/C O R R E C T I O N -- Firstbank Corporation/ In the news release,
Firstbank Corporation (Nasdaq: FBMI) Announces Second Quarter and
Year-to-Date 2004 Results, issued yesterday, July 15, by Firstbank
Corporation over PR Newswire, we are advised by the company that in
the CONSOLIDATED STATEMENTS OF INCOME chart, the dollar amounts for
Fully Tax Equivalent Interest Income, under Six Months Ended June
30 should be $16,142 and $16,169, rather than $13,474 and $14,378,
as originally issued inadvertently. Complete corrected release
follows: ALMA, Mich. (FBMI), July 15 /PRNewswire-FirstCall/ --
Thomas R. Sullivan, President and Chief Executive Officer of
Firstbank Corporation announced net income of $2,565,000 for the
quarter ended June 30, 2004, compared to $2,681,000 for the quarter
ended March 31, 2004, a decrease of 4.3%. Earnings per share were
$0.45, down 4.3% from $0.47 for the first quarter of 2004. Returns
on average assets and average equity for the second quarter of 2004
were 1.33% and 12.2%, respectively, compared with 1.39% and 12.7%
respectively in the first quarter of 2004. Earnings in the first
quarter of 2004 included a $179,000 benefit, net of taxes, from the
reversal of allowance for loan losses relating to a partial payoff
of a large loan which had associated specific reserves. When this
benefit is excluded from net income in the first quarter of 2004,
net income in the second quarter of 2004 increased 2.5% and
earnings per share increased 2.3% from $0.44 to $0.45. All per
share amounts are fully diluted amounts and have been adjusted to
reflect the 5% stock dividend paid in December 2003. Gain on sale
of mortgages increased 8.0% in the second quarter of 2004 compared
to the first quarter of 2004. However, mortgage activity nationwide
and in Firstbank's market areas was significantly lower than
year-ago levels, affecting comparisons with the year-ago period.
Net income and earnings per share for the quarter ended June 30,
2004, decreased 24.0% and 22.4% respectively compared to the
quarter ended June 30, 2003. Notwithstanding the slowdown in
mortgage banking activity from last year, Firstbank's mortgage
servicing portfolio was basically unchanged from the first quarter
with the principal balance of loans serviced for others decreasing
to $471.1 million as of June 30, 2004, from $471.4 million at March
31, 2004, but increasing 9.2% from $431.5 million at June 30, 2003.
For the first half of 2004, net income of $5,246,000 compared to
$6,668,000 for the year-to-date period ended June 30, 2003, a
decrease of 21.3%. Earnings per share were $0.92, down 20.0% from
$1.15 for the first half of 2003. Returns on average assets and
average equity for the first half of 2004 were 1.35% and 12.3%,
respectively, compared with 1.77% and 16.5% respectively in the
first half of 2003. Growth in Firstbank's loan portfolio continued.
Total portfolio loans grew 1.9%, or 7.7% annualized, in the second
quarter of 2004 and were 9.3% above the level at June 30, 2003.
Strength in loan portfolio growth was balanced between commercial
and commercial real estate loans, which together increased 6.2%
above the year-ago level, and residential mortgage loans, which
increased 15.5%. Total deposits as of June 30, 2004, increased 2.2%
from March 31, 2004, and were 2.7% above the year-ago level.
Non-interest bearing deposits increased 15.4% from March 31, 2004,
and were 8.7% over the level at June 30, 2003. Firstbank's net
interest margin, at 4.41% in the second quarter of 2004, declined
0.10% from the 4.51% level achieved in the first quarter of 2004
and in the year-ago second quarter of 2003. Upward movement in
certain interest rates affecting funding costs occurred prior to
the recent increase in the prime rate, causing narrowing of the net
interest margin during the quarter. Mr. Sullivan stated, "We
continue to be pleased with the progress of our company and the
performance of our bankers. Faced with the industry-wide slowdown
in mortgage business compared to last year, we have been able to
shift emphasis to the more traditional mainstays of community
banking - loan and deposit services to commercial and consumer
customers. Our lenders continue to manage asset quality well, and
our earnings, before reversal of allowance, increased from the
first quarter to the second quarter of 2004. We continue to believe
that we have our banks' balance sheets positioned to benefit both
net interest margin and earnings from increasing interest rates,
and the recent increase in the prime rate should contribute
positively to our earnings." With continued focus on cost control,
Firstbank reduced salaries and employee benefits expense by 2.6% in
the second quarter of 2004 compared to the first quarter of 2004.
