HOLLAND — Strong growth in its deposits and assets helped Macatawa Bank Corp. boost its corporate earnings by 43 percent for the third quarter.
The Holland-based Macatawa Bank posted third-quarter earnings of $1.3 million, or 25 cents per diluted share. That compares with net income of $947,000, or 26 cents per diluted share, in the same period a year ago. Earnings per share exceeded brokerage analysts’ consensus expectations of 21 cents per share.
New account openings were “very brisk” for the quarter, growing 38 percent from a year earlier, said Macatawa Bank President Phil Koning. The bank overall opened a net 3,767 new accounts during the quarter.
Koning attributed the strong growth in new accounts to mergers in the market, most notably the recent completion of Fifth Third Bank’s acquisition of Old Kent Bank.
Even with the effects of the weakened U.S. economy, which will continue to slow loan activity, Macatawa executives are upbeat about the company’s future financial performance. The bank still expects to meet a projected 20 percent growth rate in its loan volume over the next year, Koning said.
“We remain optimistic about the prospects for the remainder of this year and beyond,” Koning told brokerage analysts during a conference call last week.
Earnings for the first nine months of the year were $3.6 million, or 84 cents per share, up 59 percent from the $2.2 million, or 62 cents per share, during the same period in 2000.
Macatawa’s loan portfolio — about 70 percent of which comes from commercial loans — grew 36 percent from the third quarter of 2000 to the third quarter of 2001, from $373 million to $507 million.
Elsewhere, Macatawa’s assets grew 41 percent, from $451.3 million to $633.7 million on a year-to-year basis. Total deposits at the end of the third quarter increased 36 percent over a year ago, from $366.6 million to $502.4 million.
As the bank picked up more business, its efficiency ratio improved, Koning said. The efficiency ratio was 61.09 percent for the third quarter. It stood at 67.95 percent at the end of the same period a year ago. The efficiency ratio is 61.66 percent through the first nine months of the year, versus 70.23 percent for the same period in 2000.
Macatawa Bank has 13 branch offices in southern Ottawa County, northern Allegan County and southwestern Kent County. The bank plans to open two new offices in 2002, in Holland and Grand Rapids, Koning said.
Macatawa also will break ground within a month on a new corporate headquarters between Holland and Zeeland, a project that will cost between $7 million and $8 million. Occupancy is targeted for late 2002.
Operating efficiencies generated through a centralized corporate office will offset some of the cost to build and operate the new facility, Koning said. The corporation’s administrative operations are now housed in several leased locations in the area and the bank is coordinating existing leases to expire as close as possible to when it moves into the new office, he said.
“We expect tremendous efficiencies when we move into that facility because right now we’re spread all over town,” Koning said.