Macatawa Bank Corporation Reports Fourth Quarter and Full Year 2021 Results

Rhea-AI Summary

Macatawa Bank Corporation (NASDAQ: MCBC) reported a net income of $29.0 million for 2021, down from $30.2 million in 2020. The fourth quarter net income was $6.2 million, a decrease from $9.0 million in Q4 2020, primarily due to lower Paycheck Protection Program (PPP) loan fees. However, the company recorded a $750,000 provision benefit for loan losses, reflecting improving economic conditions. Total deposits increased by 12% year-over-year, and the investment securities portfolio grew by $174 million in Q4 2021 as the bank strategically deployed excess liquidity.

Positive

• Net income for 2021 totaled $29.0 million, emphasizing overall profitability.
• Fourth quarter loan portfolio growth, excluding PPP loans, suggesting strong commercial loan origination activity.
• Total deposits rose 12% year-over-year, indicating robust customer engagement.
• Provision for loan losses benefit of $750,000 in Q4 2021 reflects improved credit quality.

Negative

• Net income decreased in Q4 2021 to $6.2 million from $9.0 million in Q4 2020.
• Net interest income fell by $3.7 million from Q4 2020, impacted by reduced PPP loan fees.
• Non-interest income decreased by $296,000 in Q4 2021 compared to the previous quarter.

HOLLAND, Mich., Jan. 27, 2022 (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 2021.

• Full year 2021 net income of $29.0 million versus $30.2 million in prior year
• Net income of $6.2 million in fourth quarter 2021 versus $9.0 million in fourth quarter 2020
• Decline in fourth quarter 2021 earnings from prior year fourth quarter earnings primarily due to decrease in Paycheck Protection Program ("PPP") loan fees recognized
• Provision for loan losses benefit of $750,000 in fourth quarter 2021 reflecting improvement in economic conditions
• Continued expense management discipline – 5% decrease in total noninterest expense from fourth quarter 2020
• Loan portfolio balances, excluding PPP loans, down for the year but showing growth in the fourth quarter
• Further growth in deposit balances – up 12% from fourth quarter 2020
• Grew investment securities portfolio by $174 million in fourth quarter 2021 to strategically deploy excess liquidity
• Asset-sensitive balance sheet is well-positioned for a rising interest rate environment
  

The Company reported net income of $6.2 million, or $0.18 per diluted share, in the fourth quarter 2021 compared to $9.0 million, or $0.26 per diluted share, in the fourth quarter 2020.   For the full year 2021, the Company reported net income of $29.0 million, or $0.85 per diluted share, compared to $30.2 million, or $0.88 per diluted share, for the full year 2020.   

"We are pleased to report solid results for the fourth quarter of 2021 and for the full year 2021,” said Ronald L. Haan, President and CEO of the Company. “We are encouraged by our commercial loan origination activity and the resulting portfolio growth in the fourth quarter 2021, excluding run-off of PPP loans. Our credit quality remains strong and we had no commercial loan chargeoffs during the fourth quarter 2021, contributing to a provision for loan loss benefit of $750,000 for the quarter. Other fee income including wealth management fees, debit card interchange income and treasury management fees experienced healthy growth, offsetting most of the reduction in mortgage gains for the year while total non-interest expenses were flat for the year and down in the fourth quarter 2021 compared to the same period in the prior year.

“Through measured growth of our investment portfolio, we accelerated the deployment of excess liquid funds caused by our robust deposit growth. Focusing on short-term, high quality securities, we grew our investment portfolio by $174.0 million in the fourth quarter 2021.”

Mr. Haan concluded: "Despite a challenging environment, we produced strong earnings for the fourth quarter of 2021 and for the year. Our asset quality is strong and as we have managed our balance sheet to be asset-sensitive, we are very well-positioned to benefit from the rising interest rate environment that we expect in 2022. We look forward to building on our fourth quarter momentum and seizing more opportunities to strategically deploy the excess funds our customers have entrusted us with.”

