ChoiceOne Reports Third Quarter 2024 Results
ChoiceOne Financial Services (NASDAQ:COFS) reported strong Q3 2024 results with net income of $7.3 million, up 43.5% from Q3 2023. Core loans grew organically by $64.5 million (18.4% annualized) in Q3, while deposits increased by $102.1 million (19.5% annualized). The company's net interest margin improved to 3.17%, up from 2.95% in Q2 2024. Notable developments include a definitive merger agreement with Fentura Financial and completion of a $34.5 million public offering of common stock. Asset quality remains strong with nonperforming loans at 0.19% of total loans.
ChoiceOne Financial Services (NASDAQ:COFS) ha riportato risultati solidi per il terzo trimestre del 2024, con un utile netto di 7,3 milioni di dollari, in aumento del 43,5% rispetto al terzo trimestre del 2023. I prestiti core sono aumentati organicamente di 64,5 milioni di dollari (18,4% annualizzato) nel terzo trimestre, mentre i depositi sono cresciuti di 102,1 milioni di dollari (19,5% annualizzato). Il margine d'interesse netto dell'azienda è migliorato al 3,17%, rispetto al 2,95% nel secondo trimestre del 2024. Sviluppi significativi includono un accordo di fusione definitivo con Fentura Financial e il completamento di un'offerta pubblica di azioni comuni da 34,5 milioni di dollari. La qualità degli attivi rimane forte, con prestiti non performanti allo 0,19% del totale dei prestiti.
ChoiceOne Financial Services (NASDAQ:COFS) reportó resultados sólidos para el tercer trimestre de 2024, con un ingreso neto de 7,3 millones de dólares, un aumento del 43,5% en comparación con el tercer trimestre de 2023. Los préstamos principales crecieron orgánicamente en 64,5 millones de dólares (18,4% anualizado) en el tercer trimestre, mientras que los depósitos aumentaron en 102,1 millones de dólares (19,5% anualizado). El margen neto de interés de la compañía mejoró al 3,17%, subiendo desde el 2,95% en el segundo trimestre de 2024. Desarrollos notables incluyen un acuerdo de fusión definitivo con Fentura Financial y la finalización de una oferta pública de acciones comunes por 34,5 millones de dólares. La calidad de los activos se mantiene sólida, con préstamos no productivos en el 0,19% del total de préstamos.
ChoiceOne Financial Services (NASDAQ:COFS)는 2024년 3분기 강력한 실적을 보고했으며, 순이익은 730만 달러로 2023년 3분기 대비 43.5% 증가했습니다. 핵심 대출은 3분기 동안 6450만 달러(연율 18.4%) 유기적으로 증가했으며, 예금은 1억 210만 달러(연율 19.5%) 증가했습니다. 회사의 순이자 마진은 3.17%로, 2024년 2분기의 2.95%에서 개선되었습니다. 주요 개발 사항으로는 Fentura Financial과의 확정 합병 계약 및 3450만 달러 규모의 일반 주식 공개 발행 완료가 포함됩니다. 자산 품질은 강력하게 유지되며, 비수익 대출은 총 대출의 0.19%입니다.
ChoiceOne Financial Services (NASDAQ:COFS) a rapporté de solides résultats pour le troisième trimestre 2024, avec un bénéfice net de 7,3 millions de dollars, en augmentation de 43,5% par rapport au troisième trimestre 2023. Les prêts principaux ont augmenté de manière organique de 64,5 millions de dollars (18,4% annualisé) au troisième trimestre, tandis que les dépôts ont augmenté de 102,1 millions de dollars (19,5% annualisé). La marge d'intérêt nette de l'entreprise s'est améliorée à 3,17%, contre 2,95% au deuxième trimestre 2024. Développements notables incluent un accord de fusion définitif avec Fentura Financial et l'achèvement d'une offre publique d'actions ordinaires de 34,5 millions de dollars. La qualité des actifs reste solide avec des prêts non performants à 0,19% du total des prêts.
ChoiceOne Financial Services (NASDAQ:COFS) hat starke Ergebnisse für das 3. Quartal 2024 gemeldet, mit einem Nettogewinn von 7,3 Millionen Dollar, was einem Anstieg von 43,5% im Vergleich zum 3. Quartal 2023 entspricht. Die Kerndarlehen sind im 3. Quartal organisch um 64,5 Millionen Dollar (18,4% annualisiert) gewachsen, während die Einlagen um 102,1 Millionen Dollar (19,5% annualisiert) zugenommen haben. Die Nettozinsmarge des Unternehmens verbesserte sich auf 3,17%, gestiegen von 2,95% im 2. Quartal 2024. Bemerkenswerte Entwicklungen umfassen eine endgültige Fusionsvereinbarung mit Fentura Financial und den Abschluss eines öffentlichen Angebots von Stammaktien im Wert von 34,5 Millionen Dollar. Die Asset-Qualität bleibt stark, mit notleidenden Krediten bei 0,19% der Gesamtdarlehen.
