issued 33,000 shares of Series A, no par value $1,000 liquidation preference, fixed rate cumulative perpetual preferred stock (Preferred Stock) and warrants to purchase 578,947 shares of our common stock at an exercise price of $8.55 per share (Warrants), to the U.S. Department of Treasury in return for $33 million under the Capital Purchase Program (CPP). Of the proceeds, $32.7 million was allocated to the Preferred Stock and $0.3 million was allocated to the Warrants based on the relative fair value of each. The $0.3 million discount on the Preferred Stock is being accreted using an effective yield method over five years. The Preferred Stock and Warrants qualify as Tier 1 capital.

On June 28, 2012 the U.S. Department of Treasury sold all of the shares of our Preferred Stock in a modified Dutch auction process. During the auction, we successfully bid on and retired 16,000 of the 33,000 outstanding shares of our Preferred Stock at a price of $941.01 per share, or $15.1 million in the aggregate. As a result of the retirement of these shares, 17,000 shares remain outstanding, held by private investors, and carry the same terms under which they were originally issued.

The warrants were immediately exercisable for 578,947 shares of our common stock at an exercise price of $8.55 per common share. The warrants were transferrable and could be exercised at any time on or before January 30, 2019. We negotiated a repurchase of all of the outstanding warrants with the U.S. Treasury at a price of $1,946,670. The repurchase of these warrants occurred in July 2012 and reduced equity by the amount of the purchase price.

The remaining 17,000 shares of Preferred Stock pay cumulative quarterly cash dividends at a rate of 5% per year on the $1,000 liquidation preference through February 15, 2014 and at a rate of 9% per year thereafter. We accrue dividends based on the rates, liquidation preference and time since last quarterly dividend payment. We may redeem the Preferred Stock for the liquidation preference plus accrued and unpaid dividends subject to prior consultation with the Federal Reserve Board.

Under the CPP, the consent of the U.S. Treasury was required for any quarterly common stock dividend of more than $0.225 per share (subject to adjustment for stock splits, stock dividends and certain other transactions) and for any common share repurchases (other than common share repurchases in connection with any benefit plan in the ordinary course of business) in each case until January 30, 2012, unless the Preferred Stock had been fully redeemed or the U.S. Treasury had transferred all the Preferred Stock to third parties prior to that date. This restriction on common stock dividends lapsed in January of 2012. In addition, all accrued and unpaid dividends on the Preferred Stock must be declared and the payment set aside for the benefit of the holders of Preferred Stock before any dividend may be declared on our common stock and before any shares of our common stock may be repurchased, subject to certain limited exceptions. Holders of shares of the Preferred Stock have no right to exchange or convert such shares into any other security of Firstbank Corporation and have no right to require the redemption or repurchase of the Preferred Stock. The Preferred Stock does not have a sinking fund.  The Preferred Stock is non-voting, other than class voting rights on certain matters that could adversely affect the Preferred Stock.

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Note 25 - Firstbank Corporation (Parent Company Only) (Detail) - Condensed Statements of Income and Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Dividends and returns of capital from banking subsidiaries (net of capital infusions)	$ 16,150	$ 3,680	$ 4,000
Income before income tax and undistributed subsidiary income	11,928	1,161	1,238
Income tax benefit	4,256	1,834	1,512
Equity in undistributed subsidiary income	5,190	3,618	1,993
Net income	10,534	5,623	3,763
Comprehensive income	11,246	8,373	3,311
Parent Company [Member]
Other income	5,821	5,921	5,656
Other expense	(10,043)	(8,440)	(8,418)
Income tax benefit	1,416	844	532
Change in unrealized gain (loss) on securities, net of tax and classification effects	712	2,750	(452)
Subsidiary of Common Parent [Member]
Equity in undistributed subsidiary income	$ (2,810)	$ 3,618	$ 1,993

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Note 19 - Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies Disclosure [Text Block]

NOTE 19 – CONTINGENCIES

From time to time certain claims are made against the Company and its banking subsidiaries in the normal course of business. There were no outstanding claims considered by management to be material at December 31, 2012.

