ITEM 1. BUSINESS.
Firstbank Corporation (the "Corporation") is a bank holding company. The Corporation owns all of the outstanding stock of Bank of Alma, Firstbank (Mount Pleasant), 1st Bank (West Branch), and Bank of Lakeview.
The Corporation's business is concentrated in a single industry segment--commercial banking. Each subsidiary bank of the Corporation 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, mortgage (principally single family), home improvement, automobile, and other consumer loans. Bank of Alma also offers trust services.
Bank of Alma owns Niles Agency, Incorporated, which offers general insurance agency services. 1st Bank owns 1st Armored, Incorporated, an armored car service provider. Each of the three subsidiary banks also offers securities brokerage services at their main offices through arrangements with third party brokerage firms.
The principal sources of revenues for the Corporation and its subsidiaries are interest and fees on loans. On a consolidated basis, interest and fees on loans accounted for approximately 80 percent of total revenues in 1997, 80 percent of total revenues in 1996, and 79 percent in 1995. In addition, interest income from investment securities accounted for approximately 11 percent of total revenues on a consolidated basis in 1997, 10 percent of total revenues on a consolidated basis in 1996, and 12 percent in 1995. No other single source of revenue accounted for 15 percent or more of the Corporation's total revenues in any of the last three years. The Corporation has no foreign assets and no income from foreign sources. The business of the subsidiary banks of the Corporation is not seasonal to any material extent.
Bank of Alma is 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. Bank of Alma also has one full service branch located in each of the following communities near Alma: Ashley, Auburn, Ithaca, Merrill, Pine River Township, Riverdale, St. Charles, St. Louis, and Vestaburg.
Firstbank is a Michigan state-chartered bank which was incorporated in 1894. Its main office and one branch are located in Mount Pleasant, Michigan. Firstbank also has one full service branch located in each of the following communities near Mount Pleasant: Clare, Shepherd, Union Township, and Winn.
1st Bank is a Michigan state-chartered bank which was incorporated in 1980. Its main office is located in West Branch, Michigan.
1st Bank also has one full service branch located in each of the following communities near West Branch: Fairview, Hale, Higgins Lake, Rose City, St. Helen, and West Branch Township.
Bank of Lakeview is a Michigan state-chartered bank which was established in 1904. Its main office and one branch are located in Lakeview, and it has branches in Howard City, Morley, Remus, and Stanwood. The Corporation acquired Bank of Lakeview and its holding company parent in August of 1997. Bank of Lakeview operates as an independent community bank. The acquisition was accounted for as a purchase transaction (the details of which are more fully described in the 8-K dated August 8, 1997). Accordingly, the results of operations of Bank of Lakeview are included with those of the Company for periods subsequent to the date of merger. Although the markets served by Bank of Lakeview are contiguous with those of the Corporation, the markets do not overlap and the Corporation's subsidiary banks have not divested any branches.
The following table shows comparative information concerning the Corporation's subsidiary banks:
As of December 31, 1997, the Corporation and its subsidiaries employed 295 persons on a full-time equivalent basis.
Banking in the Corporation's market areas and in the State of Michigan is highly competitive. In addition to competition from other commercial banks, banks face significant competition from nonbank 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).
The Corporation's subsidiary banks compete directly with other banks, thrift institutions, credit unions and other nondepository financial institutions in four geographic banking markets where their offices are located. Bank of Alma primarily competes in Gratiot, Midland, Montcalm, and Saginaw Counties; Firstbank primarily in Isabella and Clare Counties; 1st Bank primarily in Iosco, Oscoda, Ogemaw, and Roscommon Counties; and Bank of Lakeview primarily in Mecosta and Montcalm Counties.
Banks and bank holding companies are extensively regulated. The Corporation is a bank holding company that is regulated by the Federal Reserve System. Bank of Alma, Firstbank, 1st Bank, and Bank of Lakeview are chartered under state law and are supervised, examined, and regulated by the Federal Deposit Insurance Corporation and the Financial Institutions Bureau of the Michigan Department of Consumer and Industry Services. As of December 31, 1997, Bank of Lakeview was a member of the Federal Reserve System. In 1998, Bank of Lakeview discontinued its membership in the Federal Reserve System. None of the other subsidiary banks are members of the Federal Reserve System. All of the banks' deposits are insured by the Federal Deposit Insurance Corporation to the maximum extent provided by law.
