Exhibit 99.1

 
For Immediate Release
NASDAQ Stock Market:
MCBC

Macatawa Bank Corporation Reports
Third Quarter 2020 Results

HOLLAND, Mich. (October 22, 2020) – Macatawa Bank Corporation (NASDAQ: MCBC), the holding company for Macatawa Bank (collectively, the “Company”), today announced its results for the third quarter of 2020.

Net income of $7.1 million in third quarter 2020 versus $8.2 million in third quarter 2019 – down 13%
Provision for loan losses of $500,000 in third quarter 2020 versus no provision in the third quarter 2019, due to additional qualitative allocations for effects of COVID-19 pandemic
Net loan recoveries of $203,000 in third quarter 2020 versus $4.0 million net chargeoffs in second quarter 2020 and $259,000 net recoveries in third quarter 2019
Net interest margin decreased to 2.43% in third quarter 2020 versus 3.29% in third quarter 2019 primarily due to federal funds rate decreases during the past year, low-yielding Paycheck Protection Program (“PPP”) loans and high on-balance sheet liquidity
Growth in non-interest income of $879,000 (17%) from third quarter 2019 driven by increased residential mortgage volume
Modest increase in total non-interest expense – up $524,000 (5%) from third quarter 2019
Loan portfolio balances up by $165.1 million (12%) from third quarter 2019, driven by PPP loans
Approximately 75% of loans modified under CARES Act have returned to contractual terms at September 30, 2020
Core deposit balances up by $350.4 million (19%) from third quarter 2019
Capital and liquidity levels remain strong

The Company reported net income of $7.1 million, or $0.21 per diluted share, in the third quarter 2020 compared to $8.2 million, or $0.24 per diluted share, in the third quarter 2019.  For the first nine months of 2020, the Company reported net income of $21.2 million, or $0.62 per diluted share, compared to $23.8 million, or $0.70 per diluted share, for the same period in 2019.

"We are pleased to report solid profitability for the third quarter of 2020, despite the challenges of operating during a continuing world-wide pandemic,” said Ronald L. Haan, President and CEO of the Company.  “The COVID-19 pandemic has continued to have a significant impact on our community, but the Company has again proven resilient and consistent in serving the financial needs of our customers and our community.  We were active participants in the Small Business Administration’s Paycheck Protection Program (PPP) and originated 1,738 PPP loans totaling $346.7 million in the second and third quarters of 2020.  The loans were distributed to many local small businesses in order to protect jobs and allow continued paychecks to employees in those companies.  Despite the challenging environment in the third quarter of 2020, we produced $7.1 million in earnings for the quarter.  Mortgage gains in the third quarter of 2020 were nearly double the level achieved a year ago and offset much of the reduction in net interest income caused by the significant decrease in market interest rates in 2020. An increase in provision for loan losses was another reason for the reduction in net income in the third quarter of 2020 compared to the third quarter of 2019, as we increased our allowance for loan losses due to factors associated with COVID-19, including additional allocations provided to loans that remained under CARES Act modifications at September 30, 2020.  We returned to achieving net loan recoveries in the third quarter of 2020 after experiencing a sizeable charge-off in the second quarter of 2020.”


Macatawa Bank Corporation 3Q Results / page 2 of 7

Mr. Haan concluded:  "We will continue to experience challenges relating to the impact of COVID-19 on our customers and our business.  We have actively worked with our borrowers to provide payment relief where possible while protecting the Company’s position.  We provided short-term modifications on $337.2 million of loans through the third quarter of 2020.  Approximately 75 percent of the loans that had been modified during the COVID-19 pandemic have either paid off or have returned to their normal loan payment terms with only $80 million of these loans remaining in modified status at September 30, 2020.  Our capital levels significantly exceed regulatory requirements, and we believe our strong balance sheet should provide the strength and stability to weather these difficult times.”

