SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission file number: 333-45755
MACATAWA BANK CORPORATION
(Exact name of small business issuer as specified in its charter)
MICHIGAN 38-3391345
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
51 E. Main Street, Zeeland, Michigan 49464
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (616) 748-9491
-----------
Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes _X_ No ___
The number of shares outstanding of each of the issuers classes of common stock,
as of the latest practicable date: 2,435,125 shares of the Company's Common
Stock (no par value) were outstanding as of August 7, 1998.
Transitional Small Business Disclosure Format (check one): Yes ___ No _X_
1
<PAGE>
INDEX
Page
Number(s)
Part I. Financial Information (unaudited):
Item 1.
Consolidated Financial Statements 3
Notes to Consolidated Financial Statements 7
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
Part II. Other Information
Item 1.
Legal Proceedings 14
Item 2.
Changes in Securities and Use of Proceeds 14
Item 3.
Defaults Upon Senior Securities 14
Item 4.
Submission of Matters to a Vote of Securities Holders 14
Item 5.
Other Information 14
Item 6.
Exhibits and Reports on Form 8-K 14
Signatures 15
2
<PAGE>
Part I Financial Information (unaudited)
MACATAWA BANK CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30, 1998 (unaudited) and December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
June 30, December 31,
1998 1997
----------- -----------
(Unaudited)
ASSETS
<S> <C> <C>
Cash and due from banks $ 3,733,511 $ 415,120
Federal funds sold 700,000 --
Short-term investments -- 7,000,000
------------ ------------
Cash and cash equivalents 4,433,511 7,415,120
Securities available for sale, at fair value 15,970,575 2,000,400
Total loans 60,374,560 497,704
Allowance for loan losses (910,000) (7,500)
------------ ------------
59,464,560 490,204
Premises and equipment - net 2,502,189 681,807
Accrued interest receivable 672,057 38,532
Organizational costs 58,423 66,139
Other assets 418,183 29,991
------------ ------------
Total Assets $ 83,519,498 $ 10,722,193
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing $ 10,411,954 $ 245,812
Interest-bearing 52,208,983 2,466,411
------------ ------------
Total 62,620,937 2,712,223
Accrued expenses and other liabilities 238,802 37,963
------------ ------------
Total liabilities 62,859,739 2,750,186
Shareholders' equity
Preferred stock, no par value, 500,000 shares
authorized; no shares issued and outstanding
Common stock, no par value, 9,500,000 shares
authorized; 2,435,125 and 940,125 shares issued
and outstanding as of June 30, 1998, and
December 31, 1997, respectively 22,291,163 8,137,268
Retained deficit (1,611,984) (165,525)
Net unrealized appreciation (depreciation) on securities
available for sale, net of tax (19,420) 264
------------ ------------
Total shareholders' equity 20,659,759 7,972,007
------------ ------------
Total liabilities and shareholders' equity $ 83,519,498 $ 10,722,193
============ ============
</TABLE>
- -------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements
3
<PAGE>
MACATAWA BANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Three and six months ended June 30, 1998
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
Three Months Six Months
ended ended
June 30, 1998 June 30, 1998
----------- ------------
(unaudited) (unaudited)
<S> <C> <C>
Interest Income
Loans, including fees $ 808,846 $ 954,357
Securities 365,224 563,185
----------- -----------
Total interest income 1,174,070 1,517,542
Interest expense
Deposits 446,763 585,107
Other 962 1,001
----------- -----------
Total interest expense 447,725 586,108
Net interest income 726,345 931,434
Provision for loan losses (702,000) (902,500)
Net interest income after provision for loan losses 24,345 28,934
Noninterest income 68,272 71,713
Noninterest expense
Salaries and benefits 616,611 909,009
Occupancy expense of premises 60,999 90,294
Furniture and equipment expense 45,895 75,259
Legal and professional fees 39,122 73,686
Advertising 38,707 65,322
Supplies 51,514 75,988
Other expense 161,020 257,548
----------- -----------
Total noninterest expenses 1,013,868 1,547,106
Loss before federal income tax (921,251) (1,446,459)
Federal income tax 0 0
----------- -----------
Net loss $ (921,251) $(1,446,459)
=========== ===========
Basic and diluted loss per share (.39) (1.26)
Average shares outstanding 2,336,554 1,148,553
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
4
<PAGE>
MACATAWA BANK CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended June 30, 1998
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
Six Months
ended
June 30, 1998
(Unaudited)
<S> <C>
Cash flows from operating activities
Net loss $ (1,446,459)
Adjustments to reconcile net loss to net
cash from operating activities
Depreciation and amortization 79,681
Provision for loan losses 902,500
Net change in
Organizational costs 7,716
