ChoiceOne Financial Services, Inc. (COFS) came out with quarterly earnings of $0.92 per share, beating the Zacks Consensus Estimate of $0.91 per share. This compares to earnings of $0.83 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +1.66%. A quarter ago, it was expected that this company would post earnings of $0.86 per share when it actually produced earnings of $0.97, delivering a surprise of +12.79%.Over the last four qu ...

EXHIBIT 99.1 News Release ChoiceOne Reports Fourth Quarter 2025 Results Significant items impacting comparable periods of 2024 and 2025 results include the following: Highlights "2025 was a landmark year for ChoiceOne—not only because of the successful merger with Fentura and its subsidiary, The State Bank, but also due to our strong financial performance. These accomplishments are a direct result of the hard work and dedication of our exceptional team, whose efforts truly shined throughout the year" said K ...

SPARTA, Mich., Jan. 30, 2026 /PRNewswire/ -- ChoiceOne Financial Services, Inc. ("ChoiceOne", NASDAQ:COFS), the parent company for ChoiceOne Bank, reported financial results for the quarter ended December 31, 2025. Significant items impacting comparable periods of 2024 and 2025 results include the following: ChoiceOne reported net income of $13,867,000 and $28,176,000 for the three months ended and year ended December 31, 2025, compared to net income of $7,159,000 and $26,727,000 for the same periods in the ...

Core Points - ChoiceOne Financial Services, Inc. and ChoiceOne Bank have awarded a $1 million Affordable Housing Program grant to Fresh Coast Alliance in partnership with the Federal Home Loan Bank of Indianapolis [1][2] - The grant will fund renovations to four of Fresh Coast Alliance's five sober living homes, increasing housing capacity by 10 percent and providing additional beds for individuals in recovery [2][3] - The partnership emphasizes the importance of affordable housing in community stability and public health, reflecting a commitment to support individuals reentering society after incarceration or addiction [3][4] Company Information - ChoiceOne Financial Services, Inc. is a financial holding company based in Sparta, Michigan, with assets exceeding $4.3 billion and operates 54 offices across Michigan [8] - Fresh Coast Alliance collaborates with over 30 agencies and provides holistic programming, including safe and sober housing, and is one of the few providers in the county accepting Medicaid for substance use disorder treatment [6] - The Federal Home Loan Bank of Indianapolis is a government-sponsored enterprise that provides low-cost funding solutions to member financial institutions, focusing on housing and small business needs [5]

Group 1 - The article does not provide any specific content related to company or industry analysis [1]

Financial Performance - ChoiceOne reported net income of $14.7 million for the three months ended September 30, 2025, compared to $7.3 million for the same period in the prior year, representing a 100.5% increase [154]. - The annualized return on average assets was 1.36% for the third quarter of 2025, up from 1.09% in the same period in 2024 [163]. - Cash dividends declared in the third quarter of 2025 were $4.2 million or $0.28 per share, compared to $2.4 million or $0.27 per share in the same period in 2024 [164]. - 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 [189]. - Income tax expense was $3.6 million and $3.1 million for the three and nine months ended September 30, 2025, with an effective tax rate of 19.9% and 17.8% respectively [192]. Assets and Liabilities - Total assets increased to $4.3 billion as of September 30, 2025, an increase of $1.6 billion compared to the same date in 2024, primarily due to the merger [157]. - Total liabilities stood at $3,869,800, slightly down from $3,870,900 in the previous quarter, a decrease of 0.03% [170]. - As of September 30, 2025, total assets were $4.3 billion, net loans were $2.9 billion, and total deposits were $3.5 billion [195]. - Total available-for-sale securities increased to $544.0 million from $479.1 million as of December 31, 2024, driven by securities acquired through the Merger [197]. Loans and Deposits - Core loans grew by $1.4 billion due to the merger on March 1, 2025, while organic growth was $65.3 million or 4.5% over the twelve months ended September 30, 2025 [158]. - Deposits, excluding brokered deposits, increased by $1.3 billion as of September 30, 2025, compared to the same date in 2024, largely as a result of the merger [159]. - Average loans increased by $1.5 billion and $1.2 billion for the three and nine months ended September 30, 2025, respectively, driven by organic growth and the impact of the Merger [178]. - Nonperforming loans to total loans (excluding loans held for sale) were 0.69% as of September 30, 2025, with 0.39% attributed to PCD loans acquired through the Merger [188]. Interest Income and Expenses - Interest income for the three months ended September 30, 2025, increased by $23.9 million compared to the same period in 2024 [158]. - Total interest expense increased by $5.7 million and $13.4 million for the three and nine months ended September 30, 2025, respectively, primarily due to a $1.2 billion increase in interest-bearing liabilities from the Merger [180]. - Loan interest income increased by $23.9 million in the third quarter of 2025 compared to the