Macatawa Bank Corporation Reports Third Quarter 2021 Results

Rhea-AI Summary

Macatawa Bank Corporation (NASDAQ: MCBC) reported a net income of $7.2 million for Q3 2021, marginally up from $7.1 million in Q3 2020. The loan portfolio decreased by 26% due to a drop in PPP loans, while commercial loan originations rose 30% year-over-year to $114.6 million. Deposit balances increased by 18% to $2.55 billion. The Company also redeemed its $20 million trust preferred securities, saving $600,000 annually. Despite some declines in net interest income and non-interest income, credit quality remains strong with no commercial loan charge-offs reported.

Positive

• Net income increased to $7.2 million, or $0.21 per diluted share.
• Commercial loan originations accelerated by 30% year-over-year.
• Deposit balances rose by 18% to $2.55 billion.
• Redeemed $20 million of trust preferred securities, reducing interest expense by $600,000 annually.
• Strong credit quality with no commercial loan charge-offs.

Negative

• Loan portfolio balances down by 26%, largely due to a decrease in PPP loans.
• Net interest income decreased by $161,000 from Q2 2021 and $378,000 from Q3 2020.
• Non-interest income decreased by $527,000 from Q2 2021 and $450,000 from Q3 2020.

HOLLAND, Mich., Oct. 28, 2021 (GLOBE NEWSWIRE) -- Macatawa Bank Corporation (NASDAQ: MCBC), the holding company for Macatawa Bank (collectively, the “Company”), today announced its results for the third quarter 2021.

• Net income of $7.2 million in third quarter 2021 versus $7.1 million in third quarter 2020
• Provision for loan losses benefit of $550,000 in the third quarter 2021 versus $500,000 provision expense in the third quarter 2020
• Loan portfolio balances down by $405.7 million (26%) from third quarter 2020 reflecting a net decrease of $261.6 million in PPP loans in the same time period
• New commercial loan origination activity accelerated in the third quarter 2021 - $114.6 million versus $88.2 million in third quarter 2020 and $62.0 million in second quarter 2021
• Deposit balances up by $382.6 million (18%) from third quarter 2020
• The Company redeemed its remaining $20 million trust preferred securities on July 7, 2021
• Capital and liquidity levels increased further during the quarter and remain strong
  

The Company reported net income of $7.2 million, or $0.21 per diluted share, in the third quarter 2021 compared to $7.1 million, or $0.21 per diluted share, in the third quarter 2020. For the first nine months of 2021, the Company reported net income of $22.8 million, or $0.67 per diluted share, compared to $21.2 million, or $0.62 per diluted share, for the same period in 2020.   

"We are pleased to report solid results for the third quarter of 2021,” said Ronald L. Haan, President and CEO of the Company. “We are encouraged by our increase in commercial loan origination activity. Originations were up 30 percent in third quarter 2021 over third quarter 2020 and were up 85 percent over second quarter 2021. Our credit quality remains strong and we experienced no commercial loan chargeoffs during the third quarter 2021, allowing for a provision for loan loss benefit of $550,000 during the third quarter 2021.”

“In addition, our customers’ deposits remain high. They are continuing to retain an unprecedented level of balances with us, with total deposits having grown from $1.7 billion at March 31, 2020 to over $2.5 billion at September 30, 2021. This not only speaks to the strength of our customers, but their confidence in us as their banking institution.”   

“Our strong liquidity and capital position allowed us to redeem the remaining $20.0 million of trust preferred securities in the third quarter 2021. This simplifies our capital structure and will reduce interest expense by approximately $600,000 annually.”

Mr. Haan concluded: "Despite a challenging environment, we produced strong earnings for the third quarter of 2021. Our asset quality is strong and we are well-positioned to build on our third quarter momentum and seize more opportunities to safely deploy the excess funds our customers have entrusted us with.”

