Company Overview - ChoiceOne Financial Services, Inc. (COFS) is expected to report a year-over-year decline in earnings, with a projected earnings per share (EPS) of $0.80, reflecting an 8.1% decrease compared to the previous year [3] - The company's revenues are anticipated to reach $41.3 million, which represents an 84% increase from the same quarter last year [3] Earnings Expectations - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that analysts have not significantly altered their outlook for the company [4] - The Most Accurate Estimate for ChoiceOne Financial Services is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -2.50%, suggesting a bearish sentiment among analysts regarding the company's earnings prospects [12] Historical Performance - In the last reported quarter, ChoiceOne Financial Services exceeded the expected EPS of $0.82 by delivering an actual EPS of $0.86, resulting in a surprise of +4.88% [13] - Over the past four quarters, the company has beaten consensus EPS estimates three times [14] Market Sentiment - The current Zacks Rank for ChoiceOne Financial Services is 4, indicating a "Sell" rating, which complicates the prediction of an earnings beat [12] - Despite the potential for an earnings miss, other market factors may influence stock performance, as stocks can still gain despite missing earnings expectations [15][17] Industry Context - In comparison, Synchrony (SYF), a player in the Zacks Financial - Miscellaneous Services industry, is expected to post earnings of $1.72 per share, reflecting an 11% year-over-year increase, with revenues projected at $4.5 billion, up 2.2% from the previous year [19] - Synchrony has an Earnings ESP of +5.16% and a Zacks Rank of 3 (Hold), indicating a higher likelihood of beating the consensus EPS estimate [20]

Core Points - ChoiceOne Financial Services, Inc. announces the retirement of Chairman Jack G. Hendon effective July 5, 2025, in accordance with the company's mandatory retirement policy for directors [1][2] - Hendon has been with the company for 12 years, serving as a director since August 2013 and as Chairman since December 2021, bringing valuable expertise in accounting and finance [2] - Gregory A. McConnell will succeed Hendon as Chairman, and Roxanne M. Page will be appointed as Vice Chairwoman, both effective July 5, 2025 [4] Company Overview - ChoiceOne Financial Services, Inc. is a financial holding company based in Sparta, Michigan, with assets exceeding $4 billion [9] - The company operates 56 offices across West, Central, and Southeast Michigan through its subsidiary, ChoiceOne Bank, which also offers insurance and investment products [9]

Financial Performance - ChoiceOne reported a net loss of $13.9 million for Q1 2025, compared to a net income of $5.6 million in Q1 2024, resulting in a diluted loss per share of $1.29[152] - The annualized return on average assets and average shareholders' equity was (1.68)% and (18.39)%, respectively, for Q1 2025, compared to 0.86% and 11.26% in Q1 2024[160] - Income tax benefit was $3.7 million in the first quarter of 2025, compared to an expense of $1.2 million in the same period of 2024, with an effective tax rate of 21.0%[184] - Net cash used in operating activities was $6.5 million for Q1 2025, a significant decline from $15.3 million net cash provided in Q1 2024, driven by a net loss of $13.9 million[212] Assets and Liabilities - Total assets increased to $4.3 billion as of March 31, 2025, up $1.6 billion from the previous year, primarily due to the merger[154] - Total assets as of March 31, 2025, were $4.3 billion, with net loans of $2.9 billion and total deposits of $3.6 billion[187] - Shareholders' equity increased to $426.9 million as of March 31, 2025, from $206.8 million on March 31, 2024, primarily due to a merger that issued 6,070,836 shares valued at $193.0 million[210] Loans and Deposits - Core loans grew by $40.1 million or 10.6% on an annualized basis in Q1 2025, and by $157.3 million or 11.3% year-over-year[155] - Deposits, excluding brokered deposits, increased by $1.4 billion as of March 31, 2025, driven by the merger and organic growth[156] - The company has total outstanding loans to the automotive sector of $99.3 million, representing 3.4% of gross loans[150] - Average loans increased by $607.1 million in Q1 2025, attributed to both organic growth and the impact of the Merger[170] - Core loans grew by $1.4 billion through acquisition in the first quarter of 2025, with organic growth of $40.1 million or 10.6% on an annualized basis[197] - Uninsured deposits totaled $1.2 billion or 33.9% of total deposits as of March 31, 2025, down from 37.0% at December 31, 2024[206] Interest Income and Expense - Interest income increased by $11.9 million in Q1 2025 compared to Q1 2024, including $2.8 million from purchased loan interest accretion related to the merger[155] - Tax-equivalent net interest income increased by $9.8 million in Q1 2025 compared to Q1 2024, driven by loan growth and higher interest rates[168] - Interest income from loans rose by $11.9 million in Q1 2025, with an average rate increase of 64 basis points compared to Q1 2024[170] - Interest expense increased by $1.7 million in Q1 2025, primarily due to a $321.2 million increase in average balances of interest-bearing demand and savings deposits[172] - The cost of deposits to average total deposits was an annualized 1.59% in Q1 2025, down from 1.65% in Q1 2024[158] Credit Losses and Nonperforming Assets - The provision for credit losses on loans was $13.1 million in Q1 2025, mainly due to $12.0 million related to the acquisition of non-PCD loans in the Merger[177] - Nonperforming assets rose by $15.1 million to $19.3 million at March 31, 2025, largely due to non-accrual loans and OREO acquired in the Merger[178] - The allowance for credit losses (ACL) was 1.18% of total loans at March 31, 2025, up from 1.07% as of December 31, 2024[178] - Net charge-offs for the first three months of 2025 were $72,000, up from $51,000 in the same period of 2024, with annualized net charge-offs as a percentage of average loans remaining at 0.01% for both years[179][180] Noninterest Income and Expense - Noninterest income increased by $871,000 for the three months ended March 31, 2025, driven by higher mortgage servicing rights income and trust income from the Merger[181] - Noninterest expense rose by $22.0 million in the first quarter of 2025, primarily due to $17.2 million in merger-related expenses[183] Capital and Borrowing - Total capital to risk-weighted assets ratio for ChoiceOne Bank was 11.9% as of March 31, 2025, down from 12.6% on March 31, 2024, attributed to the merger impact[211] - ChoiceOne had $130.0 million in outstanding borrowings from the FHLB at a weighted average fixed rate of 4.03% as of March 31, 2025[214] - Total available borrowing capacity from the FHLB and the Federal Reserve Bank was $945.3 million as of March 31, 2025[214] Cash Flow - Net cash provided by investing activities surged to $257.0 million in Q1 2025, compared to $7.6 million net cash used in the same period in 2024, due to the sale of $78.9 million in securities from the merger[212] - Net cash provided by financing activities was $207.8 million for Q1 2025, up from $71.7 million in Q1 2024, with a decrease in borrowing by $207.5 million compared to an increase of $10.0 million in the prior year[212]

