ChoiceOne Reports Third Quarter 2025 Results

Rhea-AI Summary

ChoiceOne Financial Services (NASDAQ:COFS) reported Q3 2025 results with net income of $14.7M for the quarter and $14.3M for the nine months ended Sept 30, 2025.

The March 1, 2025 merger with Fentura added approximately $1.8B in assets, $1.4B in loans and $1.4B in deposits; merger-related after-tax expenses were $13.9M YTD and merger PCL after-tax was $9.5M.

GAAP net interest margin rose to 3.73% in Q3 2025; total assets grew to $4.3B and shareholders' equity to $449.6M as of Sept 30, 2025.

Positive

• Merger added $1.8B assets on March 1, 2025
• GAAP net interest margin improved to 3.73% in Q3 2025
• Total assets increased to $4.3B as of Sept 30, 2025
• Shareholders' equity rose to $449.6M as of Sept 30, 2025
• Noninterest income rose $2.3M in Q3 2025

Negative

• Merger-related after-tax expenses of $13.9M YTD
• Merger-related provision for credit losses after-tax $9.5M
• Noninterest expense increased by $10.8M in Q3 2025
• Total risk-based capital ratio decreased to 12.8%

Insights

Banking Financial Analyst

Merger drove large scale growth and NII gains; earnings damaged by one‑time merger costs but core metrics and asset quality look solid.

ChoiceOne's quarter shows how the Merger mechanically changed the company: total assets rose to $4.3 billion primarily from the transaction, core loans increased by $1.4 billion from the merger, and GAAP net interest income rose to $37.6 million, lifting the GAAP NIM to 3.73%. Excluding recorded merger expenses and merger-related provision charges, nine-month adjusted net income equals $37,657,000, indicating the underlying business is generating meaningful interest income post‑combination.

Key dependencies and risks are explicit in the release: merger-related charges of $13.9 million (nine months) and merger-related PCL of $9.5 million materially affected reported results. A measurable portion of nonperforming loans, 0.39%, stems from purchased credit‑deteriorated loans acquired in the merger. Liquidity and funding mix changed—uninsured deposits are $1.2 billion or 33.2% of deposits—and borrowing capacity stood at $1.2 billion. These are factual exposures that will determine near‑term volatility in funding cost and credit performance.

Monitor these concrete items over the next 6–18 months: realized accretion from purchased loans (estimated remaining accretion $51.1 million and $2.3 million for the remainder of 2025 and $8.2 million in 2026 using the effective interest method), the run‑rate of noninterest expense after merger costs cease, and the ratio of allowance for credit losses to loans (1.19% as of September 30, 2025). Each item is explicitly disclosed and will determine whether reported GAAP results converge with the stronger adjusted profitability figures.

SPARTA, Mich., Oct. 24, 2025 /PRNewswire/ -- ChoiceOne Financial Services, Inc. ("ChoiceOne", NASDAQ:COFS), the parent company for ChoiceOne Bank, reported financial results for the quarter ended September 30, 2025. 

Significant items impacting comparable first nine month period of 2024 and 2025 results include the following:

• On March 1, 2025, ChoiceOne completed the merger (the "Merger") of Fentura Financial, Inc. ("Fentura"), the former parent company of The State Bank, with and into ChoiceOne with ChoiceOne surviving the merger. On March 14, 2025, the consolidation of The State Bank with and into ChoiceOne Bank with ChoiceOne Bank surviving the consolidation was completed.
• The total assets, loans and deposits acquired in the Merger were approximately $1.8 billion, $1.4 billion and $1.4 billion, respectively.
• Merger related expenses, net of taxes, of $13.9 million or $1.02 per diluted share for the nine months ended September 30, 2025. There were no merger expenses in the third quarter of 2025 and management does not anticipate additional material merger expenses.
• Merger related provision for credit losses, net of taxes, of $9.5 million during the first quarter ended March 31, 2025, or $0.69 per diluted share as of September 30, 2025.

