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 September 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 November 13, 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 15
Item 2.
Changes in Securities and Use of Proceeds 15
Item 3.
Defaults Upon Senior Securities 15
Item 4.
Submission of Matters to a Vote of Securities Holders 15
Item 5.
Other Information 15
Item 6.
Exhibits and Reports on Form 8-K 15
Signatures 16
-2-
<PAGE>
<TABLE>
Part I Financial Information
MACATAWA BANK CORPORATION
CONSOLIDATED BALANCE SHEETS
September 30, 1998 (unaudited) and December 31, 1997
- --------------------------------------------------------------------------------
September 30, December 31,
1998 1997
--------------- --------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and due from banks $ 7,204,399 $ 415,120
Federal funds sold 8,700,000 --
Short-term investments -- 7,000,000
-------------- ------------
Cash and cash equivalents 15,904,399 7,415,120
Securities available for sale, at fair value 19,124,900 2,000,400
Total loans 102,099,185 497,704
Allowance for loan losses (1,530,000) (7,500)
-------------- ------------
100,569,185 490,204
Premises and equipment - net 5,123,762 681,807
Accrued interest receivable 834,392 38,532
Organizational costs 41,337 66,139
Other assets 156,815 29,991
-------------- ------------
Total Assets $141,754,790 $10,722,193
============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing $ 14,138,860 $ 245,812
Interest-bearing 106,783,392 2,466,411
-------------- ------------
Total 120,922,252 2,712,223
Accrued expenses and other liabilities 755,270 37,963
-------------- ------------
Total liabilities 121,677,522 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 September 30, 1998, and
December 31, 1997, respectively 22,260,646 8,137,268
Retained deficit (2,265,812) (165,525)
Net unrealized appreciation (depreciation) on securities
available for sale, net of tax 82,434 264
-------------- ------------
Total shareholders' equity 20,077,268 7,972,007
-------------- ------------
Total liabilities and shareholders' equity $141,754,790 $10,722,193
============== ============
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements
-3-
<PAGE>
<TABLE>
MACATAWA BANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Three and nine months ended September 30, 1998
(unaudited)
- --------------------------------------------------------------------------------
Three Months Nine
ended Months ended
September 30, 1998 September 30, 1998
(unaudited) (unaudited)
<S> <C> <C>
Interest Income
Loans, including fees $ 1,776,575 $2,730,932
Investments 424,631 987,816
------------ -----------
Total interest income 2,201,206 3,718,748
Interest expense
Deposits 1,054,017 1,639,124
Other 0 1,001
----------- -----------
Total interest expense 1,054,017 1,640,125
Net interest income 1,147,189 2,078,623
Provision for loan losses (620,000) (1,522,500)
Net interest income after provision for loan losses 527,189 556,123
Noninterest income 220,537 292,250
Noninterest expense
Salaries and benefits 778,798 1,687,802
Occupancy expense of premises 93,385 183,679
Furniture and equipment expense 76,543 151,802
Legal and professional fees 59,654 133,340
Advertising 66,535 131,857
Supplies 69,306 145,294
Other expense 257,338 514,886
----------- -----------
Total noninterest expenses 1,401,554 2,948,660
Loss before federal income tax (653,828) (2,100,287)
Federal income tax 0 0
----------- -----------
Net loss $ (653,828) $(2,100,287)
=========== ===========
Basic and diluted loss per share (.27) (1.10)
Average shares outstanding 2,435,125 1,909,411
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
<TABLE>
MACATAWA BANK CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
Nine months ended September 30, 1998
(unaudited)
- --------------------------------------------------------------------------------
Nine Months
ended
September 30, 1998
(Unaudited)
<S> <C>
Cash flows from operating activities
Net loss $ (2,100,287)
Adjustments to reconcile net loss to net
cash from operating activities
Depreciation and amortization 161,226
Provision for loan losses 1,522,500
Net change in
Organizational costs 24,802
Accrued interest receivable and other assets (922,684)
Accrued expenses and other liabilities 674,980
-------------
Net cash from operating activities 639,463
Cash flows from investing activities
Net increase in loans (101,601,481)
Purchase of
Securities available for sale (21,000,000)
Maturities and calls of securities available for sale 4,000,000
Premises and equipment (4,603,184)
-------------
Net cash from investing activities (123,204,665)
Cash flows from financing activities
Net increase in deposits 118,210,029
Net proceeds from sale of stock 14,123,378
------------
Net cash from financing activities 132,333,407
Net change in cash and cash equivalents 8,489,279
Cash and cash equivalents at beginning of period 7,415,120
