Tag - Mcbc

Shares of Macatawa Bank Corp. (Nasdaq: MCBC) are down to a new 52-week low following news that the Holland, Mich.-based financial holding company reported a decline in second-quarter profit. Also after today’s opening bell, RBC Capital Markets analysts downgraded Macatawa to “underperform” from “sector perform.”

The net income for the second quarter of 2007 was $4.59 million, or $0.26 per share, compared with a net income of $5.76 million, or $0.33 per share, during the same three-month period of 2006, the company announced after Monday’s close.

“We’re clearly disappointed with this decline,” CEO Ben Smith said this morning on a conference call. “These results reflect the environment within which we’re operating – the nature of the economy in Michigan as it relates to residential real estate. It’s putting pressure on our performance.”

Smith blamed a deterioration of residential land development in Michigan, which he said has hurt banks throughout the state.

Terry McEvoy, an analyst with investment bank Oppenheimer & Co., appears to agree. 

“The results were similar to those of other Michigan and Western Michigan banks,” he said.

During the second quarter, Macatawa’s non-performing loans climbed to $29 million, an increase of $12 million from the first quarter.

Of the $29 million in non-performing loans, $26 million are real estate loans used for land development or residential construction, Ron Haan, Macatawa’s executive vice president, said.