Operating Results
Net interest income for the fourth quarter 2021 totaled $12.8 million, a decrease of $1.5 million from the third quarter 2021 and a decrease of $3.7 million from the fourth quarter 2020. Net interest margin for the fourth quarter 2021 was 1.85 percent, down 19 basis points from the third quarter 2021, and down 84 basis points from the fourth quarter 2020. Net interest income for the fourth quarter 2021 reflected amortization of $1.2 million in fees from loans originated under the PPP, compared to $2.8 million in the third quarter 2021 and $3.2 million in the fourth quarter 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. During the fourth quarter 2021, the Company had approved and received forgiveness disbursements from the SBA on 245 loans with balances totaling $36.7 million. In the third quarter 2021, the Company had approved and received forgiveness disbursements from the SBA on 909 loans with balances totaling $92.4 million. Net interest margin was further negatively impacted in the fourth quarter 2021 versus the fourth quarter 2020 by our carrying significantly higher balances of federal funds sold due to the significant increase in balances held by depositors throughout the COVID-19 pandemic. These balances, which earn only 10-15 basis points in interest, increased by $582.4 million, on average, from the fourth quarter 2020 and caused a 49 basis point decrease in net interest margin in the fourth quarter 2021 compared to fourth quarter 2020. 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 the 2020 federal funds rate decreases. Without these floors, net interest income for the quarter would have been lower than stated by approximately $1.0 million.

On July 7, 2021, the Company redeemed its remaining $20.0 million of trust preferred securities. The Company estimates that this will save approximately $600,000 of interest expense annually, with regulatory capital remaining significantly above levels required to be categorized as well capitalized.

Non-interest income decreased $296,000 in the fourth quarter 2021 compared to the third quarter 2021 and decreased $1.7 million from the fourth quarter 2020. Gains on sales of mortgage loans in the fourth quarter 2021 were down $337,000 compared to the third quarter 2021 and were down $1.9 million from the fourth quarter 2020. The Company originated $16.4 million in mortgage loans for sale in the fourth quarter 2021 compared to $21.3 million in the third quarter 2021 and $36.2 million in the fourth quarter 2020. For the full year 2021 non-interest income decreased by only $281,000 despite a decrease in mortgage gains of $1.8 million. Higher deposit service charge income, wealth management fees and debit card interchange income from customer usage softened the effect of a lower level of mortgage gains recognized in the quarter and the full year.  

Non-interest expense was $11.3 million for the fourth quarter 2021, compared to $11.6 million for the third quarter 2021 and $12.0 million for the fourth quarter 2020. The largest component of non-interest expense was salaries and benefit expenses. Salaries and benefit expenses were down $254,000 compared to the third quarter 2021 and were down $569,000 compared to the fourth quarter 2020. The decreases compared to the third quarter 2021 and the fourth quarter 2020 were due largely to a lower level of commissions from mortgage production as volume decreased and also due to lower medical insurance costs. The table below identifies the primary components of the changes in salaries and benefits between periods.

Dollars in 000s		Q4 2021 to Q3 2021				Q4 2021 to Q4 2020
Salaries and other compensation		$	(149	)		$	(189	)
Salary deferral from commercial loans			(32	)			24
Bonus accrual			142				(16	)
Mortgage production – variable comp			(41	)			(221	)
401k matching contributions			(13	)			(80	)
Medical insurance costs			(161	)			(87	)
Total change in salaries and benefits		$	(254	)		$	(569	)

FDIC assessment expense was $217,000 in the fourth quarter 2021 compared to $204,000 in the third quarter 2021 and $194,000 in the fourth quarter 2020. FDIC assessment expense increased primarily as a result of the significant increase in deposit balances between periods. Data processing expenses were up $15,000 in the fourth quarter 2021 compared to the third quarter 2021 and were down $194,000 compared to the fourth quarter 2020 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 2021 and the fourth quarter 2020 due to a continued focus on expense management.  

Federal income tax expense was $1.4 million for the fourth quarter 2021, $1.7 million for the third quarter 2021, and $1.8 million for the fourth quarter 2020. 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 18.0 percent for the fourth quarter 2021, compared to 19.4 percent for the third quarter 2021 and 16.8 percent for the fourth quarter 2020.  

Asset Quality
A provision for loan losses benefit of $750,000 was recorded in the fourth quarter 2021 compared to provision benefit of $550,000 in the third quarter 2021 and provision expense of $800,000 in the fourth quarter 2020. Net loan recoveries for the fourth quarter 2021 were $107,000, compared to third quarter 2021 net loan recoveries of $276,000 and fourth quarter 2020 net loan recoveries of $50,000. At December 31, 2021, the Company had experienced net loan recoveries in twenty-six of the past twenty-eight quarters.   Total loans past due on payments by 30 days or more amounted to $129,000 at December 31, 2021, down $308,000 from $437,000 at September 30, 2021 and down $452,000 from $581,000 at December 31, 2020. Delinquencies at December 31, 2021 were comprised of just four individual loans. Delinquency as a percentage of total loans was just 0.01 percent at December 31, 2021, well below the Company’s peer level.

