Macatawa Bank Corporation Form 11-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

_________________

FORM 11-K

ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Mark One):
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. [NO FEE REQUIRED]

For the fiscal year ended December 31, 2004

OR

[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED].

  For the transition period from ______________ to _______________

Commission file number         000-25927

A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Macatawa Bank 401(k) Plan

B. Name of the issuer of the securities held pursuant to the plan and the address of its principal executive office:

MACATAWA BANK CORPORATION
10753 Macatawa Drive
Holland, Michigan 49424


MACATAWA BANK
401(k) PLAN

TABLE OF CONTENTS


PAGE

Report of Independent Registered Public Accounting Firm

Financial Statements for the Years Ended December 31, 2004 and 2003

     Statements of Net Assets Available for Benefits

     Statements of Changes in Net Assets Available for Benefits

     Notes to Financial Statements
4-7

Supplementary Information for the Year Ended December 31, 2004

     Schedule H, Line 4i - Schedule of Assets (Held at End of Year)



REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

May 25, 2005

Plan Administrator
Macatawa Bank 401(k) Plan
Holland, Michigan

We have audited the accompanying statement of net assets available for benefits of the Macatawa Bank 401(k) Plan (the “Plan”) as of December 31, 2004, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Macatawa Bank 401(k) Plan as of December 31, 2003, and for the year then ended, were audited by other auditors whose report dated May 4, 2004, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the 2004 financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2004, and the changes in net assets available for benefits for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The December 31, 2004 supplemental schedule of assets (held at end of year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic 2004 financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic 2004 financial statements as a whole.

/s/ Rehmann Robson




5800 Gratiot • Suite 201 • P.O. Box 2025 • Saginaw, MI 48605 • 989.799.9580 • Fax 989.799.0227 • www.rehmann.com


MACATAWA BANK
401(k) PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS


December 31

ASSETS 2004 2003


Investments, at fair value            
   Mutual funds   $ 9,094,990   $ 6,791,622  
   Common stock    689,747    201,633  
   Participant loans    6,910    10,682  


Total investments    9,791,647    7,003,937  


Cash    11,735    11,294  


Receivables  
   Employer contribution    7,271    6,907  
   Dividend receivable    2,698    24,544  


Total receivables    9,969    31,451  


Total assets (equal to net assets available for benefits)   $ 9,813,351   $ 7,046,682  


The accompanying notes are an integral part of these financial statements.

-2-


MACATAWA BANK
401(k) PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS


Year Ended December 31

2004 2003


Additions to net assets attributed to            
   Investment income  
     Net appreciation in fair value of mutual funds   $ 740,549   $ 1,121,824  
     Net appreciation in fair value of common stock    100,576    23,534  
     Dividends and interest    230,823    85,518  


   Total investment income    1,071,948    1,230,876  


   Contributions  
     Employer's    560,613    440,424  
     Participants'    1,062,090    800,764  
     Rollovers    454,092    1,155,511  


   Total contributions    2,076,795    2,396,699  


Total additions    3,148,743    3,627,575  
   
Deductions from net assets attributed to  
   Benefits paid to participants    382,074    480,914  


Net increase    2,766,669    3,146,661  
   
Net assets available for benefits  
   Beginning of year    7,046,682    3,900,021  


   End of year   $ 9,813,351   $ 7,046,682  


The accompanying notes are an integral part of these financial statements.

-3-


MACATAWA BANK
401(k) PLAN

NOTES TO FINANCIAL STATEMENTS


1. DESCRIPTION OF THE PLAN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  The following description of the Macatawa Bank 401(k) Plan (“Plan”) provides only general information. Participants should refer to the Plan agreement, or Summary Plan Description for a more complete description of the Plan’s provisions. Macatawa Bank is a 100% owned subsidiary of Macatawa Bank Corporation.