Accrued interest receivable and other assets (1,021,717)
Accrued expenses and other liabilities 210,980
------------
Net cash from operating activities (1,267,299)
Cash flows from investing activities
Net increase in loans (59,876,856)
Purchase of
Securities available for sale (16,000,000)
Maturities and calls of securities available for sale 2,000,000
Premises and equipment (1,900,063)
------------
Net cash from investing activities (75,776,919)
Cash flows from financing activities
Net increase in deposits 59,908,714
Net proceeds from sale of stock 14,153,895
------------
Net cash from financing activities 74,062,609
Net change in cash and cash equivalents (2,981,609)
Cash and cash equivalents at beginning of period 7,415,120
------------
Cash and cash equivalents at end of period $ 4,433,511
============
Supplemental disclosures of cash flow information
Cash paid during the period for interest $ 430,961
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
5
<PAGE>
MACATAWA BANK CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Six months ended June 30, 1998
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
Accumulated
Other Total
Common Retained Comprehensive Shareholders'
Stock Deficit Income Equity
<S> <C> <C> <C> <C>
Balance, December 31, 1997 $ 8,137,268 $ (165,525) $ 264 $ 7,972,007
Proceeds from sale of stock $14,153,895 14,153,895
Net loss for six months ended
June 30, 1998 (unaudited) (1,446,459) (1,446,459)
Other comprehensive income, net of tax:
Unrealized gains/losses on securities (19,684) (19,684)
-------- ----------
Other comprehensive income (19,684) (19,684)
-------- ----------
Comprehensive Income (1,466,143)
----------- ------------- ------------ -----------
Balance, June 30, 1998 $22,291,163 $ (1,611,984) $ (19,420) $20,659,759
=========== ============= ============ ===========
</TABLE>
6
<PAGE>
MACATAWA BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1998 (unaudited) and December 31, 1997
- --------------------------------------------------------------------------------
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and six month
periods ended June 30, 1998, are not necessarily indicative of the results that
may be expected for the year ended December 31, 1998. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the Company's Registration Statement on Form SB-2 containing audited financial
statements for the period from May 21, 1997 (date of inception), through
December 31, 1997.
NOTE 2 COMPUTATION OF EARNINGS PER SHARE
Basic earnings (loss) per share is based on net income (loss) divided by
the weighted average number of shares outstanding during the period.
NOTE 3 PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
Macatawa Bank Corporation (the "Company), and its wholly-owned subsidiary,
Macatawa Bank (the "Bank"). All significant intercompany accounts and
transactions have been eliminated in consolidation.
NOTE 4 INITIAL PUBLIC OFFERING
The Company completed its initial public offering on April 7, 1998. The
Company issued 1,495,000 shares of common stock in the initial public offering,
resulting in net proceeds to the Company of $14,153,895, subject to further
adjustment based upon the final actual expenses incurred.
NOTE 5 COMPARATIVE DATA
The Company became the bank holding company for Macatawa Bank on February
23, 1998, when all of the Bank's outstanding common stock was converted into all
of the outstanding stock of the Company and all of the Bank's shareholders
became all of the Company's shareholders. The Bank had commenced its application
process for regulatory approval on May 21, 1997, completed its initial sale of
common stock on November 7, 1997, and opened for operations on November 25,
1997. Comparable statements of income and cash flows for the comparable periods
ended June 30, 1997, have not been presented since the Company had not been
incorporated and did not have operations during that period.
7
<PAGE>
MACATAWA BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1998 (unaudited) and December 31, 1997
- --------------------------------------------------------------------------------
NOTE 6 - SECURITIES
The amortized cost and fair values of securities were as follows:
<TABLE>
Available for Sale
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Values
<S> <C> <C> <C> <C>
June 30, 1998 (Unaudited)
U.S. Treasury securities and
obligations of U.S. Government
corporation and agencies $16,000,000 $ 0 $ (29,425) $15,970,575
=========== ============ ============= ===========
December 31, 1997
U.S. Treasury securities and
obligations of U.S. Government
corporations and agencies $ 2,000,000 $ 400 $ 0 $ 2,000,400
=========== ============ ============= ===========
</TABLE>
Contractual maturities of debt securities at June 30, 1998, were as follows. No
held-to-maturity securities existed at June 30, 1998. Expected maturities may
differ from contractual maturities because borrowers may have the right to call
or prepay obligations with or without call or prepayment penalties.