Laws that govern banks significantly limit their business activities in a number of respects. Prior approval of the Federal Reserve Board, and in some cases various other governing agencies, is required for the Corporation to acquire control of any additional banks or branches. The business activities of the Corporation and its subsidiaries are limited to banking and to other activities which are determined by the Federal Reserve Board to be closely related to banking. Transactions among the Corporation and the Corporation's subsidiary banks are significantly restricted. In addition, bank regulations govern the ability of the subsidiary banks to pay dividends or make other distributions to the Corporation.
In addition to laws that affect businesses in general, banks are subject to a number of federal and state laws and regulations which have a material impact on their business. These include, among others, state usury laws, state laws relating to fiduciaries, the Truth In Lending Act, the Truth in Savings Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Expedited Funds Availability Act, the Community Reinvestment Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the Bank Secrecy Act, the Community Development and Regulatory Improvement Act, the Financial Institutions Reform, Recovery and Enforcement Act, the FDIC Improvement Act of 1991 (the "FDIC Improvement Act"), electronic funds transfer laws, redlining laws, antitrust laws, environmental laws, and privacy laws.
The instruments of government monetary policy, as determined by the Federal Reserve Board, may influence the growth and distribution of bank loans, investments, and deposits, and may also affect interest rates on loans and deposits. These policies have a significant effect on the operating results of banks.
Under applicable laws, regulations, and policies, the Corporation is expected to act as a source of financial strength to each subsidiary bank and to commit resources to support each subsidiary bank. Any insured depository institution owned by the Corporation may be assessed for losses incurred by the Federal Deposit Insurance Corporation (the "FDIC") in connection with assistance provided to, or the failure of, any other insured depository institution owned by the Corporation.
The FDIC has authority to impose special assessments on insured depository institutions to repay FDIC borrowings from the United States Treasury or other sources and to establish periodic assessment rates on Bank Insurance Fund ("BIF") member banks so as to maintain the BIF at the designated reserve ratio defined in the FDIC Improvement Act. Bank of Alma and Firstbank also hold deposits that are insured by the Savings Association Insurance Fund ("SAIF") administered by the FDIC. Deposit insurance premiums on those deposits are paid to the SAIF at rates applicable to that fund. The FDIC has implemented a system of risk-based premiums for deposit insurance pursuant to which the premiums paid by a depository institution will be based on the perceived probability that the insurance funds will incur a loss in respect of that institution.
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the "Riegle-Neal Act") substantially changed the geographic constraints applicable to the banking industry. The Riegle-Neal Act allows bank holding companies to acquire banks located in any state in the United States without regard to geographic restrictions or reciprocity requirements imposed by state law. Effective June 1, 1997 (or earlier if expressly authorized by applicable state law), the Riegle-Neal Act also allows banks to 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 by the Riegle-Neal Act 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 Commissioner, (i) acquisition of Michigan banks by FDIC-insured banks, savings banks, or savings and loan associations located in other states, (ii) 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, (iii) consolidation of Michigan banks and FDIC-insured banks, savings banks, or savings and loan associations located in other states having laws permitting such consolidation, (iv) 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 (v) establishment by foreign banks of branches located in Michigan.
Risk-based capital and leverage standards apply to all banks under federal regulations. The risk-based capital ratio standards establish a systematic analytical framework that is intended to make regulatory capital requirements sensitive to differences in risk profiles among banking organizations, take off-balance sheet liability exposures into explicit account in assessing capital adequacy, and minimize disincentives to hold liquid, low-risk assets. Risk-based capital ratios are determined by allocating assets and specified off-balance sheet commitments into risk-weighting categories. Higher levels of capital are required for categories perceived as representing greater risk.
Failure to meet minimum capital ratio standards could subject a bank to a variety of enforcement remedies available to the federal regulatory authorities, including restrictions on certain kinds of activities, restrictions on asset growth, limitations on the ability to pay dividends, the issuance of a directive to increase capital, and the termination of deposit insurance by the FDIC. Maintaining capital at "well capitalized" levels is one condition to the assessment of federal deposit insurance premiums at the lowest available rate.
Each of the Corporation's subsidiary banks and the Corporation itself, on a consolidated basis, maintains capital at levels which exceed both the minimum and well capitalized levels under currently applicable regulatory requirements. The following table summarizes compliance with regulatory capital ratios by the Corporation and each of its subsidiary banks at December 31, 1997.