Highlights

• ChoiceOne reported net income of $14,681,000 and $14,309,000 for the three and nine months ended September 30, 2025, compared to net income of $7,348,000 and $19,568,000 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 $14,681,000 and $37,657,000 for the three and nine months ended September 30, 2025, respectively.
• Diluted earnings per share were $0.97 and $1.05 for the three and nine months ended September 30, 2025, compared to diluted earnings per share of $0.85 and $2.46 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 $0.97 and $2.76 for the three and nine months ended September 30, 2025.
• In the third quarter of 2025, ChoiceOne's GAAP net interest margin increased to 3.73%, compared to 3.17% in the same period of 2024. GAAP net interest income also saw a substantial increase, reaching $37.6 million compared to $20.2 million in the third quarter of 2024. This growth was primarily due to the additional net interest income attributable to the Merger beginning on March 1, 2025. Interest income due to accretion from purchased loans increased GAAP net interest margin by 36 basis points for the third quarter of 2025.
• Core loans, which exclude held for sale loans and loans to other financial institutions, declined by $10.3 million or 1.4% on an annualized basis during the third quarter of 2025 and grew organically by $65.3 million or 4.5% during the twelve months ended September 30, 2025. Core loans grew by $1.4 billion due to the Merger on March 1, 2025. Loan interest income increased $23.9 million in the third quarter of 2025 compared to the same period in 2024. Interest income for the three months ended September 30, 2025, includes $3.6 million of interest income due to accretion from purchased loans.
• Asset quality continues to remain strong, with annualized net loan charge-offs to average loans of 0.03% and nonperforming loans to total loans (excluding loans held for sale) of 0.69% as of September 30, 2025. Notably, 0.39% of the nonperforming loans to total loans (excluding loans held for sale) is attributed to loans purchased with credit deterioration through the Merger.

"ChoiceOne continues to deliver exceptional results, driven by the strength of our strategic merger with Fentura and a focus on serving our communities," said Kelly Potes, Chief Executive Officer. "We are proud of the momentum we have built and remain committed to creating lasting value for our customers, employees, and shareholders."

ChoiceOne reported net income of $14,681,000 and $14,309,000 for the three and nine months ended September 30, 2025, compared to net income of $7,348,000 and $19,568,000 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 $14,681,000 and $37,657,000 for the three and nine months ended September 30, 2025, respectively.  Diluted earnings per share was $0.97 and $1.05 for the three and nine months ended September 30, 2025, compared to diluted earnings per share of $0.85 and $2.46 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 $0.97 and $2.76 for the three and nine months ended September 30, 2025.

As of September 30, 2025, total assets were $4.3 billion, an increase of $1.6 billion compared to September 30, 2024.  The growth in total assets is primarily attributed to the Merger.  The growth in total assets was offset by a $36.0 million reduction in loans to other financial institutions and a $47.0 million reduction in cash and cash equivalents on September 30, 2025 compared to September 30, 2024.  Loans to other financial institutions consist of a warehouse line of credit to a bank used to facilitate mortgage loan originations, with interest rates and balances that fluctuate in line with the national mortgage market.  The reduction in cash balances is primarily due to purchases of agency mortgage backed securities during the third quarter of 2025.

Core loans, which exclude held for sale loans and loans to other financial institutions, declined by $10.3 million or 1.4% on an annualized basis during the third quarter of 2025 and grew organically by $65.3 million or 4.5% during the twelve months ended September 30, 2025.  Core loans grew by $1.4 billion due to the Merger on March 1, 2025.  Loan interest income increased $23.9 million in the third quarter of 2025 compared to the same period in 2024.  Interest income for the three months ended September 30, 2025, includes $3.6 million of interest income due to accretion from purchased loans.  Of this amount, $1.8 million was calculated using the effective interest rate method of amortization, while the remaining $1.8 million 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 the remainder of 2025 and 2026 using the effective interest method of amortization is $2.3 million and $8.2 million, respectively; however, actual results will be dependent on prepayment speeds and other factors.  It is estimated that a total of $51.1 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 $8.0 million as of September 30, 2025, compared to June 30, 2025.  During the third quarter of 2025 non-interest bearing deposits declined by $39.9 million while interest bearing demand deposits increased by $73.4 million.  The shift from non-interest-bearing to interest-bearing demand deposits was partly due to quarter-end timing and fluctuations in business and municipal activity. The growth in interest-bearing demand deposits was primarily concentrated in non-maturity interest-bearing checking and money market accounts.  The average balance of non-interest-bearing deposits rose to $930.3 million in the third quarter of 2025, up from $915.6 million in the second quarter of 2025. Deposits, excluding brokered deposits, increased by $1.3 billion as of September 30, 2025, compared to September 30, 2024 largely as a result of the Merger.  ChoiceOne continues to be proactive in managing its liquidity position by using brokered deposits and FHLB advances to ensure ample liquidity.  At September 30, 2025, total available borrowing capacity secured by pledged assets was $1.2 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 September 30, 2025.

