Macatawa Bank Corporation (MCBC) | Investment Case

1. Company Snapshot

1.a. Company Description

Macatawa Bank Corporation operates as the bank holding company for Macatawa Bank that provides commercial and consumer banking and trust services.The company accepts various deposits, such as checking accounts, savings accounts, time deposits, regular and money market savings accounts, certificates of deposit, and demand deposits.Its loan products include commercial and industrial loans comprising loans to finance operations and equipment; commercial real estate loans, which consist of construction and development, multi-family, and other non-residential real estate loans; and residential mortgage loans, as well as 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 offers ATM and debit card processing, cash management, trust, and brokerage services.In addition, it provides fraud protection; collection services; disbursement solutions; fund management; and investment and retirement plan services.It serves individuals, businesses, associations, churches, nonprofit organizations, financial institutions, and government authorities.

As of December 31, 2021, the company had 26 full-service branches in Kent, Ottawa, and northern Allegan counties, Michigan.Macatawa Bank Corporation was incorporated in 1997 and is based in Holland, Michigan.

Show Full description

1.b. Last Insights on MCBC

Macatawa Bank Corporation's recent performance was driven by the proposed sale to Wintrust Financial Corporation, which is expected to provide shareholders with a premium valuation. The company's strong financial performance, including a 14% increase in net income, has likely contributed to the interest in the acquisition. Additionally, the bank's efforts to expand its digital capabilities and improve customer experience may have also positively impacted its recent performance.

1.c. Company Highlights

Last Price	14.82
Change Percentage	-0.87%
Open	14.91
Previous Close	14.95
Market Cap ( Millions)	509
Volume	2782084
Year High	15.16
Year Low	8.31
M A 50	14.34
M A 200	11.62

FCF Yield	8.46%
Dividend Yield	0.00%
ROE	16.19%
Debt / Equity	10.73%
Net Debt / EBIDTA	-2.83%
Price To Book	1.77
Price Earnings Ratio	11.78
Price To FCF	11.82
Price To sales	3.85
EV / EBITDA	9.45

2. Transcript Summary

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3. NewsRoom

Macatawa Bank Corporation Announces Special Meeting Results

Jul -31

Source: globenewswire.com

CAPITAL BANCORP INVESTOR ALERT BY THE FORMER ATTORNEY GENERAL OF LOUISIANA: Kahn Swick & Foti, LLC Investigates Merger of Capital Bancorp, Inc. - CBNK

Jul -02

Source: prnewswire.com

MACATAWA BANK INVESTOR ALERT by the Former Attorney General of Louisiana: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of Macatawa Bank Corporation - MCBC

May -10

Source: businesswire.com

SHAREHOLDER INVESTIGATION: The M&A Class Action Firm Announces An Investigation of Hibbett, Inc.

Apr -26

Source: prnewswire.com

Macatawa Bank (MCBC) Q1 Earnings and Revenues Miss Estimates

Apr -25

Source: Zacks Investment Research

Macatawa Bank Corporation Declares Quarterly Dividend

Apr -25

Source: globenewswire.com

Macatawa Bank Corporation Reports First Quarter 2024 Results

Apr -25

Source: globenewswire.com

Macatawa (MCBC) Moves 37.7% Higher: Will This Strength Last?

Apr -17

Source: Zacks Investment Research

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.00%)

6. Segments

Commercial Banking

Expected Growth: 2.0%

Macatawa Bank Corporation's 2.0% growth in Commercial Banking is driven by a strong loan portfolio, increased commercial deposit growth, and expansion of treasury management services. Additionally, strategic investments in digital banking platforms and targeted marketing efforts have contributed to the segment's growth.

7. Detailed Products

Personal Banking

Macatawa Bank Corporation offers a range of personal banking services, including checking and savings accounts, credit cards, loans, and investment products.

Business Banking

Macatawa Bank Corporation provides business banking services, including commercial loans, cash management, and treasury management solutions.

Mortgage Lending

Macatawa Bank Corporation offers mortgage lending services, including residential and commercial mortgage loans.

Wealth Management

Macatawa Bank Corporation provides wealth management services, including investment management, trust services, and financial planning.

Insurance Services

Macatawa Bank Corporation offers insurance services, including life insurance, long-term care insurance, and annuities.

Online Banking

Macatawa Bank Corporation provides online banking services, including bill pay, fund transfers, and account management.

8. Macatawa Bank Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Macatawa Bank Corporation operates in a highly competitive industry, and customers have various alternatives to choose from. However, the bank's strong brand reputation and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

Macatawa Bank Corporation's customers have some bargaining power due to the availability of alternative banking services. However, the bank's strong relationships with its customers and personalized services reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Macatawa Bank Corporation has a diversified supplier base, which reduces the bargaining power of suppliers. The bank's strong financial position also gives it negotiating power over its suppliers.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory requirements and capital requirements. This makes it difficult for new entrants to enter the market, reducing the threat of new entrants.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. Macatawa Bank Corporation faces intense competition from larger banks and fintech companies, which increases the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	17.38%
Debt Cost	3.95%
Equity Weight	82.62%
Equity Cost	6.53%
WACC	6.08%
Leverage	21.03%

11. Quality Control: Macatawa Bank Corporation passed 5 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Heritage Financial

A-Score: 6.5/10

Value: 6.0

Growth: 3.9

Quality: 6.8

Yield: 8.0

Momentum: 7.0

Volatility: 7.3

1-Year Total Return ->

Esquire Financial

A-Score: 6.3/10

Value: 4.1

Growth: 8.8

Quality: 7.4

Yield: 1.0

Momentum: 9.5

Volatility: 7.3

1-Year Total Return ->

Citizens Community Bancorp

A-Score: 6.2/10

Value: 6.8

Growth: 5.2

Quality: 5.6

Yield: 4.0

Momentum: 7.0

Volatility: 8.7

1-Year Total Return ->

OptimumBank

A-Score: 5.6/10

Value: 9.1

Growth: 6.4

Quality: 8.0

Yield: 0.0

Momentum: 2.5

Volatility: 7.7

1-Year Total Return ->

CrossFirst Bankshares

A-Score: 5.6/10

Value: 6.3

Growth: 8.3

Quality: 7.8

Yield: 0.0

Momentum: 5.0

Volatility: 6.0

1-Year Total Return ->

Macatawa Bank

A-Score: 5.1/10

Value: 5.4

Growth: 6.6

Quality: 8.0

Yield: 3.0

Momentum: 5.0

Volatility: 2.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-5.17%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.08%

Macatawa Bank Corporation - US5542251021

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on MCBC

1.c. Company Highlights

Strong Momentum

More Volatile

Average Quality

Earnings Miss

Revenues Beats

Better Quality

Medium Volatility

Average Growth

Stable Momentum

Fairly Valued

Average Yield

Expensive

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.00%)

6. Segments

Commercial Banking

Expected Growth: 2.0%

7. Detailed Products

Personal Banking

Business Banking

Mortgage Lending

Wealth Management

Insurance Services

Online Banking

8. Macatawa Bank Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Macatawa Bank Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

14.82$

Current Price

14.82$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA