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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2004

OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number: 000-25927

MACATAWA BANK CORPORATION
(Exact name of issuer as specified in its charter)

Michigan
(State of other jurisdiction of
incorporation or organization)		 38-3391345
(I.R.S. Employer
Identification No.)

10753 Macatawa Drive, Holland, Michigan 49424
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (616) 820-1444

_________________

Indicate by check whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ___x___   No _____

Indicate by check whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes ___x___   No _____

The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 8,817,338 shares of the Company’s Common Stock (no par value) were outstanding as of October 28, 2004.

INDEX

Page
Number
Part I         Financial Information:  
 
                  Item 1 
                  Consolidated Financial Statements  3  
                  Notes to Consolidated Financial Statements  9  
 
                  Item 2 
                  Management's Discussion and Analysis of 
                  Financial Condition and Results of Operations  18  
 
                  Item 3 
                  Quantitative and Qualitative Disclosures 
                  About Market Risk  27  
 
                  Item 4 
                  Controls and Procedures  29  
 
Part II        Other Information: 
 
                  Item 1 
                  Legal Proceedings  29  
 
                  Item 2 
                  Changes in Securities and Use of Proceeds  30  
 
                  Item 3 
                  Defaults Upon Senior Securities  30  
 
                  Item 4 
                  Submission of Matters to a Vote of Security Holders  30  
 
                  Item 5 
                  Other Information  30  
 
                  Item 6 
                  Exhibits  31  
 
Signatures  32  

2

Part I Financial Information
Item 1.

MACATAWA BANK CORPORATION
CONSOLIDATED BALANCE SHEETS
As of September 30, 2004 (unaudited) and December 31, 2003

(dollars in thousands except share data) September 30,
2004		 December 31,
2003
ASSETS
   Cash and due from banks		   $      38,258   $      41,633  
   Federal funds sold  3,322   18,414  
      Cash and cash equivalents  41,580   60,047  
 
   Securities available for sale  132,860   107,049  
   Securities held to maturity  2,554   2,624  
   Federal Home Loan Bank stock  10,344   8,793  
   Loans held for sale  1,942   4,054  
   Total loans  1,361,017   1,157,107  
   Allowance for loan losses  (18,600 ) (16,093 )
   1,342,417   1,141,014  
 
   Premises and equipment - net  44,558   38,713  
   Accrued interest receivable  6,352   5,095  
   Goodwill  23,915   23,915  
   Acquisition intangibles  2,454   2,787  
   Other assets  8,018   7,020  
      Total assets  $ 1,616,994   $ 1,401,111  
LIABILITIES AND SHAREHOLDERS' EQUITY 
  Deposits 
      Noninterest-bearing  $    149,343   $    139,557  
      Interest-bearing  1,173,220   969,842  
         Total  1,322,563   1,109,399  
 
  Federal Home Loan Bank advances  121,616   145,680  
  Long-term debt  41,238   19,655  
  Accrued expenses and other liabilities  4,761   4,477  
          Total liabilities  1,490,178   1,279,211  
 
   Shareholders' equity 
     Preferred stock, no par value, 500,000 shares authorized; 
         no shares issued and outstanding 
     Common stock, no par value, 20,000,000 shares authorized; 
         8,812,591 shares and 8,370,073 issued and outstanding as of 
         September 30, 2004 and December 31, 2003, respectively  124,114   114,568  
     Retained earnings  1,152   5,300  
     Accumulated other comprehensive income  1,550   2,032  
        Total shareholders' equity  126,816   121,900  
   Total liabilities and shareholders' equity  $ 1,616,994   $ 1,401,111  

See accompanying notes to consolidated financial statements

3

MACATAWA BANK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Three and Nine Month Periods Ended September 30, 2004 and 2003
(unaudited)

(dollars in thousands except per share data) Three Months
Ended
September 30, 2004		 Three Months
Ended
September 30, 2003		 Nine Months
Ended
September 30, 2004		 Nine Months
Ended
September 30, 2003
Interest income
   Loans, including fees		   $18,838   $15,228   $52,073   $44,262  
   Securities  1,506   1,145   4,212   3,405  
      Total interest income  20,344   16,373   56,285   47,667  
 