The following table shows the amounts by which the Corporation's capital (on a consolidated basis) exceeds current regulatory requirements on a dollar amount basis:
The nature of the business of the Corporation's 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.
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 in this Annual Report on Form 10-K by reference 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 Corporation itself. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "is likely," "plans," "projects," "opinion," 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 ("Future Factors") 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. Furthermore, the Corporation undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.
Future Factors 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; and the vicissitudes of the national economy. These are representative of the Future Factors that could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.
The following tables provide information concerning the business of the registrant.
DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY
INVESTMENT PORTFOLIO
The carrying values of investment securities as of the dates indicated are summarized as follows:
ANALYSIS OF INVESTMENT SECURITIES PORTFOLIO
The following table shows, by class of maturities at December 31, 1997, the amounts and weighted average yields of such investment securities :
ANALYSIS OF INVESTMENT SECURITIES PORTFOLIO (CON'T)
The aggregate book value of the securities of no single issuer except the U.S. Government or agencies exceeded ten percent of the Corporation's consolidated shareholders' equity as of December 31, 1997.
LOAN PORTFOLIO
The following table presents the loans outstanding at the indicated dates according to the type of loan:
The following table shows the maturity of commercial, agricultural and real estate construction loans outstanding at December 31, 1997. Also provided are the amounts due after one year classified according to their sensitivity to changes in interest rates.
NONPERFORMING LOANS AND ASSETS
The following table summarizes nonaccrual, troubled debt restructurings, and past-due loans at the dates indicated:
The gross interest income that would have been recorded for the year ended December 31, 1997, 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, was $196,000. The amount of interest income on those loans that was included in net income for the period was $128,000.
Loan performance is reviewed regularly by external loan review specialists, loan officers, and senior management. When reasonable doubt exists concerning collectibility 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, 1997, the Corporation had $15,556,000 in commercial and mortgage loans for which payments are presently current although the borrowers are experiencing financial difficulties. Those loans are subject to constant attention and their status is reviewed on a monthly basis.
As of December 31, 1997, there were no concentrations of loans exceeding 10% of total loans which are not otherwise disclosed as a category of loans in the consolidated balance sheets of the Corporation contained in the Corporation's annual report to shareholders for the year ended December 31, 1997.
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.
The allowance for loan losses is based on management's evaluation of the portfolio, past loan loss experience, current economic conditions, volume, growth, and 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. [FN] Includes the allowance of Bank of Lakeview at date of acquisition of $1,326.
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses was allocated to provide for possible losses within the following loan categories at the dates indicated:
AVERAGE DEPOSITS
The daily average deposits and rates paid on such deposits for the periods indicated were:
The time remaining until maturity of time certificates of deposit and other time deposits of $100,000 or more at December 31, 1997, was as follows (Dollars in Thousands):
RETURN ON EQUITY AND ASSETS
The following table sets forth certain financial ratios for the years ended:
SHORT-TERM BORROWED FUNDS
Included in short-term borrowed funds are repurchase agreements as described in Note J to the consolidated financial statements in the Corporation's annual report to shareholders for the year ended December 31, 1997, which consist of the following:
ITEM 2.
ITEM 2. PROPERTIES.
The offices of the Corporation and the main office of Bank of Alma are located at 311 Woodworth Avenue, Alma, Michigan. Bank of Alma occupies approximately 24,000 square feet of this brick building. The remaining 900 square feet are rented as office space to an unrelated business. Bank of Alma owns this property, as well as a parcel of real estate adjacent to the main office which is presently being used as a parking lot. Bank of Alma also owns a parcel of vacant land at 218 East Center Street, Alma, Michigan, which is currently available for sale.
Bank of Alma owns and operates one 3-lane drive-up branch in Alma, Michigan. Also located on the Alma branch property is a garage used to house the bank's vehicles and for general storage. A 960 square foot building owned by Bank of Alma in Pine River Township has three inside tellers in addition to the three outside stations.
Bank of Alma leases the facility for the St. Louis branch. This facility is approximately 900 square feet consisting of wood frame construction. The Bank of Alma has negotiated the purchase of this building and is leasing the facility on a month-to-month basis until closing of the purchase.
Bank of Alma owns and operates a branch located in Merrill, Michigan. The branch occupies approximately 2,000 square feet of a 4,000 square foot wood and brick building. The remainder of the building is available for community use. The bank operates a two-lane drive-up facility which is attached to the building and covered by a canopy. Bank of Alma also owns the property adjacent to the office which is used for parking.
