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	%