Interest expense 
   Deposits  4,835   4,040   13,467   13,064  
   Other  1,890   1,397   5,238   3,772  
      Total interest expense  6,725   5,437   18,705   16,836  
Net interest income  13,619   10,936   37,580   30,831  
 
Provision for loan losses  3,900   1,040   6,565   2,905  
Net interest income after 
  provision for loan losses  9,719   9,896   31,015   27,926  
 
Noninterest income 
   Service charges on deposit accounts  795   648   2,175   1,900  
   Loan production revenue  340   1,319   1,617   3,278  
   Trust fees  684   620   2,255   1,806  
   Other  442   199   1,263   509  
      Total noninterest income  2,261   2,786   7,310   7,493  
 
Noninterest expense 
   Salaries and benefits  4,950   4,418   14,285   12,117  
   Occupancy  675   628   2,014   1,702  
   Furniture and equipment  689   680   2,095   1,915  
   Legal and professional fees  155   295   469   603  
   Advertising  295   270   867   752  
   Data processing  247   179   744   564  
   Supplies  137   145   407   420  
   Other  1,785   1,495   5,241   4,141  
      Total noninterest expenses  8,933   8,110   26,122   22,214  
Income before federal income tax  3,047   4,572   12,203   13,205  
 
Income tax expense  931   1,509   3,875   4,400  
Net income  $  2,116   $  3,063   $  8,328   $  8,805  
Basic earnings per share  $     .24   $     .35   $     .95   $    1.00  
Diluted earnings per share  .24   .34   .93   .99  
Dividends per share  .12   .10   .35   .28  

See accompanying notes to consolidated financial statements

4

MACATAWA BANK CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three and Nine Month Periods Ended September 30, 2004 and 2003
(unaudited)

(dollars in thousands) Three Months
ended
September 30, 2004		 Three Months
ended
September 30, 2003		 Nine Months
ended
September 30, 2004		 Nine Months
ended
September 30, 2003
Net income   $2,116   $ 3,063   $ 8,328   $ 8,805  
Other comprehensive income, net of tax: 
   Net unrealized gains/(losses) on 
     securities  2,220   (1,108 ) (281 ) (856 )
   Net unrealized gains/(losses) on 
     derivative instruments  921   436   (201 ) 441  
Comprehensive income  $5,257   $ 2,391   $ 7,846   $ 8,390  

See accompanying notes to consolidated financial statements






5

MACATAWA BANK CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Nine Month Periods Ended September 30, 2004 and 2003
(unaudited)

(dollars in thousands except per share data) Common
Stock		 Retained
Earnings		 Accumulated
Other
Comprehensive
Income		 Total
Shareholders'
Equity
Balance, January 1, 2003   $ 105,201   $ 5,931   $ 2,842   $ 113,974  
 
Net income for nine months ended September 30, 2003    8,805     8,805  
 
Other comprehensive income, net of tax: 
   Net unrealized losses on securities      (856 ) (856 )
   Net unrealized gains on derivative instruments      441   441  
        Comprehensive income    8,390
 
Issued 78,219 shares for stock option exercises  403      403  
 
Issued 397,664 shares in payment of 5% stock dividend  8,927  (8,941 )   (14 )
 
Cash dividends at $.28 per share    (2,466 )   (2,466 )
Balance, September 30, 2003  $ 114,531  $ 3,329   $ 2,427   $ 120,287  
Balance, January 1, 2004  $ 114,568  $ 5,300   $ 2,032   $ 121,900  
 
Net income for nine months ended 
   September 30, 2004    8,328     8,328  
 
Other comprehensive income, net of tax: 
   Net unrealized losses on securities      (281 ) (281 )
 
   Net unrealized losses on derivative 
     instruments      (201 ) (201 )
        Comprehensive income        7,846  
 
Issued 24,255 shares for stock option 
     exercises (net of 4,718 shares 
     exchanged)  216      216  
 
