Macatawa Bank Corporation is a bank holding company. The company 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 principally located in Ottawa County. The company's services include checking and savings accounts safe deposit boxes travelerschecks money orders trust services and commercial mortgage and consumerloans. Macatawa Bank Corp. has a market cap of $52.7 million; its shares were traded at around $3.07 with and P/S ratio of 0.4. Macatawa Bank Corp. had an annual average earning growth of 10.4% over the past 5 years.
Highlight of Business Operations:Noninterest Income: Noninterest income for the three month period ended March 31, 2009 increased to $5.3 million from $5.0 million for the same period in the prior year. The three month period ended March 31, 2008 included $832,000 of gains realized on the settlement of interest rate swaps. An increase of approximately $1.1 million of net gains on mortgage loans to $1.62 million for the first quarter of 2009 was the primary reason for the increase, and was largely associated with a significant increase in refinancing activity from the decline in mortgage rates during the quarter. An increase in revenue from ATM and debit card processing offset slight declines in revenue from deposit and trust services and are the primary reasons for remaining changes in non-interest income. The lower level of equity market valuations in the first quarter of 2009 versus the first quarter of 2008 was the primary reason for the decrease in trust income.
FINANCIAL CONDITION Summary: Total assets were $2.09 billion at March 31, 2009 a decrease of $57.0 million from $2.15 billion at December 31, 2008. The overall decrease in total assets reflects a decline of $74.1 in our loan portfolio and $10.1 million in available for sale securities partially used to increase short-term investments by $34.2 million.
Portfolio Loans and Asset Quality: Total portfolio loans declined by $74.1 million to $1.70 billion at March 31, 2009 compared to $1.77 billion at December 31, 2008. During the first three months of 2009, our commercial, residential mortgage and consumer loan portfolios decreased by $46.8 million, $21.3 million and $5.5 million, respectively.
Loans for the development or sale of 1-4 family residential properties were approximately $70.2 million or 62% of total non-performing loans at March 31, 2009 compared to $59.9 million or 65% of total non-performing loans at December 31, 2008. Of the total at March 31, 2009, approximately $3.4 million was secured by vacant land, $47.3 million was secured by developed residential land and $19.2 million was secured by 1-4 family properties held for speculative purposes.
Foreclosed assets totaled $18.5 million at March 31, 2009 compared to $19.5 million at December 31, 2008. Of the $18.5 million, there were 32 commercial real estate relationships totaling approximately $17.7 million. The remaining balance was comprised of 11 residential mortgage properties totaling approximately $1.8 million. All properties are carried at their fair value less costs to sell.
CAPITAL RESOURCES AND LIQUIDITY Capital Resources: Total shareholders equity decreased $4.6 million to $144.6 million at March 31, 2009 compared to $149.2 million at December 31, 2008. The decrease was primarily from the $4.1 million net loss the Company incurred in the first quarter of 2009. Cash dividends of $939,000 or $30.00 per share were declared on preferred shares during the first quarter of 2009. The Company has continued its temporary suspension of cash dividends to common shareholders to maintain its capital levels during the current economic downturn.
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