-------------
Cash and cash equivalents at end of period $ 15,904,399
=============
Supplemental disclosures of cash flow information
Cash paid during the period for interest $ 1,264,719
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
-5-
<PAGE>
<TABLE>
MACATAWA BANK CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Nine months ended September 30, 1998
(Unaudited)
- --------------------------------------------------------------------------------
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
Net proceeds from sale of stock $14,123,378 14,123,378
Net loss for nine months ended
September 30, 1998 (unaudited) (2,100,287) (2,100,287)
Other comprehensive income,
net of tax:
Unrealized gains/losses on
securities 82,170 82,170
----------- ------------
Other comprehensive income 82,170 82,170
----------- ------------
Comprehensive Income (1,466,143)
----------- ------------ ----------- -----------
Balance, September 30, 1998 $22,260,646 $ (2,265,812) $ 82,434 $20,077,268
=========== ============ =========== ===========
</TABLE>
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<PAGE>
MACATAWA BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 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 nine month
periods ended September 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 $14,123,378. Invoices relating to
the offering paid in the third quarter totalled $30,517.
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 September 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
September 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>
September 30, 1998 (Unaudited)
U.S. Treasury securities and
obligations of U.S. Government
corporation and agencies $19,000,000 $124,900 $ 0 $19,124,900
=========== ======== =========== ===========
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 September 30, 1998, were as
follows. No held-to-maturity securities existed at September 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 $ 8,033,600
Due from 2003 to 2007 11,000,000 11,091,300
-------------- --------------
$19,000,000 $19,124,900
============== ==============
</TABLE>
- --------------------------------------------------------------------------------
(Continued)
-8-
<PAGE>
MACATAWA BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998 (unaudited) and December 31, 1997
- --------------------------------------------------------------------------------
NOTE 7 - LOANS
Loans are as follows:
<TABLE>
September 30, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
Commercial $66,375,403 $ 130,000
Mortgage 21,485,753 207,245
Consumer 14,238,029 160,459
----------- ---------
102,099,185 497,704
Allowance for loan losses (1,530,000) (7,500)
------------ -----------
$100,569,185 $ 490,204
============ ===========
</TABLE>
Activity in the allowance for loan losses is as follows:
<TABLE>
Period from
Nine May 21,
months (date of inception)
ended through
September 30, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
Balance at beginning of period $ 7,500 $ 0
Provision charged to operating expense 1,522,500 7,500
------------ ----------
Balance at end of period $ 1,530,000 $ 7,500
============ ==========
</TABLE>
- --------------------------------------------------------------------------------
(Continued)
-9-
<PAGE>
MACATAWA BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 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>
September 30, 1998 (unaudited)
Land $ 779,822 $ 779,822
Building and improvements 1,492,715 $ (42,733) 1,449,982
Furniture and equipment 1,617,723 (124,264) 1,493,459
Construction in progress $ 1,400,499 1,400,499
------------------------------ ------------
$ 5,290,759 $ (166,997) $ 5,123,762
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>
September 3 December 31,
1998 1997
<S> <C> <C>
Noninterest-bearing demand deposit accounts $ 15,061,734 $ 245,812
Money market accounts 51,963,298 1,173,742
NOW and Super NOW accounts 13,561,098 628,653
Savings accounts 4,917,268 146,973
Certificates of deposit 36,341,728 517,043
------------- ------------
$121,845,126 $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 seven full
service branch office locations: downtown Zeeland, downtown Holland, Maple
Avenue in Holland, Butternut Drive in Holland, 16th Street in Holland, Jenison
and temporary facilities in Allendale. In addition, the Bank has a commercial
lending, administration and operations center at 250 E. 8th Street, Holland,
Michigan. The Bank also has a loan production office at 348 Waverly Road,
Holland, Michigan.
The Bank has purchased real estate in Allendale, Michigan, and is building
a permanent branch facility. In addition, the Bank has purchased real estate
located at the corner of Washington and State Streets in Zeeland, Michigan,
where the Bank is building a full service branch office. Both of these offices
are expected to open during the fourth quarter of 1998.