- Net income increased 43.5% YoY to $7.3 million in Q3 2024
- Core loans grew 18.4% annualized in Q3 2024
- Deposits increased 19.5% annualized in Q3 2024
- Net interest margin improved to 3.17% from 2.95% in Q2 2024
- Strong asset quality with only 0.19% nonperforming loans
- Successfully raised $34.5 million through public offering
- Diluted EPS negatively impacted by share dilution from capital raise
- Interest expense on borrowings increased by $3.4 million YoY
- Noninterest expenses increased 12.3% YoY in Q3 2024
Insights
ChoiceOne's Q3 2024 results demonstrate robust financial performance with net income up
Quarterly Highlights
- ChoiceOne reported net income of
$7,348,000 $19,568,000 $5,122,000 $15,968,000 43.5% and22.6% , respectively. Net income adjusted for merger related expenses was$7,981,000 $20,201,000 - ChoiceOne entered into a definitive merger agreement with Fentura Financial, Inc. ("Fentura") on July 25, 2024. Fentura is the parent company of The State Bank, with
$1.8 billion Michigan :Genesee ,Ingham ,Jackson ,Livingston ,Oakland ,Saginaw , andShiawassee . - On July 26, 2024, ChoiceOne completed an underwritten public offering of 1,380,000 shares of its common stock at a price to the public of
$25.00 $34.5 million - Diluted earnings per share were
$0.85 $2.46 $0.68 $2.12 $0.93 $2.54 - GAAP Net interest margin in the third quarter of 2024 increased to
3.17% , compared to2.95% in the second quarter of 2024, and2.64% in the third quarter of 2023. GAAP net interest income was$20.2 million $16.2 million - Core loans, which exclude held for sale loans and loans to other financial institutions, grew organically by
$64.5 million 18.4% on an annualized basis during the third quarter of 2024 and$179.4 million 14.0% since September 30, 2023. Loan interest income increased$5.5 million - Deposits, excluding brokered deposits, increased
$102.1 million 19.5% in the third quarter of 2024 and$117.6 million 5.7% during the twelve months since September 30, 2023. The increase in deposits in the third quarter was driven by public funds including schools and townships which historically increase in the third quarter of each year due to the timing of tax collection. The increase in deposits in the twelve months ended September 30, 2024 is a combination of new business and recapture of deposit losses from the prior year. - Asset quality remains strong with only
0.19% of nonperforming loans to total loans (excluding held for sale) as of September 30, 2024.
"I am very pleased with the results of the third quarter of 2024, which highlight the growth in core loans and deposits driven by the success of our experienced team. The proactive management of our balance sheet has also resulted in improvements in our net interest margin in the third quarter and positions us to manage changing market conditions. We remain committed to our communities, customers, and stakeholders, and sincerely appreciate the trust they place in us as their local financial partner," said Kelly Potes, Chief Executive Officer.
ChoiceOne reported net income of
As of September 30, 2024, total assets were
Deposits, excluding brokered deposits, increased
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, decreasing deposit expenses. In addition, the Federal Reserve decreased the federal funds rate by 50 basis points in September 2024 and signaled potential further rate drops in the future. These factors led to a slight decline in the cost of deposits to average total deposits 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 rate assets and variable rate liabilities. On September 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 third quarter of 2024, showing core loan growth, an improving net interest margin and excellent credit metrics. In addition, we announced completion of the Capital Raise to supplement regulatory capital ratios, and the pending merger with Fentura and the State Bank, a highly respected community bank in
About ChoiceOne
ChoiceOne Financial Services, Inc. is a financial holding company headquartered in
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:
- the failure to obtain necessary regulatory approvals when expected or at all (and the risk that such approvals may result in a materially burdensome regulatory condition (as defined in the merger agreement));
- the failure of Fentura to obtain shareholder approval, for ChoiceOne to obtain the shareholder approval, or for either party to satisfy any of the other closing conditions to the proposed transaction on a timely basis or at all;
- the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement;
- the possibility that the anticipated benefits of the proposed transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy, competitive factors in the areas where ChoiceOne and Fentura do business, or as a result of other unexpected factors or events;
- the impact of purchase accounting with respect to the proposed transaction, or any change in the assumptions used regarding the assets purchased and liabilities assumed to determine their fair value;
- diversion of management's attention from ongoing business operations and opportunities;
- potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; or
- the outcome of any legal proceedings that may be instituted against ChoiceOne or Fentura.
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
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.
