U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2008

[_]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________.

Commission file number: 000-14209

FIRSTBANK CORPORATION
(Exact name of registrant as specified in its charter)

Michigan
(State of Incorporation)

38-2633910
(I.R.S. Employer Identification No.)

311 Woodworth Avenue
Alma, Michigan
(Address of principal executive offices)

48801
(Zip Code)

Registrant’s telephone number, including area code: (989) 463-3131

Securities registered pursuant to Section 12(g) of the Exchange Act:

Common Stock
(Title of Class)

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] interceptions or interference.

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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 reporting company” in Rule 12b-2 of the Exchange Act (check one):
Large accelerated filer Accelerated filer X Non-accelerated filer Smaller reporting company

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

Common stock outstanding at July 31, 2008: 7,491,836 shares.

INDEX




PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (UNAUDITED)	Page 3

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	Page 13

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	Page 18

Item 4.	Controls and Procedures	Page 19



PART II.	OTHER INFORMATION

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	Page 20

Item 4.	Submission of Matters to a Vote of Security Holders	Page 20

Item 5.	Other Information	Page 20

Item 6.	Exhibits	Page 21


SIGNATURES		Page 22


EXHIBIT INDEX		Page 23

Item 1 : Financial Statements (UNAUDITED)

FIRSTBANK CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2008 AND DECEMBER 31, 2007
(Dollars in thousands)
UNAUDITED

	June 30, 2008			December 31, 2007


ASSETS
Cash and due from banks	$	40,283		$	42,198
Short term investments		6,281			3,331

Total Cash and Cash Equivalents		46,564			45,529

Trading account securities		502			675
Securities available for sale		96,489			104,455
Federal Home Loan Bank stock		8,666			8,007
Loans held for sale		191			1,725
Loans, net of allowance for loan losses of $12,328 at June 30, 2008
and $11,477 at December 31, 2007		1,140,508			1,110,452
Premises and equipment, net		27,959			27,554
Acquisition goodwill		35,553			34,421
Other intangibles		4,390			5,832
Accrued interest receivable and other assets		28,336			27,089


TOTAL ASSETS	$	1,389,158		$	1,365,739


LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Non-interest bearing accounts	$	148,385		$	152,126
Interest bearing accounts:
Demand		219,161			222,371
Savings		160,862			147,654
Time		485,300			489,241

Total Deposits		1,013,708			1,011,392

Securities sold under agreements to repurchase and overnight borrowings		48,718			42,791
Federal Home Loan Bank advances		152,966			138,126
Notes Payable		3,957			909
Subordinated Debentures		36,084			36,084
Accrued interest and other liabilities		15,605			17,826

Total Liabilities		1,271,038			1,247,128

SHAREHOLDERS' EQUITY
Preferred stock; no par value, 300,000 shares authorized, none issued
Common Stock; 20,000,000 shares authorized, 7,484,368 shares issued
and outstanding (7,407,198 at December 31, 2007 )		112,491			111,436
Retained earnings		5,790			6,692
Accumulated other comprehensive income		(161	)		483

Total Shareholders' Equity		118,120			118,611


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,389,158		$	1,365,739

See notes to consolidated financial statements.

FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
JUNE 30, 2008 AND 2007
(Dollars in thousands except per share data)
UNAUDITED

	Three Months Ended June 30,
	2008			2007


Interest Income:
Interest and fees on loans	$	19,031		$	17,042
Securities
Taxable		945			687
Exempt from Federal Income Tax		349			267
Short term investments		86			269

Total Interest Income		20,411			18,265
Interest Expense:
Deposits		6,468			6,589
FHLB advances and other		1,961			1,659
Subordinated Debt		501			342

Total Interest Expense		8,893			8,590
Net Interest Income		11,518			9,675
Provision for loan losses		3,466			739

Net Interest Income after provision for loan losses		8,052			8,936
Non-interest Income:
Gain on sale of mortgage loans		565			375
Service charges on deposit accounts		1,256			994
Gain/(loss) on trading account securities		(160	)		0
Gain/(loss) on sale of securities		(67	)		0
Mortgage servicing, net of amortization		131			130
Other		647			896

Total Non-interest Income		2,372			2,395
Non-interest Expense:
Salaries and employee benefits		5,523			4,826
Occupancy and equipment		1,740			1,326
Amortization and impairment of intangibles		281			436
FDIC insurance premium		103			25
Other		2,697			2,357

Total Non-interest Expense		10,344			8,970

Income before federal income taxes		80			2,361
Federal income taxes		(212	)		614


NET INCOME	$	292		$	1,747


Comprehensive Income	$	(548	)	$	1,516


Basic Earnings Per Share	$	0.04		$	0.27


Diluted Earnings Per Share	$	0.04		$	0.27


Dividends Per Share	$	0.225		$	0.225

See notes to consolidated financial statements.

FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
JUNE 30, 2008 AND 2007
(Dollars in thousands except per share data)
UNAUDITED

	Six Months Ended June 30,

	2008			2007


Interest Income:
Interest and fees on loans	$	38,786		$	33,840
Securities
Taxable		1,984			1,313
Exempt from Federal Income Tax		702			537
Short term investments		177			580

Total Interest Income		41,649			36,270
Interest Expense:
Deposits		13,520			13,096
FHLB advances and other		4,099			3,291
Subordinated Debt		1,049			687

Total Interest Expense		18,668			17,074
Net Interest Income		22,981			19,196
Provision for loan losses		4,281			18

Net Interest Income after provision for loan losses		18,700			19,178
Non-interest Income:
Gain on sale of mortgage loans		1,707			699
Service charges on deposit accounts		2,424			1,938
Gain/(loss) on trading account securities		(173	)		0
Gain/(loss) on sale of securities		62			(130	)
Mortgage servicing, net of amortization		8			275
Other		1,275			1,891

Total Non-interest Income		5,303			4,673
Non-interest Expense:
Salaries and employee benefits		11,370			9,556
Occupancy and equipment		3,489			2,677
Amortization and impairment of intangibles		562			597
FDIC insurance premium		216			49
Other		5,415			4,837

Total Non-interest Expense		21,052			17,716
Income before federal income taxes		2,951			6,135
Federal income taxes		509			1,730


NET INCOME	$	2,442		$	4,405


Comprehensive Income	$	1,798		$	5,107


Basic Earnings Per Share	$	0.33		$	0.68


Diluted Earnings Per Share	$	0.33		$	0.68


Dividends Per Share	$	0.450		$	0.450

See notes to consolidated financial statements.

FIRSTBANK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED
JUNE 30, 2008 AND 2007
(Dollars in thousands)
UNAUDITED

	Six months ended June 30,
	2008			2007


OPERATING ACTIVITIES
Net income	$	2,442		$	4,405
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		4,281			18
Depreciation of premises and equipment		1,586			1,351
Net amortization of security premiums/discounts		13			(168	)
Loss on trading account securities		173			0
Loss/(Gain) on sale of securities		(62	)		130
Amortization and impairment of intangibles		562			597
Stock option and stock grant compensation expense		107			140
Gain on sale of mortgage loans		(1,707	)		(699	)
Proceeds from sales of mortgage loans		73,751			32,653
Loans originated for sale		(70,510	)		(31,462	)
Deferred federal income tax expense/(benefit)		(1,237	)		48
Increase in accrued interest receivable and other assets		2,198			1,235
Increase in accrued interest payable and other liabilities		(2,221	)		277

NET CASH PROVIDED BY OPERATING ACTIVITIES		9,376			8,525

INVESTING ACTIVITIES
Proceeds from sale of securities available for sale		2,335			13,394
Proceeds from maturities and calls of securities available for sale		80,414			18,340
Purchases of securities available for sale		(75,711	)		(36,118	)
Purchases of FHLB stock		(659	)		(137	)
Proceeds from sale of fixed assets		7			0
Net increase in portfolio loans		(36,464	)		(11,773	)
Net purchases of premises and equipment		(1,998	)		(1.298	)

NET CASH USED IN INVESTING ACTIVITIES		(32,076	)		(17,592	)

FINANCING ACTIVITIES
Net increase/(decrease) in deposits		2,316			(9,680	)
Increase/(decrease) in securities sold under agreements to repurchase and
other short term borrowings		5,927			7,718
Repayment of notes payable and other borrowings		(27	)		(22	)
Proceeds from issuance of other borrowings		3,076			0
Repayment of Federal Home Loan Bank borrowings		(15,161	)		(8,785	)
Proceeds from Federal Home Loan Bank borrowings		30,000			12,000
Issuance of common stock, net		948			1,327
Cash dividends		(3,344	)		(2,931	)

NET CASH PROVIDED BY FINANCING ACTIVITIES		23,735			(373	)

INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS		1,035			(9,440	)
Cash and cash equivalents at beginning of period		45,529			56,937

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	46,564		$	47,497

CONSOLIDATED STATEMENTS OF CASHFLOWS (continued)

	Six months ended June 30,
	2008		2007


Supplemental Disclosure
Interest Paid	$	19,075	$	13,705
Income Taxes Paid	$	1,775	$	2,525
Non cash transfers of loans to Other Real Estate Owned	$	2,127	$	891

See notes to consolidated financial statements.

ICNB Financial acquisition:
(In Thousands of Dollars)




Securities acquired (including FHLB stock)	28,252
Loans acquired, net of allowance for loan losses	178,456
Bank premises and equipment acquired	7,283
Acquisition intangibles recorded	18,983
Other assets acquired	12,152
Deposits assumed	(171,999	)
Borrowings assumed	(32,558	)
Other liabilities assumed	(6,679	)

FIRSTBANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2007
UNAUDITED

NOTE 1 — FINANCIAL STATEMENTS

The accompanying unaudited financial information presented is for Firstbank Corporation (“Corporation”) and its wholly owned subsidiaries: Firstbank – Alma, Firstbank (Mt. Pleasant), Firstbank – West Branch (including its wholly owned subsidiaries; 1st Armored, Inc., 1st Title, Inc., and its majority holding in 1st Investors Title, LLC and C.A. Hanes Realty, Inc. for the six months of 2007), Firstbank – St. Johns, Keystone Community Bank, Firstbank – West Michigan and its wholly owned subsidiary Accord Financial Services, Inc., collectively the “Banks”), FBMI Risk Management Services, Inc., and Austin Mortgage Company. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 2008, are not necessarily indicative of the results that may be expected for the year ending December 31, 2008. The balance sheet at December 31, 2007, has been derived from the audited financial statements at that date. For further information, refer to the consolidated financial statements and footnotes thereto included in the Corporation’s annual report on Form 10-K for the year ended December 31, 2007.

