For Immediate Release
|
|
NASDAQ Stock Market:
|
MCBC
|
· |
Net income of $6.9 million in third quarter 2018 versus $4.9 million in third quarter 2017 – up 41%
|
· |
Growth in net interest income primary driver of earnings improvement – up 15% from third quarter 2017
|
· |
Loan portfolio balances and bond financing to businesses up by $98.7 million (8%), from September 30, 2017
|
· |
Core deposit balances up by $111.6 million (7%), from September 30, 2017
|
· |
Asset quality metrics remained strong
|
Dollars in 000s
|
Sept 30,
2018
|
Jun 30,
2018
|
Mar 31,
2018
|
Dec 31,
2017
|
Sept 30,
2017
|
|||||||||||||||
Commercial Real Estate
|
$
|
121
|
$
|
121
|
$
|
121
|
$
|
385
|
$
|
440
|
||||||||||
Commercial and Industrial
|
---
|
2
|
201
|
4
|
4
|
|||||||||||||||
Total Commercial Loans
|
121
|
123
|
322
|
389
|
444
|
|||||||||||||||
Residential Mortgage Loans
|
2
|
2
|
2
|
2
|
58
|
|||||||||||||||
Consumer Loans
|
---
|
---
|
---
|
4
|
19
|
|||||||||||||||
Total Non-Performing Loans
|
$
|
123
|
$
|
125
|
$
|
324
|
$
|
395
|
$
|
521
|
Dollars in 000s
|
Sept 30,
2018
|
Jun 30,
2018
|
Mar 31,
2018
|
Dec 31,
2017
|
Sept 30,
2017
|
|||||||||||||||
Non-Performing Loans
|
$
|
123
|
$
|
125
|
$
|
324
|
$
|
395
|
$
|
521
|
||||||||||
Other Repossessed Assets
|
---
|
---
|
---
|
11
|
---
|
|||||||||||||||
Other Real Estate Owned
|
3,465
|
3,872
|
5,223
|
5,767
|
6,661
|
|||||||||||||||
Total Non-Performing Assets
|
$
|
3,588
|
$
|
3,997
|
$
|
5,547
|
$
|
6,173
|
$
|
7,182
|
Dollars in 000s
|
Sept 30,
2018
|
Jun 30,
2018
|
Mar 31,
2018
|
Dec 31,
2017
|
Sept 30,
2017
|
|||||||||||||||
Construction and Development
|
$
|
93,794
|
$
|
85,193
|
$
|
81,948
|
$
|
92,241
|
$
|
84,659
|
||||||||||
Other Commercial Real Estate
|
459,146
|
461,808
|
447,922
|
449,694
|
445,703
|
|||||||||||||||
Commercial Loans Secured by Real Estate
|
552,940
|
547,001
|
529,870
|
541,935
|
530,362
|
|||||||||||||||
Commercial and Industrial
|
467,703
|
458,468
|
477,088
|
465,208
|
418,838
|
|||||||||||||||
Total Commercial Loans
|
$
|
1,020,643
|
$
|
1,005,469
|
$
|
1,006,958
|
$
|
1,007,143
|
$
|
949,200
|
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 “anticipates,” "believe," "expect," "may," "should," "will," ”intend,” "continue," "improving," "additional,"
"focus," "forward," "future," "efforts," "strategy," "momentum," "positioned," 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 trends in our key operating metrics and financial
performance, future levels of earnings and profitability, future levels of earning assets, future asset quality, future growth, and future net interest margin. 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 deferred tax assets) and other real estate owned 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 sell
other real estate owned at its carrying value or at all, reduce non-performing asset expenses, utilize our deferred tax asset, reduce future tax liabilities, successfully implement new programs and initiatives, increase efficiencies,
maintain our current level of deposits and other sources of funding, maintain liquidity, respond to declines in collateral values and credit quality, improve profitability, and produce consistent core earnings 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. 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, extent, 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, 2017. 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.