In the three months ended September 30, 2025, compared to the same period in the prior year, ChoiceOne's cost of deposits to average total deposits increased by 4 basis points, rising from 1.53% to 1.57%, primarily due to higher-cost deposits acquired through the Merger. This increase was partially offset by a decline in CD costs and a reduction in wholesale funding costs. The annualized cost of funds decreased by 10 basis points, from 1.87% to 1.77% in the three months ended September 30, 2025 compared to the same period in the prior year.  In the three months ended September 30, 2025, compared to the three months ended June 30, 2025, annualized cost of funds decreased to 1.77% from 1.84%, primarily due to a decrease in higher cost local and brokered CDs.  Interest expense on borrowings for the three months ended September 30, 2025, declined by $489,000 compared to the same period in the prior year.  As of September 30, 2025, the total balance of borrowed funds from the FHLB was $198.0 million at a weighted average fixed rate of 4.23%, with $158.0 million due within 12 months.

The provision for credit losses on loans was $200,000 in the third quarter of 2025, due to $244,000 in net charge offs, as well as small adjustments to qualitative and quantitative factors.  The ratio of the allowance for credit losses to total loans (excluding loans held for sale) was 1.19% on September 30, 2025 compared to 1.19% on June 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 0.03% and nonperforming loans to total loans (excluding loans held for sale) of 0.69% as of September 30, 2025.  Notably, 0.39% of the nonperforming loans to total loans (excluding loans held for sale) is attributed to loans purchased with credit deterioration through the Merger.  

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 fix swaps to hedge interest rate risk on approximately $40.6 million of newly purchased agency mortgage backed securities.   The 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 September 30, 2025, ChoiceOne held pay-fixed interest rate swaps with a total notional value of $381.3 million, a weighted average coupon of 3.15%, a fair value of $6.8 million and an average remaining contract length of 7.2 years.  These derivative instruments are designed to change in value as interest rates rise or fall inverse to the change in unrealized losses on the securities available for sale portfolio due to changes in interest rates.  Settlements from swaps amounted to $1.3 million for the third quarter of 2025 compared to $1.3 million for the second 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.

As of September 30, 2025, shareholders' equity was $449.6 million, a significant increase from $247.7 million on September 30, 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. Additionally, the sale of 1,380,000 shares of common stock at $25.00 per share on July 26, 2024, generated $34.5 million in aggregate gross proceeds (before deducting discounts and estimated offering expenses).  ChoiceOne Bank continues to be "well-capitalized," with a total risk-based capital ratio of 12.8% as of September 30, 2025, compared to 13.1% on September 30, 2024, with the decrease primarily due to the impact of the Merger.

Noninterest income increased by $2.3 million and $5.6 million for the three and nine months ended September 30, 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 also increased as a result of higher estate settlement fees and customers obtained from the Merger.  Additionally, ChoiceOne recognized income from two death benefit claims under bank-owned life insurance policies during the second quarter for an additional $299,000.

Noninterest expense increased by $10.8 million and $44.0 million for the three and nine months ended September 30, 2025, compared to the same periods in 2024. The year to date increase was largely due to merger-related expenses of $17.4 million during the nine months ended September 30, 2025, compared to $645,000 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.  ChoiceOne continues to strive to optimize our cost structure while investing in opportunities that enhance our performance and reinforce the value we bring to customers and shareholders.

"Our strong financial performance this quarter is due to our outstanding employees and customers.  With the Merger behind us, our team is focused on serving our clients and growing our core business.  I am thankful for our employees for their hard work and our customers who trust us to be their community bank." said Kelly Potes, Chief Executive Officer.