  Description of the Plan

  General

  The Plan is a defined contribution plan covering all full-time employees of the Macatawa Bank Corporation (“Plan Sponsor”) who have attained the age of 21, or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

  Contributions

  Each year participants may contribute from pretax annual compensation, as defined in the Plan, up to the maximum amount permissible under Internal Revenue Code Section 402(g). Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. The Plan’s Sponsor contributes an amount equal to 100% of the first 3% and 50% of the second 3% of base compensation that a participant contributes to the Plan. Participants direct the investment of contributions into various investment options offered by the Plan. The Plan currently offers mutual funds as investment options for participants, plus Macatawa Bank Corporation common stock which was added as an investment option to the Plan in 2003.

  Participant Accounts

  Each participant’s account is credited with the participant’s contribution, the Plan Sponsor match, and an allocation of Plan earnings. Plan earnings are allocated based on the ratio of each participant’s account balance to the total account balance. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

  Vesting

  A participant is immediately vested in employee and employer matching contributions, plus actual earnings thereon.

-4-


MACATAWA BANK
401(k) PLAN

NOTES TO FINANCIAL STATEMENTS


  Participant Loans

  Participant loans, although not permitted by the Plan, result from participant rollovers from predecessor plans. Loan balances are secured by the balance in the participant’s account, have interest rates ranging from 5.75% to 10.50%, and expected maturities through March 2007. Principal and interest is paid ratably through payroll deductions.

  Payment of Benefits

  On termination of service due to death, disability or retirement, a participant may elect to receive a lump-sum amount equal to the value of his or her vested account as defined by the Plan agreement. For termination of service for other reasons, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution.

  Summary of Significant Accounting Policies

  Use of Estimates

  The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

  Basis of Accounting

  The financial statements of the Plan are prepared under the accrual method of accounting.

  Investment Valuation and Income Recognition

  The Plan’s investments are stated at fair value. Quoted market prices are used to value investments. Shares of registered investment companies are valued at the net asset value of shares held by the Plan at year-end. Money market fund investments and participant loans are reported at cost, which approximates fair value.

  Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

  Administrative Expenses

  The Plan Sponsor pays substantially all administrative expenses.

  Payment of Benefits

  Benefits are recorded when paid.

-5-


MACATAWA BANK
401(k) PLAN

NOTES TO FINANCIAL STATEMENTS


  Reclassification

  Certain amounts as reported in the 2003 financial statements have been reclassified to conform with the 2004 presentation.

2. INVESTMENTS

  Investments representing 5% or more of the Plan’s net assets available for benefits are as follows at December 31:

2004 2003


Investments at fair value as determined by quoted market price            
    Mutual Funds  
       Fidelity Spartan U.S. Equity Index Fund   $ 1,659,911   $ 1,473,457  
       Fidelity Dividend Growth Fund    1,260,238    1,110,486  
       Dodge and Cox Stock Fund    863,171    366,651  
       Neuberger Berman Genesis Fund    789,574    455,288  
       Fidelity Diversified International Fund    784,480    477,856  
       Columbia Acorn Fund    732,722    414,107  
       Fidelity Government Income Fund    641,656    354,746  
       Fidelity Aggressive Growth Fund    556,769    441,274  
    Common Stock  
       Macatawa Bank Corporation    689,747    -  

3. PARTY-IN-INTEREST TRANSACTIONS

  Parties-in-interest are defined under Department of Labor (DOL) regulations as any fiduciary of the Plan, any party rendering service to the Plan, the employer, and certain others. The Plan’s investment in participant loans as of December 31, 2004 and 2003 represent party-in-interest investments.

  Macatawa Bank, through its trust department, serves as trustee, custodian and recordkeeper for the Plan. Therefore, all transactions between the Plan and Macatawa Bank constitute party-in-interest transactions.

  The 21,361 and 7,103 shares of Macatawa Bank Corporation common stock held by the Plan as of December 31, 2004 and 2003 represents approximately 0.24% and .08% of the Corporation’s outstanding shares as of December 31, 2004 and 2003, respectively.

