ChoiceOne Financial Services, Inc. (“ChoiceOne”, NASDAQ:COFS), the parent company for ChoiceOne Bank, reported financial results for the quarter ended December 31, 2025.
Significant items impacting comparable periods of 2024 and 2025 results include the following:
— On March 1, 2025, ChoiceOne completed the merger (the “Merger”) of Fentura Financial, Inc. (“Fentura”), the former parent company of The State Bank, with and into ChoiceOne with ChoiceOne surviving the merger. On March 14, 2025, the consolidation of The State Bank with and into ChoiceOne Bank with ChoiceOne Bank surviving the consolidation was completed.
— The total assets, loans and deposits acquired in the Merger were approximately $1.8 billion, $1.4 billion and $1.4 billion, respectively.
— Merger related expenses, net of taxes, of $13.9 million or $0.99 per diluted share for the year ended December 31, 2025. There were no merger expenses in the fourth quarter of 2025 and management does not anticipate additional material merger expenses.
— Merger related provision for credit losses, net of taxes, of $9.5 million during the first quarter ended March 31, 2025, or $0.68 per diluted share for the year ended December 31, 2025.
Highlights
— ChoiceOne reported net income of $13,867,000 and $28,176,000 for the three months ended and year ended December 31, 2025, compared to net income of $7,159,000 and $26,727,000 for the same periods in the prior year, respectively. Net income excluding merger expenses, net of taxes, and merger related provision for credit losses, net of taxes, was $13,867,000 and $51,524,000 for the three months ended and year ended December 31, 2025, respectively.
— Diluted earnings per share were $0.92 and $2.01 for the three months ended and year ended December 31, 2025, compared to diluted earnings per share of $0.79 and $3.25 in the same periods in the prior year. Diluted earnings per share excluding merger expenses, net of taxes, and merger related provision for credit losses, net of taxes, were $0.92 and $3.68 for the three months ended and year ended December 31, 2025.
— Core loans, which exclude held for sale loans and loans to other financial institutions, increased by $55.6 million or 7.6% on an annualized basis during the fourth quarter of 2025 and grew organically by $86.1 million or 5.7% during the twelve months ended December 31, 2025. Core loans also grew by $1.4 billion due to the Merger on March 1, 2025.
— Asset quality continues to remain strong, with annualized net loan charge-offs to average loans of 0.04%. Nonperforming loans to total loans (excluding loans held for sale) increased to 0.98% as of December 31, 2025 compared to 0.69% as of September 30, 2025. Notably, 0.63% of the nonperforming loans to total loans (excluding loans held for sale) is attributed to certain purchased loans which were identified prior to the Merger as having credit deterioration. Importantly, we believe this uptick is not indicative of a broader trend, and current portfolio performance does not suggest emerging weakness in underlying credit quality.
“2025 was a landmark year for ChoiceOne–not only because of the successful merger with Fentura and its subsidiary, The State Bank, but also due to our strong financial performance. These accomplishments are a direct result of the hard work and dedication of our exceptional team, whose efforts truly shined throughout the year” said Kelly Potes, Chief Executive Officer.
ChoiceOne reported net income of $13,867,000 and $28,176,000 for the three months ended and year ended December 31, 2025, compared to net income of $7,159,000 and $26,727,000 for the same periods in the prior year, respectively. Net income excluding merger expenses, net of taxes, and merger related provision for credit losses, net of taxes, was $13,867,000 and $51,524,000 for the three months ended and year ended December 31, 2025, respectively. Diluted earnings per share were $0.92 and $2.01 for the three months ended and year ended December 31, 2025, compared to diluted earnings per share of $0.79 and $3.25 in the same periods in the prior year. Diluted earnings per share excluding merger expenses, net of taxes, and merger related provision for credit losses, net of taxes, were $0.92 and $3.68 for the three months ended and year ended December 31, 2025.
As of December 31, 2025, total assets were $4.4 billion, an increase of $1.7 billion compared to December 31, 2024. The growth in total assets is primarily attributed to the Merger. In addition to growth related to the Merger, ChoiceOne also grew in core loans, securities and loans to other financial institutions, which consist of a warehouse line of credit used to facilitate mortgage loan originations. Interest rates and balances from this warehouse line of credit fluctuate with the national mortgage market and are short term in nature.
