COFS ChoiceOne Financial Services Inc

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) January 22, 2025

ChoiceOne Financial Services, Inc.
(Exact Name of Registrant as
Specified in its Charter)

	Michigan (State or Other Jurisdiction of Incorporation)	001-39209 (Commission File Number)	38-2659066 (IRS Employer Identification No.)

109 East Division Street Sparta, Michigan (Address of Principal Executive Offices)	49345 (Zip Code)

Registrant's telephone number, including area code: (616) 887-7366

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock	COFS	NASDAQ Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02	Results of Operations and Financial Condition.

On January 22, 2025, ChoiceOne Financial Services, Inc. issued the press release attached as Exhibit 99.1 to this Form 8-K, which is here incorporated by reference. This Report and the Exhibit are furnished to, and not filed with, the Commission.

Item 9.01	Financial Statements and Exhibits.

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	(d)	Exhibits:
		99.1	Press Release dated January 22, 2025. This Exhibit is furnished to, and not filed with, the Commission.
	104	104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated:	January 22, 2025	CHOICEONE FINANCIAL SERVICES, INC. (Registrant)
		By:	/s/ Adom J. Greenland
			Adom J. Greenland Its Chief Financial Officer and Treasurer

 

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EXHIBIT 99.1

 

News Release

ChoiceOne Reports Fourth Quarter and Year End 2024 Results

Sparta, Michigan – January 22, 2025 – ChoiceOne Financial Services, Inc. ("ChoiceOne", NASDAQ:COFS), the parent company for ChoiceOne Bank, reported financial results for the quarter ended December 31, 2024.

Highlights

 

 

“ChoiceOne had an outstanding fourth quarter and full year 2024, which underscore the growth in our core loans and deposits, thanks to the dedication and expertise of our team. Our proactive balance sheet management has led to improvements in our net interest margin, positioning us well to navigate changing market conditions. We are also excited about the upcoming anticipated close of our pending merger with Fentura Financial, Inc. and The State Bank expected to occur in the first quarter of 2025, which will further enhance our markets and capabilities," said Kelly Potes, Chief Executive Officer.

ChoiceOne reported net income of $7,159,000 and $26,727,000 for the three and twelve months ended December 31, 2024, compared to $5,293,000 and $21,261,000 for the same periods in 2023, representing growth of 35.3% and 25.7%, respectively. Net income adjusted for merger related expenses was $7,532,000 and $27,733,000 for the three and twelve months ended December 31, 2024. Diluted earnings per share were $0.79 and $3.25 in the three and twelve months ended December 31, 2024, compared to $0.70 and $2.82 per share in the same periods in the prior year. The sale of 1,380,000 shares of common stock during the third quarter of 2024 negatively impacted diluted earnings per share for 2024. Diluted earnings per share adjusted for merger expenses were $0.83 and $3.37 in the three and twelve months ended December 31, 2024.

As of December 31, 2024, total assets were $2.7 billion, an increase of $146.5 million compared to December 31, 2023. The growth is primarily attributed to an increase in core loans of $114.5 million and loans to other financial institutions of $20.5 million. This growth was offset by a $48.9 million reduction in securities during the same time period. ChoiceOne has actively managed its balance sheet to

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support organic loan growth, strategically shifting from lower-yielding assets to higher-yielding loans. This is reflected in the loan growth observed.

Deposits, excluding brokered deposits, declined by $24.0 million or an annualized 4.4% in the fourth quarter of 2024 and increased $79.0 million or 3.8% during 2024. The decrease in deposits in the fourth quarter of 2024 was due to seasonal outflow of public funds, which includes taxes received by schools and townships during the third quarter of 2024. The increase in deposits in the twelve months ended December 31, 2024 is a combination of new business and recapture of deposit losses from the prior year. ChoiceOne continues to be proactive in managing its liquidity position by using brokered deposits and FHLB advances to ensure ample liquidity. At December 31, 2024, total available borrowing capacity secured by pledged assets was $837.2 million. ChoiceOne can increase its capacity by utilizing unsecured federal fund lines and pledging additional assets. Uninsured deposits totaled $833.2 million or 37.6% of deposits at December 31, 2024.

