Firstbank Corp - Current report filing (8-K)
June 16 2008 - 9:46AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: June 13, 2008
FIRSTBANK CORPORATION
(Exact Name of
Registrant as Specified in Charter)
Michigan
(State or Other Jurisdiction
of Incorporation)
|
000-14209
(Commission
File Number)
|
38-2633910
(IRS Employer
Identification No.)
|
311 Woodworth Avenue
Alma, Michigan
(Address of principal executive office)
|
48801
(Zip Code)
|
Registrants
telephone number, including area code:
(989) 463-3131
Check the appropriate box below if
the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions:
[_] Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425).
[_] Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
[_] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)).
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)).
Section 2.06 Material Impairment
On June 13, 2008, the
board of directors of Firstbank Corporation determined that it will make extra loan
loss provisions during the second quarter totaling approximately $3.1 million in
addition to the planned provision of $300,000.
This increase in
provision expense reflects a variety of factors including the ongoing economic
stresses impacting the Michigan and national economies, the continued deterioration in
real estate values, and Firstbank's practice of immediately reserving for problem loans
when they are identified.
This change will
decrease earnings by approximately $2.0 million on an after-tax basis, or $0.27
per diluted share.
Firstbank Corporation,
and all of its subsidiary banks, will remain well capitalized under federal
regulatory capital requirements.
Thomas R. Sullivan,
President & CEO of the Company commented, While we are disappointed to announce
these loan loss provisions, it is fiscally prudent to do so at this time. During our
regular credit quality review process we determined that the level of economic stress
has reached a point at which borrowers that had previously been able to service their
debt, had or were about to exhaust their payment sources. This resulted in a stronger
focus being applied to the underlying collateral values, which primarily consists of
real estate, prompting us to make these provisions.
The bulk of these
provisions were taken at our newest affiliate bank, Firstbank - West Michigan, which
completed the conversion into our company during the fourth quarter of 2007. In
times of less credit stress, most of these problem credits could, and were able to,
perform according to their terms and that was our judgment at the time of acquisition.
Part of our culture is to openly recognize problems when they are identified, and
the actions we are taking in the second quarter are in keeping with this
principle. We are devoting additional resources to address these problem loans,
including having named Bill Benear, who was previously with our Lakeview affiliate,
the Senior Lending Officer of West Michigan. We are confident that Bill's extensive
experience, and strong background in resolving problem loans, will enable us to
manage through this situation as quickly as possible.
Management's ongoing
analysis of impaired loans and their underlying collateral values revealed the
continued deterioration in the level of property values as well as reduced borrower
ability to make regularly scheduled payments. The impairment charge was based on
information currently available and may change as new information is received. The
ultimate amount of the impairment, and the potential losses to Firstbank Corporation
and its subsidiary banks, may be higher or lower depending on the realizable value of the
collateral.
The out-of-pocket
expenditures in connection with the resolution of the loans could vary, depending on
the length of time, and number of hours of professional assistance required to finally
resolve the loans, the nature of the proceedings in which the loans are resolved, and
other factors not susceptible to precise estimation, and they could be higher or
lower. The impairment charge was calculated to include an estimate of these
out-of-pocket expenditures.
Section 9.01 Financial
Statements and Exhibits
|
99.1
|
Press
Release Dated June 13, 2008.
|
SIGNATURE
Pursuant
to the requirements 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: June 13, 2008
|
|
FIRSTBANK CORPORATION
(Registrant)
By: /s/ Samuel G. Stone
Samuel G. Stone
Executive Vice President and CFO
|
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