Macatawas Earnings Slide
Net income for 2007 was $9.08 million, or 53 cents per diluted share, compared with net income of $19.83 million, or $1.14 per share for 2006.
"As we told the investment community in December, we considered these extra provisions both necessary and prudent in light of
Macatawa's credit exposure is primarily isolated in residential development loans, which are a declining portion of its total portfolio, the company said. Macatawa has no exposure to sub-prime mortgage loans.
The company's non-performing loans increased $25.2 million during the fourth quarter to $73.9 million, representing about 4.22 percent of total loans as of Dec. 31. Macatawa indicated that loans to residential developers comprised most of the increased in non-performing loans. Management believes that with the additional provisions in the fourth quarter, non-performing loans are either well collateralized of adequately reserved.
Smith said the bank has made every effort to identify its credit exposure based on the current environment.
"We remain well-capitalized," he observed. "Our loan loss reserve is a healthy 1.91 percent of total loans, we have a strong balance sheet and we remain profitable."