Important Additional Information and Where to Find It
This communication is being made in respect of the proposed merger between ChoiceOne and Fentura. This material is not a solicitation of any vote or approval of the ChoiceOne or Fentura shareholders and is not a substitute for the proxy statement/prospectus or any other documents that ChoiceOne and Fentura may send to their respective shareholders in connection with the proposed transaction.
In connection with the proposed Merger, ChoiceOne has filed with the SEC a Registration Statement on Form S-4 that will include a Proxy Statement and Prospectus of ChoiceOne and Fentura, as well as other relevant documents regarding the proposed Merger. A definitive Proxy Statement and Prospectus will be sent to ChoiceOne and Fentura shareholders when available. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND PROSPECTUS REGARDING THE PROPOSED MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
A free copy of the Proxy Statement and Prospectus, once available, as well as other filings containing information about ChoiceOne, Fentura, and the proposed transaction may be obtained at the SEC's Internet site http://www.sec.gov. You will also be able to obtain these documents, free of charge, from ChoiceOne under the "Investor Relations" section of its website, www.choiceone.bank (which website is not incorporated herein by reference). In addition, investors and security holders may obtain free copies of the documents ChoiceOne has filed with the SEC by directing a request to ChoiceOne Financial Services, Inc., Attn: Adom Greenland, 109 E. Division Street,
Participants in Solicitation
ChoiceOne, Fentura, and certain of their respective directors, executive officers and other members of management or employees may, under the SEC's rules, be deemed to be participants in the solicitation of proxies from ChoiceOne and Fentura shareholders in respect of the proposed merger, which will be described in the Proxy Statement and Prospectus. Information about ChoiceOne's directors and executive officers is available in its definitive proxy statement relating to its 2024 annual meeting of shareholders, which was filed with the SEC on April 11, 2024, and other documents filed by ChoiceOne with the SEC. Information about the directors and executive officers of Fentura and their ownership of Fentura common stock and those participants and other persons who may, under the SEC's rules, be deemed participants in the proposed transaction may be obtained by reading the Proxy Statement and Prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.
Condensed Balance Sheets | ||||||||||||
(In thousands) | September 30, | June 30,2024 | September 30, | |||||||||
Cash and cash equivalents | $ | 145,938 | $ | 101,002 | $ | 144,673 | ||||||
Equity securities, at fair value | 7,816 | 7,502 | 7,262 | |||||||||
Securities Held to Maturity | 391,954 | 392,699 | 414,743 | |||||||||
Securities Available for Sale | 497,552 | 491,670 | 490,804 | |||||||||
Federal Home Loan Bank stock | 4,449 | 4,449 | 4,449 | |||||||||
Federal Reserve Bank stock | 5,307 | 5,066 | 5,065 | |||||||||
Loans held for sale | 5,994 | 5,946 | 5,222 | |||||||||
Loans to other financial institutions | 38,492 | 36,569 | 23,763 | |||||||||
Core loans | 1,465,458 | 1,400,958 | 1,286,037 | |||||||||
Total loans held for investment | 1,503,950 | 1,437,527 | 1,309,800 | |||||||||
Allowance for credit losses | (16,490) | (16,152) | (14,872) | |||||||||
Loans, net of allowance for credit losses | 1,487,460 | 1,421,375 | 1,294,928 | |||||||||
Premises and equipment | 27,135 | 27,370 | 29,628 | |||||||||
Cash surrender value of life insurance policies | 45,699 | 45,384 | 44,788 | |||||||||