ChoiceOne's cost of deposits to average total deposits has declined since peaking in the first quarter of 2024 due to positive cash flow from pay-fixed interest rate swaps, hedged against deposits, and decreasing deposit expenses. In addition, the Federal Reserve has decreased the federal funds rate by 50 basis points since September 2024. These factors led to a cost of deposits to average total deposits of an annualized 1.58% in the fourth quarter of 2024 compared to an annualized 1.57% in the fourth quarter of 2023. Cost of deposits to average total deposits peaked in the first quarter of 2024 at an annualized 1.65%. If rates continue to decline, we expect to see slight declines in deposit costs; however, these declines will be muted by the decrease in cash flows from pay-fixed interest rate swaps collected. Interest expense on borrowings for the three and twelve months ended December 31, 2024, increased $153,000 and $3.1 million compared to the same periods in the prior year, due to increases in the average balances borrowed. During the fourth quarter of 2024, ChoiceOne paid down its advance from the Bank Term Funding Program and replaced it with $135.0 million of FHLB borrowings. This increased our total borrowed balance at the FHLB to $175.0 million at a weighted average fixed rate of 4.5%, with the earliest maturity in January 2025. Total cost of funds ended flat in the fourth quarter of 2024 with an annualized 1.90% compared to an annualized 1.91% in the fourth quarter of 2023.

The provision for credit losses expense on loans was $200,000 in the fourth quarter of 2024, due in part to loan growth during the quarter. The ratio of the allowance for credit losses to total loans (excluding loans held for sale) was 1.07% on December 31, 2024 compared to 1.11% on December 31, 2023. Asset quality continues to remain strong, with annualized net loan charge-offs to average loans of 0.04% and nonperforming loans to total loans (excluding loans held for sale) of 0.27% as of December 31, 2024.

ChoiceOne uses interest rate swaps to manage interest rate exposure to certain fixed rate assets and variable rate liabilities. On December 31, 2024, ChoiceOne had pay-fixed interest rate swaps with a total notional value of $401.0 million, a weighted average coupon of 3.07%, a fair value of $23.6 million and an average remaining contract length of 7 to 8 years. These derivative instruments increase in value as long-term interest rates rise, which offsets the reduction in equity due to unrealized losses on securities available for sale. Settlements from swaps amounted to $1.5 million for the fourth quarter of 2024 compared to $2.5 million for the third quarter of 2024 and were a contributing factor to the decrease in net interest margin during the fourth quarter of 2024 compared to the third quarter of 2024. Fully tax equivalent net interest margin excluding the swaps was 23 basis points lower than tax equivalent net interest margin reported for the fourth quarter of 2024. Due in part to pay fixed interest rate swaps we have in place, our balance sheet is asset sensitive. 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.

Shareholders’ equity totaled $260.4 million as of December 31, 2024, up from $195.6 million as of December 31, 2023, due in large part to the $34.5 million in aggregate gross proceeds (before deducting discounts and estimated offering expenses) received from the sale of 1,380,000 shares of common stock during the third quarter of 2024. The additional increase is due to retained earnings and an improvement in accumulated other compressive loss (AOCI) of $13.8 million compared to December 31, 2023. The improvement in AOCI is due to both the shortening duration and maturing (paydowns) of the securities portfolio, offset by the change in unrealized gain of the pay-fixed swap derivatives. The pay-fixed swap derivatives are designed to offset swings in AOCI due to changes in interest rates. ChoiceOne Bank remains “well-capitalized” with a total risk-based capital ratio of 12.7% as of December 31, 2024, compared to 12.4% on December 31, 2023.

Noninterest income increased $948,000 and $3.1 million in the three and twelve months ended December 31, 2024, compared to the same periods in the prior year. The increase was largely due to an increase in customer service charges of $304,000 and $1.2 million in the three and twelve months ended December 31, 2024 compared to the same periods in 2023 and earnings on life insurance policies in the three and twelve months ended December 31, 2024, compared to the same periods in the prior year. ChoiceOne recognized earnings on a bank owned life insurance death benefit claim in the amount of $504,000 during the fourth quarter of 2024. ChoiceOne also saw an uptick in gains on sales of loans during the fourth quarter of 2024 due in part to participation in the FHLB Rate Advantage program which provided incentives to home buyers in the low to moderate income bracket. In addition, there were a number of construction loans which were finalized and written into salable market loans during the fourth quarter of 2024.

