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Overview of ChoiceOne Financial Services Inc. (NASDAQ: COFS)
ChoiceOne Financial Services Inc., headquartered in Sparta, Michigan, is a financial holding company and the parent corporation of ChoiceOne Bank, a full-service community-focused financial institution. With a history spanning over 110 years, ChoiceOne Bank serves customers across Western and Southeastern Michigan through its 35 branch offices located in Kent, Ottawa, Muskegon, Newaygo, Lapeer, St. Clair, Macomb, and Oakland counties. The company is dedicated to providing personalized financial solutions to individuals, businesses, and municipalities, emphasizing its role as a trusted partner within the communities it serves.
Core Business Areas
ChoiceOne Financial Services operates through its primary subsidiary, ChoiceOne Bank, offering a comprehensive suite of financial products and services. These include:
- Personal and Business Banking: A wide range of deposit products such as savings accounts, checking accounts, and certificates of deposit (CDs), as well as safe deposit services and automated transaction machine (ATM) services.
- Lending Solutions: Commercial and consumer loans, including loans for businesses, agriculture, construction, inventory, and real estate. The company also engages in municipal lending and other specialized credit products.
- Insurance and Investment Services: Through its subsidiary, ChoiceOne Insurance Agencies, Inc., the company offers insurance and investment products to help customers achieve financial security and growth.
- Treasury and Cash Management: Services designed to meet the needs of businesses and municipalities, including cash flow management and treasury solutions.
Market Presence and Competitive Position
ChoiceOne primarily operates in Kent, Muskegon, Newaygo, and Ottawa counties in Western Michigan, as well as Lapeer, Macomb, and St. Clair counties in Southeastern Michigan. Its localized approach allows it to build strong relationships with customers and communities, setting it apart from larger, national banks. The company’s recent merger with Fentura Financial, Inc., expected to close in early 2025, will position it as the third-largest publicly traded bank in Michigan, with approximately $4.3 billion in consolidated total assets and 56 branch offices. This strategic move expands its geographic footprint into Flint and Saginaw and strengthens its presence in Detroit's suburbs.
Strategic Initiatives and Financial Resilience
ChoiceOne demonstrates a proactive approach to navigating economic and market challenges. Key strategic initiatives include:
- Interest Rate Management: The use of interest rate swaps to hedge against fluctuations in interest rates, helping to stabilize net interest income and balance sheet performance.
- Liquidity Optimization: Active management of liquidity through brokered deposits, Federal Home Loan Bank (FHLB) advances, and the Bank Term Funding Program (BTFP) to support organic loan growth and meet funding needs.
- Cost Control: Strategic branch closures and a focus on operational efficiency to reduce noninterest expenses while maintaining high service levels.
- Community Commitment: A continued emphasis on supporting local communities through tailored financial solutions, philanthropic efforts, and customer-centric service.
Growth Opportunities
The pending merger with Fentura Financial, Inc. presents significant growth opportunities for ChoiceOne. The combined entity will benefit from expanded market coverage, enhanced product offerings, and increased operational scale. Additionally, ChoiceOne's focus on leveraging technology and innovation positions it to compete effectively in the evolving financial landscape, catering to both traditional and digital banking customers.
Conclusion
ChoiceOne Financial Services Inc. exemplifies the strengths of a community-focused financial institution with a robust and diversified business model. Its strategic initiatives, commitment to customer service, and prudent financial management underscore its resilience and adaptability in a dynamic economic environment. With its regional expertise and expanding market presence, ChoiceOne is well-positioned to continue delivering value to its customers, communities, and shareholders.
On January 1, 2022, ChoiceOne Financial Services appointed Adom J. Greenland as Secretary, Chief Financial Officer, and Treasurer, replacing Thomas L. Lampen, who retired after 29 years. Greenland, previously the COO and a CPA, brings valuable experience from his tenure as Senior Vice President since 2015 and his background at PricewaterhouseCoopers. ChoiceOne, headquartered in Sparta, Michigan, has approximately $2.1 billion in assets and operates 35 branches, making it Michigan's 10th largest bank holding company.