The allowance for loan losses of $15.9 million was 1.43 percent of total loans at December 31, 2021, compared to $16.5 million or 1.45 percent of total loans at September 30, 2021, and $17.4 million or 1.22 percent at December 31, 2020. The ratio at December 31, 2021, September 30, 2021 and December 31, 2020 includes PPP loans, which are fully guaranteed by the SBA and receive no allowance allocation. The ratio excluding PPP loans was 1.49 percent at December 31, 2021, 1.56 percent at September 30, 2021 and 1.45 percent at December 31, 2020. The coverage ratio of allowance for loan losses to nonperforming loans continued to be strong and significantly exceeded 1-to-1 coverage at 173-to-1 as of December 31, 2021.

At December 31, 2021, the Company's nonperforming loans were $92,000, representing 0.01 percent of total loans. This compares to $420,000 (0.04 percent of total loans) at September 30, 2021 and $533,000 (0.04 percent of total loans) at December 31, 2020. Other real estate owned and repossessed assets were $2.3 million at December 31, 2021, compared to $2.3 million at September 30, 2021 and $2.5 million at December 31, 2020. Total non-performing assets, including other real estate owned and nonperforming loans, were $2.4 million, or 0.08 percent of total assets, at December 31, 2021. Total nonperforming assets, including other real estate owned and nonperforming loans, decreased by $635,000 from December 31, 2020 to December 31, 2021.

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

Dollars in 000s		Dec 31, 2021			Sept 30, 2021			June 30, 2021			Mar 31, 2021			Dec 31, 2020
Commercial Real Estate		$	5		$	332		$	341		$	432		$	438
Commercial and Industrial			1			---			---			---			---
Total Commercial Loans			6			332			341			432			438
Residential Mortgage Loans			86			88			92			93			95
Consumer Loans			---			---			---			---			---
Total Non-Performing Loans		$	92		$	420		$	433		$	525		$	533

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

Dollars in 000s		Dec 31, 2021			Sept 30, 2021			June 30, 2021			Mar 31, 2021			Dec 31, 2020
Non-Performing Loans		$	92		$	420		$	433		$	525		$	533
Other Repossessed Assets			---			---			---			---			---
Other Real Estate Owned			2,343			2,343			2,343			2,371			2,537
Total Non-Performing Assets		$	2,435		$	2,763		$	2,776		$	2,896		$	3,070

Balance Sheet, Liquidity and Capital

Total assets were $2.93 billion at December 31, 2021, an increase of $27.3 million from $2.90 billion at September 30, 2021 and an increase of $286.7 million from $2.64 billion at December 31, 2020. Assets were elevated at each period due to customers holding a higher level of deposits during the COVID-19 pandemic, including balances from PPP loan proceeds. Total loans were $1.11 billion at December 31, 2021, a decrease of $27.6 million from $1.14 billion at September 30, 2021 and a decrease of $320.3 million from $1.43 billion at December 31, 2020.

Commercial loans decreased by $281.2 million from December 31, 2020 to December 31, 2021, along with a decrease of $31.8 million in the residential mortgage portfolio, and a decrease of $7.4 million in the consumer loan portfolio. Within commercial loans, commercial real estate loans decreased by $36.1 million and commercial and industrial loans decreased by $57.0 million. However, the largest decrease in commercial loans was in PPP loans which decreased by $187.1 million due to forgiveness by the SBA, partially offset by new PPP loan originations of $126.9 million. Excluding PPP loans, total commercial loans increased by $10.4 million during the fourth quarter 2021.   

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

Dollars in 000s		Dec 31, 2021			Sept 30, 2021			June 30, 2021			Mar 31, 2021			Dec 31, 2020
Construction and Development		$	103,755		$	104,636		$	102,608		$	117,178		$	118,665
Other Commercial Real Estate			412,346			422,574			427,291			423,424			433,508
Commercial Loans Secured by Real Estate			516,101			527,210			529,899			540,602			552,173
Commercial and Industrial			378,318			356,812			359,846			392,208			436,331
Paycheck Protection Program			41,939			77,571			169,679			253,811			229,079
Total Commercial Loans		$	936,358		$	961,593		$	1,059,424		$	1,186,621		$	1,217,583

Bank owned life insurance was $52.5 million at December 31, 2021, down $313,000 from $52.8 million at September 30, 2021 and up $10.0 million from $42.5 million at December 31, 2020 due to an additional $10.0 million in insurance policies purchased early in the second quarter 2021 and earnings on the underlying investments.