same period in 2024 [205]. Capital and Equity - Shareholders' equity rose to $449.6 million as of September 30, 2025, up from $260.8 million on December 31, 2024, primarily driven by the Merger [214]. - As of September 30, 2025, ChoiceOne Financial Services Inc. reported total capital to risk-weighted assets at $418.645 million, representing a ratio of 13.0%, exceeding the minimum required ratio of 8.0% [216]. - Common equity Tier 1 capital to risk-weighted assets for ChoiceOne Financial Services Inc. was $333.388 million, with a ratio of 10.3%, above the minimum requirement of 4.5% [216]. Cash Flow - Net cash provided by operating activities for the nine months ended September 30, 2025, was $17.8 million, a decrease from $24.6 million in the same period in 2024, primarily due to a $15.1 million decrease in other liabilities [217]. - Net cash provided by investing activities increased to $224.9 million for the nine months ended September 30, 2025, compared to a net cash used of $56.3 million in the same period in 2024, driven by the sale of $78.9 million in securities from the Merger with Fentura [217]. - Net cash used in financing activities was $240.5 million for the nine months ended September 30, 2025, compared to $122.2 million provided in the same period in the prior year, reflecting a decrease in borrowing by $147.2 million [217]. Risk Management - ChoiceOne entered into $30.4 million in amortizing pay fix swaps during the third quarter of 2025 to hedge interest rate risk [161]. - The ratio of the allowance for credit losses to total loans was 1.19% on September 30, 2025, compared to 1.07% on December 31, 2024 [162]. - The provision for credit losses on loans was $200,000 and $14.0 million for the three and nine months ended September 30, 2025, respectively [186]. - Nonperforming assets increased by $15.8 million to $19.9 million at September 30, 2025, largely due to non-accrual loans and OREO acquired in the Merger [187]. Operational Metrics - The cost of deposits to average total deposits increased by 4 basis points to 1.57% for the three months ended September 30, 2025 [160]. - 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 [181]. - The average rate paid on interest-bearing demand deposits and savings deposits increased by 30 basis points and 20 basis points for the three and nine months ended September 30, 2025, respectively [180]. - Noninterest expense increased by $10.8 million and $44.0 million for the three and nine months ended September 30, 2025, largely due to merger-related expenses of $17.4 million [191].

Core Insights - ChoiceOne Financial Services reported strong financial results for the quarter ended September 30, 2025, with net income of $14.68 million, significantly up from $7.35 million in the same period last year, driven by the strategic merger with Fentura Financial [3][7] - The company’s total assets reached $4.3 billion, an increase of $1.6 billion compared to the previous year, primarily due to the merger [4][11] - Diluted earnings per share rose to $0.97 for the third quarter of 2025, compared to $0.85 in the same period last year [3][7] Financial Performance - Net income for the nine months ended September 30, 2025, was $14.31 million, compared to $19.57 million in the prior year [3][7] - Excluding merger-related expenses, net income was $14.68 million for the third quarter and $37.66 million for the nine months [3][7] - The company’s net interest margin increased to 3.73% from 3.17% year-over-year, with net interest income rising to $37.6 million from $20.2 million [7][9] Asset and Loan Growth - Total assets increased to $4.3 billion, with core loans growing by $1.4 billion due to the merger [4][5] - Core loans, excluding held-for-sale loans, declined by $10.3 million or 1.4% on an annualized basis in Q3 2025 but grew organically by $65.3 million or 4.5% year-over-year [5][7] - Loan interest income increased by $23.9 million in Q3 2025 compared to the same period in 2024 [5][7] Deposit Trends - Deposits, excluding brokered deposits, increased by $1.3 billion year-over-year, largely due to the merger [6][8] - Non-interest-bearing deposits decreased by $39.9 million, while interest-bearing demand deposits increased by $73.4 million in Q3 2025 [6][8] - The average balance of non-interest-bearing deposits rose to $930.3 million in Q3 2025, up from $915.6 million in Q2 2025 [6][8] Noninterest Income and Expenses - Noninterest income increased by $2.3 million and $5.6 million for the three and nine months ended September 30, 2025, respectively, driven by higher interchange income and trust income [12][13] - Noninterest expenses rose by $10.8 million and $44.0 million for the three and nine months ended September 30, 2025, primarily due to merger-related expenses [13][14] Capital and Asset Quality - Shareholders' equity increased to $449.6 million from $247.7 million year-over-year, driven by the merger [11][12] - The allowance for credit losses to total loans ratio was 1.19% as of September 30, 2025, indicating strong asset quality [10][11] - Nonperforming loans to total loans stood at 0.69%, with 0.39% attributed to loans purchased with credit deterioration through the merger [10][11]