|
Quarterly
|
Nine Months Ended
September 30
|
|||||||||||||||||||
EARNINGS SUMMARY
|
3rd Qtr
2018
|
2nd Qtr
2018
|
3rd Qtr
2017
|
2018
|
2017
|
|||||||||||||||
Total interest income
|
$
|
17,687
|
$
|
16,836
|
$
|
14,626
|
$
|
50,542
|
$
|
42,516
|
||||||||||
Total interest expense
|
2,525
|
2,183
|
1,488
|
6,544
|
4,090
|
|||||||||||||||
Net interest income
|
15,162
|
14,653
|
13,138
|
43,998
|
38,426
|
|||||||||||||||
Provision for loan losses
|
-
|
(300
|
)
|
(350
|
)
|
(400
|
)
|
(1,350
|
)
|
|||||||||||
Net interest income after provision for loan losses
|
15,162
|
14,953
|
13,488
|
44,398
|
39,776
|
|||||||||||||||
NON-INTEREST INCOME
|
||||||||||||||||||||
Deposit service charges
|
1,132
|
1,060
|
1,172
|
3,242
|
3,342
|
|||||||||||||||
Net gains on mortgage loans
|
270
|
222
|
369
|
633
|
1,273
|
|||||||||||||||
Trust fees
|
889
|
945
|
801
|
2,759
|
2,412
|
|||||||||||||||
Other
|
2,208
|
2,241
|
1,958
|
6,464
|
5,982
|
|||||||||||||||
Total non-interest income
|
4,499
|
4,468
|
4,300
|
13,098
|
13,009
|
|||||||||||||||
NON-INTEREST EXPENSE
|
||||||||||||||||||||
Salaries and benefits
|
6,360
|
6,389
|
6,211
|
18,942
|
18,363
|
|||||||||||||||
Occupancy
|
939
|
973
|
922
|
2,984
|
2,939
|
|||||||||||||||
Furniture and equipment
|
760
|
773
|
797
|
2,338
|
2,278
|
|||||||||||||||
FDIC assessment
|
127
|
132
|
134
|
391
|
404
|
|||||||||||||||
Problem asset costs, including losses and (gains)
|
108
|
83
|
(77
|
)
|
652
|
(140
|
)
|
|||||||||||||
Other
|
2,945
|
2,909
|
2,769
|
8,625
|
8,590
|
|||||||||||||||
Total non-interest expense
|
11,239
|
11,259
|
10,756
|
33,932
|
32,434
|
|||||||||||||||
Income before income tax
|
8,422
|
8,162
|
7,032
|
23,564
|
20,351
|
|||||||||||||||
Income tax expense
|
1,570
|
1,434
|
2,157
|
4,228
|
6,253
|
|||||||||||||||
Net income
|
$
|
6,852
|
$
|
6,728
|
$
|
4,875
|
$
|
19,336
|
$
|
14,098
|
||||||||||
Basic earnings per common share
|
$
|
0.20
|
$
|
0.20
|
$
|
0.14
|
$
|
0.57
|
$
|
0.42
|
||||||||||
Diluted earnings per common share
|
$
|
0.20
|
$
|
0.20
|
$
|
0.14
|
$
|
0.57
|
$
|
0.42
|
||||||||||
Return on average assets
|
1.43
|
%
|
1.44
|
%
|
1.10
|
%
|
1.37
|
%
|
1.08
|
%
|
||||||||||
Return on average equity
|
15.12
|
%
|
15.23
|
%
|
11.34
|
%
|
14.54
|
%
|
11.17
|
%
|
||||||||||
Net interest margin (fully taxable equivalent)
|
3.37
|
%
|
3.37
|
%
|
3.21
|
%
|
3.36
|
%
|
3.24
|
%
|
||||||||||
Efficiency ratio
|
57.16
|
%
|
58.88
|
%
|
61.68
|
%
|
59.43
|
%
|
63.06
|
%
|
BALANCE SHEET DATA
Assets
|
September 30
2018 |
June 30
2018 |
September 30
2017 |
|||||||||
Cash and due from banks
|
$
|
30,837
|
$
|
37,105
|
$
|
28,318
|
||||||
Federal funds sold and other short-term investments
|