Effect of Newly Issued Accounting Standards

In February 2006, the Financial Accounting Standards Board (FASB) issued Statement No. 159, The Fair Value Option for Financial Assets and Liabilities. Adoption of this statement is required for January 1, 2008. Early adoption was allowed, effective to January 1, 2007, if that election was made by April 30, 2007. This statement allows, but does not require, companies to record certain assets and liabilities at their fair value. The fair value determination is made at the instrument level, so similar assets or liabilities could be partially accounted for using the historical cost method, while other similar assets or liabilities are accounted for using the fair value method. Changes in fair value are recorded through the income statement in subsequent periods. The statement provides for a one time opportunity to transfer existing assets and liabilities to fair value at the point of adoption with a cumulative effect adjustment recorded against equity. After adoption, the election to report assets or liabilities at fair value must be made at the point of their inception. The adoption of this standard did not have a material effect on our financial statements.

In September 2006, the FASB issued Statement No. 157, Fair Value Measurements. This Statement defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This Statement establishes a fair value hierarchy about the assumptions used to measure fair value and clarifies assumptions about risk and the effect of a restriction on the sale or use of an asset. The standard is effective for fiscal years beginning after November 15, 2007. The adoption of this standard did not have a material effect on our financial statements.

In September 2006, the FASB Emerging Issues Task Force finalized Issue No. 06-4, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements. This issue requires that a liability be recorded during the service period when a split-dollar life insurance agreement continues after participants’ employment or retirement. The required accrued liability will be based on either the post-employment benefit cost for the continuing life insurance or based on the future death benefit depending on the contractual terms of the underlying agreement. This issue is effective for fiscal years beginning after December 15, 2007. The adoption of EITF No. 06-4 did not have a material effect on our financial statements.

Effect of Newly Issued but not yet Effective Accounting Standards

In January 2008, the FASB issued Statement No. 160, Noncontrolling Interest in Consolidated Financial Statements – an amendment of ARB No. 51. This Statement applies to all entities that prepare consolidated financial statements, except not-for-profit organizations, but will affect only those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary. The statement requires specific reporting and accounting treatment for minority interest and changes in minority interest positions of an entity. We do not anticipate that this statement will have a significant effect on the results of the company.

NOTE 2 — ACQUISITIONS AND DIVESTITURES

On July 1, 2007 we acquired ICNB Financial Corporation (ICNB). ICNB was the holding company for The Ionia County National Bank of Ionia, based in Ionia, Michigan. Ionia County National Bank subsequently changed its name to Firstbank – West Michigan. The purpose of the acquisition was to increase market share in the Michigan banking market. As of June 30, 2007, ICNB had total assets of $231 million, total deposits of $171 million, and total loans, net of allowance, of $180 million. The merger was accounted for using the purchase accounting method of accounting, and accordingly the purchase price was allocated to assets acquired and the liabilities assumed based upon the estimated fair value as of the merger date.

Firstbank Corporation paid an aggregate value of $38.4 million to acquire the shares of ICNB common stock outstanding. The purchase price was determined using the Firstbank’s market price on February 1, 2007, the date of the merger agreement. We issued 874,740 shares of Firstbank common stock, and paid $19,584,000 in cash for the acquisition. The acquisition resulted in the creation of $18.6 million of intangible assets, of which $14.9 million was designated as goodwill and $3.7 million as core deposit intangible.

ICNB’s financial information is incorporated into the financial statements contained within this report from July 1, 2007 forward, the date of the merger.

On September 30, 2007, we sold our 55% ownership in C.A. Hanes Realty, Inc. at a loss after taxes of $104,000. Historical earnings from C.A. Hanes Realty, Inc. are included in the financial statements presented in this report.

NOTE 3 — GOODWILL

Changes in the carrying amount of goodwill are as follows:

	(In Thousands of Dollars)
	2008		2007


Balance at January 1	$	34,421	$	20,094
Impairment write down		0		0
Goodwill from acquisitions		252		0
Reclassification of other intangibles to goodwill		880		0

Balance at June 30	$	35,553	$	20,094

The $252,000 shown as goodwill from acquisitions relates to the ICNB purchase, and the $880,000 reclassification represents goodwill relating to the acquisition of Firstbank – Lakeview which had previously been reported as other intangible assets.

NOTE 4 — NONPERFORMING LOANS AND ASSETS

Nonperforming Loans and Assets

The following table summarizes nonaccrual and past due loans at the dates indicated:

(Dollars in thousands)

	June 30, 2008			December 31, 2007


Nonperforming loans:
Nonaccrual loans	$	16,265		$	10,454
Loans 90 days or more past due and still accruing		1,428			3,161
Renegotiated loans		278			543

Total nonperforming loans	$	17,971		$	14,158


Property from defaulted loans	$	3,923		$	3,167

Nonperforming loans as a percent of total loans*		1.56	%		1.26	%
Nonperforming loans plus Other Real Estate as a percent of total		1.89	%		1.54	%
loans* plus Other Real Estate
Nonperforming assets as a percent of total assets		1.58	%		1.27	%

Analysis of the Allowance for Loan Losses

(Dollars in Thousands)

