U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB

                                   (Mark One)


    (X) Quarterly report under Section 13 or 15(d) of the Securities Exchange
                                   Act of 1934

                  For the quarterly period ended June 30, 1998.


       ( ) Transition report under Section 13 or 15(d) of the Exchange Act

       For the transition period from _______________ to ________________

                         Commission file number 0-22435

                                 FIRSTBANK CORP.

        (Exact Name of Small Business Issuer as Specified in Its Charter)

             Delaware                                      84-1389562
 (State or Other Jurisdiction of                        (I.R.S. Employer
  Incorporation or Organization)                       Identification No.)

                       920 Main Street, Lewiston, ID 83501
                     Address of Principal Executive Offices

                                 (208) 746-9610

                (Issuer's Telephone Number, Including Area Code)

              (Former Name, Former Address and Former Fiscal Year,
                          If Changed Since Last Report)

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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.

      (X) Yes         ( ) No


                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date:

Common Stock 1,983,750 shares outstanding on June 30, 1998

Transitional Small Business Disclosure Format (check one):

      ( ) Yes         (X) No



<PAGE>




                                 FIRSTBANK CORP.
                                TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION


Item    1. Financial Statements                                            Page

        Consolidated Statements of Financial Condition                       
           As of June 30, 1998 and March 31, 1998                            1
        Consolidated Statements of Income                                    
           For the three months ended June 30, 1998 and June 30, 1997        2
        Consolidated Statements of Cash Flows                                
           For the three months ended June 30, 1998 and June 30, 1997        3
        Consolidated Statements of Comprehensive Income                      
           For the three months ended June 30, 1998 and June 30, 1997        4
        Notes to Consolidated Financial Statements                           5

Item    2. Management's Discussion and Analysis of Financial
           Condition and Results of Operations                             6 - 8



PART II. OTHER INFORMATION

Item    1. Legal Proceedings                                                 9
Item    2. Changes in Securities                                             9
Item    3. Defaults Upon Senior Securities                                   9
Item    4. Submission of Matters to a Vote of Security Holders               9
Item    5. Other Information                                                 9
Item    6. Exhibits and Reports on Form 8-K                                  9


<PAGE>

PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements

                        FirstBank Corp. and Subsidiaries
                 Consolidated Statements of Financial Condition

<TABLE>
<CAPTION>
                                                                             At June 30,     At March 31,
                                                                                1998             1998
                                                                           -------------    -------------
                                                                            (Unaudited)
<S>                                                                        <C>              <C>
ASSETS Cash and cash equivalents:
  Non-interest bearing deposits                                            $   5,292,762    $   5,443,129
  Interest bearing deposits                                                    2,280,702        1,139,185
  Federal funds sold                                                           1,613,933        1,834,506
                                                                           -------------    -------------
Total cash and cash equivalents                                                9,187,397        8,416,820

Investment securities:
  Held-to-maturity                                                             1,746,136        2,449,375
  Available-for-sale                                                           3,181,073        2,654,233
Mortgage-backed securities:
  Held-to-maturity                                                             3,318,291        3,420,153
  Available-for-sale                                                           7,651,499        7,969,533
Certificates of deposit                                                          991,000          991,000
Loans receivable, net                                                        156,664,988      145,696,660
Accrued interest receivable                                                    1,761,948        1,374,239
Real estate owned                                                                718,579          883,441
Stock in FHLB, at cost                                                         2,166,175        2,110,075
Premises and equipment, net                                                    4,727,091        4,705,829
Income taxes receivable                                                           59,429          468,807
Cash surrender value of life insurance policies                                1,529,266        1,400,055
Mortgage servicing assets                                                        551,633          406,666
Other assets                                                                     177,285          616,284
                                                                           -------------    -------------
TOTAL ASSETS                                                               $ 194,431,790    $ 183,563,170
                                                                           =============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Deposits                                                                 $ 119,960,680    $ 114,495,090
  Advances from borrowers for taxes and insurance                                727,600        1,329,080
  Advances from FHLB                                                          42,202,106       35,655,579
  Deferred federal and state income taxes                                        201,497          245,017
  Accrued expenses and other liabilities                                         949,223        1,830,406
                                                                           -------------    -------------
Total Liabilities                                                            164,041,106      153,555,172
                                                                           -------------    -------------