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Note 16 - Stock Based Compensation (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2006	Dec. 31, 1997	Dec. 31, 1993
Stock Issued During Period, Value, Restricted Stock Award, Gross	$ 96,000	$ 118,000	$ 115,000
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense	33,000	40,000	39,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)	0	0		315,000	593,798	395,986
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)		61,642
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in Shares)	0	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price (in Dollars per share)			$ 2.33
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	32,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition	1 year 6 months
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value	27,000	57,000	23,000
Restricted Stock or Unit Expense	56,000	37,000	20,000
Restricted Stock [Member]
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	$ 210,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition	2 years 36 days
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in Shares)		10

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Note 18 - Financial Instruments With Off-Balance Sheet Risk (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Fair Value, Off-balance Sheet Risks [Table Text Block]

(In Thousands of Dollars)	2012				2011
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to make loans (at market rates)	$	82,395	$	10,137	$	44,091	$	11,254
Unused lines of credit and letters of credit	$	25,923	$	126,490	$	22,205	$	118,443
Standby letters of credit	$	5,201	$	15,225	$	4,776	$	15,110

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Note 21 - Stock Repurchase Program (Detail) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Stock Repurchase Program, Authorized Amount		$ 0	$ 0
Stock Repurchased and Retired During Period, Shares (in Shares)	16,000,000,000
Preferred Stock, Shares Outstanding (in Shares)	33,000	17,000	33,000
Preferred Stock, Par or Stated Value Per Share (in Dollars per share)	$ 941.01
Preferred Stock, Liquidation Preference, Value	1,000
Warrants and Rights Outstanding	578,947
Payments for Repurchase of Warrants	$ 1,946,670	$ 1,947,000	$ 0	$ 0

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Note 7 - Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Table Text Block]

Year end premises and equipment were as follows:
(In Thousands of Dollars)	2012			2011
Land	$	6,186		$	6,186
Buildings		32,891			33,082
Furniture, fixtures and equipment		17,431			17,951
Total		56,508			57,219
Less:
Accumulated depreciation		(32,152	)		(32,132	)
Total	$	24,356		$	25,087

Operating Leases of Lessee Disclosure [Table Text Block]

(In Thousands of Dollars)
	Facilities		Equipment		Total
2013	$	325	$	7	$	332
2014		115		3		118
2015		97		2		99
2016		99		0		99
2017		102		0		102
Total	$	738	$	12	$	750

