Macatawa Bank's Quarterly
Income Up 15 Percent
HOLLAND — Macatawa Bank Corp. posted net income of $5.22 million for the first quarter of 2006, an increase of 15 percent over first quarter 2005 net income. Diluted earnings per share totaled 50 cents for the quarter versus 44 cents in the year-ago quarter.
Total assets were up $34 million to $1.9 billion at quarter’s end. Growth in total assets for the quarter was led by a $42.3 million increase in total loans, of which $37 million was commercial loans. Asset growth was primarily driven by a $34.8 million increase in deposits.
First quarter net interest was up 10 percent to $16.3 million, which was attributed primarily to an increase in average earning assets of 11 percent, or $175.4 million, for the quarter. Non-interest income was $3.2 million, reflecting an increase of $521,000 over the first quarter of 2005.
CFO Jon Swets said strong growth in net interest income as well as non-interest income drove the improvement in the bank’s bottom-line performance in the quarter. He noted that customer preferences toward time-deposit CDs have continued, and that seems to be the case industry-wide.
According to Macatawa, increases in financial service offerings to customers, including trust, brokerage and deposit services, more than offset a decline in gains on the sale of mortgage loans. Macatawa experienced “very good” new account activity, Swets noted. In fact, the company generated new accounts that will generate $130,000 in annualized new fee income this year, he pointed out. The company’s brokerage arm, too, produced a strong increase in revenues.
“We continue to plan for future growth and have set strong goals for ourselves in 2006 and the staff to achieve them,” Swets remarked. “We’ve added to our lending staff over the last six to nine months and pulled as many operational activities as possible out of the branches and centralized them so the branches can focus on service and selling.”
Philip Koning, president and CEO, said the fundamental concept of growing the bank and expanding its market share is moving forward. He said he was especially pleased with the bank’s loan growth in the quarter, given the competitive environment both from a pricing and credit structure standpoint.
Macatawa opened a record number of new deposit accounts in the first quarter, and the number of new households and new business accounts opened increased 15 percent compared with the first quarter of 2005.
“We believe this is the result of cross-selling to our existing customer base, our new Switch Anywhere campaign, and our focus on business development. Our geographic expansion and our ability to attract more customers from our existing marketplace should bear fruit for us as the year progresses. Management remains very confident that we will meet our earnings objectives and our growth objectives for the year 2006.”
Switch Anywhere is a free service the bank started in February to help new and existing customers transfer their accounts over to Macatawa.