Macatawa Bank Corporation Reports Fourth Quarter and Full Year 2020 Results

Rhea-AI Summary

Macatawa Bank Corporation (NASDAQ: MCBC) reported a net income of $9.0 million for Q4 2020, up 10% from $8.2 million in Q4 2019. Annual net income decreased 6% to $30.2 million in 2020, impacted by the pandemic. The bank set aside $800,000 for loan losses in Q4 2020, driven by economic uncertainties. Net interest margin rose to 2.69%, bolstered by $113.5 million in PPP loan forgiveness. Total deposits surged 31% year-over-year to $2.30 billion. The company maintained strong capital levels, categorizing as “well capitalized,” despite challenges posed by COVID-19.

Positive

• Net income increased by 10% in Q4 2020 compared to the same quarter in 2019.
• Total deposits grew by 31% year-over-year, indicating strong customer trust and retention.
• Net interest margin improved to 2.69% due to forgiveness of PPP loans.
• Over 99% of modified loans under the CARES Act returned to contractual terms by year-end.

Negative

• Full year net income decreased by 6% compared to 2019, reflecting pandemic impacts.
• Provision for loan losses increased to $800,000 in Q4 2020, a sign of economic strain.

HOLLAND, Mich., Jan. 28, 2021 (GLOBE NEWSWIRE) -- Macatawa Bank Corporation (NASDAQ: MCBC), the holding company for Macatawa Bank (collectively, the “Company”), today announced its results for the fourth quarter and full year of 2020.

• Net income of $9.0 million in fourth quarter 2020 versus $8.2 million in fourth quarter 2019 – up 10%
• Full year 2020 net income of $30.2 million versus $32.0 million in 2019 – down just 6% despite COVID-19 pandemic challenges
• Provision for loan losses of $800,000 in the fourth quarter 2020 versus no provision in the fourth quarter 2019, due to additional qualitative allocations for effects of COVID-19 pandemic on economic conditions
• Net interest margin increased 26 basis points to 2.69% during the fourth quarter 2020 primarily due to unamortized fees recognized upon forgiveness of $113.5 million of Paycheck Protection Program (“PPP”) loans in the quarter
• Growth in non-interest income of $2.0 million (39%) from fourth quarter 2019 driven by increased gains on sales of mortgage loans
• Loan portfolio balances up by $43.7 million (3%) from fourth quarter 2019, driven by PPP loans
• Over 99% of loan balances modified under CARES Act have returned to contractual terms at December 31, 2020
• Core deposit balances up by $545.3 million (31%) from fourth quarter 2019
• Capital and liquidity levels increased further during the quarter and remain strong
  

The Company reported net income of $9.0 million, or $0.26 per diluted share, in the fourth quarter 2020 compared to $8.2 million, or $0.24 per diluted share, in the fourth quarter 2019. For the full year 2020, the Company reported net income of $30.2 million, or $0.88 per diluted share, compared to $32.0 million, or $0.94 per diluted share, for the same period in 2019.

"We are pleased to report solid profitability for the fourth quarter of 2020 and for the full year 2020,” said Ronald L. Haan, President and CEO of the Company. “The COVID-19 pandemic has continued to have a significant impact on our community, but the Company has again proven resilient and consistent in serving the financial needs of our customers and our community. We were active participants in the Small Business Administration’s Paycheck Protection Program (PPP) and originated 1,738 PPP loans totaling $346.7 million in 2020. The loans were distributed to many local small businesses in order to protect jobs and allow continued paychecks to employees in those companies. The SBA distributed $113.5 million in forgiveness disbursements related to these PPP loans during the fourth quarter 2020. We are participating in this program again in 2021 as reauthorized by Congress.

Despite a challenging environment, we produced $9.0 million in earnings for the fourth quarter and $30.2 million for the full year 2020. Mortgage gains in the fourth quarter of 2020 were over three times the level achieved a year ago and offset much of the reduction in net interest income caused by the decrease in market interest rates in 2020. An increase in provision for loan losses was the primary reason for the reduction in net income in the full year 2020 compared to 2019, as we increased our allowance for loan losses due to effects of the COVID-19 pandemic on economic conditions.”  

Mr. Haan concluded: "We continue to monitor challenges relating to the impact of COVID-19 on our customers and our business. We have actively worked with our borrowers to provide payment relief where possible, and over 99 percent of the balance of loans that had been modified during the COVID-19 pandemic have either paid off or have returned to their contractual loan payment terms. We look forward to further supporting the communities we serve through additional PPP lending, and we believe our strong balance sheet should provide the strength and stability to weather the remainder of these difficult times.”