Core loans, which exclude held for sale loans and loans to other financial institutions, increased by $55.6 million or 7.6% on an annualized basis during the fourth quarter of 2025 and grew organically by $86.1 million or 5.7% during the twelve months ended December 31, 2025. Core loans also grew by $1.4 billion due to the Merger on March 1, 2025. Loan interest income increased $23.0 million in the fourth quarter of 2025 compared to the same period in 2024 and decreased $506,000 compared to the third quarter of 2025. The decrease from the third quarter is due to rate reductions in PRIME rate loans which are tied to changes in the federal funds rate and a decrease in interest income due to accretion from purchased loans. Interest income for the three months ended December 31, 2025, includes $3.1 million of interest income due to accretion from purchased loans compared to $3.6 million for the three months ended September 30, 2025. Interest income due to accretion from purchased loans increased GAAP net interest margin by 29 and 36 basis points in the fourth and third quarter of 2025, respectively. Of this amount, $2.3 million was calculated using the effective interest rate method of amortization, while the remaining $635,000 resulted from accretion through unexpected payoffs and paydowns of loans with an associated fair value mark. Estimated interest income due to accretion from purchased loans for 2026 using the effective interest method of amortization is $8.0 million; however, actual results will be dependent on prepayment speeds and other factors. It is estimated that a total of $53.1 million remains to be recognized as interest income due to accretion from purchased loans over the life of the loan portfolio.
Deposits, excluding brokered deposits, increased by $760,000 as of December 31, 2025, compared to September 30, 2025. Deposits, excluding brokered deposits, increased by $1.3 billion as of December 31, 2025, compared to December 31, 2024 largely as a result of the Merger. ChoiceOne continues to be proactive in managing its liquidity position by using brokered deposits and short term FHLB advances to ensure ample liquidity. As of December 31, 2025, the total balance of borrowed funds from the FHLB was $265.0 million at a weighted average rate of 3.83%, with $245.0 million due within 12 months. At December 31, 2025, total available borrowing capacity secured by pledged assets was $1.1 billion. ChoiceOne can increase its borrowing capacity by utilizing unsecured federal fund lines and pledging additional assets. Uninsured deposits totaled $1.2 billion or 33.2% of deposits at December 31, 2025.
In the three months ended December 31, 2025, ChoiceOne’s annualized cost of deposits to average total deposits remained flat compared to the three months ended September 30, 2025 and was down one basis point compared to the three months ended December 31, 2024, despite the higher-cost deposits acquired through the Merger. The annualized cost of funds decreased by 11 basis points, from 1.90% to 1.79% in the three months ended December 31, 2025 compared to the same period in the prior year, primarily due to a decrease in higher cost local and brokered CDs. Interest expense on borrowings for the three months ended December 31, 2025, increased by $289,000 compared to the same period in the prior year, due to a $58.2 million increase in the average balance borrowed offset by a reduction in rates. In the three months ended December 31, 2025, compared to the three months ended September 30, 2025, annualized cost of funds increased 2 basis points from 1.77% to 1.79% despite reductions in federal funds rates during the fourth quarter. This is due to the timing of reductions to customer rates later in the fourth quarter, increased competition for deposits, and the reduction of cash flow on pay-fixed swaps tied to interest bearing deposits which offset interest expense. With ChoiceOne’s already low cost of deposits and market conditions, further reductions in federal funds rates may not immediately offset with savings on reductions in deposits and short term borrowings.
The provision for credit losses on loans was $1.1 million in the fourth quarter of 2025, due to $112.1 million of loan growth in the portfolio, excluding loans held for sale, and $305,000 in net charge offs. The ratio of the allowance for credit losses to total loans (excluding loans held for sale) was 1.18% on December 31, 2025 compared to 1.19% on September 30, 2025, and 1.07% on December 31, 2024. Asset quality continues to remain strong, with annualized net loan charge-offs to average loans of 0.04%. Nonperforming loans to total loans (excluding loans held for sale) increased to 0.98% as of December 31, 2025 compared to 0.69% as of September 30, 2025. Notably, 0.63% of the nonperforming loans to total loans (excluding loans held for sale) is attributed to certain purchased loans which were identified prior to the Merger as having credit deterioration. Importantly, we believe this uptick is not indicative of a broader trend, and current portfolio performance does not suggest emerging weakness in underlying credit quality.
ChoiceOne uses interest rate swaps to manage interest rate exposure to certain fixed rate assets and variable rate liabilities. During the third quarter of 2025, ChoiceOne entered into $30.4 million in amortizing pay-fixed interest rate swaps to hedge interest rate risk on approximately $40.6 million of newly purchased agency mortgage backed securities. The interest rate swaps are designed to amortize with the expected cash flow of the bonds and hold a coupon of 3.52% and a contractual term ending in 2040. On December 31, 2025, ChoiceOne held pay-fixed interest rate swaps with a total notional value of $380.4 million, a weighted average coupon of 3.15%, a fair value of $8.4 million and an average remaining contract length of 7.0 years. Settlements from interest rate swaps amounted to $955,000 for the fourth quarter of 2025 compared to $1.3 million for the third quarter of 2025. In addition to the pay-fixed interest rate swaps, ChoiceOne also employs back-to-back swaps on select commercial loans, with the impact reflected in interest income. In January 2026, ChoiceOne exited $201.0 million of pay?fixed interest rate swaps with a coupon of 3.4%, realizing a small gain, that will be applied to the basis of the hedged bonds. After evaluating multiple rate scenarios, we determined that our interest rate risk profile and overall balance?sheet flexibility are improved without the pay?fixed interest rate swaps, and we believe this action better aligns our interest?rate posture with long?term value creation for shareholders. Following this exit, ChoiceOne has approximately $180 million of pay-fixed interest rate swaps with a weighted average coupon of 2.88%.
