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Macatawa Touts Big Growth Plans
After securing options for land in Rockford and Gaines Township, and with construction set to begin this fall on a Walker location, the Holland-based Macatawa Bank is on the way to having at least nine Kent County offices by the end of 2004.
Additional Kent County offices will come in subsequent years, as Macatawa Bank looks to build the same kind of branch network in the Grand Rapids area that it’s built since the late 1990s in the Holland-Zeeland market and northern Allegan County.
“We are looking at other opportunities to grow our franchise and look for growth to continue for some time,” President Phil Koning told brokerage analysts last week during a conference call to discuss the corporation’s second quarter financial results.
In a subsequent interview, Koning said Macatawa Bank was “toying with” placing new offices in East Grand Rapids, Cascade and Standale in the future if the right locations are found.
“Whatever opportunities come that we think will be good, we’ll take advantage of them,” Koning said.
To support the push into Kent County, which picked up considerable steam last year following the acquisition of the former Grand Bank Financial Corp. in Grand Rapids, Macatawa Bank has $20 million in new capital on hand that was raised last week through a pooled preferred security issuance.
The bank’s “tremendous growth plans” required the corporation to secure additional capital, Chairman and CEO Ben Smith said. The issuance will not dilute existing shares, he said.
Talk of the new Kent County offices came as Macatawa Bank announced another quarter of strong earnings.
Macatawa Bank reported net income of $2.9 million, or 35 cents per share, for the second quarter that ended June 30. That compares with net income of $2.3 million, or 28 cents per share, during the same period a year earlier.
Mid-year net income totaled $5.7 million, or 69 cents per share, up from the $3.8 million, or 54 cents per share, during the first six months of 2002.
“Everything seems to be working very well in our market. We’re pretty pleased with how things are progressing and the outlook for the rest of the year,” Smith told brokerage analysts.
Founded in late 1997, Macatawa Bank has 17 offices in Ottawa, Kent and northern Allegan counties with total assets as of June 30 of $1.25 billion.
The bank is presently building a sixth Kent County location, at Knapp Street and East Beltline, that will open later this year, and has acquired a site at Three Mile Road and Walker Avenue with plans to begin construction on a new office there in the spring, Koning said. Options have been secured on sites for new offices by the end of 2004 at 68th Street and Kalamazoo Avenue in Gaines Township and on 10 Mile Road in Rockford, where Macatawa will likely open a temporary storefront office downtown later this year.
In the year following the Grand Bank acquisition, Macatawa Bank executives were frustrated by the inability to find good locations to begin developing a strong branch network in the market, Koning said. The “right locations” have opened up in the last three months, he said.
“We’re kind of picky about where we wanted to go,” Koning said. “The right corners finally became available for sale.”
2Q 2003: $2.9 million, 35 cents EPS
2Q 2002: $2.3 million, 28 cents EPS
YTD 2003: $5.7 million, 69 cents EPS
YTD 2002: $3.8 million, 54 cents EPS
2Q 2003: $1.25 billion
1Q 2003: $1.20 billion
2Q 2003: $1.03 billion
1Q 2003: $1.01 billion
2Q 2003: $972.9 million
1Q 2003: $965.5 million