Operating Results
Net interest income for the fourth quarter 2020 totaled $16.5 million, an increase of $1.8 million from the third quarter 2020 and an increase of $838,000 from the fourth quarter 2019. Net interest margin for the fourth quarter 2020 was 2.69 percent, up 26 basis points from the third quarter 2020, and down 55 basis points from the fourth quarter 2019. Net interest income for the fourth quarter 2020 benefitted from amortization of $3.2 million in fees from loans issued under the PPP in the second and third quarters of 2020. These fees are amortized over the loans’ contractual maturity, which is 24 months or 60 months, as applicable. Upon SBA forgiveness, the remaining unamortized fees are recognized into interest income. At December 31, 2020, the Company had approved and received forgiveness disbursements from the SBA on 765 loans with balances totaling $113.5 million. The Company expects the related fee income amortization to continue to be elevated in the first quarter of 2021 as the SBA continues to process the larger, more complex, forgiveness applications, which will positively impact net interest income. Net interest margin was negatively impacted in the fourth quarter 2020 versus the third quarter 2020 by carrying significantly higher balances of federal funds sold due to the seasonal increase in deposits from municipal customers typically experienced. These balances, which earn only 10 basis points in interest, increased by $106.3 million, on average, from the third quarter 2020 and caused an 11 basis point decrease in net interest margin in the fourth quarter 2020. The most significant factor in the 55 basis point decrease in net interest margin from the fourth quarter 2019 to the fourth quarter 2020 was the impact of the 225 basis point decrease in the federal funds rate. Floor rates established by the Company on its variable rate loans over recent years served to soften the negative impact on net interest income of these federal funds rate decreases. Without these floors, net interest income for the quarter would have been lower than stated by approximately $1.0 million.

Average interest earning assets for the fourth quarter 2020 increased $41.7 million from the third quarter 2020 and were up $526.4 million from the fourth quarter 2019.   Increases in deposit balances, including seasonal municipal deposits and business customers holding higher balances at year end, accounted for the increase from third quarter 2020.  

Non-interest income increased $980,000 in the fourth quarter 2020 compared to the third quarter 2020 and increased $2.0 million from the fourth quarter 2019. Gains on sales of mortgage loans in the fourth quarter 2020 were up $886,000 compared to the third quarter 2020 and were up $1.7 million from the fourth quarter 2019. The Company originated $36.2 million in mortgage loans for sale in the fourth quarter 2020 compared to $40.8 million in the third quarter 2020 and $28.6 million in the fourth quarter 2019. Deposit service charges were up $86,000 in the fourth quarter 2020 compared to the third quarter 2020 and were down $74,000 compared to the fourth quarter 2019. These fees are lower than in recent years due to lower overdraft fees as customers have generally retained higher deposit balances due to uncertainty related to the COVID-19 pandemic.

Non-interest expense was $12.0 million for the fourth quarter 2020, compared to $11.5 million for the third quarter 2020 and $10.6 million for the fourth quarter 2019. The largest component of non-interest expense was salaries and benefit expenses. Salaries and benefit expenses were up $113,000 compared to the third quarter 2020 and were up $809,000 compared to the fourth quarter 2019. The increases compared to the fourth quarter 2019 were due to a combination of factors, including a higher level of salary and other compensation from staffing changes and merit increases, increased bonus accrual and variable based compensation from higher mortgage production and a higher level of medical insurance expense.   The table below identifies the primary components of the changes in salaries and benefits between periods.

Dollars in 000s		Q4 2020 to Q3 2020				Q4 2020 To Q4 2019
Salaries and other compensation		$	70			$	259
Salary deferral from commercial loans			(31	)			(27	)
Bonus accrual			152				320
Mortgage production – variable comp			51				129
401k matching contributions			(30	)			(4	)
Medical insurance costs			(99	)			132
Total change in salaries and benefits		$	113			$	809

Nonperforming asset expenses remained low in the fourth quarter 2020 at just $12,000 compared to $25,000 in the third quarter 2020 and $139,000 in the fourth quarter 2019. FDIC assessment expense was $194,000 in the fourth quarter 2020 and $131,000 in the third quarter 2020. There was no FDIC assessment expense in the fourth quarter 2019 as the FDIC assessment credits fully covered the assessment in that quarter. All of the Company’s FDIC assessment credits had been applied by the second quarter 2020, so expense increased in the last three quarters of 2020. Data processing expenses were up $287,000 in the fourth quarter 2020 compared to the third quarter 2020 and were up $295,000 compared to the fourth quarter 2019 due to online banking conversion related expenses incurred in the fourth quarter 2020. Other categories of non-interest expense were relatively flat compared to the third quarter 2020 and the fourth quarter 2019 due to a continued focus on expense management.