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" 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)		September 30, 2025				June 30, 2025				September 30, 2024
Cash and cash equivalents		$	98,978			$	156,280			$	145,938
Equity securities, at fair value			9,505				9,582				7,816
Securities Held to Maturity			388,517				390,457				391,954
Securities Available for Sale			544,023				479,426				497,552
Federal Home Loan Bank stock			18,562				18,562				4,449
Federal Reserve Bank stock			12,554				12,547				5,307
Loans held for sale			6,323				7,639				5,994
Loans to other financial institutions			2,483				3,033				38,492
Core loans			2,907,445				2,917,759				1,465,458
Total loans held for investment			2,909,928				2,920,792				1,503,950
Allowance for credit losses			(34,754)				(34,798)				(16,490)
Loans, net of allowance for credit losses			2,875,174				2,885,994				1,487,460
Premises and equipment			46,159				45,667				27,135
Cash surrender value of life insurance policies			74,231				73,673				45,699
Goodwill			126,730				126,730				59,946
Intangible assets			31,694				33,421				1,250
Other assets			64,452				70,274				45,503
Total Assets		$	4,296,902			$	4,310,252			$	2,726,003
Noninterest-bearing deposits		$	903,925			$	943,873			$	521,055
Interest-bearing demand deposits			1,395,724				1,322,336				952,013
Savings deposits			588,798				595,981				335,802
Certificates of deposit			605,912				624,209				392,731
Brokered deposits			72,672				106,225				6,627
Borrowings			197,752				198,428				210,000
Subordinated debentures			48,368				48,277				35,691
Other liabilities			34,136				39,162				24,338
Total Liabilities			3,847,287				3,878,491				2,478,257
Common stock and paid-in capital, no par value; shares authorized: 30,000,000; shares outstanding: 15,017,802 at September 30, 2025, 15,008,864 at June 30, 2025, and 8,959,664 at September 30, 2024.			398,688				398,201				206,427
Retained earnings			93,124				82,647				86,765
Accumulated other comprehensive income (loss), net			(42,197)				(49,087)				(45,446)
Shareholders' Equity			449,615				431,761				247,746
Total Liabilities and Shareholders' Equity		$	4,296,902			$	4,310,252			$	2,726,003

 

 

Condensed Statements of Operations (Unaudited)
		Three Months Ended								Nine Months Ended
(Dollars in thousands, except per share data)		September 30,								September 30,
		2025				2024				2025				2024
Interest income
Loans, including fees		$	47,123			$	23,252			$	126,297			$	66,009
Securities:
Taxable			5,249				5,563				15,243				16,382
Tax exempt			1,418				1,402				4,220				4,224
Other			908				1,473				2,822				3,451
Total interest income			54,698				31,690				148,582				90,066
Interest expense
Deposits			14,287				8,362				39,843				25,464
Advances from Federal Home Loan Bank			1,926				468				5,637				1,372
Other			888				2,612				2,872				8,137
Total interest expense			17,101				11,442				48,352				34,973
Net interest income			37,597				20,248				100,230				55,093
Provision for credit losses on loans			200				425				14,013				1,100
Provision for (reversal of) credit losses on unfunded commitments			-				-				-				(675)
Net Provision for credit losses expense			200				425				14,013				425
Net interest income after provision			37,397				19,823				86,217				54,668
Noninterest income
Customer service charges			1,729				1,249				4,311				3,537
Interchange income			2,133				1,524				5,725				4,303
Insurance and investment commissions			485				184				1,320				572
Gains on sales of loans			671				631				1,470				1,610
Net gains (losses) on sales and write downs of other assets			(39)				191				(26)				203
Earnings on life insurance policies			558				315				1,791				1,115
Trust income			734				232				1,836				665
Change in market value of equity securities			458				277				804				241
Other			415				264				1,338				755
Total noninterest income			7,144				4,867				18,569				13,001
Noninterest expense
Salaries and benefits			14,127				8,372				38,178				24,467
Occupancy and equipment			2,694				1,475				6,845				4,414
Data processing			2,499				1,598				6,937				4,406
Communication			517				334				1,458				976
Professional fees			834				610				2,478				1,818
Supplies and postage			267				174				816				520
Advertising and promotional			207				168				723				517
Intangible amortization			1,728				198				4,140				604
FDIC insurance			530				390				1,535				1,155
Merger related expenses			-				645				17,369				645
Other			2,812				1,453				6,907				3,857
Total noninterest expense			26,215				15,417				87,386				43,379
Income (loss) before income tax			18,326				9,273				17,400				24,290
Income tax expense (benefit)			3,645				1,925				3,091				4,722
Net income (loss)		$	14,681			$	7,348			$	14,309			$	19,568
Basic earnings (loss) per share		$	0.98			$	0.86			$	1.05			$	2.48
Diluted earnings (loss) per share		$	0.97			$	0.85			$	1.05			$	2.46
Dividends declared per share		$	0.28			$	0.27			$	0.84			$	0.81

 