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Noninterest expense increased by $1.6 million or 11.4% and $3.6 million or 6.6% in the three and twelve months ended December 31, 2024 compared to the same periods in 2023. The increase in total noninterest expense was due in part to merger related expenses of $394,000 and $1.0 million during the three and twelve months ended December 31, 2024, compared to $0 in the same periods in the prior year. Additionally, there was an increase to employee health insurance and other benefit costs, and an increase to FDIC insurance and other costs related to the inflationary environment. The increase in costs were offset by a decline in occupancy and equipment related to two branch closures during the first quarter of 2024. ChoiceOne seeks to strategically manage costs while still making thoughtful investments in order to maintain our competitive edge and deliver exceptional value to our customers, shareholders, and communities.

“I am very pleased with the results of the fourth quarter of 2024, showing core loan growth, solid deposit balances and excellent credit metrics as we get closer to completing the pending merger with Fentura Financial, Inc. and the State Bank, a highly respected community bank in Michigan. We are excited to welcome their customers, communities, and employees to the ChoiceOne team,” said Kelly Potes, Chief Executive Officer.

 

About ChoiceOne

ChoiceOne Financial Services, Inc. is a financial holding company headquartered in Sparta, Michigan and the parent corporation of ChoiceOne Bank, Member FDIC. ChoiceOne Bank operates 35 offices in parts of Kent, Lapeer, Macomb, Muskegon, Newaygo, Ottawa, and St. Clair counties. ChoiceOne Bank offers insurance and investment products through its subsidiary, ChoiceOne Insurance Agencies, Inc. For more information, please visit Investor Relations at ChoiceOne’s website at choiceone.bank.

Forward-Looking Statements

This news 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” and variations of such words and similar expressions are intended to identify such forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding the outlook and expectations of ChoiceOne or Fentura with respect to the planned merger, the strategic benefits and financial benefits of the merger, including the expected impact of the proposed transaction on the combined company’s future financial performance and the timing of the closing of the proposed transaction. 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. Such risks, uncertainties and assumptions, include, among others, the following:

Additional 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, 2023 and in any of ChoiceOne’s subsequent SEC filings, which are available on the SEC’s website, www.sec.gov.

Non-GAAP Financial Measures

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In addition to results presented in accordance with GAAP, this presentation 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 news release under the heading non-GAAP reconciliation.

For Further Information:

Adom Greenland

Executive Vice President & CFO

(616) 887 – 2334

IR@ChoiceOne.bank

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Condensed Balance Sheets
(Unaudited)

 

(In thousands)		December 31, 2024				September 30, 2024				December 31, 2023
Cash and cash equivalents		$	96,751			$	145,938			$	55,433
Equity securities, at fair value			7,782				7,816				7,505
Securities Held to Maturity			394,534				391,954				407,959
Securities Available for Sale			479,117				497,552				514,598
Federal Home Loan Bank stock			9,383				4,449				4,449
Federal Reserve Bank stock			5,307				5,307				5,065
Loans held for sale			7,288				5,994				4,710
Loans to other financial institutions			39,878				38,492				19,400
Core loans			1,505,762				1,465,458				1,391,253
Total loans held for investment			1,545,640				1,503,950				1,410,653
Allowance for credit losses			(16,552	)			(16,490	)			(15,685	)
Loans, net of allowance for credit losses			1,529,088				1,487,460				1,394,968
Premises and equipment			27,099				27,135				29,750
Cash surrender value of life insurance policies			44,896				45,699				45,074
Goodwill			59,946				59,946				59,946
Core deposit intangible			1,096				1,250				1,854
Other assets			60,956				45,503				45,395
Total Assets		$	2,723,243			$	2,726,003			$	2,576,706
Noninterest-bearing deposits		$	524,945			$	521,055			$	547,625
Interest-bearing deposits			1,652,647				1,680,546				1,550,985
Brokered deposits			36,511				6,627				23,445
Borrowings			175,000				210,000				200,000
Subordinated debentures			35,752				35,691				35,507
Other liabilities			37,973				24,338				23,510
Total Liabilities			2,462,828				2,478,257				2,381,072
Common stock and paid-in capital, no par value; shares authorized: 30,000,000; shares outstanding: 8,965,483 at December 31, 2024, 8,959,664 at September 30, 2024, and 7,548,217 at December 31, 2023			206,780				206,427				173,513
Retained earnings			91,414				86,765				73,699
Accumulated other comprehensive income (loss), net			(37,779	)			(45,446	)			(51,578	)
Shareholders' Equity			260,415				247,746				195,634
Total Liabilities and Shareholders’ Equity		$	2,723,243			$	2,726,003			$	2,576,706