Operating Results
Net interest income for the third quarter 2020 totaled $14.7 million, a decrease of $373,000 from the second quarter 2020 and a decrease of $1.2 million from the third quarter 2019.  Net interest margin for the third quarter 2020 was 2.43 percent, down 31 basis points from the second quarter 2020, and down 86 basis points from the third quarter 2019.  Net interest income for the third quarter 2020 benefitted from amortization of $1.2 million in fees from loans issued under the PPP in the second and third quarters of 2020.  These fees are amortized over the loans’ contractual maturity, which is 24 months or 60 months, as applicable.  Upon SBA  forgiveness, the remaining unamortized fees will be recognized into interest income.  At September 30, 2020, the Company had approved and submitted 264 forgiveness applications with balances totaling $90.5 million to the SBA.  The Company received its first forgiveness disbursement on October 7, 2020 and through October 20, 2020 the Company had received forgiveness disbursements totaling $3.1 million.  The Company expects the related fee income amortization to accelerate in the fourth quarter of 2020 as the SBA processes the forgiveness applications, positively impacting net interest income.  Net interest margin was negatively impacted in the third quarter 2020 versus the second quarter 2020 by carrying significantly higher balances of federal funds sold due to the seasonal increase in deposits from municipal customers typically experienced.  These balances, which earn only 10 basis points in interest, increased by $226.3 million, on average, from the second quarter 2020 and caused a 25 basis point decrease in net interest margin in the third quarter 2020.  This constitutes most of the 31 basis point decrease from the second quarter 2020 to the third quarter 2020.  The most significant factor in the 86 basis point decrease in margin from the third quarter 2019 to the third quarter 2020 was the impact of the 225 basis point decrease in the federal funds rate.  Floor rates established by the Company on its variable rate loans over recent years served to soften the negative impact on net interest income of these federal funds rate decreases.  Without these floors, net interest income would have been lower than stated by approximately $1 million.

Average interest earning assets for the third quarter 2020 increased $199.9 million from the second quarter 2020 and were up $494.7 million from the third quarter 2019.  Increases in deposit balances, including seasonal municipal deposits, accounted for the increase from second quarter 2020.


Macatawa Bank Corporation 3Q Results / page 3 of 7

Non-interest income increased $238,000 in the third quarter 2020 compared to the second quarter 2020 and increased $879,000 from the third quarter 2019.  Gains on sales of mortgage loans in the third quarter 2020 were down $303,000 compared to the second quarter 2020 and were up $722,000 from the third quarter 2019.  The Company originated $40.8 million in mortgage loans for sale in the third quarter 2020 compared to $50.1 million in the second quarter 2020 and $24.6 million in the third quarter 2019.  Also positively affecting non-interest income in the third quarter 2020 was $253,000 in fees related to customer back-to-back interest rate swaps executed in the quarter.  These fees were $138,000 in the second quarter 2020 and $0 in the third quarter 2019.  Deposit service charges were up $127,000 in the third quarter 2020 compared to the second quarter 2020 and were down $152,000 compared to the third quarter 2019.  These fees are lower than in recent years due to lower overdraft fees as customers have generally retained higher deposit balances due to uncertainty related to the COVID-19 pandemic.

Non-interest expense was $11.5 million for the third quarter 2020, compared to $10.5 million for the second quarter 2020 and $11.0 million for the third quarter 2019.  The largest component of non-interest expense was salaries and benefit expenses.  Salaries and benefit expenses were up $714,000 compared to the second quarter 2020 and were up $208,000 compared to the third quarter 2019.  The increases compared to the second quarter 2020 and third quarter 2019 were due to a combination of actions taken to mitigate the negative effects of the COVID-19 shutdown of the economy, and the reversal of certain actions given the positive results of the second and third quarters of 2020.  Early in the third quarter 2020, the Company eliminated its personnel pay freezes, reinstated 401k matching contributions, and reinstated bonus accruals.  Favorably impacting salary and benefit expenses were lower claims experience in the Company’s medical insurance plan.  Second quarter 2020 expense benefitted from larger salary cost deferrals from origination of PPP loans.  The table below identifies the primary components of the changes in salaries and benefits between periods.

