ChoiceOne Reports Second Quarter 2024 Results
ChoiceOne Financial Services (NASDAQ: COFS) reported strong financial results for Q2 2024. Net income increased to $6,586,000, up 26.3% year-over-year. Diluted EPS rose to $0.87, compared to $0.69 in Q2 2023. The GAAP net interest margin improved to 2.95%, up from 2.79% in Q2 2023. Core loans grew organically by $12.4 million (3.6% annualized) in Q2 2024 and $175.6 million (14.3%) year-over-year. Deposits, excluding brokered deposits, increased by $64.5 million (3.2%) over the past 12 months. Asset quality remains strong with nonperforming loans at just 0.16% of total loans. The company's strategic use of interest rate swaps has contributed to improved financial performance and positioning in various rate environments.
ChoiceOne Financial Services (NASDAQ: COFS) ha riportato risultati finanziari solidi per il secondo trimestre del 2024. Il reddito netto è aumentato a 6.586.000 dollari, con un incremento del 26,3% rispetto all'anno precedente. L'EPS diluito è salito a 0,87 dollari, rispetto a 0,69 dollari nel secondo trimestre del 2023. Il margine d'interesse netto GAAP è migliorato al 2,95%, rispetto al 2,79% del secondo trimestre 2023. I prestiti core sono cresciuti organicamente di 12,4 milioni di dollari (3,6% annualizzato) nel secondo trimestre del 2024 e 175,6 milioni di dollari (14,3%) su base annua. I depositi, escluse le disponibilità da broker, sono aumentati di 64,5 milioni di dollari (3,2%) negli ultimi 12 mesi. La qualità degli attivi rimane forte, con prestiti non performanti fissati a solo 0,16% del totale dei prestiti. L'uso strategico degli swap sui tassi d'interesse da parte dell'azienda ha contribuito a migliorare le performance finanziarie e la posizione in vari ambienti di tasso.
ChoiceOne Financial Services (NASDAQ: COFS) reportó resultados financieros sólidos para el segundo trimestre de 2024. El ingreso neto aumentó a $6,586,000, un incremento del 26.3% en comparación con el año anterior. El EPS diluido se elevó a $0.87, en comparación con $0.69 en el segundo trimestre de 2023. El margen de interés neto GAAP mejoró al 2.95%, hasta de 2.79% en el segundo trimestre de 2023. Los préstamos centrales crecieron orgánicamente en $12.4 millones (3.6% anualizado) en el segundo trimestre de 2024 y $175.6 millones (14.3%) en comparación anual. Los depósitos, excluyendo los depósitos intermediados, aumentaron en $64.5 millones (3.2%) en los últimos 12 meses. La calidad de los activos se mantiene sólida, con préstamos no productivos representando solo el 0.16% del total de préstamos. El uso estratégico de swaps de tasas de interés por parte de la empresa ha contribuido a mejorar su rendimiento financiero y posición en diversos ambientes de tasas.
ChoiceOne Financial Services (NASDAQ: COFS)는 2024년 2분기 강력한 재무 결과를 보고했습니다. 순이익은 $6,586,000으로 연간 26.3% 증가했습니다. 희석 주당순이익은 2023년 2분기 0.69달러에서 $0.87로 상승했습니다. GAAP 순이자마진은 2.79%에서 2.95%로 개선되었습니다. 2024년 2분기 핵심 대출은 유기적으로 $12.4백만 (연환산 3.6%) 증가했으며, 전년 대비 $175.6백만 (14.3%) 증가했습니다. 중개되지 않은 예금을 제외한 예금은 지난 12개월 동안 $64.5백만 (3.2%) 증가했습니다. 자산 품질은 여전히 강하며, 부실 대출 비율은 총 대출의 0.16%에 불과합니다. 회사의 금리 스왑 전략적 사용이 다양한 금리 환경에서 재무 성과 및 위치 개선에 기여했습니다.
ChoiceOne Financial Services (NASDAQ: COFS) a annoncé de solides résultats financiers pour le deuxième trimestre 2024. Le revenu net a augmenté pour atteindre 6 586 000 $, en hausse de 26,3 % par rapport à l'année précédente. Le bénéfice par action dilué a grimpé à 0,87 $, contre 0,69 $ au deuxième trimestre 2023. La marge d'intérêt nette GAAP s'est améliorée à 2,95 %, contre 2,79 % au deuxième trimestre 2023. Les prêts de base ont crû organiquement de 12,4 millions $ (3,6 % annualisé) au deuxième trimestre 2024 et de 175,6 millions $ (14,3 %) d'une année sur l'autre. Les dépôts, hors dépôts courtisés, ont augmenté de 64,5 millions $ (3,2 %) au cours des 12 derniers mois. La qualité des actifs demeure solide avec des prêts non performants représentant seulement 0,16 % du total des prêts. L'utilisation stratégique des swaps de taux d'intérêt par l'entreprise a contribué à améliorer la performance financière et le positionnement dans divers environnements de taux.