Goodwill | 59,946 | 59,946 | 59,946 | |||||||||
Core deposit intangible | 1,250 | 1,448 | 2,057 | |||||||||
Other assets | 45,503 | 59,210 | 70,631 | |||||||||
Total Assets | $ | 2,726,003 | $ | 2,623,067 | $ | 2,574,196 | ||||||
Noninterest-bearing deposits | $ | 521,055 | $ | 517,137 | $ | 531,962 | ||||||
Interest-bearing deposits | 1,680,546 | 1,582,365 | 1,551,995 | |||||||||
Brokered deposits | 6,627 | 27,177 | 49,238 | |||||||||
Borrowings | 210,000 | 210,000 | 180,000 | |||||||||
Subordinated debentures | 35,691 | 35,630 | 35,446 | |||||||||
Other liabilities | 24,338 | 36,239 | 44,394 | |||||||||
Total Liabilities | 2,478,257 | 2,408,548 | 2,393,035 | |||||||||
Common stock and paid-in capital, no par value; shares authorized: 15,000,000; shares outstanding: 8,959,664 at September 30, 2024, 7,573,618 at June 30, 2024, and 7,541,187 at September 30, 2023 | 206,427 | 173,984 | 173,187 | |||||||||
Retained earnings | 86,765 | 81,836 | 70,444 | |||||||||
Accumulated other comprehensive income (loss), net | (45,446) | (41,301) | (62,470) | |||||||||
Shareholders' Equity | 247,746 | 214,519 | 181,161 | |||||||||
Total Liabilities and Shareholders' Equity | $ | 2,726,003 | $ | 2,623,067 | $ | 2,574,196 | ||||||
Condensed Statements of Income | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
(Dollars in thousands, except per share data) | September 30, | September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Interest income | ||||||||||||||||
Loans, including fees | $ | 23,252 | $ | 17,774 | $ | 66,009 | $ | 48,625 | ||||||||
Securities: | ||||||||||||||||
Taxable | 5,563 | 5,346 | 16,382 | 15,637 | ||||||||||||
Tax exempt | 1,402 | 1,420 | 4,224 | 4,244 | ||||||||||||
Other | 1,473 | 1,764 | 3,451 | 2,512 | ||||||||||||
Total interest income | 31,690 | 26,304 | 90,066 | 71,018 | ||||||||||||
Interest expense | ||||||||||||||||
Deposits | 8,362 | 7,237 | 25,464 | 15,569 | ||||||||||||
Advances from Federal Home Loan Bank | 468 | 272 | 1,372 | 1,498 | ||||||||||||
Other | 2,612 | 2,569 | 8,137 | 4,622 | ||||||||||||
Total interest expense | 11,442 | 10,078 | 34,973 | 21,689 | ||||||||||||
Net interest income | 20,248 | 16,226 | 55,093 | 49,329 | ||||||||||||
Provision for credit losses on loans | 425 | 438 | 1,100 | 332 | ||||||||||||
Provision for credit losses on unfunded commitments | - | (438) | (675) | (557) | ||||||||||||
Net Provision for credit losses expense | 425 | - | 425 | (225) | ||||||||||||
Net interest income after provision | 19,823 | 16,226 | 54,668 | 49,554 | ||||||||||||
Noninterest income | ||||||||||||||||
Customer service charges | 2,773 | 2,382 | 7,840 | 6,920 | ||||||||||||
Insurance and investment commissions | 184 | 173 | 572 | 541 | ||||||||||||
Gains on sales of loans | 631 | 536 | 1,610 | 1,479 | ||||||||||||
Net gains (losses) on sales of securities | - | (71) | - | (71) | ||||||||||||
Net gains (losses) on sales and write downs of other assets | 191 | 13 | 203 | 149 | ||||||||||||
Earnings on life insurance policies | 315 | 278 | 1,115 | 810 | ||||||||||||
Trust income | 232 | 197 | 665 | 577 | ||||||||||||
Change in market value of equity securities | 277 | (134) | 241 | (456) | ||||||||||||
Other | 264 | 330 | 755 | 911 | ||||||||||||
Total noninterest income | 4,867 | 3,704 | 13,001 | 10,860 | ||||||||||||
Noninterest expense | ||||||||||||||||
Salaries and benefits | 8,372 | 8,038 | 24,467 | 23,958 | ||||||||||||
Occupancy and equipment | 1,475 | 1,427 | 4,414 | 4,577 | ||||||||||||
Data processing | 1,932 | 1,724 | 5,382 | 5,087 | ||||||||||||
Professional fees | 610 | 435 | 1,818 | 1,675 | ||||||||||||
Supplies and postage | 174 | 192 | 520 | 580 | ||||||||||||
Advertising and promotional | 168 | 269 | 517 | 573 | ||||||||||||