Stockholders' Equity (Note 4):
  Preferred stock, $.01 par value,  500,000 shares authorized; 0 shares                
    issued and outstanding                                                             0                0
  Common stock, $.01 par value, 5,000,000 shares authorized; 1,983,750            
    shares issued and outstanding                                                 19,838           19,838
  Additional paid-in-capital                                                  19,039,968       18,989,977
  Retained earnings, substantially restricted                                 12,797,667       12,493,990
  Unearned ESOP shares (Note 3):                                              (1,442,860)      (1,493,430)
  Accumulated comprehensive loss:
    Unrealized losses on securities; available-for-sale, net of tax              (23,929)          (2,377)
                                                                           -------------    -------------
Total Stockholders' Equity                                                    30,390,684       30,007,998
                                                                           -------------    -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                 $ 194,431,790    $ 183,563,170
                                                                           =============    =============
</TABLE>

See accompanying notes to consolidated financial statements


                                                                               1

<PAGE>

                        FirstBank Corp. and Subsidiaries
                        Consolidated Statements of Income

<TABLE>
<CAPTION>
                                                             Three-months ended June 30,
                                                                 1998         1997
                                                              ----------   ----------
                                                                    (Unaudited)
<S>                                                           <C>          <C>
Interest income:                                            
  Loans receivable                                            $3,188,642   $2,665,741
  Mortgage-backed securities                                     168,078       97,154
  Investment securities                                           67,795       71,826
  Other interest earning assets                                  160,808       63,572
                                                              ----------   ----------
Total interest income                                          3,585,323    2,898,293
                                                            
Interest expense:                                           
  Deposits                                                     1,219,432    1,170,111
  Advances from FHLB                                             525,412      331,530
                                                              ----------   ----------
Total interest expense                                         1,744,844    1,501,641
                                                            
Net interest income                                            1,840,479    1,396,652
Provision for loan losses                                        135,736       18,000
                                                              ----------   ----------
Net interest income after provision for loan losses            1,704,743    1,378,652
                                                            
Non-interest income:                                        
  Gain on sale of loans                                          443,954      180,231
  Service fees and charges                                       331,390      257,278
  Commissions and other                                           39,637       26,374
                                                              ----------   ----------
Total non-interest income                                        814,981      463,883
                                                            
Non-interest expense:                                       
  Compensation and related benefits                              949,885      826,256
  Occupancy                                                      215,020      178,229
  Other                                                          656,590      477,112
                                                              ----------   ----------
Total non-interest expense                                     1,821,495    1,481,597
                                                            
Income before income tax expense                                 698,229      360,938
Income tax expense                                               247,651      135,479
                                                              ----------   ----------
Net Income                                                    $  450,578   $  225,459
                                                              ==========   ==========
                                                            
Earnings per share (Note 2):                                
  Net income per share (basic and diluted)                    $     0.25          N/A
  Weighted average shares outstanding                          1,838,562          N/A
</TABLE>
                                                         
See accompanying notes to consolidated financial statements


                                                                               2

<PAGE>
                        FirstBank Corp. and Subsidiaries,
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                  Three-months ended June 30,
                                                                                     1998            1997
                                                                                 ------------    ------------
                                                                                          (Unaudited)
<S>                                                                              <C>             <C>
Cash flows from operating activities:
  Net income                                                                     $    450,578    $    225,459
  Adjustments to reconcile net income to net cash provided by operating
   activities:
    Depreciation                                                                      162,058         124,127
    Provision for loan losses                                                         135,736          18,000
    Gain on sale of loans                                                            (443,954)       (180,231)
    FHLB stock dividends                                                              (40,700)        (21,500)
    ESOP compensation expense                                                         100,561              --
    Other (gains) losses, net                                                          50,465          (1,133)
    Provision for real estate owned                                                    20,410          14,259
    Deferred compensation expense                                                      17,731              --
    Deferred income taxes                                                             (29,579)        (25,278)
  Changes in assets and liabilities:
    Accrued interest receivable and other assets                                     (437,425)       (698,656)
    Accrued expenses and other liabilities                                           (898,914)       (733,108)
    Loss on sale of investment securities: available-for-sale                              --              --
    Income taxes receivable (payable)                                                 409,378          59,385
                                                                                 ------------    ------------
Net cash used in operating activities                                                (503,655)     (1,218,676)

