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Macatawa Bank earns $2.5M in 1Q
Macatawa Bank Corp. (Nasdaq: MCBC) said its first-quarter earnings of $2.5 million demonstrate it is “continuing its trend of improvement in key operating metrics and financial performance.”
Macatawa also announced that on April 12, it was released from its Memorandum of Understanding agreement made with government regulators, related to its problems in 2009.
Nonperforming loans were down 40 percent, compared to the first quarter last year, and costs associated with nonperforming assets were down 69 percent on the same comparison.
Macatawa reported net loan recoveries of $498,000 in the first quarter of 2013, with net loan recoveries in three of the last five quarters.
Net interest profit was down in the first quarter “due to competitive loan pricing pressure,” according to the bank.
Earnings of $3.6 million before tax in the first quarter, compared to $4.5 million a year ago, was attributed to “an unusually large loan recovery of $4.4 million in the first quarter a year ago.”
“The company’s results for the first quarter 2013 reflect solid improvement in our core business performance,” said Richard L. Postma, chairman of the board at Macatawa. “Our earnings on a pre-tax, pre-provision for loan losses basis were better this first quarter of 2013 compared to the first quarter of the prior year. At Dec. 31, 2012, we reversed our deferred tax asset valuation allowance, so the first quarter 2013 results are shown net of tax. This affects comparability to the first quarter 2012. Also in the first quarter 2012, we received a large recovery on a previously charged off loan, resulting in an unusually large negative provision for loan losses in that quarter. Considering these items, the first quarter 2013 shows a strong improvement over the first quarter 2012 results.”
Postma added that Macatawa had “high volumes” of residential mortgage originations in the first quarter, with gains on sales of loans of $825,000, almost double that of the first quarter a year ago.
On April 12, the Federal Deposit Insurance Corp. and the Michigan Department of Insurance and Financial Services (formerly Michigan Office of Financial and Insurance Regulation), notified the Macatawa that the bank’s Memorandum of Understanding with the FDIC and DIFS had served its purpose and was released.
A regulatory exam in 2009 resulted in a consent order under which Macatawa operated for two years.