Macatawa Earnings Decline

July 16, 2007
Print
Text Size:
A A

HOLLAND — Macatawa Bank Corp. reported declines in both its quarterly and year-to-date income. Second quarter net income was $4.59 million, or 26 cents per diluted share, compared with net income of $5.76 million, or 33 cents per diluted share, for the year-ago quarter. Net income for the first six months of this year totaled $9.43 million, or 54 cents per diluted share, versus net income of $10.98 million, or 63 cents per share, for the first half of 2006.

Chairman and CEO Benjamin Smith said management is disappointed with the decline in earnings. He said weak economic conditions in Macatawa's markets continue to affect its operating performance. In particular, there was a noticeable deterioration in residential land development that had a profound affect on many banks throughout Michigan, he said.

"We knew these factors would challenge our earnings and asset growth, but the extent of weakness in this sector and its impact on our performance is greater than expected," Smith said. "While we are seeing signs of increased residential real estate activity, we recognize a sustained improvement will take time to fully benefit the businesses involved with land development."   

Non-performing loans are up $12 million since the end of the first quarter and $24 million since the June of last year. Most of the increases were in loans to residential land developers, according to the company. At June 30, non-performing loans were approximately $29 million and represented about 1.71 percent of total loans.

"We have instituted additional controls over our credit administration process and have been focused on reviewing out entire commercial portfolio," Smith noted. "We continue to work diligently on addressing these loan difficulties to put them behind us."

The bank noted that other than residential land development, the company's loan portfolios continue to perform well.

Macatawa opened it 26th branch during the quarter, the latest one located in CascadeTownship. Total assets increased $135 million from June 30, 2006, to $2.12 billion at June 30 this year. Over the same 12-month period, total loans increased $71.7 million and total deposits increased $88.9 million.    

Editor's Picks

Comments powered by Disqus