Operating Results
Net interest income for the third quarter 2021 totaled $14.3 million, a decrease of $161,000 from the second quarter 2021 and a decrease of $378,000 from the third quarter 2020. Net interest margin for the third quarter 2021 was 2.04 percent, down 15 basis points from the second quarter 2021, and down 39 basis points from the third quarter 2020. Net interest income for the third quarter 2021 benefitted from amortization of $2.8 million in fees from loans originated under the PPP, compared to $2.4 million in the second quarter 2021 and $1.2 million in the third 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 third quarter 2021, the Company had approved and received forgiveness disbursements from the SBA on 909 loans with balances totaling $92.4 million. In the second quarter 2021, the Company had approved and received forgiveness disbursements from the SBA on 200 loans with balances totaling $107.7 million. Net interest margin was negatively impacted in the third quarter 2021 versus the third 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 $692.4 million, on average, from the third quarter 2020 and caused a 67 basis point decrease in net interest margin in the third quarter 2021 compared to third quarter 2020 and an 18 basis point decrease compared to second quarter 2021. 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 $527,000 in the third quarter 2021 compared to the second quarter 2021 and decreased $450,000 from the third quarter 2020. Gains on sales of mortgage loans in the third quarter 2021 were down $460,000 compared to the second quarter 2021 and were down $695,000 from the third quarter 2020. The Company originated $21.3 million in mortgage loans for sale in the third quarter 2021 compared to $39.2 million in the second quarter 2021 and $40.8 million in the third quarter 2020. 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.  

Non-interest expense was $11.6 million for the third quarter 2021, compared to $11.7 million for the second quarter 2021 and $11.5 million for the third quarter 2020. The largest component of non-interest expense was salaries and benefit expenses. Salaries and benefit expenses were down $224,000 compared to the second quarter 2021 and were down $202,000 compared to the third quarter 2020. The decreases compared to the second quarter 2021 and the third quarter 2020 were due largely to lower level of commissions from mortgage production as volume decreased, and were 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		Q3 2021 to Q2 2021				Q3 2021 to Q3 2020
Salaries and other compensation		$	0			$	30
Salary deferral from commercial loans			65				25
Bonus accrual			72				(7	)
Mortgage production – variable comp			(193	)			(129	)
401k matching contributions			(5	)			(96	)
Medical insurance costs			(163	)			(25	)
Total change in salaries and benefits		$	(224	)		$	(202	)

FDIC assessment expense was $204,000 in the third quarter 2021 compared to $159,000 in the second quarter 2021 and $131,000 in the third quarter 2020. FDIC assessment expense increased primarily as a result of the significant increase in deposit balances between periods. In addition, assessment credits of $172,000 were applied in the nine months ended September 30, 2020, contributing to the increase in the 2021 periods compared to 2020. Data processing expenses were down $15,000 in the third quarter 2021 compared to the second quarter 2021 and were up $78,000 compared to the third quarter 2020 due to higher ongoing online banking expenses from higher usage by deposit customers. Other categories of non-interest expense were relatively flat compared to the second quarter 2021 and the third quarter 2020 due to a continued focus on expense management.  

Federal income tax expense was $1.7 million for the third quarter 2021, $1.8 million for the second quarter 2021, and $1.6 million for the third quarter 2020. The effective tax rate was 19.4 percent for the third quarter 2021, compared to 19.1 percent for the second quarter 2021 and 18.5 percent for the third quarter 2020.  

Asset Quality
A provision for loan losses benefit of $550,000 was recorded in the third quarter 2021 compared to provision benefit of $750,000 in the second quarter 2021 and provision expense of $500,000 in the third quarter 2020. Net loan recoveries for the third quarter 2021 were $276,000, compared to second quarter 2021 net loan recoveries of $104,000 and third quarter 2020 net loan recoveries of $203,000. At September 30, 2021, the Company had experienced net loan recoveries in twenty-five of the past twenty-seven quarters.   Total loans past due on payments by 30 days or more amounted to $437,000 at September 30, 2021, up $311,000 from $126,000 at June 30, 2021 and down $87,000 from $524,000 at September 30, 2020. Delinquencies at September 30, 2021 were comprised of just four individual loans and the increase in overall delinquencies was due primarily to one loan that went past maturity at quarter end. Delinquency as a percentage of total loans was just 0.04 percent at September 30, 2021, well below the Company’s peer level.