Federal income tax expense was $1.8 million for the fourth quarter 2020 compared to $1.6 million for the third quarter 2020 and $1.9 million for the fourth quarter 2019. Federal income tax expense for the fourth quarter 2020 benefitted from the reversal of $92,000 deferred tax valuation allowance at the end of 2020. The effective tax rate was 16.8 percent for the fourth quarter 2020, compared to 18.5 percent for the third quarter 2020 and 19.2 percent for the fourth quarter 2019.

Asset Quality
A provision for loan losses of $800,000 was recorded in the fourth quarter 2020 compared to $500,000 in the third quarter 2020 and no provision taken in the fourth quarter 2019. Net loan recoveries for the fourth quarter 2020 were $50,000, compared to third quarter 2020 net loan recoveries of $203,000 and fourth quarter 2019 net loan recoveries of $55,000. At December 31, 2020, the Company had experienced net loan recoveries in twenty-two of the past twenty-four quarters.   Total loans past due on payments by 30 days or more amounted to $581,000 at December 31, 2020, up slightly from $524,000 at September 30, 2020 and up from $405,000 at December 31, 2019. Delinquency as a percentage of total loans was 0.04 percent at December 31, 2020, well below the Company’s peer level.

The allowance for loan losses of $17.4 million was 1.22 percent of total loans at December 31, 2020, compared to 1.07 percent of total loans at September 30, 2020, and 1.24 percent at December 31, 2019. The ratio at December 31, 2020 and at September 30, 2020 includes the PPP loans originated in the second and third quarters, which are fully guaranteed by the SBA and receive no allowance allocation. The ratio at December 31, 2020 and September 30, 2020 excluding PPP loans was 1.45 percent and 1.38 percent, respectively. The coverage ratio of allowance for loan losses to nonperforming loans continued to be strong and significantly exceeded 1-to-1 coverage at 33-to-1 as of December 31, 2020.

The CARES Act enacted in the first quarter of 2020 allowed the Company to provide payment relief to borrowers that were current on their loan terms at December 31, 2019 without being required to identify those loans as troubled debt restructurings. The Company granted 733 of these modifications with principal balances totaling $337.2 million in 2020, the large majority of which were granted an interest only period of 90 days. Some borrowers were granted an additional 90 day modification. At December 31, 2020, over 99 percent of the modifications granted had expired and the loans were back to their contractual terms. The table below shows the number of loans and balances that were under such modifications as of the end of the quarter for the dates indicated.

Dollars in 000s		Number of COVID-19 Modifications			Balance of COVID-19 Modifications
March 31, 2020			176		$	87,917
June 30, 2020			599			297,269
September 30, 2020			26			79,894
December 31, 2020			6			2,018

At December 31, 2020, the Company's nonperforming loans were $533,000, representing 0.04 percent of total loans. This compares to $195,000 (0.01 percent of total loans) at September 30, 2020 and $203,000 (0.01 percent of total loans) at December 31, 2019. Other real estate owned and repossessed assets were $2.5 million at December 31, 2020, compared to $2.6 million at September 30, 2020 and $2.7 million at December 31, 2019. Total non-performing assets, including other real estate owned and nonperforming loans, were $3.1 million, or 0.12 percent of total assets, at December 31, 2020. Total nonperforming assets, including other real estate owned and nonperforming loans, decreased by $119,000 from December 31, 2019 to December 31, 2020.

A break-down of non-performing loans is shown in the table below.

Dollars in 000s		Dec 31, 2020			Sept 30, 2020			Jun 30, 2020			Mar 31, 2020			Dec 31, 2019
Commercial Real Estate		$	438		$	97		$	2,857		$	5,908		$	98
Commercial and Industrial			---			---			---			1,211			---
Total Commercial Loans			438			97			2,857			7,119			98
Residential Mortgage Loans			95			98			100			103			105
Consumer Loans			---			---			---			8			---
Total Non-Performing Loans		$	533		$	195		$	2,957		$	7,230		$	203

A break-down of non-performing assets is shown in the table below.