Bank of Alma also owns the facilities for six other full-service branches. Each of the Ashley, Auburn, Ithaca, Riverdale, St. Charles, and Vestaburg branches is owned by Bank of Alma and housed in buildings having slightly less than 2,000 square feet.
On February 27, 1998, Bank of Alma purchased a 16,000 square foot parcel adjacent to its main office from an unrelated party. The Bank intends to demolish the buildings existing on the land, and to construct an operations center on the premises. Construction is expected to begin in the second quarter of 1998.
The main office of Firstbank is located at 102 South Main, Mt. Pleasant, Michigan. The 5,600 square foot facility is leased. The lease will expire in 2001. Firstbank has an option to extend the term for an additional five years.
Firstbank operates a branch located in Shepherd, Michigan. The bank owns the approximately 5,800 square foot brick building. Approximately half the building is used for bank purposes and the other half is leased to
other tenants for office purposes. The bank operates a two-lane drive-up facility that is attached to the building and covered by a canopy. Firstbank also owns a parcel that is adjacent to the office which is used as a parking lot.
Firstbank operates a branch located in Clare, Michigan. The branch is housed in a brick building containing approximately 4,800 square feet of space. The bank owns the building and adjacent real estate used for parking. The bank also operates a two-lane drive-up facility that is attached to the building and covered by a canopy.
Firstbank operates a branch located in Mt. Pleasant, Michigan. The branch is housed in a brick building containing approximately 1,600 square feet of space. The bank owns the building and adjacent real estate used for parking and operates a two-lane drive-up facility attached to the building.
Firstbank operates a branch located in Winn, Michigan. This branch facility is housed in a wood frame structure having approximately 1,000 square feet. Firstbank owns the building. Firstbank also owns the parcel of real estate which is adjacent to the Winn branch site.
Firstbank also operates a branch located in Union Township, Michigan. The branch located in Union Township is housed in a 3,200 square foot building. The building is owned by Firstbank. The Union Township property houses a three-lane drive-up service.
Firstbank has purchased a vacant lot in Union Township near Mt. Pleasant. The property is located at 1900 Remus Road, Mt. Pleasant, Michigan. Firstbank intends to construct a full service branch on this property in 1998.
The main office of 1st Bank is located at 502 West Houghton Avenue, West Branch, Michigan. The bank occupies approximately 3,565 square feet of office space. 1st Bank owns this property, as well as a lot adjacent to the main office. The lot has a 1,800 square foot single family residence and separate garage. The house is currently rented but is available for future expansion of the bank and for parking needs.
The executive office of 1st Bank and a full service branch are located in a 10,000 square foot building at 601 W. Houghton Avenue, West Branch, Michigan. 1st Bank occupies approximately 3,000 square feet of this building, with the remaining 7,000 square feet leased to unrelated businesses. Also located on this property are separate buildings of approximately 3,700 square feet which are leased as retail space to unrelated businesses.
1st Bank owns and operates branches located in Fairview, Higgins Lake, and Rose City containing approximately 1,500 to 2,300 square feet. 1st Bank owns each of those branches. Each of those branches occupies a wood frame building.
1st Bank also owns and operates branches located in St. Helen and West Branch, Michigan. Each branch occupies a wood frame building having approximately 900 square feet.
1st Bank operates a branch located in Hale, Michigan. The leased branch occupies a wood frame building containing approximately 2,000 square feet and sublets approximately 800 square feet to an unrelated business.
1st Bank operates an armored car service from an 8,500 square foot brick and steel building. 1st Bank owns the building. Approximately 2,000 square feet of the building are leased to unrelated businesses. In addition, 1st Bank leases approximately 1,600 square feet in a brick and steel building as an additional site for its armored car service. The lease expires in July of 2002. 1st Bank has the option to extend the lease for an additional five-year term.
1st Bank has entered into purchase agreement to acquire a 2,000 square foot brick building which will be used as a full service branch. The property is located at 2375 M-30. The purchase is expected to close during the second quarter of 1998.
The main office of the Bank of Lakeview is located at 506 S. Lincoln Avenue, Lakeview, Michigan. The bank occupies a brick and block frame building of approximately 16,000 square feet and owns a vacant parcel of land directly across South Lincoln Avenue which is used for parking.