152,339
|
107,416
|
131,571
|
|||||||||
Debt securities available for sale
|
218,615
|
218,770
|
214,182
|
|||||||||
Debt securities held to maturity
|
71,688
|
79,569
|
61,927
|
|||||||||
Federal Home Loan Bank Stock
|
11,558
|
11,558
|
11,558
|
|||||||||
Loans held for sale
|
-
|
61
|
2,199
|
|||||||||
Total loans
|
1,344,683
|
1,327,686
|
1,260,037
|
|||||||||
Less allowance for loan loss
|
16,803
|
16,695
|
16,434
|
|||||||||
Net loans
|
1,327,880
|
1,310,991
|
1,243,603
|
|||||||||
Premises and equipment, net
|
45,631
|
45,907
|
46,822
|
|||||||||
Bank-owned life insurance
|
40,996
|
40,744
|
40,042
|
|||||||||
Other real estate owned
|
3,465
|
3,872
|
6,661
|
|||||||||
Other assets
|
16,264
|
16,548
|
16,163
|
|||||||||
Total Assets
|
$
|
1,919,273
|
$
|
1,872,541
|
$
|
1,803,046
|
||||||
Liabilities and Shareholders' Equity
|
||||||||||||
Noninterest-bearing deposits
|
$
|
500,680
|
$
|
496,605
|
$
|
497,310
|
||||||
Interest-bearing deposits
|
1,117,063
|
1,083,856
|
1,008,868
|
|||||||||
Total deposits
|
1,617,743
|
1,580,461
|
1,506,178
|
|||||||||
Other borrowed funds
|
70,000
|
65,667
|
72,118
|
|||||||||
Long-term debt
|
41,238
|
41,238
|
41,238
|
|||||||||
Other liabilities
|
6,316
|
5,461
|
10,048
|
|||||||||
Total Liabilities
|
1,735,297
|
1,692,827
|
1,629,582
|
|||||||||
Shareholders' equity
|
183,976
|
179,714
|
173,464
|
|||||||||
Total Liabilities and Shareholders' Equity
|
$
|
1,919,273
|
$
|
1,872,541
|
$
|
1,803,046
|
Quarterly
|
Year to Date
|
|||||||||||||||||||||||||||
3rd Qtr
2018
|
2nd Qtr
2018
|
1st Qtr
2018
|
4th Qtr
2017
|
3rd Qtr
2017
|
2018
|
2017
|
||||||||||||||||||||||
EARNINGS SUMMARY
|
||||||||||||||||||||||||||||
Net interest income
|
$
|
15,162
|
$
|
14,653
|
$
|
14,182
|
$
|
13,517
|
$
|
13,138
|
$
|
43,998
|
$
|
38,426
|
||||||||||||||
Provision for loan losses
|
-
|
(300
|
)
|
(100
|
)
|
-
|
(350
|
)
|
(400
|
)
|
(1,350
|
)
|
||||||||||||||||
Total non-interest income
|
4,499
|
4,468
|
4,132
|
4,410
|
4,300
|
13,098
|
13,009
|
|||||||||||||||||||||
Total non-interest expense
|
11,239
|
11,259
|
11,434
|
11,253
|
10,756
|
33,932
|
32,434
|
|||||||||||||||||||||
Federal income tax expense
|
1,570
|
1,434
|
1,225
|
4,480
|
2,157
|
4,228
|
6,253
|
|||||||||||||||||||||
Net income
|
$
|
6,852
|
$
|
6,728
|
$
|
5,755
|
$
|
2,194
|
$
|
4,875
|
$
|
19,336
|
$
|
14,098
|
||||||||||||||
Basic earnings per common share
|
$
|
0.20
|
$
|
0.20
|
$
|
0.17
|
$
|
0.06
|
$
|
0.14
|
$
|
0.57
|
$
|
0.42
|
||||||||||||||
Diluted earnings per common share
|
$
|
0.20
|
$
|
0.20
|
$
|
0.17
|
$
|
0.06
|
$
|
0.14
|
$
|
0.57
|
$
|
0.42
|
||||||||||||||
MARKET DATA
|
||||||||||||||||||||||||||||
Book value per common share
