Macatawa Bank Corporation Reports Profitable Second Quarter, Improved Results
HOLLAND, Mich., July 29, 2010 (GLOBE NEWSWIRE) -- Macatawa Bank Corporation (Nasdaq:MCBC) today announced a return to profitability and improvements in several key capital and operational ratios in the second quarter 2010. The Company's results for the quarter included:
-- Pre-tax net income of $3.1 million
-- After-tax net income of $1.7 million, compared to a loss of $30.4
million in the same quarter of last year
-- Net charge-offs of $6.3 million, down 54 percent from the first quarter
2010 ($13.6 million), 72 percent less than the second quarter 2009
($22.1 million)
-- Sixth consecutive quarter of improvement in net interest margin -- now
at 3.29 percent
-- Solid improvement in capital ratios -- remained categorized as
"adequately capitalized" under applicable regulatory capital
requirements
-- Deposit accounts remain insured by the FDIC up to the maximum amount
permitted by law
Macatawa reported net income available to common shares of $1.7 million, or $0.10 per diluted share, for the second quarter 2010, compared to a net loss available to common shares of $31.3 million, or ($1.82) per diluted share, for the second quarter 2009 and a net loss of $21.1 million for the first quarter 2010. For the first half of 2010, the Company's net loss available to common shares totaled $19.4 million in 2010 compared to $36.4 million for the same period in 2009.
"Eight months ago, in an extremely challenging environment, we began an all out effort to instill business discipline and sound banking principles throughout the entire organization," said Richard L. Postma, Chairman of Macatawa Bank Corporation. "The second quarter results and our first profitable period in almost two years, coupled with improvements in nearly every key capital and performance metric, certainly are positive steps, but we still have a great deal of work to do to return the Company to financial health."
Since taking the helm as chairman in late 2009 and with the full support of the Board of Directors, Mr. Postma has navigated the Company during a critical transition period. Under this leadership, the Bank implemented improved business and banking principles, added experienced personnel, bolstered the Bank's risk management functions by adding key individuals in its Special Assets and Loan Review departments, and implemented new and more disciplined lending and loan risk management policies and new procedures for loan administration and loan review. Macatawa continued this momentum during the second quarter by accelerating workout strategies with some of its more stressed loan customers and making significant progress towards completing an independent loan review of all commercial credits.
In addition to its focus on improving asset quality, the Company continued to implement strategic initiatives to improve core operating performance. "Our quarterly net interest margin continues to improve and is currently at its highest level in the past three years, while our quarterly controllable overhead costs are at their lowest level in over two years. In addition, we continue to efficiently manage our balance sheet. We have reduced out-of-market funding on our balance sheet by nearly $200 million as we continue to scale the organization to the current realities," commented Postma. "Even though the operating environment for banking is far from normal, we are confident that we are establishing a well-disciplined banking culture which will help us return to consistent and sustained profitability. However, it is realistic to expect that as the Company strives to return to sustained positive performance, it will experience uneven results on a quarterly basis. No one should assume that the second quarter results mean that the Company's problems are fully resolved. It is a very good start, but just that, a start. We have a long road to travel to regain our shareholder and depositor confidence," said Postma.
Operating Results
Net interest income for the second quarter 2010 totaled $12.8 million, a decrease of $210,000 from the first quarter 2010 and a decrease of $580,000 from the second quarter 2009. However, net interest margin increased to 3.29 percent, up 7 basis points from 3.22 percent on a consecutive quarter basis and up 50 basis points from 2.79 percent in the second quarter 2009.
"Future margin expansion will be dampened by the sale of the Company's securities portfolio but margin should be positively impacted by the continued payoff of higher costing wholesale funds," said Postma. "The sale of our securities portfolio was an important step at firming up our capital position during this depressed economic cycle, and despite this impact on margin in the short-term, we expect continued momentum toward margin expansion over the longer term."