ChoiceOne Financial Services (NASDAQ: COFS) hat starke Finanzergebnisse für das zweite Quartal 2024 gemeldet. Der Nettogewinn stieg auf 6.586.000 $, ein Anstieg von 26,3 % im Vergleich zum Vorjahr. Der verwässerte Gewinn pro Aktie erhöhte sich auf 0,87 $, im Vergleich zu 0,69 $ im zweiten Quartal 2023. Die GAAP-Nettozinsspanne verbesserte sich auf 2,95 %, gegenüber 2,79 % im zweiten Quartal 2023. Die Basisdarlehen wuchsen organisch um 12,4 Millionen $ (annualisiert 3,6 %) im zweiten Quartal 2024 und 175,6 Millionen $ (14,3 %) im Vergleich zum Vorjahr. Die Einlagen, ohne vermittelte Einlagen, stiegen in den letzten 12 Monaten um 64,5 Millionen $ (3,2 %). Die Vermögensqualität bleibt stark, mit notleidenden Krediten, die nur 0,16 % der Gesamtdarlehen ausmachen. Der strategische Einsatz von Zinsswaps durch das Unternehmen trug zur Verbesserung der finanziellen Leistung und Positionierung in verschiedenen Zinsumfeldern bei.
- Net income increased 26.3% year-over-year to $6,586,000 in Q2 2024
- Diluted EPS rose to $0.87, up from $0.69 in Q2 2023
- GAAP net interest margin improved to 2.95%, up from 2.79% in Q2 2023
- Core loans grew organically by $175.6 million (14.3%) year-over-year
- Deposits, excluding brokered deposits, increased by $64.5 million (3.2%) over the past 12 months
- Asset quality remains strong with nonperforming loans at just 0.16% of total loans
- Total available borrowing capacity from all sources was $759.5 million as of June 30, 2024
- Shareholders' equity increased to $214.5 million, up from $179.2 million as of June 30, 2023
- Deposits, excluding brokered deposits, decreased $44.4 million (8.3% annualized) in Q2 2024
- Deposit costs rose to an annualized 1.56% in Q2 2024, compared to 0.98% in Q2 2023
- Interest expense on borrowings increased $1.1 million in Q2 2024 compared to Q2 2023
- Total cost of funds increased to an annualized 1.92% in Q2 2024, up from 1.29% in Q2 2023
- Noninterest expense increased by $705,000 (5.2%) in Q2 2024 compared to Q2 2023
Insights
ChoiceOne Financial Services' Q2 2024 results demonstrate robust performance and strategic financial management. The company reported net income of
Key financial highlights include:
- Diluted EPS increased to
$0.87 in Q2 2024 from$0.69 in Q2 2023 - GAAP net interest margin rose to
2.95% in Q2 2024, up from2.79% in Q2 2023 - Core loans grew by
14.3% year-over-year - Deposits (excluding brokered) increased by
3.2% over the past 12 months
The bank's strategic use of pay-fixed interest rate swaps has been particularly effective, contributing
Asset quality remains strong, with nonperforming loans at just
While deposit costs have increased due to the rising rate environment, ChoiceOne's proactive management and use of hedging instruments have helped control these costs. The bank's ability to grow its loan portfolio while maintaining strong asset quality in a challenging economic environment is commendable.
Overall, ChoiceOne's Q2 2024 results reflect a well-managed financial institution successfully navigating a complex interest rate environment while delivering value to shareholders.
ChoiceOne's Q2 2024 results highlight the bank's adept navigation of the current banking landscape. The institution's performance is particularly noteworthy given the challenges facing the banking sector, including deposit competition and interest rate volatility.
Several aspects of ChoiceOne's strategy stand out:
- Effective interest rate risk management: The use of pay-fixed interest rate swaps has significantly boosted net interest margin, demonstrating foresight in hedging against rate fluctuations.
- Strong organic loan growth: The
14.3% year-over-year increase in core loans indicates robust demand and effective customer relationships. - Deposit stability: Despite industry-wide pressures, ChoiceOne has managed to grow its deposit base by
3.2% over the past year, reflecting customer confidence. - Prudent liquidity management: The bank's use of multiple funding sources, including brokered deposits and the BTFP, ensures ample liquidity (
$759.5 million in available borrowing capacity).