Dollars in 000s
 
Q3 2020
to
Q2 2020
   
Q3 2020
To
Q3 2019
 
             
Salaries and other compensation
 
$
116
   
$
158
 
Salary deferral from commercial loans
   
300
     
(10
)
Bonus accrual
   
242
     
12
 
Mortgage production – variable comp
   
(17
)
   
88
 
401k matching contributions
   
136
     
11
 
Medical insurance costs
   
(63
)
   
(51
)
Total change in salaries and benefits
 
$
714
   
$
208
 

Nonperforming asset expenses remained low in the third quarter 2020 at just $25,000 compared to $17,000 in the second quarter 2020 and $46,000 in the third quarter 2019.  FDIC assessment expense was $131,000 in the third quarter 2020 and $76,000 in the second quarter 2020.  There was no FDIC assessment expense in the third quarter 2019 as the FDIC assessment credits fully covered the assessment in that quarter.  All of the Company’s FDIC assessment credits had been applied by the second quarter 2020, so expense increased in the second quarter 2020 and third quarter 2020.  Other categories of non-interest expense were relatively flat compared to the second quarter 2020 and the third quarter 2019 due to a continued focus on expense management.


Macatawa Bank Corporation 3Q Results / page 4 of 7

Federal income tax expense was $1.6 million for the third quarter 2020 compared to $1.8 million for the second quarter 2020 and $1.9 million for the third quarter 2019.  The effective tax rate was 18.5 percent for the third quarter 2020, compared to 18.7 percent for the second quarter 2020 and 18.7 percent for the third quarter 2019. 

Asset Quality
A provision for loan losses of $500,000 was recorded in the third quarter 2020 compared to no provision taken in the third quarter 2019.  Net loan recoveries for the third quarter 2020 were $203,000, compared to second quarter 2020 net loan chargeoffs of $4.0 million and third quarter 2019 net loan recoveries of $259,000.  The large provision in the second quarter 2020 was primarily due to a $4.1 million charge-off on a single loan relationship in the movie theater business.  The Company has no other borrowers in that particular industry, and believes the loss was an isolated incident.  At September 30, 2020, the Company had experienced net loan recoveries in twenty-one of the past twenty-three quarters.  Total loans past due on payments by 30 days or more amounted to $524,000 at September 30, 2020, down from $3.3 million at June 30, 2020 and up from $207,000 at September 30, 2019.  Delinquency as a percentage of total loans was 0.03 percent at September 30, 2020, well below the Company’s peer level.

The allowance for loan losses of $16.6 million was 1.07 percent of total loans at September 30, 2020, compared to 1.01 percent of total loans at June 30, 2020, and 1.24 percent at September 30, 2019.  The ratio at September 30, 2020 and at June 30, 2020 includes the PPP loans originated in the second and third quarters, which are fully guaranteed by the SBA and receive no allowance allocation.  The ratio at September 30, 2020 and June 30, 2020 excluding PPP loans was 1.38% and 1.29%, respectively.  The coverage ratio of allowance for loan losses to nonperforming loans continued to be strong and significantly exceeded 1-to-1 coverage at 85-to-1 as of September 30, 2020.

The CARES Act enacted in the first quarter of 2020 allowed the Company to provide payment relief to borrowers that were current on their loan terms at December 31, 2019 without being required to identify those loans as troubled debt restructurings, essentially allowing the presumption of the borrowers not being in financial difficulty.  The Company granted 726 of these modifications with principal balances totaling $337.2 million in the first through third quarters of 2020, the large majority of which were granting interest only period of 90 days.  Some borrowers were granted an additional 90 day modification.  By September 30, 2020, approximately 75 percent of the modifications granted had expired and the loans were back to their contractual terms.  The table below shows the number of loans and balances that were under such modifications as of the end of the quarter for the dates indicated.

 
Dollars in 000s
 
Number of
COVID-19
Modifications
   
Balance of
COVID-19
Modifications
 
March 31, 2020
   
176
   
$
87,917
 
June 30, 2020
   
599
     
297,269
 
September 30, 2020
   
26
     
79,894
 

At September 30, 2020, the Company's nonperforming loans were $195,000, representing 0.01 percent of total loans.  This compares to $3.0 million (0.19 percent of total loans) at June 30, 2020 and $211,000 (0.02 percent of total loans) at September 30, 2019.  Other real estate owned and repossessed assets were $2.6 million at September 30, 2020, compared to $2.6 million at June 30, 2020 and $3.1 million at September 30, 2019. Total non-performing assets, including other real estate owned and nonperforming loans, were $2.8 million, or 0.11 percent of total assets, at September 30, 2020.  Total nonperforming assets, including other real estate owned and nonperforming loans, decreased by $501,000 from September 30, 2019 to September 30, 2020.