Financial Performance - ChoiceOne reported net income of $13,534,000 for the three months ended June 30, 2025, compared to $6,586,000 for the same period in the prior year, reflecting a significant increase [160]. - The diluted earnings per share for the three months ended June 30, 2025, was $0.90, compared to $0.87 in the same period in the prior year [161]. - Cash dividends declared in the second quarter of 2025 were $4.2 million or $0.28 per share, compared to $2.0 million or $0.27 per share in the same period in 2024 [169]. - The annualized return on average assets was 1.26% for the second quarter of 2025, up from 0.99% for the same period in 2024 [168]. Asset and Loan Growth - Total assets increased to $4.3 billion as of June 30, 2025, an increase of $1.7 billion compared to June 30, 2024, primarily due to the merger [162]. - Core loans grew organically by $140.1 million or 10.0% during the twelve months ended June 30, 2025, despite a slight decline of $4.8 million in the second quarter [163]. - Average loans for Q2 2025 reached $2,936,168 thousand with an interest income of $46,551 thousand, resulting in an interest rate of 6.36% [172]. - The company's loan portfolio totaled $2.92 billion as of June 30, 2025, a significant increase from $1.55 billion on December 31, 2024, driven by a merger [206][208]. - Average loan balances increased to $2.9 billion in Q2 2025, compared to $1.4 billion in Q2 2024, with core loans growing organically by $140.1 million or 10.0% year-over-year [208]. Interest Income and Expenses - Interest income for the three months ended June 30, 2025, increased by $24.6 million compared to the same period in 2024, driven by higher loan interest income [163]. - Net interest income on a tax-equivalent basis for Q2 2025 was $36,711 thousand, compared to $18,756 thousand in Q2 2024, reflecting a significant increase [172]. - The net interest margin (tax-equivalent basis) improved to 3.70% in Q2 2025 from 3.01% in Q2 2024 [172]. - Total interest expense increased by $7.7 million for the six months ended June 30, 2025, driven by a $1.2 billion increase in interest-bearing liabilities from the Merger [183]. Credit Losses and Nonperforming Loans - The ratio of the allowance for credit losses to total loans was 1.19% on June 30, 2025, compared to 1.07% on December 31, 2024, indicating a slight increase in credit loss provisions [167]. - The provision for credit losses on loans was $13.8 million for the six months ended June 30, 2025, primarily due to the acquisition of $1.3 billion of non-PCD loans in the Merger [189]. - Nonperforming assets increased by $15.1 million to $19.3 million at June 30, 2025, largely due to non-accrual loans and OREO acquired in the Merger [190]. - Non-accruing loan average balances were $16.8 million in Q2 2025, compared to $1.9 million in Q2 2024, indicating a rise in non-performing loans [173]. Merger Impact - ChoiceOne completed a public offering of 1,380,000 shares at $25.00 per share, raising approximately $34.5 million before expenses [157]. - The company recognized a core deposit intangible of $31.0 million related to the merger, amortized over 10 years [214]. - ChoiceOne's total shareholders' equity reached $431.8 million as of June 30, 2025, up from $214.5 million a year earlier, primarily due to the merger [218]. - Total capital to risk-weighted assets ratio was 12.4% as of June 30, 2025, compared to 14.5% on December 31, 2024, reflecting the impact of the merger [220]. Cash Flow and Borrowings - Net cash provided by operating activities decreased to $2.5 million for the six months ended June 30, 2025, down from $31.1 million in the same period in 2024, primarily due to a net loss of $372,000 compared to a net income of $12.2 million in 2024 [221]. - Net cash provided by investing activities increased significantly to $267.0 million for the six months ended June 30, 2025, compared to $4.0 million in the same period in 2024, driven by the sale of $78.9 million of securities from the Merger with Fentura [221]. - Net cash used in financing activities was $210.0 million for the six months ended June 30, 2025, compared to $10.5 million provided in the same period in 2024, reflecting a decrease in borrowing by $146.5 million [221]. - As of June 30, 2025, ChoiceOne had $195.0 million in outstanding borrowings from the FHLB at a weighted average fixed rate of 4.36%, with the earliest maturity in July 2025 [223]. Securities and Investments - The unrealized loss on available-for-sale securities increased by $8.7 million to $69.8 million in the first six months of 2025, primarily due to increased spreads on tax-exempt municipal bonds [200]. - ChoiceOne's held to maturity securities declined to $390.5 million as of June 30, 2025, due to principal repayments, calls, and maturities [201]. - As of June 30, 2025, ChoiceOne reported $116.9 million in gross unrealized losses on investment securities, including $69.9 million in available for sale securities and $46.4 million in held to maturity securities [202]. Risk Management - The company holds interest rate derivatives with a total notional value of $351.0 million to manage interest rate risk [203]. - ChoiceOne's exposure to interest rate risk and liquidity risk is significant, with no foreign exchange risk exposure as all transactions are in U.S. dollars [222]. - Management believes that ChoiceOne's exposure to changes in commodity prices is insignificant, as agricultural loans comprise a relatively small portion of total assets [222]. - Uninsured deposits totaled $1.1 billion or 29.6% of total deposits as of June 30, 2025, compared to 37.6% at December 31, 2024 [213].