Average interest earning assets for the second quarter 2010 declined $93.7 million from the first quarter 2010 and declined $385.0 million from the second quarter 2009, negatively impacting net interest income. However, the decline in assets continues to reflect the Bank's focus on liquidity improvement, capital ratio maintenance and reduction in credit exposure within certain segments.
Non-interest income of $6.3 million for the second quarter 2010 was up $2.9 million from the first quarter 2010 and up $2.1 million from the second quarter 2009. The increase was primarily driven by the $2.7 million in gains on sales of securities in the quarter, offset by continued reductions in income from mortgage banking activities. Mortgage loan sales volumes have decreased significantly from levels in the second quarter 2009, when mortgage refinancing activity was strong as a result of low interest rates.
Non-interest expense was $14.3 million for the second quarter 2010, compared to $17.9 million for the first quarter 2010 and $21.3 million for the second quarter 2009. Last year's second quarter total was unusually high as it included $5.5 million in expense associated with the Trade Partners litigation settlement. In the most recent quarter costs associated with the administration and disposition of problem loans and non-performing assets were $2.5 million compared to $5.5 million in the first quarter 2010 and $2.4 million in the second quarter 2009. FDIC insurance assessments remain elevated at $1.2 million in the most recent quarter compared to $1.3 million in the first quarter 2010 and $1.7 million in the second quarter 2009, as a result of higher assessment rates implemented by the FDIC.
When excluding nonperforming asset costs and FDIC assessments, non-interest expense was $10.6 million for the most recent quarter, down from $11.1 million in the first quarter 2010 and $17.1 million in the second quarter 2009. Salaries and employee benefits were down $104,000 compared to the first quarter 2010 and down $678,000 from the prior year quarter as a result of a reduction in overall staffing levels due to the Company scaling its operations to respond to the impact of the prolonged economic weakness.
Asset Quality
The provision for loan losses of $1.8 million for the second quarter 2010 declined 90 percent or $17.9 million, from the first quarter 2010 and, even more dramatically, down $18.8 million from the second quarter 2009. Net charge-offs were $6.3 million compared to $13.5 million for the first quarter 2010 and $22.1 million for the second quarter 2009. During the fourth quarter 2009 and into 2010, the Company continued to complete a full, independent re-evaluation of its loan portfolio at the direction of the Board of Directors. The elevated levels of provisions for loan losses and net charge-offs in the first quarter 2010 reflect these efforts.
The loan loss reserve of $56.3 million was 4.12 percent of total loans at June 30, 2010, compared with 4.23 percent at March 31, 2010 and 2.32 percent at June 30, 2009. The loan loss reserve coverage to nonperforming loans remains elevated at 59.2 percent of non-performing loans at June 30, 2010, compared to 59.3 percent at March 31, 2010 and 39.1 percent at June 30, 2009.
At June 30, 2010, the Company's non-performing loans were $95.1 million (6.96% of total loans) compared to $102.5 million (7.13% of total loans) at March 31, 2010 and $103.9 million (6.88% of total loans) at December 31, 2009. Sales of foreclosed properties continued to improve as compared to 2009, with the Bank selling nearly $10 million of real estate in the first six months of 2010 compared to sales of $7.5 million for all of 2009.
"We intend to continue to maintain a prudent and conservative level of loan loss reserves until we see a clear trend of significant reductions in our charge-off and non-performing loan levels. That being said, we are seeing signs of stabilization in the valuations of properties securing our assets, allowing us to accelerate sales and reduce non-performing asset expenses. We also are encouraged by our efforts to find workable solutions with our challenging accounts to mitigate the impact on our loan losses and are achieving credit upgrades in some instances. Going forward, our approach to loan loss reserves will be cautious as we remain focused on reflecting the values of these assets at appropriate levels and moving the non-performing assets out of the Bank," said Postma.
A break-down of non-performing loans is shown in the table below.