	Three Months Ended September 30, 2025												Three Months Ended June 30, 2025												Three Months Ended September 30, 2024
(Dollars in thousands)	Average												Average												Average
	Balance				Interest				Rate				Balance				Interest				Rate				Balance				Interest				Rate
Assets:
Loans (1)(3)(4)(5)	$	2,927,878			$	47,142				6.39		%	$	2,936,168			$	46,551				6.36		%	$	1,460,033			$	23,262				6.34		%
Taxable securities (2)		703,045				5,249				2.96				695,546				5,264				3.04				681,578				5,563				3.25
Nontaxable securities (1)		287,274				1,795				2.48				289,061				1,764				2.45				289,335				1,775				2.44
Other		79,365				909				4.54				63,416				735				4.65				108,019				1,473				5.43
Interest-earning assets		3,997,562				55,095				5.47				3,984,191				54,314				5.47				2,538,965				32,073				5.03
Noninterest-earning assets		310,727												314,322												146,225
Total assets	$	4,308,289											$	4,298,513											$	2,685,190
Liabilities and Shareholders' Equity:
Interest-bearing demand deposits	$	1,374,827			$	6,392				1.84		%	$	1,332,318			$	6,163				1.86		%	$	916,459			$	3,111				1.35		%
Savings deposits		591,653				1,125				0.75				595,362				1,003				0.68				329,613				728				0.88
Certificates of deposit		616,686				5,777				3.72				646,247				6,353				3.94				388,183				4,296				4.40
Brokered deposit		91,735				993				4.30				120,720				1,321				4.39				17,227				227				5.25
Borrowings		179,122				2,019				4.47				169,257				1,945				4.61				210,000				2,508				4.75
Subordinated debentures		48,663			701					5.72				48,971				689				5.65				35,658				413				4.61
Other		8,550			94					4.38				11,763				129				4.39				11,756				159				5.37
Interest-bearing liabilities		2,911,236				17,101				2.33				2,924,638				17,603				2.41				1,908,896				11,442				2.38
Demand deposits		930,346												915,637												519,511
Other noninterest-bearing liabilities		28,258												30,695												18,908
Total liabilities		3,869,840												3,870,970												2,447,315
Shareholders' equity		438,449												427,543												237,875
Total liabilities and shareholders' equity	$	4,308,289											$	4,298,513											$	2,685,190
Net interest income (tax- equivalent basis) (Non-GAAP) (1)					$	37,994											$	36,711											$	20,631
Net interest margin (tax- equivalent basis) (Non-GAAP) (1)										3.77		%										3.70		%										3.23		%

(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 $17.0 million, $16.8 million, and $2.2 million in the third quarter of 2025, the second quarter of 2025 and the third 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 $3.6 million, $3.5 million and $275,000 in the third quarter of 2025, the second quarter of 2025 and the third quarter of 2024, respectively.

 

Income Adjusted for Merger Expenses - Non-GAAP Reconciliation (Unaudited)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2025				2024				2025				2024
(In Thousands, Except Per Share Data)
Net income (loss)		$	14,681			$	7,348			$	14,309			$	19,568
Merger related expenses net of tax			-				633				13,885				633
Merger related provision for credit losses, net of tax (1)			-				-				9,463				-
Adjusted net income		$	14,681			$	7,981			$	37,657			$	20,201
Weighted average number of shares			15,014,933				8,567,548				13,579,249				7,898,938
Diluted average shares outstanding			15,061,155				8,615,500				13,625,787				7,944,143
Basic earnings (loss) per share		$	0.98			$	0.86			$	1.05			$	2.48
Diluted earnings (loss) per share		$	0.97			$	0.85			$	1.05			$	2.46
Adjusted basic earnings per share		$	0.98			$	0.94			$	2.77			$	2.56
Adjusted diluted earnings per share		$	0.97			$	0.93			$	2.76			$	2.54

(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  3rd Qtr.				2025 2nd Qtr.				2025 1st Qtr.				2024 4th Qtr.				2024  3rd Qtr.
(in thousands except per share data)
Net interest income		$	37,597			$	36,322			$	26,311			$	19,349			$	20,248
Net provision expense			200				650				13,163				200				425
Noninterest income			7,144				6,503				4,922				4,994				4,867
Noninterest expense			26,215				25,506				35,665				15,344				15,417
Net income (loss) before federal income tax expense			18,326				16,669				(17,595)				8,799				9,273
Income tax expense (benefit)			3,645				3,135				(3,689)				1,640				1,925
Net income (loss)			14,681				13,534				(13,906)				7,159				7,348
Basic earnings (loss) per share			0.98				0.90				(1.30)				0.79				0.86
Diluted earnings (loss) per share			0.97				0.90				(1.29)				0.79				0.85
Adjusted basic earnings per share			0.98				0.91				0.87				0.84				0.94
Adjusted diluted earnings per share			0.97				0.91				0.86				0.83				0.93

 