|
$
|
5.41
|
$
|
5.28
|
$
|
5.16
|
$
|
5.10
|
$
|
5.11
|
$
|
5.41
|
$
|
5.11
|
||||||||||||||
Tangible book value per common share
|
$
|
5.41
|
$
|
5.28
|
$
|
5.16
|
$
|
5.10
|
$
|
5.11
|
$
|
5.41
|
$
|
5.11
|
||||||||||||||
Market value per common share
|
$
|
11.71
|
$
|
12.14
|
$
|
10.27
|
$
|
10.00
|
$
|
10.26
|
$
|
11.71
|
$
|
10.26
|
||||||||||||||
Average basic common shares
|
34,014,319
|
34,016,679
|
34,010,396
|
33,958,992
|
33,942,248
|
34,013,813
|
33,942,318
|
|||||||||||||||||||||
Average diluted common shares
|
34,014,319
|
34,016,679
|
34,011,592
|
33,965,344
|
33,947,269
|
34,014,209
|
33,948,419
|
|||||||||||||||||||||
Period end common shares
|
34,014,319
|
34,014,319
|
34,017,525
|
33,972,977
|
33,941,953
|
34,014,319
|
33,941,953
|
|||||||||||||||||||||
PERFORMANCE RATIOS
|
||||||||||||||||||||||||||||
Return on average assets
|
1.43
|
%
|
1.44
|
%
|
1.25
|
%
|
0.49
|
%
|
1.10
|
%
|
1.37
|
%
|
1.08
|
%
|
||||||||||||||
Return on average equity
|
15.12
|
%
|
15.23
|
%
|
13.24
|
%
|
5.03
|
%
|
11.34
|
%
|
14.54
|
%
|
11.17
|
%
|
||||||||||||||
Net interest margin (fully taxable equivalent)
|
3.37
|
%
|
3.37
|
%
|
3.34
|
%
|
3.25
|
%
|
3.21
|
%
|
3.36
|
%
|
3.24
|
%
|
||||||||||||||
Efficiency ratio
|
57.16
|
%
|
58.88
|
%
|
62.43
|
%
|
62.77
|
%
|
61.68
|
%
|
59.43
|
%
|
63.06
|
%
|
||||||||||||||
Full-time equivalent employees (period end)
|
332
|
339
|
332
|
340
|
343
|
332
|
343
|
|||||||||||||||||||||
ASSET QUALITY
|
||||||||||||||||||||||||||||
Gross charge-offs
|
$
|
30
|
$
|
30
|
$
|
97
|
$
|
45
|
$
|
55
|
$
|
156
|
$
|
221
|
||||||||||||||
Net charge-offs/(recoveries)
|
$
|
(108
|
)
|
$
|
(320
|
)
|
$
|
(175
|
)
|
$
|
(166
|
)
|
$
|
(214
|
)
|
$
|
(603
|
)
|
$
|
(822
|
)
|
|||||||
Net charge-offs to average loans (annualized)
|
-0.03
|
%
|
-0.10
|
%
|
-0.05
|
%
|
-0.05
|
%
|
-0.07
|
%
|
-0.06
|
%
|
-0.09
|
%
|
||||||||||||||
Nonperforming loans
|
$
|
123
|
$
|
125
|
$
|
324
|
$
|
395
|
$
|
521
|
$
|
123
|
$
|
521
|
||||||||||||||
Other real estate and repossessed assets
|
$
|
3,465
|
$
|
3,872
|
$
|
5,223
|
$
|
5,778
|
$
|
6,661
|
$
|
3,465
|
$
|
6,661
|
||||||||||||||
Nonperforming loans to total loans
|
0.01
|
%
|
0.01
|
%
|
0.02
|
%
|
0.03
|
%
|
0.04
|
%
|
0.01
|
%
|
0.04
|
%
|
||||||||||||||
Nonperforming assets to total assets
|
0.19
|
%
|
0.21
|
%
|
0.30
|
%
|
0.33
|
%
|
0.40
|
%
|
0.19
|
%
|
0.40
|
%
|
||||||||||||||
Allowance for loan losses
|
$
|
16,803
|
$
|
16,695
|
$
|
16,675
|
$
|
16,600
|
$
|
16,434
|
$
|
16,803
|
$
|
16,434
|
||||||||||||||
Allowance for loan losses to total loans
|
1.25
|
%
|
1.26
|
%
|
1.26
|
%
|
1.26
|
%
|
1.30
|
%
|
1.25
|
%
|
1.30
|
%
|
||||||||||||||