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Note 23 - Fair Value (Detail) - Financial Instruments (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Financial Assets:
Cash and cash equivalents	$ 99,601,000	$ 75,816,000	$ 73,538,000	$ 107,365,000
Cash and cash equivalents	99,601,000	75,816,000
FDIC insured bank certificates of deposit	2,927,000	4,432,000
Trading account securities	6,000	2,000
Trading account securities	6,000	2,000
Securities available for sale	353,678,000	342,184,000
Securities available for sale	353,678,000	342,184,000
Federal Home Loan Bank stock	7,266,000	7,266,000
Loans held for sale	2,921,000	349,000
Loans held for sale	2,921,000	349,000
Loans, net of allowance	942,422,000	962,890,000
Loans, net of allowance	930,354,000	944,756,000
Financial Liabilities:
Deposits	(1,241,401,000)	(1,220,542,000)
Deposits	(1,243,712,000)	(1,215,484,000)
Securities sold under agreements to repurchase and overnight borrowings	(42,785,000)	(46,784,000)
Securities sold under agreements to repurchase and overnight borrowings	(42,785,000)	(46,784,000)
Federal Home Loan Bank advances	(22,493,000)	(19,457,000)
Federal Home Loan Bank advances	(24,122,000)	(21,359,000)
Subordinated debentures	(36,084,000)	(36,084,000)
Subordinated debentures	(36,093,000)	(36,488,000)
Fair Value, Inputs, Level 1 [Member]
Financial Assets:
Cash and cash equivalents	99,601,000
FDIC insured bank certificates of deposit	2,927,000
Trading account securities	6,000
Securities available for sale	91,000	92,000
Federal Home Loan Bank stock	0
Loans held for sale	0
Loans, net of allowance	0
Financial Liabilities:
Deposits	0
Securities sold under agreements to repurchase and overnight borrowings	0
Federal Home Loan Bank advances	0
Subordinated debentures	0
Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Cash and cash equivalents	0
FDIC insured bank certificates of deposit	0
Trading account securities	0
Securities available for sale	331,717,000	325,179,000
Federal Home Loan Bank stock	0
Loans held for sale	2,921,000
Loans, net of allowance	0
Financial Liabilities:
Deposits	0
Securities sold under agreements to repurchase and overnight borrowings	(42,785,000)
Federal Home Loan Bank advances	0
Subordinated debentures	0
Fair Value, Inputs, Level 3 [Member]
Financial Assets:
Cash and cash equivalents	0
FDIC insured bank certificates of deposit	0
Trading account securities	0
Securities available for sale	21,870,000	16,914,000
Federal Home Loan Bank stock	7,266,000
Loans held for sale	0
Loans, net of allowance	930,354,000
Financial Liabilities:
Deposits	(1,243,712,000)
Securities sold under agreements to repurchase and overnight borrowings	0
Federal Home Loan Bank advances	(24,122,000)
Subordinated debentures	$ (36,093,000)

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Consolidated Statements of Changes in Shareholders’ Equity (USD $)	Common Stock [Member]	Preferred Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balances at Dec. 31, 2009	$ 114,746,000	$ 32,734,000	$ (1,198,000)	$ 598,000	$ 146,880,000
Net income			3,763,000		3,763,000
Cash dividends on common stock			(620,000)		(620,000)
Accrued dividends on preferred stock and		29,000	(1,679,000)		(1,650,000)
Amortization of stock warrants	(29,000)		29,000		0
Issuance of shares of common stock through the dividend reinvestment plan	121,000				121,000
Issuance of shares of common stock from supplemental shareholder investments	34,000				34,000
Issuance of shares of common stock	237,000				237,000
Stock option and restricted stock expense	115,000				115,000
Net change in unrealized gain/(loss) on securities available for sale, tax of				(452,000)	(452,000)
Balances at Dec. 31, 2010	115,224,000	32,763,000	295,000	146,000	148,428,000
Net income			5,623,000		5,623,000
Cash dividends on common stock			(313,000)		(313,000)
Accrued dividends on preferred stock and		29,000	(1,679,000)		(1,650,000)
Amortization of stock warrants	(29,000)		29,000		0
Issuance of shares of common stock through the dividend reinvestment plan	62,000				62,000
Issuance of shares of common stock from supplemental shareholder investments	197,000				197,000
Issuance of shares of common stock	162,000				162,000
Stock option and restricted stock expense	118,000				118,000
Net change in unrealized gain/(loss) on securities available for sale, tax of				2,750,000	2,750,000
Balances at Dec. 31, 2011	115,734,000	32,792,000	3,955,000	2,896,000	155,377,000
Net income			10,534,000		10,534,000
Cash dividends on common stock			(2,314,000)		(2,314,000)
Accrued dividends on preferred stock and		22,000	(1,269,000)		(1,247,000)
Amortization of stock warrants	(15,000)		15,000		0
Issuance of shares of common stock through the dividend reinvestment plan	440,000				440,000
Issuance of shares of common stock from supplemental shareholder investments	201,000				201,000
Issuance of shares of common stock	262,000				262,000
Stock option and restricted stock expense	96,000				96,000
Net change in unrealized gain/(loss) on securities available for sale, tax of				712,000	712,000
Redemption of 16,000 shares of preferred stock	850,000	(15,906,000)			(15,056,000)
Repurchase of stock warrants	(1,947,000)				(1,947,000)
Balances at Dec. 31, 2012	$ 115,621,000	$ 16,908,000	$ 10,921,000	$ 3,608,000	$ 147,058,000