The bank's focus on technology and customer relationships aligns with industry trends towards digital transformation and personalized banking services. However, the
ChoiceOne's ability to improve its net interest margin in a rising rate environment, coupled with its strong asset quality, positions it well among its peers. The strategic closure of two branches in Q1 2024 also indicates a willingness to optimize operations and manage costs effectively.
As the banking industry continues to face challenges from economic uncertainties and technological disruption, ChoiceOne's balanced approach to growth, risk management and operational efficiency sets a positive example for regional banks navigating these complex times.
Financial Highlights
- ChoiceOne reported net income of
$6,586,000 $12,220,000 $5,213,000 $10,846,000 26.3% and12.7% , respectively. - Diluted earnings per share were
$0.87 $1.61 $0.69 $1.44 - GAAP Net interest margin in the second quarter of 2024 increased to
2.95% , compared to2.67% in the first quarter of 2024, and2.79% in the second quarter of 2023. GAAP net interest income was$18.4 million $16.1 million - Core loans, which exclude held for sale loans and loans to other financial institutions, grew organically by
$12.4 million 3.6% on an annualized basis during the second quarter of 2024 and$175.6 million 14.3% since June 30, 2023. Loan interest income increased$6.0 million - Deposits, excluding brokered deposits, decreased
$44.4 million 8.3% in the second quarter of 2024 and increased$64.5 million 3.2% during the twelve months since June 30, 2023. The decrease in deposits in the second quarter was largely public funds including schools and townships which historically fluctuate with summer tax bill collection in July. The increase in deposits in the trailing twelve months is a combination of new business and recapture of deposit losses from the prior year. - Asset quality remains strong with only
0.16% of nonperforming loans to total loans (excluding held for sale) as of June 30, 2024.
"As we navigate through the evolving economic landscape, our bank has achieved consistent growth due to our strong team, technology, and relationships we have with our customers. Our strategic efforts have improved our net interest margin, bolstered by the use of derivative instruments which contribute positive cashflow. These steps have strengthened our financial base, so that ChoiceOne is well positioned to handle the market's fluctuations in different rate environments," said Kelly Potes, Chief Executive Officer.
ChoiceOne reported net income of
As of June 30, 2024, total assets were
Deposits, excluding brokered deposits, decreased
Increases to short term interest rates have led to higher deposit costs, which rose to an annualized
The provision for credit losses expense on loans was
ChoiceOne uses interest rate swaps to manage interest rate exposure to certain fixed assets and variable rate liabilities. On June 30, 2024, ChoiceOne had pay-fixed interest rate swaps with a total notional value of
Shareholders' equity totaled
Noninterest income increased
Noninterest expense increased by
"I am very pleased with the results of the second quarter of 2024, showing an improving net interest margin and excellent credit metrics. Our experienced team has positioned ChoiceOne to grow our franchise, improve our technology, and offer a high level of service to customers. We remain committed to our communities, customers, and stakeholders and sincerely appreciate the trust they put in us as their local financial partner." said Kelly Potes, Chief Executive Officer.
About ChoiceOne
ChoiceOne Financial Services, Inc. is a financial holding company headquartered in
Forward-Looking Statements
This release may contain forward-looking statements. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "is likely," "plans," "predicts," "projects," "may," "could," "look forward," "continue", "future", "will" 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 undertakes no 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 Financial Services, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2023.