Macatawa Bank Corporation 3Q Results / page 5 of 7

A break-down of non-performing loans is shown in the table below.

 
Dollars in 000s
 
Sept 30,
2020
   
Jun 30,
2020
   
Mar 31,
2020
   
Dec 31,
2019
   
Sept 30,
2019
 
                               
Commercial Real Estate
 
$
97
   
$
2,857
   
$
5,908
   
$
98
   
$
102
 
Commercial and Industrial
   
---
     
---
     
1,211
     
---
     
---
 
Total Commercial Loans
   
97
     
2,857
     
7,119
     
98
     
102
 
Residential Mortgage Loans
   
98
     
100
     
103
     
105
     
109
 
Consumer Loans
   
---
     
---
     
8
     
---
     
---
 
Total Non-Performing Loans
 
$
195
   
$
2,957
   
$
7,230
   
$
203
   
$
211
 

A break-down of non-performing assets is shown in the table below.

 
Dollars in 000s
 
Sept 30,
2020
   
Jun 30,
2020
   
Mar 31,
2020
   
Dec 31,
2019
   
Sept 30,
2019
 
                               
Non-Performing Loans
 
$
195
   
$
2,957
   
$
7,230
   
$
203
   
$
211
 
Other Repossessed Assets
   
---
     
---
     
---
     
---
     
---
 
Other Real Estate Owned
   
2,624
     
2,624
     
2,626
     
2,748
     
3,109
 
Total Non-Performing Assets
 
$
2,819
   
$
5,581
   
$
9,856
   
$
2,951
   
$
3,320
 

Balance Sheet, Liquidity and Capital

Total assets were $2.51 billion at September 30, 2020, an increase of $57.6 million from $2.45 billion at June 30, 2020 and an increase of $364.2 million from $2.14 billion at September 30, 2019.  Assets were elevated at September 30, 2020 and June 30, 2020 due to customers holding a higher level of deposits during the COVID-19 pandemic, including unused balances from PPP loan proceeds, particularly in the second quarter 2020.  Total loans were $1.54 billion at September 30, 2020, a decrease of $20.4 million from $1.56 billion at June 30, 2020 and an increase of $165.1 million from $1.38 billion at September 30, 2019.

Commercial loans increased by $239.3 million from September 30, 2019 to September 30, 2020, partially offset by a decrease of $60.2 million in the residential mortgage portfolio, and a decrease of $14.0 million in the consumer loan portfolio.  Commercial real estate loans decreased by $21.5 million while commercial and industrial loans increased by $260.8 million during the same period.  The growth in commercial and industrial loans was due to PPP loan originations primarily during the second quarter 2020.

The composition of the commercial loan portfolio is shown in the table below:

 
Dollars in 000s
 
Sept 30,
2020
   
Jun 30,
2020
   
Mar 31,
2020
   
Dec 30,
2019
   
Sept 30,
2019
 
                               
Construction and Development
 
$
121,578
   
$
127,094
   
$
135,648
   
$
134,710
   
$
117,782
 
Other Commercial Real Estate
   
437,345
     
442,862
     
457,003
     
463,748
     
462,686
 
Commercial Loans Secured by Real Estate
   
558,923
     
569,956
     
592,651
     
598,458
     
580,468
 
Commercial and Industrial (1)
   
752,918
     
740,761
     
527,590
     
499,572
     
492,085
 
Total Commercial Loans
 
$
1,311,841
   
$
1,310,717
   
$
1,120,241
   
$
1,098,030
   
$
1,072,553
 


(1)
Includes $339.2 million and $335.7 million in PPP loans at September 30, 2020 and June 30, 2020