As of December 31, 2025, shareholders’ equity was $465.4 million, a significant increase from $260.4 million on December 31, 2024. This growth was primarily driven by the Merger, in which ChoiceOne issued 6,070,836 shares of common stock on March 1, 2025, valued at $193.0 million. Additional growth of $2.1 million is the result of improvement to accumulated other comprehensive loss during the year. ChoiceOne also repurchased 25,116 shares of stock for a net cost of $775,000 under our existing share repurchase plan. The repurchase plan has 350,272 shares remaining to purchase as of December 31, 2025. The repurchase reflects our view that our capital position is healthy and the repurchase of shares is in the best interest of our shareholders. ChoiceOne Bank continues to be “well-capitalized,” with a total risk-based capital ratio of 12.5% as of December 31, 2025, compared to 12.7% on December 31, 2024.
Noninterest income increased by $1.1 million and $6.7 million for the three months ended and year ended December 31, 2025, compared to the same periods in the prior year. This increase was partly driven by higher interchange income, which rose due to increased volume from the Merger. Trust income as well as insurance and investment commissions income also increased as a result of higher estate settlement fees and customers obtained from the Merger. These increases were offset by a decline in gains on sales of loans and losses on sales and write downs of other assets. Gains on sales of loans declined as the bank maintained conservative underwriting and chose not to pursue certain loan sale opportunities that did not meet our pricing or credit risk standards. Noninterest income decreased $1.0 million in the fourth quarter of 2025 compared to the third quarter 2025 due primarily to losses on sales of other assets of $161,000 and unrealized losses on market value of equity securities of $655,000.
Noninterest expense increased by $10.0 million and $54.0 million for the three months ended and year ended December 31, 2025, compared to the same periods in 2024. The increase in 2025 was largely due to merger-related expenses of $17.4 million during 2025, compared to $1.0 million in the same period in the prior year. Management does not anticipate additional material merger expenses. The remainder of the increase was primarily due to the addition of Fentura on March 1, 2025. Noninterest expense decreased by $866,000 in the fourth quarter of 2025 compared to the third quarter of 2025 due to decreases in collections and fraud expenses and other operational expenses which were partially offset by an increase in salaries and benefits. ChoiceOne will continue to invest in its talented staff, technology and footprint while prioritizing operational efficiency and disciplined investment. ChoiceOne has secured a location in Troy, MI and expects to open a full service branch and lending office later in 2026. We believe this new office will help us continue our strong growth in an attractive market. In addition, we are experimenting with automation and AI?driven solutions designed to modernize processes to augment the ability for our existing staff to manage our growth.
ChoiceOne’s fourth?quarter 2025 tax expense was reduced by $340,000 as a result of purchasing a transferable tax credit that will be applied to 2025 income taxes, with allowable carrybacks to prior years. Management is continuing to evaluate additional transferable tax credit opportunities and may pursue further purchases to help offset tax expense in 2026.
“We closed the year with solid capital and liquidity and an efficient funding mix, keeping us well?positioned to support clients and create long?term value” said Kelly Potes, Chief Executive Officer. “As we move into 2026, we do so with strong organic growth momentum across our markets and a renewed focus on strengthening our customer relationships. I am grateful to our employees, Board of Directors, and shareholders for their continued support of our vision to be the Best Bank in Michigan”
About ChoiceOne
ChoiceOne Financial Services, Inc. is a financial holding company headquartered in Sparta, Michigan, with assets over $4 billion, and the parent corporation of ChoiceOne Bank. Member FDIC. ChoiceOne Bank operates 56 offices in West, Central and Southeast Michigan. ChoiceOne Bank offers insurance and investment products through its subsidiary, ChoiceOne Insurance Agencies, Inc. ChoiceOne Financial Services, Inc. common stock is quoted on the Nasdaq Capital Market under the symbol “COFS.” For more information, please visit Investor Relations at ChoiceOne’s website choiceone.bank.
Forward-Looking Statements
This press release contains forward-looking statements. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “is likely,” “plans,” “predicts,” “projects,” “may,” “could,” “look forward,” “continue”, “future”, “view” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements reflect current beliefs as to the expected outcomes of future events and are not guarantees of future performance. These statements involve certain risks, uncertainties and assumptions (“risk factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed, implied or forecasted in such forward-looking statements. Furthermore, ChoiceOne does not undertake any obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.
Risk factors include, but are not limited to, the risk factors described in Item 1A in ChoiceOne’s Annual Report on Form 10-K for the year ended December 31, 2024 and in any of ChoiceOne’s subsequent SEC filings, which are available on the SEC’s website, www.sec.gov.
Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this press release includes certain non-GAAP financial measures. ChoiceOne believes these non-GAAP financial measures provide additional information that is useful to investors in helping to understand underlying financial performance and condition and trends of ChoiceOne.
