A two-year-old consent order between the banking unit of Macatawa Bank Corp. and regulators has been terminated after the Holland, Mich., company raised additional capital and reversed a string of money-losing quarters.
The consent order with the Federal Deposit Insurance Corp. and the Michigan Office of Financial and Insurance Regulation from February 2010 required Macatawa Bank to hire qualified management, raise capital and develop a plan to reduce its delinquencies and classified assets.
The $1.5 billion-asset Macatawa said Monday that it implemented more conservative lending policies and additional corporate governance practices to meet the order's requirements. It also hired a new chief credit officer in September 2010 after its previous one resigned in May 2010 and added new members to its board in the fall of 2010.
The company raised $20.3 million in a rights offering and a public offering of common stock in June. At Dec. 31, the bank's Tier 1 capital ratio was 8.43% and its total risk-based capital was 12.46%. The consent order required the bank to maintain a Tier 1 capital ratio of at least 8% and a total risk-based capital ratio of at least 11%.
Macatawa reported in early February that it earned $5.8 million for 2011, compared with a loss of $17.9 million in 2010. It attributed the improved earnings lowering to a decline in delinquencies and the fact that it recorded no provision for loan losses in the fourth quarter.