HOLLAND — Macatawa Bank Corp. would more than double the number of authorized shares of common stock under a proposal going before shareholders next month, although the company has no plans to issue the additional shares soon.
The plan is to hold the additional shares in reserve should the corporation need them to finance future acquisitions, or if directors choose to declare stock dividends or stock splits in the future —options that the company told federal regulators it presently is not considering.
Macatawa Bank Corp. has 5.3 million common shares outstanding, plus another 239,250 shares set aside for corporate stock options and employee stock purchasing plan, according to a proxy statement filed Feb. 27 with the U.S. Securities and Exchange Commission. The pending acquisition of Grand Bank Financial Corp. in Grand Rapids will require 2.37 million shares to execute, leaving too narrow a window of unused shares to undertake future initiatives, bank President and Chief Executive Officer Phil Koning said.
“We just want to have the flexibility,” Koning said. “We wanted a little more room.”
Though increasing the number of authorized shares is needed, bank directors at this point do not foresee any immediate need for the next year or two to issue them, Koning said. The 4-year-old Macatawa, after undergoing a secondary public offering last year that raised $23.6 million, does not need to generate new capital, he said.
Macatawa shareholders will decide April 18 on raising the number of authorized shares at the corporation’s annual meeting in Holland.
Prior to the annual meeting, shareholders will decide this month on the Grand Bank acquisition. The deal, valued at $40 million, goes to Grand Bank shareholders on March 20 and Macatawa shareholders March 21. Koning expects shareholders of both corporations to overwhelmingly support the deal.
The merger will give Macatawa Bank Corp. a stronger foothold in Kent County, where it now has branches in Grandville and Wyoming, while Grand Bank gets a larger business partner and resources with which to grow from its single branch in downtown Grand Rapids.
Grand Bank will retain its corporate name and identity as its works to establish a broader branch network around the Grand Rapids area, with the Holland-based Macatawa Bank focusing on growing its presence in southwestern Kent County.
The acquisition, announced in late November, is nearing completion as Macatawa rides high with continued rapid growth and a rising share price. Macatawa’s shares have trended upward in recent months and in February broke $20 for the first time ever.