Non-GAAP financial measures have inherent limitations. Readers should be aware of these limitations and should be cautious with respect to the use of such measures. To compensate for these limitations, non-GAAP measures are used as comparative tools, together with GAAP measures, to assist in the evaluation of operating performance or financial condition. These measures are also calculated using the appropriate GAAP or regulatory components in their entirety and are computed in a manner intended to facilitate consistent period-to-period comparisons. ChoiceOne’s method of calculating these non-GAAP measures may differ from methods used by other companies. These non-GAAP measures should not be considered in isolation or as a substitute for those financial measures prepared in accordance with GAAP or in-effect regulatory requirements.
Where non-GAAP financial measures are used, the most directly comparable GAAP or regulatory financial measure, as well as the reconciliation to the most directly comparable GAAP or regulatory financial measure, can be found in the tables to this press release under the heading non-GAAP reconciliation.
Condensed Balance Sheets
(Unaudited)
(In thousands) December 31, September 30, December 31,
2025 2025 2024
Cash and cash equivalents $
87,988 $
98,978 $
96,751
Equity securities, at fair value 9,353 9,505 7,782
Securities Held to Maturity 385,193 388,517 394,534
Securities Available for Sale 554,420 544,023 479,117
Federal Home Loan Bank stock 18,562 18,562 9,383
Federal Reserve Bank stock 12,554 12,554 5,307
Loans held for sale 7,185 6,323 7,288
Loans to other financial institutions 58,987 2,483 39,878
Core loans 2,963,047 2,907,445 1,505,762
Total loans held for investment 3,022,034 2,909,928 1,545,640
Allowance for credit losses (35,550) (34,754) (16,552)
Loans, net of allowance for credit losses 2,986,484 2,875,174 1,529,088
Premises and equipment 48,110 46,159 27,099
Cash surrender value of life insurance policies 74,798 74,231 44,896
Goodwill 129,854 126,730 59,946
Intangible assets 31,149 31,694 1,096
Other assets 64,901 64,452 60,956
Total Assets $
4,410,551 $
4,296,902 $
2,723,243
Noninterest-bearing deposits $
907,007 $
903,925 $
524,945
Interest-bearing demand deposits 1,364,887 1,395,724 920,167
Savings deposits 607,045 588,798 338,109
Certificates of deposit 616,180 605,912 394,371
Brokered deposits 104,906 72,672 36,511
Borrowings 264,788 197,752 175,000
Subordinated debentures 48,460 48,368 35,752
Other liabilities 31,925 34,136 37,973
Total Liabilities 3,945,198 3,847,287 2,462,828
Common stock and paid-in capital, no par value; shares authorized: 398,386 398,688 206,780
30,000,000; shares outstanding: 15,000,939 at December 31, 2025, 15,017,802
at September 30, 2025, and 8,965,483 at December 31, 2024.
Retained earnings 102,641 93,124 91,414
Accumulated other comprehensive income (loss), net (35,674) (42,197) (37,779)
Shareholders' Equity 465,353 449,615 260,415
Total Liabilities and Shareholders' Equity $
4,410,551 $
4,296,902 $
2,723,243
Condensed Statements of Operations
(Unaudited)
Three Months Three Months Three Months Twelve Months
Ended Ended Ended Ended
(Dollars in thousands, except per share data) December 31, September 30, December 31, December 31,
2025 2025 2024 2025 2024
Interest income
Loans, including fees $
46,617 $
47,123 $
23,571 $
172,914 $
89,580
Securities:
Taxable 5,663 5,249 4,846 20,906 21,228
Tax exempt 1,402 1,418 1,390 5,622 5,614
Other 694 908 1,231 3,516 4,682
Total interest income 54,376 54,698 31,038 202,958 121,104
Interest expense
Deposits 14,127 14,287 8,710 53,970 34,174
Advances from Federal Home Loan Bank 2,564 1,926 669 8,201 2,041
Other 845 888 2,310 3,717 10,447
Total interest expense 17,536 17,101 11,689 65,888 46,662
Net interest income 36,840 37,597 19,349 137,070 74,442
Provision for credit losses on loans 1,100 200 200 15,113 1,300
Provision for (reversal of) credit losses on unfunded (300) (300) (675)
commitments
Net Provision for credit losses expense 800 200 200 14,813 625
Net interest income after provision 36,040 37,397 19,149 122,257 73,817
Noninterest income
Customer service charges 1,683 1,729 1,237 5,994 4,774
Interchange income 2,086 2,133 1,494 7,811 5,797