Macatawa Bank Corporation 3Q Results / page 6 of 7

Total deposits were $2.17 billion at September 30, 2020, up $52.3 million, or 2.5 percent, from $2.12 billion at June 30, 2020 and were up $350.4 million, or 19.3 percent, from $1.82 billion at September 30, 2019.  The Company’s municipal customers typically experience seasonal growth in their balances during the third quarter. Demand deposits were up $276.0 million in the third quarter 2020 compared to the third quarter 2019.  Money market deposits and savings deposits were up $43.9 million from the second quarter 2020 and were up $108.2 million from the third quarter 2019.  Certificates of deposit were down $18.3 million at September 30, 2020 compared to June 30, 2020 and were down $33.8 million compared to September 30, 2019 as customers reacted to changes in market interest rates.  As deposit rates have dropped, the Company has experienced some shifting between deposit types and, overall, deposit customers are holding higher levels of liquid deposit balances in the low interest rate environment and due to uncertainty related to the COVID-19 pandemic.  The Company continues to be successful at attracting and retaining core deposit customers.  Customer deposit accounts remain insured to the highest levels available under FDIC deposit insurance.

The Company's total risk-based regulatory capital ratio at September 30, 2020 was higher than the ratios at both June 30, 2020 and September 30, 2019.  Macatawa Bank’s risk-based regulatory capital ratios continue to be at levels comfortably above those required to be categorized as “well capitalized” under applicable regulatory capital guidelines.  As such, the Bank was categorized as "well capitalized" at September 30, 2020.

About Macatawa Bank
Headquartered in Holland, Mich., Macatawa Bank offers a full range of banking, retail and commercial lending, wealth management and ecommerce services to individuals, businesses and governmental entities from a network of 26 full-service branches located throughout communities in Kent, Ottawa and northern Allegan counties.  The bank is recognized for its local management team and decision making, along with providing customers excellent service, a rewarding experience and superior financial products. Macatawa Bank has been recognized for ten years as “West Michigan’s 101 Best and Brightest Companies to Work For”. For more information, visit www.macatawabank.com.


Macatawa Bank Corporation 3Q Results / page 7 of 7

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 risks and uncertainties related to, and the impact of, the global coronavirus (COVID-19) pandemic on the business, financial condition and results of operations of our company and our customers, 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, 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 “Part II, Item 1A – Risk Factors” in our Quarterly Report on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020 and in "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2019.  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)



 
Quarterly
   
Nine Months Ended
 
EARNINGS SUMMARY
  
3rd Qtr
2020
     
2nd Qtr
2020
     
3rd Qtr
2019
     
September 30
 
2020
   
2019
 
Total interest income
 
$
15,822
   
$
16,507
   
$
19,079
   
$
49,823
   
$
57,508
 
Total interest expense
   
1,148
     
1,460
     
3,243
     
4,799
     
9,696
 
Net interest income
   
14,674
     
15,047
     
15,836
     
45,024
     
47,812
 
Provision for loan losses
   
500
     
1,000
     
-
     
2,200
     
(450
)
Net interest income after provision for loan losses
   
14,174
     
14,047
     
15,836
     
42,824
     
48,262
 
                                         
NON-INTEREST INCOME
                                       
Deposit service charges
   
987
     
860
     
1,139
     
2,957
     
3,267
 
Net gains on mortgage loans
   
1,546
     
1,849
     
824
     
4,045
     
1,650
 
Trust fees
   
921
     
945
     
920
     
2,801
     
2,813
 
Other
   
2,638
     
2,200
     
2,330
     
7,101
     
6,909
 
Total non-interest income
   
6,092
     
5,854
     
5,213
     
16,904
     
14,639
 
                                         
NON-INTEREST EXPENSE
                                       
Salaries and benefits
   
6,480
     
5,766
     
6,272
     
18,937
     
18,895
 
Occupancy
   
1,026
     
949
     
966
     
2,984
     
3,055
 
Furniture and equipment
   
967
     
882
     
887
     
2,704
     
2,597
 
FDIC assessment
   
131
     
76
     
-
     
207
     
239
 
Problem asset costs, including losses and (gains)
   