Condensed Balance Sheets | ||||||||||||
(In thousands) | June 30, 2024 | March 31, 2024 | June 30, 2023 | |||||||||
Cash and cash equivalents | $ | 101,002 | $ | 150,129 | $ | 76,810 | ||||||
Equity securities, at fair value | 7,502 | 7,560 | 8,299 | |||||||||
Securities Held to Maturity | 392,699 | 397,981 | 420,549 | |||||||||
Securities Available for Sale | 491,670 | 504,636 | 521,202 | |||||||||
Federal Home Loan Bank stock | 4,449 | 4,449 | 8,366 | |||||||||
Federal Reserve Bank stock | 5,066 | 5,066 | 5,065 | |||||||||
Loans held for sale | 5,946 | 6,035 | 8,924 | |||||||||
Loans to other financial institutions | 36,569 | 30,032 | 38,838 | |||||||||
Core loans | 1,400,958 | 1,388,558 | 1,225,390 | |||||||||
Total loans held for investment | 1,437,527 | 1,418,590 | 1,264,228 | |||||||||
Allowance for credit losses | (16,152) | (16,037) | (14,582) | |||||||||
Loans, net of allowance for credit losses | 1,421,375 | 1,402,553 | 1,249,646 | |||||||||
Premises and equipment | 27,370 | 28,268 | 29,085 | |||||||||
Cash surrender value of life insurance policies | 45,384 | 45,079 | 44,510 | |||||||||
Goodwill | 59,946 | 59,946 | 59,946 | |||||||||
Core deposit intangible | 1,448 | 1,651 | 2,304 | |||||||||
Other assets | 59,210 | 57,346 | 49,020 | |||||||||
Total Assets | $ | 2,623,067 | $ | 2,670,699 | $ | 2,483,726 | ||||||
Noninterest-bearing deposits | $ | 517,137 | $ | 502,685 | $ | 544,925 | ||||||
Interest-bearing deposits | 1,582,365 | 1,641,193 | 1,490,093 | |||||||||
Brokered deposits | 27,177 | 41,970 | 51,370 | |||||||||
Borrowings | 210,000 | 210,000 | 160,000 | |||||||||
Subordinated debentures | 35,630 | 35,568 | 35,385 | |||||||||
Other liabilities | 36,239 | 32,527 | 22,713 | |||||||||
Total Liabilities | 2,408,548 | 2,463,943 | 2,304,486 | |||||||||
Common stock and paid-in capital, no par value; shares authorized: | 173,984 | 173,786 | 172,880 | |||||||||
Retained earnings | 81,836 | 77,294 | 67,281 | |||||||||
Accumulated other comprehensive income (loss), net | (41,301) | (44,324) | (60,921) | |||||||||
Shareholders' Equity | 214,519 | 206,756 | 179,240 | |||||||||
Total Liabilities and Shareholders' Equity | $ | 2,623,067 | $ | 2,670,699 | $ | 2,483,726 | ||||||
Condensed Statements of Income | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
(Dollars in thousands, except per share data) | June 30, | June 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Interest income | ||||||||||||||||
Loans, including fees | $ | 21,971 | $ | 15,978 | $ | 42,757 | $ | 30,851 | ||||||||
Securities: | ||||||||||||||||
Taxable | 5,471 | 5,378 | 10,819 | 10,291 | ||||||||||||
Tax exempt | 1,410 | 1,389 | 2,822 | 2,824 | ||||||||||||
Other | 1,092 | 571 | 1,978 | 748 | ||||||||||||
Total interest income | 29,944 | 23,316 | 58,376 | 44,714 | ||||||||||||
Interest expense | ||||||||||||||||
Deposits | 8,325 | 5,056 | 17,102 | 8,332 | ||||||||||||
Advances from Federal Home Loan Bank | 463 | 621 | 904 | 1,226 | ||||||||||||
Other | 2,785 | 1,548 | 5,525 | 2,053 | ||||||||||||
Total interest expense | 11,573 | 7,225 | 23,531 | 11,611 | ||||||||||||
Net interest income | 18,371 | 16,091 | 34,845 | 33,103 | ||||||||||||
Provision for credit losses on loans | 272 | (415) | 675 | (106) | ||||||||||||
Provision for credit losses on unfunded commitments | (272) | 165 | (675) | (119) | ||||||||||||
Net Provision for credit losses expense | - | (250) | - | (225) | ||||||||||||
Net interest income after provision | 18,371 | 16,341 | 34,845 | 33,328 | ||||||||||||
Noninterest income | ||||||||||||||||
Customer service charges | 2,662 | 2,271 | 5,067 | 4,538 | ||||||||||||
Insurance and investment commissions | 190 | 172 | 388 | 368 | ||||||||||||
Gains on sales of loans | 525 | 540 | 979 | 943 | ||||||||||||