Insurance and investment commissions 592 485 170 1,912 742
Gains on sales of loans 511 671 829 1,981 2,439
Net gains (losses) on sales and write downs of other assets (200) (39) (5) (226) 198
Earnings on life insurance policies 567 558 819 2,358 1,934
Trust income 689 734 241 2,525 906
Change in market value of equity securities (197) 458 (46) 607 195
Other 366 415 255 1,704 1,010
Total noninterest income 6,097 7,144 4,994 24,666 17,995
Noninterest expense
Salaries and benefits 14,559 14,127 8,941 52,737 33,408
Occupancy and equipment 2,469 2,694 1,383 9,314 5,797
Data processing 2,374 2,499 1,499 9,311 5,905
Communication 576 517 341 2,034 1,317
Professional fees 784 834 653 3,262 2,471
Supplies and postage 291 267 179 1,107 699
Advertising and promotional 258 207 271 981 788
Intangible amortization 1,683 1,728 153 5,823 757
FDIC insurance 475 530 180 2,010 1,335
Merger related expenses 394 17,369 1,039
Other 1,880 2,812 1,350 8,787 5,207
Total noninterest expense 25,349 26,215 15,344 112,735 58,723
Income (loss) before income tax 16,788 18,326 8,799 34,188 33,089
Income tax expense (benefit) 2,921 3,645 1,640 6,012 6,362
Net income (loss) $
13,867 $
14,681 $
7,159 $
28,176 $
26,727
Basic earnings (loss) per share $
0.92 $
0.98 $
0.79 $
2.02 $
3.27
Diluted earnings (loss) per share $
0.92 $
0.97 $
0.79 $
2.01 $
3.25
Dividends declared per share $
0.29 $
0.28 $
0.28 $
1.13 $
1.09
Table 1 - Average Balances and tax-Equivalent Interest Rates (Unaudited)
Three Months Ended December
Three Months Ended Three Months Ended December
31, 2025 September 30, 2025 31, 2024
(Dollars in thousands) Average Average Average
Balance Interest Rate Balance Interest Rate Balance Interest Rate
Assets:
Loans (1)(3)(4)(5) $
2,961,133 46,635 6.25 % $
2,927,878 $
47,142 6.39 % $
1,516,466 $
23,591 6.19 %
Taxable securities (2) 750,256 5,663 2.99 703,045 5,249 2.96 677,133 4,846 2.85
Nontaxable securities (1) 285,782 1,776 2.47 287,274 1,795 2.48 288,368 1,760 2.43
Other 69,056 694 3.99 79,365 909 4.54 100,864 1,231 4.86
Interest-earning assets 4,066,227 54,768 5.34 3,997,562 55,095 5.47 2,582,831 31,428 4.84
Noninterest-earning assets 309,300 310,727 136,699
Total assets $
4,375,527 $
4,308,289 $
2,719,530
Liabilities and Shareholders'
Equity:
Interest-bearing demand $
1,343,600 $
6,352 1.88 % $
1,374,827 $
6,392 1.84 % $
907,631 $
3,389 1.49 %
deposits
Savings deposits 596,010 1,252 0.83 591,653 1,125 0.75 336,107 810 0.96
Certificates of deposit 613,387 5,502 3.56 616,686 5,777 3.72 397,364 4,291 4.30
Brokered deposit 100,133 1,021 4.05 91,735 993 4.30 19,620 220 4.46
Borrowings 255,978 2,663 4.13 179,122 2,019 4.47 197,828 2,374 4.77
Subordinated debentures 48,411 681 5.58 48,663 701 5.72 35,719 405 4.51
Other 6,311 65 4.09 8,550 94 4.38 16,928 200 4.70
Interest-bearing liabilities 2,963,830 17,536 2.35 2,911,236 17,101 2.33 1,911,197 11,689 2.43
Demand deposits 925,414 930,346 536,653
Other noninterest-bearing 26,860 28,258 16,943
liabilities
Total liabilities 3,916,104 3,869,840 2,464,793
Shareholders' equity 459,423 438,449 254,737
Total liabilities and $
4,375,527 $
4,308,289 $
2,719,530
shareholders' equity
Net interest income (tax- $
37,232 $
37,994 $
19,739
equivalent basis) (Non-GAAP)
(1)
Net interest margin (tax- 3.63 % 3.77 % 3.04 %
equivalent basis) (Non-GAAP)
(1)
(1) Adjusted to a fully tax-equivalent basis to facilitate comparison to the taxable interest-earning assets. The adjustment uses an
incremental tax rate of 21%. The presentation of these measures on a tax-equivalent basis is not in accordance with GAAP, but is
customary in the banking industry. These non-GAAP measures ensure comparability with respect to both taxable and tax-exempt
loans and securities.
(2)
Taxable securities include dividend income from Federal Home Loan Bank and Federal Reserve Bank stock.
(3)
Loans include both loans to other financial institutions and loans held for sale.
(4) Non-accruing loan balances are included in the balances of average loans. Non-accruing loan average balances were $22.2 million,
$17.1 million, and 3.0 million in the fourth quarter of 2025, the third quarter of 2025 and the fourth quarter of 2024,
respectively.