ChoiceOne Bank (NASDAQ: COFS) announces that Senior Vice President Heather Brolick has been recognized as a 2021 Award Honoree in Crain's Detroit Business Notable Women in Banking. This accolade honors her over 30 years of leadership in banking and her significant contributions to the community. Brolick previously led the merger of Community Shores Bank into ChoiceOne, enhancing resource capabilities for the Muskegon area. ChoiceOne Bank operates with over $2.1 billion in assets and is the 10th largest holding company in Michigan.
ChoiceOne Financial Services, Inc. (NASDAQ: COFS) announced the retirement of Chairman Paul L. Johnson effective December 25, 2021. Jack G. Hendon will succeed him as Chairman, while Bradley F. McGinnis has been appointed to the Board. Johnson, who led the company since 2013, is recognized for guiding ChoiceOne through significant growth. Hendon, a CPA and partner at H&S Companies, and McGinnis, president of Mega Wall Corporation, are expected to drive further expansion in 2022. ChoiceOne operates 35 branches across Michigan and is a top 10 bank holding company in the state.
ChoiceOne Financial Services, Inc. declared a $0.25 cash dividend per share on its common stock. Shareholders of record by December 15, 2021 will receive the dividend on December 31, 2021. This amount matches the third quarter dividend and is $0.03 higher than the fourth quarter 2020 dividend. ChoiceOne Financial, based in Sparta, Michigan, operates 34 bank offices and offers various financial products.
ChoiceOne Financial Services, Inc. (NASDAQ:COFS) reported a strong financial performance for Q3 2021, achieving a net income of $5.75 million and $17.03 million for the quarter and year-to-date, respectively. This represents a significant increase compared to $3.83 million and $11.51 million in the same periods in 2020. Diluted earnings per share rose to $0.75 and $2.20, up from $0.49 and $1.55. The company experienced $131.4 million in deposit growth in Q3. However, total noninterest income declined by $1.6 million for the quarter due to lower mortgage refinancing activity.
ChoiceOne Financial Services, Inc. (Nasdaq: COFS) has been recognized as Michigan's Best Small Bank by Newsweek for 2022, marking the second consecutive year for this accolade. This ranking is part of Newsweek's evaluation of over 2,500 banks, considering factors like customer service, digital presence, and loan options. ChoiceOne Bank, with around $2.1 billion in assets, operates 35 offices in Michigan. CEO Kelly J. Potes emphasized the bank's commitment to innovative financial technology and community support amid the pandemic, enhancing its reputation in the state.
ChoiceOne Financial Services, Inc. (Nasdaq: COFS) has successfully completed a private placement of $32.5 million in subordinated notes with a 3.25% interest rate, maturing in 2031. The net proceeds will support general corporate purposes, including organic growth, potential senior debt redemption, and capital ratios. These notes will transition to a floating rate post September 3, 2026. CEO Kelly Potes expressed optimism about the favorable terms, which strengthen the company's strategy for long-term shareholder value.
ChoiceOne Financial Services, Inc. (NASDAQ:COFS) reported net income of $5.04 million in Q2 2021, compared to $4.43 million in Q2 2020. Diluted earnings per share rose to $0.65 from $0.61. Assets grew by $50.8 million in Q2 2021, with total deposits up $40.8 million for the quarter and $556.4 million year-over-year. PPP loan forgiveness generated $756,000 in fees for the quarter. Share repurchases totaled 116,000 shares for $2.9 million. Noninterest income decreased to $4.7 million, primarily due to reduced gains on loan sales.
ChoiceOne Financial Services has declared a cash dividend of $0.22 per share on its common stock. Shareholders of record as of June 15, 2021 will receive the dividend, payable on June 30, 2021. This dividend matches the first quarter of 2021 and is $0.02 higher than the second quarter of 2020. ChoiceOne, headquartered in Sparta, Michigan, operates 34 bank offices in several counties and its stock trades under the symbol COFS.
ChoiceOne Financial Services, Inc. (NASDAQ: COFS) announced the upcoming retirement of Tom Lampen, CFO, effective December 31, 2021. Lampen has served in this role for 29 years, contributing to the company's significant growth. Adom J. Greenland, current Senior Vice President and COO, is expected to succeed Lampen as CFO. Greenland has a strong background in bank operations and financial management, making him a suitable choice. ChoiceOne operates 34 branches and is recognized as one of America's Best Banks by Newsweek, with approximately $2.1 billion in assets.
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