[Financial Highlights and Overview](index=1&type=section&id=Financial%20Highlights%20and%20Overview) This section provides an executive summary of ChoiceOne's financial performance, emphasizing the impact of the Fentura merger [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) ChoiceOne reported record net income in Q2 2025, significantly impacted by the merger with Fentura Financial, Inc. completed on March 1, 2025 - ChoiceOne completed its merger with Fentura Financial, Inc. on March 1, 2025, acquiring approximately **$1.8 billion in total assets**, **$1.4 billion in loans**, and **$1.4 billion in deposits**[1](index=1&type=chunk)[4](index=4&type=chunk) Q2 & H1 2025 Financial Performance (GAAP) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income (Loss)** | $13,534,000 | ($372,000) | $6,586,000 | $12,220,000 | | **Diluted EPS (Loss)** | $0.90 | ($0.03) | $0.87 | $1.61 | Q2 & H1 2025 Financial Performance (Non-GAAP, Adjusted) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | **Adjusted Net Income** | $13,666,000 | $22,976,000 | | **Adjusted Diluted EPS** | $0.91 | $1.78 | - The results were significantly impacted by merger-related expenses and provisions. For the six months ended June 30, 2025, merger expenses (net of tax) were **$13.9 million** and the merger-related provision for credit losses (net of tax) was **$9.5 million**[4](index=4&type=chunk) [Financial Condition](index=3&type=section&id=Financial%20Condition) This section analyzes ChoiceOne's balance sheet, loan portfolio, asset quality, deposits, liquidity, and capital position [Balance Sheet Analysis](index=3&type=section&id=Balance%20Sheet%20Analysis) As of June 30, 2025, total assets reached **$4.31 billion**, a substantial increase of **$1.69 billion** from the prior year, primarily due to the Fentura merger Balance Sheet Summary | (In thousands) | June 30, 2025 | June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | $4,310,252 | $2,623,067 | +$1,687,185 | | **Total Loans, net** | $2,885,994 | $1,421,375 | +$1,464,619 | | **Total Deposits** | $3,592,624 | $2,126,679 | +$1,465,945 | | **Total Liabilities** | $3,878,491 | $2,408,548 | +$1,469,943 | | **Shareholders' Equity** | $431,761 | $214,519 | +$217,242 | [Loans and Asset Quality](index=3&type=section&id=Loans%20and%20Asset%20Quality) Core loans grew by **$1.4 billion** due to the merger, with asset quality remaining strong, evidenced by low net charge-offs and a manageable nonperforming loan ratio - Core loans (excluding held for sale and loans to other financial institutions) grew by **$1.4 billion** from the merger and **$140.1 million (10.0%)** organically over the twelve months ended June 30, 2025[4](index=4&type=chunk)[7](index=7&type=chunk) Asset Quality Metrics (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Annualized net loan charge-offs to average loans | 0.06% | | Nonperforming loans to total loans (excl. HFS) | 0.66% | | Portion of nonperforming loans from PCD | 0.41% | | Allowance for credit losses to total loans (excl. HFS) | 1.19% | [Deposits and Liquidity](index=3&type=section&id=Deposits%20and%20Liquidity) Deposits (excluding brokered) increased by **$1.4 billion** year-over-year due to the merger, with the bank maintaining a strong liquidity position - Deposits (excluding brokered) declined by **$98.0 million** from March 31, 2025, but increased by **$1.4 billion** from June 30, 2024[8](index=8&type=chunk) - The bank has **$1.2 billion** in available borrowing capacity secured by pledged assets, and uninsured deposits represent **29.6%** of total deposits[8](index=8&type=chunk) [Shareholders' Equity and Capital Ratios](index=5&type=section&id=Shareholders'%20Equity%20and%20Capital%20Ratios) Shareholders' equity more than doubled to **$431.8 million** from June 30, 2024, primarily driven by the issuance of **6.1 million shares** for the merger - Shareholders' equity increased significantly due to the issuance of **6,070,836 shares** for the merger and a prior sale of **1,380,000 shares**[13](index=13&type=chunk) Capital Ratios (ChoiceOne Bank) | Ratio | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total