HOLLAND — Macatawa Bank Corp. has sold $26.2 million of noncumulative convertible perpetual preferred stock in a private transaction with West Michigan investors.
“We are gratified by West Michigan’s continued confidence in the financial strength and prospects of Macatawa Bank,” said Macatawa Chairman and CEO Ben Smith. “During the third quarter, we announced our intention to raise additional capital in order to maintain our financial strength and enhance our lending capabilities. Our local investors demonstrated their confidence in our bank.”
Smith said the additional capital will improve Macatawa’s capital ratios and liquidity and better position the company to take advantage of lending opportunities in its market. He said Macatawa’s our investors are confident in the future of West Michigan and share a long-term commitment to the community.
Dividends on the preferred stock are payable quarterly in arrears at a rate of 12 percent per annum, if and when declared by the company’s board of directors. The shares are convertible into common stock at the option of the holder at a price per share of $8.95. On or after Oct. 31, 2011, the preferred stock will be subject to mandatory conversion into common stock under certain circumstances.
Smith said Macatawa intends to use the net proceeds of the transaction to continue making commercial and consumer loans to businesses, organizations, homeowners and individuals throughout its market area and to strengthen its balance sheet and maintain its position as a well-capitalized financial institution under regulatory guidelines.