Net gains (losses) on sales of securities | - | - | - | - | ||||||||||||
Net gains (losses) on sales and write downs of other assets | 11 | 133 | 12 | 136 | ||||||||||||
Earnings on life insurance policies | 305 | 269 | 800 | 532 | ||||||||||||
Trust income | 220 | 196 | 433 | 380 | ||||||||||||
Change in market value of equity securities | (71) | (385) | (36) | (322) | ||||||||||||
Other | 241 | 289 | 491 | 581 | ||||||||||||
Total noninterest income | 4,083 | 3,485 | 8,134 | 7,156 | ||||||||||||
Noninterest expense | ||||||||||||||||
Salaries and benefits | 8,264 | 7,837 | 16,095 | 15,920 | ||||||||||||
Occupancy and equipment | 1,477 | 1,507 | 2,939 | 3,150 | ||||||||||||
Data processing | 1,780 | 1,681 | 3,450 | 3,363 | ||||||||||||
Professional fees | 593 | 619 | 1,208 | 1,240 | ||||||||||||
Supplies and postage | 168 | 197 | 346 | 388 | ||||||||||||
Advertising and promotional | 199 | 155 | 349 | 304 | ||||||||||||
Intangible amortization | 203 | 253 | 406 | 505 | ||||||||||||
FDIC insurance | 390 | 220 | 765 | 520 | ||||||||||||
Other | 1,204 | 1,104 | 2,404 | 2,178 | ||||||||||||
Total noninterest expense | 14,278 | 13,573 | 27,962 | 27,568 | ||||||||||||
Income before income tax | 8,176 | 6,253 | 15,017 | 12,916 | ||||||||||||
Income tax expense | 1,590 | 1,040 | 2,797 | 2,070 | ||||||||||||
Net income | $ | 6,586 | $ | 5,213 | $ | 12,220 | $ | 10,846 | ||||||||
Basic earnings per share | $ | 0.87 | $ | 0.69 | $ | 1.62 | $ | 1.44 | ||||||||
Diluted earnings per share | $ | 0.87 | $ | 0.69 | $ | 1.61 | $ | 1.44 | ||||||||
Dividends declared per share | $ | 0.27 | $ | 0.26 | $ | 0.54 | $ | 0.52 | ||||||||
Other Selected Financial Highlights | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Quarterly | ||||||||||||||||||||
Earnings | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | 2023 2nd | |||||||||||||||
(in thousands except per share data) | ||||||||||||||||||||
Net interest income | $ | 18,371 | $ | 16,474 | $ | 16,556 | $ | 16,226 | $ | 16,091 | ||||||||||
Net provision expense | - | - | 375 | - | (250) | |||||||||||||||
Noninterest income | 4,083 | 4,051 | 4,046 | 3,704 | 3,485 | |||||||||||||||
Noninterest expense | 14,278 | 13,684 | 13,778 | 13,728 | 13,573 | |||||||||||||||
Net income before federal income tax expense | 8,176 | 6,841 | 6,449 | 6,202 | 6,253 | |||||||||||||||
Income tax expense | 1,590 | 1,207 | 1,156 | 1,080 | 1,040 | |||||||||||||||
Net income | 6,586 | 5,634 | 5,293 | 5,122 | 5,213 | |||||||||||||||
Basic earnings per share | 0.87 | 0.75 | 0.70 | 0.68 | 0.69 | |||||||||||||||
Diluted earnings per share | 0.87 | 0.74 | 0.70 | 0.68 | 0.69 | |||||||||||||||
End of period balances | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | 2023 2nd | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Gross loans | $ | 1,443,473 | $ | 1,424,625 | $ | 1,415,363 | $ | 1,315,022 | $ | 1,273,152 | ||||||||||
Loans held for sale (1) | 5,946 | 6,035 | 4,710 | 5,222 | 8,924 | |||||||||||||||
Loans to other financial institutions (2) | 36,569 | 30,032 | 19,400 | 23,763 | 38,838 | |||||||||||||||
Core loans (gross loans excluding 1 and 2 above) | 1,400,958 | 1,388,558 | 1,391,253 | 1,286,037 | 1,225,390 | |||||||||||||||
Allowance for credit losses | 16,152 | 16,037 | 15,685 | 14,872 | 14,582 | |||||||||||||||
Securities available for sale | 491,670 | 504,636 | 514,598 | 490,804 | 521,202 | |||||||||||||||
Securities held to maturity | 392,699 | 397,981 | 407,959 | 414,743 | 420,549 | |||||||||||||||
Other interest-earning assets | 84,484 | 100,175 | 39,411 | 130,178 | 62,762 | |||||||||||||||
Total earning assets (before allowance) | 2,412,326 | 2,427,417 | 2,377,331 | 2,350,747 | 2,277,665 | |||||||||||||||