<TABLE>
Available-for-Sale Securities
Amortized Fair
Cost Values
<S> <C> <C>
Due from 1999 to 2002 $8,000,000 $7,988,800
Due from 2003 to 2007 8,000,000 7,981,775
------------- -------------
$16,000,000 $15,970,575
============= =============
</TABLE>
- --------------------------------------------------------------------------------
(Continued)
8
<PAGE>
MACATAWA BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1998 (unaudited) and December 31, 1997
- --------------------------------------------------------------------------------
NOTE 7 - LOANS
Loans are as follows:
<TABLE>
June 30, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
Commercial $ 36,975,857 $ 130,000
Mortgage 14,863,428 207,245
Consumer 8,535,275 160,459
------------ ----------
60,374,560 497,704
Allowance for loan losses (910,000) (7,500)
------------ ----------
$ 59,464,560 $ 490,204
============ ==========
</TABLE>
Activity in the allowance for loan losses is as follows:
<TABLE>
Period from
Six May 21,
months (date of inception)
ended through
June 30, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
Balance at beginning of period $ 7,500 $ 0
Provision charged to operating expense 902,500 7,500
---------- ----------
Balance at end of period $ 910,000 $ 7,500
========= ==========
</TABLE>
- --------------------------------------------------------------------------------
(Continued)
9
<PAGE>
MACATAWA BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1998 (unaudited) and December 31, 1997
- --------------------------------------------------------------------------------
NOTE 8 - PREMISES AND EQUIPMENT - NET
Premises and equipment are as follows:
<TABLE>
Accumulated Carrying
Cost Depreciation Value
<S> <C> <C> <C>
June 30, 1998 (unaudited)
Land $ 334,401 -- $ 334,401
Building and improvements 1,071,165 $ (19,726) 1,051,439
Furniture and equipment 1,182,073 (65,724) 1,116,349
----------- ----------- -----------
$ 2,587,639 $ (85,450) $ 2,502,189
December 31, 1997
Building and improvements $ 196,761 $ (1,055) $ 195,706
Furniture and equipment 490,815 (4,714) 486,101
----------- ----------- -----------
$ 687,576 $ (5,769) $ 681,807
=========== =========== ===========
</TABLE>
NOTE 9 - DEPOSITS
Deposits are summarized as follows:
<TABLE>
June 30, December 31,
1998 1997
<S> <C> <C>
Noninterest-bearing demand deposit accounts $10,411,954 $ 245,812
Money market accounts 28,189,692 1,173,742
NOW and Super NOW accounts 8,984,123 628,653
Savings accounts 2,829,834 146,973
Certificates of deposit 12,205,334 517,043
----------- -----------
$62,620,937 $ 2,712,223
=========== ===========
</TABLE>
- --------------------------------------------------------------------------------
(Continued)
10
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
Macatawa Bank Corporation (the "Company") is a Michigan corporation and is
the bank holding company for Macatawa Bank (the "Bank"). The Bank commenced
operations on November 25, 1997. The Bank is a Michigan chartered bank with
depository accounts insured by the Federal Deposit Insurance Corporation. The
Bank provides a full range of commercial and consumer banking services,
primarily in the communities of Holland and Zeeland, Michigan, as well as the
surrounding market area primarily located in Ottawa County, Michigan.
The Company's initial plan of operation was to establish its management
team within the first few months of its operations. Management believes that it
has been successful in establishing its management team and that it can
administer the Company's growth for the next two to three years, with the
addition of branch managers, tellers and other staff personnel at any new
branches that are opened. Management believes that it will hire approximately
eight full time equivalent employees for each additional branch that is opened.
The Company's plan of operation also includes seeking out and considering
locations for additional branches in its market area. Management believes that
multiple branches make the Bank more convenient to its customers and assist the
Bank in attracting additional depositors and borrowers. The Bank has five office
locations: downtown Zeeland, downtown Holland, Maple Avenue in Holland, Jenison
and temporary facilities in Allendale.
The Bank has purchased undeveloped real estate in Allendale, Michigan,
where the Bank intends to build a branch. In addition, the Bank has purchased
real estate and has agreed to purchase an adjacent parcel located at the corner
of Washington and State Streets in Zeeland, Michigan, where the Bank proposes to
build a full service branch office, subject to the receipt of the necessary
regulatory approvals. The Bank has also purchased undeveloped real estate
located at 26 Lakewood Boulevard in Holland, Michigan, where the Bank proposes
to open a branch office, subject to receipt of the necessary zoning and
regulatory approvals. The Bank has leased undeveloped real estate located at
16th Street and Waverly in Holland, Michigan, where the Bank has begun building
a full service branch office, subject to receipt of the necessary zoning and
regulatory approvals.
