Shares of Macatawa Bank Corp. fell sharply Monday after the Holland, Mich., company restated its second-quarter earnings and said it would suspend its dividend payment to shareholders.
The $2.1 billion-asset Macatawa previously announced that it had earned $2.2 million in the quarter. But after reviewing its loan portfolio and adding $15 million to its loan-loss provision, it now says it lost $8.1 million. The restated results also include an $878,000 loss on foreclosed properties.
"The additional provisions and losses reflect continued weakness in the company's portfolio of real estate loans," Macatawa said.
The company said that it would remain well capitalized after taking the provision. Nevertheless, it has begun work to raise more capital "to provide additional liquidity and strengthen its financial position."
It also said it expects to save $9 million over the next year by suspending its dividend payment.
Macatawa's shares dropped 23.4% Monday, to close at $6.99.