(5) Interest on loans included net origination fees and interest income due to accretion from purchased loans. Interest income due to
accretion from purchased loans was $3.1 million, $3.6 million and $276,000 in the fourth quarter of 2025, the third quarter of
2025 and the fourth quarter of 2024, respectively.
Income Adjusted for Merger Expenses - Non-GAAP Reconciliation
(Unaudited)
Three Three Months Three Twelve Months Ended
Months Ended Months
Ended Ended
December 31, September 30, December 31, December 31,
2025 2025 2024 2025 2024
(In Thousands, Except Per Share Data)
Net income (loss) $
13,867 $
14,681 $
7,159 $
28,176 $
26,727
Merger related expenses net of tax 373 13,885 1,006
Merger related provision for credit losses, net of tax (1) 9,463
Adjusted net income $
13,867 $
14,681 $
7,532 $
51,524 $
27,733
Weighted average number of shares 15,015,486 15,014,933 8,963,258 13,941,260 8,166,472
Diluted average shares outstanding 15,065,937 15,061,155 9,024,567 13,992,099 8,221,065
Basic earnings (loss) per share $
0.92 $
0.98 $
0.79 $
2.02 $
3.27
Diluted earnings (loss) per share $
0.92 $
0.97 $
0.79 $
2.01 $
3.25
Adjusted basic earnings per share $
0.92 $
0.98 $
0.84 $
3.70 $
3.40
Adjusted diluted earnings per share $
0.92 $
0.97 $
0.83 $
3.68 $
3.37
(1) Merger related provision for credit loss represents the calculated credit loss on Non-PCD loans acquired during the Merger on March 1, 2025.
Other Selected Financial Highlights
(Unaudited)
Quarterly
Earnings 2025 4th 2025 3rd 2025 2nd 2025 1st 2024 4th
Qtr. Qtr. Qtr. Qtr. Qtr.
(in thousands except per share data)
Net interest income $
36,840 $
37,597 $
36,322 $
26,311 $
19,349
Net provision expense 800 200 650 13,163 200
Noninterest income 6,097 7,144 6,503 4,922 4,994
Noninterest expense 25,349 26,215 25,506 35,665 15,344
Net income (loss) before federal income tax expense 16,788 18,326 16,669 (17,595) 8,799
Income tax expense (benefit) 2,921 3,645 3,135 (3,689) 1,640
Net income (loss) 13,867 14,681 13,534 (13,906) 7,159
Basic earnings (loss) per share 0.92 0.98 0.90 (1.30) 0.79
Diluted earnings (loss) per share 0.92 0.97 0.90 (1.29) 0.79
Adjusted basic earnings per share (non-GAAP) 0.92 0.98 0.91 0.87 0.84
Adjusted diluted earnings per share (non-GAAP) 0.92 0.97 0.91 0.86 0.83
End of period balances 2025 4th 2025 3rd 2025 2nd 2025 1st 2024 4th
Qtr. Qtr. Qtr. Qtr. Qtr.
(in thousands)
Gross loans $
3,029,219 $
2,916,251 $
2,928,431 $
2,928,896 $
1,552,928
Loans held for sale (1) 7,185 6,323 7,639 3,941 7,288
Loans to other financial institutions (2) 58,987 2,483 3,033 2,393 39,878
Core loans (gross loans excluding 1 and 2 2,963,047 2,907,445 2,917,759 2,922,562 1,505,762
above)
Allowance for credit losses 35,550 34,754 34,798 34,567 16,552
Securities available for sale 554,420 544,023 479,426 480,650 479,117
Securities held to maturity 385,193 388,517 390,457 394,434 394,534
Other interest-earning assets 74,857 79,677 110,206 110,605 86,185
Total earning assets (before allowance) 4,043,689 3,928,468 3,908,520 3,914,585 2,512,764
Total assets 4,410,551 4,296,902 4,310,252 4,305,391 2,723,243
Noninterest-bearing deposits 907,007 903,925 943,873 912,033 524,945
Interest-bearing demand deposits 1,364,887 1,395,724 1,322,336 1,406,660 920,167
Savings deposits 607,045 588,798 595,981 602,337 338,109
Certificates of deposit 616,180 605,912 624,209 663,404 394,371
Brokered deposits 104,906 72,672 106,225 67,295 36,511
Total deposits 3,600,025 3,567,031 3,592,624 3,651,729 2,214,103
Deposits excluding brokered 3,495,119 3,494,359 3,486,399 3,584,434 2,177,592
Total subordinated debt 48,460 48,368 48,277 48,186 35,752
Total borrowed funds 264,788 197,752 198,428 137,330 175,000
Other interest-bearing liabilities 7,689 7,695 8,529 13,420 24,003
Total interest-bearing liabilities 3,013,955 2,916,921 2,903,985 2,938,632 1,923,913
Shareholders' equity 465,353 449,615 431,761 427,068 260,415
Average Balances 2025 4th 2025 3rd 2025 2nd 2025 1st 2024 4th
Qtr. Qtr. Qtr. Qtr. Qtr.