 

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Condensed Statements of Income
(Unaudited)

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		Three Months Ended								Twelve Months Ended
(Dollars in thousands, except per share data)		December 31,								December 31,
		2024				2023				2024				2023
Interest income
Loans, including fees		$	23,571			$	19,759			$	89,580			$	68,384
Securities:
Taxable			4,846				5,532				21,228				21,169
Tax exempt			1,390				1,385				5,614				5,629
Other			1,231				1,286				4,682				3,798
Total interest income			31,038				27,962				121,104				98,980
Interest expense
Deposits			8,710				8,421				34,174				23,990
Advances from Federal Home Loan Bank			669				273				2,041				1,771
Other			2,310				2,712				10,447				7,334
Total interest expense			11,689				11,406				46,662				33,095
Net interest income			19,349				16,556				74,442				65,885
Provision for credit losses on loans			200				933				1,300				1,265
Provision for credit losses on unfunded commitments			-				(558	)			(675	)			(1,115	)
Net Provision for credit losses expense			200				375				625				150
Net interest income after provision			19,149				16,181				73,817				65,735
Noninterest income
Customer service charges			2,731				2,427				10,571				9,347
Insurance and investment commissions			170				157				742				698
Mortgage servicing rights			366				214				1,053				820
Gains on sales of loans			463				261				1,386				1,134
Net gains (losses) on sales of securities			-				-				-				(71	)
Net gains (losses) on sales and write downs of other assets			(5	)			(2	)			198				147
Earnings on life insurance policies			819				286				1,934				1,096
Trust income			241				194				906				771
Change in market value of equity securities			(46	)			210				195				(246	)
Other			255				299				1,010				1,210
Total noninterest income			4,994				4,046				17,995				14,906
Noninterest expense
Salaries and benefits			8,941				8,005				33,408				31,963
Occupancy and equipment			1,383				1,471				5,797				6,048
Data processing			1,840				1,531				7,222				6,618
Professional fees			653				523				2,471				2,198
Supplies and postage			179				200				699				780
Advertising and promotional			271				148				788				721
Intangible amortization			153				203				757				955
FDIC insurance			180				394				1,335				1,184
Merger related expenses			394				-				1,039				-
Other			1,350				1,303				5,207				4,607
Total noninterest expense			15,344				13,778				58,723				55,074
Income before income tax			8,799				6,449				33,089				25,567
Income tax expense			1,640				1,156				6,362				4,306
Net income		$	7,159			$	5,293			$	26,727			$	21,261
Basic earnings per share		$	0.79			$	0.70			$	3.27			$	2.82
Diluted earnings per share		$	0.79			$	0.70			$	3.25			$	2.82

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Dividends declared per share		$	0.28			$	0.27			$	1.09			$	1.05

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Income Adjusted for Merger Expenses - Non-GAAP Reconciliation

(Unaudited)

 

 

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2024				2023				2024				2023
(In Thousands, Except Per Share Data)
Net income		$	7,159			$	5,293			$	26,727			$	21,261
Merger related expenses net of tax			373				-				1,006				-
Adjusted net income		$	7,532			$	5,293			$	27,733			$	21,261
Weighted average number of shares			8,963,258				7,545,197				8,166,472				7,532,998
Diluted average shares outstanding			9,024,567				7,582,255				8,221,066				7,572,290
Adjusted basic earnings per share		$	0.84			$	0.70			$	3.40			$	2.82
Adjusted diluted earnings per share		$	0.83			$	0.70			$	3.37			$	2.82

 

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Other Selected Financial Highlights

(Unaudited)

		Quarterly
Earnings		2024 4th Qtr.				2024 3rd Qtr.				2024 2nd Qtr.				2024 1st Qtr.				2023 4th Qtr.
(in thousands except per share data)
Net interest income		$	19,349			$	20,248			$	18,371			$	16,474			$	16,555
Net provision expense			200				425				-				-				375
Noninterest income			4,994				4,867				4,083				4,051				4,046
Noninterest expense			15,344				15,417				14,278				13,684				13,778
Net income before federal income tax expense			8,799				9,273				8,176				6,841				6,449
Income tax expense			1,640				1,925				1,590				1,207				1,156
Net income			7,159				7,348				6,586				5,634				5,293
Basic earnings per share			0.79				0.86				0.87				0.75				0.70
Diluted earnings per share			0.79				0.85				0.87				0.74				0.70
Adjusted basic earnings per share			0.84				0.94				0.87				0.75				0.70
Adjusted diluted earnings per share			0.83				0.93				0.87				0.74				0.70