Cash flows from investing activities:
  Purchase of mortgage-backed securities; available-for-sale                         (750,000)     (2,509,870)
  Proceeds from maturities of mortgage-backed securities; held-to-maturity            100,009         304,259
  Proceeds from maturities of mortgage-backed securities; available-for-sale          993,648              --
  Decrease in loans receivable from loans sold                                     20,845,679       9,860,203
  Other net change in loans receivable                                            (31,701,556)    (22,272,082)
  Purchase of FHLB stock                                                              (15,400)       (490,000)
  Purchases of premises and equipment                                                (193,013)       (288,569)
  Proceeds from sale of fixed assets                                                  336,357              --
  Net increase in cash surrender value of life insurance policies                    (129,211)        (17,637)
  Proceeds from sale of real estate owned                                             353,984          49,000
  Purchase of investment securities; available for sale                              (580,000)             --
  Proceeds from maturities of investment securities; held-to-maturity                 750,000              --
                                                                                 ------------    ------------
Net cash used in investing activities                                              (9,989,503)    (15,364,696)

Cash flows from financing activities:
  Cash paid for dividends                                                            (146,902)             --
  Net increase in deposits                                                          5,465,590       4,582,377
  Bank overdrafts                                                                          --        (902,916)
  Advances from borrowers for taxes and insurance                                    (601,480)       (492,349)
  Advances from FHLB                                                               33,600,000      75,709,027
  Payments on advances from FHLB                                                  (27,053,473)    (62,012,499)
                                                                                 ------------    ------------
Net cash provided by financing activities                                          11,263,735      16,883,640

Net increase in cash and cash equivalents                                             770,577         300,268

Cash and cash equivalents, beginning of period                                      8,416,820       5,302,736
                                                                                 ------------    ------------
Cash and cash equivalents, end of period                                         $  9,187,397    $  5,603,004
                                                                                 ============    ============

Supplemental disclosures of cash flow information:
  Cash paid during the period for:
     Interest                                                                       1,748,619       1,504,528
     Income taxes                                                                      18,934         101,000
  Noncash investing and financing activities:
     Unrealized (gains) losses on securities; available-for-sale, net of tax           21,552         (67,393)
     Loans receivable charged to the allowance for loan losses                         20,761             994
     Transfer from loans converted to real estate acquired through foreclosure        195,767         194,749
</TABLE>

See accompanying notes to consolidated financial statements

                                                                               3

<PAGE>

                        FirstBank Corp. and Subsidiaries
                 Consolidated Statements of Comprehensive Income


                                                    Three Months Ended June 30,
                                                         1998         1997
                                                      ---------    ---------
                                                            (Unaudited)

Net Income                                            $ 450,578    $ 225,459
Other comprehensive income (loss), net of tax:
  Change in unrealized gains (losses) on securities;           
    available-for-sale, net of tax                      (21,552)      40,800
                                                      ---------    ---------
  Net other comprehensive income (loss)                 (21,552)      40,800
                                                      ---------    ---------
Comprehensive income                                  $ 429,026    $ 266,259
                                                      =========    =========


See accompanying notes to consolidated financial statements

                                                                               4

<PAGE>
                        FIRSTBANK CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1) BASIS OF PRESENTATION

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with Generally Accepted  Accounting  Principles (GAAP) for interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes required by GAAP for complete financial  statements.  These statements
should be read in conjunction  with the  consolidated  financial  statements and
related notes included in the Company's Form 10-KSB for the year ended March 31,
1998.  In the  opinion of  management,  all  adjustments  (consisting  of normal
recurring adjustments) necessary for a fair presentation have been included. The
results of  operations  and other data for the three  months ended June 30, 1998
are not  necessarily  indicative  of results that may be expected for the entire
fiscal year ending March 31, 1999.