December September
June 30, March 31, 31, 30, June 30,
Dollars in 000s 2010 2010 2009 2009 2009
--------- ---------- ----------- ---------- ----------
Commercial Real Estate $ 81,319 $ 81,669 $ 87,321 $ 77,461 $ 87,337
Commercial and Industrial 10,418 17,782 12,713 8,477 5,657
--------- ---------- ----------- ---------- ----------
Total Commercial Loans 91,737 99,451 100,034 85,938 92,994
Residential Mortgage Loans 1,976 1,849 2,719 917 1,702
Consumer Loans 1,345 1,248 1,132 1,305 1,468
--------- ---------- ----------- ---------- ----------
Total Non-Performing Loans $ 95,058 $ 102,548 $ 103,885 $ 88,160 $ 96,164
========= ========== =========== ========== ==========
Residential Developer Loans (a) $ 37,939 $ 36,594 $ 50,002 $ 43,989 $ 52,403
========= ========== =========== ========== ==========
(a) Represents the amount of loans to residential developers secured by single family
residential property which is included in non-performing commercial loans secured by real
estate
Total non-performing assets were $143.8 million, or 8.71 percent of total assets, at June 30, 2010. A break-down of non-performing assets is shown in the table below.
June 30, March 31, December 31, September 30, June 30,
Dollars in 000s 2010 2010 2009 2009 2009
---------------------------------------------------------------------------------------------------------
Non-Performing Loans $ 95,058 $ 102,548 $ 103,885 $ 88,160 $ 96,164
Other Repossessed Assets 81 84 124 224 339
Other Real Estate Owned 48,672 45,790 37,184 33,419 23,516
---------------------------------------------------------------------------------------------------------
Total Non-Performing Assets $ 143,811 $ 148,422 $ 141,193 $ 121,803 $ 120,019
=========================================================================================================
Balance Sheet, Liquidity and Capital
Total assets were $1.65 billion at June 30, 2010, a decrease of $179.1 million from $1.83 billion at December 31, 2009. Total loans were $1.36 billion at June 30, 2010, down $145.9 million from $1.51 billion at December 31, 2009.
Commercial loans decreased by $125.2 million representing the majority of the decrease since December 31, 2009. The commercial real estate portfolio was reduced by $69.7 million as the Company continues its efforts to reduce exposure in these segments. Commercial and industrial loans declined by $55.4 million due in part to a general decline in business activity.
Of the decline in commercial real estate loans, $33.0 million of the decrease was in loans to residential developers, the portfolio that has caused the majority of stress within the Company's loan portfolio.
The composition of the commercial loan portfolio is shown in the table below:
December
June 30, March 31, 31, September 30, June 30,
Dollars in 000s 2010 2010 2009 2009 2009
---------------------------------------------------------------------------------------------
Construction and development $ 150,443 $ 156,867 $ 162,615 $ 195,712 $ 211,247
Other commercial real estate 582,882 611,904 640,437 638,952 653,058
---------------------------------------------------------------------------------------------
Commercial Loans Secured by Real
Estate 733,325 768,771 803,052 834,664 864,305
Commercial and Industrial 314,087 344,294 369,523 375,636 404,660
---------------------------------------------------------------------------------------------
Total Commercial Loans $ 1,047,412 $ 1,113,065 $ 1,172,575 $ 1,210,300 $ 1,268,965
=============================================================================================
Residential Developer Loans (a) $ 120,344 $ 130,727 $ 153,327 $ 164,852 $ 178,319
=============================================================================================
(a) Represents the amount of loans to residential developers secured by single family residential property which is included in
commercial loans secured by real estate
The reduction in loans since year end 2009 allowed the Company to reduce wholesale funding, including out-of-market deposits acquired through brokers, by $93.2 million and to reduce other borrowed funds by $56.0 million. Total deposits were $1.31 billion at June 30, 2010, down $103.6 million from $1.42 billion at December 31, 2009, primarily from the run-off of brokered deposits. Customer deposit accounts remain fully insured to the highest levels available under the FDIC insurance programs.
Two of the three regulatory capital ratios for Macatawa Bank, including the tier one risk-based capital ratio and the tier one leverage capital ratio, were maintained at levels in excess of those ordinarily required to be categorized as "well capitalized" under applicable regulatory capital guidelines. Despite these ratios, the Bank was categorized as "adequately capitalized" as its total risk-based capital ratio of 8.71 percent was below the 10.0 percent minimum to be categorized as "well capitalized." In addition, because the Bank is subject to the Consent Order, the Bank cannot be categorized as "well capitalized" regardless of actual capital levels. At June 30, 2010, the Bank did not have capital at levels required by the Consent Order.
"Our goal remains to return to 'well-capitalized' status, and we continue to work closely with our regulators in our efforts to comply with the terms of the Consent Order. While we are encouraged by the results of the quarter and are cautiously optimistic about the prospects for the rest of 2010, we remain committed to building back profitability and improving our valuation. Although improvements in our operating results may be uneven during 2010, we continue to expect the overall profit trend to be positive," Postma said. "The Board of Directors and management team are determined to restore Macatawa Bank to sustained profitability and return to a position of capital strength. The second quarter was an important step in that direction."
About Macatawa Bank
Headquartered in Holland, Michigan, Macatawa Bank Corporation is the parent company for Macatawa Bank. Through its banking subsidiary, the Company offers a full range of banking, investment and trust services to individuals, businesses, and governmental entities from a network of 26 full service branches located in communities in Kent County, Ottawa County, and northern Allegan County. Services include commercial, consumer and real estate financing; business and personal deposit services, ATMs and Internet banking services, trust and employee benefit plan services, and various investment services. The Company emphasizes its local management team and decision making, along with providing customers excellent service and superior financial products.
"CAUTIONARY STATEMENT": This press release contains forward-looking statements that are based on management's current beliefs, expectations, assumptions, estimates, plans and intentions. Forward-looking statements are identifiable by words or phrases such as "will," "expect," "strategic," "strives," "assume," "long road to travel," "future," "longer term," "continue," "intend," "until," "going-forward," "prospects" and other similar words or phrases. Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These statements include, among others, statements related to the effect of new policies and practices, future net interest margin, trends in real estate valuations, conditions in the real estate markets, future levels of non-performing loans, the rate of asset dispositions, adequacy of our capital, future capital levels, capital raising activities, future growth and funding sources, future liquidity levels, future profitability levels, the effects on earnings of changes in interest rates and the future level of other revenue sources. All statements with references to future time periods are forward-looking. Management's determination of the provision and allowance for loan losses, the appropriate carrying value of intangible assets (including goodwill, mortgage servicing rights and deferred tax assets) and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment) involves judgments that are inherently forward-looking. Our ability to fully comply with our Consent Order, improve regulatory capital ratios, successfully implement new programs and initiatives, increase efficiencies, address regulatory issues, improve internal controls over financial reporting, maintain our current level of deposits and other sources of funding, maintain liquidity, respond to declines in collateral values and credit quality, continue as a going concern and improve profitability is not entirely within our control and is not assured. The future effect of changes in the real estate, financial and credit markets and the national and regional economy on the banking industry, generally, and Macatawa Bank Corporation, specifically, are also inherently uncertain. Failure to comply with the agreements in our Consent Order could result in further regulatory action which could have a material adverse effect on Macatawa Bank Corporation and its shareholders. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("risk factors") that are difficult to predict with regard to timing, extend, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed in or implied by such forward-looking statements. Macatawa Bank Corporation does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.