Financial Condition
Total assets of the Company increased by $72,797,305 or 679% to $83,519,498
at June 30, 1998, from $10,722,193 at December 31, 1997. The increase in assets
is primarily attributable to the Bank continuing to attract customer deposits
and then lending and otherwise investing these funds. The second quarter of 1998
was the Company's second full quarter of operations, and the number of deposit
accounts increased from 465 at December 31, 1997, to more than 7,500 deposit
accounts at June 30, 1998. In addition, the Company completed an initial public
offering of common stock on April 7, 1998, which resulted in net proceeds to the
Company of $14,153,895 and an increase in total assets. The Company anticipates
that the Bank's assets will continue to increase during 1998, which will be the
Bank's first full year of operations. However, there can be no assurance that
the rate of increase will be as rapid as it was during the first six months of
1998.
Cash and cash equivalents, which includes federal funds sold and short-term
investments, decreased $2,981,609 or 40.2% to $4,433,511 at June 30, 1998, from
$7,415,120 at December 31, 1997. The decrease is the result of the increase in
the investment and loan portfolios since December 31, 1997.
11
<PAGE>
Securities available for sale increased $13,970,175 or 698.4% to
$15,970,575 at June 30, 1998 from $2,000,400 at December 31, 1997. The increase
is the result of the investment of customer deposits that have been obtained
since December 31, 1997.
The allowance for loan losses as of June 30, 1998 was $910,000,
representing approximately 1.5% of gross loans outstanding, compared to $7,500
at December 31, 1997. Macatawa Bank has not experienced any credit losses as of
June 30, 1998.
Bank premises and equipment increased by $1,820,382 or 267.0% to $2,502,189
at June 30, 1998 from $681,807 at December 31, 1997. The increase resulted from
the purchase of the Jenison branch office and the purchase of the real estate
for the proposed Zeeland branch office, as well as additional furniture,
fixtures and equipment necessary to operate the Bank branches.
Other assets increased by $388,192 from $29,991 at December 31, 1997, to
$418,183 at June 30, 1998. This increase is a result of costs incurred for
future branch sites.
Deposits increased by $59,908,714 to $62,620,937 at June 30, 1998, from
$2,712,223 at December 31, 1997. This was primarily as a result of deposits
being obtained from new customers of the Bank.
Results of Operations
The net loss for the three month and six month periods ended June 30, 1998,
was $921,251 and $1,446,459, respectively. As of December 31, 1997, the Company
had a retained deficit of $165,525, and as of March 31, 1998, the Company had a
retained deficit of $1,611,984. The retained deficit and net losses are
primarily the result of provisions for loan losses, wages paid to employees, and
fees and expenses incurred in forming the Company and applying for regulatory
approval for the Bank's existing and proposed branches. Management believes that
the Company will generate a net loss for 1998 as a result of loan loss reserves
and expenditures made to build its management team and open its main office and
branch facilities, together with the time needed to more effectively utilize its
capital and generate loan interest and fee income by making additional loans.
Management believes that the expenditures made in 1997 and 1998 will create the
infrastructure and lay the foundation for future growth and profitability in
subsequent years.
Interest income for the three month and six month periods ended June 30,
1998 was $1,174,070 and $1,517,542 respectively, related to interest income on
securities, loans, and interest earning deposits. Interest expense was $447,725
and $586,108 for the three month and six month periods ended June 30, 1998,
respectively, related to interest incurred on interest bearing deposits.
The Company has an allowance for loan losses of approximately 1.5% of total
loans at June 30, 1998. The provision for loan losses for the three month and
six month periods ended June 30, 1998 was $702,000 and $902,500, respectively.
This amount was provided as a result of the increase in the total loan
portfolio. Management believes the current loan loss reserve is adequate.
The main components of non-interest expense were primarily salaries and
benefits. Non-interest expense for the three month and six month periods ended
June 30, 1998 was $1,013,868 and $1,547,106, respectively. Other significant
components of non-interest expense consisted of occupancy and equipment
expenses, legal and accounting fees, marketing expenses, insurance and supplies.
12
<PAGE>
Liquidity and Capital Resources
The Company obtained its initial equity capital in a private placement by
the Bank to investors in November, 1997. The Company raised additional equity
capital in its initial public offering completed April 7, 1998, which resulted
in net proceeds of $14,153,895. The Company's plan of operation for the next
twelve months does not contemplate the need to raise additional capital during
that period. Management believes that its current capital and liquidity will
provide the Company with adequate capital to support its expected level of
deposit and loan growth and to otherwise meet its cash and capital requirements
for at least the next two or three years.