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Note 11 - Borrowings (Detail) - Information Relating to Securities Sold Under Agreements to Repurchase (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Balance	$ 42,785	$ 46,784
Average Interest Rate [Member]
Average Interest Rate	0.19%	0.19%
Daily Average Outstanding Balance [Member]
Balance	47,605	43,847
Daily Average Interest Rate [Member]
Average Interest Rate	0.18%	0.19%
Maximum Outstanding Month End [Member]
Balance	$ 55,047	$ 47,603

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Note 3 - Restrictions On Cash And Due From Banks

12 Months Ended

Dec. 31, 2012

Restricted Assets Disclosure [Text Block]

NOTE 3 – RESTRICTIONS ON CASH AND DUE FROM BANKS

Our subsidiary banks are required to maintain average reserve balances in the form of cash and non-interest bearing balances due from the Federal Reserve Bank. The average reserve balances required to be maintained during 2012 and 2011 were $17.8 million and $14.6 million, respectively. These balances earned interest at a rate of 0.25% during both 2012 and 2011.

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Note 3 - Restrictions On Cash And Due From Banks (Detail) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Cash and Due from Banks (in Dollars)	$ 38,544,000	$ 40,151,000
Reserve Balance [Member]
Cash and Due from Banks (in Dollars)	$ 17.8	$ 14.6
Percentage of Interest-bearing Domestic Deposits to Deposits	0.25%	0.25%

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Note 9 - Federal Income Taxes (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2016	Dec. 31, 2015
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	34.00%	34.00%	34.00%
Valuation Allowance, Deferred Tax Asset, Change in Amount	$ 1,143,000
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration	70,000			485,000	588,000
Increase Tax Expense [Member]
Other Tax Expense (Benefit)		485,000