 

End of period balances		2024 4th Qtr.				2024 3rd Qtr.				2024 2nd Qtr.				2024 1st Qtr.				2023 4th Qtr.
(in thousands)
Gross loans		$	1,552,928			$	1,509,944			$	1,443,473			$	1,424,625			$	1,415,363
Loans held for sale (1)			7,288				5,994				5,946				6,035				4,710
Loans to other financial institutions (2)			39,878				38,492				36,569				30,032				19,400
Core loans (gross loans excluding 1 and 2 above)			1,505,762				1,465,458				1,400,958				1,388,558				1,391,253
Allowance for credit losses			16,552				16,490				16,152				16,037				15,685
Securities available for sale			479,117				497,552				491,670				504,636				514,598
Securities held to maturity			394,534				391,954				392,699				397,981				407,959
Other interest-earning assets			86,185				116,643				84,484				100,175				39,411
Total earning assets (before allowance)			2,512,764				2,516,093				2,412,326				2,427,417				2,377,331
Total assets			2,723,243				2,726,003				2,623,067				2,670,699				2,576,706
Noninterest-bearing deposits			524,945				521,055				517,137				502,685				547,625
Interest-bearing deposits			1,652,647				1,680,546				1,582,365				1,641,193				1,550,985
Brokered deposits			36,511				6,627				27,177				41,970				23,445
Total deposits			2,214,103				2,208,228				2,126,679				2,185,848				2,122,055
Deposits excluding brokered			2,177,592				2,201,601				2,099,502				2,143,878				2,098,610
Total subordinated debt			35,752				35,691				35,630				35,568				35,507
Total borrowed funds			175,000				210,000				210,000				210,000				200,000
Other interest-bearing liabilities			24,003				4,956				22,378				21,512				8,060
Total interest-bearing liabilities			1,923,913				1,937,820				1,877,550				1,950,243				1,817,997
Shareholders' equity			260,415				247,746				214,519				206,756				195,634

 

Average Balances		2024 4th Qtr.				2024 3rd Qtr.				2024 2nd Qtr.				2024 1st Qtr.				2023 4th Qtr.
(in thousands)
Loans		$	1,516,466			$	1,460,033			$	1,435,966			$	1,412,569			$	1,359,643
Securities			965,501				970,913				986,281				1,002,140				1,019,218
Other interest-earning assets			100,864				108,019				80,280				64,064				92,635
Total earning assets (before allowance)			2,582,831				2,538,965				2,502,527				2,478,773				2,471,496
Total assets			2,719,530				2,685,190				2,647,716				2,621,009				2,589,541
Noninterest-bearing deposits			536,653				519,511				516,308				506,175				546,778
Interest-bearing deposits			1,641,102				1,634,255				1,601,020				1,599,509				1,565,493
Brokered deposits			19,620				17,227				34,218				34,708				32,541
Total deposits			2,197,375				2,170,993				2,151,546				2,140,392				2,144,812
Total subordinated debt			35,719				35,658				35,596				35,535				35,474
Total borrowed funds			197,828				210,000				210,000				214,835				185,707
Other interest-bearing liabilities			16,928				11,756				26,426				18,399				25,729
Total interest-bearing liabilities			1,911,197				1,908,896				1,907,260				1,902,986				1,844,944
Shareholders' equity			254,737				237,875				210,742				200,177				187,099

 

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Loan Breakout (in thousands)		2024 4th Qtr.				2024 3rd Qtr.				2024 2nd Qtr.				2024 1st Qtr.				2023 4th Qtr.
Agricultural		$	48,221			$	49,147			$	45,274			$	41,950			$	49,210
Commercial and Industrial			228,256				229,232				224,031				231,222				229,915
Commercial Real Estate			901,130				862,773				804,213				794,705				786,921
Consumer			29,412				30,693				32,811				34,268				36,541
Construction Real Estate			17,042				14,555				18,751				17,890				20,936
Residential Real Estate			281,701				279,058				275,878				268,523				267,730
Loans to Other Financial Institutions			39,878				38,492				36,569				30,032				19,400
Gross Loans (excluding held for sale)		$	1,545,640			$	1,503,950			$	1,437,527			$	1,418,590			$	1,410,653
Allowance for credit losses			16,552				16,490				16,152				16,037				15,685
Net loans		$	1,529,088			$	1,487,460			$	1,421,375			$	1,402,553			$	1,394,968