Total assets | 2,623,067 | 2,670,699 | 2,576,706 | 2,574,196 | 2,483,726 | |||||||||||||||
Noninterest-bearing deposits | 517,137 | 502,685 | 547,625 | 531,962 | 544,925 | |||||||||||||||
Interest-bearing deposits | 1,582,365 | 1,641,193 | 1,550,985 | 1,551,995 | 1,490,093 | |||||||||||||||
Brokered deposits | 27,177 | 41,970 | 23,445 | 49,238 | 51,370 | |||||||||||||||
Total deposits | 2,126,679 | 2,185,848 | 2,122,055 | 2,133,195 | 2,086,388 | |||||||||||||||
Deposits excluding brokered | 2,099,502 | 2,143,878 | 2,098,610 | 2,083,957 | 2,035,018 | |||||||||||||||
Total subordinated debt | 35,630 | 35,568 | 35,507 | 35,446 | 35,385 | |||||||||||||||
Total borrowed funds | 210,000 | 210,000 | 200,000 | 180,000 | 160,000 | |||||||||||||||
Other interest-bearing liabilities | 22,378 | 21,512 | 8,060 | 32,204 | 11,985 | |||||||||||||||
Total interest-bearing liabilities | 1,877,550 | 1,950,243 | 1,817,997 | 1,848,883 | 1,748,833 | |||||||||||||||
Shareholders' equity | 214,519 | 206,756 | 195,634 | 181,161 | 179,240 | |||||||||||||||
Average Balances | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | 2023 2nd | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Loans | $ | 1,435,966 | $ | 1,412,569 | $ | 1,359,643 | $ | 1,278,421 | $ | 1,218,860 | ||||||||||
Securities | 986,281 | 1,002,140 | 1,019,218 | 1,035,785 | 1,053,191 | |||||||||||||||
Other interest-earning assets | 80,280 | 64,064 | 92,635 | 128,704 | 41,075 | |||||||||||||||
Total earning assets (before allowance) | 2,502,527 | 2,478,773 | 2,471,496 | 2,442,910 | 2,313,126 | |||||||||||||||
Total assets | 2,647,716 | 2,621,009 | 2,589,541 | 2,568,240 | 2,422,567 | |||||||||||||||
Noninterest-bearing deposits | 516,308 | 506,175 | 546,778 | 540,497 | 534,106 | |||||||||||||||
Interest-bearing deposits | 1,601,020 | 1,599,509 | 1,565,493 | 1,550,591 | 1,472,990 | |||||||||||||||
Brokered deposits | 34,218 | 34,708 | 32,541 | 44,868 | 49,679 | |||||||||||||||
Total deposits | 2,151,546 | 2,140,392 | 2,144,812 | 2,135,956 | 2,056,775 | |||||||||||||||
Total subordinated debt | 35,596 | 35,535 | 35,474 | 35,413 | 35,352 | |||||||||||||||
Total borrowed funds | 210,000 | 214,835 | 185,707 | 181,739 | 144,231 | |||||||||||||||
Other interest-bearing liabilities | 26,426 | 18,399 | 25,729 | 19,180 | 3,763 | |||||||||||||||
Total interest-bearing liabilities | 1,907,260 | 1,902,986 | 1,844,944 | 1,831,791 | 1,706,015 | |||||||||||||||
Shareholders' equity | 210,742 | 200,177 | 187,099 | 181,219 | 171,912 | |||||||||||||||
Loan Breakout (in thousands) | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | 2023 2nd | |||||||||||||||
Agricultural | $ | 45,274 | $ | 41,950 | $ | 49,210 | $ | 43,290 | $ | 40,684 | ||||||||||
Commercial and Industrial | 224,031 | 231,222 | 229,915 | 222,357 | 224,191 | |||||||||||||||
Commercial Real Estate | 804,213 | 794,705 | 786,921 | 709,960 | 657,549 | |||||||||||||||
Consumer | 32,811 | 34,268 | 36,541 | 37,605 | 38,614 | |||||||||||||||
Construction Real Estate | 18,751 | 17,890 | 20,936 | 16,477 | 16,734 | |||||||||||||||
Residential Real Estate | 275,878 | 268,523 | 267,730 | 256,348 | 247,618 | |||||||||||||||
Loans to Other Financial Institutions | 36,569 | 30,032 | 19,400 | 23,763 | 38,838 | |||||||||||||||
Gross Loans (excluding held for sale) | $ | 1,437,527 | $ | 1,418,590 | $ | 1,410,653 | $ | 1,309,800 | $ | 1,264,228 | ||||||||||
Allowance for credit losses | 16,152 | 16,037 | 15,685 | 14,872 | 14,582 | |||||||||||||||
Net loans | $ | 1,421,375 | $ | 1,402,553 | $ | 1,394,968 | $ | 1,294,928 | $ | 1,249,646 | ||||||||||
Performance Ratios | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | 2023 2nd | |||||||||||||||
Annualized return on average assets | 0.99 | % | 0.86 | % | 0.82 | % | 0.80 | % | 0.86 | % | ||||||||||