The allowance for loan losses of $16.5 million was 1.45 percent of total loans at September 30, 2021, compared to $16.8 million or 1.36 percent of total loans at June 30, 2021, and $16.6 million or 1.07 percent at September 30, 2020. The ratio at September 30, 2021, June 30, 2021 and September 30, 2020 includes PPP loans, which are fully guaranteed by the SBA and receive no allowance allocation. The ratio excluding PPP loans was 1.56 percent at September 30, 2021, 1.57 percent at June 30, 2021 and 1.38 percent at September 30, 2020. The coverage ratio of allowance for loan losses to nonperforming loans continued to be strong and significantly exceeded 1-to-1 coverage at 39-to-1 as of September 30, 2021.

At September 30, 2021, the Company's nonperforming loans were $420,000, representing 0.04 percent of total loans. This compares to $433,000 (0.03 percent of total loans) at June 30, 2021 and $195,000 (0.01 percent of total loans) at September 30, 2020. Other real estate owned and repossessed assets were $2.3 million at September 30, 2021, compared to $2.3 million at June 30, 2021 and $2.6 million at September 30, 2020. Total non-performing assets, including other real estate owned and nonperforming loans, were $2.8 million, or 0.10 percent of total assets, at September 30, 2021. Total nonperforming assets, including other real estate owned and nonperforming loans, decreased by $56,000 from September 30, 2020 to September 30, 2021.

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

Dollars in 000s		Sept 30, 2021			June 30, 2021			Mar 31, 2021			Dec 31, 2020			Sept 30, 2020
Commercial Real Estate		$	332		$	341		$	432		$	438		$	97
Commercial and Industrial			---			---			---			---			---
Total Commercial Loans			332			341			432			438			97
Residential Mortgage Loans			88			92			93			95			98
Consumer Loans			---			---			---			---			---
Total Non-Performing Loans		$	420		$	433		$	525		$	533		$	195

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

Dollars in 000s		Sept 30, 2021			June 30, 2021			Mar 31, 2021			Dec 31, 2020			Sept 30, 2020
Non-Performing Loans		$	420		$	433		$	525		$	533		$	195
Other Repossessed Assets			---			---			---			---			---
Other Real Estate Owned			2,343			2,343			2,371			2,537			2,624
Total Non-Performing Assets		$	2,763		$	2,776		$	2,896		$	3,070		$	2,819

Balance Sheet, Liquidity and Capital

Total assets were $2.90 billion at September 30, 2021, a decrease of $39.6 million from $2.94 billion at June 30, 2021 and an increase of $392.8 million from $2.51 billion at September 30, 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 $1.14 billion at September 30, 2021, a decrease of $101.7 million from $1.24 billion at June 30, 2021 and a decrease of $405.7 million from $1.54 billion at September 30, 2020.

Commercial loans decreased by $350.2 million from September 30, 2020 to September 30, 2021, along with a decrease of $45.7 million in the residential mortgage portfolio, and a decrease of $9.8 million in the consumer loan portfolio. Within commercial loans, commercial real estate loans decreased by $31.7 million and commercial and industrial loans decreased by $56.9 million. However, the largest decrease in commercial loans was in PPP loans which decreased by $261.6 million due to forgiveness by the SBA of $388.5 million in PPP loans, partially offset by new PPP loan originations of $126.9 million.

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

Dollars in 000s		Sept 30, 2021			June 30, 2021			Mar 31, 2021			Dec 31, 2020			Sept 30, 2020
Construction and Development		$	104,636		$	102,608		$	117,178		$	118,665		$	121,578
Other Commercial Real Estate			422,574			427,291			423,424			433,508			437,345
Commercial Loans Secured by Real Estate			527,210			529,899			540,602			552,173			558,923
Commercial and Industrial			356,812			359,846			392,208			436,331			413,702
Paycheck Protection Program			77,571			169,679			253,811			229,079			339,216
Total Commercial Loans		$	961,593		$	1,059,424		$	1,186,621		$	1,217,583		$	1,311,841

Bank owned life insurance was $52.8 million at September 30, 2021, up $274,000 from $52.5 million at June 30, 2021 and up $10.4 million from $42.4 million at September 30, 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 $2.55 billion at September 30, 2021, down $46.9 million, or 1.8 percent, from $2.60 billion at June 30, 2021 and were up $382.6 million, or 17.6 percent, from $2.17 billion at September 30, 2020. Demand deposits were down $57.5 million in the third quarter 2021 compared to the second quarter 2021 and were up $342.2 million compared to the third quarter 2020. Money market deposits and savings deposits were up $13.2 million from the second quarter 2021 and were up $61.2 million from the third quarter 2020. Certificates of deposit were down $2.6 million at September 30, 2021 compared to June 30, 2021 and were down $20.8 million compared to September 30, 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 were up $25.0 million to $85.0 million at September 30, 2021 compared to $60.0 million at June 30, 2021 and were up $15.0 million compared to $70.0 million at September 30, 2021. 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 Company's total risk-based regulatory capital ratio at September 30, 2021 was lower than the ratio at June 30, 2021 due to the redemption of the remaining trust preferred securities in the third quarter 2021, but remained higher than at September 30, 2020. 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 September 30, 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												Nine Months Ended
										3rd Qtr				2nd Qtr				3rd Qtr				September 30
EARNINGS SUMMARY											2021				2021				2020				2021				2020
Total interest income										$	14,842			$	15,184			$	15,822			$	45,300			$	49,823
Total interest expense											546				727				1,148				2,057				4,799
Net interest income											14,296				14,457				14,674				43,243				45,024
Provision for loan losses											(550	)			(750	)			500				(1,300	)			2,200
Net interest income after provision for loan losses											14,846				15,207				14,174				44,543				42,824
NON-INTEREST INCOME
Deposit service charges											1,183				1,065				987				3,240				2,957
Net gains on mortgage loans											851				1,311				1,546				4,177				4,045
Trust fees											1,079				1,133				921				3,217				2,801
Other											2,529				2,660				2,638				7,715				7,101
Total non-interest income											5,642				6,169				6,092				18,349				16,904
NON-INTEREST EXPENSE
Salaries and benefits											6,278				6,502				6,480				19,192				18,937
Occupancy											992				994				1,026				3,023				2,984
Furniture and equipment											1,014				978				967				2,929				2,704
FDIC assessment											204				159				131				532				207
Other											3,062				3,085				2,929				9,077				8,927
Total non-interest expense											11,550				11,718				11,533				34,753				33,759
Income before income tax											8,938				9,658				8,733				28,139				25,969
Income tax expense											1,736				1,840				1,613				5,341				4,800
Net income										$	7,202			$	7,818			$	7,120			$	22,798			$	21,169
Basic earnings per common share										$	0.21			$	0.23			$	0.21			$	0.67			$	0.62
Diluted earnings per common share										$	0.21			$	0.23			$	0.21			$	0.67			$	0.62
Return on average assets											0.98	%			1.11	%			1.12	%			1.08	%			1.22	%
Return on average equity											11.52	%			12.79	%			12.29	%			12.40	%			12.48	%
Net interest margin (fully taxable equivalent)											2.04	%			2.19	%			2.43	%			2.18	%			2.77	%
Efficiency ratio											57.93	%			56.81	%			55.54	%			56.42	%			54.51	%
BALANCE SHEET DATA																		September 30				June 30				September 30
Assets																		2021				2021				2020
Cash and due from banks																		$	30,413			$	31,051			$	28,294