Intangible amortization | 198 | 247 | 604 | 752 | ||||||||||||
FDIC insurance | 390 | 270 | 1,155 | 790 | ||||||||||||
Merger related expenses | 645 | - | 645 | - | ||||||||||||
Other | 1,453 | 1,126 | 3,857 | 3,304 | ||||||||||||
Total noninterest expense | 15,417 | 13,728 | 43,379 | 41,296 | ||||||||||||
Income before income tax | 9,273 | 6,202 | 24,290 | 19,118 | ||||||||||||
Income tax expense | 1,925 | 1,080 | 4,722 | 3,150 | ||||||||||||
Net income | $ | 7,348 | $ | 5,122 | $ | 19,568 | $ | 15,968 | ||||||||
Basic earnings per share | $ | 0.86 | $ | 0.68 | $ | 2.48 | $ | 2.12 | ||||||||
Diluted earnings per share | $ | 0.85 | $ | 0.68 | $ | 2.46 | $ | 2.12 | ||||||||
Dividends declared per share | $ | 0.27 | $ | 0.26 | $ | 0.81 | $ | 0.78 | ||||||||
Income Adjusted for Merger Expenses - Non-GAAP Reconciliation (Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
(In Thousands, Except Per Share Data) | ||||||||||||||||
Net income | $ | 7,348 | $ | 5,122 | $ | 19,568 | $ | 15,968 | ||||||||
Merger related expenses net of tax | 633 | - | 633 | - | ||||||||||||
Adjusted net income | $ | 7,981 | $ | 5,122 | $ | 20,201 | $ | 15,968 | ||||||||
Weighted average number of shares | 8,567,548 | 7,537,996 | 7,898,938 | 7,528,887 | ||||||||||||
Diluted average shares outstanding | 8,615,500 | 7,568,034 | 7,944,143 | 7,562,160 | ||||||||||||
Adjusted basic earnings per share | $ | 0.94 | $ | 0.68 | $ | 2.56 | $ | 2.12 | ||||||||
Adjusted diluted earnings per share | $ | 0.93 | $ | 0.68 | $ | 2.54 | $ | 2.12 | ||||||||
Other Selected Financial Highlights (Unaudited) | ||||||||||||||||||||
Quarterly | ||||||||||||||||||||
Earnings | 2024 3rd | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | |||||||||||||||
(in thousands except per share data) | ||||||||||||||||||||
Net interest income | $ | 20,248 | $ | 18,371 | $ | 16,474 | $ | 16,555 | $ | 16,226 | ||||||||||
Net provision expense | 425 | - | - | 375 | - | |||||||||||||||
Noninterest income | 4,867 | 4,083 | 4,051 | 4,046 | 3,704 | |||||||||||||||
Noninterest expense | 15,417 | 14,278 | 13,684 | 13,778 | 13,728 | |||||||||||||||
Net income before federal income tax expense | 9,273 | 8,176 | 6,841 | 6,449 | 6,202 | |||||||||||||||
Income tax expense | 1,925 | 1,590 | 1,207 | 1,156 | 1,080 | |||||||||||||||
Net income | 7,348 | 6,586 | 5,634 | 5,293 | 5,122 | |||||||||||||||
Basic earnings per share | 0.86 | 0.87 | 0.75 | 0.70 | 0.68 | |||||||||||||||
Diluted earnings per share | 0.85 | 0.87 | 0.74 | 0.70 | 0.68 | |||||||||||||||
Adjusted basic earnings per share | 0.94 | 0.87 | 0.75 | 0.70 | 0.68 | |||||||||||||||
Adjusted diluted earnings per share | 0.93 | 0.87 | 0.74 | 0.70 | 0.68 | |||||||||||||||
End of period balances | 2024 3rd | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Gross loans | $ | 1,509,944 | $ | 1,443,473 | $ | 1,424,625 | $ | 1,415,363 | $ | 1,315,022 | ||||||||||
Loans held for sale (1) | 5,994 | 5,946 | 6,035 | 4,710 | 5,222 | |||||||||||||||
Loans to other financial institutions (2) | 38,492 | 36,569 | 30,032 | 19,400 | 23,763 | |||||||||||||||
Core loans (gross loans excluding 1 and 2 above) | 1,465,458 | 1,400,958 | 1,388,558 | 1,391,253 | 1,286,037 | |||||||||||||||
Allowance for credit losses | 16,490 | 16,152 | 16,037 | 15,685 | 14,872 | |||||||||||||||
Securities available for sale | 497,552 | 491,670 | 504,636 | 514,598 | 490,804 | |||||||||||||||
Securities held to maturity | 391,954 | 392,699 | 397,981 | 407,959 | 414,743 | |||||||||||||||
Other interest-earning assets | 116,643 | 84,484 | 100,175 | 39,411 | 130,178 | |||||||||||||||
Total earning assets (before allowance) | 2,516,093 | 2,412,326 | 2,427,417 | 2,377,331 | 2,350,747 | |||||||||||||||
