10753 Macatawa Drive Holland, MI 49424

Holland, Michigan — Macatawa Bank Corporation Reports Second Quarter Earnings

Macatawa Bank Corporation today announced net income for the second quarter of 2007. Net income for the quarter was $4.59 million, or $0.26 per diluted share, compared to net income of $5.76 million, or $0.33 per diluted share, for the second quarter of 2006. Net income for the first six months of 2007 totaled $9.43 million, or $0.54 per diluted share, compared to net income of $10.98 million, or $0.63 per diluted share, for the six months ended June 30, 2006.

“We are disappointed with the decline in our earnings. The weak economic conditions in our markets continue to affect our operating performance,” commented Ben Smith, Chairman and CEO. In particular, a noticeable deterioration in residential land development has had a profound affect on many banks throughout Michigan. “We knew these factors would challenge our earnings and asset growth, but the extent of weakness in this sector and its impact on our performance is greater than expected. While we are seeing signs of increased residential real estate activity, we recognize a sustained improvement will take time to fully benefit the businesses involved with land development,” added Mr. Smith.

Non-performing loans are up $12 million since the end of the first quarter and $24 million since June of last year. Most of these increases were in loans to residential land developers. At June 30, 2007, non-performing loans were approximately $29 million and represented about 1.71% of total loans. “We have instituted additional controls over our credit administration process and have been focused on reviewing our entire commercial portfolio. We continue to work diligently on addressing these loan difficulties to put them behind us,” stated Mr. Smith. Other than residential land development, the Company’s loan portfolios continue to perform well.

The Company opened its 26^th branch during the quarter in Cascade on the east side of the greater Grand Rapids metropolitan market. “We are very pleased with the progress of our branch network and other retail delivery systems. We continue to see strong levels of new customers as we expand our market share,” added Mr. Smith. Deposits within the Company’s markets grew $31 million during the quarter, or 9% on an annualized basis, allowing the Company to reduce balances of higher costing deposits from outside its market.

Second quarter net interest income totaled $16.3 million, a decrease of $640,000 compared to the second quarter of 2006. The decrease in net interest income was primarily from a decline in the net interest margin partially offset by an increase in average earning assets. Average earning assets grew by 8% or $151.2 million from the second quarter of 2006 to the second quarter of 2007. The net interest margin was 3.32% for the quarter, down only three basis points from 3.35% for the first quarter of 2007 and 42 basis points from 3.74% for the second quarter of 2006. On a consecutive quarter basis, the decline was primarily from a decrease in the yield on loans related to reduced loan interest associated with non-accrual loans. The cost of funds remained flat on a consecutive quarter basis. 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.

Non-interest income was $4.0 million for the second quarter of 2007, an increase of $391,000 or 11% compared to the second quarter of 2006. The increase was largely from higher trust fees, partially offset by lower gains on sales of loans. The increase in trust fees primarily relates to customer relationships added from the acquisition of Asset Management Services from Smith & Associates on January 1. Other types of non-interest income grew as well reflecting continued momentum in various service delivery areas.

Non-interest expense was $12.6 million for the quarter as compared to $11.3 million for the second quarter of 2006. The slight increases in salaries and benefits, occupancy and furniture and equipment primarily relate to operating costs associated with the new Asset Management Services group and the opening of four new facilities since the beginning of the year. Despite these significant investments for the future, the Company has been able to successfully manage these overhead components within a tight range. The $876,000 increase in other expense also includes operating costs associated with these new service and facility additions, as well as increases in legal and other carrying costs associated with non-performing assets and an increase of $228,000 in FDIC assessments. The additional FDIC assessments relate to a change by the FDIC in the rate for all banks effective January 1.

The provision for loan losses was $965,000 for the quarter compared to $800,000 for the second quarter of 2006. Annualized net charge-offs were 0.16% of average loans for the quarter compared to 0.01% for the second quarter of 2006. Non-performing assets to total assets were 1.69% at June 30, 2007 compared to 0.98% at March 31, 2007 and 0.38% at June 30, 2006. Of the $35.8 million of non-performing assets at June 30, approximately $6.3 million is other real estate or repossessed assets in which collateral held is considered collectible. The remaining $29.5 million are non-performing loans of which approximately two-thirds are associated with residential land development. The allowance for loan losses was 1.39% of total loans at June 30, 2007 compared to 1.36% at December 31, 2006.

Total assets increased $135.0 million or 7% from June 30, 2006 to $2.12 billion at June 30, 2007. Over the same twelve month period, total loans increased $71.7 million and total deposits increased $88.9 million. Since December 31, 2006, total loans increased $13.3 million and total deposits declined by $6 million. However, deposits within the Company’s market increased $31 million during the quarter and $43 million since December 31, 2006. The Company remained well-capitalized at June 30, 2007 with a total risk-based capital ratio of 10.9%.

“Despite the challenging operating environment, we are gaining market share, continuing to invest in people and technology and constantly improving our operations to become an even stronger bank,” concluded Mr. Smith.

Conference Call

Macatawa Bank Corporation will hold its quarterly earnings conference call on Tuesday, July 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 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, 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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