Federal funds sold and other short-term investments																			1,239,525				1,189,266				504,706
Debt securities available for sale																			241,475				239,955				229,928
Debt securities held to maturity																			137,569				121,867				91,394
Federal Home Loan Bank Stock																			11,558				11,558				11,558
Loans held for sale																			2,635				4,752				3,508
Total loans																			1,136,613				1,238,327				1,542,335
Less allowance for loan loss																			16,532				16,806				16,558
Net loans																			1,120,081				1,221,521				1,525,777
Premises and equipment, net																			42,343				42,906				43,733
Bank-owned life insurance																			52,781				52,507				42,368
Other real estate owned																			2,343				2,343				2,624
Other assets																			20,777				23,360				24,828
Total Assets																		$	2,901,500			$	2,941,086			$	2,508,718
Liabilities and Shareholders' Equity
Noninterest-bearing deposits																		$	934,477			$	956,961			$	738,471
Interest-bearing deposits																			1,618,698				1,643,115				1,432,108
Total deposits																			2,553,175				2,600,076				2,170,579
Other borrowed funds																			85,000				60,000				70,000
Long-term debt																			-				20,619				20,619
Other liabilities																			11,112				12,174				13,655
Total Liabilities																			2,649,287				2,692,869				2,274,853
Shareholders' equity																			252,213				248,217				233,865
Total Liabilities and Shareholders' Equity																		$	2,901,500			$	2,941,086			$	2,508,718
MACATAWA BANK CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands except per share information)
		Quarterly																				Year to Date
		3rd Qtr				2nd Qtr				1st Qtr				4th Qtr				3rd Qtr
			2021				2021				2021				2020				2020				2021				2020
EARNINGS SUMMARY
Net interest income		$	14,296			$	14,457			$	14,490			$	16,513			$	14,674			$	43,243			$	45,024
Provision for loan losses			(550	)			(750	)			-				800				500				(1,300	)			2,200
Total non-interest income			5,642				6,169				6,539				7,072				6,092				18,349				16,904
Total non-interest expense			11,550				11,718				11,485				11,966				11,533				34,753				33,759
Federal income tax expense			1,736				1,840				1,766				1,822				1,613				5,341				4,800
Net income		$	7,202			$	7,818			$	7,778			$	8,997			$	7,120			$	22,798			$	21,169
Basic earnings per common share		$	0.21			$	0.23			$	0.23			$	0.26			$	0.21			$	0.67			$	0.62
Diluted earnings per common share		$	0.21			$	0.23			$	0.23			$	0.26			$	0.21			$	0.67			$	0.62
MARKET DATA
Book value per common share		$	7.38			$	7.26			$	7.09			$	7.01			$	6.86			$	7.38			$	6.86
Tangible book value per common share		$	7.38			$	7.26			$	7.09			$	7.01			$	6.86			$	7.38			$	6.86
Market value per common share		$	8.03			$	8.75			$	9.95			$	8.37			$	6.53			$	8.03			$	6.53
Average basic common shares			34,190,264				34,193,016				34,195,526				34,154,820				34,109,901				34,192,916				34,108,676
Average diluted common shares			34,190,264				34,193,016				34,195,526				34,154,820				34,109,901				34,192,916				34,108,676
Period end common shares			34,189,799				34,192,317				34,193,132				34,197,519				34,101,320				34,189,799				34,101,320
PERFORMANCE RATIOS
Return on average assets			0.98	%			1.11	%			1.17	%			1.39	%			1.12	%			1.08	%			1.22	%
Return on average equity			11.52	%			12.79	%			12.91	%			15.24	%			12.29	%			12.40	%			12.48	%
Net interest margin (fully taxable equivalent)			2.04	%			2.19	%			2.33	%			2.69	%			2.43	%			2.18	%			2.77	%
Efficiency ratio			57.93	%			56.81	%			54.62	%			50.74	%			55.54	%			56.42	%			54.51	%
Full-time equivalent employees (period end)			318				321				327				328				327				318				327
ASSET QUALITY
Gross charge-offs		$	22			$	30			$	50			$	22			$	24			$	102			$	4,246
Net charge-offs/(recoveries)		$	(276	)		$	(104	)		$	(44	)		$	(50	)		$	(203	)		$	(424	)		$	2,842