Dollars in 000s		Dec 31, 2020			Sept 30, 2020			Jun 30, 2020			Mar 31, 2020			Dec 31, 2019
Non-Performing Loans		$	533		$	195		$	2,957		$	7,230		$	203
Other Repossessed Assets			---			---			---			---			---
Other Real Estate Owned			2,537			2,624			2,624			2,626			2,748
Total Non-Performing Assets		$	3,070		$	2,819		$	5,581		$	9,856		$	2,951

Balance Sheet, Liquidity and Capital

Total assets were $2.64 billion at December 31, 2020, an increase of $133.3 million from $2.51 billion at September 30, 2020 and an increase of $573.3 million from $2.07 billion at December 31, 2019. Assets were elevated at December 31, 2020 and September 30, 2020 due to customers holding a higher level of deposits during the COVID-19 pandemic, including unused balances from PPP loan proceeds, particularly in the third quarter 2020. Total loans were $1.43 billion at December 31, 2020, a decrease of $113.0 million from $1.54 billion at September 30, 2020 and an increase of $43.7 million from $1.39 billion at December 31, 2019.

Commercial loans increased by $119.6 million from December 31, 2019 to December 31, 2020, partially offset by a decrease of $61.5 million in the residential mortgage portfolio, and a decrease of $14.4 million in the consumer loan portfolio. Commercial real estate loans decreased by $46.3 million, commercial and industrial loans decreased by $63.2 million and PPP loans increased by $229.1 million, net of SBA forgiveness received, during the same period.

The composition of the commercial loan portfolio is shown in the table below:

Dollars in 000s		Dec 31, 2020			Sept 30, 2020			Jun 30, 2020			Mar 31, 2020			Dec 31, 2019
Construction and Development		$	118,665		$	121,578		$	127,094		$	135,648		$	134,710
Other Commercial Real Estate			433,508			437,345			442,862			457,003			463,748
Commercial Loans Secured by Real Estate			552,173			558,923			569,956			592,651			598,458
Commercial and Industrial			436,331			413,702			405,093			527,590			499,572
Paycheck Protection Program			229,079			339,216			335,668			---			---
Total Commercial Loans		$	1,217,583		$	1,311,841		$	1,310,717		$	1,120,241		$	1,098,030

Total deposits were $2.30 billion at December 31, 2020, up $128.0 million, or 6 percent, from $2.22 billion at September 30, 2020 and were up $545.3 million, or 31 percent, from $1.75 billion at December 31, 2019. Demand deposits were up $153.8 million in the fourth quarter 2020 compared to the third quarter 2020 and were up $490.5 million compared to the fourth quarter 2019. Money market deposits and savings deposits were down $14.3 million from the third quarter 2020 and were up $102.5 million from the fourth quarter 2019. Certificates of deposit were down $11.4 million at December 31, 2020 compared to September 30, 2020 and were down $47.7 million compared to December 31, 2019 as customers reacted to changes in market interest rates. As deposit rates have dropped, the Company has experienced some shifting between deposit types and, overall, deposit customers are holding higher levels of liquid deposit balances in the low interest rate environment and due to uncertainty related to the COVID-19 pandemic. The Company continues to be successful at attracting and retaining core deposit customers. Customer deposit accounts remain insured to the highest levels available under FDIC deposit insurance.

The Company's total risk-based regulatory capital ratio at December 31, 2020 was higher than the ratios at both September 30, 2020 and December 31, 2019. Macatawa Bank’s risk-based regulatory capital ratios continue to be at levels comfortably above those required to be categorized as “well capitalized” under applicable regulatory capital guidelines. As such, the Bank was categorized as "well capitalized" at December 31, 2020.

About Macatawa Bank
Headquartered in Holland, Mich., Macatawa Bank offers a full range of banking, retail and commercial lending, wealth management and ecommerce services to individuals, businesses and governmental entities from a network of 26 full-service branches located throughout communities in Kent, Ottawa and northern Allegan counties. The bank is recognized for its local management team and decision making, along with providing customers excellent service, a rewarding experience and superior financial products. Macatawa Bank has been recognized for ten years as “West Michigan’s 101 Best and Brightest Companies to Work For”. For more information, visit www.macatawabank.com.