Total non-interest expense for the second quarter of 2004 was 8.4%
below the level in the second quarter of 2003. Non-interest expense
in the second quarter of 2004 includes approximately $66,000
associated with Firstbank's self-tender offer. Firstbank
repurchased 11,300 shares of its common stock in the second quarter
of 2004, prior to suspending activity due to the currently pending
self-tender offer for up to 500,000 shares. Shareholders' equity
increased 1.7% in the second quarter of 2004 as the impact of share
repurchases did not fully offset increases from retained earnings
and share issuance related primarily to dividend reinvestment and
stock option exercises. The ratio of average equity to average
assets stood at 10.9% in the second quarter of 2004, the same level
as in the second quarter of 2003. Firstbank's asset quality
measures remained strong. The ratio of non- performing loans to
loans was 0.37% as of June 30, 2004, compared to 0.17% at March 31,
2004, and 0.33% at June 30, 2003. Net charge-offs in the second
quarter of 2004 were $119,000, or 0.07% annualized as a percentage
of average loans, compared to $144,000, or 0.09% annualized as a
percentage of average loans in the first quarter of 2004, and
compared to $99,000, or 0.07% annualized in the second quarter of
2003. These measures of asset quality remain at low levels and
continue to be at levels considered in the industry to be
favorable. Subsequent to June 30, 2004, one of Firstbank
Corporation's banks received substantially full pay-off of a
$557,000 loan that was classified as non-performing due to
delinquency. Firstbank Corporation, headquartered in Alma, Michigan
is currently a five bank financial services company with assets of
$786 million and 35 banking offices located in central and
northeast Michigan. Bank subsidiaries include: Firstbank - Alma;
Firstbank (Mt. Pleasant); Firstbank - West Branch; Firstbank -
Lakeview; and Firstbank - St. Johns. Other corporate affiliates
include 1st Armored, Inc.; 1st Title; Gladwin Land Company, Inc.;
and C. A. Hanes Realty, Inc. Investment services are available
through affiliations with CB Wealth Management N.A., MML Investors
Services, Inc., and Raymond James Financial Services Inc. This
press release contains certain forward-looking statements that
involve risks and uncertainties. When used in this press release
the words "anticipate," "believe," "expect," "potential," "should,"
and similar expressions identify forward-looking statements.
Forward-looking statements include, but are not limited to,
statements concerning future business growth, increases in interest
rates and positioning of balance sheets to benefit net interest
margins and earnings. Such statements are subject to certain risks
and uncertainties which could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements, including, but not limited to, economic, competitive,
governmental and technological factors affecting the Company's
operations, markets, products, services, interest rates and fees
for services. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release. FIRSTBANK CORPORATION CONSOLIDATED
STATEMENTS OF INCOME (Dollars in thousands except per share data)
UNAUDITED Three months Ended: Six months Ended: Jun 30 Mar 31 Jun
30 Jun 30 Jun 30 2004 2004 2003 2004 2003 Interest income: Interest
and fees on loans $10,058 $10,180 $10,309 $20,238 $20,871
Investment securities Taxable 380 383 483 $763 $980 Exempt from
federal income tax 228 242 262 470 526 Short term investments 32 24
108 56 230 Total interest income 10,698 10,829 11,162 21,527 22,607
Interest expense: Deposits 1,815 1,786 2,252 3,601 4,721 Notes
payable and other 995 1,030 1,025 2,025 2,045 Total interest
expense 2,810 2,816 3,277 5,626 6,766 Net interest income 7,888
8,013 7,885 15,901 15,841 Provision for loan losses 60 (191) 120
(131) 330 Net interest income after provision for loan losses 7,828
8,204 7,765 16,032 15,511 Noninterest income: Gain on sale of
mortgage loans 847 784 3,114 1,631 5,484 Service charges on deposit
accounts 703 649 646 1,352 1,251 Gain on sale of securities 11 0 2
11 9 Mortgage servicing (56) (20) (429) (76) (694) Other 1,316 952
1,464 2,268 2,836 Total noninterest income 2,821 2,365 4,797 5,186
8,886 Noninterest expense: Salaries and employee benefits 3,838