Net charge-offs to average loans (annualized)			-0.09	%			-0.03	%			-0.01	%			-0.01	%			-0.05	%			-0.04	%			0.25	%
Nonperforming loans		$	420			$	433			$	525			$	533			$	195			$	420			$	195
Other real estate and repossessed assets		$	2,343			$	2,343			$	2,371			$	2,537			$	2,624			$	2,343			$	2,624
Nonperforming loans to total loans			0.04	%			0.03	%			0.04	%			0.04	%			0.01	%			0.04	%			0.01	%
Nonperforming assets to total assets			0.10	%			0.09	%			0.11	%			0.12	%			0.11	%			0.10	%			0.11	%
Allowance for loan losses		$	16,532			$	16,806			$	17,452			$	17,408			$	16,558			$	16,532			$	16,558
Allowance for loan losses to total loans			1.45	%			1.36	%			1.26	%			1.22	%			1.07	%			1.45	%			1.07	%
Allowance for loan losses to total loans (excluding PPP loans)			1.56	%			1.57	%			1.55	%			1.45	%			1.38	%			1.56	%			1.38	%
Allowance for loan losses to nonperforming loans			3936.19	%			3881.29	%			3324.19	%			3266.04	%			8491.28	%			3936.19	%			8491.28	%
CAPITAL
Average equity to average assets			8.48	%			8.70	%			9.04	%			9.11	%			9.07	%			8.73	%			9.82	%
Common equity tier 1 to risk weighted assets (Consolidated)			17.43	%			17.10	%			16.73	%			15.79	%			15.30	%			17.43	%			15.30	%
Tier 1 capital to average assets (Consolidated)			8.51	%			9.48	%			9.80	%			9.89	%			9.78	%			8.51	%			9.78	%
Total capital to risk-weighted assets (Consolidated)			18.58	%			19.66	%			19.33	%			18.29	%			17.74	%			18.58	%			17.74	%
Common equity tier 1 to risk weighted assets (Bank)			16.88	%			16.57	%			17.60	%			16.67	%			16.18	%			16.88	%			16.18	%
Tier 1 capital to average assets (Bank)			8.24	%			8.49	%			9.52	%			9.63	%			9.52	%			8.24	%			9.52	%
Total capital to risk-weighted assets (Bank)			18.02	%			17.73	%			18.81	%			17.84	%			17.28	%			18.02	%			17.28	%
Common equity to assets			8.69	%			8.44	%			8.87	%			9.08	%			9.32	%			8.69	%			9.32	%
Tangible common equity to assets			8.69	%			8.44	%			8.87	%			9.08	%			9.32	%			8.69	%			9.32	%
END OF PERIOD BALANCES
Total portfolio loans		$	1,136,613			$	1,238,327			$	1,382,951			$	1,429,331			$	1,542,335			$	1,136,613			$	1,542,335
Earning assets			2,768,507				2,803,634				2,611,093				2,510,882				2,376,943				2,768,507				2,376,943
Total assets			2,901,500				2,941,086				2,734,341				2,642,026				2,508,718				2,901,500				2,508,718
Deposits			2,553,175				2,600,076				2,387,945				2,298,587				2,170,579				2,553,175				2,170,579
Total shareholders' equity			252,213				248,217				242,379				239,843				233,865				252,213				233,865
AVERAGE BALANCES
Total portfolio loans		$	1,182,633			$	1,324,915			$	1,401,399			$	1,481,054			$	1,542,838			$	1,302,181			$	1,499,774
Earning assets			2,804,157				2,669,862				2,537,300				2,457,746				2,416,072				2,671,417				2,177,374
Total assets			2,948,664				2,809,487				2,666,802				2,590,875				2,554,198				2,809,350				2,304,551
Deposits			2,605,043				2,468,398				2,321,012				2,249,679				2,215,509				2,465,858				1,975,799
Total shareholders' equity			249,994				244,516				241,023				236,127				231,702				245,211				226,196

FAQ

What were Macatawa Bank Corporation's earnings for Q3 2021?

Macatawa Bank Corporation reported a net income of $7.2 million for Q3 2021.

How much did commercial loan origination increase for MCBC in Q3 2021?

Commercial loan origination increased by 30% year-over-year to $114.6 million in Q3 2021.

What is the current status of deposit balances for MCBC?

Deposit balances increased by 18% to $2.55 billion as of September 30, 2021.

How much did MCBC save by redeeming trust preferred securities?

MCBC saved approximately $600,000 in annual interest expense by redeeming $20 million of trust preferred securities.

What is the loan portfolio change for MCBC compared to Q3 2020?

The loan portfolio decreased by 26% from Q3 2020, primarily due to a reduction in PPP loans.