Macatawas Quarterly Income Drops

HOLLAND — Macatawa Bank Corp.’s net income for the first quarter was nearly half of what it was a year ago. The company reported net income $2.44 million, or 14 cents per share, for the just passed quarter, versus $4.84 million, or 28 cents per share, in the first quarter of 2007.

Macatawa recorded loan loss provisions of $2.7 million in the first quarter of this year, which led to the reduced earnings in the current quarter, the company noted. The loan loss reserve was 1.81 percent, a level management said it considers appropriate based upon the current environment. Michigan’s economy continues to struggle and further weakening has occurred across the broader national economy, Chairman and CEO Ben Smith pointed out.

“During these difficult times, we remain cautious and conservative in our approach to asset quality. Although significant, the loan loss provision is down form the last quarter as we have worked hard to manage our credit position,” Smith said. “We are making good progress at identifying and working through our problem loans while achieving greater clarity of our ultimate loss exposure.”

Total loans increased $43.2 million since March 31 last year to $1.76 billion at March 31 this year, and the bulk of them were consumer mortgages. Within the commercial loan portfolio, there was a slight shift between commercial real estate and commercial and industrial loans, Macatawa reported: Commercial real estate loans declined $19.8 million while industrial loans grew by $4.1 million since March 31, 2007.

Total assets increased $19.2 million since March 31, 2007 to $2.12 billion at March 31, 2008.