About Macatawa Bank

Macatawa Bank Corporation operates as the bank holding company for Macatawa Bank that provides a full range of commercial and consumer banking and trust services in Kent County, Ottawa County, and northern Allegan County, Michigan. The bank operates branch offices and a lending and operational service facility. Commercial banking is an important focus for the company. Most of its emphasis has been on growing commercial and industrial loans. Products and Services Loan Portfolio The company has historically offered a broad range of loan products to business customers, including commercial and industrial and commercial real estate loans, and to retail customers, including residential mortgage and consumer loans. Following is a discussion of the company’s various types of lending activities. Commercial and Industrial Loans The company’s commercial and industrial lending portfolio contains loans with a variety of purposes and security, including loans to finance operations and equipment. Generally, the company’s commercial and industrial lending has been limited to borrowers headquartered, or doing business, in the company’s primary market area. These credit relationships typically require the satisfaction of appropriate loan covenants and debt formulas, and generally require that the bank be the primary depository bank of the business. These loan covenants and debt formulas are monitored through periodic, required reporting of accounts receivable aging schedules and financial statements, and in the case of larger business operations, reviews or audits by independent professional firms. Commercial Real Estate Loans The company’s commercial real estate loans primarily consist of construction and development loans and multi-family and other non-residential real estate loans. Construction and Development Loans: These consist of construction loans to commercial customers for the construction of their business facilities. They also include construction loans to builders and developers for the construction of one- to four-family residences and the development of one- to four-family lots, residential subdivisions, condominium developments and other commercial developments. Multi-Family and Other Non-Residential Real Estate Loans: These are permanent loans secured by multi-family and other non-residential real estate and include loans secured by apartment buildings, condominiums, small office buildings, small business facilities, medical facilities and other non-residential building properties, substantially all of which are located within the company’s primary market area. Retail Loans The company’s retail loans are loans to consumers and primarily consist of residential mortgage loans and consumer loans. Residential Mortgage Loans: The company originates construction loans to individuals for the construction of their residences and owner-occupied residential mortgage loans, which are generally long-term with either fixed or adjustable interest rates. The company’s general policy is to sell the majority of its fixed rate residential mortgage loans in the secondary market due primarily to the interest rate risk associated with these loans. The company does not originate loans that are considered ‘sub-prime’. Residential mortgage loan originations derive from a number of sources, including advertising, direct solicitation, real estate broker referrals, existing borrowers and depositors, builders and walk-in customers. Loan applications are accepted at most of the company’s offices and online. The substantial majority of these loans are secured by one-to-four family properties in the company’s market area. Consumer Loans: The company originates a variety of different types of consumer loans, including automobile loans, home equity lines of credit and installment loans, home improvement loans, deposit account loans and other loans for household and personal purposes. The company also originates home equity lines of credit utilizing the same underwriting standards as for home equity installment loans. Home equity lines of credit are revolving line of credit loans. The majority of the company’s existing home equity line of credit portfolio has variable rates with floors and ceilings, interest only payments and a maximum maturity of ten years. Deposit Portfolio The company offers a broad range of deposit services, including checking accounts, savings accounts and time deposits of various types. Transaction accounts and savings and time certificates are tailored to the principal market area at rates competitive with those offered in the area. All deposit accounts are insured by the FDIC up to the maximum amount permitted by law. The company solicits deposit services from individuals, businesses, associations, churches, nonprofit organizations, financial institutions and government authorities. Deposits are gathered primarily from the communities the company serves through its network of branches. The company offers business and consumer checking accounts, regular and money market savings accounts, and certificates of deposit with many term options. The company also attempts to offer a wide variety of products to meet the needs of its customers. Securities Portfolio As of December 31, 2023, the company’s investment securities were U.S. treasury and federal agency securities; agency MBS and CMOs; tax-exempt state and municipal bonds; taxable state and municipal bonds; and corporate bonds. Trust Services The company offers trust services to further provide for the financial needs of its customers. The company’s types of service include both personal trust and retirement plan services. The company’s personal trust services include financial planning, investment management services, trust and estate administration and custodial services. The company’s retirement plan services encompass all types of qualified retirement plans, including profit sharing, 401(k) and pension plans. Market Area The company’s primary market area includes Ottawa, Kent and northern Allegan counties, all located in western Michigan. This area includes two mid-sized cities, Grand Rapids and Holland, and rural areas. Supervision and Regulation The company is registered as a bank holding company with, and subject to regulation by, the Federal Reserve Board under the bank Holding Company Act of 1956, as amended (the ‘BHCA’). Under the BHCA, the company is subject to periodic examination by the Federal Reserve Board, and is required to file with the Federal Reserve Board periodic reports of the company’s operations and such additional information as the Federal Reserve Board may require. The company’s common stock is registered under the Securities Exchange Act of 1934, as amended (the ‘Exchange Act’). The company is subject to the reporting, proxy solicitation, insider trading and other restrictions and requirements of the SEC under the Exchange Act. The company is subject to the Sarbanes-Oxley Act, which imposes numerous reporting, accounting, corporate governance and business practices on companies, as well as financial and other professionals who have involvement with the U.S. public markets. The company is generally subject to these requirements and applicable SEC rules and regulations. Macatawa Bank is a Michigan banking corporation, and its deposit accounts are insured by the Deposit Insurance Fund (the ‘Insurance Fund’) of the FDIC. The bank is subject to the examination, supervision, reporting and enforcement requirements of the DIFS, as the chartering authority for Michigan banks, and the FDIC, as administrator of the Insurance Fund. As an FDIC-insured institution, the bank is required to pay deposit insurance premium assessments to the FDIC. The bank’s business includes making a variety of types of loans to individuals. In making these loans, the company is subject to state usury and regulatory laws and to various federal laws and regulations, including the privacy of consumer financial information provisions of the Gramm-Leach-Bliley Act, the Equal Credit Opportunity Act, the Fair Housing Act, the Servicemembers Civil Relief Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Real Estate Settlement Procedures Act, and the Home Mortgage Disclosure Act, which prohibit discrimination, specify disclosures to be made to borrowers regarding credit and settlement costs, and regulate the mortgage loan servicing activities of the bank, including the maintenance and operation of escrow accounts and the transfer of mortgage loan servicing. In receiving deposits, the bank is subject to extensive regulation under state and federal law and regulations, including the Truth in Savings Act, the Expedited Funds Availability Act, the Electronic Funds Transfer Act, the Federal Deposit Insurance Act and the privacy of consumer financial information provisions of the Gramm-Leach-Bliley Act. The Bank Secrecy Act of 1970 (‘BSA’) and subsequent laws and regulations require the bank to take steps to prevent the use of the bank or its systems from facilitating the flow of illegal or illicit money or terrorist funds. History Macatawa Bank Corporation, a Michigan corporation, was founded in 1997. The company was incorporated in 1997.