Total deposits were $2.58 billion at December 31, 2021, up $24.8 million, or 1.0 percent, from $2.55 billion at September 30, 2021 and up $279.4 million, or 12.2 percent, from $2.30 billion at December 31, 2020. Demand deposits were down $18.0 million in the fourth quarter 2021 compared to the third quarter 2021 and were up $170.3 million compared to the fourth quarter 2020. Money market deposits and savings deposits were up $47.3 million from the third quarter 2021 and were up $122.9 million from the fourth quarter 2020. Certificates of deposit were down $4.5 million at December 31, 2021 compared to September 30, 2021 and were down $13.8 million compared to December 31, 2020 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.

Other borrowed funds of $85.0 million at December 31, 2021 were unchanged compared to $85.0 million at September 30, 2021 and were up $15.0 million compared to $70.0 million at December 31, 2020. The increases were due to an additional $25.0 million advance taken in the third quarter 2021. This advance is putable quarterly by the FHLB and carries a rate of 0.01%. Considering the additional dividend provided by the FHLB on activity based stock, this advance effectively carries a negative interest rate, resulting in positive income for the Company from the advance. The put option on this advance was executed by the FHLB and the advance was repaid in full on January 21, 2022.

The Company's total risk-based regulatory capital ratio at December 31, 2021 was consistent with the ratio at December 31, 2020 despite the redemption of the remaining trust preferred securities in the third quarter 2021. Macatawa Bank’s risk-based regulatory capital ratios continue to be at levels considerably 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, 2021.