End of period balances		2025  3rd Qtr.				2025 2nd Qtr.				2025 1st Qtr.				2024 4th Qtr.				2024  3rd Qtr.
(in thousands)
Gross loans		$	2,916,251			$	2,928,431			$	2,928,896			$	1,552,928			$	1,509,944
Loans held for sale (1)			6,323				7,639				3,941				7,288				5,994
Loans to other financial institutions (2)			2,483				3,033				2,393				39,878				38,492
Core loans (gross loans excluding 1 and 2 above)			2,907,445				2,917,759				2,922,562				1,505,762				1,465,458
Allowance for credit losses			34,754				34,798				34,567				16,552				16,490
Securities available for sale			544,023				479,426				480,650				479,117				497,552
Securities held to maturity			388,517				390,457				394,434				394,534				391,954
Other interest-earning assets			79,677				110,206				110,605				86,185				116,643
Total earning assets (before allowance)			3,928,468				3,908,520				3,914,585				2,512,764				2,516,093
Total assets			4,296,902				4,310,252				4,305,391				2,723,243				2,726,003
Noninterest-bearing deposits			903,925				943,873				912,033				524,945				521,055
Interest-bearing demand deposits			1,395,724				1,322,336				1,406,660				920,167				952,013
Savings deposits			588,798				595,981				602,337				338,109				335,802
Certificates of deposit			605,912				624,209				663,404				394,371				392,731
Brokered deposits			72,672				106,225				67,295				36,511				6,627
Total deposits			3,567,031				3,592,624				3,651,729				2,214,103				2,208,228
Deposits excluding brokered			3,494,359				3,486,399				3,584,434				2,177,592				2,201,601
Total subordinated debt			48,368				48,277				48,186				35,752				35,691
Total borrowed funds			197,752				198,428				137,330				175,000				210,000
Other interest-bearing liabilities			7,695				8,529				13,420				24,003				4,956
Total interest-bearing liabilities			2,916,921				2,903,985				2,938,632				1,923,913				1,937,820
Shareholders' equity			449,615				431,761				427,068				260,415				247,746

 

Average Balances		2025  3rd Qtr.				2025 2nd Qtr.				2025 1st Qtr.				2024 4th Qtr.				2024  3rd Qtr.
(in thousands)
Loans		$	2,927,878			$	2,936,168			$	2,019,643			$	1,516,466			$	1,460,033
Securities			990,319				984,607				978,769				965,501				970,913
Other interest-earning assets			79,365				63,416				115,091				100,864				108,019
Total earning assets (before allowance)			3,997,562				3,984,191				3,113,503				2,582,831				2,538,965
Total assets			4,308,289				4,298,513				3,319,591				2,719,530				2,685,190
Noninterest-bearing deposits			930,346				915,637				651,424				536,653				519,511
Interest-bearing deposits			2,583,166				2,573,927				2,030,543				1,641,102				1,634,255
Brokered deposits			91,735				120,720				45,553				19,620				17,227
Total deposits			3,605,247				3,610,284				2,727,520				2,197,375				2,170,993
Total subordinated debt			48,663				48,971				40,182				35,719				35,658
Total borrowed funds			179,122				169,257				193,961				197,828				210,000
Other interest-bearing liabilities			8,550				11,763				20,553				16,928				11,756
Total interest-bearing liabilities			2,911,236				2,924,638				2,330,792				1,911,197				1,908,896
Shareholders' equity			438,449				427,543				302,537				254,737				237,875

 

Loan Breakout (in thousands)		2025  3rd Qtr.				2025 2nd Qtr.				2025 1st Qtr.				2024 4th Qtr.				2024  3rd Qtr.
Agricultural		$	51,183			$	47,273			$	48,165			$	48,221			$	49,147
Commercial and Industrial			352,876				351,367				345,138				228,256				229,232
Commercial Real Estate			1,728,774				1,743,541				1,757,599				901,130				862,773
Consumer			27,328				29,741				30,932				29,412				30,693
Construction Real Estate			18,440				21,508				18,067				17,042				14,555
Residential Real Estate			728,844				724,329				722,661				281,701				279,058
Loans to Other Financial Institutions			2,483				3,033				2,393				39,878				38,492
Gross Loans (excluding held for sale)		$	2,909,928			$	2,920,792			$	2,924,955			$	1,545,640			$	1,503,950
Allowance for credit losses			34,754				34,798				34,567				16,552				16,490
Net loans		$	2,875,174			$	2,885,994			$	2,890,388			$	1,529,088			$	1,487,460

 