In June  1998,  the  Financial  Accounting  Standards  Board  Issued  SFAS  133,
"Accounting  for  Derivative  Instruments  and  Hedging  Activities."  SFAS  133
requires  companies to recognize all  derivatives  contracts as either assets or
liabilities  in the balance sheet and to measure them at fair value.  If certain
conditions are met, a derivative may be specifically  designated as a hedge, the
objective  of which is to match the  timing of gain or loss  recognition  on the
hedging  derivative with the recognition of (i) the changes in the fair value of
the hedged assets or liability that are  attributable to the hedged risk or (ii)
the earnings effect of the hedged forecasted  transaction.  For a derivative not
designated as a hedging instrument,  the gain or loss is recognized in income in
the period of change.  SFAS 133 is effective  for all fiscal  quarters of fiscal
years beginning after June 15, 1999.  Historically,  the Company has not entered
into  derivative  contracts  either to hedge existing  risks or for  speculative
purposes.  Accordingly, the Company does not expect adoption of the new standard
on April 1, 2000 to affect its financial statements.

The  unaudited  consolidated  financial  statements  of  FirstBank  Corp.  ("the
Company")  include  the  accounts  of  its  wholly-owned  subsidiary,  FirstBank
Northwest  (the  "Savings  Bank")  and  it's  wholly-owned  subsidiary,  TriStar
Financial  Corporation for the  three-months  ended June 30, 1998. The financial
statements  for the periods  prior to July 1, 1997  include only the accounts of
the Savings Bank and its subsidiary.  All significant  intercompany accounts and
transactions have been eliminated in consolidation.

(2) EARNINGS PER SHARE

Basic earnings per share is computed by dividing the Company's net income by the
weighted average number of common shares outstanding during the period.  Diluted
earnings  per  share  reflects  the  potential  dilution  that  could  occur  if
securities or other  contracts to issue common stock were exercised or converted
into common stock.  The company had no dilutive  potential  common stock at June
30, 1998, and therefore,  basic and diluted earnings per share are the same this
period. ESOP shares, which are unallocated and not yet committed to be released,
are excluded from the weighted average shares outstanding calculation. No shares
were outstanding prior to July 1, 1997,  therefore earnings per common share for
those periods have not been presented.

(3) EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP")

During 1997 the Company established a tax-qualified  internally  leveraged ESOP.
The ESOP covers  substantially all employees who have attained the age of 21 and
completed  one year of service.  In  connection  with the  conversion to a stock
company,  the ESOP purchased  158,700 shares of the Company's  common stock at a
price of $10.00 per share using funds loaned by the Company. All ESOP shares are
held in a suspense  account and are allocated  among the  participants  on a pro
rata basis as the loan is repaid.  Currently  this  receivable  from the ESOP is
scheduled to be repaid with level principal and interest  payments over 25 years
with no penalty for prepayment.  Shares  released from the suspense  account are
allocated among the participants based upon their pro rata annual compensation.

The sale of the shares to the ESOP was recorded by the Company as unearned  ESOP
shares, a contra equity account.  As ESOP shares are committed to be released to
compensate  employees,  the contra equity account is reduced and a corresponding
charge to  compensation  expense  equal to the fair  market  value of the shares
committed  to be  released  is  recorded.  Upon  committing  these  share  to be
released,   they  become   outstanding   for   purposes  of   earnings-per-share
computations.  Dividends on allocated ESOP shares are recorded as a reduction of
retained  earnings;  dividends  on  unallocated  ESOP  shares are  recorded as a
reduction in ESOP debt.  Compensation  expense  related to the ESOP was $100,561
for the  three-months  ended June 30, 1998. As of June 30, 1998, the Company has
allocated  or  committed  to release to the ESOP  14,414  earned  shares and has
144,286 unearned, restricted shares remaining to be release. The market value of
unearned,  restricted  shares  held by the ESOP  trust  was  approximately  $3.2
million at June 30, 1998.

(4) DIVIDEND

On April 28, 1998 the Board of  Directors  declared a cash  dividend of $.08 per
common share to  shareholders of record as of May 7, 1998. The dividend was paid
on May 21.  On July  23,  1998 the  Board of  Directors  declared  another  cash
dividend  of $.08 per common  share to  shareholders  of record as of August 20,
1998. This dividend will be paid on September 3, 1998.

                                                                               5

<PAGE>

ITEM 2
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking statements,  within the meaning of Section 21E of the Securities
and Exchange Act of 1934, are made throughout this  Management's  Discussion and
Analysis of Financial Condition and Results of Operations. For this purpose, any
statements  contained  herein that are not statements of historical  fact may be
deemed to be  forward-looking  statements.  Without limiting the foregoing,  the
words "believes",  "anticipates",  "plans",  "expects",  "estimates" and similar
expressions  are intended to identify  forward-looking  statements.  There are a
number of  important  factors  that could  cause the  results of the  Company to
differ  materially from those indicated herein.  These factors include,  but are
not limited to, those set forth in Item 7 entitled  Management's  Discussion and
Analysis of Financial  Condition and Results of Operations in the Company's Form
10-KSB for the year ended March 31, 1998.