Bank of Lakeview owns and operates one 3 lane drive-up branch in Lakeview, Michigan. The 700 square foot building which also offers ATM service is of brick construction.
Bank of Lakeview owns and operates three full service branches located in Howard City, Remus and Morley, Michigan containing from 1,200 to 2,300 square feet. Each of these branches occupies a brick building.
Bank of Lakeview leases property for the Canadian Lakes branch located in Stanwood, Michigan. The facility is approximately 2,000 square feet of wood construction. The lease expires August 31, 2000. Bank of Lakeview has the option to extend the lease for two additional five year periods.
Management considers the properties and equipment of the Corporation and its subsidiaries to be well maintained, in good operating condition, and adequate for their operations.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
The Corporation and its subsidiaries 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 the Corporation's consolidated financial condition.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT.
The following information concerning executive officers of the Corporation who are not directors 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 who are not also directors or nominees for election to the Board of Directors of the Corporation is given below. Except as otherwise indicated, all existing officers have had the same principal employment for over 5 years.
MARY D. DECI (age 51) has been Chief Financial Officer, Secretary, and Treasurer of the Corporation since 1994. Ms. Deci has been Senior Vice President of Bank of Alma since 1994, and Controller of Bank of Alma since 1988. Ms. Deci has been Vice President of the Corporation and of Bank of Alma since 1989 and has been an officer of Bank of Alma since 1988.
RICHARD L. JARVIS (age 60) has been Executive Vice President of Firstbank since December, 1991, and has been Vice President of the Corporation since 1987. Mr. Jarvis served as President and Chief Executive Officer of Firstbank from 1987 until December, 1991. Mr. Jarvis served as a director of Firstbank from 1987 to 1991.
DALE A. PETERS (age 55) has been Vice President of the Corporation and President, Chief Executive Officer, and a director of 1st Bank since 1987. He has been Chairman of the Board of 1st Bank since 1988.
RICHARD J. SCHURTZ (age 61) has been Vice President of the Corporation since the acquisition of Bank of Lakeview in August of 1997. Mr. Schurtz has been President and Chief Executive Officer of Bank of Lakeview since 1994. He has served as a director of Bank of Lakeview since 1994.
THOMAS R. SULLIVAN (age 47) has been Executive Vice President of the Corporation since November, 1996, and has been President, Chief Executive Officer, and a director of Firstbank since December, 1991. Mr. Sullivan served as Vice President of the Corporation from 1991 to 1996.
JAMES E. WHEELER, II (age 38), has been Vice President of the Corporation and Senior Vice President and Chief Loan Officer of Bank of Alma since 1989.
PART II ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.
The information under the caption "Common Stock Data" on page 13 in the registrant's annual report to shareholders for the year ended December 31, 1997, is here incorporated by reference.
At various times in 1997, the Corporation issued unregistered shares of its common stock totaling 2,898 shares to members of the boards of directors of the Corporation and the Corporation's subsidiary banks, Firstbank and 1st Bank. The shares were issued as retainers and directors fees for the directors' services on the boards. The Corporation claims an exemption from registration for the issuances under Section 4(2) of the Securities Act of 1933, as amended, which exempts transactions by an issuer not involving any public offering. The shares were issued in accordance with the Corporation's board compensation policy. The issuance did not involve any general solicitation.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA.
The information under the heading "Selected Financial Data" on page 3 in the registrant's annual report to shareholders for the year ended December 31, 1997, is here incorporated by reference.
ITEM 7.
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 4 through 12 in the registrant's annual report to shareholders for the year ended December 31, 1997, is here incorporated by reference.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Information under the headings "Liquidity and Interest Rate Sensitivity" on pages 8 and 9 and "Quantitative and Qualitative Disclosure About Market Risk" on pages 9 through 10 in the registrant's annual report to shareholders for the year ended December 31, 1997, is here incorporated by reference.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The report of independent auditors and the consolidated financial statements on pages 14 through 32 and the quarterly results of operations on page 13 in the registrant's annual report to shareholders for the year ended December 31, 1997, are here incorporated by reference.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information under the captions "Board of Directors" 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 27, 1998, is here incorporated by reference.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION.