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Note 22 - Capital Adequacy (Detail) - Actual and Required Capital Amounts at Year End and Ratios (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Total Capital to Risk Weighted Assets
Actual Amount (in Dollars)	$ 155,135	$ 163,919
Actual Ratio	15.99%	16.55%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	77,618	79,233
Minimum Required For Capital Adequacy Purposes Ratio	8.00%	8.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	97,023	99,041
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
Tier 1 (Core) Capital to Risk Weighted Assets
Actual Amount (in Dollars)	142,884	151,473
Actual Ratio	14.73%	15.29%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	38,809	39,616
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	58,214	59,425
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	6.00%	6.00%
Tier 1 (Core) Capital to Average Assets
Actual Amount (in Dollars)	142,884	151,473
Actual Ratio	9.71%	10.30%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	58,854	58,840
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	73,568	73,551
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	5.00%	5.00%
Alma [Member]
Total Capital to Risk Weighted Assets
Actual Amount (in Dollars)	33,195	32,595
Actual Ratio	15.81%	15.02%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	16,797	17,358
Minimum Required For Capital Adequacy Purposes Ratio	8.00%	8.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	20,997	21,698
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
Tier 1 (Core) Capital to Risk Weighted Assets
Actual Amount (in Dollars)	30,541	29,855
Actual Ratio	14.55%	13.76%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	8,399	8,679
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	12,598	13,019
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	6.00%	6.00%
Tier 1 (Core) Capital to Average Assets
Actual Amount (in Dollars)	30,541	29,855
Actual Ratio	8.15%	8.22%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	14,998	14,536
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	18,748	18,170
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	5.00%	5.00%
Mt Pleasant [Member]
Total Capital to Risk Weighted Assets
Actual Amount (in Dollars)	37,816	37,793
Actual Ratio	12.74%	13.05%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	23,748	23,165
Minimum Required For Capital Adequacy Purposes Ratio	8.00%	8.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	29,685	28,957
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
Tier 1 (Core) Capital to Risk Weighted Assets
Actual Amount (in Dollars)	34,097	34,168
Actual Ratio	11.49%	11.80%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	11,874	11,583
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	17,811	17,374
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	6.00%	6.00%
Tier 1 (Core) Capital to Average Assets
Actual Amount (in Dollars)	34,097	34,168
Actual Ratio	8.12%	8.31%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	16,765	16,443
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	20,994	20,554
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	5.00%	5.00%
West Branch [Member]
Total Capital to Risk Weighted Assets
Actual Amount (in Dollars)	23,021	22,843
Actual Ratio	14.01%	13.39%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	13,144	13,649
Minimum Required For Capital Adequacy Purposes Ratio	8.00%	8.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	16,430	17,062
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
Tier 1 (Core) Capital to Risk Weighted Assets
Actual Amount (in Dollars)	20,945	20,693
Actual Ratio	12.75%	12.13%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	6,572	6,825
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	9,858	10,237
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	6.00%	6.00%
Tier 1 (Core) Capital to Average Assets
Actual Amount (in Dollars)	20,945	20,693
Actual Ratio	8.55%	8.39%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	9,803	9,871
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	12,253	12,338
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	5.00%	5.00%
Community Bank [Member]
Total Capital to Risk Weighted Assets
Actual Amount (in Dollars)	28,641	26,838
Actual Ratio	15.78%	14.03%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	14,521	15,299
Minimum Required For Capital Adequacy Purposes Ratio	8.00%	8.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	18,151	19,123
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
West Michigan [Member]
Total Capital to Risk Weighted Assets
Actual Amount (in Dollars)	15,226	20,035
Actual Ratio	12.83%	16.95%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	9,493	9,454
Minimum Required For Capital Adequacy Purposes Ratio	8.00%	8.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	11,866	11,818
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
Tier 1 (Core) Capital to Risk Weighted Assets
Actual Amount (in Dollars)	13,729	18,533
Actual Ratio	11.57%	15.68%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	4,746	4,727
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	7,119	7,091
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	6.00%	6.00%
Tier 1 (Core) Capital to Average Assets
Actual Amount (in Dollars)	13,729	18,533
Actual Ratio	7.29%	9.72%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	7,538	7,625
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	9,422	9,531
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	5.00%	5.00%
Keystone Community Bank [Member]
Tier 1 (Core) Capital to Risk Weighted Assets
Actual Amount (in Dollars)	26,333	24,416
Actual Ratio	14.51%	12.77%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	7,260	7,649
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	10,891	11,474
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	6.00%	6.00%
Tier 1 (Core) Capital to Average Assets
Actual Amount (in Dollars)	26,333	24,416
Actual Ratio	11.61%	10.09%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	9,072	9,680
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount (in Dollars)	$ 11,340	$ 12,100
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	5.00%	5.00%