Annualized return on average equity | 12.50 | % | 11.26 | % | 11.32 | % | 11.31 | % | 12.13 | % | ||||||||||
Annualized return on average tangible common equity | 17.22 | % | 15.81 | % | 16.40 | % | 16.55 | % | 18.31 | % | ||||||||||
Net interest margin (GAAP) | 2.95 | % | 2.67 | % | 2.66 | % | 2.64 | % | 2.79 | % | ||||||||||
Net interest margin (fully tax-equivalent) | 3.01 | % | 2.74 | % | 2.72 | % | 2.70 | % | 2.86 | % | ||||||||||
Efficiency ratio | 61.47 | % | 64.55 | % | 65.31 | % | 65.74 | % | 65.92 | % | ||||||||||
Annualized cost of funds | 1.92 | % | 2.00 | % | 1.91 | % | 1.70 | % | 1.29 | % | ||||||||||
Annualized cost of deposits | 1.56 | % | 1.65 | % | 1.57 | % | 1.36 | % | 0.98 | % | ||||||||||
Cost of interest bearing liabilities | 2.44 | % | 2.53 | % | 2.45 | % | 2.18 | % | 1.70 | % | ||||||||||
Shareholders' equity to total assets | 8.18 | % | 7.74 | % | 7.59 | % | 7.04 | % | 7.22 | % | ||||||||||
Tangible common equity to tangible assets | 5.98 | % | 5.56 | % | 5.32 | % | 4.74 | % | 4.83 | % | ||||||||||
Annualized noninterest expense to average assets | 2.16 | % | 2.09 | % | 2.13 | % | 2.14 | % | 2.24 | % | ||||||||||
Loan to deposit | 67.87 | % | 65.17 | % | 66.70 | % | 61.65 | % | 61.02 | % | ||||||||||
Full-time equivalent employees | 368 | 367 | 369 | 376 | 380 | |||||||||||||||
Capital Ratios ChoiceOne Financial Services Inc. | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | 2023 2nd | |||||||||||||||
Total capital (to risk weighted assets) | 13.5 | % | 13.3 | % | 13.0 | % | 13.2 | % | 13.2 | % | ||||||||||
Common equity Tier 1 capital (to risk weighted assets) | 10.7 | % | 10.5 | % | 10.3 | % | 10.4 | % | 10.5 | % | ||||||||||
Tier 1 capital (to risk weighted assets) | 10.9 | % | 10.7 | % | 10.5 | % | 10.7 | % | 10.8 | % | ||||||||||
Tier 1 capital (to average assets) | 7.7 | % | 7.6 | % | 7.5 | % | 7.4 | % | 7.7 | % | ||||||||||
Capital Ratios ChoiceOne Bank | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | 2023 2nd | |||||||||||||||
Total capital (to risk weighted assets) | 13.2 | % | 12.6 | % | 12.4 | % | 12.7 | % | 12.7 | % | ||||||||||
Common equity Tier 1 capital (to risk weighted assets) | 12.5 | % | 11.8 | % | 11.8 | % | 12.0 | % | 12.2 | % | ||||||||||
Tier 1 capital (to risk weighted assets) | 12.5 | % | 11.8 | % | 11.8 | % | 12.0 | % | 12.2 | % | ||||||||||
Tier 1 capital (to average assets) | 8.8 | % | 8.3 | % | 8.4 | % | 8.3 | % | 8.7 | % | ||||||||||
Asset Quality | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | 2023 2nd | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Net loan charge-offs (recoveries) | $ | 157 | $ | 51 | $ | 120 | $ | 148 | $ | 67 | ||||||||||
Annualized net loan charge-offs (recoveries) to average loans | 0.04 | % | 0.01 | % | 0.04 | % | 0.05 | % | 0.02 | % | ||||||||||
Allowance for credit losses | $ | 16,152 | $ | 16,037 | $ | 15,685 | $ | 14,872 | $ | 14,582 | ||||||||||
Unfunded commitment liability | $ | 1,485 | $ | 1,757 | $ | 2,160 | $ | 2,718 | $ | 3,156 | ||||||||||
Allowance to loans (excludes held for sale) | 1.12 | % | 1.13 | % | 1.11 | % | 1.14 | % | 1.15 | % | ||||||||||
Total funds reserved to pay for loans (includes liability for | 1.23 | % | 1.25 | % | 1.27 | % | 1.34 | % | 1.40 | % | ||||||||||
Non-Accruing loans | $ | 2,086 | $ | 1,715 | $ | 1,723 | $ | 1,670 | $ | 1,581 | ||||||||||
Nonperforming loans (includes OREO) | $ | 2,358 | $ | 1,837 | $ | 1,845 | $ | 1,792 | $ | 1,847 | ||||||||||
Nonperforming loans to total loans (excludes held for sale) | 0.16 | % | 0.13 | % | 0.13 | % | 0.14 | % | 0.15 | % | ||||||||||
Nonperforming assets to total assets | 0.09 | % | 0.07 | % | 0.07 | % | 0.07 | % | 0.07 | % | ||||||||||