 

Performance Ratios		2024 4th Qtr.				2024 3rd Qtr.				2024 2nd Qtr.				2024 1st Qtr.				2023 4th Qtr.
Annualized return on average assets			1.05	%			1.09	%			0.99	%			0.86	%			0.82	%
Annualized return on average equity			11.24	%			12.36	%			12.50	%			11.26	%			11.32	%
Annualized return on average tangible common equity			14.54	%			16.29	%			17.22	%			15.81	%			16.40	%
Net interest margin (GAAP)			2.98	%			3.17	%			2.95	%			2.67	%			2.66	%
Net interest margin (fully tax-equivalent)			3.04	%			3.23	%			3.01	%			2.74	%			2.72	%
Efficiency ratio			61.29	%			60.80	%			61.47	%			64.55	%			65.31	%
Annualized cost of funds			1.90	%			1.87	%			1.92	%			2.00	%			1.91	%
Annualized cost of deposits			1.58	%			1.53	%			1.56	%			1.65	%			1.57	%
Cost of interest bearing liabilities			2.43	%			2.38	%			2.44	%			2.53	%			2.45	%
Shareholders' equity to total assets			9.56	%			9.09	%			8.18	%			7.74	%			7.59	%
Tangible common equity to tangible assets			7.49	%			7.00	%			5.98	%			5.56	%			5.32	%
Annualized noninterest expense to average assets			2.26	%			2.30	%			2.16	%			2.09	%			2.13	%
Loan to deposit			70.14	%			68.38	%			67.87	%			65.17	%			66.70	%
Full-time equivalent employees			377				371				368				367				369

 

Capital Ratios ChoiceOne Financial Services Inc.		2024 4th Qtr.				2024 3rd Qtr.				2024 2nd Qtr.				2024 1st Qtr.				2023 4th Qtr.
Total capital (to risk weighted assets)			14.5	%			15.0	%			13.5	%			13.3	%			13.0	%
Common equity Tier 1 capital (to risk weighted assets)			12.0	%			12.3	%			10.7	%			10.5	%			10.3	%
Tier 1 capital (to risk weighted assets)			12.2	%			12.5	%			10.9	%			10.7	%			10.5	%
Tier 1 capital (to average assets)			9.1	%			9.0	%			7.7	%			7.6	%			7.5	%
Commercial Real Estate Loans as a percentage of total capital			195.6	%			193.3	%			205.1	%			206.8	%			213.6	%

 

Capital Ratios ChoiceOne Bank		2024 4th Qtr.				2024 3rd Qtr.				2024 2nd Qtr.				2024 1st Qtr.				2023 4th Qtr.
Total capital (to risk weighted assets)			12.7	%			13.1	%			13.2	%			12.6	%			12.4	%
Common equity Tier 1 capital (to risk weighted assets)			12.0	%			12.3	%			12.5	%			11.8	%			11.8	%
Tier 1 capital (to risk weighted assets)			12.0	%			12.3	%			12.5	%			11.8	%			11.8	%
Tier 1 capital (to average assets)			8.9	%			8.9	%			8.8	%			8.3	%			8.4	%
Commercial Real Estate Loans as a percentage of total capital			224.9	%			222.2	%			208.9	%			218.2	%			222.9	%

 

 

 

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Asset Quality		2024 4th Qtr.				2024 3rd Qtr.				2024 2nd Qtr.				2024 1st Qtr.				2023 4th Qtr.
(in thousands)
Net loan charge-offs (recoveries)		$	138			$	87			$	157			$	51			$	120
Annualized net loan charge-offs (recoveries) to average loans			0.04	%			0.02	%			0.04	%			0.01	%			0.04	%
Allowance for credit losses		$	16,552			$	16,490			$	16,152			$	16,037			$	15,685
Unfunded commitment liability		$	1,485			$	1,485			$	1,485			$	1,757			$	2,160
Allowance to loans (excludes held for sale)			1.07	%			1.10	%			1.12	%			1.13	%			1.11	%
Total funds reserved to pay for loans (includes liability for unfunded commitments and excludes held for sale)			1.17	%			1.20	%			1.23	%			1.25	%			1.27	%
Non-Accruing loans		$	3,704			$	2,355			$	2,086			$	1,715			$	1,723
Nonperforming loans (includes OREO)		$	4,177			$	2,884			$	2,358			$	1,837			$	1,845
Nonperforming loans to total loans (excludes held for sale)			0.27	%			0.19	%			0.16	%			0.13	%			0.13	%
Nonperforming assets to total assets			0.15	%			0.11	%			0.09	%			0.07	%			0.07	%