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Note 6 - Loans (Detail) - Credit Quality Indicators (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Financing Receivable	$ 963,762	$ 983,909
Pass [Member] | Commercial and Industrial [Member]
Financing Receivable	133,844	122,812
Pass [Member] | Commercial Real Estate Loans [Member]
Financing Receivable	373,527	373,320
Watch Loan [Member] | Commercial and Industrial [Member]
Financing Receivable	5,375	19,542
Watch Loan [Member] | Commercial Real Estate Loans [Member]
Financing Receivable	50,741	56,571
Special Mention [Member] | Commercial and Industrial [Member]
Financing Receivable	5,433	7,878
Special Mention [Member] | Commercial Real Estate Loans [Member]
Financing Receivable	18,119	21,155
Substandard [Member] | Commercial and Industrial [Member]
Financing Receivable	1,879	2,928
Substandard [Member] | Commercial Real Estate Loans [Member]
Financing Receivable	9,664	5,686
Impaired Restructured and Accruing Loans [Member] | Commercial and Industrial [Member]
Financing Receivable	3,230	3,562
Impaired Restructured and Accruing Loans [Member] | Commercial Real Estate Loans [Member]
Financing Receivable	12,113	10,652
Impaired Restructured and Accruing Loans [Member] | First Lien Residential Mortgage Loans [Member]
Financing Receivable	4,953	4,425
Impaired Restructured and Accruing Loans [Member] | Junior Lein Residential Mortgage Loans [Member]
Financing Receivable	235	278
Impaired Restructured and Accruing Loans [Member] | Consumer Loans [Member]
Financing Receivable	191	210
Impaired Nonaccrual Loans [Member] | Commercial and Industrial [Member]
Financing Receivable	447	1,771
Impaired Nonaccrual Loans [Member] | Commercial Real Estate Loans [Member]
Financing Receivable	8,429	15,336
Doubtful [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable	25	0
Performing Financing Receivable [Member] | First Lien Residential Mortgage Loans [Member]
Financing Receivable	202,342	199,117
Performing Financing Receivable [Member] | Junior Lein Residential Mortgage Loans [Member]
Financing Receivable	58,089	66,169
Performing Financing Receivable [Member] | Consumer Loans [Member]
Financing Receivable	67,178	64,075
Loans more than 60 days past due [Member] | First Lien Residential Mortgage Loans [Member]
Financing Receivable	1,046	2,203
Loans more than 60 days past due [Member] | Junior Lein Residential Mortgage Loans [Member]
Financing Receivable	96	328
Loans more than 60 days past due [Member] | Consumer Loans [Member]
Financing Receivable	39	239
Nonaccrual loans [Member] | First Lien Residential Mortgage Loans [Member]
Financing Receivable	6,038	5,374
Nonaccrual loans [Member] | Junior Lein Residential Mortgage Loans [Member]
Financing Receivable	328	278
Nonaccrual loans [Member] | Consumer Loans [Member]
Financing Receivable	401	0
Commercial and Industrial [Member]
Financing Receivable	150,208	158,493
Commercial Real Estate Loans [Member]
Financing Receivable	472,618	482,720
First Lien Residential Mortgage Loans [Member]
Financing Receivable	214,379	211,119
Junior Lein Residential Mortgage Loans [Member]
Financing Receivable	58,748	67,053
Consumer Loans [Member]
Financing Receivable	$ 67,809	$ 64,524

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Note 20 - Dividend Limitation of Subsidiaries

12 Months Ended

Dec. 31, 2012

Restrictions on Dividends, Loans and Advances [Text Block]

NOTE 20 – DIVIDEND LIMITATION OF SUBSIDIARIES

Capital guidelines adopted by Federal and State regulatory agencies and restrictions imposed by law limit the amount of cash dividends the banks can pay to the Company. At December 31, 2012, using the most restrictive of these conditions for each bank, the aggregate cash dividends that the banks can pay the Company without prior approval was $23,118,000. It is not the intent of management to have dividends paid in amounts which would reduce the capital of the banks to levels below those which are considered prudent by management and in accordance with guidelines of regulatory authorities.

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Note 26 - Other Comprehensive Income (Detail) - Other Comprehensive Income Components and Related Taxes (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Change in unrealized holding gains and losses on available for sale securities	$ 1,034	$ 4,204	$ (689)
Reclassification adjustments for gains and losses later recognized in income	44	(37)	4
Net unrealized gains and (losses)	1,078	4,167	(685)
Tax effect	(366)	(1,417)	233
Other comprehensive income (loss)	$ 712	$ 2,750	$ (452)