Core Insights - ChoiceOne Financial Services, Inc. (COFS) reported quarterly earnings of $0.86 per share, exceeding the Zacks Consensus Estimate of $0.82 per share, and up from $0.74 per share a year ago, representing an earnings surprise of 4.88% [1] - The company posted revenues of $31.23 million for the quarter ended March 2025, which missed the Zacks Consensus Estimate by 5.07%, compared to year-ago revenues of $20.53 million [2] - The stock has underperformed the market, losing about 21% since the beginning of the year, while the S&P 500 declined by 5.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.84 on revenues of $41.8 million, and for the current fiscal year, it is $3.48 on revenues of $160.4 million [7] - The estimate revisions trend for ChoiceOne Financial Services is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Financial - Miscellaneous Services industry, to which ChoiceOne belongs, is currently in the top 35% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - ChoiceOne reported a net loss of $13,906,000 for the three months ended March 31, 2025, compared to net income of $5,634,000 for the same period in 2024[6] - Diluted loss in earnings per share was $1.29 for the three months ended March 31, 2025, compared to diluted earnings per share of $0.74 in the same period in the prior year[6] - Adjusted net income, excluding merger-related expenses, was $9,310 thousand for the three months ended March 31, 2025[34] - Net income for the three months ended March 31, 2025, was a loss of $13,906 thousand, compared to a profit of $7,159 thousand in the previous quarter[31] - Basic earnings per share for the three months ended March 31, 2025, was $(1.30), compared to $0.79 in the previous quarter[31] Assets and Liabilities - Total assets, loans, and deposits acquired in the Merger effective March 1, 2025, were approximately $1.8 billion, $1.4 billion, and $1.4 billion, respectively[4] - ChoiceOne Financial Services, Inc. has assets exceeding $4 billion as of March 31, 2025[21] - Total assets increased to $4,305,176 thousand from $2,723,243 thousand year-over-year[29] - Total liabilities increased to $3,017,054 thousand in Q1 2025, up from $2,420,832 thousand in Q1 2024, reflecting a growth of approximately 24.7%[40] Loans and Credit Quality - Core loans grew organically by $40.1 million or 10.6% on an annualized basis during Q1 2025, and by $157.3 million or 11.3% during the twelve months ended March 31, 2025[8] - The provision for credit losses on loans was $13.1 million in Q1 2025, primarily due to $12.0 million of expense for the acquisition of $1.3 billion of non-PCD loans in the Merger[14] - The provision for credit losses on loans was $13,163 thousand for the three months ended March 31, 2025, compared to $200 thousand in the previous quarter[31] - Nonperforming loans to total loans (excluding held for sale) rose to 0.65% in Q1 2025 from 0.27% in Q4 2024, indicating a deterioration in asset quality[39] - The allowance for credit losses increased to $34,567,000 in Q1 2025 from $16,552,000 in Q4 2024, reflecting a more conservative approach to potential loan losses[39] Income and Expenses - GAAP net interest margin rose significantly to 3.43%, up from 2.67% in the same period of 2024, with GAAP net interest income reaching $26.3 million compared to $16.5 million in Q1 2024[4] - Noninterest income increased by $871,000 for the three months ended March 31, 2025, compared to the same period in the prior year, partly due to higher mortgage servicing rights income from the Merger[18] - Noninterest expense increased by $22.0 million for the three months ended March 31, 2025, largely due to merger-related expenses of $17.2 million[19] - Total noninterest expense increased to $35,665 thousand for the three months ended March 31, 2025, from $15,344 thousand in the previous quarter[31] Merger Impact - The merger with Fentura Financial, Inc. and The State Bank significantly expanded ChoiceOne's capabilities and market presence[20] - Deposits, excluding brokered deposits, increased by $1.4 billion as of March 31, 2025, compared to the same period in 2024, driven by the Merger[11] - The company anticipates finding expected synergies in the combined entities post-merger[20] Growth Metrics - Total assets reached $4,305,176,000 in Q1 2025, up from $2,723,243,000 in Q4 2024, marking a growth of 58.1%[37] - Gross loans increased to $2,928,896,000 in Q1 2025, compared to $1,552,928,000 in Q4 2024, a rise of 88.5%[37] - Total deposits rose to $3,651,729,000 in Q1 2025, up from $2,214,103,000 in Q4 2024, an increase of 64.8%[37] - Shareholders' equity improved to $426,853,000 in Q1 2025, compared to $260,415,000 in Q4 2024, reflecting a growth of 63.9%[37] Operational Efficiency - The efficiency ratio worsened to 111.01% in Q1 2025 compared to 61.29% in Q4 2024, suggesting increased operational costs[38] - The annualized return on average assets decreased to -1.68% in Q1 2025 from 1.05% in Q4 2024, reflecting a decline in profitability[38] - The loan to deposit ratio increased to 80.21% in Q1 2025 from 70.14% in Q4 2024, indicating a tighter liquidity position[38] Workforce - Full-time equivalent employees rose to 605 in Q1 2025 from 377 in Q4 2024, reflecting expansion in workforce[38]