 

 

NON-GAAP Reconciliation		2024 4th Qtr.				2024 3rd Qtr.				2024 2nd Qtr.				2024 1st Qtr.				2023 4th Qtr.
Net interest income (tax-equivalent basis) (Non-GAAP)		$	19,739			$	20,631			$	18,756			$	16,871			$	16,945
Net interest margin (fully tax-equivalent)			3.04	%			3.23	%			3.01	%			2.74	%			2.72	%
Reconciliation to Reported Net Interest Income
Net interest income (tax-equivalent basis) (Non-GAAP)		$	19,739			$	20,631			$	18,756			$	16,871			$	16,945
Adjustment for taxable equivalent interest			(390	)			(383	)			(385	)			(397	)			(390	)
Net interest income (GAAP)		$	19,349			$	20,248			$	18,371			$	16,474			$	16,555
Net interest margin (GAAP)			2.98	%			3.17	%			2.95	%			2.67	%			2.66	%

 

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	Three Months Ended December 31,
	2024												2023
(Dollars in thousands)	Average												Average
	Balance				Interest				Rate				Balance				Interest				Rate
Assets:
Loans (1)(3)(4)(5)	$	1,516,466			$	23,591				6.19		%	$	1,359,643			$	19,782				5.77		%
Taxable securities (2)		677,133				4,846				2.85				726,335				5,532				3.02
Nontaxable securities (1)		288,368				1,760				2.43				292,883				1,753				2.37
Other		100,864				1,231				4.86				92,635				1,284				5.50
Interest-earning assets		2,582,831				31,428				4.84				2,471,496				28,350				4.55
Noninterest-earning assets		136,699												118,045
Total assets	$	2,719,530											$	2,589,541
Liabilities and Shareholders' Equity:
Interest-bearing demand deposits	$	907,631			$	3,389				1.49		%	$	864,689			$	3,667				1.68		%
Savings deposits		336,107				810				0.96				343,766				530				0.61
Certificates of deposit		397,364				4,291				4.30				357,038				3,812				4.24
Brokered deposit		19,620				220				4.46				32,541				413				5.03
Borrowings		197,828				2,374				4.77				185,707				2,221				4.75
Subordinated debentures		35,719				405				4.51				35,474				414				4.63
Other		16,928				200				4.70				25,729				349				5.38
Interest-bearing liabilities		1,911,197				11,689				2.43				1,844,944				11,405				2.45
Demand deposits		536,653												546,778
Other noninterest-bearing liabilities		16,943												10,720
Total liabilities		2,464,793												2,402,442
Shareholders' equity		254,737												187,099
Total liabilities and shareholders' equity	$	2,719,530											$	2,589,541
Net interest income (tax-equivalent basis) (Non-GAAP) (1)					$	19,739											$	16,945
Net interest margin (tax-equivalent basis) (Non-GAAP) (1)										3.04		%										2.72		%
Reconciliation to Reported Net Interest Income
Net interest income (tax-equivalent basis) (Non-GAAP) (1)					$	19,739											$	16,945
Adjustment for taxable equivalent interest						(390	)											(390	)
Net interest income (GAAP)					$	19,349											$	16,555
Net interest margin (GAAP)										2.98		%										2.66		%

 

 

 

 

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v3.24.4

Cover	Jan. 22, 2025
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jan. 22, 2025
Entity File Number	001-39209
Entity Registrant Name	ChoiceOne Financial Services, Inc.
Entity Central Index Key	0000803164
Entity Tax Identification Number	38-2659066
Entity Incorporation, State or Country Code	MI
Entity Address, Address Line One	109 East Division Street
Entity Address, City or Town	Sparta
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	49345
City Area Code	(616)
Local Phone Number	887-7366
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock
Trading Symbol	COFS
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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