(in thousands)
Loans $
2,961,133 $
2,927,878 $
2,936,168 $
2,019,643 $
1,516,466
Securities 1,036,038 990,319 984,607 978,769 965,501
Other interest-earning assets 69,056 79,365 63,416 115,091 100,864
Total earning assets (before allowance) 4,066,227 3,997,562 3,984,191 3,113,503 2,582,831
Total assets 4,375,527 4,308,289 4,298,513 3,319,591 2,719,530
Noninterest-bearing deposits 925,414 930,346 915,637 651,424 536,653
Interest-bearing deposits 2,552,997 2,583,166 2,573,927 2,030,543 1,641,102
Brokered deposits 100,133 91,735 120,720 45,553 19,620
Total deposits 3,578,544 3,605,247 3,610,284 2,727,520 2,197,375
Total subordinated debt 48,411 48,663 48,971 40,182 35,719
Total borrowed funds 255,978 179,122 169,257 193,961 197,828
Other interest-bearing liabilities 6,311 8,550 11,763 20,553 16,928
Total interest-bearing liabilities 2,963,830 2,911,236 2,924,638 2,330,792 1,911,197
Shareholders' equity 459,423 438,449 427,543 302,537 254,737
Loan Breakout (in thousands) 2025 4th 2025 3rd 2025 2nd 2025 1st 2024 4th
Qtr. Qtr. Qtr. Qtr. Qtr.
Agricultural $
56,218 $
51,183 $
47,273 $
48,165 $
48,221
Commercial and Industrial 352,556 352,876 351,367 345,138 228,256
Commercial Real Estate 1,780,396 1,728,774 1,743,541 1,757,599 901,130
Consumer 26,701 27,328 29,741 30,932 29,412
Construction Real Estate 19,139 18,440 21,508 18,067 17,042
Residential Real Estate 728,037 728,844 724,329 722,661 281,701
Loans to Other Financial Institutions 58,987 2,483 3,033 2,393 39,878
Gross Loans (excluding held for sale) $
3,022,034 $
2,909,928 $
2,920,792 $
2,924,955 $
1,545,640
Allowance for credit losses 35,550 34,754 34,798 34,567 16,552
Net loans $
2,986,484 $
2,875,174 $
2,885,994 $
2,890,388 $
1,529,088
Performance Ratios 2025 4th 2025 3rd 2025 2nd 2025 1st 2024 4th
Qtr. Qtr. Qtr. Qtr. Qtr.
Annualized return on average assets 1.27 1.36 1.26 -1.68 1.05
% % % % %
Annualized return on average equity 12.07 13.39 12.66 -18.39 11.24
% % % % %
Annualized return on average tangible common equity 16.66 19.08 18.26 -27.97 14.54
% % % % %
Net interest margin (GAAP) 3.59 3.73 3.66 3.43 2.98
% % % % %
Net interest margin (fully tax-equivalent) 3.63 3.77 3.70 3.48 3.04
% % % % %
Efficiency ratio 54.12 54.76 55.32 111.01 61.29
% % % % %
Annualized cost of funds 1.79 1.77 1.84 1.86 1.90
% % % % %
Annualized cost of deposits 1.57 1.57 1.65 1.59 1.58
% % % % %
Cost of interest bearing liabilities 2.35 2.33 2.41 2.37 2.43
% % % % %
Shareholders' equity to total assets 10.55 10.46 10.02 9.91 9.56
% % % % %
Tangible common equity to tangible assets 7.16 7.04 6.54 6.40 7.49
% % % % %
Annualized noninterest expense to average assets 2.32 2.43 2.37 4.30 2.26
% % % % %
Loan to deposit 84.14 81.76 81.51 80.21 70.14
% % % % %
Full-time equivalent employees 569 573 571 605 377
Capital Ratios ChoiceOne Financial 2025 4th 2025 3rd 2025 2nd 2025 1st 2024 4th
Services Inc. Qtr. Qtr. Qtr. Qtr. Qtr.
Total capital (to risk weighted assets) 12.7 13.0 12.4 12.0 14.5
% % % % %
Common equity Tier 1 capital (to risk 10.2 10.3 9.8 9.4 12.0
% % % % %
weighted assets)
Tier 1 capital (to risk weighted assets) 10.7 10.9 10.4 10.0 12.2
% % % % %
Tier 1 capital (to average assets) 8.5 8.5 8.2 10.4 9.1
% % % % %
Tier 1 capital (to total assets) 8.1 8.2 7.9 7.6 8.9
% % % % %
Commercial Real Estate Loans (non-owner 279.0 275.2 288.2 302.0 195.6
% % % % %
occupied) as a percentage of total capital
Capital Ratios ChoiceOne Bank 2025 4th 2025 3rd 2025 2nd 2025 1st 2024 4th
Qtr. Qtr. Qtr. Qtr. Qtr.
