10753 Macatawa Drive Holland, MI 49424

Holland, Michigan — Macatawa Bank Corporation Reports First Quarter Earnings

Macatawa Bank Corporation today announced net income for the first quarter of 2007. Net income for the quarter was $4.84 million, or $0.29 per diluted share, as compared to net income of $5.22 million, or $0.32 per diluted share, for the first quarter of 2006.

“Although earnings are down, they did meet our expectations considering the challenging economy and difficult interest rate environment,” commented Ben Smith, Chairman and CEO. “While we don’t see any immediate relief on the horizon, we are focused on positioning ourselves for a more normal environment,” added Mr. Smith. During the quarter the Company made great strides at solidifying its infrastructure, diversifying its revenue sources and penetrating its markets.

The Company completed three new facilities during the quarter. The new Breton Village branch in Grand Rapids has opened nearly 200 new accounts and is near $3 million in total deposits since opening in January. The downtown Holland and Byron Center offices have grown over $7 million and $2.5 million in total deposits, respectively, since relocating to their new branches in February.

Non-interest income during the quarter was positively impacted by a $371,000 or 45% increase in trust income. Customer relationships added from the acquisition of Asset Management Services from Smith & Associates on January 1 generated the majority of this increase.

“In addition to the excitement generated from these new facilities and from our new Asset Management Services group, we continue to expand and add new relationships across our entire franchise,” added Mr. Smith. The Company added more than 1,000 checking accounts during the quarter, helping support an increase of in-market deposits.

First quarter net interest income totaled $16.1 million, a decrease of $255,000 compared to the first quarter of 2006. The decrease in net interest income was from a decline in the net interest margin partially offset by an increase in average earning assets. Average earning assets grew by 11% or $193.4 million from the first quarter of 2006 to the first quarter of 2007. The net interest margin was 3.35% for the quarter, down 20 basis points from 3.55% for the fourth quarter of 2006 and 43 basis points from 3.78% for the first quarter of 2006. On a consecutive quarter basis, the decline was primarily from a decrease in the yield on loans and partially from an increase in the cost of funds. The decrease in the loan yield was related to lower loan fees and reduced loan interest associated with non-accrual loans. The decline in net interest margin from the prior year quarter is primarily because the cost of funds has risen more than the yield on assets. Net interest margin continues to be pressured by the inverted yield curve, when long-term rates remain below short-term rates.

Non-interest income was $3.7 million for the first quarter of 2007, an increase of $541,000 or 17% compared to the first quarter of 2006. The increase was largely from the $371,000 increase in trust fees discussed above. All other types of non-interest income grew as well reflecting continued momentum in various service delivery areas.

Non-interest expense was $11.8 million for the quarter as compared to $11.1 million for the first quarter of 2006. The increase includes small increases in each category of non-interest expense, including operating costs associated with the new Asset Management Services group beginning January 1 and the opening of the three new facilities during the quarter. In addition, the $310,000 increase in other expenses includes an increase of $176,000 in additional FDIC assessments related to a change in the FDIC assessment rate for all banks effective January 1. Despite these additional costs necessary to support the Company’s long-term growth, the Company has been able to successfully manage its overhead costs within a tight range over the last five quarters.

The provision for loan losses was $875,000 for the quarter compared to $700,000 for the first quarter of 2006. Annualized net charge-offs were 0.10% of average loans for the quarter compared to 0.08% for the first quarter of 2006. Non-performing assets to total assets were 0.98% at March 31, 2007 compared to 0.36% at March 31, 2006.

The balance of non-performing loans at March 31 primarily relates to commercial and residential real estate customers, many of whom have been affected by the soft real estate market in West Michigan. The allowance for loan losses was 1.38% of total loans at March 31, 2007 compared to 1.36% at December 31, 2006.

Total assets increased $216.1 million or 11% from March 31, 2006 to $2.12 billion at March 31, 2007. Over the same twelve month period, total loans increased $131.1 million and total deposits increased $96.8 million. For the quarter, total loans increased $10 million and total deposits declined by $28 million. However, deposits within the Company’s market increased $12 million during the quarter. This increase, coupled with an increase in other borrowings at more attractive terms and pricing allowed the Company to reduce its reliance on brokered deposits by over $40 million during the quarter.

The Company remained well-capitalized at March 31, 2007 with a total risk-based capital ratio of 11.0%.

“Every company faces difficult business cycles. It’s the ones that view these times as opportunities that come out ahead of the rest. At Macatawa, we are dedicated to seizing opportunities that will improve our company and position us for even greater success in the future,” Mr. Smith concluded.

Conference Call

Macatawa Bank Corporation will hold its quarterly earnings conference call on Tuesday, April 17, 2007, 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. Through its banking subsidiary, the Corporation offers a full range of banking, investment and trust services to individuals, businesses, and governmental entities from a network of 25 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.”

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