Performance Ratios		2025  3rd Qtr.				2025 2nd Qtr.				2025 1st Qtr.				2024 4th Qtr.				2024  3rd Qtr.
Annualized return on average assets			1.36	%			1.26	%			-1.68	%			1.05	%			1.09	%
Annualized return on average equity			13.39	%			12.66	%			-18.39	%			11.24	%			12.36	%
Annualized return on average tangible common equity			19.08	%			18.26	%			-27.97	%			14.54	%			16.29	%
Net interest margin (GAAP)			3.73	%			3.66	%			3.43	%			2.98	%			3.17	%
Net interest margin (fully tax-equivalent)			3.77	%			3.70	%			3.48	%			3.04	%			3.23	%
Efficiency ratio			54.76	%			55.32	%			111.01	%			61.29	%			60.80	%
Annualized cost of funds			1.77	%			1.84	%			1.86	%			1.90	%			1.87	%
Annualized cost of deposits			1.57	%			1.65	%			1.59	%			1.58	%			1.53	%
Cost of interest bearing liabilities			2.33	%			2.41	%			2.37	%			2.43	%			2.38	%
Shareholders' equity to total assets			10.46	%			10.02	%			9.91	%			9.56	%			9.09	%
Tangible common equity to tangible assets			7.04	%			6.54	%			6.40	%			7.49	%			7.00	%
Annualized noninterest expense to average assets			2.43	%			2.37	%			4.30	%			2.26	%			2.30	%
Loan to deposit			81.76	%			81.51	%			80.21	%			70.14	%			68.38	%
Full-time equivalent employees			573				571				605				377				371

 

Capital Ratios ChoiceOne Financial Services Inc.		2025  3rd Qtr.				2025 2nd Qtr.				2025 1st Qtr.				2024 4th Qtr.				2024  3rd Qtr.
Total capital (to risk weighted assets)			13.0	%			12.4	%			12.0	%			14.5	%			15.0	%
Common equity Tier 1 capital (to risk weighted assets)			10.3	%			9.8	%			9.4	%			12.0	%			12.3	%
Tier 1 capital (to risk weighted assets)			10.9	%			10.4	%			10.0	%			12.2	%			12.5	%
Tier 1 capital (to average assets)			8.5	%			8.2	%			10.4	%			9.1	%			9.0	%
Tier 1 capital (to total assets)			8.2	%			7.9	%			7.6	%			8.9	%			8.7	%
Commercial Real Estate Loans (non- owner occupied) as a percentage of total capital			275.2	%			288.2	%			302.0	%			195.6	%			193.3	%

 

Capital Ratios ChoiceOne Bank		2025  3rd Qtr.				2025 2nd Qtr.				2025 1st Qtr.				2024 4th Qtr.				2024  3rd Qtr.
Total capital (to risk weighted assets)			12.8	%			12.4	%			11.9	%			12.7	%			13.1	%
Common equity Tier 1 capital (to risk weighted assets)			11.7	%			11.3	%			10.9	%			12.0	%			12.3	%
Tier 1 capital (to risk weighted assets)			11.7	%			11.3	%			10.9	%			12.0	%			12.3	%
Tier 1 capital (to average assets)			9.1	%			8.9	%			11.3	%			8.9	%			8.9	%
Tier 1 capital (to total assets)			8.8	%			8.6	%			8.3	%			8.7	%			8.5	%
Commercial Real Estate Loans (non- owner occupied) as a percentage of total capital			280.0	%			290.6	%			303.9	%			224.9	%			222.2	%

 

Asset Quality		2025  3rd Qtr.				2025 2nd Qtr.				2025 1st Qtr.				2024 4th Qtr.				2024  3rd Qtr.
(in thousands)
Net loan charge-offs (recoveries)		$	244			$	418			$	72			$	138			$	87
Annualized net loan charge-offs (recoveries) to average loans			0.03	%			0.06	%			0.01	%			0.04	%			0.02	%
Allowance for credit losses		$	34,754			$	34,798			$	34,567			$	16,552			$	16,490
Unfunded commitment liability		$	1,647			$	1,647			$	1,647			$	1,485			$	1,485
Allowance to loans (excludes held for sale)			1.19	%			1.19	%			1.18	%			1.07	%			1.10	%
Total funds reserved to pay for loans (includes liability for unfunded commitments and excludes held for sale)			1.25	%			1.25	%			1.24	%			1.17	%			1.20	%
Non-Accruing loans		$	17,365			$	16,854			$	16,789			$	3,704			$	2,355
Nonperforming loans (includes OREO)		$	19,940			$	19,296			$	19,154			$	4,177			$	2,884
Nonperforming loans to total loans (excludes held for sale)			0.69	%			0.66	%			0.65	%			0.27	%			0.19	%
Non Accrual classified as PCD		$	11,393				12,017				12,891				-				-
Nonperforming loans to total loans (excludes held for sale) attributed to PCD			0.39	%			0.41	%			0.44	%			-				-
Nonperforming assets to total assets			0.46	%			0.45	%			0.44	%			0.15	%			0.11	%