Information contained under the captions "Compensation of Directors and Executive Officers" and "Compensation Committee Interlocks and Insider Participation" in the registrant's definitive proxy statement for its annual meeting of shareholders to be held April 27, 1998, is here incorporated by reference.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information under the caption "Voting Securities" in the registrant's definitive proxy statement for its annual meeting of shareholders to be held April 27, 1998, is here incorporated by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information under the caption "Compensation Committee Interlocks and Insider Participation" in the registrant's definitive proxy statement for its annual meeting of shareholders to be held April 27, 1998, is here incorporated by reference.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(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, 1997, in Item 8:
PAGE NUMBER IN STATEMENT OR REPORT ANNUAL REPORT
Report of Independent Auditors 14 Consolidated Balance Sheets as of December 31, 1997, and 1996 15 Consolidated Statements of Income for the years ended December 31, 1997, 1996, and 1995 16 Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 1997, 1996, and 1995 17 Consolidated Statements of Cash Flows for the years ended December 31, 1997, 1996, and 1995 18 Notes to Consolidated Financial Statements 19-32
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, 1997.
(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) The following exhibits are filed as part of this report:
NUMBER EXHIBIT
3(a) ARTICLES OF INCORPORATION. Previously filed as an exhibit to registrant's Registration Statement on Form S-2 (Registration No. 33-68432) filed on September 3, 1993. Here incorporated by reference.
3(b) BYLAWS. Previously filed as an exhibit to the registrant's Registration Statement on Form S-2 (Registration No. 33-68432) filed on September 3, 1993. Here incorporated by reference.
NUMBER EXHIBIT
10(a) FORM OF INDEMNITY AGREEMENT WITH DIRECTORS AND OFFICERS. Previously filed as an exhibit to the registrant's Registration Statement on Form S-2 (Registration No. 33-68432) filed on September 3, 1993. Here incorporated by reference.
10(b) MAIN OFFICE LEASE. Previously filed as an exhibit to the registrant's Registration Statement on Form S-2 (Registration No. 33-68432) filed on September 3, 1993. Here incorporated by reference.
10(c) DEFERRED COMPENSATION PLAN. Previously filed as an exhibit to the registrant's Form 10-K for the year ended December 31, 1995. Here incorporated by reference.
10(d) TRUST UNDER DEFERRED COMPENSATION PLAN. Previously filed as an exhibit to the registrant's Form 10-K for the year ended December 31, 1995. Here incorporated by reference.
10(e) STOCK OPTION AND RESTRICTED STOCK PLAN OF 1993. Previously filed as an appendix to the registrant's definitive proxy statement for its annual 26, 1993. Here incorporated by reference.
10(f) 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 on April 28, 1997. Here incorporated by reference.
10(g) AGREEMENT AND PLAN OF MERGER. Previously filed as Appendix A to the registrant's Registration Statement on Form S-4 filed on June 20, 1997. Here incorporated by reference.
13 1997 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.)
21 SUBSIDIARIES OF REGISTRANT.
23 CONSENT OF CROWE, CHIZEK AND COMPANY LLP.
24 POWERS OF ATTORNEY.
27(a) FINANCIAL DATA SCHEDULE FOR YEAR ENDED DECEMBER 31, 1997.
27(b) AMENDED FINANCIAL DATA SCHEDULE FOR QUARTER ENDED SEPTEMBER 30, 1997.
27(c) AMENDED FINANCIAL DATA SCHEDULE FOR QUARTER ENDED JUNE 30, 1997.
27(d) AMENDED FINANCIAL DATA SCHEDULE FOR QUARTER ENDED MARCH 31, 1997.
27(e) AMENDED FINANCIAL DATA SCHEDULE FOR YEAR ENDED DECEMBER 31, 1996.
27(f) AMENDED FINANCIAL DATA SCHEDULE FOR QUARTER ENDED SEPTEMBER 30, 1996.
27(g) AMENDED FINANCIAL DATA SCHEDULE FOR QUARTER ENDED JUNE 30, 1996.
27(h) AMENDED FINANCIAL DATA SCHEDULE FOR QUARTER ENDED MARCH 31, 1996.
27(i) AMENDED FINANCIAL DATA SCHEDULE FOR YEAR ENDED DECEMBER 31, 1995.
99 FIRSTBANK CORPORATION 401(K) PLAN PERFORMANCE TABLE.
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 Mary D. Deci, Secretary, Firstbank Corporation, 311 Woodworth Avenue, P.O. Box 1029, Alma, Michigan 48801.
(b) REPORTS ON FORM 8-K.
During the last quarter of the period covered by this report, the registrant filed no Current Reports on Form 8-K.