capital (to risk weighted assets) | 12.4% | 13.2% | | Common equity Tier 1 capital | 11.3% | 12.5% | | Tier 1 capital (to risk weighted assets) | 11.3% | 12.5% | [Results of Operations](index=3&type=section&id=Results%20of%20Operations) This section details ChoiceOne's income statement performance, including net interest income, provisions, and noninterest income and expenses [Net Interest Income and Margin](index=3&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income for Q2 2025 nearly doubled to **$36.3 million** from **$18.4 million** in Q2 2024, a direct result of the merger Net Interest Income and Margin Comparison | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Net Interest Income** | $36.3 million | $18.4 million | | **GAAP Net Interest Margin** | 3.66% | 2.95% | - Accretion income from purchased loans added **36 basis points** to the net interest margin in Q2 2025[4](index=4&type=chunk) - The annualized cost of funds to average total deposits decreased to **1.84%** in Q2 2025 from **1.92%** in Q2 2024, as the company paid down borrowings[9](index=9&type=chunk) [Provision for Credit Losses](index=3&type=section&id=Provision%20for%20Credit%20Losses) The provision for credit losses was **$0.65 million** in Q2 2025, primarily due to changes in economic forecasts, with a higher six-month provision due to merger-related non-PCD loans Provision for Credit Losses | Period | Provision Amount | | :--- | :--- | | **Three Months Ended June 30, 2025** | $650,000 | | **Six Months Ended June 30, 2025** | $13,813,000 | - The ratio of the allowance for credit losses to total loans (excluding loans held for sale) was **1.19%** on June 30, 2025, up from **1.07%** on December 31, 2024[10](index=10&type=chunk) [Noninterest Income](index=5&type=section&id=Noninterest%20Income) Noninterest income increased by **$2.4 million** to **$6.5 million** in Q2 2025 compared to the prior-year quarter, driven by card fees, trust income, and death benefit claims Noninterest Income Comparison (Three Months Ended June 30) | (In thousands) | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Noninterest Income** | $6,503 | $4,083 | +$2,420 | | Credit and debit card fees | $2,083 | $1,516 | +$567 | | Trust income | $596 | $220 | +$376 | [Noninterest Expense](index=5&type=section&id=Noninterest%20Expense) Noninterest expense rose by **$11.2 million** to **$25.5 million** in Q2 2025 compared to Q2 2024, with **$17.4 million** of the six-month increase attributable to one-time merger-related expenses Noninterest Expense Comparison (Three Months Ended June 30) | (In thousands) | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Noninterest Expense** | $25,506 | $14,278 | +$11,228 | | Merger related expenses | $166 | $0 | +$166 | - For the six months ended June 30, 2025, merger-related expenses totaled **$17.4 million**, accounting for a large portion of the year-over-year increase in noninterest expense[15](index=15&type=chunk) [Financial Tables](index=8&type=section&id=Financial%20Tables) This section provides detailed financial statements and reconciliations, offering a comprehensive view of ChoiceOne's financial position and performance [Condensed Balance Sheets](index=8&type=section&id=Condensed%20Balance%20Sheets) The condensed balance sheet as of June 30, 2025, shows total assets of **$4.31 billion**, total liabilities of **$3.88 billion**, and shareholders' equity of **$431.8 million** Condensed Balance Sheet (in thousands) | Account | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total Assets | $4,310,252 | $4,305,391 | $2,623,067 | | Total loans held for investment | $2,920,792 | $2,924,955 | $1,437,527 | | Total Liabilities | $3,878,491 | $3,878,323 | $2,408,548 | | Shareholders' Equity | $431,761 | $427,068 | $214,519 | [Condensed Statements of Operations](index=9&type=section&id=Condensed%20Statements%20of%20Operations) For the three months ended June 30, 2025, the company reported net income of **$13.5 million**, or **$0.90** per diluted share, contrasting with a six-month net loss due to merger costs Condensed Statement of Operations (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Net interest income | $36,322 | $62,633 | | Net Provision for credit losses | $650 | $13,813 | | Total noninterest income | $6,503 | $11,425 | | Total noninterest expense | $25,506 | $61,171 | | Net income (loss) | $13,534 | $(372) | | Diluted earnings (loss) per share | $0.90 | $(0.03) | [Non-GAAP Reconciliation](index=12&type=section&id=Non-GAAP%20Reconciliation) This section provides reconciliations for non-GAAP measures, adjusting for merger-related expenses and provisions to offer a clearer view of core operating performance Reconciliation of Net Income (Loss) to Adjusted Net Income (Non-GAAP) | (In Thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Net income (loss) (GAAP) | $13,534 | $(372) | | Merger related expenses net of tax | $132 | $13,885 | | Merger related provision for credit losses, net of tax | $0 | $9,463 | | **Adjusted net income (Non-GAAP)** | **$13,666** | **$22,976** | Reconciliation of Net Interest Margin (Non-GAAP) | Metric | 2025 2nd Qtr. | | :--- | :--- | | Net interest margin (GAAP) | 3.66% | | Net interest margin (tax-equivalent basis) | 3.70% | [Other Selected Financial Highlights](index=14&type=section&id=Other%20Selected%20Financial%20Highlights) This section presents a quarterly breakdown of key performance ratios and balances, highlighting strong Q2 2025 performance despite merger-related impacts in Q1 Quarterly Performance Ratios | Ratio | 2025 2nd Qtr. | 2025 1st Qtr. | 2024 4th Qtr. | | :--- | :--- | :--- | :--- | | Annualized return on average assets | 1.26% | -1.68% | 1.05% | | Net interest margin (GAAP) | 3.66% | 3.43% | 2.98% | | Efficiency ratio | 55.32% | 111.01% | 61.29% | Quarterly Asset Quality | (in thousands) | 2025 2nd Qtr. | 2025 1st Qtr. | 2024 4th Qtr. | | :--- | :--- | :--- | :--- | | Net loan charge-offs | $418 | $72 | $138 | | Nonperforming loans | $19,296 | $19,154 | $4,177 | | Nonperforming loans to total loans | 0.66% | 0.65% | 0.27% |

Core Insights - ChoiceOne Financial Services reported record net income of $13,534,000 for the quarter ended June 30, 2025, compared to $6,586,000 in the same period of the previous year, reflecting the successful execution of its merger with Fentura Financial and The State Bank [3][7] - The company's total assets increased to $4.3 billion, up by $1.7 billion from the previous year, primarily due to the merger [4][11] - The net interest margin rose significantly to 3.66% from 2.95% year-over-year, driven by increased net interest income [7][8] Financial Performance - Net income excluding merger expenses was $13,666,000 for the quarter, and diluted earnings per share were $0.90, compared to $0.87 in the same period last year [3][7] - Total interest income for the quarter was $53,925,000, a substantial increase from $29,944,000 in the prior year [21] - Noninterest income increased by $2.4 million for the quarter, driven by higher credit and debit card fees and trust income [12] Asset and Loan Growth - Total loans held for investment were $2.9 billion, with core loans growing by $1.4 billion due to the merger [4][5] - Core loans grew organically by $140.1 million or 10.0% year-over-year, despite a slight decline of $4.8 million in the second quarter [5][9] - The company reported a reduction in loans to other financial institutions and securities, attributed to a strategic shift towards internally driven originations [4][5] Deposits and Liquidity - Deposits, excluding brokered deposits, increased by $1.4 billion year-over-year, but declined by $98 million from the previous quarter due to seasonal fluctuations [6][11] - As of June 30, 2025, total available borrowing capacity was $1.2 billion, with uninsured deposits totaling $1.1 billion or 29.6% of total deposits [6][11] Merger Impact - The merger added approximately $1.8 billion in total assets, $1.4 billion in loans, and $1.4 billion in deposits [7] - Merger-related expenses for the quarter were approximately $132,000, with management not anticipating material expenses going forward [7][13] - The merger has strengthened the company's market position and enhanced its ability to serve communities [3][14]