Year 2000 Compliance
Because many computerized systems use only two digits to record the year in
date fields (for example, the year 1998 is recorded as 98), such systems may not
be able to accurately process dates ending in the year 2000 and after. The
effects of the issue will vary from system to system and may adversely affect
the ability of a financial institution's operations as well as its ability to
prepare financial statements. The Company and the Bank were organized in 1997
and the Company acquired its computer equipment within the past twelve months
and has contracted with a leading supplier of information processing services.
The Company has an internal task force to assess year 2000 compliance by the
Company and its vendors. In addition, the Bank asks commercial borrowers about
year 2000 compliance as part of the loan application and review process.
Management does not anticipate that the Company will incur material operating
expenses or be required to invest heavily in computer system improvements to be
year 2000 compliant. Nevertheless, the inability of the Company to successfully
address year 2000 issues could result in interruptions in the Company's business
and have a material adverse effect on the Company's results of operations.
Recent Regulatory Developments
Various bills have been introduced in the Congress that would allow bank
holding companies to engage in a wider range of nonbanking activities, including
greater authority to engage in securities and insurance activities. While the
scope of permissible nonbanking activities and the conditions under which the
new powers could be exercised varies among the bills, the expanded powers
generally would be available to a bank holding company only if the bank holding
company and its bank subsidiaries remain well- capitalized and well-managed. The
bills also impose various restrictions on transactions between the depository
institution subsidiaries of bank holding companies and their non-bank
affiliates. These restrictions are intended to protect the depository
institutions from the risks of the new nonbanking activities permitted to such
affiliates. At this time, the Company is unable to predict whether any of the
pending bills will be enacted and, therefore, is unable to predict the impact
such legislation may have on the operations of the Company and the Bank.
Forward Looking Statements
This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Reform Act of
1995, and is including this statement for purposes of these safe harbor
provisions. Forward-looking statements, which are based on certain assumptions
and describe future plans, strategies and expectations of the Company, are
generally identifiable by use of the words "believe," "expect," "intend,"
"anticipate," "estimate," "project" or similar expressions. The Company's
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain. Factors which could have a material adverse affect on the
operations and future prospects of the Company and the subsidiaries include, but
are not limited to, changes in: interest rates,
13
<PAGE>
general economic conditions, legislative/regulatory changes, monetary and fiscal
policies of the U.S. Government, including policies of the U.S. Treasury and the
Federal Reserve Board, the quality or composition of the loan or investment
portfolios, demand for loan products, deposit flows, competition, demand for
financial services in the Company's market area and accounting principles,
policies and guidelines. These risks and uncertainties should be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements. Further information concerning the Company and its business,
including additional factors that could materially affect the Company's
financial results, is included in the Company's filings with the Securities and
Exchange Commission.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Securities Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits -
27 Financial Data Schedule
(EDGAR version only)
(b) Reports on Form 8K - None.
14
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this Quarterly Report on Form 10-QSB
for the quarter ended June 30, 1998, to be signed on its behalf by the
undersigned, thereunto duly authorized.
MACATAWA BANK CORPORATION
/s/ Benj. A. Smith, III
Benj. A. Smith, III
Chairman and Chief Executive Officer
/s/ Philip J. Koning
Philip J. Koning
Treasurer and Secretary
(Principal Accounting Officer)
DATE: August 13, 1998
15
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information from SEC Form 10-QSB and is
qualified in its entirety by reference to such financial information.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 3,733,511
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 700,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 15,970,575
<INVESTMENTS-CARRYING> 15,970,575
<INVESTMENTS-MARKET> 15,970,575
<LOANS> 60,374,560
<ALLOWANCE> 910,000
<TOTAL-ASSETS> 83,519,498
<DEPOSITS> 62,620,937
<SHORT-TERM> 0
<LIABILITIES-OTHER> 238,802
<LONG-TERM> 0
0
0
<COMMON> 22,291,163
<OTHER-SE> (1,631,404)
<TOTAL-LIABILITIES-AND-EQUITY> 83,514,498
<INTEREST-LOAN> 954,357
<INTEREST-INVEST> 563,185
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 1,517,542
<INTEREST-DEPOSIT> 585,107
<INTEREST-EXPENSE> 586,108
<INTEREST-INCOME-NET> 931,434
<LOAN-LOSSES> 902,500
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,547,106
<INCOME-PRETAX> (1,446,459)
<INCOME-PRE-EXTRAORDINARY> (1,446,459)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,446,459)
<EPS-PRIMARY> (1.26)
<EPS-DILUTED> (1.26)
<YIELD-ACTUAL> 2.42
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 7,500
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 910,000
<ALLOWANCE-DOMESTIC> 910,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