25
     
17
     
46
     
103
     
114
 
Other
   
2,904
     
2,814
     
2,838
     
8,824
     
8,682
 
Total non-interest expense
   
11,533
     
10,504
     
11,009
     
33,759
     
33,582
 
Income before income tax
   
8,733
     
9,397
     
10,040
     
25,969
     
29,319
 
Income tax expense
   
1,613
     
1,759
     
1,882
     
4,800
     
5,512
 
Net income
 
$
7,120
   
$
7,638
   
$
8,158
   
$
21,169
   
$
23,807
 
                                         
Basic earnings per common share
 
$
0.21
   
$
0.22
   
$
0.24
   
$
0.62
   
$
0.70
 
Diluted earnings per common share
 
$
0.21
   
$
0.22
   
$
0.24
   
$
0.62
   
$
0.70
 
Return on average assets
   
1.12
%
   
1.31
%
   
1.59
%
   
1.22
%
   
1.59
%
Return on average equity
   
12.29
%
   
13.50
%
   
15.69
%
   
12.48
%
   
15.80
%
Net interest margin (fully taxable equivalent)
   
2.43
%
   
2.74
%
   
3.29
%
   
2.77
%
   
3.43
%
Efficiency ratio
   
55.54
%
   
50.26
%
   
52.30
%
   
54.51
%
   
53.77
%

BALANCE SHEET DATA
  
September 30
2020
     
June 30
2020
     
September 30
2019
  
Assets
Cash and due from banks
 
$
28,294
   
$
33,079
   
$
50,870
 
Federal funds sold and other short-term investments
   
504,706
     
426,926
     
319,566
 
Debt securities available for sale
   
229,928
     
229,489
     
209,895
 
Debt securities held to maturity
   
91,394
     
89,195
     
81,995
 
Federal Home Loan Bank Stock
   
11,558
     
11,558
     
11,558
 
Loans held for sale
   
3,508
     
1,677
     
1,317
 
Total loans
   
1,542,335
     
1,562,688
     
1,377,227
 
Less allowance for loan loss
   
16,558
     
15,855
     
17,145
 
Net loans
   
1,525,777
     
1,546,833
     
1,360,082
 
Premises and equipment, net
   
43,733
     
43,052
     
43,956
 
Bank-owned life insurance
   
42,368
     
42,654
     
41,960
 
Other real estate owned
   
2,624
     
2,624
     
3,109
 
Other assets
   
24,828
     
24,061
     
20,190
 
                         
Total Assets
 
$
2,508,718
   
$
2,451,148
   
$
2,144,498
 
                         
Liabilities and Shareholders' Equity
                       
Noninterest-bearing deposits
 
$
738,471
   
$
748,624
   
$
501,731
 
Interest-bearing deposits
   
1,432,108
     
1,369,667
     
1,318,409
 
Total deposits
   
2,170,579
     
2,118,291
     
1,820,140
 
Other borrowed funds
   
70,000
     
70,000
     
60,000
 
Long-term debt
   
20,619
     
20,619
     
41,238
 
Other liabilities
   
13,655
     
12,900
     
11,335
 
Total Liabilities
   
2,274,853
     
2,221,810
     
1,932,713
 
                         
Shareholders' equity
   
233,865
     
229,338
     
211,785
 
                         
Total Liabilities and Shareholders' Equity
 
$
2,508,718
   
$
2,451,148
   
$
2,144,498
 


MACATAWA BANK CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands except per share information)


   
Quarterly
   
Year to Date
 
                                           
   