Core Insights - ChoiceOne Financial Services, Inc. reported a net loss of $13.9 million for Q1 2025, a significant decline compared to a net income of $5.6 million in Q1 2024, primarily due to merger-related expenses and provisions for credit losses [5][6][19] - The merger with Fentura Financial, Inc. and The State Bank was completed on March 1, 2025, significantly enhancing ChoiceOne's market presence and capabilities [4][21] - Total assets increased to $4.3 billion as of March 31, 2025, up from $2.7 billion a year earlier, largely driven by the merger [7][17] Financial Performance - The diluted loss per share was $1.29 for Q1 2025, compared to diluted earnings per share of $0.74 in the same period of the previous year [6][29] - Net interest income rose to $26.3 million in Q1 2025, up from $16.5 million in Q1 2024, attributed to the merger's contribution [5][28] - The GAAP net interest margin increased to 3.43% in Q1 2025, compared to 2.67% in Q1 2024, reflecting the merger's impact [5][30] Loan and Deposit Growth - Core loans grew by $1.4 billion due to the merger, with organic growth of $40.1 million or 10.6% annualized in Q1 2025 [8][11] - Deposits, excluding brokered deposits, increased by $1.4 billion as of March 31, 2025, driven by the merger and organic growth [11][12] - The loan-to-deposit ratio stood at 80.21% as of March 31, 2025, indicating a balanced approach to asset management [7] Asset Quality and Credit Losses - The provision for credit losses was $13.1 million in Q1 2025, primarily due to the acquisition of non-PCD loans [14] - Asset quality remained strong, with annualized net loan charge-offs to average loans at 0.01% and nonperforming loans at 0.65% as of March 31, 2025 [14][19] Merger Impact - The merger resulted in approximately $1.8 billion in total assets, $1.4 billion in loans, and $1.4 billion in deposits being acquired [5][11] - ChoiceOne recognized a core deposit intangible of $31 million related to the merger, amortized over 10 years [10] - The valuation mark on acquired loans was estimated at a reduction of $64.7 million, with $59.8 million expected to be accretable to interest income [9]