Total capital (to risk weighted assets) 12.5 12.8 12.4 11.9 12.7
% % % % %
Common equity Tier 1 capital (to risk 11.4 11.7 11.3 10.9 12.0
% % % % %
weighted assets)
Tier 1 capital (to risk weighted assets) 11.4 11.7 11.3 10.9 12.0
% % % % %
Tier 1 capital (to average assets) 9.1 9.1 8.9 11.3 8.9
% % % % %
Tier 1 capital (to total assets) 8.7 8.8 8.6 8.3 8.7
% % % % %
Commercial Real Estate Loans (non-owner 284.4 280.0 290.6 303.9 224.9
% % % % %
occupied) as a percentage of total capital
Asset Quality 2025 4th 2025 3rd 2025 2nd 2025 1st 2024 4th
Qtr. Qtr. Qtr. Qtr. Qtr.
(in thousands)
Net loan charge-offs (recoveries) $
305 $
244 $
418 $
72 $
138
Annualized net loan charge-offs (recoveries) to average 0.04 0.03 0.06 0.01 0.04
% % % % %
loans
Allowance for credit losses $
35,550 $
34,754 $
34,798 $
34,567 $
16,552
Unfunded commitment liability $
1,347 $
1,647 $
1,647 $
1,647 $
1,485
Allowance to loans (excludes held for sale) 1.18 1.19 1.19 1.18 1.07
% % % % %
Total funds reserved to pay for loans (includes liability for 1.22 1.25 1.25 1.24 1.17
% % % % %
unfunded commitments and excludes held for sale)
Non-Accruing loans $
27,058 $
17,365 $
16,854 $
16,789 $
3,704
Nonperforming loans (includes OREO) $
29,582 $
19,940 $
19,296 $
19,154 $
4,177
Nonperforming loans to total loans (excludes held for sale) 0.98 0.69 0.66 0.65 0.27
% % % % %
Non Accrual classified as PCD $
19,007 $
11,393 $
12,017 $
12,891
$
Nonperforming loans to total loans (excludes held for sale) 0.63 0.39 0.41 0.44
% % % %
attributed to PCD
Nonperforming assets to total assets 0.67 0.46 0.45 0.44 0.15
% % % % %
Other Non-GAAP Reconciliation
(Unaudited)
NON-GAAP Reconciliation 2025 4th 2025 3rd 2025 2nd 2025 1st 2024 4th
Qtr. Qtr. Qtr. Qtr. Qtr.
Net interest income (tax-equivalent basis) (Non-GAAP) $
37,232 $
37,994 $
36,711 $
26,710 $
19,739
Net interest margin (fully tax-equivalent) 3.63 3.77 3.70 3.48 3.04
% % % % %
Reconciliation to Reported Net Interest Income
Net interest income (tax-equivalent basis) (Non-GAAP) $
37,232 $
37,994 $
36,711 $
26,710 $
19,739
Adjustment for taxable equivalent interest (392) (397) (389) (399) (390)
Net interest income (GAAP) $
36,840 $
37,597 $
36,322 $
26,311 $
19,349
Net interest margin (GAAP) 3.59 3.73 3.66 3.43 2.98
% % % % %
(dollars in thousands) 2025 4th 2025 3rd 2025 2nd 2025 1st 2024 4th
Qtr. Qtr. Qtr. Qtr. Qtr.
Total assets $
4,410,551 $
4,296,902 $
4,310,252 $
4,305,391 $
2,723,243
Less: goodwill 129,854 126,730 126,730 126,730 59,946
Less: core deposit intangible 31,149 31,694 33,421 35,153 1,096
Tangible assets $
4,249,548 $
4,138,478 $
4,150,101 $
4,143,508 $
2,662,201
Total equity $
465,353 $
449,615 $
431,761 $
427,068 $
260,415
Less: goodwill 129,854 126,730 126,730 126,730 59,946
Less: core deposit intangible 31,149 31,694 33,421 35,153 1,096
Tangible common equity $
304,350 $
291,191 $
271,610 $
265,185 $
199,373
Tangible common equity to tangible assets 7.16 7.04 6.54 6.40 7.49
% % % % %
(dollars in thousands) 2025 4th 2025 3rd 2025 2nd 2025 1st 2024 4th
Qtr. Qtr. Qtr. Qtr. Qtr.
Net income $
13,867 $
14,681 $
13,534 $
(13,906) $
7,159
Less: intangible amortization (tax affected at 21%) 1,330 1,365 1,369 537 121
Adjusted net income $
12,537 $
13,316 $
12,165 $
(14,443) $
7,038
Average shareholders' equity $
459,423 $
438,449 $
427,543 $
302,537 $
254,737
Less: average goodwill 127,308 126,730 126,730 83,030 59,946
Less: average core deposit intangible 31,092 32,599 34,356 12,983 1,179
Average tangible common equity $
301,023 $
279,120 $
266,457 $
206,524 $
193,612
Return on average tangible common equity 16.66 19.08 18.26 -27.97 14.54
% % % % %
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SOURCE ChoiceOne Financial Services, Inc.
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