Allowance for loan losses to nonperforming loans
|
13660.98
|
%
|
13356.00
|
%
|
5146.60
|
%
|
4202.53
|
%
|
3154.32
|
%
|
13660.98
|
%
|
3154.32
|
%
|
||||||||||||||
CAPITAL
|
||||||||||||||||||||||||||||
Average equity to average assets
|
9.47
|
%
|
9.44
|
%
|
9.42
|
%
|
9.68
|
%
|
9.69
|
%
|
9.44
|
%
|
9.69
|
%
|
||||||||||||||
Common equity tier 1 to risk weighted assets (Consolidated)
|
12.13
|
%
|
11.83
|
%
|
11.67
|
%
|
11.31
|
%
|
11.70
|
%
|
12.13
|
%
|
11.70
|
%
|
||||||||||||||
Tier 1 capital to average assets (Consolidated)
|
11.90
|
%
|
11.91
|
%
|
11.83
|
%
|
11.88
|
%
|
12.04
|
%
|
11.90
|
%
|
12.04
|
%
|
||||||||||||||
Total capital to risk-weighted assets (Consolidated)
|
15.79
|
%
|
15.49
|
%
|
15.36
|
%
|
14.99
|
%
|
15.50
|
%
|
15.79
|
%
|
15.50
|
%
|
||||||||||||||
Common equity tier 1 to risk weighted assets (Bank)
|
14.28
|
%
|
14.01
|
%
|
13.87
|
%
|
13.54
|
%
|
13.99
|
%
|
14.28
|
%
|
13.99
|
%
|
||||||||||||||
Tier 1 capital to average assets (Bank)
|
11.56
|
%
|
11.58
|
%
|
11.50
|
%
|
11.56
|
%
|
11.72
|
%
|
11.56
|
%
|
11.72
|
%
|
||||||||||||||
Total capital to risk-weighted assets (Bank)
|
15.36
|
%
|
15.09
|
%
|
14.96
|
%
|
14.62
|
%
|
15.10
|
%
|
15.36
|
%
|
15.10
|
%
|
||||||||||||||
Tangible common equity to assets
|
9.59
|
%
|
9.60
|
%
|
9.42
|
%
|
9.15
|
%
|
9.63
|
%
|
9.59
|
%
|
9.63
|
%
|
||||||||||||||
END OF PERIOD BALANCES
|
||||||||||||||||||||||||||||
Total portfolio loans
|
$
|
1,344,683
|
$
|
1,327,686
|
$
|
1,325,545
|
$
|
1,320,309
|
$
|
1,260,037
|
$
|
1,344,683
|
$
|
1,260,037
|
||||||||||||||
Earning assets
|
1,804,672
|
1,751,167
|
1,751,315
|
1,767,752
|
1,680,458
|
1,804,672
|
1,680,458
|
|||||||||||||||||||||
Total assets
|
1,919,273
|
1,872,541
|
1,863,780
|
1,890,232
|
1,803,046
|
1,919,273
|
1,803,046
|
|||||||||||||||||||||
Deposits
|
1,617,743
|
1,580,461
|
1,560,872
|
1,579,010
|
1,506,178
|
1,617,743
|
1,506,178
|
|||||||||||||||||||||
Total shareholders' equity
|
183,976
|
179,714
|
175,376
|
172,986
|
173,464
|
183,976
|
173,464
|
|||||||||||||||||||||
AVERAGE BALANCES
|
||||||||||||||||||||||||||||
Total portfolio loans
|
$
|
1,325,268
|
$
|
1,327,408
|
$
|
1,314,838
|
$
|
1,285,688
|
$
|
1,252,075
|
$
|
1,322,543
|
$
|
1,258,940
|
||||||||||||||
Earning assets
|
1,799,600
|
1,756,909
|
1,730,576
|
1,681,297
|
1,652,028
|
1,762,614
|
1,609,143
|
|||||||||||||||||||||
Total assets
|
1,915,655
|
1,872,559
|
1,845,911
|
1,802,386
|
1,775,302
|
1,878,297
|
1,735,425
|
|||||||||||||||||||||
Deposits
|
1,614,151
|
1,575,408
|
1,537,376
|
1,497,213
|
1,481,539
|
1,575,926
|
1,433,277
|
|||||||||||||||||||||
Total shareholders' equity
|
181,329
|
176,749
|
173,913
|
174,427
|
171,987
|
177,358
|
168,209
|