 

Other Non-GAAP Reconciliation (Unaudited)
NON-GAAP Reconciliation		2025  3rd Qtr.				2025 2nd Qtr.				2025 1st Qtr.				2024 4th Qtr.				2024  3rd Qtr.
Net interest income (tax-equivalent basis) (Non-GAAP)		$	37,994			$	36,711			$	26,710			$	19,739			$	20,631
Net interest margin (fully tax-equivalent)			3.77	%			3.70	%			3.48	%			3.04	%			3.23	%
Reconciliation to Reported Net Interest Income
Net interest income (tax-equivalent basis) (Non-GAAP)		$	37,994			$	36,711			$	26,710			$	19,739			$	20,631
Adjustment for taxable equivalent interest			(397)				(389)				(399)				(390)				(383)
Net interest income  (GAAP)		$	37,597			$	36,322			$	26,311			$	19,349			$	20,248
Net interest margin (GAAP)			3.73	%			3.66	%			3.43	%			2.98	%			3.17	%

 

(dollars in thousands)		2025  3rd Qtr.				2025 2nd Qtr.				2025 1st Qtr.				2024 4th Qtr.				2024  3rd Qtr.
Total assets		$	4,296,902			$	4,310,252			$	4,305,391			$	2,723,243			$	2,726,003
Less: goodwill			126,730				126,730				126,730				59,946				59,946
Less: core deposit intangible			31,694				33,421				35,153				1,096				1,250
Tangible assets		$	4,138,478			$	4,150,101			$	4,143,508			$	2,662,201			$	2,664,807
Total equity		$	449,615			$	431,761			$	427,068			$	260,415			$	247,746
Less: goodwill			126,730				126,730				126,730				59,946				59,946
Less: core deposit intangible			31,694				33,421				35,154				1,096				1,250
Tangible common equity		$	291,191			$	271,610			$	265,184			$	199,373			$	186,550
Tangible common equity to tangible assets			7.04	%			6.54	%			6.40	%			7.49	%			7.00	%

 

(dollars in thousands)		2025  3rd Qtr.				2025 2nd Qtr.				2025 1st Qtr.				2024 4th Qtr.				2024  3rd Qtr.
Net income		$	14,681			$	13,534			$	(13,906)			$	7,159			$	7,348
Less: intangible amortization (tax affected at 21%)			1,365				1,369				537				121				156
Adjusted net income		$	13,316			$	12,165			$	(14,443)			$	7,038			$	7,192
Average shareholders' equity		$	438,449			$	427,543			$	302,537			$	254,737			$	237,875
Less: average goodwill			126,730				126,730				83,030				59,946				59,946
Less: average core deposit intangible			32,599				34,356				12,983				1,179				1,355
Average tangible common equity		$	279,120			$	266,457			$	206,524			$	193,612			$	176,574
Return on average tangible common equity			19.08	%			18.26	%			-27.97	%			14.54	%			16.29	%

 

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SOURCE ChoiceOne Financial Services, Inc.

FAQ

What did ChoiceOne (COFS) report for net income in Q3 2025?

ChoiceOne reported $14.7 million in net income for Q3 2025.

How did the March 1, 2025 merger affect ChoiceOne's balance sheet (COFS)?

The merger added about $1.8B in assets, $1.4B in loans and $1.4B in deposits.

What were ChoiceOne's merger-related costs reported in 2025 (COFS)?

Merger-related after-tax expenses were $13.9M and merger-related PCL after-tax was $9.5M year-to-date.

What is ChoiceOne's GAAP net interest margin for Q3 2025 (COFS)?

GAAP net interest margin increased to 3.73% for Q3 2025.

How large were ChoiceOne's total assets and shareholders' equity as of Sept 30, 2025 (COFS)?

Total assets were $4.3B and shareholders' equity was $449.6M as of Sept 30, 2025.

Did ChoiceOne (COFS) report any material credit quality metrics in Q3 2025?

Yes — annualized net loan charge-offs were 0.03% and nonperforming loans were 0.69% of total loans.