GENERAL

On July 1, 1997,  FirstBank  Northwest  converted  from mutual to stock form and
became a wholly owned  subsidiary of a newly formed  Delaware  holding  company,
FirstBank Corp. The Company sold 1,983,750  shares of common stock at $10.00 per
share in conjunction with a subscription offering to the Savings Bank's Employee
Stock Ownership Plan (ESOP) and eligible account holders.  The net proceeds were
approximately $18,921,825.  The company used approximately $9,470,000 of the net
proceeds to purchase  all the capital  stock of the Savings  Bank.  In addition,
$1,587,000  was loaned to the ESOP for the  purchase  of  158,700  shares in the
offering.

The Company's principal business is the business of the Savings Bank. Therefore,
the  discussion  in  the  Management's  Discussion  and  Analysis  of  Financial
Conditions  and  Results  of  Operation  relates  to the  Savings  Bank  and its
operations.  In August 1997,  the Bank opened up a retail  branch in  Clarkston,
Washington.  The Bank now has offices in Idaho and  Washington.  In January 1998
the Bank changed its charter to a Washington state charter.

On January 13th, the Company announced plans to offer  state-of-the-art  on line
banking  services to customers by Fall of 1998.  With this system  customers can
access  their  accounts  by  screen  phones,   personal  computers,   touch-tone
telephones and through internet access. The Bank is currently testing the system
through a pilot program.

On July 22nd the shareholders approved the Company's Management  Recognition and
Development  Plan and 1998  Stock  Option  Plan.  On July 23,  1998 the Board of
Directors  awarded shares of restricted  stock and stock options pursuant to the
Plans.  Based on the  price  of the  Company's  common  stock on the date of the
grants,  the monthly expense before taxes of the restricted stock awards will be
about $27,000 each month for 60 months.

FINANCIAL CONDITION AT JUNE 30, 1998 AND MARCH 31, 1998

Assets increased from $183.6 million at March 31, 1998 to $194.4 million at June
30, 1998.  Cash and cash  equivalents  increased  from $8.4 million at March 31,
1998  to  $9.2   million   at  June   30,   1998.   Mortgage-backed   securities
available-for-sale decreased from $8.0 million at March 31, 1998 to $7.7 million
at June 30, 1998. Loans  receivable,  increased from $145.7 million at March 31,
1998 to  $156.7  million  at June 30,  1998 as a result  of an  increase  in new
commercial  lending  of $5.7  million,  construction  lending  of $2.1  million,
agricultural  operating  lending of $2.7 million and $1.8 million in residential
real estate lending. Accrued interest receivable increased $1.4 million at March
31, 1998 to $1.8 million at June 30, 1998 due to a higher  average asset base in
securities and loans.  Deposits  increased from $114.5 million at March 31, 1998
to $120.0 million at June 30, 1998.  Activity within deposit balances  increased
primarily  due to the  Savings  Bank  benefiting  from  funds  deposited  by the
customers of other local institutions,  following larger bank mergers,  and from
deposits of new  commercial  loan  customers.  Federal Home Loan Bank of Seattle
(FHLB) advances  increased from $35.7 million at March 31, 1998 to $42.2 million
at June 30, 1998.  The increase in deposits and FHLB  borrowing was used to fund
increasing loans receivable.  Accrued expenses and other  liabilities  decreased
from $1.8  million  at March 31,  1998 to $0.9  million  at June 30,  1998.  The
primary reason for the decrease was timing of investor mortgage loan payoffs. It
is the policy of the Savings Bank to cease accruing interest on loans 90 days or
more past due.  Nonaccrual  loans  decreased  from $454,000 at March 31, 1998 to
$35,000 at June 30, 1998.

RESULTS OF OPERATIONS FOR THREE MONTHS ENDED JUNE 30, 1998 AND 1997

Net income  increased  from $225,000 for the three months ended June 30, 1997 to
$451,000 for the three months ended June 30, 1998.

