- change ups
Macatawa Bank year-end income jumps to $35M
Macatawa Bank Corp. (Nasdaq: MCBC) in Holland has reported net income on common shares of $21.2 million in the fourth quarter of 2012 and $35.5 million for the entire year or $1.31 per diluted share.
In 2011, Macatawa's net earnings came in at $5.8 million or 26 cents per share.
Reversal of the bank’s deferred tax asset valuation allowance of $18.9 million in the fourth quarter made a big difference in that quarter and the year-end earnings.
There was growth in net loans for the fourth quarter, the first quarterly increase in total loans in four years, and Macatawa also reported continued improvement in loan-portfolio quality.
“The company’s results for the fourth quarter and the full year of 2012 reflect solid improvement in our core business performance enhanced by favorable one-time events,” said Richard L. Postma, chairman of the Macatawa board.
“Large recoveries throughout the year of previously charged-off loans and a large loan pre-payment fee led to significant increases in earnings in 2012," Postma said. "The DTA allowance reversal was particularly important, as it would not have been possible without the significant improvement in our three year cumulative earnings results.”
Postma said the bank’s core business performance is also improving.
“Excluding the impact of the DTA allowance reversal, net income would have been $2.4 million for the fourth quarter of 2012, up from $1.1 million in the same period of the prior year, with much of the improvement due to reductions in non-performing asset costs, which were down $1 million," he said. "Another significant development was our return to loan growth. Total loans grew $33.2 million in the fourth quarter 2012.
“This is the first quarterly growth in loans the bank has experienced since the fourth quarter of 2008," Postma said. "Our retail banking efforts resulted in growth in core deposits of $41.5 million for the fourth quarter 2012 and $71 million for the full year 2012 and also resulted in large mortgage-origination volumes, producing strong gains on sales of loans for the same periods."
The Federal Reserve Bank terminated Macatawa’s Written Agreement in the fourth quarter, following termination of the Consent Order by the Federal Deposit Insurance Corp. and the Michigan Office of Financial and Insurance Regulation in the first quarter of 2012.
Postma said Macatawa’s capital ratios on Dec. 31 were the highest levels in the bank’s history.
The bank's stock price closed at $4.31 on yesterday. The price closed at $3.00 on Feb. 3 last year.