Core Viewpoint - ChoiceOne Financial Services, Inc. has successfully consolidated The State Bank into ChoiceOne Bank, enhancing operational efficiency and growth opportunities in Michigan [1][2]. Group 1: Consolidation Details - The consolidation of The State Bank into ChoiceOne Bank was completed on March 14, 2025, with The State Bank now operating under the ChoiceOne Bank name [1]. - This merger follows the earlier completion of the merger with Fentura on March 1, 2025, resulting in a financial holding company with over $4 billion in assets and 56 offices across West, Central, and Southeast Michigan [3]. Group 2: Leadership and Community Engagement - Former Fentura CEO Ronald Justice highlighted the merger as a significant opportunity for customers, communities, employees, and shareholders, emphasizing the cultural and geographical fit [4]. - The company celebrated its name change with community officials and made donations to local nonprofit organizations, reinforcing its commitment to community support [5]. Group 3: Company Overview - ChoiceOne Financial Services, Inc. is headquartered in Sparta, Michigan, and operates as a financial holding company with over $4 billion in assets [6]. - ChoiceOne Bank provides insurance and investment products through its subsidiary, ChoiceOne Insurance Agencies, Inc., and is listed on the Nasdaq Capital Market under the symbol "COFS" [6].

Core Viewpoint - ChoiceOne Financial Services has successfully completed the merger with Fentura Financial, creating a bank holding company with assets exceeding $4 billion and operating 56 offices across Michigan [1][2]. Group 1: Merger Details - The merger between ChoiceOne Financial Services and Fentura Financial became effective on March 1, 2025 [1]. - The combined organization will be headquartered in Sparta, Michigan, and will consolidate The State Bank into ChoiceOne Bank, effective March 14, 2025 [2]. Group 2: Strategic Benefits - The acquisition is described as a natural geographical and cultural fit, allowing for an expansion of the community bank franchise into Central and Southeastern Michigan [2]. - The merger is expected to enhance the range and capacity for commercial and consumer lending, alongside advancements in technology [2]. - ChoiceOne aims to provide a comprehensive line of products and services to small businesses and consumers in West, Central, and Southeast Michigan through an improved retail network [2]. Group 3: Company Overview - ChoiceOne Financial Services is a financial holding company and the parent corporation of ChoiceOne Bank and The State Bank, collectively operating 56 offices in various counties across Michigan [3]. - The company offers insurance and investment products through its subsidiary, ChoiceOne Insurance Agencies, Inc. [3]. - ChoiceOne Financial Services is publicly traded on the Nasdaq Capital Market under the symbol "COFS" [3].

Core Viewpoint - ChoiceOne Financial Services, Inc. has received regulatory approval to merge with Fentura Financial, Inc., enhancing its presence in Michigan and creating a combined organization with approximately $4.3 billion in assets [1][2]. Company Overview - ChoiceOne Financial Services, Inc. is headquartered in Sparta, Michigan, and operates as the parent company of ChoiceOne Bank, which has 35 offices across several counties [3]. - The company is currently an approximately $2.6 billion-asset bank holding company, ranking as the eighth largest in Michigan based on asset size [3]. - ChoiceOne Bank offers a range of financial products, including insurance and investment services through its subsidiary [3]. Fentura Financial Overview - Fentura Financial, Inc. is the holding company for The State Bank, which operates 21 offices in various counties in Michigan [4]. - The State Bank provides a full array of banking services, including consumer, mortgage, and wealth management, while also engaging in community support initiatives [4]. Merger Details - The merger is expected to be effective on March 1, 2025, with the bank consolidation anticipated to take place on March 14, 2025 [2]. - Post-merger, the combined entity will operate under the ChoiceOne name and brand, expanding its geographical footprint into several new counties [2].

Core Insights - ChoiceOne Financial Services, Inc. (COFS) reported quarterly earnings of $0.83 per share, matching the Zacks Consensus Estimate and showing an increase from $0.70 per share a year ago [1] - The company achieved revenues of $24.34 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 1.43% and up from $20.6 million year-over-year [2] - The stock has underperformed the market, losing about 1.4% since the beginning of the year compared to the S&P 500's gain of 2.9% [3] Earnings Performance - The company has surpassed consensus EPS estimates three times over the last four quarters, with a notable surprise of 25.68% in the previous quarter [1][2] - The current consensus EPS estimate for the upcoming quarter is $0.93, with expected revenues of $34.5 million, and for the current fiscal year, the estimate is $3.80 on $167.7 million in revenues [7] Market Outlook - The earnings outlook and estimate revisions will significantly influence the stock's immediate price movement, with the current Zacks Rank for the stock being 3 (Hold), indicating expected performance in line with the market [6] - The Financial - Miscellaneous Services industry, to which ChoiceOne belongs, is currently in the top 36% of Zacks industries, suggesting a favorable environment for stock performance [8]