Net interest income  increased from $1.4 million for the three months ended June
30,  1997 to $1.8  million  for the three  months  ended  June 30,  1998.  Total
interest income  increased from $2.9 million for the three months ended June 30,
1997 to $3.6  million for three  months  ended June 30,  1998.  The  increase in
interest income stemmed from an increase in average  interest earning assets due


                                                                               6
<PAGE>

to the receipt of the  offering  proceeds  offset  slightly be a decrease in the
weighted  average  yield on the  loan  portfolio  was  8.9% as of June 30,  1997
compared to the  weighted  average  yield at June 30, 1998 of 8.5%.  The average
balance  for  loans  receivable  was $120  million  in the 1st  quarter  of 1997
compared to the 1st  quarter  1998  average  balance of $150  million.  Interest
income from  investment  securities  decreased from $72,000 for the three months
ended June 30, 1997 to $68,000 for the three  months  ended June 30,  1998.  The
decrease is primarily due to a decrease in average yield.  Interest  income from
mortgage-backed  securities  increased  from  $97,000 for the three months ended
June 30, 1997 to $168,000 for the three months ended June 30, 1998. The increase
is due  primarily  to a higher  average  balance  and a slightly  higher  yield.
Interest expense increased from $1.5 million for the three months ended June 30,
1997 to $1.7 million for the same time period in 1998.  The increase in interest
expense is due  primarily to higher  average  deposit  balances,  an increase in
average FHLB  advances and a decrease in weighted  average  rates.  The weighted
average  rate on deposits  for the three  months  ended June 30, 1998 was 4.17%,
whereas the weighted average rate on deposits as of June 30, 1997 was 4.25%. The
weighted  average rate on FHLB advances for the three months ended June 30, 1998
was 5.70%,  whereas the weighted  average  rate on FHLB  advances as of June 30,
1997 was 5.98%.

Provision for loan losses is based upon  management's  consideration of economic
conditions  which may  affect  the  ability  of  borrowers  to repay the  loans.
Management also reviews  individual loans for which full  collectibility may not
be reasonably assured and considers,  among other matters, the risks inherent in
the Savings  Bank's  portfolio  and the estimated  fair value of the  underlying
collateral.  This evaluation is ongoing and results in variations in the Savings
Bank's provision for loan losses.  As a result of this  evaluation,  the Savings
Bank's  provision  for loan losses  increased  from $18,000 for the three months
ended June 30, 1997 to $136,000 for the three  months  ended June 30, 1998.  The
loans  receivable  portfolio  increased  about $11  million  dollars in the last
quarter, of which approximately $5.7 million was in commercial lending.

Non-interest  income increased from $464,000 for the three months ended June 30,
1997 to $815,000 for the three months  ended June 30, 1998.  The primary  reason
for the  increase  is the gain on sale of loans  increased  about  $275,000  and
service fees and charges increase about $125,000.

Non-interest expense increased from $1.5 million for the three months ended June
30, 1997 to $1.8 million for the three months ended June 30, 1998.  The increase
in compensation  and other related expenses of $125,000 is because of the branch
in Clarkston and the expanded  commercial  and  agriculture  departments.  Other
expenses that were up are advertising and data processing.

Income  taxes  increased  from an expense of $135,000 for the three months ended
June 30,  1997 to  expense of  $248,000  for the same time  period in 1998.  The
increase was primarily due to an increase in taxable income.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's primary recurring sources of funds are customer deposits,
proceeds from principal and interest  payments on loans,  proceeds from sales of
loans,  maturing  securities and FHLB advances.  While  maturities and scheduled
amortization  of loans are a  predictable  source of  funds,  deposit  flows and
mortgage prepayments are greatly influenced by general interest rates,  economic
conditions and competition.

         The Company must maintain an adequate  level of liquidity to ensure the
availability of sufficient funds to support loan growth and deposit withdrawals,
to  satisfy   financial   commitments   and  to  take  advantage  of  investment
opportunities.  The Company generally  maintains  sufficient cash and short-term
investments to meet short-term  liquidity needs. At June 30, 1998, cash and cash
equivalents  totaled $9.2  million,  or 4.7% of total assets.  In addition,  the
Company  maintains a credit facility with the  FHLB-Seattle,  which provides for
immediately  available  advances.  Advances under this credit  facility  totaled
$42.2 million at June 30, 1998.