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Note 6 - Loans (Detail) - Loan Modifications (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Troubled Debt Restructurings Number of contracts	54	85	36
Troubled Debt Restructurings Pre-modification outstanding recorded investment	$ 7,857	$ 9,142	$ 9,708
Troubled Debt Restructurings Post-modification outstanding recorded investment	7,605	8,686	8,426
Troubled Debt Restructurings that Subsequently Defaulted Number of contracts	12	23	12
Troubled Debt Restructurings that Subsequently Defaulted Recorded investment	1,743	2,529	1,517
Commercial and Industrial [Member]
Troubled Debt Restructurings Number of contracts	11	11	1
Troubled Debt Restructurings Pre-modification outstanding recorded investment	1,199	3,615	36
Troubled Debt Restructurings Post-modification outstanding recorded investment	1,188	3,526	36
Troubled Debt Restructurings that Subsequently Defaulted Number of contracts	5	2	0
Troubled Debt Restructurings that Subsequently Defaulted Recorded investment	1,143	468	0
Commercial Real Estate Loans [Member]
Troubled Debt Restructurings Number of contracts	17	13	7
Troubled Debt Restructurings Pre-modification outstanding recorded investment	4,456	4,017	6,604
Troubled Debt Restructurings Post-modification outstanding recorded investment	4,221	3,786	5,757
Troubled Debt Restructurings that Subsequently Defaulted Number of contracts	4	10	3
Troubled Debt Restructurings that Subsequently Defaulted Recorded investment	401	1,233	860
First Lien Residential Mortgage Loans [Member]
Troubled Debt Restructurings Number of contracts	19	13	27
Troubled Debt Restructurings Pre-modification outstanding recorded investment	1,948	1,427	3,025
Troubled Debt Restructurings Post-modification outstanding recorded investment	1,943	1,291	2,633
Troubled Debt Restructurings that Subsequently Defaulted Number of contracts	2	11	8
Troubled Debt Restructurings that Subsequently Defaulted Recorded investment	190	828	614
Junior Lein Residential Mortgage Loans [Member]
Troubled Debt Restructurings Number of contracts	4	1	1
Troubled Debt Restructurings Pre-modification outstanding recorded investment	126	83	43
Troubled Debt Restructurings Post-modification outstanding recorded investment	126	83	0
Troubled Debt Restructurings that Subsequently Defaulted Number of contracts	1	0	1
Troubled Debt Restructurings that Subsequently Defaulted Recorded investment	9	0	43
Consumer Loans [Member]
Troubled Debt Restructurings Number of contracts	3	0	0
Troubled Debt Restructurings Pre-modification outstanding recorded investment	128	0	0
Troubled Debt Restructurings Post-modification outstanding recorded investment	127	0	0
Troubled Debt Restructurings that Subsequently Defaulted Number of contracts	0	0	0
Troubled Debt Restructurings that Subsequently Defaulted Recorded investment	$ 0	$ 0	$ 0

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Note 4 - Securities (Tables)

12 Months Ended

Dec. 31, 2012

Investment [Table Text Block]

(In Thousands of Dollars)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
Securities Available for Sale:
December 31, 2012:
U.S. governmental agency	$	105,629	$	1,271	$	(15	)	$	106,885
States and political subdivisions		116,123		1,786		(95	)		117,814
Mortgage Backed Securities		64,550		1,729		(2	)		66,277
Collateralized Mortgage Obligations		60,278		810		(58	)		61,030
Equity and other Securities		1,610		62		0			1,672
Total	$	348,190	$	5,658	$	(170	)	$	353,678
December 31, 2011:
U.S. governmental agency	$	132,534	$	1,325	$	(25	)	$	133,834
States and political subdivisions		76,574		1,238		(23	)		77,789
Mortgage Backed Securities		70,059		1,080		(87	)		71,052
Collateralized Mortgage Obligations		57,006		854		(15	)		57,845
Equity and other Securities		1,606		58		0			1,664
Total	$	337,779	$	4,555	$	(150	)	$	342,184

Schedule of Unrealized Loss on Investments [Table Text Block]

(In Thousands of Dollars)	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
December 31, 2012:
U.S. governmental agency	$	10,135	$	(15	)	$	0	$	0		$	10,135	$	(15	)
States and political subdivisions		17,141		(93	)		582		(2	)		17,723		(95	)
Mortgage Backed Securities		0		0			513		(2	)		513		(2	)
Collateralized Mortgage Obligations		19,995		(55	)		721		(3	)		20,716		(58	)
Total Temporarily Impaired	$	47,271	$	(163	)	$	1,816	$	(7	)	$	49,087	$	(170	)
December 31, 2011:
U.S. governmental agency	$	0	$	0		$	17,974	$	(25	)	$	17,974	$	(25	)
States and political subdivisions		3,738		(2	)		2,249		(21	)		5,987		(23	)
Mortgage Backed Securities		0		0			18,091		(87	)		18,091		(87	)
Collateralized Mortgage Obligations		0		0			6,590		(15	)		6,590		(15	)
Total Temporarily Impaired	$	3,738	$	(2	)	$	44,904	$	(148	)	$	48,642	$	(150	)

