NasdaqGS:MCBC

Stock Analysis Report

Executive Summary

Macatawa Bank Corporation operates as the bank holding company for Macatawa Bank that provides commercial and consumer banking and trust services.

Rewards

Trading at 26.7% below its fair value

Earnings grew by 21.2% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -3.4% per year for the next 3 years

High level of non-cash earnings

Unstable dividend track record



Snowflake Analysis

Flawless balance sheet and good value.


Similar Companies

Share Price & News

How has Macatawa Bank's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MCBC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.3%

MCBC

0.3%

US Banks

0.9%

US Market


1 Year Return

2.3%

MCBC

12.0%

US Banks

20.0%

US Market

Return vs Industry: MCBC underperformed the US Banks industry which returned 12.1% over the past year.

Return vs Market: MCBC underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

MCBCIndustryMarket
7 Day-0.3%0.3%0.9%
30 Day-1.9%-1.3%1.4%
90 Day-0.4%1.2%8.8%
1 Year5.2%2.3%15.3%12.0%22.5%20.0%
3 Year11.9%4.1%25.1%16.2%49.9%40.3%
5 Year122.2%99.1%76.7%56.6%73.2%54.1%

Price Volatility Vs. Market

How volatile is Macatawa Bank's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Macatawa Bank undervalued compared to its fair value and its price relative to the market?

26.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MCBC ($10.61) is trading below our estimate of fair value ($14.48)

Significantly Below Fair Value: MCBC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MCBC is good value based on its PE Ratio (11.3x) compared to the Banks industry average (12.6x).

PE vs Market: MCBC is good value based on its PE Ratio (11.3x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: MCBC's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: MCBC is overvalued based on its PB Ratio (1.7x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is Macatawa Bank forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

-3.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCBC's earnings are forecast to decline over the next 3 years (-3.4% per year).

Earnings vs Market: MCBC's earnings are forecast to decline over the next 3 years (-3.4% per year).

High Growth Earnings: MCBC's earnings are forecast to decline over the next 3 years.

Revenue vs Market: MCBC's revenue (0.7% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: MCBC's revenue (0.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MCBC's Return on Equity is forecast to be low in 3 years time (12.3%).


Next Steps

Past Performance

How has Macatawa Bank performed over the past 5 years?

22.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MCBC has a high level of non-cash earnings.

Growing Profit Margin: MCBC's current net profit margins (38.2%) are higher than last year (34.4%).


Past Earnings Growth Analysis

Earnings Trend: MCBC's earnings have grown significantly by 22.7% per year over the past 5 years.

Accelerating Growth: MCBC's earnings growth over the past year (21.2%) is below its 5-year average (22.7% per year).

Earnings vs Industry: MCBC earnings growth over the past year (21.2%) exceeded the Banks industry 12.2%.


Return on Equity

High ROE: MCBC's Return on Equity (14.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Macatawa Bank's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: MCBC has a low level of unsold assets or inventory.

Debt Coverage by Assets: MCBC's debt is covered by short term assets (assets are 3.5x debt).


Financial Institutions Analysis

Asset Level: MCBC's level of assets compared to its equity is low.

Allowance for Bad Loans: MCBC has a sufficient allowance for bad loans.

Low Risk Liabilities: MCBC's liabilities are made up of primarily low risk sources of funding.

Loan Level: MCBC has an acceptable proportion of non-loan assets held.

Low Risk Deposits: MCBC's loans are broadly funded by customer deposits.

Level of Bad Loans: MCBC has an appropriate level of bad loans (0.01%)


Next Steps

Dividend

What is Macatawa Bank's current dividend yield, its reliability and sustainability?

3.02%

Current Dividend Yield


Dividend Yield vs Market

company3.0%marketbottom25%1.4%markettop25%3.7%industryaverage2.8%forecastin3Years3.4%

Current dividend yield vs market & industry

Notable Dividend: MCBC's dividend (3.02%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: MCBC's dividend (3.02%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, MCBC has been paying a dividend for less than 10 years.

Growing Dividend: MCBC's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (29.8%), MCBC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MCBC's dividends in 3 years are forecast to be well covered by earnings (43.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

11.0yrs

Average management tenure


CEO

Ron Haan (65yo)

11yrs

Tenure

US$556,854

Compensation

Mr. Ronald L. Haan, also known as Ron, has been the Chief Executive Officer and President of Macatawa Bank Corporation (the “Company”) since August 2009. Mr. Haan serves as Chairman, President and Chief Ex ...


CEO Compensation Analysis

Compensation vs Market: Ron's total compensation ($USD556.85K) is below average for companies of similar size in the US market ($USD1.68M).

Compensation vs Earnings: Ron's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Ronald Haan
President11yrsUS$556.85k0.84% $3.0m
Jon Swets
Senior VP17.6yrsUS$306.23k0.35% $1.3m
Craig Hankinson
Chief Operating Officer3yrsUS$367.73k0.16% $584.7k
Jill Walcott
Senior VP & Chief Retail Banking Officer18.1yrsUS$276.06k0.21% $761.3k
Jeff Tatreau
Senior VP & CTO0yrsno datano data
Jodi Sevigny
Senior VP & Chief Marketing Officer0yrsno datano data
Sandra Holzgen
Senior VP & Chief Human Resources Officer2.5yrsno datano data
Timothy Doyle
Senior VP & Chief Commercial Banking Officer0yrsno data0.045% $164.1k
Erich VanRavenswaay
Senior VP & Chief Wealth Management Officer0yrsno datano data
Justin Van Beek
Senior VP & Chief Risk Officer0yrsno datano data

11.0yrs

Average Tenure

53yo

Average Age

Experienced Management: MCBC's management team is seasoned and experienced (11 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Ronald Haan
President11yrsUS$556.85k0.84% $3.0m
Birgit Klohs
Independent Director9.4yrsUS$40.25k0.027% $98.4k
Richard Postma
Independent Chairman of the Board10.3yrsno data4.58% $16.5m
Douglas Padnos
Independent Director10.5yrsUS$43.70k0.38% $1.4m
Charles Geenen
Independent Director9.4yrsUS$42.75k0.34% $1.2m
Robert Herr
Independent Director9.3yrsUS$47.25k0.059% $213.1k
Thomas Rosenbach
Independent Director9.3yrsUS$45.70k0.13% $453.2k
Michael Le Roy
Independent Director4.2yrsUS$41.30k0.014% $50.0k

9.4yrs

Average Tenure

65yo

Average Age

Experienced Board: MCBC's board of directors are considered experienced (9.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Macatawa Bank Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Macatawa Bank Corporation
  • Ticker: MCBC
  • Exchange: NasdaqGS
  • Founded: 1997
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$361.388m
  • Shares outstanding: 34.06m
  • Website: https://www.macatawabank.com

Number of Employees


Location

  • Macatawa Bank Corporation
  • 10753 Macatawa Drive
  • Holland
  • Michigan
  • 49424
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MCBCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDApr 1998

Biography

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, and multi-family and other non-residential real estate loans; retail loans, such as residential mortgage loans; and 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, and trust and brokerage services. It serves individuals, businesses, associations, churches, nonprofit organizations, financial institutions, and government authorities through 26 branch offices, as well as a lending and operation service facility in Kent County, Ottawa County, and northern Allegan County, Michigan. Macatawa Bank Corporation was founded in 1997 and is headquartered in Holland, Michigan. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 23:44
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.