Risk factors include, but are not limited to, the risk factors described in "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2009 and in "Part II, Item 1A -- Risk Factors" of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2010; changes in market interest rates, changes in FDIC assessment rates, changes in banking laws and regulations; changes in property values, asset quality, and the financial capability of borrowers; actions of bank regulatory authorities; changes in tax laws; changes in prices, levies and assessments; the impact of technological advances and issues; the impact of possible future litigation; governmental and regulatory policy changes; changes in the quality and composition of our loan portfolio; changes in value and credit quality of investment securities; the local and global effects of current and future military actions; and current uncertainties and fluctuations in the financial markets and stocks of financial services providers due to concerns about credit availability and concerns about the Michigan economy in particular. These and other factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.
MACATAWA BANK CORPORATION
CONSOLIDATED FINANCIAL SUMMARY
(Unaudited)
(Dollars in thousands except per share information)
Three Months Ended Six Months Ended
June 30 June 30
----------------------- --------------------------
EARNINGS SUMMARY 2010 2009 2010 2009
--------- ------------ ------------ ------------
Total interest income $ 19,537 $ 24,531 $ 40,475 $ 49,655
Total interest expense 6,719 11,133 14,629 23,461
--------- ------------ ------------ ------------
Net interest income 12,818 13,398 25,846 26,194
Provision for loan loss 1,800 20,630 21,510 31,160
--------- ------------ ------------ ------------
Net interest income after
provision for loan loss 11,018 (7,232) 4,336 (4,966)
NON-INTEREST INCOME
Deposit service charges 1,063 1,210 2,128 2,439
Net gains on mortgage loans 399 501 580 2,123
Trust fees 797 984 1,686 1,917
Net gains on security sales 2,715 -- 2,715 --
Other 1,348 1,529 2,681 3,068
--------- ------------ ------------ ------------
Total non-interest income 6,322 4,224 9,790 9,547
NON-INTEREST EXPENSE
Salaries and benefits 5,554 6,232 11,005 12,375
Occupancy 989 1,056 2,041 2,212
Furniture and equipment 888 1,018 1,869 2,046
FDIC assessment 1,192 1,707 2,450 2,478
Administration and
disposition of problem
assets 2,464 2,439 7,999 4,598
Trade Partners litigation
settlement -- 5,533 -- 5,533
Other 3,202 3,279 6,851 6,503
--------- ------------ ------------ ------------
Total non-interest expense 14,289 21,264 32,215 35,745
--------- ------------ ------------ ------------
Income (loss) before income
tax 3,051 (24,272) (18,089) (31,164)
Income tax expense (benefit) 1,303 6,134 1,303 3,384
--------- ------------ ------------ ------------
Net income (loss) $ 1,748 $ (30,406) $ (19,392) $ (34,548)
--------- ------------ ------------ ------------
Dividends declared on
preferred shares -- 939 -- 1,878
--------- ------------ ------------ ------------
Net income (loss) available
to common shares $ 1,748 $ (31,345) $ (19,392) $ (36,426)
========= ============ ============ ============
Basic earnings per common
share $ 0.10 $ (1.82) $ (1.10) $ (2.12)