3rd Qtr
2020
   
2nd Qtr
2020
   
1st Qtr
2020
   
4th Qtr
2019
   
3rd Qtr
2019
   
2020
   
2019
 
EARNINGS SUMMARY
                                         
Net interest income
 
$
14,674
   
$
15,047
   
$
15,303
   
$
15,675
   
$
15,836
   
$
45,024
   
$
47,812
 
Provision for loan losses
   
500
     
1,000
     
700
     
-
     
-
     
2,200
     
(450
)
Total non-interest income
   
6,092
     
5,854
     
4,959
     
5,089
     
5,213
     
16,904
     
14,639
 
Total non-interest expense
   
11,533
     
10,504
     
11,722
     
10,643
     
11,009
     
33,759
     
33,582
 
Federal income tax expense
   
1,613
     
1,759
     
1,429
     
1,949
     
1,882
     
4,800
     
5,512
 
Net income
 
$
7,120
   
$
7,638
   
$
6,411
   
$
8,172
   
$
8,158
   
$
21,169
   
$
23,807
 
                                                         
Basic earnings per common share
 
$
0.21
   
$
0.22
   
$
0.19
   
$
0.24
   
$
0.24
   
$
0.62
   
$
0.70
 
Diluted earnings per common share
 
$
0.21
   
$
0.22
   
$
0.19
   
$
0.24
   
$
0.24
   
$
0.62
   
$
0.70
 
                                                         
MARKET DATA
                                                       
Book value per common share
 
$
6.86
   
$
6.72
   
$
6.56
   
$
6.38
   
$
6.22
   
$
6.86
   
$
6.22
 
Tangible book value per common share
 
$
6.86
   
$
6.72
   
$
6.56
   
$
6.38
   
$
6.22
   
$
6.86
   
$
6.22
 
Market value per common share
 
$
6.53
   
$
7.82
   
$
7.12
   
$
11.13
   
$
10.39
   
$
6.53
   
$
10.39
 
Average basic common shares
   
34,109,901
     
34,108,982
     
34,106,719
     
34,080,275
     
34,060,796
     
34,108,676
     
34,048,087
 
Average diluted common shares
   
34,109,901
     
34,108,982
     
34,106,719
     
34,080,275
     
34,060,796
     
34,108,676
     
34,048,087
 
Period end common shares
   
34,101,320
     
34,114,901
     
34,107,995
     
34,103,542
     
34,061,080
     
34,101,320
     
34,061,080
 
                                                         
PERFORMANCE RATIOS
                                                       
Return on average assets
   
1.12
%
   
1.31
%
   
1.27
%
   
1.59
%
   
1.59
%
   
1.22
%
   
1.59
%
Return on average equity
   
12.29
%
   
13.50
%
   
11.63
%
   
15.27
%
   
15.69
%
   
12.48
%
   
15.80
%
Net interest margin (fully taxable equivalent)
   
2.43
%
   
2.74
%
   
3.25
%
   
3.24
%
   
3.29
%
   
2.77
%
   
3.43
%
Efficiency ratio
   
55.54
%
   
50.26
%
   
57.85
%
   
51.26
%
   
52.30
%
   
54.51
%
   
53.77
%
Full-time equivalent employees (period end)
   
327
     
335
     
331
     
325
     
327
     
327
     
327
 
                                                         
ASSET QUALITY
                                                       
Gross charge-offs
 
$
24
   
$
4,183
   
$
39
   
$
33
   
$
48
   
$
4,246
   
$
246
 
Net charge-offs/(recoveries)
 
$
(203
)
 
$
4,034
   
$
(989
)
 
$
(55
)
 
$
(259
)
 
$
2,842
   
$
(719
)
Net charge-offs to average loans (annualized)
   
-0.05
%
   
1.03
%
   
-0.29
%
   
-0.02
%
   
-0.08
%
   
0.25
%
   
-0.07
%
Nonperforming loans
 
$
195
   
$
2,957
   
$
7,230
   
$
203
   
$
211
   
$
195
   
$
211
 
Other real estate and repossessed assets
 
$
2,624
   
$
2,624
   
$
2,626
   
$
2,748
   
$
3,109
   
$
2,624
   
$
3,109
 
Nonperforming loans to total loans
   
0.01
%
   
0.19
%
   
0.52
%
   
0.01
%
   
0.02
%
   
0.01
%
   
0.02
%
Nonperforming assets to total assets
   
0.11
%
   
0.23
%
   
0.49
%
   
0.14
%
   
0.15
%
   
0.11
%
   
0.15
%
Allowance for loan losses
 
$
16,558
   
$
15,855
   
$
18,889
   
$
17,200
   
$
17,145
   
$
16,558
   
$
17,145
 
Allowance for loan losses to total loans
   
1.07
%
   
1.01
%
   
1.35
%
   
1.24
%
   
1.24
%
   
1.07
%
   
1.24
%
Allowance for loan losses to total loans (excluding PPP loans)
   