3,941 4,080 7,779 7,842 Occupancy and equipment 923 969 914 1,892
1,863 Amortization of intangibles 77 76 73 153 185 FDIC insurance
premium 21 22 23 43 46 Michigan single business tax 24 21 74 45 135
Other 1,988 1,574 2,334 3,562 4,307 Total noninterest expense 6,871
6,603 7,498 13,474 14,378 Income before federal income taxes 3,778
3,966 5,064 7,744 10,019 Federal income taxes 1,213 1,285 1,691
2,498 3,351 Net Income $2,565 $2,681 $3,373 $5,246 $6,668 Fully Tax
Equivalent Interest Income $8,015 $8,127 $8,048 $16,142 $16,169 Per
Share Data: Basic Earnings $0.46 $0.48 $0.59 $0.94 $1.17 Diluted
Earnings $0.45 $0.47 $0.58 $0.92 $1.15 Dividends Paid $0.21 $0.20
$0.19 $0.41 $0.37 Performance Ratios: Return on Average Assets*
1.33% 1.39% 1.78% 1.35% 1.77% Return on Average Equity* 12.2% 12.7%
16.3% 12.3% 16.5% Net Interest Margin (FTE) * 4.41% 4.51% 4.51%
4.46% 4.54% Book Value Per Share+ $15.44 $15.22 $14.93 $15.44
$14.93 Average Equity/Average Assets 10.9% 11.0% 10.9% 10.9% 10.7%
Net Charge-offs 119 144 99 263 258 Net Charge-offs as a % of
Average Loans^* 0.07% 0.09% 0.07% 0.08% 0.05% * Annualized + Period
End ^ Total loans less loans held for sale FIRSTBANK CORPORATION
CONSOLIDATED BALANCE SHEETS (Dollars in thousands) UNAUDITED Jun 30
Mar 31 Dec 31 Jun 30 2004 2004 2003 2003 ASSETS Cash and cash
equivalents: Cash and due from banks $24,070 $21,579 $27,442
$24,816 Short term investments 10,807 11,858 5,703 33,999 Total
cash and cash equivalents 34,877 33,437 33,145 58,815 Securities
available for sale 66,256 64,122 70,731 72,136 Federal Home Loan
Bank stock 5,241 5,184 4,929 4,809 Loans: Loans held for sale 1,400
2,672 4,160 7,890 Portfolio loans: Commercial 101,393 112,851
112,263 100,796 Commercial real estate 216,689 202,828 203,080
198,706 Residential mortgage 221,766 212,159 204,806 192,051 Real
estate construction 51,442 52,746 55,160 43,436 Consumer 57,944
56,156 57,557 58,364 Credit card 1,828 1,961 2,587 2,444 Total
portfolio loans 651,062 638,701 635,453 595,797 Less allowance for
loan losses (11,232) (11,292) (11,627) (11,712) Net portfolio loans
639,830 627,409 623,826 584,085 Premises and equipment, net 17,923
17,931 18,103 17,222 Goodwill 4,880 4,880 4,880 4,880 Other
intangibles 2,538 2,622 2,698 2,848 Other assets 13,111 13,770
14,028 13,858 TOTAL ASSETS $786,056 $772,027 $776,500 $766,543
LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Deposits:
Noninterest bearing accounts 105,104 91,110 102,296 96,723 Interest
bearing accounts: Demand 181,272 189,767 181,642 182,249 Savings
98,651 99,877 95,395 90,938 Time 204,341 195,850 188,221 204,236
Total deposits 589,368 576,604 567,554 574,146 Securities sold
under agreements to repurchase and overnight borrowings 28,883
27,386 47,069 28,069 FHLB Advances and notes payable 72,475 72,727
67,255 69,298 Accrued interest and other liabilities 8,641 10,072
8,878 10,525 Total liabilities 699,367 686,789 690,756 682,038
SHAREHOLDERS' EQUITY Preferred stock; no par value, 300,000 shares
authorized, none issued Common stock; 10,000,000 shares authorized
* 74,115 73,535 75,591 68,538 Retained earnings 12,139 10,749 9,187
14,321 Accumulated other comprehensive income 435 954 966 1,646
Total shareholders' equity 86,689 85,238 85,744 84,505 TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY $786,056 $772,027 $776,500
$766,543 * Common stock shares issued and outstanding 5,615,224
5,589,389 5,642,304 5,657,632 Asset Quality Ratios: Non-Performing
Loans / Loans^ 0.37% 0.17% 0.22% 0.33% Non-Perf. Loans + OREO /
Loans^ + OREO 0.39% 0.21% 0.26% 0.45% Non-Performing Assets / Total
Assets 0.33% 0.18% 0.21% 0.35% Allowance for Loan Loss as a % of
Loans^ 1.73% 1.77% 1.83% 1.97% Allowance / Non-Performing Loans
464% 1015% 822% 608% Quarterly Average Balances: Total Portfolio
Loans^ $644,714 $642,911 $615,474 $591,952 Total Earning Assets
$729,187 $724,939 $714,907 $714,344 Total Shareholders' Equity
$84,977 $85,167 $85,028 $83,038 Total Assets 779,826 776,694
763,503 762,072 Diluted Shares Outstanding 5,707,903 5,751,389
5,814,986 5,860,149 ^ Total Loans less loans held for sale
DATASOURCE: Firstbank Corporation CONTACT: Samuel G. Stone,
Executive Vice President and Chief Financial Officer of Firstbank
Corporation, +1-989-466-7325 Web site:
http://www.firstbank-corp.com/
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