About Macatawa Bank
Headquartered in Holland, Michigan, 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 "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2020. 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											2021				2021				2020				2021				2020
Total interest income										$	13,334			$	14,842			$	17,401			$	58,634			$	67,224
Total interest expense											508				546				888				2,565				5,687
Net interest income											12,826				14,296				16,513				56,069				61,537
Provision for loan losses											(750	)			(550	)			800				(2,050	)			3,000
Net interest income after provision for loan losses											13,576				14,846				15,713				58,119				58,537
NON-INTEREST INCOME
Deposit service charges											1,206				1,183				1,073				4,446				4,030
Net gains on mortgage loans											514				851				2,432				4,691				6,477
Trust fees											1,114				1,079				957				4,331				3,758
Other											2,512				2,529				2,610				10,227				9,711
Total non-interest income											5,346				5,642				7,072				23,695				23,976
NON-INTEREST EXPENSE
Salaries and benefits											6,024				6,278				6,593				25,216				25,530
Occupancy											963				992				971				3,986				3,955
Furniture and equipment											1,011				1,014				974				3,940				3,678
FDIC assessment											217				204				194				749				400
Other											3,122				3,062				3,234				12,199				12,162
Total non-interest expense											11,337				11,550				11,966				46,090				45,725
Income before income tax											7,585				8,938				10,819				35,724				36,788
Income tax expense											1,369				1,736				1,822				6,710				6,623
Net income										$	6,216			$	7,202			$	8,997			$	29,014			$	30,165
Basic earnings per common share										$	0.18			$	0.21			$	0.26			$	0.85			$	0.88
Diluted earnings per common share										$	0.18			$	0.21			$	0.26			$	0.85			$	0.88
Return on average assets											0.85	%			0.98	%			1.39	%			1.02	%			1.27	%
Return on average equity											9.84	%			11.52	%			15.24	%			11.74	%			13.19	%
Net interest margin (fully taxable equivalent)											1.85	%			2.04	%			2.69	%			2.09	%			2.75	%
Efficiency ratio											62.39	%			57.93	%			50.74	%			57.78	%			53.47	%
BALANCE SHEET DATA																		December 31				September 30				December 31
Assets																			2021				2021				2020
Cash and due from banks																		$	23,669			$	30,413			$	31,480
Federal funds sold and other short-term investments																			1,128,119				1,239,525				752,256
Debt securities available for sale																			416,063				241,475				236,832
Debt securities held to maturity																			137,003				137,569				79,468
Federal Home Loan Bank Stock																			11,558				11,558				11,558
Loans held for sale																			1,407				2,635				5,422
Total loans																			1,108,993				1,136,613				1,429,331
Less allowance for loan loss																			15,889				16,532				17,408
Net loans																			1,093,104				1,120,081				1,411,923
Premises and equipment, net																			41,773				42,343				43,254
Bank-owned life insurance																			52,468				52,781				42,516
Other real estate owned																			2,343				2,343				2,537
Other assets																			21,244				20,777				24,780
Total Assets																		$	2,928,751			$	2,901,500			$	2,642,026
Liabilities and Shareholders' Equity
Noninterest-bearing deposits																		$	886,115			$	934,477			$	809,437
Interest-bearing deposits																			1,691,843				1,618,698				1,489,150
Total deposits																			2,577,958				2,553,175				2,298,587
Other borrowed funds																			85,000				85,000				70,000
Long-term debt																			-				-				20,619
Other liabilities																			11,788				11,112				12,977
Total Liabilities																			2,674,746				2,649,287				2,402,183
Shareholders' equity																			254,005				252,213				239,843
Total Liabilities and Shareholders' Equity																		$	2,928,751			$	2,901,500			$	2,642,026
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
			2021				2021				2021				2021				2020				2021				2020
EARNINGS SUMMARY
Net interest income		$	12,826			$	14,296			$	14,457			$	14,490			$	16,513			$	56,069			$	61,537
Provision for loan losses			(750	)			(550	)			(750	)			-				800				(2,050	)			3,000
Total non-interest income			5,346				5,642				6,169				6,539				7,072				23,695				23,976
Total non-interest expense			11,337				11,550				11,718				11,485				11,966				46,090				45,725
Federal income tax expense			1,369				1,736				1,840				1,766				1,822				6,710				6,623
Net income		$	6,216			$	7,202			$	7,818			$	7,778			$	8,997			$	29,014			$	30,165
Basic earnings per common share		$	0.18			$	0.21			$	0.23			$	0.23			$	0.26			$	0.85			$	0.88
Diluted earnings per common share		$	0.18			$	0.21			$	0.23			$	0.23			$	0.26			$	0.85			$	0.88
MARKET DATA
Book value per common share		$	7.41			$	7.38			$	7.26			$	7.09			$	7.01			$	7.41			$	7.01
Tangible book value per common share		$	7.41			$	7.38			$	7.26			$	7.09			$	7.01			$	7.41			$	7.01