Total assets | 2,726,003 | 2,623,067 | 2,670,699 | 2,576,706 | 2,574,196 | |||||||||||||||
Noninterest-bearing deposits | 521,055 | 517,137 | 502,685 | 547,625 | 531,962 | |||||||||||||||
Interest-bearing deposits | 1,680,546 | 1,582,365 | 1,641,193 | 1,550,985 | 1,551,995 | |||||||||||||||
Brokered deposits | 6,627 | 27,177 | 41,970 | 23,445 | 49,238 | |||||||||||||||
Total deposits | 2,208,228 | 2,126,679 | 2,185,848 | 2,122,055 | 2,133,195 | |||||||||||||||
Deposits excluding brokered | 2,201,601 | 2,099,502 | 2,143,878 | 2,098,610 | 2,083,957 | |||||||||||||||
Total subordinated debt | 35,691 | 35,630 | 35,568 | 35,507 | 35,446 | |||||||||||||||
Total borrowed funds | 210,000 | 210,000 | 210,000 | 200,000 | 180,000 | |||||||||||||||
Other interest-bearing liabilities | 4,956 | 22,378 | 21,512 | 8,060 | 32,204 | |||||||||||||||
Total interest-bearing liabilities | 1,937,820 | 1,877,550 | 1,950,243 | 1,817,997 | 1,848,883 | |||||||||||||||
Shareholders' equity | 247,746 | 214,519 | 206,756 | 195,634 | 181,161 | |||||||||||||||
Average Balances | 2024 3rd | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Loans | $ | 1,460,033 | $ | 1,435,966 | $ | 1,412,569 | $ | 1,359,643 | $ | 1,278,421 | ||||||||||
Securities | 970,913 | 986,281 | 1,002,140 | 1,019,218 | 1,035,785 | |||||||||||||||
Other interest-earning assets | 108,019 | 80,280 | 64,064 | 92,635 | 128,704 | |||||||||||||||
Total earning assets (before allowance) | 2,538,965 | 2,502,527 | 2,478,773 | 2,471,496 | 2,442,910 | |||||||||||||||
Total assets | 2,685,190 | 2,647,716 | 2,621,009 | 2,589,541 | 2,568,240 | |||||||||||||||
Noninterest-bearing deposits | 519,511 | 516,308 | 506,175 | 546,778 | 540,497 | |||||||||||||||
Interest-bearing deposits | 1,634,255 | 1,601,020 | 1,599,509 | 1,565,493 | 1,550,591 | |||||||||||||||
Brokered deposits | 17,227 | 34,218 | 34,708 | 32,541 | 44,868 | |||||||||||||||
Total deposits | 2,170,993 | 2,151,546 | 2,140,392 | 2,144,812 | 2,135,956 | |||||||||||||||
Total subordinated debt | 35,658 | 35,596 | 35,535 | 35,474 | 35,413 | |||||||||||||||
Total borrowed funds | 210,000 | 210,000 | 214,835 | 185,707 | 181,739 | |||||||||||||||
Other interest-bearing liabilities | 11,756 | 26,426 | 18,399 | 25,729 | 20,480 | |||||||||||||||
Total interest-bearing liabilities | 1,908,896 | 1,907,260 | 1,902,986 | 1,844,944 | 1,833,091 | |||||||||||||||
Shareholders' equity | 237,875 | 210,742 | 200,177 | 187,099 | 181,219 | |||||||||||||||
Loan Breakout (in thousands) | 2024 3rd | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | |||||||||||||||
Agricultural | $ | 49,147 | $ | 45,274 | $ | 41,950 | $ | 49,210 | $ | 43,290 | ||||||||||
Commercial and Industrial | 229,232 | 224,031 | 231,222 | 229,915 | 222,357 | |||||||||||||||
Commercial Real Estate | 862,773 | 804,213 | 794,705 | 786,921 | 709,960 | |||||||||||||||
Consumer | 30,693 | 32,811 | 34,268 | 36,541 | 37,605 | |||||||||||||||
Construction Real Estate | 14,555 | 18,751 | 17,890 | 20,936 | 16,477 | |||||||||||||||
Residential Real Estate | 279,058 | 275,878 | 268,523 | 267,730 | 256,348 | |||||||||||||||
Loans to Other Financial Institutions | 38,492 | 36,569 | 30,032 | 19,400 | 23,763 | |||||||||||||||
Gross Loans (excluding held for sale) | $ | 1,503,950 | $ | 1,437,527 | $ | 1,418,590 | $ | 1,410,653 | $ | 1,309,800 | ||||||||||
Allowance for credit losses | 16,490 | 16,152 | 16,037 | 15,685 | 14,872 | |||||||||||||||
Net loans | $ | 1,487,460 | $ | 1,421,375 | $ | 1,402,553 | $ | 1,394,968 | $ | 1,294,928 | ||||||||||
Performance Ratios | 2024 3rd | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | |||||||||||||||
Annualized return on average assets | 1.09 | % | 0.99 | % | 0.86 | % | 0.82 | % | 0.80 | % | ||||||||||