         The primary  investing  activity of the Company is the  origination  of
loans.  During the quarters ended June 30, 1997 and 1998, the Company originated
loans in the amounts of $32.5  million and $45.7 million  respectively.  At June
30, 1998, the Company had loan commitments  totaling $25.6 million,  undisbursed
lines of credit totaling $8.3 million, and undisbursed loans in process totaling
$11.9  million.  The  Company  anticipates  that it will have  sufficient  funds
available  to meet its current loan  origination  commitments.  Certificates  of
deposit  that are  scheduled  to mature in less than one year from June 30, 1998
totaled  $56.5  million.  Historically,  the  Company  has been able to retain a
significant  amount of its deposits as they mature.  In addition,  management of
the  Company  believes  that  it  can  adjust  the  offering  rates  of  savings
certificates to retain deposits in changing interest rate environments.

         The Bank is required to maintain  specific  amounts of capital pursuant
to the FDIC and the State of Washington  requirements.  As of June 30, 1998, the
Bank was in  compliance  with all  regulatory  capital  requirements  which were
effective as of such date with Tier 1 Capital to average assets,  Tier 1 Capital
to  risk-weighted  assets and Total  capital to  risk-weighted  assets of 10.9%,
16.1% and 17.1%, respectively.

                                                                               7
<PAGE>

YEAR 2000 ISSUES

         The  Year  2000  issue  exists   because  many  computer   systems  and
applications  use two-digit date fields to designate a year. As the century date
change  occurs,  date-sensitive  systems may recognize the year 2000 as 1900, or
not at all.  This  inability to  recognize  or properly  treat the year 2000 may
cause systems to process financial and operational information incorrectly.

         All of the  material  data  processing  of the  Company  that  could be
affected  by this  problem is  provided by a third  party  service  bureau.  The
Company's  service bureau informed the Company that it is year 2000 compliant as
of July 1998 and it will make its systems  available  for testing in the week of
September 28, 1998.  The Company has developed a plan and created a committee of
the Board of Directors  to analyze how the year 2000 will impact its  operations
and to monitor the status of its vendors.  The Company will  continue to monitor
its status as well as its service  providers'  status in their efforts to become
year 2000 compliant. The Company does not believe that the costs associated with
its  actions  and those of its vendors  will be  material  to the  Company.  The
Company's  service bureau will make available  certain  software that will allow
the Company to test its critical  applications.  The Company estimates the costs
incurred  for the  implementation  and testing of such  software to be $100,000.
Such  costs are  expected  to be  incurred  during  fiscal  1999.  The costs for
accomplishing  the Company's plans to complete the year 2000  modifications  and
testing processes are based on management's  best estimates,  which were derived
utilizing  numerous  assumption  of  future  events,   including  the  continued
availability  of various  resources,  third-party  modification  plans and other
factors.  However,  there  can be no  guarantee  that  these  estimates  will be
achieved,  and actual  results  could differ from those plans.  In the event the
Company's service bureau is unable to fulfill its contractual obligations to the
Company,  it could have a significant  adverse impact on the financial condition
and results of operations of the Company.

                                                                               8

<PAGE>

                        FIRSTBANK CORP. AND SUBSIDIARIES

PART II  -  OTHER INFORMATION

Item 1 - Legal Proceeding

     There are no material legal proceedings to which the Company or the Savings
     Bank is a party or of which any of their property is subject.  From time to
     time, the Savings Bank is a party to various legal proceedings  incident to
     its business.

Item 2 - Changes in Securities

     None.

Item 3 - Defaults upon Senior Securities

     Not applicable.

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

     None.

Item 5 - Other Information

     None.

Item 6 - Exhibits and Reports on Form 8-K

     (a)  Exhibits:  none
     (b)  Reports on Form 8-K; No reports on Form 8-K have been filed during the
          quarter for which this report is filed.


                                   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.


                             FIRSTBANK CORP.


DATED:  August 10, 1998      BY: /s/ CLYDE E. CONKLIN
                                 -----------------------------------------
                                     Clyde E. Conklin
                                     President and Chief Executive Officer

                             BY: /s/ LARRY K. MOXLEY
                                 -----------------------------------------
                                     Larry K. Moxley
                                     Secretary and Chief Financial Officer


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