CAUTIONARY STATEMENT: This press release contains forward-looking statements that are based on management's current beliefs, expectations, assumptions, estimates, plans and intentions. Forward-looking statements are identifiable by words or phrases such as “anticipates,” "believe," "expect," "may," "should," "will," ”intend,” "continue," "improving," "additional," "focus," "forward," "future," "efforts," "strategy," "momentum," "positioned," and other similar words or phrases. Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These statements include, among others, statements related to risks and uncertainties related to, and the impact of, the global coronavirus (COVID-19) pandemic on the business, financial condition and results of operations of our company and our customers, trends in our key operating metrics and financial performance, future levels of earnings and profitability, future levels of earning assets, future asset quality, future growth, and future net interest margin. All statements with references to future time periods are forward-looking. Management's determination of the provision and allowance for loan losses, the appropriate carrying value of intangible assets (including deferred tax assets) and other real estate owned and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment) involves judgments that are inherently forward-looking. Our ability to sell other real estate owned at its carrying value or at all, reduce non-performing asset expenses, utilize our deferred tax asset, successfully implement new programs and initiatives, increase efficiencies, maintain our current level of deposits and other sources of funding, maintain liquidity, respond to declines in collateral values and credit quality, improve profitability, and produce consistent core earnings is not entirely within our control and is not assured. The future effect of changes in the real estate, financial and credit markets and the national and regional economy on the banking industry, generally, and Macatawa Bank Corporation, specifically, are also inherently uncertain. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("risk factors") that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed in or implied by such forward-looking statements. Macatawa Bank Corporation does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

Risk factors include, but are not limited to, the risk factors described in “Part II, Item 1A – Risk Factors” in our Quarterly Report on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020 and in "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2019. These and other factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.

MACATAWA BANK CORPORATION
CONSOLIDATED FINANCIAL SUMMARY
(Unaudited)
(Dollars in thousands except per share information)
	Quarterly												Twelve Months Ended
	4th Qtr				3rd Qtr				4th Qtr				December 31
EARNINGS SUMMARY		2020				2020				2019				2020				2019
Total interest income	$	17,401			$	15,822			$	18,435			$	67,224			$	75,942
Total interest expense		888				1,148				2,760				5,687				12,455
Net interest income		16,513				14,674				15,675				61,537				63,487
Provision for loan losses		800				500				-				3,000				(450	)
Net interest income after provision for loan losses		15,713				14,174				15,675				58,537				63,937
NON-INTEREST INCOME
Deposit service charges		1,073				987				1,147				4,030				4,415
Net gains on mortgage loans		2,432				1,546				697				6,477				2,347
Trust fees		957				921				999				3,758				3,812
Other		2,610				2,638				2,246				9,711				9,154
Total non-interest income		7,072				6,092				5,089				23,976				19,728
NON-INTEREST EXPENSE
Salaries and benefits		6,593				6,480				5,784				25,530				24,679
Occupancy		971				1,026				940				3,955				3,994
Furniture and equipment		974				967				823				3,678				3,420
FDIC assessment		194				131				-				400				239
Problem asset costs, including losses and (gains)		12				25				139				115				253
Other		3,222				2,904				2,957				12,047				11,639
Total non-interest expense		11,966				11,533				10,643				45,725				44,224
Income before income tax		10,819				8,733				10,121				36,788				39,441
Income tax expense		1,822				1,613				1,949				6,623				7,462
Net income	$	8,997			$	7,120			$	8,172			$	30,165			$	31,979
Basic earnings per common share	$	0.26			$	0.21			$	0.24			$	0.88			$	0.94
Diluted earnings per common share	$	0.26			$	0.21			$	0.24			$	0.88			$	0.94
Return on average assets		1.39	%			1.12	%			1.59	%			1.27	%			1.59	%
Return on average equity		15.24	%			12.29	%			15.27	%			13.19	%			15.66	%
Net interest margin (fully taxable equivalent)		2.69	%			2.43	%			3.24	%			2.75	%			3.38	%
Efficiency ratio		50.74	%			55.54	%			51.26	%			53.47	%			53.14	%
BALANCE SHEET DATA									December 31				September 30				December 31
Assets										2020				2020				2019
Cash and due from banks									$	31,480			$	28,294			$	31,942
Federal funds sold and other short-term investments										752,256				504,706				240,508
Debt securities available for sale										236,832				229,928				225,249
Debt securities held to maturity										79,468				91,394				82,720
Federal Home Loan Bank Stock										11,558				11,558				11,558
Loans held for sale										5,422				3,508				3,294
Total loans										1,429,331				1,542,335				1,385,627
Less allowance for loan loss										17,408				16,558				17,200
Net loans										1,411,923				1,525,777				1,368,427
Premises and equipment, net										43,254				43,733				43,417
Bank-owned life insurance										42,516				42,368				42,156
Other real estate owned										2,537				2,624				2,748
Other assets										24,780				24,828				16,751
Total Assets									$	2,642,026			$	2,508,718			$	2,068,770
Liabilities and Shareholders' Equity
Noninterest-bearing deposits									$	809,437			$	738,471			$	482,499
Interest-bearing deposits										1,489,150				1,432,108				1,270,795
Total deposits										2,298,587				2,170,579				1,753,294
Other borrowed funds										70,000				70,000				60,000
Long-term debt										20,619				20,619				20,619
Other liabilities										12,977				13,655				17,388
Total Liabilities										2,402,183				2,274,853				1,851,301
Shareholders' equity										239,843				233,865				217,469
Total Liabilities and Shareholders' Equity									$	2,642,026			$	2,508,718			$	2,068,770