Diluted earnings per common
share $ 0.10 $ (1.82) $ (1.10) $ (2.12)
Return on average assets 0.41% -5.87% -2.23% -3.49%
Return on average equity 10.32% -86.53% -51.25% -50.03%
Net interest margin 3.29% 2.79% 3.26% 2.72%
Efficiency ratio 74.66% 120.67% 90.40% 100.01%
BALANCE SHEET DATA June 30 December 31 June 30
Assets 2010 2009 2009
------------ ------------ ------------
Cash and due from banks $ 26,311 $ 24,687 $ 23,057
Federal funds sold and other
short-term investments 118,825 54,062 96,013
Securities available for
sale 20,112 129,090 159,194
Securities held to maturity 83 414 656
Federal Home Loan Bank Stock 12,275 12,275 12,275
Loans held for sale 1,431 649 811
Total loans 1,364,881 1,510,816 1,621,895
Less allowance for loan loss 56,286 54,623 37,621
------------ ------------ ------------
Net loans 1,308,595 1,456,193 1,584,274
------------ ------------ ------------
Premises and equipment, net 59,770 61,015 62,327
Bank-owned life insurance 24,675 24,395 23,932
Other real estate owned 48,672 37,183 23,516
Other assets 28,998 30,209 25,884
------------ ------------ ------------
Total Assets $ 1,649,747 $ 1,830,172 $ 2,011,939
============ ============ ============
Liabilities and
Shareholders' Equity
Noninterest-bearing deposits $ 263,324 $ 221,470 $ 219,229
Interest-bearing deposits 1,049,377 1,194,867 1,356,823
------------ ------------ ------------
Total deposits 1,312,701 1,416,337 1,576,052
Other borrowed funds 222,003 278,023 268,690
Surbordinated debt 1,650 1,650 950
Long-term debt 41,238 41,238 41,238
Other liabilities 5,915 4,933 8,375
------------ ------------ ------------
Total Liabilities 1,583,507 1,742,181 1,895,305
Shareholders' equity 66,240 87,991 116,634
------------ ------------ ------------
Total Liabilities and
Shareholders' Equity $ 1,649,747 $ 1,830,172 $ 2,011,939
============ ============ ============
MACATAWA BANK CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands except per share information)
Quarterly Year to Date
-------------------------------------------------------------------- --------------------------
2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
2010 2010 2009 2009 2009 2010 2009
------------ ------------ ------------ ------------ ------------ ------------ ------------
EARNINGS SUMMARY
Net interest income $ 12,818 $ 13,028 $ 13,406 $ 13,194 $ 13,398 $ 25,846 $ 26,194
Provision for loan
loss 1,800 19,710 21,600 21,580 20,630 21,510 31,160
Total non-interest
income 6,322 3,468 3,515 3,634 4,224 9,790 9,547
Total non-interest
expense 14,289 17,926 15,915 15,731 21,264 32,215 35,745
Federal income tax
expense (benefit) 1,303 -- (11,385) (600) 6,134 1,303 3,384
Net income (loss) 1,748 (21,140) (9,209) (19,883) (30,406) (19,392) (34,548)
Dividends declared
on preferred shares -- -- -- 991 939 -- 1,878
Net income (loss)
available to common
shares $ 1,748 $ (21,140) $ (9,209) $ (20,874) $ (31,345) $ (19,392) $ (36,426)
Basic earnings per
common share $ 0.10 $ (1.19) $ (0.52) $ (1.18) $ (1.82) $ (1.10) $ (2.12)
Diluted earnings per
common share $ 0.10 $ (1.19) $ (0.52) $ (1.18) $ (1.82) $ (1.10) $ (2.12)
MARKET DATA
Book value per
common share $ 1.87 $ 1.91 $ 3.10 $ 3.64 $ 4.74 $ 1.87 $ 4.74