	Three months ended June 30,						Six months ended June 30,
	2008			2007			2008			2007


Balance at beginning of period	$	11,550		$	9,081		$	11,477		$	11,559
Charge-offs		(2,928	)		(410	)		(3,916	)		(682	)
Recoveries		240			91			486			199

Net charge-offs		(2,688	)		(319	)		(3,430	)		(483	)
Provision for loan losses		3,466			739			4,281			18

Balance at end of period	$	12,328		$	9,501		$	12,328		$	9,501


Average total loans* outstanding during the period	$	1,142,324		$	916,775		$	1,136,477		$	910,676
Allowance for loan loss as a percent of total loans*		1.07	%		1.03	%		1.07	%		1.03	%
Allowance for loan loss as a percent
of nonperforming loans		69	%		103	%		69	%		103	%
Net Charge-offs^ as a percent of average loans*		0.94	%		0.14	%		0.60	%		0.11	%

*All loan ratios exclude loans held for sale
^Annualized

NOTE 5 — FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table’s present information about our assets measured at fair value on a recurring basis at June 30, 2008, and valuation techniques used by us to determine those fair values.

In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets that we have the ability to access.

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.

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)		Balance at June 30, 2008


Securities available for sale	$	80,655		-	$	15,834	$	96,489
Federal Home Loan Bank stock		-	$	8,666		-	$	8,666
Trading securities	$	502		-		-	$	502

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

(Dollars in Thousands)	Investment Securities Available for Sale


Balance at December 31, 2007	$	12,760
Total realized and unrealized gains/(losses) included in income		0
Total unrealized gains/(losses) included in other comprehensive income		(509	)
Net purchases, sales, calls and maturities		3,619
Net transfers in/out of Level 3		(35	)

Balance at June 30, 2008	$	15,835

The Level 3 assets that were still held by us at June 30, 2008 are carried at historical cost unless a better fair value can be determined. During the period, $461,000 of these securities were sold, or paid down, and $4,080,000 of new securities was acquired. The $35,000 of net transfers out of Level 3 related to a re-classification of two small assets which were reclassified to other assets.

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, auction rate securities, and other like assets. We carry local municipal securities at historical cost unless economic conditions for the municipalities changes to a degree requiring a valuation adjustment. The valuation of auction rate securities is based on recent transactions for similar securities.

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, which are accounted for under the guidelines of SFAS 114 – Accounting by Creditors for Impairment of a Loan . We have estimated the fair value of these assets 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. At June 30, 2008 we recognized a non-cash impairment charge of $536,000 to adjust these assets to their estimated fair values.

Assets Measured at Fair Value on a Nonrecurring Basis

(Dollars in Thousands)	Balance at June 30, 2008		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Losses for the period ended June 30, 2008


Impaired loans accounted
for under FAS 114	$	22,699		-		-	$	22,699	$	(2,375	)

Impaired loans accounted for under FAS 114 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). The $2.4 million in losses indicated in the table above were charged to the allowance for loan losses.

Other assets, including bank-owned life insurance, goodwill, intangible assets and other assets acquired in business combinations, are also subject to periodic impairment assessments under other accounting principles generally accepted in the United States of America. These assets are not considered financial instruments. Effective February 12, 2008, the Financial Accounting Standards Board issued a staff position, FSP FAS 157-2, which delayed the applicability of FAS 157 to non-financial instruments. Accordingly, these assets have been omitted from the above disclosures.

NOTE 6 — BASIC AND DILUTED EARNINGS PER SHARE

(Dollars in Thousands Except per Share Data)	Three Months Ended June 30,				Six Months Ended June 30,
	2008		2007		2008		2007


Earnings per share
Net income	$	292	$	1,747	$	2,442	$	4,405
Weighted average common shares outstanding		7,452,000		6,533,000		7,435,000		6,514,000

Basic Earnings per Share	$	0.04	$	0.27	$	0.33	$	0.68


Earnings per share assuming dilution
Net income	$	292	$	1,747	$	2,442	$	4,405
Weighted average common shares outstanding		7,452,000		6,533,000		7,435,000		6,514,000
Add dilutive effect of assumed exercises of options		0		12,000		0		17,000


Weighted average common and dilutive potential common		7,452,000		6,545,000		7,435,000		6,531,000
shares outstanding

Diluted Earnings per Share	$	0.04	$	0.27	$	0.33	$	0.68

Stock options for 284,752 shares for the three month period and 230,719 for the six month period of 2007, and 484,520 shares for the three and six month periods of 2008, were not considered in computing diluted earnings per share because they were anti-dilutive.

Item 2 . Management's Discussion and Analysis of Financial Condition and Results of Operations.

The consolidated financial information presented is for Firstbank Corporation (“Corporation”) and its wholly owned subsidiaries; Firstbank – Alma, Firstbank (Mt. Pleasant), Firstbank – West Branch (including its wholly owned subsidiaries: 1st Armored, Inc., 1st Title, Inc. and its majority holding in 1ST Investors Title, LLC, and C.A. Hanes Realty, Inc.), Firstbank – St. Johns, Keystone Community Bank, Firstbank – West Michigan (collectively the “Banks”), FBMI Risk Management Services, Inc., and Austin Mortgage Company. See note 2 of the notes to consolidated financial statements for additional disclosures on Firstbank – West Michigan and C.A. Hanes Realty, Inc. Comparisons to prior year are affected by the acquisition of Firstbank – West Michigan in the third quarter of 2007.