Annualized return on average equity | 12.36 | % | 12.50 | % | 11.26 | % | 11.32 | % | 11.31 | % | ||||||||||
Annualized return on average tangible common equity | 16.29 | % | 17.22 | % | 15.81 | % | 16.40 | % | 16.55 | % | ||||||||||
Net interest margin (GAAP) | 3.17 | % | 2.95 | % | 2.67 | % | 2.66 | % | 2.64 | % | ||||||||||
Net interest margin (fully tax-equivalent) | 3.23 | % | 3.01 | % | 2.74 | % | 2.72 | % | 2.70 | % | ||||||||||
Efficiency ratio | 60.80 | % | 61.47 | % | 64.55 | % | 65.31 | % | 65.74 | % | ||||||||||
Annualized cost of funds | 1.87 | % | 1.92 | % | 2.00 | % | 1.91 | % | 1.70 | % | ||||||||||
Annualized cost of deposits | 1.53 | % | 1.56 | % | 1.65 | % | 1.57 | % | 1.36 | % | ||||||||||
Cost of interest bearing liabilities | 2.38 | % | 2.44 | % | 2.53 | % | 2.45 | % | 2.18 | % | ||||||||||
Shareholders' equity to total assets | 9.09 | % | 8.18 | % | 7.74 | % | 7.59 | % | 7.04 | % | ||||||||||
Tangible common equity to tangible assets | 7.00 | % | 5.98 | % | 5.56 | % | 5.32 | % | 4.74 | % | ||||||||||
Annualized noninterest expense to average assets | 2.30 | % | 2.16 | % | 2.09 | % | 2.13 | % | 2.14 | % | ||||||||||
Loan to deposit | 68.38 | % | 67.87 | % | 65.17 | % | 66.70 | % | 61.65 | % | ||||||||||
Full-time equivalent employees | 371 | 368 | 367 | 369 | 376 | |||||||||||||||
Capital Ratios ChoiceOne Financial Services Inc. | 2024 3rd | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | |||||||||||||||
Total capital (to risk weighted assets) | 15.0 | % | 13.5 | % | 13.3 | % | 13.0 | % | 13.2 | % | ||||||||||
Common equity Tier 1 capital (to risk weighted assets) | 12.3 | % | 10.7 | % | 10.5 | % | 10.3 | % | 10.4 | % | ||||||||||
Tier 1 capital (to risk weighted assets) | 12.5 | % | 10.9 | % | 10.7 | % | 10.5 | % | 10.7 | % | ||||||||||
Tier 1 capital (to average assets) | 9.0 | % | 7.7 | % | 7.6 | % | 7.5 | % | 7.4 | % | ||||||||||
Commercial Real Estate Loans as a percentage of total capital | 193.3 | % | 205.1 | % | 206.8 | % | 213.6 | % | 186.3 | % | ||||||||||
Capital Ratios ChoiceOne Bank | 2024 3rd | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | |||||||||||||||
Total capital (to risk weighted assets) | 13.1 | % | 13.2 | % | 12.6 | % | 12.4 | % | 12.7 | % | ||||||||||
Common equity Tier 1 capital (to risk weighted assets) | 12.3 | % | 12.5 | % | 11.8 | % | 11.8 | % | 12.0 | % | ||||||||||
Tier 1 capital (to risk weighted assets) | 12.3 | % | 12.5 | % | 11.8 | % | 11.8 | % | 12.0 | % | ||||||||||
Tier 1 capital (to average assets) | 8.9 | % | 8.8 | % | 8.3 | % | 8.4 | % | 8.3 | % | ||||||||||
Commercial Real Estate Loans as a percentage of total capital | 221.8 | % | 208.9 | % | 218.2 | % | 222.9 | % | 194.4 | % | ||||||||||
Asset Quality | 2024 3rd | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Net loan charge-offs (recoveries) | $ | 87 | $ | 157 | $ | 51 | $ | 120 | $ | 148 | ||||||||||
Annualized net loan charge-offs (recoveries) to average loans | 0.02 | % | 0.04 | % | 0.01 | % | 0.04 | % | 0.05 | % | ||||||||||
Allowance for credit losses | $ | 16,490 | $ | 16,152 | $ | 16,037 | $ | 15,685 | $ | 14,872 | ||||||||||
Unfunded commitment liability | $ | 1,485 | $ | 1,485 | $ | 1,757 | $ | 2,160 | $ | 2,718 | ||||||||||
Allowance to loans (excludes held for sale) | 1.10 | % | 1.12 | % | 1.13 | % | 1.11 | % | 1.14 | % | ||||||||||
Total funds reserved to pay for loans (includes liability for unfunded commitments and excludes held for sale) | 1.20 | % | 1.23 | % | 1.25 | % | 1.27 | % | 1.34 | % | ||||||||||
Non-Accruing loans | $ | 2,355 | $ | 2,086 | $ | 1,715 | $ | 1,723 | $ | 1,670 | ||||||||||
Nonperforming loans (includes OREO) | $ | 2,884 | $ | 2,358 | $ | 1,837 | $ | 1,845 | $ | 1,792 | ||||||||||