Tangible book value
per common share $ 1.85 $ 1.88 $ 3.07 $ 3.62 $ 4.71 $ 1.85 $ 4.71
Market value per
common share $ 1.20 $ 1.75 $ 2.09 $ 2.60 $ 2.82 $ 1.20 $ 2.82
Average basic common
shares 17,692,231 17,696,922 17,699,552 17,669,440 17,260,269 17,694,269 17,211,524
Average diluted
common shares 17,692,231 17,696,922 17,699,552 17,669,440 17,260,269 17,694,269 17,211,524
Period end common
shares 17,682,458 17,696,423 17,698,108 17,701,817 17,659,264 17,682,458 17,659,264
PERFORMANCE RATIOS
Return on average
assets 0.41% -4.74% -1.95% -3.97% -5.87% -2.23% -3.49%
Return on average
equity 10.32% -101.04% -38.85% -67.58% -86.53% -51.25% -50.03%
Net interest margin
(fully taxable
equivalent) 3.29% 3.22% 3.04% 2.83% 2.79% 3.26% 2.72%
Efficiency ratio 74.66% 108.67% 94.05% 93.48% 120.67% 90.40% 100.01%
Full-time equivalent
employees (period
end) 391 375 380 395 400 391 400
ASSET QUALITY
Gross charge-offs $ 6,851 $ 14,235 $ 15,563 $ 11,758 $ 22,317 $ 21,087 $ 32,621
Net charge-offs $ 6,296 $ 13,550 $ 15,026 $ 11,152 $ 22,105 $ 19,847 $ 31,801
Net charge-offs to
average loans
(annualized) 1.79% 3.68% 3.91% 2.79% 5.27% 2.75% 3.73%
Nonperforming loans $ 95,058 $ 102,548 $ 103,885 $ 88,160 $ 96,164 $ 95,058 $ 96,164
Other real estate
and repossessed
assets $ 48,753 $ 45,874 $ 37,308 $ 33,643 $ 23,885 $ 48,753 $ 23,855
Nonperforming loans
to total loans 6.96% 7.13% 6.88% 5.66% 5.93% 6.96% 5.93%
Nonperforming assets
to total assets 8.72% 8.64% 7.71% 6.15% 5.97% 8.72% 5.97%
Allowance for loan
loss $ 56,286 $ 60,782 $ 54,623 $ 48,049 $ 37,621 $ 56,286 $ 37,621
Allowance for loan
loss to total loans 4.12% 4.23% 3.62% 3.09% 2.32% 4.12% 2.32%
Allowance for loan
loss to
nonperforming loans 59.21% 59.27% 52.58% 54.50% 39.12% 59.21% 39.12%
CAPITAL & LIQUIDITY
Average equity to
average assets
(Consolidated) 4.02% 4.69% 5.01% 5.94% 6.79% 4.36% 6.99%
Tier 1 capital to
average assets
(Consolidated) 5.25% 4.80% 6.01% 6.30% 7.44% 5.25% 7.44%
Total capital to
risk-weighted
assets
(Consolidated) 8.81% 8.27% 9.23% 9.46% 10.33% 8.81% 10.33%
Tier 1 capital to
average assets
(Bank) 6.31% 5.83% 6.58% 6.70% 7.43% 6.31% 7.43%
Total capital to
risk-weighted
assets (Bank) 8.70% 8.14% 9.07% 9.32% 10.16% 8.70% 10.16%
END OF PERIOD
BALANCES
Total portfolio
loans $ 1,364,881 $ 1,438,107 $ 1,510,816 $ 1,556,903 $ 1,621,895 $ 1,364,881 $ 1,621,895
Interest earning
assets 1,517,318 1,589,670 1,702,227 1,857,467 1,887,636 1,517,318 1,887,636
Total assets 1,649,747 1,718,429 1,830,172 1,981,772 2,011,939 1,649,747 2,011,939
Deposits 1,312,701 1,370,767 1,416,337 1,546,311 1,576,052 1,312,701 1,576,052
Total shareholders'
equity 66,240 66,917 87,991 97,674 116,634 66,240 116,634
AVERAGE BALANCES
Total portfolio
loans $ 1,408,672 $ 1,473,337 $ 1,538,038 $ 1,598,743 $ 1,678,648 $ 1,440,826 $ 1,707,035
Interest earning
assets 1,555,372 1,649,121 1,769,242 1,870,995 1,940,364 1,601,988 1,949,809
Total assets 1,686,311 1,785,286 1,893,275 2,001,415 2,071,098 1,735,525 2,084,530
Deposits 1,341,243 1,394,701 1,467,497 1,554,127 1,611,922 1,367,824 1,616,018
Total shareholders'
equity 67,733 83,692 94,819 117,687 140,556 75,669 145,623
CONTACT: Macatawa Bank Corporation
Jon Swets, SVP and CFO
616.494.7645
Released July 29, 2010