Realized Gain (Loss) on Investments [Table Text Block]

(In Thousands of Dollars)	2012		2011			2010
Trading Account Securities Gains/(Losses)	$	4	$	(11	)	$	3
Available for Sale Securities
Other than temporary impairment losses	$	0	$	0		$	(150	)
Gross realized gains		44		28			200
Gross realized losses		0		(65	)		(46	)
Net realized gains (losses)	$	44	$	(37	)	$	4

Investments Classified by Contractual Maturity Date [Table Text Block]

(In Thousands of Dollars)	Fair Value
Due in one year or less	$	93,182
Due after one year through five years		109,398
Due after five years through ten years		75,022
Due after ten years		74,404
Total		352,006
Equity securities		1,672
Total securities	$	353,678

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Note 13 - Subordinated Debentures

12 Months Ended

Dec. 31, 2012

Subordinated Borrowings Disclosure [Text Block]

NOTE 13 – SUBORDINATED DEBENTURES

On October 18, 2004, a trust formed by us issued $10,310,000 of 90 day LIBOR plus 1.99% variable rate trust preferred securities as part of a pooled offering of such securities. We issued subordinated debentures to the trust in exchange for the proceeds of the offering; the debentures represent the sole assets of the trust. We may redeem the subordinated debentures, in whole or in part, any time on or after October 18, 2009 at 100% of the principal amount of the securities. The debentures are required to be paid in full on October 18, 2034.

On January 20, 2006, a trust formed by us issued $10,310,000 of trust preferred securities as part of a pooled offering of such securities. The securities carried an interest rate of 6.049% for five years, and then converted to a variable rate of 90 day LIBOR plus 1.27% in 2011, for the remainder of their term. We issued subordinated debentures to the trust in exchange for the proceeds of the offering; the debentures represent the sole assets of the trust. We may redeem the subordinated debentures, in whole or in part, any time on or after April 7, 2011 at 100% of the principal amount of the securities. The debentures are required to be paid in full on April 7, 2036.

On July 30, 2007, two trusts, formed by us, issued $15,464,000 of trust preferred securities as part of a pooled offering of such securities. One of the trusts issued $7,732,000 of variable rate securities at 90 day LIBOR plus 1.35% (6.71% on the date of issuance). The other trust issued $7,732,000 of fixed rate securities that carried an interest rate of 6.566% for five years, and then converted to a variable rate of 90 day LIBOR plus 1.35% in 2012 for the remainder of their term. Firstbank then issued subordinated debentures to the trust in exchange for the proceeds of the offering; the debentures represent the sole assets of each of the trusts. We may redeem the subordinated debentures, in whole or in part, any time on or after July 30, 2012 at 100% of the principal amount of the securities. The debentures are required to be paid in full on July 30, 2037.

The trusts are not consolidated with the Company’s financial statements, but rather the subordinated debentures are shown as a liability. Our investment in the stock of the trust was $1,084,000 and is included in equity securities available for sale. These investments are restricted from sale and are carried at historical cost, which approximates fair value.

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Note 17 - Related Party Transactions (Detail) - Loans to Principal Officers, Directors, and Their Affiliates (Officers Directors And Affiliates [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Officers Directors And Affiliates [Member]
Beginning balance	$ 40,477	$ 48,510
New loans	39,074	46,283
Repayments	(43,885)	(47,972)
Deletion of Directors	(896)	(6,344)
Ending balance	$ 34,770	$ 40,477