MACATAWA BANK CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands except per share information)
		Quarterly																				Year to Date
		4th Qtr				3rd Qtr				2nd Qtr				1st Qtr				4th Qtr
			2020				2020				2020				2020				2019				2020				2019
EARNINGS SUMMARY
Net interest income		$	16,513			$	14,674			$	15,047			$	15,303			$	15,675			$	61,537			$	63,487
Provision for loan losses			800				500				1,000				700				-				3,000				(450	)
Total non-interest income			7,072				6,092				5,854				4,959				5,089				23,976				19,728
Total non-interest expense			11,966				11,533				10,504				11,722				10,643				45,725				44,224
Federal income tax expense			1,822				1,613				1,759				1,429				1,949				6,623				7,462
Net income		$	8,997			$	7,120			$	7,638			$	6,411			$	8,172			$	30,165			$	31,979
Basic earnings per common share		$	0.26			$	0.21			$	0.22			$	0.19			$	0.24			$	0.88			$	0.94
Diluted earnings per common share		$	0.26			$	0.21			$	0.22			$	0.19			$	0.24			$	0.88			$	0.94
MARKET DATA
Book value per common share		$	7.01			$	6.86			$	6.72			$	6.56			$	6.38			$	7.01			$	6.38
Tangible book value per common share		$	7.01			$	6.86			$	6.72			$	6.56			$	6.38			$	7.01			$	6.38
Market value per common share		$	8.37			$	6.53			$	7.82			$	7.12			$	11.13			$	8.37			$	11.13
Average basic common shares			34,154,820				34,109,901				34,108,982				34,106,719				34,080,275				34,120,275				34,056,200
Average diluted common shares			34,154,820				34,109,901				34,108,982				34,106,719				34,080,275				34,120,275				34,056,200
Period end common shares			34,197,519				34,101,320				34,114,901				34,107,995				34,103,542				34,197,519				34,103,542
PERFORMANCE RATIOS
Return on average assets			1.39	%			1.12	%			1.31	%			1.27	%			1.59	%			1.27	%			1.59	%
Return on average equity			15.24	%			12.29	%			13.50	%			11.63	%			15.27	%			13.19	%			15.66	%
Net interest margin (fully taxable equivalent)			2.69	%			2.43	%			2.74	%			3.25	%			3.24	%			2.75	%			3.38	%
Efficiency ratio			50.74	%			55.54	%			50.26	%			57.85	%			51.26	%			53.47	%			53.14	%
Full-time equivalent employees (period end)			328				327				335				331				325				328				325
ASSET QUALITY
Gross charge-offs		$	22			$	24			$	4,183			$	39			$	33			$	4,268			$	279
Net charge-offs/(recoveries)		$	(50	)		$	(203	)		$	4,034			$	(989	)		$	(55	)		$	2,792			$	(774	)
Net charge-offs to average loans (annualized)			-0.01	%			-0.05	%			1.03	%			-0.29	%			-0.02	%			0.19	%			-0.06	%
Nonperforming loans		$	533			$	195			$	2,957			$	7,230			$	203			$	533			$	203
Other real estate and repossessed assets		$	2,537			$	2,624			$	2,624			$	2,626			$	2,748			$	2,537			$	2,748
Nonperforming loans to total loans			0.04	%			0.01	%			0.19	%			0.52	%			0.01	%			0.04	%			0.01	%
Nonperforming assets to total assets			0.12	%			0.11	%			0.23	%			0.49	%			0.14	%			0.12	%			0.14	%
Allowance for loan losses		$	17,408			$	16,558			$	15,855			$	18,889			$	17,200			$	17,408			$	17,200
Allowance for loan losses to total loans			1.22	%			1.07	%			1.01	%			1.35	%			1.24	%			1.22	%			1.24	%