Market value per common share		$	8.82			$	8.03			$	8.75			$	9.95			$	8.37			$	8.82			$	8.37
Average basic common shares			34,229,664				34,190,264				34,193,016				34,195,526				34,154,820				34,202,179				34,120,275
Average diluted common shares			34,229,664				34,190,264				34,193,016				34,195,526				34,154,820				34,202,179				34,120,275
Period end common shares			34,259,945				34,189,799				34,192,317				34,193,132				34,197,519				34,259,945				34,197,519
PERFORMANCE RATIOS
Return on average assets			0.85	%			0.98	%			1.11	%			1.17	%			1.39	%			1.02	%			1.27	%
Return on average equity			9.84	%			11.52	%			12.79	%			12.91	%			15.24	%			11.74	%			13.19	%
Net interest margin (fully taxable equivalent)			1.85	%			2.04	%			2.19	%			2.33	%			2.69	%			2.09	%			2.75	%
Efficiency ratio			62.39	%			57.93	%			56.81	%			54.62	%			50.74	%			57.78	%			53.47	%
Full-time equivalent employees (period end)			311				318				321				327				328				311				328
ASSET QUALITY
Gross charge-offs		$	22			$	22			$	30			$	50			$	22			$	124			$	4,268
Net charge-offs/(recoveries)		$	(107	)		$	(276	)		$	(104	)		$	(44	)		$	(50	)		$	(531	)		$	2,792
Net charge-offs to average loans (annualized)			-0.04	%			-0.09	%			-0.03	%			-0.01	%			-0.01	%			-0.04	%			0.19	%
Nonperforming loans		$	92			$	420			$	433			$	525			$	533			$	92			$	533
Other real estate and repossessed assets		$	2,343			$	2,343			$	2,343			$	2,371			$	2,537			$	2,343			$	2,537
Nonperforming loans to total loans			0.01	%			0.04	%			0.03	%			0.04	%			0.04	%			0.01	%			0.04	%
Nonperforming assets to total assets			0.08	%			0.10	%			0.09	%			0.11	%			0.12	%			0.08	%			0.12	%
Allowance for loan losses		$	15,889			$	16,532			$	16,806			$	17,452			$	17,408			$	15,889			$	17,408
Allowance for loan losses to total loans			1.43	%			1.45	%			1.36	%			1.26	%			1.22	%			1.43	%			1.22	%
Allowance for loan losses to total loans (excluding PPP loans)			1.49	%			1.56	%			1.57	%			1.55	%			1.45	%			1.49	%			1.45	%
Allowance for loan losses to nonperforming loans			17270.65	%			3936.19	%			3881.29	%			3324.19	%			3266.04	%			17270.65	%			3266.04	%
CAPITAL
Average equity to average assets			8.66	%			8.48	%			8.70	%			9.04	%			9.11	%			8.71	%			9.62	%
Common equity tier 1 to risk weighted assets (Consolidated)			17.24	%			17.43	%			17.10	%			16.73	%			15.79	%			17.24	%			15.79	%
Tier 1 capital to average assets (Consolidated)			8.72	%			8.51	%			9.48	%			9.80	%			9.89	%			8.72	%			9.89	%
Total capital to risk-weighted assets (Consolidated)			18.32	%			18.58	%			19.66	%			19.33	%			18.29	%			18.32	%			18.29	%
Common equity tier 1 to risk weighted assets (Bank)			16.70	%			16.88	%			16.57	%			17.60	%			16.67	%			16.70	%			16.67	%
Tier 1 capital to average assets (Bank)			8.44	%			8.24	%			8.49	%			9.52	%			9.63	%			8.44	%			9.63	%
Total capital to risk-weighted assets (Bank)			17.77	%			18.02	%			17.73	%			18.81	%			17.84	%			17.77	%			17.84	%
Common equity to assets			8.67	%			8.69	%			8.44	%			8.87	%			9.08	%			8.67	%			9.08	%
Tangible common equity to assets			8.67	%			8.69	%			8.44	%			8.87	%			9.08	%			8.67	%			9.08	%
END OF PERIOD BALANCES
Total portfolio loans		$	1,108,993			$	1,136,613			$	1,238,327			$	1,382,951			$	1,429,331			$	1,108,993			$	1,429,331
Earning assets			2,803,853				2,768,507				2,803,634				2,611,093				2,510,882				2,803,853				2,510,882
Total assets			2,928,751				2,901,500				2,941,086				2,734,341				2,642,026				2,928,751				2,642,026
Deposits			2,577,958				2,553,175				2,600,076				2,387,945				2,298,587				2,577,958				2,298,587
Total shareholders' equity			254,005				252,213				248,217				242,379				239,843				254,005				239,843
AVERAGE BALANCES
Total portfolio loans		$	1,109,863			$	1,182,633			$	1,324,915			$	1,401,399			$	1,481,054			$	1,253,706			$	1,495,068
Earning assets			2,780,236				2,804,157				2,669,862				2,537,300				2,457,746				2,698,846				2,247,850
Total assets			2,917,569				2,948,664				2,809,487				2,666,802				2,590,875				2,836,627				2,376,523
Deposits			2,564,961				2,605,043				2,468,398				2,321,012				2,249,679				2,490,838				2,044,643
Total shareholders' equity			252,606				249,994				244,516				241,023				236,127				247,075				228,692

FAQ

What is Macatawa Bank Corporation's net income for 2021?

Macatawa Bank Corporation reported a net income of $29.0 million for the year 2021.

How did Macatawa Bank Corporation perform in Q4 2021?

In Q4 2021, Macatawa Bank Corporation's net income was $6.2 million, down from $9.0 million in Q4 2020.

What contributed to the decline in earnings for Macatawa Bank Corporation?

The decline in earnings was primarily due to a decrease in Paycheck Protection Program loan fees.

How much did Macatawa Bank Corporation's deposits increase in 2021?

Total deposits increased by 12% year-over-year, demonstrating strong customer retention.

What positive developments did Macatawa Bank Corporation report?

The company reported a $750,000 provision benefit for loan losses and growth in its investment securities portfolio.