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Bank Plans New Stock Offering
HOLLAND — The prospects for future growth similar to that experienced since its 1997 formation prompted Macatawa Bank Corp. to plan a secondary stock offering that executives hope will net upwards of $20 million.
The Holland-based Macatawa Bank plans to use the proceeds from the secondary public offering to pay off a $4 million debt and finance further growth.
“The opportunities for growth, and the growth we’ve been experiencing, have been phenomenal. If that continues we need to raise additional capital,” Macatawa Chairman Benjamin Smith III said.
Macatawa filed papers with the U.S. Securities and Exchange Commission on May 14, seeking permission to sell an additional 1.4 million at a maximum price of $17.40 per share. The actual price at which shares will sell, as well as the proceeds generated, depends on the bid price for shares the day the secondary offering begins.
“If we raise $20 million, that’d be great, and we expect we will,” Smith said.
Smith expects the new share offering to occur by mid-June. It will raise Macatawa Bank’s outstanding shares issued to more than 5 million. The underwriters will have a 30-day option to purchase and issue an additional 210,000 shares.
Macatawa Bank Corp. was founded in the wake of the 1996 acquisition of the former FMB Corp. of Zeeland by Columbus, Ohio-based Huntington Bancshares. Founders sought to tap into an emerging niche market for small banks that customers, in an era of industry consolidation, perceived as more attuned to the local market and customer needs.
The corporation opened its first branch office in November 1997 in downtown Zeeland and today has 13 banking offices in southern Ottawa County and southwestern Kent and northwestern Allegan counties. Macatawa plans to add two more offices in southwestern Kent County and an additional office north of Holland.
Macatawa’s SEC filing indicated the corporation wants to add many more offices in the years ahead.
“Our current intention for the next several years is to open at least two additional branches each year, subject to economic conditions, our continued success in penetrating new markets, our ability to find appropriate branch sites and hire qualified employees, our evaluation of costs and other factors,” the filing stated.
Macatawa Bank went public in April 1998 with an initial public offering that raised $14.1 million, which was on top of the $8.2 million provided by the bank’s original investors and founders. A subsequent offering to existing shareholders in June 1999 raised another $14.6 million.
As of March 31, Macatawa Bank had assets of $528.3 million and deposits of $417.7 million. Smith told shareholders at Macatawa Bank’s recent annual meeting that he’d like to see the corporation grow to $1 billion in assets and earnings of $10 million annually within five years.
The bank posted 2000 net income of $3.3 million, and earnings of $1.1 million in the first quarter of 2001.
The first quarter also saw Macatawa open more new accounts than ever before, more than 3,600. Smith attributes the new business largely to the recent acquisitions of the former Old Kent Bank and Ottawa Financial Corp. by Cincinnati-based Fifth Third Bancorp.