Financial Condition
Total assets of the Company increased by $131,032,597 to $141,754,790 at
September 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 third quarter
of 1998 was the Company's third full quarter of operations, and the number of
deposit accounts increased from 465 at December 31, 1997, to more than 10,000
deposit accounts at September 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 $14,123,378. 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, management does not believe that the rate of
increase will be as rapid as it was during the first nine months of 1998.
Cash and cash equivalents, which includes federal funds sold and short-term
investments, increased $8,489,279 or 114% to $15,904,399 at September 30, 1998,
from $7,415,120 at December 31, 1997. The increase is primarily the result of
deposit growth since December 31, 1997.
Securities available for sale increased $17,124,500 to $19,124,900 at
September 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.
-11-
<PAGE>
Total loans increased by $101,601,481 to $102,099,185 at September 30, 1998
from $497,704 at December 31, 1997. While management believes that total loans
will continue to increase, the rate of increase in the future will be
substantially less than the rate of increase during the Company's first year of
operations.
The allowance for loan losses as of September 30, 1998 was $1,530,000
representing approximately 1.5% of gross loans outstanding, compared to $7,500
at December 31, 1997. Macatawa Bank has not experienced any material credit
losses as of September 30, 1998.
Bank premises and equipment increased by $4,441,955 to $5,123,762 at
September 30, 1998 from $681,807 at December 31, 1997. The increase resulted
from the purchase of the Jenison branch and Butternut Drive branch office in
Holland, the purchase of the real estate for the proposed Zeeland and Allendale
branch offices, and construction in progress, as well as additional furniture,
fixtures and equipment necessary to operate the Bank branches.
Deposits increased by $118,210,029 to $120,922,252 at September 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 nine month periods ended September 30,
1998, was $653,828 and $2,100,287, respectively. As of December 31, 1997, the
Company had a retained deficit of $165,525, and as of September 30, 1998, the
Company had a retained deficit of $2,265,812. 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 also
contributed to the retained deficit and net losses. 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 nine month periods ended September
30, 1998 was $2,201,206 and $3,718,748, respectively, related to interest income
on securities, loans, and interest earning deposits. Interest expense was
$1,054,017 and $1,640,125 for the three month and nine month periods ended
September 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 September 30, 1998. The provision for loan losses for the three month
and nine month periods ended September 30, 1998 was $620,000 and $1,522,500,
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 nine month periods ended
September 30, 1998 was $1,401,554 and $2,948,660, respectively. Other
significant components of non-interest expense consisted of occupancy and
equipment expenses, legal and accounting fees, marketing expenses, insurance and
supplies.
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
-12-
<PAGE>
April 7, 1998, which resulted in net proceeds of $14,123,378. Given the rapid
growth of the bank, additional equity capital may be required within the next
year.
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, its vendors, and major deposit customers. 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, 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
-13-
<PAGE>
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.
-14-
<PAGE>
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 September 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: November 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 7,204,399
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 8,700,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 19,124,900
<INVESTMENTS-CARRYING> 19,124,900
<INVESTMENTS-MARKET> 19,124,900
<LOANS> 102,099,185
<ALLOWANCE> 1,530,000
<TOTAL-ASSETS> 141,754,790
<DEPOSITS> 120,922,252
<SHORT-TERM> 0
<LIABILITIES-OTHER> 755,270
<LONG-TERM> 0
0
0
<COMMON> 22,260,646
<OTHER-SE> (2,183,378)
<TOTAL-LIABILITIES-AND-EQUITY> 141,754,790
<INTEREST-LOAN> 2,730,932
<INTEREST-INVEST> 987,816
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 3,718,748
<INTEREST-DEPOSIT> 1,639,124
<INTEREST-EXPENSE> 1,640,125
<INTEREST-INCOME-NET> 2,078,623
<LOAN-LOSSES> 1,522,500
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,948,660
<INCOME-PRETAX> (2,100,287)
<INCOME-PRE-EXTRAORDINARY> (2,100,287)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,100,287)
<EPS-PRIMARY> (1.10)
<EPS-DILUTED> (1.10)
<YIELD-ACTUAL> 4.43
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 7,500
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1,522,500
<ALLOWANCE-DOMESTIC> 1,522,500
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
