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 "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2020.  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

1st Qtr

2021

4th Qtr

2020

3rd Qtr

2020

2nd Qtr

2020

1st Qtr

2020

EARNINGS SUMMARY

Net interest income

$

14,490

$

16,513

$

14,674

$

15,047

$

15,303

Provision for loan losses

-

800

500

1,000

700

Total non-interest income

6,539

7,072

6,092

5,854

4,959

Total non-interest expense

11,485

11,966

11,533

10,504

11,722

Federal income tax expense

1,766

1,822

1,613

1,759

1,429

Net income

$

7,778

$

8,997

$

7,120

$

7,638

$

6,411

Basic earnings per common share

$

0.23

$

0.26

$

0.21

$

0.22

$

0.19

Diluted earnings per common share

$

0.23

$

0.26

$

0.21

$

0.22

$

0.19

MARKET DATA

Book value per common share

$

7.09

$

7.01

$

6.86

$

6.72

$

6.56

Tangible book value per common share

$

7.09

$

7.01

$

6.86

$

6.72

$

6.56

Market value per common share

$

9.95

$

8.37

$

6.53

$

7.82

$

7.12

Average basic common shares

34,195,526

34,154,820

34,109,901

34,108,982

34,106,719

Average diluted common shares

34,195,526

34,154,820

34,109,901

34,108,982

34,106,719

Period end common shares

34,193,132

34,197,519

34,101,320

34,114,901

34,107,995

PERFORMANCE RATIOS

Return on average assets

1.17

%

1.39

%

1.12

%

1.31

%

1.27

%

Return on average equity

12.91

%

15.24

%

12.29

%

13.50

%

11.63

%

Net interest margin (fully taxable equivalent)

2.33

%

2.69

%

2.43

%

2.74

%

3.25

%

Efficiency ratio

54.62

%

50.74

%

55.54

%

50.26

%

57.85

%

Full-time equivalent employees (period end)

327

328

327

335

331

ASSET QUALITY

Gross charge-offs

$

50

$

22

$

24

$

4,183

$

39

Net charge-offs/(recoveries)

$

(44

)

$

(50

)

$

(203

)

$

4,034

$

(989

)

Net charge-offs to average loans (annualized)

-0.01

%

-0.01

%

-0.05

%

1.03

%

-0.29

%

Nonperforming loans

$

525

$

533

$

195

$

2,957

$

7,230

Other real estate and repossessed assets

$

2,371

$

2,537

$

2,624

$

2,624

$

2,626

Nonperforming loans to total loans

0.04

%

0.04

%

0.01

%

0.19

%

0.52

%

Nonperforming assets to total assets

0.11

%

0.12

%

0.11

%

0.23

%

0.49

%

Allowance for loan losses

$

17,452

$

17,408

$

16,558

$

15,855

$

18,889

Allowance for loan losses to total loans

1.26

%

1.22

%

1.07

%

1.01

%

1.35

%

Allowance for loan losses to total loans (excluding PPP loans)

1.55

%

1.45

%

1.38

%

1.29

%

1.35

%

Allowance for loan losses to nonperforming loans

3324.19

%

3266.04

%

8491.28

%

536.19

%

261.26

%

CAPITAL

Average equity to average assets

9.04

%

9.11

%

9.07

%

9.68

%

10.93

%

Common equity tier 1 to risk weighted assets (Consolidated)

16.73

%

15.79

%

15.30

%

14.92

%

13.43

%

Tier 1 capital to average assets (Consolidated)

9.80

%

9.89

%

9.78

%

10.49

%

11.90

%

Total capital to risk-weighted assets (Consolidated)

19.33

%

18.29

%

17.74

%

17.30

%

15.81

%

Common equity tier 1 to risk weighted assets (Bank)

17.60

%

16.67

%

16.18

%

15.81

%

14.23

%

Tier 1 capital to average assets (Bank)

9.52

%

9.63

%

9.52

%

10.21

%

11.56

%

Total capital to risk-weighted assets (Bank)

18.81

%

17.84

%

17.28

%

16.87

%

15.39

%

Common equity to assets

8.87

%

9.08

%

9.32

%

9.36

%

11.01

%

Tangible common equity to assets

8.87

%

9.08

%

9.32

%

9.36

%

11.01

%

END OF PERIOD BALANCES

Total portfolio loans

$

1,382,951

$

1,429,331

$

1,542,335

$

1,562,688

$

1,395,341

Earning assets

2,611,093

2,510,882

2,376,943

2,316,213

1,912,400

Total assets

2,734,341

2,642,026

2,508,718

2,451,148

2,031,090

Deposits

2,387,945

2,298,587

2,170,579

2,118,291

1,705,380

Total shareholders' equity

242,379

239,843

233,865

229,338

223,580

AVERAGE BALANCES

Total portfolio loans

$

1,401,399

$

1,481,054

$

1,542,838

$

1,571,544

$

1,384,465

Earning assets

2,537,300

2,457,746

2,416,072

2,216,193

1,897,236

Total assets

2,666,802

2,590,875

2,554,198

2,338,888

2,017,823

Deposits

2,321,012

2,249,679

2,215,509

2,007,258

1,701,994

Total shareholders' equity

241,023

236,127

231,702

226,288

220,538