Allowance for loan losses to total loans (excluding PPP loans)			1.45	%			1.38	%			1.29	%			1.35	%			1.24	%			1.45	%			1.24	%
Allowance for loan losses to nonperforming loans			3266.04	%			8491.28	%			536.19	%			261.26	%			8472.91	%			3266.04	%			8472.91	%
CAPITAL
Average equity to average assets			9.11	%			9.07	%			9.68	%			10.93	%			10.42	%			9.62	%			10.17	%
Common equity tier 1 to risk weighted assets (Consolidated)			15.79	%			15.30	%			14.92	%			13.43	%			13.46	%			15.79	%			13.45	%
Tier 1 capital to average assets (Consolidated)			9.89	%			9.78	%			10.49	%			11.90	%			11.49	%			9.89	%			11.49	%
Total capital to risk-weighted assets (Consolidated)			18.29	%			17.74	%			17.30	%			15.81	%			15.78	%			18.29	%			15.77	%
Common equity tier 1 to risk weighted assets (Bank)			16.67	%			16.18	%			15.81	%			14.23	%			14.26	%			16.67	%			14.25	%
Tier 1 capital to average assets (Bank)			9.63	%			9.52	%			10.21	%			11.56	%			11.15	%			9.63	%			11.15	%
Total capital to risk-weighted assets (Bank)			17.84	%			17.28	%			16.87	%			15.39	%			15.33	%			17.84	%			15.32	%
Common equity to assets			9.08	%			9.32	%			9.36	%			11.01	%			10.52	%			9.08	%			10.51	%
Tangible common equity to assets			9.08	%			9.32	%			9.36	%			11.01	%			10.52	%			9.08	%			10.51	%
END OF PERIOD BALANCES
Total portfolio loans		$	1,429,331			$	1,542,335			$	1,562,688			$	1,395,341			$	1,385,627			$	1,429,331			$	1,385,627
Earning assets			2,510,882				2,376,943				2,316,213				1,912,400				1,943,356				2,510,882				1,943,356
Total assets			2,642,026				2,508,718				2,451,148				2,031,090				2,068,770				2,642,026				2,068,770
Deposits			2,298,587				2,170,579				2,118,291				1,705,380				1,753,294				2,298,587				1,753,294
Total shareholders' equity			239,843				233,865				229,338				223,580				217,469				239,843				217,469
AVERAGE BALANCES
Total portfolio loans		$	1,481,054			$	1,542,838			$	1,571,544			$	1,384,465			$	1,377,051			$	1,495,068			$	1,372,905
Earning assets			2,457,746				2,416,072				2,216,193				1,897,236				1,931,333				2,247,850				1,887,101
Total assets			2,590,875				2,554,198				2,338,888				2,017,823				2,055,398				2,376,523				2,008,302
Deposits			2,249,679				2,215,509				2,007,258				1,701,994				1,727,946				2,044,643				1,692,935
Total shareholders' equity			236,127				231,702				226,288				220,538				214,112				228,692				204,191

FAQ

What were Macatawa Bank's net income results for Q4 2020?

Macatawa Bank reported a net income of $9.0 million in Q4 2020, a 10% increase from $8.2 million in Q4 2019.

How did COVID-19 affect Macatawa Bank's financial performance in 2020?

The bank's net income for the full year 2020 decreased by 6% to $30.2 million due to challenges posed by the pandemic.

What is Macatawa Bank's net interest margin for Q4 2020?

The net interest margin increased to 2.69% in Q4 2020.

How much did Macatawa Bank set aside for loan losses in Q4 2020?

The bank set aside $800,000 for loan losses in Q4 2020.

What growth did Macatawa Bank see in total deposits by the end of 2020?

Total deposits increased by 31% year-over-year, reaching $2.30 billion by December 31, 2020.