10753 Macatawa Drive Holland, MI 49424

Holland, Michigan — Macatawa Bank Corporation Reports 64% Increase in Annual Earnings

Macatawa Bank Corporation today announced net income for the fourth quarter of 2005. Net income was $5.54 million, or a 25% increase over fourth quarter 2004 net income of $4.45 million. Diluted earnings per share totaled $0.53 for the fourth quarter of 2005 compared to $0.43 for the same period in 2004. Net income for the year ended December 31, 2005 increased 64% to a record $20.89 million, or $2.00 per diluted share, as compared to 2004 net income of $12.78 million, or $1.24 per diluted share. The annual results for 2004 reflect the impact of the $2.3 million ($1.5 million after-tax, or $0.15 per share) charge to earnings related to a commercial borrower, as discussed in the SEC Form 8-K dated October 8, 2004. Without this loss in the prior year results, annual earnings would still represent an increase of 46% over the prior year.

“2005 was another great year for us and stands out as a year in which great strides were made at improving our profitability,” said Ben Smith, Chairman and CEO. Return on average equity (ROE) was 15.30% and return on average assets (ROA) was 1.17% for 2005. This compares with an ROE of 10.15% and an ROA of 0.83% for 2004. For the quarter, ROE was 15.69% and ROA was 1.20%. “These results reflect the value of our business model and the hard work of our exceptional people,” stated Mr. Smith. Strong growth in core loan and deposit portfolios was the primary driver of the 21% increase in annual net interest revenue. Noninterest revenue, made up largely from financial services fees and mortgage sales revenue, increased nearly 30% for the year. “These revenue increases more than offset increases in expenses as we continue to improve the efficiency of our operations,” added Mr. Smith. The efficiency ratio has improved over the past three years, declining from 58.11% in 2003 to 57.04% in 2004 and to 54.62% in 2005.

Total assets for the year increased nearly $200 million to $1.87 billion at December 31, 2005. Total loans increased $151.5 million to $1.55 billion and total deposits increased $156.3 million to $1.51 billion. The growth in deposits was led by a 27% increase in non-interest checking accounts to $188.76 million. “Macatawa increased its lead as the number one deposit Bank in Ottawa County. We also made significant progress during the year on our strategic initiatives in Kent County. Generating deposits in our markets will remain a top priority to ensure the continued strength of our franchise,” commented Mr. Smith.

Fourth quarter net interest income totaled $16.4 million, an increase of $2.0 million or 14%, as compared to the fourth quarter of 2004. The improvement in net interest income was driven by a combination of increases in both average earning assets and net interest margin. Average earning assets grew by 12% or $180.4 million from $1.53 billion for the fourth quarter of 2004 to $1.71 billion for the fourth quarter of 2005. The net interest margin increased six basis points from 3.76% for the fourth quarter of 2004 to 3.82% for the fourth quarter of 2005. For the year, the net interest margin increased 17 basis points from 3.64% in 2004 to 3.81% in 2005. The increase in net interest margin reflects the impact of the increases in short-term rates that began in mid-2004.

Non-interest income was $3.3 million for the fourth quarter of 2005, an increase of $582,000 over the fourth quarter of 2004. The increase resulted from expanded financial services offerings to customers including brokerage, trust and deposit services.

Non-interest expense increased to $10.8 million for the quarter as compared to $9.3 million for the fourth quarter of 2004. Salaries and benefits increased by $878,000 over the fourth quarter of the prior year, representing the largest category of the increase. The increase was primarily related to additional staffing in each line of business and in support departments consistent with growth of the Bank. All remaining categories, including occupancy, furniture and equipment and other expense, also increased moderately during the quarter consistent with growth of the Bank.

The provision for loan losses was $795,000 for the quarter, down from $1.3 million from the fourth quarter of 2004. Asset quality remained strong during the quarter and at December 31, 2005, supporting the decline in the provision for loan losses. Net charge-offs were down $345,000 and were 0.09% of average loans for the quarter compared to 0.20% for the same period in the prior year. Non-performing assets to total assets were 0.26% at December 31, 2005 compared to 0.35% at December 31, 2004. The allowance for loan losses represents 1.36% of total loans at December 31, 2005.

For the quarter, total loans were up $36.4 million and total deposits were up $50.3 million. The Company remained well-capitalized at December 31, 2005, with a total risk-based capital ratio of 10.91%.

“We are very pleased with our performance for the fourth quarter and the full year of 2005. For 2006, we have established aggressive yet realistic expansion goals while continuing to focus on our profitability. We are excited about our prospects for continued success,” concluded Mr. Smith.

Conference Call

Macatawa Bank Corporation will hold its quarterly earnings conference call on Tuesday, January 17, 2006, at 10:00 A.M. Persons who wish to access the call may do so via the Internet by visiting www.macatawabank.com and clicking on the webcast link in the Investor Information section. It may also be accessed by logging on to www.streetevents.com. A replay of the call will be available for 30 days following the call.

Headquartered in Holland, Michigan, Macatawa Bank Corporation is the parent company for Macatawa Bank and Macatawa Investment Services. Through its subsidiaries, the Corporation offers a full range of banking, investment and trust services to individuals, businesses, and governmental entities from a network of 23 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, ATM’s and Internet banking services, trust and employee benefit plan services, and various investment services. The Corporation emphasizes its local management team and decision making, along with providing customers excellent service and superior financial products.

“CAUTIONARY STATEMENT: This press release contains certain forward-looking statements that involve 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 our operations, markets, products, services, and pricing. These statements include, among others, statements related to future growth and funding sources, future profitability levels, the effects on earnings of changes in interest rates and the future level of other revenue sources. Annualized growth rates are not intended to imply future growth at those rates. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Further information concerning our business, including additional factors that could materially affect our financial results, is included in our filings with the Securities and Exchange Commission.”

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MACATAWA BANK CORPORATION
CONSOLIDATED FINANCIAL SUMMARY
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MACATAWA BANK CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
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