ChoiceOne Reports Fourth Quarter 2025 Results

SPARTA, Mich., Jan. 30, 2026 /PRNewswire/ -- 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:

Highlights

"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,

2025

September 30,

2025

December 31,

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

9,383

Federal Reserve Bank stock

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:

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.

398,386

398,688

206,780

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

Ended

Three Months

Ended

Three Months

Ended

Twelve Months

Ended

(Dollars in thousands, except per share data)

December 31,

September 30,

December 31,

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

15,113

1,300

Provision for (reversal of) credit losses on unfunded

commitments

(300)

(675)

Net Provision for credit losses expense

800

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

1.13

1.09

Table 1 - Average Balances and tax-Equivalent Interest Rates (Unaudited)

Three Months Ended December

31, 2025

Three Months Ended

September 30, 2025

Three Months Ended December

31, 2024

(Dollars in thousands)

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

deposits

1,343,600

6,352

1.88

1,374,827

6,392

1.84

907,631

3,389

1.49

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

4.09

8,550

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

liabilities

26,860

28,258

16,943

Total liabilities

3,916,104

3,869,840

2,464,793

Shareholders' equity

459,423

438,449

254,737

Total liabilities and

shareholders' equity

4,375,527

4,308,289

2,719,530

Net interest income (tax-

equivalent basis) (Non-GAAP)

(1)

37,232

37,994

19,739

Net interest margin (tax-

equivalent basis) (Non-GAAP)

(1)

3.63

3.77

3.04

(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

Months

Ended

Three Months

Ended

Three

Months

Ended

Twelve Months Ended

December 31,

September 30,

December 31,

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

Qtr.

2025 3rd

Qtr.

2025 2nd

Qtr.

2025 1st

Qtr.

2024 4th

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

Qtr.

2025 3rd

Qtr.

2025 2nd

Qtr.

2025 1st

Qtr.

2024 4th

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

above)

2,963,047

2,907,445

2,917,759

2,922,562

1,505,762

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

Qtr.

2025 3rd

Qtr.

2025 2nd

Qtr.

2025 1st

Qtr.

2024 4th

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

Qtr.

2025 3rd

Qtr.

2025 2nd

Qtr.

2025 1st

Qtr.

2024 4th

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

Qtr.

2025 3rd

Qtr.

2025 2nd

Qtr.

2025 1st

Qtr.

2024 4th

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

1.65

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

Services Inc.

2025 4th

Qtr.

2025 3rd

Qtr.

2025 2nd

Qtr.

2025 1st

Qtr.

2024 4th

Qtr.

Total capital (to risk weighted assets)

12.7

13.0

12.4

12.0

14.5

Common equity Tier 1 capital (to risk

weighted assets)

10.2

10.3

9.8

9.4

12.0

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

8.2

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

occupied) as a percentage of total capital

279.0

275.2

288.2

302.0

195.6

Capital Ratios ChoiceOne Bank

2025 4th

Qtr.

2025 3rd

Qtr.

2025 2nd

Qtr.

2025 1st

Qtr.

2024 4th

Qtr.

Total capital (to risk weighted assets)

12.5

12.8

12.4

11.9

12.7

Common equity Tier 1 capital (to risk

weighted assets)

11.4

11.7

11.3

10.9

12.0

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

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

occupied) as a percentage of total capital

284.4

280.0

290.6

303.9

224.9

Asset Quality

2025 4th

Qtr.

2025 3rd

Qtr.

2025 2nd

Qtr.

2025 1st

Qtr.

2024 4th

Qtr.

(in thousands)

Net loan charge-offs (recoveries)

305

244

418

138

Annualized net loan charge-offs (recoveries) to average

loans

0.04

0.03

0.06

0.01

0.04

Allowance for credit losses

35,550

34,754

34,798

34,567

16,552

Unfunded commitment liability

1,347

1,647

1,485

Allowance to loans (excludes held for sale)

1.18

1.19

1.18

1.07

Total funds reserved to pay for loans (includes liability for

unfunded commitments and excludes held for sale)

1.22

1.25

1.24

1.17

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)

attributed to PCD

0.63

0.39

0.41

0.44

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

Qtr.

2025 3rd

Qtr.

2025 2nd

Qtr.

2025 1st

Qtr.

2024 4th

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

Qtr.

2025 3rd

Qtr.

2025 2nd

Qtr.

2025 1st

Qtr.

2024 4th

Qtr.

Total assets

4,410,551

4,296,902

4,310,252

4,305,391

2,723,243

Less: goodwill

129,854

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

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

Qtr.

2025 3rd

Qtr.

2025 2nd

Qtr.

2025 1st

Qtr.

2024 4th

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

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

SOURCE ChoiceOne Financial Services, Inc.