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: March 23, 1998 FIRSTBANK CORPORATION
By /S/MARY D. DECI Mary D. Deci Vice President, Secretary, Treasurer and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
March 23, 1998 /S/ JOHN MCCORMACK John McCormack President, Chief Executive Officer, and Director (Principal executive officer)
March 23, 1998 /S/ MARY D. DECI Mary D. Deci Vice President, Secretary, and Treasurer (Principal financial and accounting officer)
March 23, 1998 /S/ WILLIAM E. GOGGIN William E. Goggin Director
March 23, 1998 /S/ EDWARD B. GRANT Edward B. Grant Director
March 23, 1998 /S/ CHARLES W. JENNINGS Charles W. Jennings Director
March 23, 1998 /S/ PHILLIP G. PEASLEY Phillip G. Peasley Director
March 23, 1998 /S/ DAVID D. ROSLUND David D. Roslund Director
*By /S/ MARY D. DECI Mary D. Deci (Attorney in Fact)
INDEX TO EXHIBITS
NUMBER EXHIBIT PAGE
3(a) ARTICLES OF INCORPORATION. Previously filed as an exhibit to registrant's Registration Statement on Form S-2 (Registration No. 33-68432) filed on September 3, 1993. Here incorporated by reference.
3(b) BYLAWS. Previously filed as an exhibit to the registrant's Registration Statement on Form S-2 (Registration No. 33-68432) filed on September 3, 1993. Here incorporated by reference.
10(a)FORM OF INDEMNITY AGREEMENT WITH DIRECTORS AND OFFICERS. Previously iled as an exhibit to the registrant's Registration Statement on Form S-2 (Registration No. 33-68432) filed on September 3, 1993. Here incorporated by reference.
10(b) MAIN OFFICE LEASE. Previously filed as an exhibit to the registrant's Registration Statement on Form S-2 (Registration No. 33-68432) filed on September 3, 1993. Here incorporated by reference.
10(c) DEFERRED COMPENSATION PLAN. Previously filed as an exhibit to the registrant's Form 10-K for the year ended December 31, 1995. Here incorporated by reference.
10(d)TRUST UNDER DEFERRED COMPENSATION PLAN. Previously filed as an exhibit to the registrant's Form 10-K for the year ended December 31, 1995. Here incorporated by reference.
10(e)STOCK OPTION AND RESTRICTED STOCK PLAN OF 1993. Previously filed as an appendix to the registrant's definitive proxy statement for its annual 26, 1993. Here incorporated by reference.
10(f)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 on April 28, 1997. Here incorporated by reference.
10(g) AGREEMENT AND PLAN OF MERGER. Previously filed as Appendix A to the registrant's Registration Statement on Form S-4 filed on June 20, 1997. Here incorporated by reference.
13 1997 ANNUAL REPORT TO SHAREHOLDERS. (This report, except for 30 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.)
21 SUBSIDIARIES OF REGISTRANT. 69
23 CONSENT OF CROWE, CHIZEK AND COMPANY LLP. 70
24 POWERS OF ATTORNEY. 71
27(a) FINANCIAL DATA SCHEDULE FOR YEAR ENDED DECEMBER 31, 1997. 78
27(b) AMENDED FINANCIAL DATA SCHEDULE FOR QUARTER ENDED SEPTEMBER 30, 79 1997.
27(c) AMENDED FINANCIAL DATA SCHEDULE FOR QUARTER ENDED JUNE 30, 1997. 80
27(d) AMENDED FINANCIAL DATA SCHEDULE FOR QUARTER ENDED MARCH 31, 81 1997.
27(e) AMENDED FINANCIAL DATA SCHEDULE FOR YEAR ENDED DECEMBER 31, 82 1996.
27(f) AMENDED FINANCIAL DATA SCHEDULE FOR QUARTER ENDED SEPTEMBER 30, 83 1996.
27(g) AMENDED FINANCIAL DATA SCHEDULE FOR QUARTER ENDED JUNE 30, 1996. 84
27(h) AMENDED FINANCIAL DATA SCHEDULE FOR QUARTER ENDED MARCH 31, 85 1996.
27(i) AMENDED FINANCIAL DATA SCHEDULE FOR YEAR ENDED DECEMBER 31, 86 1995.
99 FIRSTBANK CORPORATION 401(K) PLAN PERFORMANCE TABLE. 87 [FN] Management contract or compensatory plan. This Exhibit is filed by incorporation by reference to a prior filing.