  Cash dividends of $7,618 and $1,211 were paid to the Plan by Macatawa Bank Corporation during 2004 and 2003, respectively. The Plan held the following party-in-interest investments (at fair value) as of December 31:

2004 2003


    Macatawa Bank Corporation common stock     $ 689,747   $ 201,633  

-6-


MACATAWA BANK
401(k) PLAN

NOTES TO FINANCIAL STATEMENTS


4. INCOME TAX STATUS

  The Macatawa Bank 401(k) Plan is a prototype plan, and uses a standardized Plan document. The Internal Revenue Service has determined and informed the Plan by letter dated January 12, 2004, that the prototype plan is designed in accordance with the applicable sections of the Internal Revenue Code (IRC) for tax exempt status. The Plan Administrator believes the Plan is being operated in accordance with the terms of the Plan document and continues to qualify for tax-exempt status.

5. PLAN TERMINATION

  Although it has not expressed any intent to do so, Macatawa Bank Corporation has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA.

6. RISKS AND UNCERTAINTIES

  The Plan provides for investment options in various mutual funds and Macatawa Bank Corporation common stock. Investment securities are exposed to various risks, such as, interest rate, market and credit risks. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statement of net assets available for benefits and participants’ individual account balances.

* * * * *

-7-






SUPPLEMENTARY INFORMATION






MACATAWA BANK
401(k) PLAN

SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)

DECEMBER 31, 2004

PLAN #001

EIN 38-3378283


(a) (b) Identity of
Issue, Borrower,
Lessor, or
Similar Party
(c) Description of
Investment Including
Maturity Date, Rate of
Interest, Collateral,
Par or Maturity Value
(e)
Current
Value




    Mutual funds              
       Fidelity Investments   Spartan U.S. Equity Index Fund 38,729 shares   $ 1,659,911  
       Fidelity Investments   Dividend Growth Fund, 44,234 shares    1,260,238  
       Dodge and Cox Funds   Dodge and Cox Stock Fund, 6,629 shares    863,171  
       Neuberger Berman   Neuberger Berman Genesis Fund, 26,460 shares    789,574  
       Fidelity Investments   Diversified International Fund, 27,391 shares    784,480  
       Columbia   Columbia Acorn Fund, 27,702 shares    732,722  
       Fidelity Investments   Government Income Fund, 62,662 shares    641,656  
       Fidelity Investments   Aggressive Growth Fund, 33,540 shares    556,769  
       Vanguard   Vanguard Mid-Cap Index Fund, 27,149 shares    424,608  
       T. Rowe Price International   T. Rowe Price PS Balanced Fund, 22,036 shares    400,842  
       Value Line Mutual Funds   Value Line Income Growth Fund, 46,130 shares    385,183  
       Northern Trust   Money Market Fund, 233,735 shares    233,735  
       T. Rowe Price International   T. Rowe Price PS Growth Fund, 9,034 shares    197,940  
       Strong   Strong Opportunity Fund, 2,853 shares    132,366  
       T. Rowe Price International   T. Rowe Price PS Income Fund, 2,143 shares    31,795  

          9,094,990  

   Common stock  
*       Macatawa Bank Corporation   Common stock, 21,361 shares    689,747  

   Cash  
       Dreyfus   Cash Management Fund, 11,735 shares    11,735  

   Loans  
*       Participant loans   Maturing through March 2007  
   with interest rates ranging from  
   5.75% to 10.50%    6,910  

   Total      $ 9,803,382  

(a) An asterisk in this column identifies a person known to be a party-in-interest.

9


SIGNATURES

        The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees of the Macatawa Bank Corporation 401(k) Plan have caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

MACATAWA BANK 401(K) PLAN


By: /s/ Thomas DeWitt
      ——————————————
      Thomas DeWitt

Date: June 17, 2005


EXHIBIT INDEX

Exhibit No. Description

23.1 Consent of Independent Registered Public Accounting Firm