Events Occurring in the Second Quarter 2008

In the second quarter of 2008, we completed our previously announced merger of our Mt. Pleasant and Lakeview affiliates into one entity. While we still remain committed to our multi-charter structure, these two affiliates already shared many resources and had overlapping geographic markets. The merger of these two affiliates is expected to provide greater efficiency in serving these markets and will allow us to better serve our customers in those markets.

We also closed the loan origination component of our Austin Mortgage Company affiliate (acquired in the Ionia County National Bank acquisition in 2007) in the second quarter of the year. The balance sheet of the entity retained a small loan portfolio of under $635,000, which will remain on the books of the company. Current market conditions and the state of the economy in Michigan no longer provide a profitable business climate for the lending activities in which this affiliate participates. We recorded $106,000 of pre-tax expense associated with severance and lease facility expenses in the second quarter associated with the closing of this business unit.

Financial Condition

The Michigan economy continues to struggle through difficult times with the highest unemployment rate in the nation, rising foreclosures, and slowing demand for manufactured products. Despite these negative trends, we have maintained respectable core profitability and favorable asset quality measures compared with peer banks. Trends showing higher non performing assets, while elevated, are showing signs of slowing in their progression. Nonperforming loans will continue to be a problem in the near term due to current economic conditions; however, we are constantly monitoring our loan portfolios for developing issues and reacting to them with swift actions to mitigate losses wherever possible.

Total assets increased $23.4 million, or 1.7%, during the first six months of 2008. Cash and cash equivalents increased $1.0 million, or 2.3%. Securities available for sale were lower, decreasing $8.1 million, or 7.7%, from December 31, 2007. Total portfolio loans increased $30.9 million, or 2.8%, during the first six months of 2008. Average total loans were 2.1% higher in the second quarter of 2008 when compared with the fourth quarter of 2007.

Residential mortgages grew $6.0 million, or 1.6% from year end 2007. For a short period in the first quarter, rates on residential mortgages provided us the opportunity to refinance loans and increase our residential portfolio. Real estate construction loans increased $6.9 million, or 5.5% primarily from a limited number of new loans to developers. Commercial and commercial real estate loans were $18.5 million, or 3.5%, higher, than December 31, 2007.

Net charge-offs of loans were $2,688,000 in the second quarter of 2008 compared to $319,000 in the second three months of 2007 and $743,000 in the first quarter of 2008. The ratio of net charge-offs of loans (annualized) to average loans was 0.94% in 2008 compared to 0.14% in the same period of 2007 and 0.26% in the first quarter of 2008. Of the $2,688,000 in net charge offs, $1,839,000 had specific reserves allocated to them in prior periods. The charge offs in the current quarter were largely within our newest affiliate, Firstbank-West Michigan, which recorded loan losses of $2,173,000 in the quarter.

At June 30, 2008, the allowance as a percentage of average outstanding loans was 1.07% compared with 1.03% at the same point a year earlier and 1.02% from year end 2007. Non-performing loans as a percent of total loans was 1.56% at June 30, 2008, compared with 0.97% a year earlier, and 1.26% at year end 2007. Nonperforming loans increased $3.8 million from year end, and other real estate owned increased $756,000 compared with year end numbers. Our overall asset quality has always been considered one of the strengths of our banking franchise and has allowed us to maintain favorable asset quality measures relative to competitor banks in Michigan. We continue to be diligent in review of our loan portfolios for problem loans and believe that early detection of troubled credits is critical to our ability to maintain our allowance for loan losses at its current level. We maintain the allowance for loan losses at a level considered adequate to cover losses within the loan portfolio. The allowance balance is established after considering past loan loss experience, current economic conditions, composition of the loan portfolio, delinquencies, and other relevant factors.

Securities available for sale were lower by $8.0 million or 7.6% in the first half, primarily due to a $7.7 million decrease in agency backed securities. We held $8.9 million of auction rate securities at June 30, 2008 compared with $8.0 million at year end 2007. Due to current market conditions, these auction rate securities have become less liquid than in previous periods and were written down $506,000 through other comprehensive income in the second quarter.

Total deposits were basically unchanged when compared with year end balances, increasing just $2.3 million, or 0.2%. Within the deposit base, non-interest bearing demand account balances decreased $3.7 million or 2.5%, interest bearing demand account balances decreased $3.2 million, or 1.4%, savings balances increased $13.2 million, or 8.9%, and time balances decreased $3.9 million, or 0.8%. Within time balances, wholesale CDs were $0.4 million higher than year end, while core market CDs decreased $4.3 million. These changes resulted from normal season fluctuations and customer preferences.

For the six month period ended June 30, 2008, securities sold under agreements to repurchase and overnight borrowings increased $5.9 million, or 13.9%, due to normal fluctuations in customer cash flows. Federal Home Loan Bank advances and notes payable were up $17.9 million, or 12.9% higher than year end. Federal Home Loan Bank advances were utilized to fund loan growth which outpaced increase in core deposits.