1.38
%
   
1.29
%
   
1.35
%
   
1.24
%
   
1.24
%
   
1.38
%
   
1.24
%
Allowance for loan losses to nonperforming loans
   
8491.28
%
   
536.19
%
   
261.26
%
   
8472.91
%
   
8125.59
%
   
8491.28
%
   
8125.59
%
                                                         
CAPITAL
                                                       
Average equity to average assets
   
9.07
%
   
9.68
%
   
10.93
%
   
10.42
%
   
10.15
%
   
9.82
%
   
10.08
%
Common equity tier 1 to risk weighted assets (Consolidated)
   
15.30
%
   
14.92
%
   
13.43
%
   
13.46
%
   
13.23
%
   
15.30
%
   
13.23
%
Tier 1 capital to average assets (Consolidated)
   
9.78
%
   
10.49
%
   
11.90
%
   
11.49
%
   
12.22
%
   
9.78
%
   
12.22
%
Total capital to risk-weighted assets (Consolidated)
   
17.74
%
   
17.30
%
   
15.81
%
   
15.78
%
   
16.83
%
   
17.74
%
   
16.83
%
Common equity tier 1 to risk weighted assets (Bank)
   
16.18
%
   
15.81
%
   
14.23
%
   
14.26
%
   
15.31
%
   
16.18
%
   
15.31
%
Tier 1 capital to average assets (Bank)
   
9.52
%
   
10.21
%
   
11.56
%
   
11.15
%
   
11.88
%
   
9.52
%
   
11.88
%
Total capital to risk-weighted assets (Bank)
   
17.28
%
   
16.87
%
   
15.39
%
   
15.33
%
   
16.39
%
   
17.28
%
   
16.39
%
Common equity to assets
   
9.32
%
   
9.36
%
   
11.01
%
   
10.52
%
   
9.88
%
   
9.32
%
   
9.88
%
Tangible common equity to assets
   
9.32
%
   
9.36
%
   
11.01
%
   
10.52
%
   
9.88
%
   
9.32
%
   
9.88
%
                                                         
END OF PERIOD BALANCES
                                                       
Total portfolio loans
 
$
1,542,335
   
$
1,562,688
   
$
1,395,341
   
$
1,385,627
   
$
1,377,227
   
$
1,542,335
   
$
1,377,227
 
Earning assets
   
2,376,943
     
2,316,213
     
1,912,400
     
1,943,356
     
1,999,817
     
2,376,943
     
1,999,817
 
Total assets
   
2,508,718
     
2,451,148
     
2,031,090
     
2,068,770
     
2,144,498
     
2,508,718
     
2,144,498
 
Deposits
   
2,170,579
     
2,118,291
     
1,705,380
     
1,753,294
     
1,820,140
     
2,170,579
     
1,820,140
 
Total shareholders' equity
   
233,865
     
229,338
     
223,580
     
217,469
     
211,785
     
233,865
     
211,785
 
                                                         
AVERAGE BALANCES
                                                       
Total portfolio loans
 
$
1,542,838
   
$
1,571,544
   
$
1,384,465
   
$
1,377,051
   
$
1,348,417
   
$
1,499,774
   
$
1,371,507
 
Earning assets
   
2,416,072
     
2,216,193
     
1,897,236
     
1,931,333
     
1,921,346
     
2,177,374
     
1,872,195
 
Total assets
   
2,554,198
     
2,338,888
     
2,017,823
     
2,055,398
     
2,049,006
     
2,304,551
     
1,992,431
 
Deposits
   
2,215,509
     
2,007,258
     
1,701,994
     
1,727,946
     
1,728,657
     
1,975,799
     
1,681,137
 
Total shareholders' equity
   
231,702
     
226,288
     
220,538
     
214,112
     
208,031
     
226,196
     
200,847