1053584--3/30/2010--MACATAWA_BANK

related topics

{stock, price, share}

{financial, litigation, operation}

{loan, real, estate}

{loss, insurance, financial}

{condition, economic, financial}

{competitive, industry, competition}

{debt, indebtedness, cash}

{stock, price, operating}

{regulation, change, law}

{acquisition, growth, future}

{control, financial, internal}

{interest, director, officer}

{product, market, service}

{provision, law, control}

{personnel, key, retain}

{tax, income, asset}

{capital, credit, financial}

Risks related to the Company's Business The Company's past operating results may not be indicative of its future operating results. Our elevated level of non-performing assets and other problem loans could continue to have an adverse effect on the Company's results of operations and financial condition. The national, state and local economic conditions could have a material adverse effect on the Company's results of operations and financial condition. The failure to comply with the Consent Order could result in enforcement proceedings. The Company will likely become subject to a regulatory order. Our independent auditor has included a going concern paragraph in its opinion on its audit of our consolidated financial statements. If the Company cannot raise additional capital to satisfy the capital levels required by the Consent Order in a timely fashion, then its ability to maintain its current level of assets and to further expand its operations through organic growth could be materially impaired. In addition, the Bank could become subject to an enforcement action. The state of financial markets and the economy may adversely affect our sources of liquidity and capital. The Company and Bank are subject to liquidity risk in their operations, which could adversely affect their ability to fund various obligations. The Bank cannot accept, renew or roll over brokered deposits without a waiver from the FDIC, which could materially adversely affect the Bank's liquidity position. If the Transaction Account Guaranty Program of the FDIC's Temporary Liquidity Guarantee Program expires on June 30, 2010 as currently scheduled, then the Bank could experience a significant reduction in uninsured deposits, which could materially adversely affect the Bank's liquidity position. If the condition of the Bank's loan portfolio continues to worsen, its ability to borrow funds from the Federal Home Loan Bank could be adversely affected, which could materially adversely affect the Bank's liquidity position. Our credit losses could increase and our allowance for loan losses may not be adequate to cover actual loan losses. Our business is subject to various lending risks depending on the nature of the borrower's business, its cash flow and our collateral. Our loan portfolio has and will continue to be affected by the on-going correction in residential real estate prices and reduced levels of home sales. The Company may be required to pay additional insurance premiums to the FDIC, which could negatively impact earnings. We rely heavily on our management and other key personnel, and the loss of any of them may adversely affect our operations. The Company's controls and procedures may fail or be circumvented. The Company may be a defendant in a variety of litigation and other actions, which may have a material adverse effect on the Company's financial condition and results of operations. The Company could be adversely affected by the soundness of other financial institutions, including defaults by larger financial institutions. Our future success is dependent on our ability to compete effectively in the highly competitive banking industry. We are subject to significant government regulation, and any regulatory changes may adversely affect us. Evaluation of investment securities for other-than-temporary impairment involves subjective determinations and could materially impact the Company's results of The Company depends upon the accuracy and completeness of information about customers. We continually encounter technological change, and we may have fewer resources than our competitors to continue to invest in technological improvements. Risks associated with the Company's stock The Company's ability to pay dividends is limited and it may be unable to pay future dividends. The market price for our common stock fluctuates. The Company may issue additional shares of its common stock in the future, which could dilute a shareholder's ownership of common stock. The Company may issue debt and equity securities that are senior to Company common stock as to distributions and in liquidation, which could negatively affect the value of Company common stock. Exercise of our outstanding Warrants to purchase common stock or conversion of our outstanding preferred stock could substantially dilute a shareholder's ownership of common stock. Our articles of incorporation and bylaws and Michigan laws contain certain provisions that could make a takeover more difficult.

Full 10-K form ▸

1053584--3/30/2010--MACATAWA_BANK_CORP