Total shareholders’ equity decreased $0.5 million, or 0.4%, during the first six months of 2008. Net income of $2.4 million and stock issuances of $948,000 increased shareholders’ equity, while dividends of $3.4 million decreased shareholders’ equity. Stock issuance was primarily related to shares issued through dividend reinvestment. The per share book value of shareholders’ equity was $15.78 at June 30, 2008, decreasing from $16.01 at December 31, 2007. Tangible shareholders equity per share (total equity less goodwill and other intangible assets) was $10.45 at the end of the second quarter of 2008, compared with $10.58 at year end 2007. The declines in both these measures of shareholders’ equity per share resulted from dividends exceeding earnings in the second quarter.

The following table discloses compliance with current regulatory capital requirements on a consolidated basis:

(Dollars in Thousands)

	Leverage			Tier I Capital			Total Risk- Based Capital


Capital Balances at June 30, 2008	$	113,906		$	113,906		$	125,634
Required Regulatory Capital	$	54,395		$	45,039		$	90,077
Capital in Excess of Regulatory Minimums	$	59,511		$	68,867		$	35,557

Capital Ratios at June 30, 2008		8.38	%		10.12	%		11. 16	%
Regulatory Capital Ratios - Minimum Requirement		4.00	%		4.00	%		8.00	%

Results of Operations

Three Months Ended June 30, 2008

For the second quarter of 2008, net income was $292,000, basic and diluted earnings per share were $0.04, compared with $1,747,000, and $0.27 basic and diluted per share for the second quarter of 2007, and $2,150,000, $0.29 basic and diluted earnings per share, for the first quarter of 2008. This year’s second quarter was heavily impacted by a $3.5 million charge to loan loss provision, reducing after-tax earnings by $2.3 million. The charge to loan loss provision was required as we identified several loans for which the borrowers had exhausted their sources of repayment. These loans were either transferred into nonaccrual status and specific reserves established, or charged down to the value of the collateral that can be recovered on the loan.

Average earning assets increased $244.6 million, or 24.1%, when the second quarter of 2008 is compared to the same quarter a year ago. This comparison is affected by the acquisition of Firstbank – West Michigan in the third quarter of 2007. Compared with the previous quarter, earning assets increased $9.9 million, or 0.8%. The yield on earning assets decreased 71 basis points, to 6.60%, for the quarter ended June 30, 2008, compared to 7.31% for the same quarter a year ago, and was 33 basis points lower when compared with the quarter ended March 31, 2008. The cost of funding related liabilities also decreased, falling 25 basis points when comparing this year’s second quarter to the same period a year ago, from 3.39% in 2007, to 3.14% in 2008. Compared with prior quarter, the cost of funding related liabilities also fell by 22 basis points. Since the decrease in yield on earning assets was larger than the decrease in the cost of funds relative to earning assets, the net interest margin decreased 13 basis points from last year’s second quarter to 3.79% in the current quarter and a similar 11 basis points when compared to the previous quarter. Net interest income increased $1.8 million to $11.5 million in the second quarter of 2008 compared with the same period of 2007, primarily due to the previously mentioned acquisition. Unpaid interest on loans which are transferred to nonaccrual status is reversed against interest income in the period. During the second quarter, interest reversals associated with loans moving to nonaccrual status were $203,000 compared with $55,000 in the first quarter.

The provision for loan losses increased $2.7 million when the second quarter of 2008 is compared to the same quarter of 2007. Provision for loan losses was $3.5 million in the second quarter compared with a provision for loan losses of $739,000 in the second quarter of 2007. In the second quarter of 2008 we identified several loans in our portfolio which the borrowers had been making payments, but were unable to sustain those payments as the economy continued to struggle. After a detailed review of these loans, it was determined that some of them should be moved to nonaccrual status, while others should be charged off. Following that review, our analysis showed that we needed to increase our provision for loan losses to provide for the remaining probable losses in the portfolio. We perform quantitative and qualitative analysis of factors which impact the allowance for loan losses consistently across our six banking subsidiaries. The process applies risk factors for historical charge-offs and delinquency experience, portfolio segment growth rates, and industry and regional factors and trends as they affect the banks’ portfolios. The consideration of exposures to industries most affected by current risks in the economic and political environment and the review of risks in certain credits that are not considered part of the non-performing loan category contributed to the establishment of the allowance levels at each bank.

Total non-interest income was $2.4 million in the second quarter, compared with $2.4 million in the second quarter of 2007 and $2.9 million in the first quarter of 2008. Compared with 2007‘s second quarter, mortgage gains and deposit fees were higher by $190,000 and $262,000, respectively. Offsetting these improvements were losses on trading account securities, losses on the sale of securities, and other income, which were down $160,000, $67,000, and $249,000, respectively.

Total non-interest expense increased $1.4 million, or 15.3%, when comparing the three month periods ended June 30, 2008 and 2007 and was largely due to the addition of Firstbank – West Michigan. Compared with the first quarter of 2008, non-interest expense decreased $364,000, primarily from lower salary and benefits costs. Within the salary and employee benefits area, salaries were $92,000 lower than first quarter and benefits decreased $231,000 mainly due to lower group health care, unemployment, and FICA costs.

Federal Income tax expense was a benefit of $212,000 in the second quarter as tax exempt income exceeded net income. We had $721,000 of federal income tax in the first quarter of the year and $614,000 in the second quarter of 2007.