Issued 418,263 shares in payment of 5% 
     stock dividend  9,330  (9,355 )   (25 )
 
Cash dividends at $.35 per share    (3,121 )   (3,121 )
Balance, September 30, 2004  $ 124,114  $ 1,152   $ 1,550   $ 126,816  

See accompanying notes to consolidated financial statements

6

MACATAWA BANK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Month Periods Ended September 30, 2004 and 2003
(unaudited)

(dollars in thousands) Nine Months
Ended
September 30, 2004		 Nine Months
Ended
September 30, 2003
Cash flows from operating activities
   Net income		   $     8,328   $     8,805  
   Adjustments to reconcile net income to net 
      cash from operating activities: 
         Depreciation and amortization  2,214   2,166  
         Provision for loan losses  6,565   2,905  
         Loan production revenue  (1,617 ) (3,278 )
         Origination of loans for sale  (103,559 ) (283,075 )
         Proceeds from sales of loans originated for sale  107,288   296,589  
         Net change in: 
            Accrued interest receivable and other assets  (2,255 ) 2,717  
            Accrued expenses and other liabilities  234   (4,451 )
               Net cash from operating activities  17,198   22,378  
 
Cash flows from investing activities 
   Loan originations and payments, net  (207,968 ) (129,281 )
   Purchase of Federal Home Loan Bank Stock  (1,551 ) (1,648 )
   Purchases of securities available for sale  (57,074 ) (28,996 )
   Maturities and calls of securities available for sale  30,575   14,069  
   Principal paydowns on securities  353   2,365  
   Additions to premises and equipment  (7,752 ) (12,737 )
        Net cash used in investing activities  (243,417 ) (156,228 )
 
Cash flows from financing activities 
   Net increase in deposits  213,164   79,073  
   Net increase (decrease) in short term borrowings  ---   (3,541 )
   Proceeds from Federal Home Loan Bank advances  184,000   86,000  
   Repayments of Federal Home Loan Bank advances  (208,065 ) (54,998 )
   Proceeds from long-term debt and other borrowings  21,583   22,152  
   Repayments of other borrowings  ---   (7,218 )
   Cash dividends paid  (3,146 ) (2,480 )
   Proceeds from exercise of stock options  216   403  
        Net cash from financing activities  207,752   119,391  
Net change in cash and cash equivalents  (18,467 ) (14,459 )
 
Cash and cash equivalents at beginning of period  60,047   47,874  
Cash and cash equivalents at end of period  $   41,580   $   33,415  

See accompanying notes to consolidated financial statements

7

MACATAWA BANK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
Nine Month Periods Ended September 30, 2004 and 2003
(unaudited)

(dollars in thousands) Nine Months
Ended
September 30, 2004		 Nine Months
Ended
September 30, 2003
Supplemental disclosures of cash flow information
   Cash paid during the period for:		      
      Interest  $18,610   $17,353  
      Income taxes  4,125   4,600  

See accompanying notes to consolidated financial statements

8

MACATAWA BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

NOTE 1 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 2004, are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. For further information, refer to the consolidated financial statements and footnotes thereto included in Macatawa Bank Corporation’s (the “Company”) 2003 Annual Report containing financial statements for the year ended December 31, 2003.

All per share amounts and average shares outstanding have been adjusted for all periods presented to reflect the 5% stock dividends distributed on May 28, 2004 and May 30, 2003.

Employee compensation expense under stock option plans is reported using the intrinsic value method. No compensation cost related to stock options was recognized during the three and nine month periods ended September 30, 2004 and 2003, as all options granted had an exercise price equal to or greater than the market price of the underlying common stock at date of grant. Had compensation cost for stock options been measured using the fair value method, net income and basic and diluted earnings per share would have been the pro forma amounts indicated below (dollars in thousands except per share data). The pro forma effect may increase in the future if more options are granted.

Three Months
Ended
September 30, 2004		 Three Months
Ended
September 30, 2003		 Nine Months
Ended
September 30, 2004		 Nine Months
Ended
September 30, 2003