NON-GAAP Reconciliation | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | 2023 2nd | |||||||||||||||
Net interest income (tax-equivalent basis) (Non-GAAP) | $ | 18,756 | $ | 16,871 | $ | 16,945 | $ | 16,609 | $ | 16,468 | ||||||||||
Net interest margin (fully tax-equivalent) | 3.01 | % | 2.74 | % | 2.72 | % | 2.70 | % | 2.86 | % | ||||||||||
Reconciliation to Reported Net Interest Income | ||||||||||||||||||||
Net interest income (tax-equivalent basis) (Non-GAAP) (1) | $ | 18,756 | $ | 16,871 | $ | 16,945 | $ | 16,609 | $ | 16,468 | ||||||||||
Adjustment for taxable equivalent interest | (385) | (397) | (390) | (383) | (377) | |||||||||||||||
Net interest income (GAAP) | $ | 18,371 | $ | 16,474 | $ | 16,555 | $ | 16,226 | $ | 16,091 | ||||||||||
Net interest margin (GAAP) | 2.95 | % | 2.67 | % | 2.66 | % | 2.64 | % | 2.79 | % | ||||||||||
Three Months Ended June 30, | ||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||
(Dollars in thousands) | Average | Average | ||||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Loans (1)(3)(4)(5) | $ | 1,435,966 | $ | 21,981 | 6.16 | % | $ | 1,218,860 | $ | 15,986 | 5.26 | % | ||||||||||||
Taxable securities (2) | 696,023 | 5,471 | 3.16 | 756,239 | 5,378 | 2.85 | ||||||||||||||||||
Nontaxable securities (1) | 290,258 | 1,785 | 2.47 | 296,952 | 1,758 | 2.38 | ||||||||||||||||||
Other | 80,280 | 1,092 | 5.47 | 41,075 | 571 | 5.57 | ||||||||||||||||||
Interest-earning assets | 2,502,527 | 30,329 | 4.87 | 2,313,126 | 23,693 | 4.11 | ||||||||||||||||||
Noninterest-earning assets | 145,189 | 109,441 | ||||||||||||||||||||||
Total assets | $ | 2,647,716 | $ | 2,422,567 | ||||||||||||||||||||
Liabilities and Shareholders' Equity: | ||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 876,344 | $ | 2,921 | 1.34 | % | $ | 815,179 | $ | 1,905 | 0.94 | % | ||||||||||||
Savings deposits | 333,056 | 649 | 0.78 | 372,651 | 345 | 0.37 | ||||||||||||||||||
Certificates of deposit | 391,620 | 4,331 | 4.45 | 285,160 | 2,225 | 3.13 | ||||||||||||||||||
Brokered deposit | 34,218 | 424 | 4.98 | 49,679 | 581 | 4.69 | ||||||||||||||||||
Borrowings | 210,000 | 2,480 | 4.75 | 144,231 | 1,717 | 4.78 | ||||||||||||||||||
Subordinated debentures | 35,596 | 412 | 4.65 | 35,352 | 407 | 4.62 | ||||||||||||||||||
Other | 26,426 | 356 | 5.41 | 3,763 | 45 | 4.81 | ||||||||||||||||||
Interest-bearing liabilities | 1,907,260 | 11,573 | 2.44 | 1,706,015 | 7,225 | 1.70 | ||||||||||||||||||
Demand deposits | 516,308 | 534,106 | ||||||||||||||||||||||
Other noninterest-bearing liabilities | 13,406 | 10,534 | ||||||||||||||||||||||
Total liabilities | 2,436,974 | 2,250,655 | ||||||||||||||||||||||
Shareholders' equity | 210,742 | 171,912 | ||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 2,647,716 | $ | 2,422,567 | ||||||||||||||||||||
Net interest income (tax-equivalent basis) (Non-GAAP) (1) | $ | 18,756 | $ | 16,468 | ||||||||||||||||||||
Net interest margin (tax-equivalent basis) (Non-GAAP) (1) | 3.01 | % | 2.86 | % | ||||||||||||||||||||
Reconciliation to Reported Net Interest Income | ||||||||||||||||||||||||
Net interest income (tax-equivalent basis) (Non-GAAP) (1) | $ | 18,756 | $ | 16,468 | ||||||||||||||||||||
Adjustment for taxable equivalent interest | (385) | (377) | ||||||||||||||||||||||
Net interest income (GAAP) | $ | 18,371 | $ | 16,091 | ||||||||||||||||||||
Net interest margin (GAAP) | 2.95 | % | 2.79 | % | ||||||||||||||||||||
(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 |
(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 |
(5) | Interest on loans included net origination fees and accretion income. Accretion income was |
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SOURCE ChoiceOne Financial Services, Inc.
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