Six months ended June 30, 2008

For the first half of 2008, net income was $2,442,000, basic and diluted earnings per share were $0.33, compared with $4,405,000, and $0.68 basic and diluted per share for the first half of 2007. The first half of 2007 included a one time benefit of a $971,000 pre-tax reversal of loan loss provision relating to a payoff of a large commercial loan, which had been considered impaired. As a result, we provided only $18,000 for loan losses in the first six months of 2007. The benefit to last year’s first half earnings of that event was $0.10 per share. Provision for loan losses in the first six months of 2008 was $4.3 million, resulting in substantially lower earnings for the year. The higher provision expense for this year was required as we identified several loans for which the borrowers had exhausted their sources of repayment. These loans were either transferred into nonaccrual status and specific reserves established, or charged down to the value of the collateral that can be recovered on the loan.

Average earning assets increased $243.5 million, or 24.1%, when the first half of 2008 is compared to the same period a year ago. This comparison is affected by the acquisition of Firstbank – West Michigan. The Federal Reserve lowered its target federal funds rate by 125 basis points in January, by another 75 basis points in March, and by 25 basis points in May. The prime rate, which is used in pricing our variable rate loan portfolios followed suit and decreased by the same amount, putting pressure on our net interest margin late in the first quarter and throughout the second quarter of the year. These significant rate moves by the Federal Reserve in the first quarter caused our loans tied to prime rate to re-price at a significantly faster pace than we were able to offset by reducing the rates paid on our deposit accounts and certificates of depoit. As a result, the yield on earning assets decreased 55 basis points, to 6.77%, for the six months ended June 30, 2008, compared to 7.32% for the same six months a year ago. The cost of funding related liabilities also decreased, falling 41 basis points when comparing this year’s first six months to the same period a year ago, from 3.40% in 2007, to 2.99% in 2008. Since the decrease in yield on earning assets was larger than the decrease in the cost of funds relative to earning assets, the net interest margin decreased 14 basis points from last year’s first half. Net interest margin in this year’s first six months was 3.78% compared with 3.92% for the same period a year ago. Net interest income increased $3.8 million to $23.0 million in the first six months of 2008 compared with the same period of 2007, primarily due to the previously mentioned acquisition. Unpaid interest on loans which are transferred to nonaccrual status is reversed against interest income in the period the loan is transferred. During the current year, interest reversals associated with loans moving to nonaccrual status were $258,000 compared with $127,000 in the first half of 2007.

The provision for loan losses increased $4.3 million when the first six months 2008 are compared to the same period of 2007. Provision for loan losses was $4.3 million in the first half of 2007 compared with a provision for loan losses of $18,000 in the last year’s first half. In the second quarter of 2008 we identified several loans in our portfolio for which the borrowers had been making payments, but were unable to sustain those payments as the economy continued to struggle. After a detailed review of these loans, it was determined that some of them should be moved to nonaccrual status, while others should be charged off. Following that review, our analysis showed that we needed to increase our provision for loan losses to provide for the remaining probable losses in the portfolio. We perform quantitative and qualitative analysis of factors which impact the allowance for loan losses consistently across our seven banking subsidiaries. The process applies risk factors for historical charge-offs and delinquency experience, portfolio segment growth rates, and industry and regional factors and trends as they affect the banks’ portfolios. The consideration of exposures to industries most affected by current risks in the economic and political environment and the review of risks in certain credits that are not considered part of the non-performing loan category contributed to the establishment of the allowance levels at each bank.

Non interest income increased $630,000 in the first six months of 2008, when compared with the same period of 2007. Gains on the sale of mortgage loans increased $1 million and deposit fees were $486,000 higher than a year ago. The addition of Firstbank – West Michigan contributed $150,000 of the increase in mortgage gains and $402,000 of the increase in deposit fees. During the first two months of the year, rates on residential mortgage loans fell to a level that spurred re-finance activity. We were able to take advantage of that rate environment, resulting in higher gains on sale of loans. Also resulting from the increased mortgage re-finance activity was lower mortgage servicing income as amortization of mortgage servicing rights increased, reducing non-interest income by $267,000 when compared with last year’s first half. Gains and losses on securities transactions, which were a loss of $111,000 in this year’s first half, were little changed from a year ago when we recorded a loss of $130,000. Other income decreased $616,000 from a year ago largely due to losses on the sale of other real estate owned in 2008.

Total non-interest expense increased $3.3 million, or 18.8%, when comparing the six month periods ended June 30, 2008 and 2007 and was largely due to the addition of Firstbank – West Michigan, which had non-interest expense of $3.5 million during the first half of 2008. Also contributing to the higher non-interest expense is FDIC premiums, which are $167,000 higher than a year ago. The FDIC began charging higher premiums late last year, but provided partial reductions to those charges in the form of credits, based on each banks historical contributions to the insurance fund. Those credits are becoming fully aborbed in the current year and will lead to higher expenses in this area going forward.

Federal Income tax expense was $509,000 in the first six months of the year compared with $1.7 million of federal income tax in the first half of last year. The lower tax expense was primarily due to the lower level of earnings in the current year.

Contractual Obligations, Commitments, Contingent Liabilities, and Off-Balance Sheet Arrangements

The Corporation has various financial obligations, including contractual obligations and commitments that may require future cash payments. Management believes that there have been no material changes in the Corporation’s overall level of these financial obligations since December 31, 2007 and that any changes in the Corporation’s obligations which have occurred are routine for the industry. Further discussion of the nature of each type of obligation is included in Managements Discussion and Analysis on page 14 of the Corporation’s Form 10K Annual Report, and is incorporated herein by reference.