Nonperforming loans to total loans (excludes held for sale) | 0.19 | % | 0.16 | % | 0.13 | % | 0.13 | % | 0.14 | % | ||||||||||
Nonperforming assets to total assets | 0.11 | % | 0.09 | % | 0.07 | % | 0.07 | % | 0.07 | % | ||||||||||
NON-GAAP Reconciliation | 2024 3rd | 2024 2nd | 2024 1st | 2023 4th | 2023 3rd | |||||||||||||||
Net interest income (tax-equivalent basis) (Non-GAAP) | $ | 20,631 | $ | 18,756 | $ | 16,871 | $ | 16,945 | $ | 16,609 | ||||||||||
Net interest margin (fully tax-equivalent) | 3.23 | % | 3.01 | % | 2.74 | % | 2.72 | % | 2.70 | % | ||||||||||
Reconciliation to Reported Net Interest Income | ||||||||||||||||||||
Net interest income (tax-equivalent basis) (Non-GAAP) | $ | 20,631 | $ | 18,756 | $ | 16,871 | $ | 16,945 | $ | 16,609 | ||||||||||
Adjustment for taxable equivalent interest | (383) | (385) | (397) | (390) | (383) | |||||||||||||||
Net interest income (GAAP) | $ | 20,248 | $ | 18,371 | $ | 16,474 | $ | 16,555 | $ | 16,226 | ||||||||||
Net interest margin (GAAP) | 3.17 | % | 2.95 | % | 2.67 | % | 2.66 | % | 2.64 | % | ||||||||||
Three Months Ended September 30, | ||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||
(Dollars in thousands) | Average | Average | ||||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Loans (1)(3)(4)(5) | $ | 1,460,033 | $ | 23,262 | 6.34 | % | $ | 1,278,421 | $ | 17,779 | 5.52 | % | ||||||||||||
Taxable securities (2) | 681,578 | 5,563 | 3.25 | 741,287 | 5,345 | 2.86 | ||||||||||||||||||
Nontaxable securities (1) | 289,335 | 1,775 | 2.44 | 294,498 | 1,797 | 2.42 | ||||||||||||||||||
Other | 108,019 | 1,473 | 5.43 | 128,704 | 1,766 | 5.44 | ||||||||||||||||||
Interest-earning assets | 2,538,965 | 32,073 | 5.03 | 2,442,910 | 26,687 | 4.33 | ||||||||||||||||||
Noninterest-earning assets | 146,225 | 125,330 | ||||||||||||||||||||||
Total assets | $ | 2,685,190 | $ | 2,568,240 | ||||||||||||||||||||
Liabilities and Shareholders' Equity: | ||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 916,459 | $ | 3,111 | 1.35 | % | $ | 856,485 | $ | 2,885 | 1.34 | % | ||||||||||||
Savings deposits | 329,613 | 728 | 0.88 | 357,687 | 462 | 0.51 | ||||||||||||||||||
Certificates of deposit | 388,183 | 4,296 | 4.40 | 336,419 | 3,308 | 3.90 | ||||||||||||||||||
Brokered deposit | 17,227 | 227 | 5.25 | 44,868 | 582 | 5.15 | ||||||||||||||||||
Borrowings | 210,000 | 2,508 | 4.75 | 181,739 | 2,171 | 4.74 | ||||||||||||||||||
Subordinated debentures | 35,658 | 413 | 4.61 | 35,413 | 413 | 4.62 | ||||||||||||||||||
Other | 11,756 | 159 | 5.37 | 20,480 | 257 | 4.97 | ||||||||||||||||||
Interest-bearing liabilities | 1,908,896 | 11,442 | 2.38 | 1,833,091 | 10,078 | 2.18 | ||||||||||||||||||
Demand deposits | 519,511 | 540,497 | ||||||||||||||||||||||
Other noninterest-bearing liabilities | 18,908 | 13,433 | ||||||||||||||||||||||
Total liabilities | 2,447,315 | 2,387,021 | ||||||||||||||||||||||
Shareholders' equity | 237,875 | 181,219 | ||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 2,685,190 | $ | 2,568,240 | ||||||||||||||||||||
Net interest income (tax-equivalent basis) (Non-GAAP) (1) | $ | 20,631 | $ | 16,609 | ||||||||||||||||||||
Net interest margin (tax-equivalent basis) (Non-GAAP) (1) | 3.23 | % | 2.70 | % | ||||||||||||||||||||
Reconciliation to Reported Net Interest Income | ||||||||||||||||||||||||
Net interest income (tax-equivalent basis) (Non-GAAP) (1) | $ | 20,631 | $ | 16,609 | ||||||||||||||||||||
Adjustment for taxable equivalent interest | (383) | (383) | ||||||||||||||||||||||
Net interest income (GAAP) | $ | 20,248 | $ | 16,226 | ||||||||||||||||||||
Net interest margin (GAAP) | 3.17 | % | 2.64 | % | ||||||||||||||||||||
(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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