Critical Accounting Policies

Certain of the Corporation’s accounting policies are important to the portrayal of the Corporation’s 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. Management believes that its critical accounting policies include determining the allowance for loan losses, determining the fair value of securities and other financial instruments, the valuation of mortgage servicing rights, determination of purchase accounting adjustments, and estimating state and federal contingent tax liabilities. The Corporation’s significant accounting policies are discussed in detail in Managements Discussion and Analysis on pages 15 through 16 in the Corporation’s annual report to shareholders for the year ended December 31, 2007.

FORWARD LOOKING STATEMENTS

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 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 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; 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.

Item 3 . 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 pages 17 and 18 in the registrant’s annual report to shareholders for the year ended December 31, 2007, is here incorporated by reference. Firstbank’s annual report is filed as Exhibit 13 to its Form 10-K annual report for its fiscal year ended December 31, 2007.

We face market risk to the extent that both earnings and the fair values of its financial instruments are affected by changes in interest rates. The Corporation manages this risk with static GAP analysis and simulation modeling. We do not believe that there has been a material change in the nature of our primary market risk exposures, including the categories of market risk to which we are exposed and the particular markets that present the primary risk of loss to the Corporation. As of the date of this Form 10-Q Quarterly 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.

The methods by which we manage our primary market risk exposures, as described in the sections of our Form 10-K Annual Report incorporated by reference in response to this item, have not changed materially during the current year. As of the date of this Form 10-Q quarterly report, we do not expect to change those methods in the near term. However, we may change those methods in the future to adapt to changes in circumstances or to implement new techniques.

Our market risk exposure is mainly comprised of our vulnerability to interest rate risk. Prevailing interest rates and interest rate relationships in the future will be primarily determined by market, economic, and geopolitical 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” of this Form 10-Q quarterly report for a discussion of the limitations on our responsibility for such statements.

Item 4 . Controls and Procedures

a)	Evaluation of Disclosure Controls and Procedures

On August 5, 2008, the Corporation’s Chief Executive Officer and Chief Financial Officer reported on the Corporation’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) to the Audit Committee. The portion of that report which constitutes their conclusions about the effectiveness of the disclosure controls and procedures based on their evaluation as of June 30, 2008 is as follows: “Based on our knowledge and the most recent evaluation, we believe the disclosure controls and procedures to be reasonably effective and commercially practical in providing information for management of the Corporation and for fair reporting to the investing public.”

b)	Changes in Internal Controls

During the period covered by this report, there have been no 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.

PART II. OTHER INFORMATION

Item 2 . Unregistered Sales of Equity Securities and Use of Proceeds

During 2006, the Corporation repurchased 222,500 shares of its common stock in open market transactions under the November 2003 repurchase plan. The shares were purchased at an average price of $23.61 per share. As of June 30, the Corporation had remaining authority to repurchase up to $278,813 of market value of its common stock under the November 2003 repurchase plan.

On July 23,2007, the board of director’s approved a plan to re-establish the authorization to repurchase shares for an aggregate amount of up to $5 million, from this point forward, of Firstbank Corporation stock. During the third quarter of 2007, we repurchased 103,100 shares of our stock at an average price of $17.47. We had no stock repurchases during the first two quarters of 2008.

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as a Part of Publicly Announced Plans or Programs		Maximum Approximate Dollar Value of Shares that May yet Be Purchased Under the Approved Plan


April		0		-		0	$	3,199,242

May		0		-		0	$	3,199,242

June		0		-		0	$	3,199,242

Total		0		-		0	$	3,199,242

Item 4 . Submission of Matters to a Vote of Security Holders

The annual meeting was held on April 28, 2008. At the meeting, three directors were elected to hold office, each for a term of three years.

			Vote
Director Nominee:	Term Expires		For:		Withheld:


Thomas P. Dickinson		2011		5,661,101		137,627
Edward B. Grant		2011		5,652,710		146,019
Samuel A. Smith		2011		5,652,801		145,927

Item 5 . Other Information

The audit committee of the Board of Directors approved the categories of all non-audit services performed by the registrant’s independent accountants during the period covered by this report.

Item 6 . Exhibits

Exhibit

Description

31.1

Certificate of the President and Chief Executive Officer of Firstbank Corporation pursuant to 18 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certificate of the Executive Vice President and Chief Financial Officer of Firstbank Corporation pursuant to 18 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certificate of the Chief Executive Officer and the 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.

SIGNATURES

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.

Date: August 5, 2008

FIRSTBANK CORPORATION
(Registrant)

/s/ Thomas R. Sullivan
——————————————
Thomas R. Sullivan
President, Chief Executive Officer
(Principal Executive Officer)

Date: August 5, 2008

/s/ Samuel G. Stone
——————————————
Samuel G. Stone
Executive Vice President, Chief Financial Officer
(Principal Accounting Officer)

EXHIBIT INDEX

Exhibit

Description

31.1	Certificate of the Chief Executive Officer of Firstbank Corporation pursuant to 18 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certificate of the Chief Financial Officer of Firstbank Corporation pursuant to 18 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certificate of the Chief Executive Officer and the 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.